FINANCIAL RESULTS FOURTH QUARTER 2020
Resultados cuarto trimestre 2020
Index I. Message from the management ...... 3 II. Highlights of the period ...... 4 III. Consolidated financial results ...... 7 IV. Events of the period ...... 10 V. Events after fourth quarter 2020 ...... 10 VI. Retail revenues ...... 11 VII. Results by business unit ...... 12 VIII. Financial business ...... 14 IX. Consolidated financial statements ...... 17 X. Annexes ...... 22 A. Gross merchandise volume (GMV) (MM$) ...... 22 B. Growth in nominal sales by equivalent local – Same Store Sales (SSS) ...... 22 C. # Of stores and sales area of retail formats ...... 23 D. # Of shopping centers and leasable area of real state operators ...... 23 E. Debt maturity profile (MM$) ...... 24 F. Average collection period, average payment period and days of inventory ...... 24 G. Consolidated results as of december 2020 ...... 25
Notes: All dollar figures are calculated considering the exchange rate as of January 4th of 2020: 710,95 $/US$. Symbols for quarters: 1Q, 2Q, 3Q y 4Q. Symbols for periods: 6M, 9M, 12M Symbols for currency: $ CLP: Chilean Pesos; US$: U.S. Dollars; PEN: Peruvian Soles; COP: Colombian Pesos; ARS: Argentinean Pesos; BRL: Brazilean Real. Th: thousand; Mn: million. YoY: period compared with the same period of the previous year. QoQ: quarter compared with the previous quarter
2 Resultados cuarto trimestre 2020
I. M ESSAGE FROM THE MANAGEMENT
Gaston Bottazzini, CEO of Falabella, commented about business evolution:
“Our e-commerce platform continues to grow strongly. GMV process all payments made in the new integrated platform during the quarter reached US$ 1.0bn (US$ 3.3bn during of falabella.com and will also allow us to offer payment 2020), doubling 2019. Our Marketplace business has also processing services and financial services to the Sellers of our gained scale, reaching US $ 763mn in GMV during 2020, 2.6 Marketplace. times higher than in 2019. The investment plan that we announced for 2021 seeks to During the fourth quarter, as sanitary restrictions were strengthen our physical-digital ecosystem by allocating US$ partially lifted, we were able to recover the performance of 443 million (56% of the annual investment) to technology our physical stores, resulting in growth on a “same store” and logistics to continue accelerating our transformation. basis in almost all countries in our retail formats. It is worth We put special focus on continuing to scale existing logistics highlighting, the 43% growth in total revenues in the retail assets, which allowed us to deliver 30 million orders during businesses in Chile during 4Q20. 2020, to increase processing capacity and strengthen the We have also continued working on improving our service service proposal to Marketplace Sellers, aiming to deliver levels in e-commerce deliveries, recovering service levels most of our shipments in less 48 hours. similar to the pre-pandemic in Chile. The year 2020 has been one of many challenges, but also of The recovery in physical store sales, coupled with the very relevant decisions for the future of Falabella in the sustained growth in online sales, continued to drive strong region, such as: the integration of e-commerce platforms, top line growth. In this, the strengthening of our online the integration of logistics for home delivery and the decision proposals and our apps has been instrumental. In the case of to reduce exposure in Argentina. Also, we have taken various Department Stores in Chile, online penetration reached actions to make our organization and processes more 42% in the quarter (55% fullyear) and the app accounted for efficient. Their impacts will be seen in a more tangible way in 40% of GMV. 2021. Decisions that focus us on accelerating the execution of our strategy” In Home Improvement and Supermarkets, we continue to capitalize on the positive momentum due to strong demand Key Figures (US$ million) for their product categories. Regional revenues from both 4Q19 4Q20 Var (%) formats grew 29% and 27% respectively. Total sales GMV Online 503 991 97% We continue to make progress in transforming Banco GMV retail (1P) 385 768 100% Falabella into a 100% digital bank with Fintech solutions. GMV marketplace (3P) 119 223 88% During the year, we introduced 100% digital solutions and Total sales of physical stores 3.086 3.684 19% processes for product openings, transactions, and support Total sales 3.590 4.676 30% requirements. We launched the first 100% digital credit card TPV 354 763 116% Financial Results in Chile, reaching more than 250,000 openings during the Non-Banking Revenue 3.166 3.822 21% year across the region. In 2020 we doubled the number of Financial Services Revenue 491 378 -23% digital transactions, reaching more than 90 million. Also, Total Revenue 3.657 4.200 15% during the year, 44% of the financial products origination EBITDA 405 652 61% was made through digital channels. Net (Loss) Income 111 195 75% Balance Sheet The development of Fpay, as digital wallet and payment Cash (non-banking) 422 1.711 305% processing portal, has allowed us to build a proprietary Gross Loan Book 7.900 6.546 -17% payment processing engine, which during 2020 processed Total Net Debt (Exc. Banking) 3.974 3.412 -14% payments totalling US$ 2,606 million. This platform will
3 Fourth Quarter Results 2020
II. HIGHLIGHTS OF THE PERIOD
Online business continues to grow strongly in the fourth quarter
• GMV reached US$ 1.0bn in 4Q20, 2x YoY, driven by strong growth in the sale of both 1P products (2.0x) and Marketplace (1.9x) YoY. Online penetration reached 21% regionally. • During 2020, GMV reached US$ 3.3bn, 2.2x compared with 2019.
GMV Growth 4Q20 Online Penetration Online Penetration YoY (%) (%) (%) 4Q19 4Q20 2019 2020
Department Stores 92% 23% 38% 22% 49%
Home Improvement 137% 5% 9% 4% 10%
Supermarkets 118% 2% 4% 1% 3%
Marketplaces 88%
Total 97% 14% 21% 12% 24%
• Marketplace GMV reached US$ 223 million in 4Q20, with a 22% share of total online sales. In 2020, the GMV of Marketplace reached US$ 763 million. • +8 million orders were delivered across the region during the quarter. • E-commerce in Chile: • GMV grew 2.2x YoY during the quarter, driven by continued dynamism in consumption, due to the withdrawals from individual pension accounts. • Marketplace sales grew 2.8x during the fourth quarter. • Home Improvement continues to gain scale, during 2020 it reached online sales (GMV) of US$ 404 million, a 2.5x increase over 2019. • In Department Stores, GMV reached US$ 412 million during 4Q20, an increase of 119% YoY. Home deliveries increased 7x compared to the previous year. Click & Collect represented 26% of total units sold through online channel in 4Q20. • The falabella.com app reached a 40% share over department stores’ GMV during the quarter. • Linio registered a 93% growth in GMV compared to 4Q19. • E-commerce in Perú: • In Department Stores, GMV grew 101% YoY, driven by a 46% YoY increase in traffic and a 120% increase in total orders. • In Home Improvement, GMV grew 108% in the quarter. • In Supermarkets, GMV grew 169%, reaching a 5% of online penetration. Additionally, the Fazil ODD App reported a 71% increase in traffic and 47% growth in total orders compared to the third quarter of this year. • The total GMV of the Marketplace in Peru grew 88% in the quarter. • E-commerce en Colombia: • In Department Stores, GMV grew 75% in 4Q20. The participation of mobile channels in online sales continues to grow, the Falabella App represented a 24% of the format total sales. • Home Improvement showed an increase of 195% in terms of GMV.
4 Fourth Quarter Results 2020
GROSS MERCHANDISE VOLUME (GMV)1 (MMUS$)
GMV 4Q19 % Total 4Q20 % Total Var % 2020 Retail (1P) 385 76% 768 78% 100% 2.572 Deparment stores 309 61% 592 60% 92% 1.973 Home improvement 61 12% 144 14% 137% 488 Supermarkets 15 3% 33 3% 118% 110 Marketplace (3P) 119 24% 223 22% 88% 763 Total GMV 503 100% 991 100% 97% 3.335
GMV by country 4Q19 % Total 4Q20 % Total Var % 2020 Chile 259 51% 575 114% 122% 1.980 Perú 99 20% 196 39% 98% 605 Colombia 77 15% 128 25% 67% 425 Others 69 14% 92 18% 33% 324 Total GMV by country 503 100% 991 197% 97% 3.335
We continue strengthening the digital channels of the financial business
• Fpay • We continue to improve the user experience, while adding new functionalities: • We implemented contactless payments for parking tickets in our Mallplaza and Open shopping centers. Through a QR code printed on the parking ticket, and scanning it with Fpay, the customer can make the payment quickly, easily and avoiding to queue to pay in an automated machine. • In Chile, we continue to focus on expanding the network of businesses that operate with Fpay. To date we operate with more than 3,000 associated stores. • We launched Fpay in Peru, offering contactless payments, through QR codes, in our retailers, along with money transfers between users. • Advances in digitization • TPV2 of Falabella reached US$ 763 million during 4Q20, 2.2x YoY. In 2020, TPV reached US$ 2,606 million. • In Chile, 73% of payments of the credit card statement are made digitally. • During the quarter, more than 100,000 digital credit cards were opened in the region. Approximately a 35% of these openings were made through the group's e-commerce portals. • During 2020, the sale of financial products through digital channels represented 44% of the total sale of financial products. In the quarter, it is close to 50%.
Strong revenue growth in the retail business in Chile
• Sales growth continues across all retail formats in Chile, with a strong recovery in sales in physical stores, along with strong performance in e-commerce.
Department Stores Home Improvement Supermarkets YoY (%) YoY (%) YoY (%) Revenue SSS GMV Revenue SSS GMV Revenue SSS GMV
3Q20 26% -5,0% 355% 3Q20 25% 22,6% 332% 3Q20 18% 13,3% 122%
4Q20 41% 22,7% 119% 4Q20 46% 33,7% 152% 4Q20 41% 25,9% 87%
1 GMV figures are rounded 2 Corresponds to the total volume of sales made through our proprietary payment processing platforms, in our retailers and associated businesses
5 Fourth Quarter Results 2020
Strong growth in Home Improvement revenue across all countries
• Home Improvement businesses continue to capitalize on the positive consumer momentum in all markets. • Total Home Improvement revenues in the region grew 30%. The online business continues to gain scale in this format, reaching sales of US$ 156 million in the fourth quarter (+144%) and US$ 213 million in 2020 (+147%).
