THIRD QUARTER 2019 RESULTS€¦ · Third Quarter 2019 Results 3 I. E X E C U T I V E S U M M A R Y...

THIRD QUARTER 2019

RESULTS

Third Quarter 2019 Results

2

Index

I. Executive summary ........................................................................................................................................ 3

II. Consolidated financial results, as of september 2019 ................................................................................ 4

III. Main events during the period ................................................................................................................... 6

IV. 3rd quarter 2019 results ............................................................................................................................... 8

V. Retail indicators .......................................................................................................................................... 11

VI. Financial Business Units, ........................................................................................................................... 16

VII. Other Indicators ....................................................................................................................................... 20

VIII. Operating Results by Business Unit ........................................................................................................ 21

IX. Financial Structure ..................................................................................................................................... 23

X. Falabella Financial Statements .................................................................................................................. 25

Notes:

All dollar figures are calculated based on the observed exchange rate as of October 1st, 2019: 728.21 $/US$.

Symbols for quarters: 1Q, 2Q, 3Q & 4Q.

Currency symbols: $ CLP: chilean pesos; US$: U.S. dollars.; PEN: peruvian soles; COP: colombian pesos; ARS: argentine pesos; BRL: Brazilian

reales.

Th: thousand; Mn: million


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I . E X E C U T I V E S U M M A R Y

Gaston Bottazzini, CEO of Falabella, commented:

“Financial results for the third quarter were pressured by a slow consumer environment in Chile. We continued investing in

technology, which has deteriorated our margins but allowed us to advance on our strategic priorities. Our marketplace posted the

best performance since we acquired Linio, we achieved NMV growth in our e-commerce of 41%, and our financial business continued

to show solid growth.”

In the third quarter of 2019, consolidated revenues reached $2,223,921 Mn (US$3,054), an increase of 1% compared to the same period of the previous year. Deceleration was explained by a 0.8% decrease in the retail businesses in Chile and the performance of Argentina. At the same time, sales of the latter were affected by IAS 29 effect.

Falabella's NMV reached Mn$184,847 (MnUS$ 254), a 41%1 increase compared with 3Q18. Online department store sales totaled MM$120,692 (MMUS$166) (20% of total regional sales of this segment); MM$25,3912 (MMUS$35) at Sodimac.com (3% of total regional sales of this segment); MM$5,358 (MMUS$7) at Tottus.com (1% of total regional sales of this segment).

Linio's NMV grew 63% in the quarter reaching Mn$33.407 (MnUS$46) in the quarter. Chile, Colombia and Peru showed the highest acceleration since Linio was acquired, growing to 104%, 100% and 142%, respectively, driven by traffic growth.

We continue to make progress in strengthening our logistics capabilities. The corporate click & collect network surpassed 125 locations, a new distribution center specialized in white goods that will serve all our formats was inaugurated in Lurin, Peru, and the automation of one of Sodimac's distribution centers in Chile was completed.

CMR card sales reached Mn$1,897,417 (MnUS$2,606), driven by sale on third parties (on-them), which represents more than 60% of the sales with our mean of payment. On the other hand, we continued opening credit card through our online channels. More than 14% of the credit cards openings of the quarter were completed online.

The consolidated loan book as of September 30, 2019 amounted to Mn$5,253,436 (MnUS$7,214), 10% more than the same period of the previous year, highlighting the growth of Banco Falabella Chile and Banco Falabella Colombia. The sale of financial products3 in digital channels grew 39%, reaching Mn$255,490 (MnUS$351), which represents 34% of the total sale of financial products.

Gross profit in the quarter amounted to $795,604 Mn (US$1,093 Mn), growing 0.2% in the period, resulting on a margin compression of 35 bps, due to strong promotional aggressiveness in Chile and partially offset by a solid performance in Peru, Colombia and Brazil.

The operating result reached $148,293 Mn (US$ 204 Mn). S,G&A expenses grew 3% YoY, resulting on an operating margin compression of 95 basis points. Excluding the implementation of IFRS 16, the increase would have been 5%, translating into margin compression of 140 basis points. The higher expenses were mainly explained by a step-up in marketing expenses in Linio paired with investment in technology that will be offset by future efficiencies.

EBITDA totaled $258,287 Mn (US$ 355), an increase of 3% compared to 3Q18. Without IFRS 16, EBITDA would have fallen 11%.

Profit for the period was affected by an increase in losses on our operation in Mexico of Mn$2,023 (MnUS $3) and an accounting loss of Mn$ 8,717 (MnUS$ 12) associated with the implementation of IFRS 16, contracting by 38% and totaling Mn$ 47,889 (MnUS$ 66). Without these effects, the contraction would have been 24%.

1 At the close of 3Q18, Falabella's online sales reached Mn$117,971 (MnUS$162) and Linio's NMV for August and September 2018 Mn$13,468 (MnUS$18). 2 Includes the home improvement business in Chile, Peru, Argentina, Brazil and Uruguay. 3 Total sales of Avance en Efectivo y Super Avances CMR and consumer credits of Banco Falabella Chile, Banco Falabella Colombia and Banco Falabella Peru originated online.


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I I . C O N S O L I D A T E D F I N A N C I A L R E S U L T S , A S O F S E P T E M B E R 2 0 1 9

Consolidated Income Statement 3Q 2019 (CLP million)4

Consolidated Income Statement 9M19

4 CMR Argentina is included in the Non-Banking Operations. Promotora CMR is consolidated in Banco Falabella Chile, in the Banking Operations.

3Q18 % Rev. 3Q19 % Rev. Var %

Revenues of Non-Banking Operations 1,878,026 1,881,456 0.2%

Revenues of Banking Operations 319,595 342,465 7.2%

Total Revenues 2,197,621 100.0% 2,223,921 100.0% 1.2%

COGS of Non-Banking Operations (1,252,290) -57.0% (1,277,205) -57.4% 2.0%

COGS of Banking Operations (151,413) -6.9% (151,112) -6.8% -0.2%

Gross Profit 793,918 36.1% 795,604 35.8% 0.2%

SG&A Expenses (626,540) -28.5% (647,311) -29.1% 3.3%

Operational Income 167,378 7.6% 148,293 6.7% -11.4%

Depreciation + Amortization 82,731 3.8% 109,994 4.9% 33.0%

EBITDA 250,109 11.4% 258,287 11.6% 3.3%

Other Income / (Expenses) 1,761 3,753 113.1%

Net Financial Income / (Cost) (38,773) (34,388) -11.3%

Profit / (Loss) in Associates 1,515 (426) -128.1%

Exchange Rate Differences (10,850) (20,839) 92.1%

Non-Operating Profit (46,347) -2.1% (51,900) -2.3% 12.0%

Profit Before Tax Expenses 121,031 5.5% 96,393 4.3% -20.4%

Income Tax (31,201) (32,402) 3.8%

Minority Interest (13,045) (16,103) 23.4%

Net Profit / (Loss) 76,785 3.5% 47,888 2.2% -37.6%

9M18 % Rev. 9M19 % Rev. Var %

Revenues of Non-Banking Operations 5,745,784 5,802,438 1.0%

Revenues of Banking Operations 931,847 1,007,830 8.2%

Total Revenues 6,677,631 100.0% 6,810,268 100.0% 2.0%

COGS of Non-Banking Operations (3,802,886) -56.9% (3,931,140) -57.7% 3.4%

COGS of Banking Operations (409,923) -6.1% (432,935) -6.4% 5.6%

Gross Profit 2,464,822 36.9% 2,446,193 35.9% -0.8%

SG&A Expenses (1,849,541) -27.7% (1,917,795) -28.2% 3.7%

Operational Income 615,281 9.2% 528,398 7.8% -14.1%

Depreciation + Amortization 236,517 3.5% 325,025 4.8% 37.4%

EBITDA 851,798 12.8% 853,423 12.5% 0.2%

Other Income / (Expenses) 121 12,275 10044.6%

Net Financial Income / (Cost) (129,747) (145,840) 12.4%

Profit / (Loss) in Associates 5,889 83 -98.6%

Exchange Rate Differences (16,592) (19,595) 18.1%

Non-Operating Profit (140,329) -2.1% (153,077) -2.2% 9.1%

Profit Before Tax Expenses 474,952 7.1% 375,321 5.5% -21.0%

Income Tax (112,266) (111,145) -1.0%

Minority Interest (44,856) (47,547) 6.0%

Net Profit / (Loss) 317,830 4.8% 216,629 3.2% -31.8%


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Summary of Consolidated Balance Sheet, as of September 30th 2019 (CLP million)