GMV Growth 152% 108% 195% 129% 222% 4Q20 YoY (%)
SSS Growth 33,7% 11,8% 15,9% 30,0% 30,5% 4Q20 YoY (%)
46%
Revenues Growth 30% 4Q20 Local Currency 22% YoY (%) 19% 19%
Chile Peru Colombia Argentina Brasil
Falabella will invest US$ 796 million in 2021 • Technology and logistics account for 56% of the announced investments, mainly focused on the integration of e-commerce proposals under falabella.com and on scaling logistics capabilities, along with optimizing delivery times. • Investments in technology for US$ 303 million (of which US$ 92 million to be recorded as Capex and US$ 211 million as operational expenses), focused on technological developments for the integration of e-commerce platforms, such as: • Integrated seller center, a single platform for Sellers to manage their product publications and manage their payments and invoices. • Unique e-commerce engine for falabella.com. • Unique payment processing platform (based on Fpay) for unified e-commerce. • Enhancement of the express delivery management engine (based on Fazil) to provide express deliveries to falabella.com, both for 1P and Sellers (3P) products. • Technological developments to enhance integrations of logistics systems and enhance the visibility of the last mile. • Investments in logistics for US$ 140 million, focused on: • Increase the order processing capacity of existing distribution centers. • Scale the capacity to process third-party products (warehousing, packaging and delivery services). • Integrate and scale the capacity of the existing network of transfer centers. • Construction of new facilities to consolidate cargo (cross-dock) from different origins and increase the density of the last mile. • Investments for US$ 353 million in store openings and remodeling • US$ 110 million to continue developing expansions with strong growth potential. • Opening of IKEA in Chile, Peru and Colombia. • Expand the Supermarket business in Peru. • Continue to expand Home Improvement in Mexico. • US$ 243 million in renovations and expansions, mainly focused on strategic real estate assets to continue strengthening the physical-digital ecosystem.
6 Fourth Quarter Results 2020
III. CONSOLIDATED FINANCIAL RESULTS
Consolidated Income Statement 4Q20 (MM$US) 4Q19 % Rev. 4Q20 % Rev. Var % 0 0 0 0 0 Revenues of Non-Banking Operations 3.166 3.822 20,7% Revenues of Banking Operations 491 378 -23,1% Total Revenues 3.658 100,0% 4.200 100,0% 14,8% COGS of Non-Banking Operations (2.113) -57,8% (2.549) -60,7% 20,7% COGS of Banking Operations (257) -7,0% (107) -2,5% -58,4% Gross Profit 1.289 35,2% 1.544 36,8% 19,9% SG&A Expenses (1.039) -28,4% (1.055) -25,1% 1,5% Operational Income 249 6,8% 490 11,7% 96,6% Depreciation + Amortization 156 4,3% 162 3,9% 3,9% EBITDA 405 11,1% 652 15,5% 60,9% Other Income / (Expenses) 12 0,0% (69) 0,0% -674,8% Net Financial Income / (Cost) (82) 0,0% (122) 0,0% 47,6% Profit / (Loss) in Associates 2 0,0% 10 0,0% 582,9% Exchange Rate Differences (3) 0,0% (2) 0,0% -48,7% Non-Operating Profit (72) -2,0% (182) -4,3% 151,2% Profit Before Tax Expenses 177 4,8% 308 7,3% 74,2% Income Tax (47) 0,0% (99) 0,0% 109,5% Minority Interest (19) 0,0% (14) 0,0% -23,4% Net Profit / (Loss) 111 3,0% 195 4,6% 75,4%
Income Statement • During the fourth quarter of 2020, the company's consolidated revenues reached US$ 4.200 million, an increase of 14.8% YoY. The increase is mainly explained by higher revenues from the retail businesses in the region, partially offset by lower revenues from the banking and shopping center businesses. • The retail formats in Chile stand out, Department Stores with an increase of 41.0%, Home Improvement with a growth of 45.5% and Supermarkets with 40.8%. • Banking businesses registered a 26.0% drop in revenue, mainly explained by the -17.1% contraction of the YoY loan portfolio and lower placement rates. • The drop in revenues in shopping centers is explained by lower rental revenue, explained by not collecting rent from the non-operating leasable area due to the prevailing sanitary restrictions in the context of the pandemic. • Gross profit reached US$ 1,544 million in 4Q20, increasing 19.9% YoY. The increase is mainly explained by: • A higher contribution from Home Improvement Chile (resulting from the increase in sales and an improvement of 528 basis points in margin), Department Stores Chile (resulting from the increase in sales and almost flat margin) and Supermarkets in Chile (resulting from the increase in in sales and an improvement of 224 basis points in margin). Also contributing was the higher margin in Chilean banking operations, explained by lower risk costs. • This was partially offset by lower contributions from banking operations in Peru (due to higher risk costs) and Department Stores in Argentina. • Consolidated EBITDA reached US$ 652 million during the quarter, an increase of 60.9% YoY. The increase represents an improvement of 444 points in margin, mainly explained by: • Greater contribution from retail operations in Chile, together with greater contribution from banking businesses in Chile. • This was partially offset by a lower contribution from banking operations in Peru and Colombia. • Net income reached US$ 195 million during the fourth quarter of 2020, explained by the higher contribution of profits from Home Improvement Chile, Banco Falabella Chile and Department Stores in Chile. This was partially offset by losses in the Department Stores, CMR and Home Improvement businesses in Argentina.
7 Fourth Quarter Results 2020
• In “other gains (losses)” an extraordinary loss of US$ 86 million was recorded related to a write-down in the book value of our operations in Argentina (Department Stores, Home Improvement and Financial Services). The adjustment made to the book value of these assets is made in the context of the process of closing some stores and the evaluation of strategic alternatives to reduce exposure to that market. Excluding the extraordinary loss, Net Income for the period would have reached US$ 280 million (an increase of 153% YoY).
Cash & Liquidity
• Regarding the company's liquidity levels, at the end of December 2020, cash and equivalents amounted to US$ 3,464 million at a consolidated level. • Non-banking businesses: US$ 1,711 million. • Banking businesses: US$ 1,753 million.
Leverage
• Total debt of non-banking businesses reached US$ 5,123 million as of December 2020, an increase of 16.5% YoY, explained by the new financings subscribed during the first half of 2020 to strengthen the liquidity of the company, in the context of the pandemic. • Net debt reached US$ 3,412 million as of December 2020.
Net Leverage of Non-Banking businesses Net Financial Debt / Non-Banking businesses EBITDA3
0,99 3,75 0,96 3,48
dec-19 dec-20 dec-19 dec-20
3 EBITDA = gross profit - distribution costs - administrative expenses - expenses by function + depreciation, Net financial debt = current financial liabilities + noncurrent financial liabilities - hedging assets - cash and cash equivalents.
8 Fourth Quarter Results 2020
Debt Maturity Profile 4
Debt Maturity Profile (MMUS$) 5 2.380
1.102
617 555 459
100
2021 2022 2023 2024 2025 2026+
Total Consolidated Financial Debt (excluding banking operations): MMUS$ 5,212
4 Total consolidated financial debt includes CMR Argentina, but does not include Falabella's banking operations (Banco Falabella Chile, Banco Falabella Peru and Banco Falabella Colombia) and accrued interest. The debt maturity profile considers the sum of the capital amortizations for each period. 5 Balances in US$ converted at each country's closing exchange rate.
9 Fourth Quarter Results 2020
IV. EVENTS O F T H E PERIOD
• On December 23rd, 2020, Falabella S.A. appointed Ashish Grover, who has been serving as managing director of Falabella India since 2018, as Chief Information Officer, with the aim of accelerating the company's transformation and promoting the implementation of disruptive and innovative solutions. Ashish has more than 20 years of experience leading technology programs in different countries and companies, such as Reliance, Target, GE and American Express.
• Store openings • During November in Chile, Tottus La Serena was inaugurated, with a surface area of 3,310 m2. The new Homecenter Antofagasta La Portada store with a size of 11,861 m2 also began operations. • In Peru, two new Supermarket stores were opened. Panamericana Urbana Hypermarket in November and with an area of 1,508 m2, together with La Merced Hypermarket in December with an area of 1,833 m2.
• Store closings • During the quarter, four Department Stores, Florida I, Avellaneda, Dot and Tortugas were closed in Argentina. While in the Home Improvement format, the Villa Tesei store was closed in the month of November. • The Homy Parque Arauco and Homy Plaza Vespucio stores in Chile closed, to be transformed into IKEA stores.
V. E VENTS AFTER FOURTH QUARTER 2 0 2 0
• On January 11, 2021, Falabella appointed Francisco Irarrázaval as CEO of Falabella Department Stores for the Region. He will assume his functions on March 31, 2021. Previously he served as general manager of Ripley Chile and Peru, and previously as e-commerce manager. Francisco Irarrázaval succeeds Gonzalo Somoza in the role, who will continue to be part of Falabella as advisor and director of different group companies.
• The closure of three Department Stores in Argentina, located in Mendoza, Córdova and San Juan, was announced.
10 Fourth Quarter Results 2020
VI. R ETAIL REVENUES Retail revenues 4Q20 (MM$)6,7
Var Local 4Q19 4Q20 Var % Currency %
Chile Department Stores 420.952 593.371 41,0% 41,0% Home Improvement 500.949 728.979 45,5% 45,5% Supermarkets 180.188 253.706 40,8% 40,8% Peru Department Stores 197.627 212.803 7,7% 16,1% Home Improvement 184.465 205.811 11,6% 18,7% Supermarkets 275.586 322.901 17,2% 25,9% Colombia Department Stores 176.206 165.363 -6,2% 1,7% Home Improvement 245.434 279.538 13,9% 21,9% Argentina Department Stores 82.611 33.885 -59,0% -7,2% Home Improvement 36.974 20.496 -44,6% 18,5% Brazil 0,0% Home Improvement 59.314 59.211 -0,2% 29,7%
Retail revenues 12M20 (MM$)10,11
Var Local 12M19 12M20 Var % Currency %
Chile Department Stores 1.472.211 1.554.182 5,6% 5,6% Home Improvement 2.092.653 2.290.251 9,4% 9,4% Supermarkets 750.665 867.018 15,5% 15,5% Peru Department Stores 650.252 550.057 -15,4% -18,5% Home Improvement 669.966 587.984 -12,2% -16,4% Supermarkets 881.830 1.151.187 30,5% 23,0% Colombia Department Stores 436.045 411.048 -5,7% -4,2% Home Improvement 847.930 844.962 -0,4% -0,2% Argentina Department Stores 217.489 136.542 -37,2% -7,1% Home Improvement 108.279 73.467 -32,2% 0,4% Brazil 0,0% Home Improvement 209.119 218.878 4,7% 22,4%
6 All variations are in nominal terms and have been calculated in both Chilean pesos and the local currency of each country 7 Revenues in Argentina are affected by the application of IAS 29.
11 Fourth Quarter Results 2020
VII. R ESULTS BY BUSINESS UNIT
Results by segment 4Q20 (MM$)
Chile Department Stores Home Improvement Supermarkets 4Q19 4Q20 (%, bps) 4Q19 4Q20 (%, bps) 4Q19 4Q20 (%, bps) Revenues 420.952 593.371 41,0% 500.949 728.979 45,5% 180.188 253.706 40,8% Gross Profit 144.736 207.741 43,5% 142.536 245.900 72,5% 47.453 72.488 52,8% Gross Margin 34,4% 35,0% 63 28,5% 33,7% 528 26,3% 28,6% 224 SG&A (139.227) (157.771) 13,3% (142.914) (153.749) 7,6% (51.497) (56.791) 10,3% SG&A / Revenues -33,1% -26,6% 649 -28,5% -21,1% 744 -28,6% -22,4% 620 Operating Profit 5.509 49.970 807,0% (378) 92.151 -24478,6% (4.044) 15.697 -488,2% Operating Margin 1,3% 8,4% 711 -0,1% 12,6% 1272 -2,2% 6,2% 843 EBITDA 25.486 68.861 170,2% 23.505 120.239 411,5% 7.165 26.940 276,0% EBITDA Margin 6,1% 11,6% 555 4,7% 16,5% 1180 4,0% 10,6% 664
Banco Falabella Chile 4Q19 4Q20 (%, bps) Revenues 222.961 176.311 -20,9% Gross Profit 98.309 149.504 52,1% Gross Margin 44,1% 84,8% 4070 SG&A (57.191) (66.958) 17,1% SG&A / Revenues -25,7% -38,0% -1233 Operating Profit 41.118 82.546 100,8% Operating Margin 18,4% 46,8% 2838 EBITDA 45.771 87.263 90,7% EBITDA Margin 20,5% 49,5% 2897
International operations Peru Colombia Argentina Brazil 4Q19 4Q20 (%, bps) 4Q19 4Q20 (%, bps) 4Q19 4Q20 (%, bps) 4Q19 4Q20 (%, bps) Revenues 741.023 796.005 7,4% 237.964 217.429 -8,6% 137.060 58.071 -57,6% 59.314 59.211 -0,2% Gross Profit 245.328 240.745 -1,9% 92.060 77.216 -16,1% 65.685 31.235 -52,4% 17.202 22.158 28,8% Gross Margin 33,1% 30,2% -286 38,7% 35,5% -317 47,9% 53,8% 586 29,0% 37,4% 842 SG&A (178.016) (182.475) 2,5% (60.222) (63.003) 4,6% (56.418) (16.005) -71,6% (23.180) (18.432) -20,5% SG&A / Revenues -24,0% -22,9% 110 -25,3% -29,0% -367 -41,2% -27,6% 1360 -39,1% -31,1% 795 Operating Profit 67.312 58.270 -13,4% 31.837 14.212 -55,4% 9.267 15.230 64,3% (5.978) 3.726 -162,3% Operating Margin 9,1% 7,3% -176 13,4% 6,5% -684 6,8% 26,2% 1947 -10,1% 6,3% 1637 EBITDA 95.297 84.035 -11,8% 39.886 22.109 -44,6% 12.853 16.648 29,5% (4.699) 5.931 -226,2% EBITDA Margin 12,9% 10,6% -230 16,8% 10,2% -659 9,4% 28,7% 1929 -7,9% 10,0% 1794
Others Plaza S.A. Other, elimnation & anulment Falabella 4Q19 4Q20 (%, bps) 4Q19 4Q20 (%, bps) 4Q19 4Q20 (%, bps) Revenues 72.273 60.720 -16,0% 27.822 42.520 52,8% 2.600.507 2.986.324 14,8% Gross Profit 47.718 37.057 -22,3% 15.049 13.973 -7,2% 916.076 1.098.016 19,9% Gross Margin 66,0% 61,0% -500 54,1% 32,9% -2123 35,2% 36,8% 154 SG&A (16.097) (9.786) -39,2% (14.236) (24.958) 75,3% (738.999) (749.928) 1,5% SG&A / Revenues -22,3% -16,1% 616 -51,2% -58,7% -753 -28,4% -25,1% 331 Operating Profit 31.621 27.271 -13,8% 812 (10.985) -1452,2% 177.077 348.088 96,6% Operating Margin 43,8% 44,9% 116 2,9% -25,8% -2876 6,8% 11,7% 485 EBITDA 45.116 41.036 -9,0% (2.468) (9.792) 296,8% 287.913 463.269 60,9% EBITDA Margin 62,4% 67,6% 516 -8,9% -23,0% -1416 11,1% 15,5% 444
12 Fourth Quarter Results 2020
Results by segment 12M20 (MM$)
Chile Department Stores Home Improvement Supermarkets 12M19 12M20 (%, bps) 12M19 12M20 (%, bps) 12M19 12M20 (%, bps) Revenues 1.472.211 1.554.182 5,6% 2.092.653 2.290.251 9,4% 750.665 867.018 15,5% Gross Profit 456.360 461.174 1,1% 619.529 714.166 15,3% 188.939 229.329 21,4% Gross Margin 31,0% 29,7% -133 29,6% 31,2% 158 25,2% 26,5% 128 SG&A (496.614) (527.937) 6,3% (562.185) (588.307) 4,6% (197.991) (220.132) 11,2% SG&A / Revenues -33,7% -34,0% -24 -26,9% -25,7% 118 -26,4% -25,4% 99 Operating Profit (40.254) (66.763) 65,9% 57.344 125.859 119,5% (9.052) 9.197 -201,6% Operating Margin -2,7% -4,3% -156 2,7% 5,5% 276 -1,2% 1,1% 227 EBITDA 39.268 10.920 -72,2% 153.556 225.360 46,8% 33.107 53.358 61,2% EBITDA Margin 2,7% 0,7% -196 7,3% 9,8% 250 4,4% 6,2% 174
Banco Falabella Chile 12M19 12M20 (%, bps) Revenues 891.275 770.279 -13,6% Gross Profit 468.173 425.305 -9,2% Gross Margin 52,5% 55,2% 269 SG&A (222.103) (233.197) 5,0% SG&A / Revenues -24,9% -30,3% -535 Operating Profit 246.070 192.108 -21,9% Operating Margin 27,6% 24,9% -267 EBITDA 264.107 211.356 -20,0% EBITDA Margin 29,6% 27,4% -219
International operations Peru Colombia Argentina Brazil 12M19 12M20 (%, bps) 12M19 12M20 (%, bps) 12M19 12M20 (%, bps) 12M19 12M20 (%, bps) Revenues 2.509.792 2.538.451 1,1% 670.512 634.078 -5,4% 386.684 243.011 -37,2% 209.119 218.878 4,7% Gross Profit 809.714 707.209 -12,7% 280.698 222.088 -20,9% 174.345 121.231 -30,5% 70.841 78.330 10,6% Gross Margin 32,3% 27,9% -440 41,9% 35,0% -684 45,1% 49,9% 480 33,9% 35,8% 191 SG&A (626.187) (665.908) 6,3% (212.455) (209.575) -1,4% (167.971) (118.161) -29,7% (81.927) (70.346) -14,1% SG&A / Revenues -24,9% -26,2% -128 -31,7% -33,1% -137 -43,4% -48,6% -518 -39,2% -32,1% 704 Operating Profit 183.527 41.301 -77,5% 68.244 12.513 -81,7% 6.374 3.070 -51,8% (11.086) 7.984 -172,0% Operating Margin 7,3% 1,6% -569 10,2% 2,0% -820 1,6% 1,3% -39 -5,3% 3,6% 895 EBITDA 284.634 156.776 -44,9% 98.035 43.232 -55,9% 17.862 13.087 -26,7% 404 18.623 4509,7% EBITDA Margin 11,3% 6,2% -516 14,6% 6,8% -780 4,6% 5,4% 77 0,2% 8,5% 832
Others Plaza S.A. Other, elimnation & anulment Falabella 12M19 12M20 (%, bps) 12M19 12M20 (%, bps) 12M19 12M20 (%, bps) Revenues 309.598 187.329 -39,5% 118.266 165.322 39,8% 9.410.775 9.468.800 0,6% Gross Profit 230.146 104.693 -54,5% 63.524 28.646 -54,9% 3.362.269 3.092.171 -8,0% Gross Margin 74,3% 55,9% -1.845 53,7% 17,3% -3.638 35,7% 32,7% -307 SG&A (41.925) (42.398) 1,1% (47.436) (49.757) 4,9% (2.656.794) (2.725.717) 2,6% SG&A / Revenues -13,5% -22,6% -909 -40,1% -30,1% 1.001 -28,2% -28,8% -55 Operating Profit 188.221 62.295 -66,9% 16.088 (21.110) -231,2% 705.475 366.454 -48,1% Operating Margin 60,8% 33,3% -2.754 13,6% -12,8% -2.637 7,5% 3,9% -363 EBITDA 238.307 116.114 -51,3% 12.056 (20.371) -269,0% 1.141.336 828.455 -27,4% EBITDA Margin 77,0% 62,0% -1.499 10,2% -12,3% -2.252 12,1% 8,7% -338
13 Fourth Quarter Results 2020
VIII. F INANCIAL BUSINESS CMR Argentina: Income Statement CMR Argentina 4Q19 4Q20 Var. % Selected Operating Results (Th ARS) Interest income 862.752 522.689 -39,4% Fee and commission income 732.121 654.090 -10,7% Total Income 1.594.873 1.176.779 -26,2% Interest expense (302.265) (65.324) -78,4% Credit risk cost (124.734) 71.209 -157,1% Other expenses (237.786) (191.368) -19,5% Total expenses (664.786) (185.483) -72,1% Gross Profit 930.087 991.296 6,6% Administrative expenses (501.684) (380.975) -24,1% Operating Income 428.404 610.321 42,5% Net income 365.436 (2.074.699) -667,7% Efficiency ratio 47,6% 41,4% 12M19 12M20 Var. % Selected Operating Results (Th ARS) Interest income 2.983.332 2.005.668 -32,8% Fee and commission income 2.204.226 2.115.266 -4,0% Total Income 5.187.558 4.120.933 -20,6% Interest expense (1.432.898) (258.159) -82,0% Provision for loan losses (619.174) (140.242) -77,4% Other expenses (738.307) (599.504) -18,8% Total expenses (2.790.379) (997.906) -64,2% Gross Profit 2.397.180 3.123.027 30,3% Administrative expenses (1.491.650) (1.440.974) -3,4% Operating Income 905.530 1.682.053 85,8% Net income (88.191) (1.891.887) 2045,2% Efficiency ratio 49,5% 44,2% CMR Argentina: Balance sheet & Operational information CMR Argentina dec-19 dec-20 Var. % Selected Balance Sheet Accounts (Th ARS) Loans from customers, gross 4.843.553 3.886.739 -19,8% Allowance for loan losses (294.367) (1.236.243) 320,0% Loans from customers, net 4.549.186 2.650.496 -41,7% Total Assets 6.077.471 5.262.512 -13,4% Total Liabilities 5.005.613 4.257.406 -14,9% Total Equity 1.071.859 1.005.106 -6,2% Total Liabilities + Total Equity 6.077.471 5.262.512 -13,4% Operational information NPL (+90 days) 179.728 114.337 -36,4% Open Accounts (with balance) 384.726 287.306 -25,3% Average Loan (local currency) 12.590 13.528 7,5% Duration (months) 1,4 2,7 15,5% Ratios NPL / Loans from customers, gross 3,7% 2,9% Allowance for loan losses/NPL 1,6 10,8 ROAE -12,3% -91,8% ROAA -1,5% -28,7%