Summary of Consolidated Cash Flow, as of September 30th 2019 (CLP million)

31-dic-18 30-sept-19 Var %

Current Assets - Non Banking Business 2,550,271 2,274,875 -10.8%

Non Current Assets - Non Banking Business 7,163,331 8,337,219 16.4%

Total Assets - Non Banking Business 9,713,602 10,612,094 9.2%

Total Assets - Banking Business 6,167,903 6,672,469 8.2%

Total Assets 15,881,505 17,284,563 8.8%

Current Liabialities - Non Banking Business 1,934,637 1,837,673 -5.0%

Non Current Liabialities - Non Banking Business 3,511,637 4,391,925 25.1%

Total Liabialities - Non Banking Business 5,446,274 6,229,598 14.4%

Total Liabialities - Banking Business 4,447,874 4,965,119 11.6%

Total Liabialities 9,894,148 11,194,717 13.1%

Total Equity 5,987,357 6,089,846 1.7%

Total Liabilities + Equity 15,881,505 17,284,563 8.8%

30-sept-18 30-sept-19 Var %

Cash flow from operating activities - Non Banking Business 223,922 410,037 83.1%

Cash flow from operating activities - Banking Business 276,853 (44,310) -116.0%

Cash flow from operating activities 500,775 365,727 -27.0%

Cash flow from investment activities - Non Banking Business (439,742) (410,554) -6.6%

Cash flow from investment activities - Banking Business (10,305) 239,090 -2420.1%

Cash flow from investment activities (450,047) (171,464) -61.9%

Cash flow from financing activities - Non Banking Business (100,033) (308,052) 208.0%

Cash flow from financing activities - Banking Business 101,572 (61,892) -160.9%

Cash flow from financing activities 1,539 (369,944) -24137.9%

Increase (decrease) in cash and cash equivalents 52,267 (175,681) -436.1%

Impact of exchange rate differences on cash and cash equivalents 7,178 4,593 -36.0%

Cash and cash equivalents at the beginning of the period 494,959 689,412 39.3%

Cash and cash equivalents at the end of the period 554,404 518,325 -6.5%


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I I I . M A I N E V E N T S D U R I N G T H E P E R I O D

On April 15, Falabella agreed to sell Viajes Falabella in Chile, Colombia, Peru and Argentina, plus the license for use of the brand, to Despegar. Along with the sale, a commercial contract was signed for ten years between Falabella Financiero and Despegar that will promote the use of CMR in the platforms of Despegar and will allow to promote the loyalty program CMR Puntos. The sale of Viajes Falabella Chile, Peru and Argentina took place in June. During July, the sale of Viajes Falabella Colombia to Despegar was completed, and the transaction made effective.

During this quarter, we continued to make progress in building a physical-digital ecosystem and improving the value proposition for our customers in our different business units:

o In Chile, we opened our loyalty program, CMR Puntos, to any means of payment in Sodimac and Falabella, following the same initiative than in Tottus, which has allowed us to increase contact with our customers.

o At Linio, marketing investment accelerated, increasing app downloads by 204% and unique users by 70% regionally. At the same time, Linio began to offer access to credit to sellers, advancing in an attractive proposal for them.

o We reached more than 125 stores with corporate Click and Collect, we inaugurated a new distribution center in Lurin, Peru specialized in white goods that will serve all our formats, and completed the the automation of one of Sodimac's distribution centers in Chile.

o During this quarter, there were three store openings and four closings:

In July, we opened the sixth Sodimac store in Brazil located in Osasco with a sales area of approximately 9,000 sqm.

In August, we opened a new Hiperbodega Precio Uno supermarket in Trujillo, Peru with approximately 1,800 sqm of retail space. And on September 24, the Hiperbodega Precio Uno began operations in Piura Grau in an area of 1500 sqm.

Within our portfolio optimization strategy, the company closed two Maestro stores in Peru, a Dicico store in Brazil and a Homy store in Chile, where one of the first IKEA stores will be located.

o At the same time, we continued with our store remodeling program:

In Brazil, eight Dicico stores were remodeled to become the new Sodimac Dicico format totaling 35 Sodimac Dicico stores in the country.

In Chile, Mallplaza continued with the remodelling of three of its shopping centres: Mallplaza Norte, Mallplaza Oeste and Mallplaza La Serena, which will result on an increase of 35,100 sqm in gross leasable area.

In Peru, Mallplaza started the expansion of two shopping center: Mallplaza Bellavista and Mallplaza Trujillo

The results of the Dow Jones Sustainability Index were announced in September. For the fourth consecutive year, Falabella SA was selected to integrate the Dow Jones Sustainability Index World which groups leading companies in terms of sustainability, based on economic, social and environmental criteria. The company ranked fourth among the most sustainable retailers in the world and obtained the highest score in social matters.

Events after the period

In October, the CyberMonday was held in Chile, with a very strong participation of Linio and Falabella.com through mobile channels

In October, we open two Hiper Bodega Precio Uno, one in Iquitos la Marina (with a selling area of 2,000 sqm.) and the other in Pucallpa (2,400 sqm.) reaching 21 stores operating in this format in Peru.

Also in October, Mallplaza Buenavista was inaugurated in Barranquilla, Colombia with an area of 58,000 sqm. The mall will feature the country's largest Falabella store, 150 brands, 50 of them new in the city, with big names such as the Cinépolis lounges; Africa, a new generation children's playground; Eva Boulevard, the largest fair dedicated to women arriving for the first time in Barranquilla; and Carulla Fresh Market.


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As a result of the events that took place in Chile as of October 18, 2019, and the alterations to the public order to which they led, certain stores, offices and commercial centers of our subsidiaries and formats that operate in Chile have suffered damages of varying magnitude, which have made it necessary to suspend their activities, temporarily or permanently. We are still in the process of normalizing operations of the affected places, but we have begun to operate them gradually, subject to the reestablishment of public order and constrained by the degree of affectation they have due to the damages suffered

As of the date of issuance of these financial statements, of the 68 Tottus Supermarkets in Chile 58 are operating, 85 Home Improvement stores are open over a total of 89 stores, and of the 47 department stores in Chile, 45 stores are operational. The main Shopping Centers in the country were closed for a few days. Additionally, deliveries from our e-commerce and marketplace business have suffered delays for approximately two weeks, and are currently operating.

At the date of issuance of these financial statements Falabella S.A. It is evaluating and quantifying the damages suffered, which are mainly related to deterioration of inventories, of property, plant and equipment and investment properties, as well as, to the economic effects that this situation has generated in the operations of our Chilean businesses. Falabella S.A. and its subsidiaries have insurance that reasonably covers the risks of deterioration, paralysis and other for its assets, all contracted with leading insurance companies and has already initiated the procedures contemplated on the policies.


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I V . 3 R D Q U A R T E R 2 0 1 9 R E S U L T S

1. Revenues

In the third quarter of 2019, the company's consolidated revenues amounted to Mn$2,223,921 (MnUS$3,054), reaching Mn$6,810,268 (MnUS$9,352) for the year. Compared to the same period of the previous year, this meant an increase of 1% for the quarter and 2% for the last nine months. Excluding the exchange rate effect (considering the same exchange rate in 2019 as the one used in 2018), this represents an increase of 2% and 3%, respectively.

In Chile, Banco Falabella stimulated the growth of the period, with revenues growing 5.1% in the quarter and 5.5% in the first nine months of the year, mainly derived from a 9.5% annual increase in the loan portfolio, while sales of retail businesses were affected throughout the year by a weak discretionary consumption environment. Supermarket revenues contracted by 0.4% in the quarter and 0.3% in the last nine months, mainly affected by the weak performance of non-food category. In home improvement, sales contracted 1.0% in the quarter and 1.1% in the nine months ended September. Finally, department stores in Chile showed a 1.5% contraction in revenues for the last nine months and of 0.7% for the quarter, mainly driven by the online channel and offset by high promotional activity that resulted in a contraction of the average ticket.

Consolidated revenues in Peru grew 8.5% in the third quarter and 8.8% in the last nine months, compared to the same period of the previous year. The growth was driven by supermarket sales that increased 11.1% in the first nine months of the year (10.6% in the 3Q19) explained by 5 net openings; home improvement, which revenues increased 5.0% in the quarter and 7.8% in the first nine months of the year; and department store sales that increased by 9.2% in the quarter and 6.5% in the 9M compared to the same period of the previous year.

In Colombia, revenues increased 3.2% in the quarter and 8.6% in the first nine months of the year, compared to the same period of the previous year. The expansion was explained by a 1.1% growth in department store sales in CLP (7.0% in local currency) in the last three months, driven by the strong growth of the online channel paired with a dynamic consumer environment, which implied a 4.4% growth in CLP in the last nine months (7.9% growth in local currency). Banco Falabella Colombia's operating income in local currency grew 14.7% in the 3Q19 and 21.4% in the 9M19, as a result of a 29.7% increase in the loan book.

Argentina showed a 42.2% decrease in the quarter and a 30.4% accumulated to September, compared to the same period of the previous year. This is explained by the weak consumption dynamism and by the effect of IAS 29. Without the latter effect, revenues would have fallen 24.6% and 25.3%, respectively.

In Brazil, sales grew 20.6% in the quarter and 14.4% in the last nine months compared to the same period of the previous year, driven by strong SSS, mainly explained by ince in sales in our remodeled Sodimac Dicico stores.

2. Operating Income

The company's operating income during 3Q19 reached Mn$148,293 (MnUS$ 204), totaling Mn$528,398 (MnUS$726) for the first nine month of the year, representing a decrease of 11.4% and 14.1%, respectively, compared to the same periods of the previous year. Excluding the implementation of NIIF 16, the contraction would have been of 17.5% and 19.5%, respectively.

Banco Falabella Chile reached an operating result of Mn$64,434 (MnUS$88) in the quarter, 3.7% more than the same period of the previous year, mainly explained by growth in revenues. For the last nine months, the result totaled MM$204,952 (MMUS$281) with a contraction of 1.2% with respect to the same period of the previous year.

In Chile, home improvement reported a 24.9% contraction in the accumulated operating result for the year (45.3% in 3Q19), mainly explained by a lower gross margin, driven by strong promotional activity in categories which at the same time increased their participation on total sales. Supermarkets showed a negative operating result of Mn$3,735 (-MnUS$5) in 3Q19 and Mn$5,008 (-MnUS$7) in 9M19, as a result of the deterioration in gross margin of the non-food categories. In department stores, the operating margin was negative in 6.4% in the third quarter and -4.4% in the last 9M, mainly explained by gross margin compression.

Mallplaza reached an operating result of Mn$52,626 (MnUS$72) for the quarter and Mn$156,600 (MnUS$215) for the last nine months, an increase of 5.4% and 6.4%, respectively. This performance is mainly explained by an increase in the leasable area.


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The businesses in Peru reached operating income of Mn$36,271 (MnUS$50) for the 3Q19 and Mn$116,214 (MnUS$160) for the 9M19. In Colombia, operating income totaled Mn$11,024 (MnUS$15) for 3Q19 and Mn$36,406 (MnUS$50) for )M, mainly explained by the performance of Banco Falabella Colombia, associated with the loan book growth.

3. Non-Operating Results and Net Income

The non-operating result for the period presented a loss of Mn$51,900 (MnUS$71) for 3Q19 and Mn$153,077 (MnUS$210) for

the year, 9.1% higher than the same period in 2018. The increase is mainly explained by net financial costs, which increased by

12.4% as a result of the implementation of IFRS 16, and by exchange rate differences.

Consolidated net income for the quarter reached Mn$47,889 (MnUS$ 66), totaling Mn$216,630 (MnUS$ 297) for the last nine

months, a decrease of 37.6% and 31.8%, respectively, compared to the same period of the previous year. Net income does not

include asset revaluation for investment properties, as Falabella adopted the historical cost method.

4. Consolidated Balance Sheet

Non-banking current assets fell by Mn$275,396 (MnUS$ 378) compared to December 2018, mainly generated by a fall in cash

and cash equivalents, commercial debtors and other accounts receivable. The decrease in cash and cash equivalents was

explained by the accumulation of cash as of December 31, 2018 for the payment of dividends in the month of January 2019,

while the difference on commercial debtors and other accounts receivable was mainly explained by a drop CMR Argentina loan

book. Contraction in inventories, was explained by better inventory management at our home improvement division.

Non-banking current assets increased by Mn$1,173,888 (MnUS$1,612), mainly due to an increase in property, plant and

equipment as a result of IFRS 16, and investment property as a result of the activation of real estate projects. In the case of

banking businesses, total assets increased by Mn$504,566 (MnUS$693) compared to December 2018, mainly due to the increase

in the loan book portfolio in Banco Falabella Chile and Colombia, and the increase in trading instruments and financial derivative

contracts. This increase was offset by the decline in available-for-sale investment instruments. As a result, total assets increased

by Mn$1,403,058 (MnUS$1,927).

Non-banking current liabilities decreased by Mn$96,964 (MnUS$133) compared to December 2018, mainly explained by the

decrease in trade and other accounts payable, explained by the dividend payment on January 2019, and offset by an increase in

current lease liabilities as a result of IFRS 16. Non-banking current liabilities increased by Mn$880.288 (MnUS$ 1,209) mainly

explained by the increase in liabilities for non-current leases due to IFRS 16. On the other hand, total banking business liabilities

increased by Mn$517,245 (MnUS$ 710), mainly due to the increase in financial derivative contracts, deposits and other term

deposits. This last increase is due to an increase in demand and term deposits in Banco Falabella Chile and an increase in the

collection of term deposit certificates in Banco Falabella Colombia. This increase in bank liabilities was offset by a fall in

obligations to banks. As a result, total liabilities increased by Mn$1,300,569 (MnUS$1,786).

As of the date of this report, Falabella has three bonds in dollars, one for MnUS$ 500 and two for MnUS$ 400 each, which are

hedged, at both principal and interest levels, with swaps until maturity.

5. Consolidated Cash Flow

Cash flow from operating activities of the non-banking business increased by Mn$186,115 (MnUS$256) in September 2019

compared to the same period of the previous year, mainly due to higher collections from the sale of goods and services, and lower

cash flows generated by income tax payments. Cash flow from operating activities of banking businesses decreased by

Mn$321,163 (MnUS$441), mainly explained by a net increase in trading instruments and a decrease in deposits and other term

deposits. As a result, cash flow from consolidated operating activities fell by Mn$135,048 (MnUS$ 185) in the period.

Cash flow from investment activities of the non-banking business was Mn$29,188 (MnUS$40) less negative than the same period

of the previous year, mainly due to lower cash flows used to obtain control of subsidiaries or other businesses. On the other hand,

the cash flow from investment activities of banking businesses increased by Mn$249,395 (MnUS$342) with respect to the previous


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year, due to a net increase in investment instruments available for sale. As a result, cash flow from consolidated investment

activities as of September 2019 was Mn$278,583 (MnUS$383) less negative than the same period of 2018.

Cash flow from financing activities of the non-bank business as of September 2019 was Mn$208.019 (MnUS$ 286) more negative

than the comparable period, as a result of lower loan amounts, offset by lower loan payments. Cash flow from financing activities

of the banking business fell by Mn$163,464 (MnUS$ 224) compared to the same period of the previous year due to higher

payments of bonds and other long-term loans. As a result, cash flow from consolidated financing activities decreased by

Mn$371.483 (MnUS$510) compared to the same period of the previous year.


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V . R E T A I L I N D I C A T O R S

1. Retail Business Revenue

Retail Revenue 3Q19 (CLP million)5,6

Retail Revenue 9M19 (CLP million)

5 All revenue variations are in nominal terms and have been calculated in both Chilean pesos and local currency of each country. 6 Argentina’s revenues are affected by the application of IAS 29.