14 Fourth Quarter Results 2020
Banco Falabella: Income Statement
Banco Falabella Chile Banco Falabella Perú Banco Falabella Colombia 4Q19 4Q20 Var. % 4Q19 4Q20 Var. % 4Q19 4Q20 Var. % (Mn CLP) (Th SOL) (Mn COP) Interest income and adjustements 190.950 149.727 -21,6% 232.585 169.303 -27,2% 184.705 158.500 -14,2% Interest expense and adjustements (27.204) (17.676) -35,0% (31.560) (21.059) -33,3% (40.284) (30.522) -24,2% Net interest income and adjustments 163.747 132.051 -19,4% 201.026 148.243 -26,3% 144.421 127.978 -11,4% Fee and commission income 31.217 25.870 -17,1% 73.145 52.566 -28,1% 71.809 62.520 -12,9% Fee and commission expense (21.668) (13.631) -37,1% (30.251) (10.857) -64,1% (16.602) (14.415) -13,2% Net fee and commission income 9.548 12.240 28,2% 42.894 41.710 -2,8% 55.207 48.105 -12,9% Net income from financial operations 3.635 1.332 -63,4% 4.027 5.670 40,8% 1.958 5.102 160,6% Other operating net income 794 715 -9,9% 4.047 (10.249) -353,2% 3.261 1.115 -65,8% Operational Income 177.724 146.337 -17,7% 251.993 185.374 -26,4% 204.848 182.300 -11,0% Provision for loan losses (79.415) 3.169 -104,0% (80.778) (86.772) 7,4% (65.501) (79.117) 20,8% Operating expenses (57.191) (66.959) 17,1% (146.138) (132.679) -9,2% (105.419) (122.662) 16,4% Operating Income 41.118 82.547 100,8% 25.078 (34.076) -235,9% 33.928 (19.479) -157,4% Net Income 33.060 62.206 88,2% 17.602 (22.331) -226,9% 33.520 (10.596) -131,6% Efficiency ratio 32,2% 45,8% 58,0% 71,6% 51,5% 67,3% 12M19 12M20 Var. % 12M19 12M20 Var. % 12M19 12M20 Var. % (Mn CLP) (Th SOL) (Mn COP) Interest income and adjustements 764.610 664.445 -13,1% 918.019 728.162 -20,7% 715.908 700.662 -2,1% Interest expense and adjustements (110.572) (80.712) -27,0% (118.276) (114.044) -3,6% (151.168) (149.601) -1,0% Net interest income and adjustments 654.038 583.733 -10,7% 799.744 614.118 -23,2% 564.741 551.060 -2,4% Fee and commission income 123.961 104.033 -16,1% 281.842 211.299 -25,0% 269.866 238.186 -11,7% Fee and commission expense (84.811) (57.851) -31,8% (128.810) (43.653) -66,1% (60.999) (54.515) -10,6% Net fee and commission income 39.150 46.182 18,0% 153.032 167.646 9,5% 208.867 183.671 -12,1% Net income from financial operations 15.946 15.758 -1,2% 12.011 9.058 -24,6% 10.216 23.161 126,7% Other operating net income 2.703 1.801 -33,4% 27.460 (6.502) -123,7% 5.549 2.414 -56,5% Operational Income 711.837 647.474 -9,0% 992.246 784.320 -21,0% 789.372 760.307 -3,7% Provision for loan losses (243.664) (222.168) -8,8% (279.905) (439.698) 57,1% (168.617) (296.996) 76,1% Operating expenses (222.103) (233.198) 5,0% (590.603) (497.853) -15,7% (412.971) (414.689) 0,4% Operating Income 246.070 192.108 -21,9% 121.737 (153.231) -225,9% 207.785 48.622 -76,6% Net Income 186.434 148.003 -20,6% 84.818 (109.207) -228,8% 138.399 31.146 -77,5% Efficiency ratio 31,2% 36,0% 59,5% 63,5% 52,3% 54,5%
15 Fourth Quarter Results 2020
Banco Falabella: Balance sheet and operacional information8 Banco Falabella Chile Banco Falabella Perú Banco Falabella Colombia dec-19 dec-20 Var. % dec-19 dec-20 Var. % dec-19 dec-20 Var. % Selected Balance Sheet Accounts (Mn CLP) (Th SOL) (Mn COP) Cash and deposits in banks 180.757 183.859 1,7% 373.181 642.199 72,1% 171.058 128.245 -25,0% Trading investments 739.839 1.334.288 80,3% 385.372 434.565 12,8% 181.026 525.682 190,4% Loans from customers, gross 3.911.440 3.282.384 -16,1% 3.327.483 2.694.231 -19,0% 3.809.072 3.744.840 -1,7% Allowance for loan losses (255.009) (215.771) -15,4% (255.243) (287.902) 12,8% (223.926) (320.777) 43,3% Loans from customers, net 3.656.431 3.066.613 -16,1% 3.072.239 2.406.329 -21,7% 3.585.145 3.424.063 -4,5% Total Assets 5.367.978 5.785.721 7,8% 4.415.424 4.005.846 -9,3% 4.240.403 4.436.455 4,6% Deposits 591.640 1.330.566 124,9% 483.305 580.290 20,1% 618.727 897.507 45,1% Time deposits 1.878.148 1.371.380 -27,0% 2.473.297 2.427.891 -1,8% 2.260.969 2.298.415 1,7% Total deposits 2.469.788 2.701.945 9,4% 2.956.602 3.008.182 1,7% 2.879.696 3.195.921 11,0% Other financial liabilities 573.004 374.813 -34,6% 316.114 38.006 -88,0% 286.808 132.151 -53,9% Total Liabilities 4.566.870 4.948.335 8,4% 3.645.538 3.345.057 -8,2% 3.654.909 3.812.153 4,3% Total Equity 801.108 837.386 4,5% 769.886 660.789 -14,2% 585.494 624.302 6,6% Total Liabilities + Total Equity 5.367.978 5.785.721 7,8% 4.415.424 4.005.846 -9,3% 4.240.403 4.436.455 4,6% Operational information NPL (+90 days) 133.425 67.672 -49,3% 95.565 140.307 46,8% 68.443 148.881 117,5% Current, Saving and checking Accounts1.060.605 1.052.738 -0,7% 998.265 1.040.517 4,2% 1.589.220 1.665.549 4,8% Open Accounts (with balance) 2.784.938 2.592.138 -6,9% 1.126.694 915.347 -18,8% 1.086.499 1.008.113 -7,2% Average Loan (local currency) 1.404.498 1.266.284 -9,8% 2.953 2.943 -0,3% 3.505.822 3.714.702 6,0% Duration (months) 5,7 5,7 -0,3% 7,3 8,7 19,0% 12,5 15,8 27,0% ATMs 391 387 -1,0% 173 173 0,0% 66 66 0,0% Branches 193 160 -17,1% 70 60 -14,3% 91 93 2,2% Ratios NPL / Loans from customers, gross 3,4% 2,1% 2,9% 5,2% 1,8% 4,0% Allowance for loan losses/NPL 1,9 3,2 2,7 2,1 3,3 2,2 Basilea 15,5% 15,8% 15,4% 14,1% 10,9% 13,7% ROAE 25,7% 20,8% 11,3% -15,4% 25,8% 4,8% ROAA 3,7% 2,7% 2,0% -2,6% 3,6% 0,7%
Percentage of sales with CMR Card (LTM)9
1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 Chile - Falabella 47,4% 47,5% 47,7% 47,2% 47,7% 49,1% 49,0% 45,5% Chile - Sodimac 26,9% 26,7% 26,4% 26,3% 25,8% 25,6% 23,2% 20,8% Chile - Tottus 20,3% 20,4% 20,5% 18,7% 18,8% 17,9% 16,2% 15,2% Peru - Falabella, Sodimac, Tottus 36,5% 36,7% 37,1% 37,4% 36,9% 35,7% 34,2% 33,1% Colombia - Falabella y Sodimac 23,4% 23,4% 23,3% 25,7% 23,5% 23,1% 23,0% 22,0% Argentina - Falabella y Sodimac 21,2% 19,8% 17,6% 14,8% 15,1% 15,2% 16,2% 15,4%
8 ROA and ROE ratios in Banco Falabella Chile considers UDM profit corresponding to the integration of the Bank with CMR. 9 Percentage of sales with CMR: is the sale through the card with respect to the total sale of each business.