3Q18 3Q19 Var %Var Local

Currency %

Chile

Department Stores 334,342 331,964 -0.7% -0.7%

Home Improvement 495,376 490,399 -1.0% -1.0%

Supermarkets 196,323 195,444 -0.4% -0.4%

Peru

Department Stores 146,924 160,448 9.2% 4.2%

Home Improvement 158,883 166,845 5.0% 0.1%

Supermarkets 189,438 209,445 10.6% 5.4%

Colombia



Argentina

Department Stores 55,720 34,262 -38.5% 69.9%

Home Improvement 30,140 17,078 -43.3% 58.0%

Brazil


9M18 9M19 Var %Var Local

Currency %

Chile

Department Stores 1,067,012 1,051,259 -1.5% -1.5%

Home Improvement 1,610,017 1,591,704 -1.1% -1.1%

Supermarkets 572,126 570,477 -0.3% -0.3%

Peru

Department Stores 425,164 452,625 6.5% -0.4%


Supermarkets 545,680 606,244 11.1% 3.9%

Colombia



Argentina



Brazil



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Online sales 3Q19 (CLP million)7

NMV Linio 3Q19 (CLP Million)

Linio NMV 3Q19 - anual growth Excluding exchange rate effect

7 Online sales include revenue generated in the online cannel for all retail businesses excluding home improvement in Colombia and Mexico. * NMV Linio corresponds to the Net Merchandise Value. A measure of the total sum in Chilean pesos of all transactions made through Linio, net of VAT.

Share

Department stores 120,692 19.6%

Home improvement 25,391 3.5%

Supermarkets 5,358 1.3%

Total 151,440 8.6%

3Q19

3Q18 3Q19 Var %

NMV Linio * 20,508 33,407 62.9%

142%

104% 100%

23%

Peru Chile Colombia Others


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Same Store Sales (SSS) Nominal Growth 8, 9, 10

8 All variations are calculated in nominal terms and in the local currency of each country. In Argentina, SSS are calculated net of IIBB. 9 SSS growth includes revenue generated from the online cannel of each business unit. 10 SSS calculation does not include stores that had significant changes in sales area open to the public, due to remodeling, expansions, reductions or closings.

1Q17 2Q17 3Q17 4Q17 2017 1Q18 2Q18 3Q18 4Q18 2018 1Q19 2Q19 3Q19

Chile

Department Stores 8.1% 6.0% 4.7% 1.7% 4.8% -4.9% 0.2% -7.2% -3.3% -3.6% -3.0% -1.2% -3.5%

Home Improvement -1.7% -2.4% -2.5% 13.9% 1.6% 4.6% 5.8% 1.9% -2.0% 2.4% -1.7% -4.2% -0.7%

Supermarkets -2.0% 3.5% 1.5% 2.6% 1.4% 1.7% 1.9% 2.6% -1.2% 1.1% 1.5% -2.4% -1.2%

Peru

Department Stores -5.9% 5.0% -0.8% 1.4% 0.3% 12.1% 8.4% 3.8% 0.3% 5.4% 0.3% -4.4% 4.6%

Home Improvement -2.6% 3.6% 5.5% 4.5% 2.7% 6.0% 1.0% 2.9% 3.7% 2.6% 1.7% 3.4% 2.1%

Supermarkets -1.0% 0.6% 0.2% 1.0% 0.3% 4.8% 10.3% 6.1% 3.5% 6.0% 3.9% -0.5% 2.7%

Colombia

Department Stores -2.4% -4.4% 0.4% 1.2% -0.9% 0.6% 11.9% 15.0% 9.9% 10.5% 9.8% 9.0% 9.5%

Home Improvement -2.7% -7.1% -4.2% -5.4% -4.8% -0.9% 4.6% 3.8% 7.7% 3.9% 7.8% 8.1% 8.1%

Argentina

Department Stores 16.5% 20.4% 25.4% 29.9% 23.6% 38.3% 36.7% 30.7% 27.2% 32.4% 20.2% 23.4% 36.1%

Home Improvement 14.1% 18.9% 23.0% 29.9% 23.6% 25.6% 23.4% 26.4% 18.5% 23.2% 18.1% 13.5% 16.6%

Brazil

Home Improvement -3.0% -1.0% 10.6% 3.2% 2.4% 7.9% -1.3% -2.0% 8.8% 3.1% 8.1% 18.2% 11.8%


14

2. Number of Stores and Sales Area of Retail Businesses 11, 12

3. Number of Shopping Malls and GLA of Real Estate Operators 13, 14

The company and its subsidiaries own 1,000,000 sqm. of additional GLA in free standing Falabella, Sodimac, Tottus, Maestro stores and other locations.

11 Sales area includes cashiers and check out areas. In the case of Tottus, this represents approximately 8% of total sales area. This definition may differ from how some peers in the industry measure their sales area, and thus, has implications when comparing sales per square meter. 12 Department stores Peru and Colombia include a Crate & Barrel store. 13 Open includes Power Centers (shopping malls with only two anchor stores, in addition to smaller shops) and Shopping Centers (shopping malls with three anchor stores, in addition to smaller stores) and is not part of Plaza S.A 14 It does not consider Autoplaza as a separate shopping center

September 2018 September 2019

Sales Area (m²) Stores (#) Sales Area (m²) Stores (#)

Chile

Department Stores 321,154 46 327,209 47

Home Improvement 771,648 90 770,851 89

Supermarkets 218,751 66 223,151 68

Peru



Supermarkets 240,456 68 250,263 73

Colombia



Argentina



Brazil


Uruguay


México


Total Stores 3,020,298 499 3,053,642 503

September 2018 September 2019

GLA (m²) Shopping Malls (#) GLA (m²) Shopping Malls (#)

Chile

Mallplaza 1,368,000 17 1,372,000 17

Open 230,000 10 203,000 9

Peru

Mallplaza 203,000 3 204,000 3

Open 317,000 11 316,000 11

Colombia

Mallplaza 76,000 2 76,000 2

Total Real Estate 2,194,000 43 2,171,000 42


15

4. Sales per Square Meter of Retail Businesses 15

Sales per Square Meter - 3Q19 (CLP / sqm)

Sales per Square Meter - 9M19 (CLP / sqm)

15 Revenue divided by average area of the period. The YoY variation corresponds to the variation in Chilean pesos and the variation in local currency. Total sales per square meter is the sum of revenue from the retail business divided by the average total surface of stores for the period. Online sales are included in the total sales figure of each business unit.

3Q18 3Q19 Var %Var Local

Currency %

Chile


Home Improvement 643,529 634,657 -1.4% -1.4%

Supermarkets 897,473 877,164 -2.3% -2.3%

Peru



Supermarkets 793,461 842,633 6.2% 1.3%

Colombia



Argentina



Brazil


TOTAL 654,611 654,076 -0.1%

9M18 9M19 Var %Var Local

Currency %

Chile


Home Improvement 2,119,132 2,057,580 -2.9% -2.9%

Supermarkets 2,643,676 2,624,771 -0.7% -0.7%

Peru

Department Stores 2,402,572 2,578,682 7.3% 0.4%

Home Improvement 1,210,606 1,332,643 10.1% 3.0%

Supermarkets 2,299,676 2,462,048 7.1% 0.1%

Colombia

Department Stores 1,408,920 1,448,685 2.8% 6.3%

Home Improvement 1,515,984 1,559,501 2.9% 6.1%

Argentina

Department Stores 3,334,127 2,342,909 -29.7% 44.2%

Home Improvement 1,160,850 755,502 -34.9% 33.7%

Brazil


TOTAL 2,007,224 1,998,054 -0.5%


16

V I . F I N A N C I A L B U S I N E S S U N I T S 16, 17

CMR Units: Income Statement 18

CMR Units: Balance Sheet Accounts and Operational Information

16 See definitions at the end of the report. 17 The “Allowance for loan losses” line includes the provisions recorder under assets and liabilities. Please refer to the notes of the financial statements. 18 Promotora CMR is shown in an illustrative way. As of January 2019, this operation is already consolidated in Banco Falabella Chile.

Promotora CMR CMR Argentina

3Q18 3Q19 Var. % 3Q18 3Q19 Var. %

Selected Operating Results (Mn CLP) (Th ARS)

Interest income 107,363 121,078 12.8% 551,958 781,572 41.6%

Fee and commission income 19,261 19,515 1.3% 369,389 580,735 57.2%

Total Income 126,624 140,593 11.0% 921,347 1,362,307 47.9%

Interest expense (8,711) (12,618) 44.9% (493,641) (272,846) -44.7%

Credit risk cost (30,793) (38,558) 25.2% (122,604) (148,771) 21.3%

Other expenses (16,941) (14,875) -12.2% (146,280) (194,706) 33.1%

Total expenses (56,445) (66,051) 17.0% (762,525) (616,322) -19.2%

Gross Profit 70,179 74,542 6.2% 158,822 745,985 369.7%

Administrative expenses (20,619) (19,347) -6.2% (292,213) (381,619) 30.6%

Operating Income 49,560 55,195 11.4% (133,391) 364,366 -373.2%

Net income 37,144 40,982 10.3% (7,037) (391,705) NM

Efficiency ratio 20.4% 17.1% 103.8% 42.7%

9M18 9M19 Var. % 9M18 9M19 Var. %

Selected Operating Results (Mn CLP) (Th ARS)

Interest income 320,958 355,313 10.7% 1,489,027 2,120,581 42.4%

Fee and commission income 55,691 57,948 4.1% 1,100,493 1,472,105 33.8%

Total Income 376,649 413,261 9.7% 2,589,520 3,592,686 38.7%

Interest expense (26,080) (37,529) 43.9% (1,136,147) (1,130,633) -0.5%

Provision for loan losses (80,491) (105,338) 30.9% (285,556) (494,440) 73.2%

Other expenses (52,479) (46,683) -11.0% (376,054) (500,520) 33.1%

Total expenses (159,050) (189,550) 19.2% (1,797,757) (2,125,593) 18.2%

Gross Profit 217,599 223,711 2.8% 791,763 1,467,093 85.3%

Administrative expenses (61,234) (55,977) -8.6% (782,366) (989,967) 26.5%

Operating Income 156,365 167,734 7.3% 9,398 477,126 4977.1%

Net income 117,609 125,058 6.3% 55,163 (453,626) -922.3%

Efficiency ratio 20.5% 17.0% 72.6% 50.5%

Promotora CMR CMR Argentina

sep 18 sep 19 Var. % sep 18 sep 19 Var. %

Selected Balance Sheet Accounts (Mn CLP) (Th ARS)

Loans from customers, gross 1,765,980 2,041,069 15.6% 6,289,243 4,588,551 -27.0%

Allowance for loan losses (122,004) (133,690) 9.6% (298,017) (292,649) -1.8%

Loans from customers, net 1,643,976 1,907,379 16.0% 5,991,226 4,295,901 -28.3%

Total Assets 1,833,034 2,049,786 11.8% 6,845,207 5,563,639 -18.7%

Total Liabilities 1,620,850 1,542,600 -4.8% 6,176,560 4,988,804 -19.2%

Total Equity 212,184 507,186 139.0% 668,647 574,835 -14.0%

Total Liabilities + Total Equity 1,833,034 2,049,786 11.8% 6,845,207 5,563,639 -18.7%

Operational information

NPL (+90 days) 53,315 59,191 11.0% 251,922 188,131 -25.3%

Open Accounts (with balance) 2,598,020 2,748,592 5.8% 463,283 391,496 -15.5%

Average Loan (local currency) 679,741 742,587 9.2% 13,575 11,721 -13.7%

Duration (months) 5.7 5.7 0.0% 3.1 2.7 -11.6%

Ratios

NPL / Loans from customers, gross 3.0% 2.9% 4.0% 4.1%

Allowance for loan losses/NPL 2.3 2.3 1.2 1.6

ROAE 36.7% 38.7% 11.1% N/A

ROAA 9.3% 8.5% 1.3% N/A


17

Banco Falabella: Income Statement

Banco Falabella Chile Banco Falabella Perú Banco Falabella Colombia

3Q18 3Q19 Var. % 3Q18 3Q19 Var. % 3Q18 3Q19 Var. %

(Mn CLP) (Th SOL) (Mn COP)

Interest income and adjustements 183,523 192,570 4.9% 221,473 231,280 4.4% 148,111 183,703 24.0%

Interest expense and adjustements (25,105) (26,605) 6.0% (29,017) (29,457) 1.5% (27,817) (39,303) 41.3%

Net interest income and adjustments 158,418 165,965 4.8% 192,456 201,823 4.9% 120,295 144,401 20.0%

Fee and commission income 28,625 31,362 9.6% 65,899 71,914 9.1% 65,963 68,363 3.6%

Fee and commission expense (22,175) (20,199) -8.9% (29,743) (35,282) 18.6% (14,369) (14,857) 3.4%

Net fee and commission income 6,450 11,163 73.1% 36,156 36,633 1.3% 51,594 53,506 3.7%

Net income (expense) from financial operations 2,738 2,318 -15.3% 2,322 2,185 -5.9% 1,344 3,411 153.7%

Other operating net income 1,689 763 -54.8% 5,071 9,074 78.9% 2,741 491 -82.1%

Net operating profit before provisions for loan losses 169,294 180,209 6.4% 236,005 249,715 5.8% 175,974 201,809 14.7%

Provision for loan losses (55,365) (56,857) 2.7% (81,210) (69,571) -14.3% (59,490) (46,348) -22.1%

Operating expenses (51,795) (58,918) 13.8% (145,165) (153,274) 5.6% (92,163) (102,348) 11.1%

Operating Income 62,135 64,434 3.7% 9,631 26,870 179.0% 24,321 53,112 118.4%

Net Income 46,705 47,952 2.7% 5,898 18,272 209.8% 14,492 32,534 124.5%

Efficiency ratio 30.6% 32.7% 61.5% 61.4% 52.4% 50.7%

9M18 9M19 Var. % 9M18 9M19 Var. % 9M18 9M19 Var. %

(Mn CLP) (Th SOL) (Mn COP)

Interest income and adjustements 546,083 573,660 5.0% 680,662 685,434 0.7% 407,317 531,203 30.4%

Interest expense and adjustements (73,169) (83,368) 13.9% (92,038) (86,716) -5.8% (75,968) (110,884) 46.0%

Net interest income and adjustments 472,914 490,292 3.7% 588,623 598,718 1.7% 331,349 420,319 26.9%

Fee and commission income 84,255 92,744 10.1% 199,115 208,697 4.8% 181,904 198,056 8.9%

Fee and commission expense (67,970) (63,143) -7.1% (83,572) (98,559) 17.9% (41,645) (44,396) 6.6%

Net fee and commission income 16,285 29,601 81.8% 115,543 110,138 -4.7% 140,259 153,660 9.6%

Net income (expense) from financial operations 6,571 12,310 87.4% 6,585 7,983 21.2% 2,941 8,258 180.8%

Other operating net income 3,380 1,910 -43.5% 17,581 23,413 33.2% 6,941 2,288 -67.0%

Net operating profit before provisions for loan losses 499,149 534,113 7.0% 728,332 740,252 1.6% 481,490 584,525 21.4%

Provision for loan losses (139,414) (164,249) 17.8% (220,459) (199,127) -9.7% (151,490) (103,115) -31.9%

Operating expenses (152,292) (164,912) 8.3% (433,687) (444,465) 2.5% (262,896) (307,552) 17.0%

Operating Income 207,444 204,952 -1.2% 74,186 96,660 30.3% 67,104 173,857 159.1%

Net Income 156,251 153,374 -1.8% 50,183 67,216 33.9% 39,621 104,879 164.7%

Efficiency ratio 30.5% 30.9% 59.5% 60.0% 54.6% 52.6%


18

Banco Falabella: Balance Sheet Accounts and Operational Information

Banco Falabella Chile Banco Falabella Perú Banco Falabella Colombia

sep 18 sep 19 Var. % sep 18 sep 19 Var. % sep 18 sep 19 Var. %

Selected Balance Sheet Accounts (Mn CLP) (Th SOL) (Mn COP)

Cash and deposits in banks 112,645 118,293 5.0% 562,803 344,784 -38.7% 271,625 167,431 -38.4%

Trading investments 688,248 655,361 -4.8% 236,438 394,973 67.1% 221,113 215,011 -2.8%

Loans from customers, gross 3,447,613 3,774,187 9.5% 3,036,113 3,119,346 2.7% 2,688,419 3,486,345 29.7%