16 Fourth Quarter Results 2020
IX. C ONSOLIDATED FINANCIAL STATEMENTS For the period For the period ended as of ended as of 31-dic-20 31-dic-19 TH CLP TH CLP Statement of Income Non-banking Business Revenue from continuing operations 8.281.049.949 8.053.582.835 Cost of sales (5.790.733.690) (5.433.070.250) Gross Profit 2.490.316.259 2.620.512.585 Distribution costs (191.796.601) (121.283.216) Administrative expenses (1.988.674.117) (1.966.962.395) Other expenses, by function (111.787.544) (141.899.290) Other gains (losses) (45.064.092) 20.796.536 Financial income 67.907.001 27.400.950 Financial expenses (254.510.949) (209.910.800) Equity interest in profits (losses) of associates accounted for using the equity method 3.579.174 336.784
Foreign currency translation (29.085.779) (22.065.192) Income from indexation units (28.678.051) (21.944.001) Profit (Loss), before Taxes (87.794.699) 184.981.961 Income tax expense (5.243.074) (62.097.989) Profit (Loss) from Non-banking Business (93.037.773) 122.883.972 Banking Services (Presentation) Interest and indexation revenue 978.716.654 1.108.745.967 Interest and indexation expenses (138.045.499) (183.119.743) Net Income from Interest and Indexation 840.671.155 925.626.224 Fee revenue 206.908.355 245.043.799 Fee expenses (86.761.814) (116.057.421) Net Fee Income 120.146.541 128.986.378 Net income from financial operations 26.894.489 17.187.950 Net exchange gains (losses) (3.198.974) 4.289.403 Other operating income 2.125.477 3.402.024 Provision for loan losses (384.783.080) (337.736.214) Total Operating Income, net 601.855.608 741.755.765 Employee remunerations and expenses (139.733.434) (149.509.710) Administrative expenses (206.582.607) (197.819.946) Depreciation and amortization (37.506.177) (34.996.501) Other operating expenses (49.636.946) (44.322.854) Total Operating Expenses (433.459.164) (426.649.011) Operating Income 168.396.444 315.106.754 Income from equity method investments in companies 708.890 834.977 Income before Income Taxes 169.105.334 315.941.731 Income tax expense (39.403.119) (82.649.229) Profit (loss) from Banking Business 129.702.215 233.292.502 Profit (Loss) 36.664.442 356.176.474 Profit (loss), Attributable to: Owners of the parent 30.758.319 295.473.530 Non-controlling interests 5.906.123 60.702.944 Profit (Loss) 36.664.442 356.176.474 Earnings (loss) per share Basic earnings (loss) per share Basic earnings (loss) per share from continuing operations 0,010 0,120 Basic Earnings (Loss) per Share 0,010 0,120 Diluted Earnings (Loss) per Share Diluted earnings (loss) per share from continuing operations 0,010 0,120 Diluted Earnings (Loss) per Share 0,010 0,120
17 Fourth Quarter Results 2020
Balance Sheet 31-dic-20 31-dic-19 TH CLP TH CLP Assets Non-banking Businesses Current assets Cash and cash equivalents 1.216.193.920 299.965.353 Other financial assets 41.163.435 14.577.323 Other non-financial assets 103.954.106 97.397.454 Trade and other accounts receivable 416.572.521 503.747.308 Accounts receivable from related parties 33.374.856 44.176.657 Inventory 1.161.244.547 1.332.853.655 Tax assets 59.292.980 117.161.072 Total of current assets different from those assets or disposal groups classified as held for sale or as held for distribution to owners 3.031.796.365 2.409.878.822
Non-current assets or disposal groups classified as held for sale or as held for distribution to owners 29.095.216 17.371.457
Non-current assets or disposal groups classified as held for sale or as held for 29.095.216 17.371.457 distribution to owners Total Current Assets 3.060.891.581 2.427.250.279 Non-current Assets Other financial assets 195.004.590 204.578.162 Other non-financial assets 91.649.259 103.842.937 Accounts receivable from clients 5.594.155 11.126.047 Accounts receivable to related parties 13.841.640 - Investments accounted for using the equity method 194.146.313 191.478.678 Intangible assets other than goodwill 340.551.306 342.682.434 Goodwill 607.108.378 649.149.802 Property, plant and equipment 3.388.090.202 3.698.385.781 Investment properties 3.315.319.472 3.235.069.703 Non-current tax assets 16.538.022 17.420.067 Deferred tax assets 233.685.099 212.284.708 Total Non-current Assets 8.401.528.436 8.666.018.319 Total Assets – Non-banking Business Banking Services Assets (Presentation) Cash and bank deposits 336.805.631 304.355.220 Transactions with settlement in progress 273.561.309 80.926.931 Financial assets held for trading 450.773.778 179.336.474 Retro-purchase agreements and securities loans 15.016.800 - Financial derivative contracts 640.330.966 411.178.302 Loans and accounts receivable from clients 4.304.988.052 5.219.216.732 Available for sale instruments 1.071.527.684 681.030.022 Investments in companies 3.134.482 3.721.554 Intangibles 76.525.371 78.118.482 Property, plant and equipment 58.890.879 72.907.960 Current taxes 13.217.364 12.694.107 Deferred taxes 66.492.338 48.804.829 Other assets 144.844.995 148.111.627 Total Bank Services Assets 7.456.109.649 7.240.402.240 Total Assets 18.918.529.666 18.333.670.838
18 Fourth Quarter Results 2020
31-dic-20 31-dic-19 TH CLP TH CLP
Net Equity and Liabilities Non-banking Business Other financial liabilities 530.542.382 443.932.448 Leasing liabilities, current 79.955.074 82.881.467 Trade and other accounts payable 1.145.100.927 1.109.205.979 Accounts payable to related parties 18.084.369 17.092.382 Other current provisions 26.052.956 23.758.134 Current tax liabilities 22.623.827 30.806.089 Employee benefits provisions 145.574.678 149.449.341 Other non-financial liabilities 194.908.389 165.561.711 Total Current Liabilities 2.162.842.602 2.022.687.551 Non-current Liabilities Other financial liabilities 3.229.990.163 2.813.299.285 Leasing liabilities, non-current 853.592.987 900.374.562 Trade and other accounts payable, non-current 1.074.634 1.920.686 Other long-term provisions 8.425.778 9.590.858 Deferred tax liabilities 591.807.294 613.982.006 Employee benefits provision 43.599.751 55.968.813 Other non-financial liabilities 50.636.869 55.025.873 Total Non-current Liabilities 4.779.127.476 4.450.162.083 Total Non-banking Business Liabilities 6.941.970.078 6.472.849.634 Banking Services Liabilities (Presentation) Deposits and other demand liabilities 1.549.896.493 802.372.070 Transactions with settlement in progress 265.976.430 73.993.355 Time deposits and other term deposits 2.421.271.205 3.027.251.232 Financial derivative contracts 587.247.845 458.352.017 Due to banks 341.118.713 547.171.749 Debt instruments issued 205.447.491 263.878.200 Other financial obligations 74.735.593 89.407.460 Leasing liabilities 27.237.056 35.524.567 Deferred taxes 13.390.117 2.973.670 Provisions 31.025.702 32.017.182 Other liabilities 473.957.252 295.267.626 Total Banking Services Liabilities 5.991.303.897 5.628.209.128 Total Liabilities 12.933.273.975 12.101.058.762 Net Equity - - Issued capital 919.419.389 919.419.389 Retained earnings 4.459.532.797 4.439.393.886 Share premium 93.482.329 93.482.329 Own shares in portfolio (43.405.118) (43.405.118) Other reserves (407.289.735) (149.943.365) Equity attributable to owners of the parent 5.021.739.662 5.258.947.121 Non-controlling interests 963.516.029 973.664.955 Total Equity 5.985.255.691 6.232.612.076 Total Equity and Liabilities 18.918.529.666 18.333.670.838
19 Fourth Quarter Results 2020
31-dic-20 31-dic-20 TH$ TH$ Statement of cash flows Cash flows provided by (used in) operating activities Non-banking Business (Presentation) Classes of proceeds from operating activities Proceeds from sale of goods and providing services 9.938.936.822 9.662.676.818 Classes of payments Payment to suppliers for supplying goods and services (7.846.998.881) (7.590.559.336) Payments to and on account of employees (1.125.689.570) (1.089.947.524) Income taxes refunded (paid) 13.252.206 (106.184.750) Other cash inflows (outflows) (197.870.348) (93.396.237) Subtotal net cash flows provided by Non-banking Business operating activities 781.630.229 782.588.971 Banking Services (Presentation) Consolidated net income (loss) for the period 129.702.215 233.292.502 Charges (credits) to income that do not involve cash movements: Depreciation and amortization 37.506.177 34.996.501 Credit risk provision 467.908.202 410.002.119 Net profit from equity method investments (708.890) (834.977) Other charges that do not involve significant cash flow movements 39.403.119 82.649.230 Net change in interest, indexations and fees accrued on assets and liabilities 60.263.614 2.315.390 Changes in assets and liabilities affecting operating cash flow: Decrease (increase) in loans and accounts receivable from clients 399.516.167 (979.583.572) Net decrease (increase) in instruments held for trading (35.624.166) 17.132.815 Increase in deposits and other demand obligations 747.524.423 154.943.734 (Decrease) increase in deposits and other time deposits (620.906.874) 466.514.110 Decrease in obligations with banks 19.423.687 75.986.826 Other use of cash 172.698.136 (39.500.188) Subtotal