Allowance for loan losses (205,089) (237,313) 15.7% (244,990) (241,328) -1.5% (209,451) (208,831) -0.3%

Loans from customers, net 3,242,523 3,536,874 9.1% 2,791,123 2,878,018 3.1% 2,478,968 3,277,513 32.2%

Total Assets 4,474,838 5,030,634 12.4% 4,043,097 4,170,283 3.1% 3,267,806 3,984,754 21.9%

Deposits 462,158 523,525 13.3% 490,668 473,737 -3.5% 621,356 674,837 8.6%

Time deposits 1,342,858 1,630,255 21.4% 2,153,827 2,180,056 1.2% 1,728,913 2,301,672 33.1%

Total deposits 1,805,016 2,153,780 19.3% 2,644,495 2,653,792 0.4% 2,350,269 2,976,509 26.6%

Other financial liabilities 945,190 657,582 -30.4% 84,700 48,347 -42.9% 236,427 177,619 -24.9%

Total Liabilities 4,018,456 4,257,328 5.9% 3,301,055 3,418,186 3.5% 2,827,639 3,432,554 21.4%

Total Equity 456,382 773,306 69.4% 742,042 752,096 1.4% 440,167 552,200 25.5%

Total Liabilities + Total Equity 4,474,838 5,030,634 12.4% 4,043,097 4,170,283 3.1% 3,267,806 3,984,754 21.9%

Operational information

NPL (+90 days) 108,486 105,677 -2.6% 102,544 71,745 -30.0% 78,639 80,186 2.0%

Current, Saving and checking Accounts 1,001,770 1,051,790 5.0% 1,102,913 981,241 -11.0% 1,577,527 1,503,116 -4.7%

Open Accounts (with balance) 73,474 40,537 -44.8% 982,531 1,073,815 9.3% 1,021,757 1,023,084 0.1%

Average Loan (local currency) NM NM NM 3,090 2,905 -6.0% 2,631,173 3,407,682 29.5%

Duration (months) 16.5 15.7 -5.2% 7.8 7.6 -2.7% 12.0 11.7 -2.8%

ATMs 413 416 0.7% 172 173 0.6% 66 66 0.0%

Branches 101 100 -1.0% 69 68 -1.4% 90 88 -2.2%

Ratios

NPL / Loans from customers, gross 3.1% 2.8% 3.4% 2.3% 2.9% 2.3%

Allowance for loan losses/NPL 1.9 2.2 2.4 3.4 2.7 2.6

Basilea 16.3% 15.4% 16.8% 15.9% 11.8% 11.4%

ROAE 22.3% 25.4% 8.8% 12.8% 13.3% 23.0%

ROAA 2.2% 3.4% 1.4% 2.4% 2.2% 3.2%


19

Percentage of Sales with CMR Card 19

19 Porcentaje de venta con CMR: es la venta a través de la tarjeta con respecto a la venta total de cada negocio.

1Q17 1H17 9M17 2017 1Q18 1H18 9M18 12M18 1Q19 1H19 9M19

Chile - Falabella 42.0% 45.2% 45.6% 46.1% 44.1% 47.0% 46.9% 47.0% 45.6% 50.0% 46.4%

Chile - Sodimac 26.7% 27.8% 27.5% 27.6% 26.0% 26.4% 26.8% 26.9% 25.9% 26.1% 26.6%

Chile - Tottus 18.6% 19.4% 19.9% 20.1% 19.1% 19.4% 19.7% 20.2% 19.7% 19.9% 20.7%

Peru - Falabella, Sodimac & Tottus 35.2% 37.3% 37.3% 37.6% 32.8% 35.6% 35.6% 36.1% 35.3% 38.6% 37.0%

Colombia - Falabella & Sodimac 20.4% 22.1% 21.6% 23.1% 19.6% 22.0% 22.1% 23.3% 20.2% 24.2% 22.0%

Argentina - Falabella & Sodimac 23.0% 25.0% 25.1% 25.3% 25.7% 23.1% 22.9% 22.8% 18.2% 16.1% 13.9%


20

V I I . O T H E R I N D I C A T O R S

Average Collection Period 20, Average Payment Period and Days of Inventory 21

Chile

International Operations 22

20 Collection period does not include accounts receivable of the retail businesses (department stores, home improvement and supermarkets) with Promotora CMR 21 Average Collection Period (does not include Promotora CMR and Plaza S.A.): Current trade and other receivables *90/ Revenue Average Collection Period for Promotora CMR: Duration (lineal) * 30 Average Collection Period for Plaza S.A. corresponds to the payment of the common expenses of the building. Average Payable Period: Current trade and other current accounts payable * 90 /Cost of sales. Inventory turnover: Inventories (net) * 90 / Cost of sales 22 Indicators include retail operations only, except Peru, which includes Maestro's two real estate companies.

Dep. Stores Home Improv. Supermarkets Promotora CMR Plaza S.A.

3Q18 3Q19 3Q18 3Q19 3Q18 3Q19 3Q18 3Q19 3Q18 3Q19

Average Collection Period 13.1 13.6 21.1 18.6 4.3 5.1 120.0 123.9 30.0 31.0

Average Payment Period 50.6 51.7 40.8 34.5 35.1 45.5 NM NM NM NM

Days of inventory 110.8 122.2 98.6 84.2 49.2 50.8 NM NM NM NM

Peru Argentina Colombia Brazil

3Q18 3Q19 3Q18 3Q19 3Q18 3Q19 3Q18 3Q19

Average Collection Period 4.0 3.7 11.5 18.0 8.5 7.0 34.2 49.6

Average Payment Period 48.6 49.7 61.5 113.1 77.9 50.0 99.2 84.1

Days of inventory 93.7 98.0 98.6 134.1 139.9 134.3 156.8 146.2


21

V I I I . O P E R A T I N G R E S U L T S B Y B U S I N E S S U N I T 23

Operating Results 3Q19 (CLP million)

Chile

International Operations

Others

23 International Operating Results includes banking Business in Peru and Colombia, credit card business in Argentina and real estate business in Peru, as well as the corresponding retail businesses.

Department Stores Home Improvement Supermarkets

3Q18 3Q19 (%, bps) 3Q18 3Q19 (%, bps) 3Q18 3Q19 (%, bps)

Revenues 334,342 331,964 -0.7% 495,376 490,399 -1.0% 196,323 195,444 -0.4%

Gross Profit 104,691 99,386 -5.1% 153,124 144,620 -5.6% 49,681 47,060 -5.3%

Gross Margin 31.3% 29.9% -137 30.9% 29.5% -142 25.3% 24.1% -123

SG&A (111,922) (120,508) 7.7% (140,017) (137,446) -1.8% (48,234) (50,795) 5.3%

SG&A / Revenues -33.5% -36.3% -283 -28.3% -28.0% 24 -24.6% -26.0% -142

Operating Profit (7,231) (21,122) 192.1% 13,107 7,174 -45.3% 1,447 (3,735) -358.1%

Operating Margin -2.2% -6.4% -420 2.6% 1.5% -118 0.7% -1.9% -265

EBITDA 2,935 (1,180) -140.2% 25,152 31,354 24.7% 6,737 6,852 1.7%

EBITDA Margin 0.9% -0.4% -123 5.1% 6.4% 132 3.4% 3.5% 7

Banco Falabella Chile

3Q18 3Q19 (%, bps)

Revenues 213,837 224,695 5.1%

Gross Profit 113,930 123,352 8.3%

Gross Margin 53.3% 54.9% 162

SG&A (51,795) (58,918) 13.8%

SG&A / Revenues -24.2% -26.2% -200

Operating Profit 62,135 64,434 3.7%

Operating Margin 29.1% 28.7% -38

EBITDA 64,097 68,997 7.6%

EBITDA Margin 30.0% 30.7% 73

Peru Colombia Argentina Brazil

3Q18 3Q19 (%, bps) 3Q18 3Q19 (%, bps) 3Q18 3Q19 (%, bps) 3Q18 3Q19 (%, bps)

Revenues 566,283 614,615 8.5% 141,941 146,493 3.2% 104,308 60,253 -42.2% 44,316 53,464 20.6%

Gross Profit 173,112 193,661 11.9% 58,412 61,113 4.6% 46,873 29,199 -37.7% 15,082 19,377 28.5%

Gross Margin 30.6% 31.5% 94 41.2% 41.7% 57 44.9% 48.5% 352 34.0% 36.2% 221

SG&A (144,166) (157,390) 9.2% (52,641) (50,089) -4.8% (45,724) (26,774) -41.4% (18,935) (20,736) 9.5%

SG&A / Revenues -25.5% -25.6% -15 -37.1% -34.2% 289 -43.8% -44.4% -60 -42.7% -38.8% 394

Operating Profit 28,946 36,271 25.3% 5,771 11,024 91.0% 1,149 2,425 111.1% (3,853) (1,359) -64.7%

Operating Margin 5.1% 5.9% 79 4.1% 7.5% 346 1.1% 4.0% 292 -8.7% -2.5% 615

EBITDA 49,887 61,573 23.4% 11,528 18,248 58.3% 1,991 4,408 121.4% (2,732) 2,135 -178.1%

EBITDA Margin 8.8% 10.0% 121 8.1% 12.5% 433 1.9% 7.3% 541 -6.2% 4.0% 1016

Plaza S.A. Other, elimnation & anulment Falabella

3Q18 3Q19 (%, bps) 3Q18 3Q19 (%, bps) 3Q18 3Q19 (%, bps)

Revenues 76,934 79,919 3.9% 23,961 26,674 11.3% 2,197,621 2,223,921 1.2%

Gross Profit 59,210 61,084 3.2% 19,804 16,752 -15.4% 793,918 795,604 0.2%

Gross Margin 77.0% 76.4% -53 82.6% 62.8% -1985 36.1% 35.8% -35

SG&A (9,266) (8,458) -8.7% (3,841) (16,196) NM (626,540) (647,311) 3.3%

SG&A / Revenues -12.0% -10.6% 146 -16.0% -60.7% -4469 -28.5% -29.1% -60

Operating Profit 49,944 52,626 5.4% 15,962 555 -96.5% 167,378 148,293 -11.4%

Operating Margin 64.9% 65.8% 93 66.6% 2.1% -6454 7.6% 6.7% -95

EBITDA 61,991 65,018 4.9% 28,524 883 -96.9% 250,109 258,287 3.3%

EBITDA Margin 80.6% 81.4% 78 119.0% 3.3% -11573 11.4% 11.6% 23


22

Operating Results 9M19 (CLP million)

International Operations

Others

Department Stores Home Improvement Supermarkets

9M18 9M19 (%, bps) 9M18 9M19 (%, bps) 9M18 9M19 (%, bps)

Revenues 1,067,012 1,051,259 -1.5% 1,610,017 1,591,704 -1.1% 572,126 570,477 -0.3%

Gross Profit 342,512 311,624 -9.0% 495,972 476,993 -3.8% 148,100 141,486 -4.5%

Gross Margin 32.1% 29.6% -246 30.8% 30.0% -84 25.9% 24.8% -108

SG&A (338,011) (357,387) 5.7% (419,131) (419,271) 0.0% (139,865) (146,494) 4.7%

SG&A / Revenues -31.7% -34.0% -232 -26.0% -26.3% -31 -24.4% -25.7% -123

Operating Profit 4,501 (45,763) -1116.8% 76,841 57,722 -24.9% 8,235 (5,008) -160.8%

Operating Margin 0.4% -4.4% -478 4.8% 3.6% -115 1.4% -0.9% -232

EBITDA 32,946 13,782 -58.2% 113,825 130,051 14.3% 23,665 25,943 9.6%

EBITDA Margin 3.1% 1.3% -178 7.1% 8.2% 110 4.1% 4.5% 41

Banco Falabella Chile

9M18 9M19 (%, bps)

Revenues 633,718 668,314 5.5%

Gross Profit 359,736 369,864 2.8%

Gross Margin 56.8% 55.3% -142

SG&A (152,292) (164,912) 8.3%

SG&A / Revenues -24.0% -24.7% -64

Operating Profit 207,444 204,952 -1.2%

Operating Margin 32.7% 30.7% -207

EBITDA 213,144 218,336 2.4%

EBITDA Margin 33.6% 32.7% -96

Peru Colombia Argentina Brazil

9M18 9M19 (%, bps) 9M18 9M19 (%, bps) 9M18 9M19 (%, bps) 9M18 9M19 (%, bps)

Revenues 1,626,276 1,768,768 8.8% 398,270 432,547 8.6% 358,678 249,624 -30.4% 130,898 149,805 14.4%

Gross Profit 512,123 564,385 10.2% 164,070 188,639 15.0% 164,583 108,660 -34.0% 45,373 53,639 18.2%

Gross Margin 31.5% 31.9% 42 41.2% 43.6% 242 45.9% 43.5% -236 34.7% 35.8% 114

SG&A (409,837) (448,171) 9.4% (149,525) (152,232) 1.8% (153,907) (111,553) -27.5% (58,451) (58,747) 0.5%

SG&A / Revenues -25.2% -25.3% -14 -37.5% -35.2% 235 -42.9% -44.7% -178 -44.7% -39.2% 544

Operating Profit 102,287 116,214 13.6% 14,545 36,406 150.3% 10,676 (2,893) -127.1% (13,078) (5,108) -60.9%

Operating Margin 6.3% 6.6% 28 3.7% 8.4% 476 3.0% -1.2% -414 -10.0% -3.4% 658

EBITDA 159,779 189,337 18.5% 30,780 58,149 88.9% 13,306 5,009 -62.4% (9,828) 5,103 -151.9%

EBITDA Margin 9.8% 10.7% 88 7.7% 13.4% 571 3.7% 2.0% -170 -7.5% 3.4% 1,091

Plaza S.A. Other, elimnation & anulment

9M18 9M19 (%, bps) 9M18 9M19 (%, bps) 9M18 9M19 (%, bps)

Revenues 224,099 237,325 5.9% 56,537 90,444 60.0% 6,677,631 6,810,268 2.0%

Gross Profit 172,437 182,428 5.8% 59,916 48,475 -19.1% 2,464,822 2,446,193 -0.8%

Gross Margin 76.9% 76.9% -8 106.0% 53.6% -5,238 36.9% 35.9% -99

SG&A (25,261) (25,828) 2.2% (3,261) (33,200) 918.0% (1,849,541) (1,917,795) 3.7%

SG&A / Revenues -11.3% -10.9% 39 -5.8% -36.7% -3,094 -27.7% -28.2% -46

Operating Profit 147,176 156,600 6.4% 56,655 15,275 -73.0% 615,281 528,398 -14.1%

Operating Margin 65.7% 66.0% 31 100.2% 16.9% -8,332 9.2% 7.8% -146

EBITDA 181,353 193,191 6.5% 92,828 14,523 -84.4% 851,798 853,423 0.2%

EBITDA Margin 80.9% 81.4% 48 164.2% 16.1% -14,813 12.8% 12.5% -22

Falabella


23

I X . F I N A N C I A L S T R U C T U R E

Total liabilities as of September 30th, 2019 reached $11,194,717 million (MnUS$ 15.373). In turn, the leverage of the non-banking

business24 amounted to 1.02x.

Considering the financial debt 25 of the non-baking business, the ratio of Net Financial Debt / EBITDA was 3.66x. This ratio differs

from that reported until December 2018 because it considers Promotora CMR within the banking segment. The securities

presented as of September 30th, 2018 have been restated, for comparability purposes.

If Promotora CMR would had been incorporated in the non-banking business, this ratio would have been 3.16x as of September

2019.

Falabella’s firm-wide policy is to raise debt in local currency, or to hedge to local currency any debt raised in foreign currency.

Under 144ª/Reg S, the company has three bonds, one for US$ 500 million and another two US$ 400 million, both of which are

fully hedged with swaps, capital and interest, to maturity.

Leverage Non-Banking Operations

Net Financial Debt / EBITDA Non-Banking 26

24 Non-banking operations leverage = total non-banking operations liabilities divided by total equity. 25 Non-banking business financial debt = total current non-bank operations liabilities + total non- current non-banking operations liabilities. 26 EBITDA = Gross Profit – Distribution costs – Administrative costs – Other expenses, by function + Depreciations; Net Financial Debt = Current financial liabilities – Financial Assets (Hedges) – Cash & Cash Equivalents.