net cash flows provided by Banking Services operating activities 1.416.705.810 457.914.490 Net cash flows provided by operating activities 2.198.336.039 1.240.503.461 Cash flows provided by (used in) investing activities Non-banking Business (Presentation) Cash flows from loss of control of subsidiaries or other businesses 4.209.950 1.898.806 Cash flows used to obtain control of subsidiaries or other businesses (18.421.834) - Contributions made to related companies (29.275.407) (24.048.504) Loans to related parties (2.047.852) (8.247.990) Proceeds from disposal of property, plant and equipment 1.538.896 7.641.469 Additions to property, plant and equipment (279.388.984) (367.167.794) Purchases of intangible assets (49.918.932) (65.317.189) Amounts from sales of intangible assets 13.366.043 - Additions to other long-term assets (123.383.685) (183.581.724) Dividends received 16.186.707 10.881.230 Interest received 24.914.283 11.556.512 Other cash inflows (outflows) (6.708.836) 2.185.044 Subtotal net cash flows used in investing activities in the Non-banking Business (448.929.651) (614.200.140) Banking Services (Presentation) Net (Increase) decrease in investment securities available for sale (65.414.091) 148.697.225 Additions to property, plant and equipment (33.982.056) (30.574.836) Dividends received 247.434 638.601 Other sources of cash (84.180) 1.581.946 Subtotal net cash flows used in Banking Services investing activities (99.232.893) 120.342.936 Net cash flows used in investing activities (548.162.544) (493.857.204) Cash flows provided by (used in) financing activities Non-Banking Services (Presentation) Amounts from the issuance of shares 4.959.484 14.951.189 Payments for selling the entity's shares - 1.301.278 Proceeds from long-term loans 809.818.703 199.154.400 Proceeds from short-term loans 1.898.099.783 1.070.683.908 Total proceeds from loans 2.707.918.486 1.269.838.308 Payment of loans (2.044.888.397) (1.517.463.862) Dividends paid (108.030.689) (212.541.867) Interest paid (186.551.639) (148.775.186) Other cash inflows (outflows) 3.483.996 16.563.489 Subtotal net cash flows provided by (used in) Non-banking Business financing activities 376.891.241 (576.126.651) Banking Services (Presentation) Retrieval of letters of credit (9.934.960) (10.071.569) Bond Issuance and other liabilities (payment) (58.430.709) (4.239.041) Borrowing from loans (payment) (225.476.722) (39.381.186) Other cash outflows (4.736.907) 15.902.077 Subtotal net cash flows provided by (used in) Banking Services financing activities (298.579.298) (37.789.719) Net cash flows used in financing activities 78.311.943 (613.916.370) Net decrease in cash and cash equivalents, before the effect of changes in the exchange rate 1.728.485.438 132.729.887 Effects of changes in the exchange rate on cash and cash equivalents Effects of changes in the exchange rate on cash and cash equivalents (103.891.485) 15.640.299 Net decrease in cash and cash equivalents 1.624.593.953 148.370.186 Cash and cash equivalents at beginning of period 837.781.863 689.411.677 Cash and cash equivalents at end of period 2.462.375.816 837.781.863 20 Fourth Quarter Results 2020
Cash Flow – Chile operations (MMCLP$)
Department Home December 2020 Supermarkets Banco Falabella Plaza S.A. Stores Improvement Cash flow from operating activities 64.080.590 356.621.062 101.303.303 1.281.936.145 86.438.725 Cash flow from investing activities (239.819.763) (55.386.097) (100.000.856) (18.070.072) (98.324.365) Cash flow from financing activities 165.688.904 (276.487.487) (3.397.355) (584.782.980) 181.180.785 Increase (decrease) in cash and cash equivalents (10.050.269) 24.747.478 (2.094.908) 679.083.093 169.295.145 Impact of exchange rate differences on cash and cash equivalents (443.780) 1.336.457 (126.809) 0 (2.503.323) Cash and cash equivalents at the beginning of the period 55.899.858 22.797.653 13.473.556 414.080.602 35.722.612 Cash and cash equivalents at the end of the period 45.439.183 48.881.588 11.250.913 1.093.163.695 202.514.434
Department Home December 2019 Supermarkets Banco Falabella Plaza S.A. Stores Improvement Cash flow from operating activities 41.385.229 174.016.242 67.950.807 348.486.100 222.937.457 Cash flow from investing activities (122.535.891) (91.406.108) (41.029.165) 167.140.337 (78.178.426) Cash flow from financing activities 79.230.621 (83.223.493) (28.504.514) (354.705.011) (160.762.414) Increase (decrease) in cash and cash equivalents (1.920.041) (613.359) (1.582.872) 160.921.426 (16.003.383) Impact of exchange rate differences on cash and cash equivalents 396.911 (3.087.154) (174.147) 0 170.404 Cash and cash equivalents at the beginning of the period 57.456.963 26.498.167 15.210.971 253.159.175 51.555.592 Cash and cash equivalents at the end of the period 56.260.773 22.797.654 13.473.556 414.080.601 35.722.613
Cash Flow – International Operations (MMCLP$)
December 2020 Peru Colombia Argentina Brazil
Cash flow from operating activities 468.385.109 52.526.891 11.523.694 18.135.677 Cash flow from investing activities (116.845.759) (96.034.593) (14.332.493) (6.135.140) Cash flow from financing activities (115.575.423) 59.893.326 20.763.119 21.101.954 Increase (decrease) in cash and cash equivalents 235.963.927 16.385.624 17.954.320 33.102.491 Impact of exchange rate differences on cash and cash equivalents (72.192.738) (5.328.221) (10.741.744) (10.740.586) Cash and cash equivalents at the beginning of the period 166.983.567 85.173.726 8.127.249 3.896.781 Cash and cash equivalents at the end of the period 330.754.756 96.231.129 15.339.825 26.213.104
December 2019 Peru Colombia Argentina Brazil
Cash flow from operating activities 336.864.163 (102.914.131) 76.232.011 (5.026.695) Cash flow from investing activities (173.984.433) (13.231.340) (3.152.035) (11.724.430) Cash flow from financing activities (152.418.315)0 148.956.2270 (67.488.599)0 17.751.6180 Increase (decrease) in cash and cash equivalents 10.461.415 32.810.756 5.591.377 1.000.493 Impact of exchange rate differences on cash and cash equivalents 11.020.1480 7.229.5290 (1.098.721)0 141.3180 Cash and cash equivalents at the beginning of the period 145.502.0080 45.133.4400 3.634.5930 2.754.9700 Cash and cash equivalents at the end of the period 166.983.570 85.173.725 8.127.249 3.896.781
21 Fourth Quarter Results 2020
X. ANN EXE S
A. G ROSS MERCHANDISE VOLUME (GMV ) ( MM$ )
GMV 4Q19 % Total 4Q20 % Total Var % 2020 Retail (1P) 273.448 76% 546.292 78% 100% 1.828.398 Deparment stores 219.697 61% 421.056 60% 92% 1.402.945 Home improvement 43.128 12% 102.026 14% 137% 347.239 Supermarkets 10.623 3% 23.210 3% 118% 78.214 Marketplace (3P) 84.329 24% 158.397 22% 88% 542.520 Total GMV 357.777 100% 704.688 100% 97% 2.370.917
GMV by country 4Q19 % Total 4Q20 % Total Var % 2020 Chile 184.010 51% 409.101 58% 122% 1.407.947 Perú 70.155 20% 139.087 20% 98% 430.196 Colombia 54.575 15% 91.216 13% 67% 302.387 Others 49.036 14% 65.285 9% 33% 230.387 Total GMV by country 357.777 100% 704.688 100% 97% 2.370.917
B. G ROWTH IN NOMINAL SALES BY EQUIVALENT LOCAL – SAME STORE SALES (SSS) 10, 11, 12, 13
1Q18 2Q18 3Q18 4Q18 2018 1Q19 2Q19 3Q19 4Q19 2019 1Q20 2Q20 3Q20 4Q20 2020 Chile Department Stores -4,9% 0,2% -7,2% -3,3% -3,6% -3,0% -1,2% -3,5% -3,6% -2,8% N/A N/A -5,0% 22,7% N/A Home Improvement 4,6% 5,8% 1,9% -2,0% 2,4% -1,7% -4,2% -0,7% -6,1% -3,1% -5,1% -9,7% 22,6% 33,7% 6,5% Supermarkets 1,7% 1,9% 2,6% -1,2% 1,1% 1,5% -2,4% -1,2% -0,9% -0,8% 5,3% 7,1% 13,3% 25,9% 12,1% Peru Department Stores 12,1% 8,4% 3,8% 0,3% 5,4% 0,3% -4,4% 4,6% -2,8% -0,9% N/A N/A -26,2% -1,2% N/A Home Improvement 6,0% 1,0% 2,9% 3,7% 2,6% 1,7% 3,4% 2,1% -0,7% 1,5% N/A N/A 15,3% 11,8% N/A Supermarkets 4,8% 10,3% 6,1% 3,5% 6,0% 3,9% -0,5% 2,7% 2,5% 2,2% 4,9% N/A 19,7% 17,7% N/A Colombia Department Stores 0,6% 11,9% 15,0% 9,9% 10,5% 9,8% 9,0% 9,5% 8,6% 9,1% N/A N/A -31,4% -21,5% N/A Home Improvement -0,9% 4,6% 3,8% 7,7% 3,9% 7,8% 8,1% 8,1% 8,2% 8,1% N/A N/A 1,2% 15,9% N/A Argentina Department Stores 38,3% 36,7% 30,7% 27,2% 32,4% 20,2% 23,4% 36,1% 56,2% 35,8% N/A N/A 35,7% 22,4% N/A Home Improvement 25,6% 23,4% 26,4% 18,5% 23,2% 18,1% 13,5% 16,6% 36,8% 22,2% N/A N/A -8,9% 30,0% N/A Brazil Home Improvement 7,9% -1,3% -2,0% 8,8% 3,1% 8,1% 18,2% 11,8% 6,6% 10,8% -3,6% 19,5% 36,9% 30,5% 21,4%
10 All growths are in nominal terms and have been calculated in each country's local currency. In Argentina they are net of the gross income tax (IIBB) 11 Nominal sales growth per location incorporates online channel sales (where such operation exists). Subsequently, as a result of the Covid-19 pandemic, online sales are excluded from the analysis. 12 The SSS calculation does not consider stores that have significant changes, with the comparable period, in their sales area, either due to remodeling, expansions, reductions or closings. 13 Where it says "N/A", means that the metric is not applicable, considering the closure of physical stores during the second half of March due to the health emergency in the region.
22 Fourth Quarter Results 2020
C. # OF STORES AND SALES AREA OF RETAIL FORMATS 14, 15 December 2019 December 2020 Sales Area (m²) Stores (#) Sales Area (m²) Stores (#) Chile Department Stores 328.169 47 320.408 46 Home Improvement 767.680 89 760.980 85 Supermarkets 224.901 69 201.552 67 Perú Department Stores 173.415 29 187.905 30 Home Improvement 376.265 55 385.217 56 Supermarkets 264.368 77 274.000 81 Colombia Department Stores 176.330 25 189.589 26 Home Improvement 386.256 40 386.256 40 Argentina Department Stores 56.890 10 34.289 6 Home Improvement 94.073 9 84.818 8 Brasil Home Improvement 172.112 53 174.279 53 Uruguay Home Improvement 24.849 3 24.849 3 México Home0 Improvement 57.209 5 65.628 6 Total Stores 3.102.516 511 3.089.770 507 0 0 0 0 0
D. # OF SHOPPING CENTERS AND LEASABLE AREA OF REAL STATE OPERATORS 16, 17
December 2019 December 2020 GLA (m²) Shopping Malls (#) GLA (m²) Shopping Malls (#) Chile Mallplaza 1.378.000 17 1.381.264 17 Open 215.000 9 212.152 9 Peru Mallplaza 202.000 3 269.000 4 Open 317.000 11 326.433 11 Colombia Mallplaza0 123.000 3 164.207 4 Total Real State 2.235.000 43 2.353.055 45 0 0 0 0 0
14 The sales area includes the checkout line. In the case of Tottus, it represents approximately 8% of the surface. This definition may differ from how it is measured by other market players and has implications for sales/m2 comparison. 15 Since 2Q20, excludes Stand Alone stores of own brands (Crate & Barrel in Peru and Colombia). 16 Falabella, through its subsidiaries, also owns approximately 1,000,000 m2 of additional leasable space in free standing locations of Falabella, Sodimac, Tottus, Maestro and others. 17 Open considers Power Centers and Shopping Centers (locations where there are two anchor stores and smaller premises) different from those operated by Mallplaza. It does not consider Autoplaza as a separate shopping center.
23 Fourth Quarter Results 2020
E. D EBT MATURITY PROFILE ( M M $ ) 1.691.867
783.234
438.398 394.365 326.053
71.414
2021 2022 2023 2024 2025 2026+
Total Consolidated Financial Debt (excluding banking operations): MM$ 3.705.331
F. A V E R A G E COLLECTION PERIOD 18, AVERAGE PAYMENT PE RIOD A N D D A Y S OF INVENTORY 19 Chile Dep. Stores Home Improv. Supermarkets Plaza S.A. 4Q19 4Q20 4Q19 4Q20 4Q19 4Q20 4Q19 4Q20 Average Collection Period 14,3 11,3 22,5 12,9 17,2 8,5 48,0 67,0 Average Payment Period 48,2 50,5 43,2 41,9 54,6 40,6 NM NM Days of inventory 90,8 69,6 80,6 46,2 53,4 36,8 NM NM
Operaciones Internacionales 20 Peru Argentina Colombia Brazil 4Q19 4Q20 4Q19 4Q20 4Q19 4Q20 4Q19 4Q20 Average Collection Period 5,1 2,6 13,4 22,8 6,1 3,2 50,3 52,7 Average Payment Period 53,3 51,8 65,1 112,3 57,6 55,4 79,0 99,3 Days of inventory 85,7 61,7 62,5 119,4 74,4 71,5 112,4 90,1
18 Collection days do not include accounts receivable from retail formats (department stores, home improvement and supermarkets) with Promotora CMR 19 Average collection days (does not include Plaza S.A.): Commercial Debtors and Other Accounts Receivable, Current (net) * 90 / Ordinary Income Average collection for Plaza S.A. corresponds to the days of collection. Average payment: Commercial Creditors and Other Accounts Payable, Current * 90 / Cost of sales. Inventory Turnover: Inventories (net) * 90 / Cost of sales 20 Indicators include retail operations only, except Peru, which includes the two Maestro real estate companies.
24 Fourth Quarter Results 2020
G. C ONSOLIDATED RESULTS AS OF DECEMBER 2020
Consolidated Income Statement 4Q20 (MM$)
4Q19 % Rev. 4Q20 % Rev. Var % Revenues of Non-Banking Operations 2.251.145 2.717.582 20,7% Revenues of Banking Operations 349.362 268.742 -23,1% Total Revenues 2.600.507 100,0% 2.986.324 100,0% 14,8% COGS of Non-Banking Operations (1.501.930) -57,8% (1.812.383) -60,7% 20,7% COGS of Banking Operations (182.501) -7,0% (75.925) -2,5% -58,4% Gross Profit 916.076 35,2% 1.098.016 36,8% 19,9% SG&A Expenses (738.999) -28,4% (749.928) -25,1% 1,5% Operational Income 177.077 6,8% 348.088 11,7% 96,6% Depreciation + Amortization 110.836 4,3% 115.181 3,9% 3,9% EBITDA 287.913 11,1% 463.269 15,5% 60,9% Other Income / (Expenses) 8.522 (48.988) -674,8% Net Financial Income / (Cost) (58.614) (86.507) 47,6% Profit / (Loss) in Associates 1.089 7.437 582,9% Exchange Rate Differences (2.470) (1.267) -48,7% Non-Operating Profit (51.473) -2,0% (129.325) -4,3% 151,2% Profit Before Tax Expenses 125.604 4,8% 218.763 7,3% 74,2% Income Tax (33.602) (70.394) 109,5% Minority Interest (13.157) (10.075) -23,4% Net Profit / (Loss) 78.845 3,0% 138.294 4,6% 75,4%
Consolidated Income Statement 12M20 (MM$)
12M19 % Rev. 12M20 % Rev. Var % Revenues of Non-Banking Operations 8.053.583 8.281.050 2,8% Revenues of Banking Operations 1.357.192 1.187.750 -12,5% Total Revenues 9.410.775 100,0% 9.468.800 100,0% 0,6% COGS of Non-Banking Operations (5.433.070) -57,7% (5.790.734) -61,2% 6,6% COGS of Banking Operations (615.436) -6,5% (585.895) -6,2% -4,8% Gross Profit 3.362.269 35,7% 3.092.171 32,7% -8,0% SG&A Expenses (2.656.794) -28,2% (2.725.717) -28,8% 2,6% Operational Income 705.475 7,5% 366.454 3,9% -48,1% Depreciation + Amortization 435.861 4,6% 462.001 4,9% 6,0% EBITDA 1.141.336 12,1% 828.455 8,7% -27,4% Other Income / (Expenses) 20.797 (45.064) -316,7% Net Financial Income / (Cost) (204.454) (215.282) 5,3% Profit / (Loss) in Associates 1.172 4.288 265,9% Exchange Rate Differences (22.065) (29.086) 31,8% Non-Operating Profit (204.550) -2,2% (285.144) -3,0% 39,4% Profit Before Tax Expenses 500.925 5,3% 81.310 0,9% -83,8% Income Tax (144.747) (44.646) -69,2% Minority Interest (60.704) (5.906) -90,3% Net Profit / (Loss) 295.474 3,1% 30.758 0,3% -89,6%
25 Fourth Quarter Results 2020
1. Revenues
During 4Q20, the consolidated revenues of the Falabella group amounted to CLP$ 2,986,324 million, which represents a growth of 14.8% compared to the previous year. The variation is mainly explained by higher sales in the Retail formats, highlighting mainly the operations in Chile of Home Improvement, Department Stores and Supermarkets. In Chile, sales of retail formats grew 43.0% in the quarter, resulting from a greater dynamism in consumption, driven by withdrawals from individual pension fund accounts, accompanied by strong growth in online sales of 122%, which represents 22% of total sales. In particular, the Department Stores format grew by 41.0%, despite the sanitary restrictions that affected the normal operation of the stores, accompanied by a 119% YoY growth in online sales. For its part, Home Improvement achieved a positive variation of 45.5% compared to 4Q19 and a growth in online sales of 152% YoY. Supermarkets reported a 40.8% YoY growth, despite having 3 fewer stores since October 2019. Banco Falabella, on the other hand, showed a 20.9% drop in revenue in the quarter, mainly explained by the decrease 16.1% annual in the loan portfolio. In Peru, consolidated revenues grew 7.4% in 4Q20. The above, explained by the growth in Supermarkets of 17.2% (+25.9% in local currency) compared to the previous year, followed by Home Improvement with a growth of 11.6% YoY (+18.7% in local currency), and, to a lesser extent, Department Stores with 7.7% YoY (+16,1% in local currency). At the country level, the online channel showed an increase of 98% YoY. Banking Operations in Peru reported a 31.7% drop (expressed in local currency) due to lower gross loans with a variation of 19.0% YoY. In Colombia, revenues decreased compared to the fourth quarter of last year, with a variation of -8.6%. The Department Stores format reported a 6.2% YoY drop (+1.7% in local currency), accompanied by a 67% YoY growth in the format total online sales. Additionally, the Bank decreased 14.5% (expressed in local currency) in the context of lower activity. Argentina decreased 57.6% during 4Q20, compared to the same period of the previous year. This is explained by the closure of five stores during the quarter and the devaluation of the local currency, which impacted with a drop in sales of 59.0% (-7.2% in local currency) in Department Stores and a drop of 44,6% in Home Improvement (+18.5% in local currency). In Brazil, sales decreased 0.2% in the quarter compared to the same period last year explained by currency depreciation (+29.7% in local currency), sustained by the performance of physical stores and an increase in sales in the online channel of 222% YoY.
Analysis of the full year results for the period ended on December 2020 Revenues grew 0.6% compared to the previous year, reaching CLP$ 9,468,800 million. The increase is explained by the good performance of Supermarkets and Home Improvement, mainly offset by a decrease in revenues from the Banking business due to lower loans, as well as lower revenues at Shopping Centers and Department Stores, which were strongly affected by operating restrictions based on of the pandemic throughout the year. In Chile, revenues from retail formats during the year grew 9.2%, mainly driven by sales in Supermarkets with 15.5% increase YoY, followed by Home Improvement with 9.4% YoY and finally 5.6% YoY in Department Stores. Revenues from the Banking business decreased 13.6% YoY associated with a lower generation of financial revenues as a result of lower loans. In Peru, revenues increased 1.1%, mainly explained by the performance of Supermarkets with a positive variation of 30.5% YoY (+23,0% in local currency), offset by the strict limitations on the operation of both the physical and online channels sustained in the country, mainly during the second quarter of the year which hit the Department Store and Home Improvement formats. In Colombia, accumulated revenue reported a 5.4% drop, mainly explained by the restrictions imposed on the opening of stores during the months of April, May and June, affecting the retail formats present in the country along with a decrease of the financial business. In Argentina, for the twelve months of the year, the country reported a decrease of 37.2% at the level of income, mainly explained by the devaluation of the currency and the closing of stores during the pandemic in the middle of the year, added to the closing stores definitively in the last quarter. The Department Stores format faced a 37.2% decrease compared to the previous year (- 7.1% in local currency), while Home Improvement reported a decrease of 32.2% (+0.4% in local currency). local). Regarding Financial Services, CMR's revenues decreased 22.1% in local currency, explained by lower levels of loans. Finally, Brazil reported a 4.7% YoY growth in sales (+22.4% in local currency).
26 Fourth Quarter Results 2020
2. Operational Results
The company's operating result during the fourth quarter reached CLP$ 348,088 million, which represents a 96.6% growth compared to the 4Q19 result. This, mainly explained by a higher gross margin contribution from retail formats. In Chile, the retail formats reported a positive operating result of CLP$ 157,818 million, an increase compared to the operating result of CLP$ 1,087 million of the same quarter of the previous year. The foregoing associated with the better performance of the three formats during the quarter. Banco Falabella Chile reported an operating result during the quarter of CLP$ 82,546 million, reflecting an increase of 100.8% compared to the same quarter of the previous year. This is mainly explained by the improvement in gross margin associated with the decrease in risk costs, despite the contraction in revenues. Mallplaza achieved a positive operating result of CLP$ 27,271 million during the quarter, a negative variation of 13.8% YoY. This is due to a lower gross profit associated with not collecting rents from business partners who were unable to operate normally in shopping centers, given the sanitary situation. The Peruvian operations showed an operating result of CLP$ 58,270 million during the quarter, with a variation of -13.4%, mainly explained at the country level by a lower gross profit, despite a higher dilution of administrative and selling expenses. This was driven by a lower contribution from Shopping Centers and Banco Falabella Peru, which could not be offset by the performance of Sodimac Peru and Falabella Peru. Colombia reported a positive operating result in the quarter of CLP$ 14,212 million, associated with the C-19 pandemic that affected gross profit in conjunction with the 4.6% YoY increase in SG&A. Likewise, the Bank was affected by an increase in risk costs, as a consequence of an increase in provisions. Brazil reported a positive operating result of CLP$ 3,726 million, representing growth compared to the negative operating result during the same period of the previous year. This is driven by higher gross profit and lower SG&A expenses. Analysis of the 12 months accumulated as of December 2020 In 2020, the operating result reached CLP$ 366,454 million, a 48.1% YoY drop, which is explained by a drop in Shopping Centers, Financial Services and Department Stores, not being offset by the better performance of Home Improvement and Supermarkets. The financial business in Chile reached an operating result of CLP$ 192,108 million, equivalent to a 21.9% drop, mainly due to lower loans compared to last year. Regarding the retail businesses, they reported CLP$ 68,293 million mainly explained by the negative impact on Department Stores as a result of sanitary restrictions. Mallplaza, reflected an operating result of CLP$ 62,295 million, a decrease of 66.9% explained by the lower rental collection in the context of the pandemic. Peru showed an operating result of CLP$ 41,301 million, which represents a negative variation of 77.5% compared to 2019. Explained by a lower contribution of the retail formats, Department Stores and Home Improvement, added to a fall in Banco Falabella and Shopping Centers. The above was not offset by the greater contribution of the Supermarkets format during the year. Colombia presented a positive operating result of CLP$ 12,513 million, which corresponds to a decrease of 81.7% YoY, due to a lower gross profit and a lower dilution of SG&A. Finally, Brazil achieved a positive operating result of CLP$ 7,984 million, reversing the negative operating result of CLP$ 11,086 million reported last year, due to higher sales and lower costs (in a context of devaluation of the local currency, compared to the Chilean peso).
3. Non-Operating Result & Net Income The non-operating result presented a loss of CLP$ 129,325 million for the quarter, a figure 151.2% lower than the same period in 2019. The above, explained by “other gains (losses)” where an extraordinary loss of CLP$ 60,886 million was recorded associated with to the deterioration in the value of our operations in Argentina (Department Stores, Home Improvement and Financial Services). The adjustment made to the book value of these assets takes place in the context of the closing process of some stores and the process of evaluating strategic alternatives to reduce exposure to that market. Excluding the extraordinary loss, Net Income for the period would have reached CLP$ 199,180 million (an increase of 153% YoY).
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Net income reached CLP$ 138,294 million during the fourth quarter 2020, 75.4% higher than the same period of the previous year. This, as a consequence of higher net income from the retail businesses in Chile and Banco Falabella. During the 12 months to December 2020, the non-operating result reached CLP$ -285,144 million, a figure 39.4% lower than the previous year. During the same period, the consolidated net profit reached CLP$ 30,758 million, which represents a drop of 89.6% compared to the previous year, mainly explained by lower profits in shopping centers, Banco Falabella Peru and Banco Falabella Chile, which could not be offset due to higher profits in Home Improvement Chile, Supermarkets in Chile and Home Improvement Brazil.
4. Balance Sheet As of December 31st of 2020 (MM$) 31-dec-19 31-dic-20 Var % Current Assets - Non Banking Business 2.427.250 3.060.892 26,1% Non Current Assets - Non Banking Business 8.666.018 8.401.528 -3,1% Total Assets - Non Banking Business 11.093.268 11.462.420 3,3% Total Assets - Banking Business 7.240.402 7.456.110 3,0% Total Assets 18.333.670 18.918.530 3,2%
Current Liabialities - Non Banking Business 2.022.688 2.162.843 6,9% Non Current Liabialities - Non Banking Business 4.450.162 4.779.127 7,4% Total Liabialities - Non Banking Business 6.472.850 6.941.970 7,2% Total Liabialities - Banking Business 5.628.208 5.991.304 6,5% Total Liabialities 12.101.058 12.933.274 6,9% Total Equity 6.232.612 5.985.256 -4,0% Total Liabilities + Equity 18.333.670 18.918.530 3,2%
Non-banking current assets grew by CLP$ 633,642 million compared to December 2019, mainly driven by the increase in cash and cash equivalents, stemming from the increase in current and non-current financial liabilities for credits obtained from banking institutions and for the issuance of debt from long term. On the other hand, non-bank non-current assets decreased by CLP$ 264,490 million, mainly explained by the decrease in property, plant and equipment (related to FX translation to account for the depreciation of foreign currencies) and partially offset by an increase in investment properties. In the case of banking businesses, total assets increased by CLP$ 215,708 million compared to December 2019, mainly due to the decrease in credits and accounts receivable from customers. This decrease is partially offset by the increase in investment instruments available for sale and instruments for trading. As a result, the total consolidated assets increased by CLP$ 584,860 million.
Non-bank current liabilities increased by CLP$ 140,155 million compared to December 2019, explained mostly by the increase in other current financial liabilities, associated with the increase in loans obtained from banking institutions. In turn, non-bank non- current liabilities increased by CLP$ 328,965 million, mainly explained by the increase in other non-current financial liabilities resulting from the new loans subscribed to strengthen liquidity. For its part, the total liabilities of banking businesses increased by CLP$ 363,096 million, due to higher deposits and other demand obligations, together with higher operations with settlements in progress. The foregoing, offset by a drop in deposits and other term deposits. As a result, total liabilities increased by CLP$ 832,216 million.
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5. Cash Flow Statement
As of December 31st of 2020 (MM$) 31-dic-19 31-dic-20 Var % Cash flow from operating activities - Non Banking Business 782.589 781.630 -0,1% Cash flow from operating activities - Banking Business 457.914 1.416.706 209,4% Cash flow from operating activities 1.240.503 2.198.336 77,2%
Cash flow from investment activities - Non Banking Business (614.200) (448.930) -26,9% Cash flow from investment activities - Banking Business 120.343 (99.233) -182,5% Cash flow from investment activities (493.857) (548.163) 11,0%
Cash flow from financing activities - Non Banking Business (576.127) 376.891 -165,4% Cash flow from financing activities - Banking Business (37.790) (298.579) 690,1% Cash flow from financing activities (613.917) 78.312 -112,8%
Increase (decrease) in cash and cash equivalents 132.729 1.728.485 1202,3% Impact of exchange rate differences on cash and cash equivalents 15.640 (103.891) -764,3% Cash and cash equivalents at the beginning of the period 689.412 837.782 21,5% Cash and cash equivalents at the end of the period 837.782 2.462.376 193,9%
Cash flow from non-banking business operating activities decreased by CLP$959 million as of December 2020 compared to the same period of the previous year, mainly due to higher payments to suppliers for the supply of goods and services. Cash flow from banking business operations increased by CLP$ 958,792 million, mainly explained by a decrease in loans and accounts receivable from customers and an increase in deposits and other demand obligations, offset by a decrease in deposits and other catchments. As a result, the consolidated cash flow from operating activities as of December 2020 was CLP$ 957,833 million higher than the same period of the previous year.
Cash flow from investment activities of the non-banking business was CLP$ 165,270 million less than in 2019, mainly due to lower flow associated with purchases of property, plant and equipment, as well as lower purchases of other long-term assets. For its part, cash flow from investment activities in banking businesses decreased by CLP$219,576 million compared to the previous year, explained by a net increase in investment instruments available for sale. As a result, the consolidated cash flow from investment activities as of December 2020 was CLP$ 54,306 million less than the same period in 2019.
The cash flow from non-banking business financing activities as of December 2020 was CLP$ 953,018 million higher than the comparable period, due to higher amounts from short and long-term loans taken to strengthen the Company's liquidity. On the other hand, cash flow from banking business financing activities decreased by CLP$ 260,789 million compared to the same period of the previous year, due to higher payments of bonds and loans. As a result, the consolidated cash flow from financing activities increased by CLP$ 692,229 million with respect to the same flow of the previous period.
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Definitions for Financial Business Units
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Address: Manuel Rodríguez Norte 730 Santiago, Chile
Contacts: Juan-Luis Carrasco Valentina Klein Bruno Valenzuela
Investors Relations E-mail: [email protected]
Website: investors.falabella.com
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