1.04 1.02

sept-18 sept-19

4.18 3.66

sept-18 sept-19


24

Debt Maturity Profile 27

Debt Maturity Profile (CLP million)

Total Consolidated Financial Debt (without banking operations): Mn$ 3,297,170.

Debt Maturity Profile (US$ million) 28

Total Consolidated Financial Debt (without banking operations): MnUS$ 4,528.

27 Total consolidated financial debt does not include the banking operations of the Falabella Group (Banco Falabella Chile, Banco Falabella Peru and Banco Falabella Colombia) or accrued interests; however, it does include Promotora CMR and CMR Argentina. 28 Debt converted to US$ using the local currency exchange rate for each country at the close of the period.

351,012 320,022243,112

173,212

593,144

1,616,667

2019 2020 2021 2022 2023 2024+

482 439 334 238

815

2,220

2019 2020 2021 2022 2023 2024+


25

X . F A L A B E L L A F I N A N C I A L S T A T E M E N T S 29

29 Banking business does not include CMR Argentina.

For the year ended as of

30-Sep-19

For the year ended as of

30-Sep-18

TH CLP TH CLP

Statement of Income

Non-banking Business

Revenue from continuing operations 5,802,437,766 5,745,783,560

Cost of sales (3,931,139,953) (3,802,885,751)

Gross Profit 1,871,297,813 1,942,897,809

Distribution costs (92,854,316) (82,212,746)

Administrative expenses (1,413,848,214) (1,384,656,917)

Other expenses, by function (96,458,229) (95,733,611)

Other gains (losses) 12,274,805 120,767

Financial income 16,074,752 27,823,269

Financial expenses (147,869,227) (139,455,425)

Equity interest in profits (losses) of associates accounted for using the equity method (613,139) 5,436,026

Foreign currency translation (19,594,921) (16,592,306)

Income from indexation units (14,045,294) (18,114,625)

Profit (Loss), before Taxes 114,364,030 239,512,241

Income tax expense (38,987,134) (50,556,535)

Profit (loss) from Non-banking Business 75,376,896 188,955,706

Banking Services (Presentation)

Interest and indexation revenue 824,896,564 763,849,417

Interest and indexation expenses (136,139,206) (117,304,963)

Net Income from Interest and Indexation 688,757,358 646,544,454

Fee revenue 180,549,699 163,658,025

Fee expenses (85,214,410) (86,921,328)

Net Fee Income 95,335,289 76,736,697

Net income from financial operations 15,822,252 14,495,739

Net exchange gains (losses) (133,397) (6,044,816)

Other operating income 2,383,321 4,339,327

Provision for loan losses (227,270,017) (214,147,917)

Total Operating Income, net 574,894,806 521,923,484

Employee remunerations and expenses (110,110,720) (106,844,561)

Administrative expenses (145,550,287) (130,874,488)

Depreciation and amortization (25,046,097) (15,415,148)

Other operating expenses (33,927,514) (33,802,578)

Total Operating Expenses (314,634,618) (286,936,775)

Operating Income 260,260,188 234,986,709

Income from equity method investments in companies 696,269 453,266

Income before Income Taxes 260,956,457 235,439,975

Income tax expense (72,156,783) (61,709,168)

Profit (loss) from Banking Business 188,799,674 173,730,807

Profit (Loss) 264,176,570 362,686,513

Profit (loss), Attributable to:

Owners of the parent 216,629,233 317,830,088

Non-controlling interests 47,547,337 44,856,425

Profit (Loss) 264,176,570 362,686,513

Earnings per share

Basic earnings per share

Basic earnings (loss) per share from continuing operations 0.09 0.13

Basic Earnings (Loss) per Share 0.09 0.13

Diluted Earnings (Loss) per Share

From continuing operations 0.09 0.13

Diluted Earnings (Loss) per Share 0.09 0.13


26

30-sept-19 31-dic-18

Balance Sheet TH CLP TH CLP

Assets

Non-banking Businesses

Current assets

Cash and cash equivalents 229,137,324 317,491,382

Other financial assets 25,708,733 25,831,939

Other non-financial assets 119,595,603 127,027,906

Trade and other accounts receivable 376,016,078 505,261,560

Accounts receivable from related parties 47,638,158 60,013,844

Inventory 1,362,268,995 1,410,494,616

Tax assets 97,138,341 86,778,115

Total of current assets different from those assets or disposal groups classified as held for sale or as held for

distribution to owners 2,257,503,232 2,532,899,362

Non-current assets or disposal groups classified as held for sale or as held for distribution to owners 17,371,457 17,371,457

Non-current assets or disposal groups classified as held for sale or as held for distribution to owners 17,371,457 17,371,457

Total Current Assets 2,274,874,689 2,550,270,819

Non-current Assets

Other financial assets 155,670,466 105,525,159

Other non-financial assets 101,782,763 95,161,666

Accounts receivable 11,614,267 9,004,961

Investments accounted for using the equity method 161,143,417 135,735,296

Intangible assets other than goodwill 326,614,693 312,876,174

Goodwill 635,555,483 625,914,880

Property, plant and equipment 3,632,152,360 2,725,338,067

Investment properties 3,098,353,173 2,972,046,449

Non-current tax assets 11,198,812 16,341,601

Deferred tax assets 203,134,029 165,387,150

Total Non-current Assets 8,337,219,463 7,163,331,403

Total Assets – Non-banking Business 10,612,094,152 9,713,602,222

Banking Services Assets (Presentation)

Cash and bank deposits 227,904,881 303,217,364

Transactions with settlement in progress 107,295,836 57,290,605

Financial assets held for trading 372,686,310 155,634,743

Financial derivative contracts 302,630,118 88,101,263

Loans and accounts receivable from clients 4,892,635,061 4,631,682,308

Available for sale instruments 404,123,644 658,887,042

Investments in companies 3,416,951 3,179,466

Intangibles 70,730,215 68,260,141

Property, plant and equipment 71,546,815 41,384,274

Current taxes 3,054,870 6,934,952

Deferred taxes 46,665,346 49,592,217

Other assets 169,779,251 103,738,704

Total Bank Services Assets 6,672,469,298 6,167,903,079

Total Assets 17,284,563,450 15,881,505,301


27

30-sept-19 31-dic-18

TH CLP TH CLP

Net Equity and Liabilities

Non-banking Business

Other financial liabilities 629,004,966 558,213,658

Leasing liabilities, current 104,756,997 -

Trade and other accounts payable 793,589,425 1,019,436,064

Accounts payable to related parties 17,302,183 15,308,531

Other current provisions 22,821,646 24,732,430

Current tax liabilities 15,532,271 27,485,565

Employee benefits provisions 138,778,203 143,333,626

Other non-financial liabilities 115,887,749 146,127,369

Total Current Liabilities 1,837,673,440 1,934,637,243

Non-current Liabilities

Other financial liabilities 2,810,989,490 2,806,585,586

Leasing liabilities, non-current 859,008,402 -

Other liabilities 1,777,255 1,089,919

Other long-term provisions 9,068,085 9,324,355

Deferred tax liabilities 601,524,683 594,329,358

Employee benefits provision 57,516,848 45,182,842

Other non-financial liabilities 52,040,549 55,124,675

Total Non-current Liabilities 4,391,925,312 3,511,636,735

Total Non-banking Business Liabilities 6,229,598,752 5,446,273,978

Banking Services Liabilities (Presentation)

Deposits and other demand liabilities 686,003,294 639,081,704

Transactions with settlement in progress 138,713,063 46,413,806

Time deposits and other term deposits 2,661,286,744 2,538,382,394

Financial derivative contracts 325,107,375 87,064,300

Due to banks 443,368,207 510,566,109

Debt instruments issued 266,314,463 268,117,240

Other financial obligations 94,967,917 106,133,093

Leasing liabilities 34,193,146 -

Current taxes 3,674,458 91,904

Deferred taxes - -

Provisions 34,507,713 41,430,388

Other liabilities 276,982,484 210,593,162

Total Banking Services Liabilities 4,965,118,864 4,447,874,100

Total Liabilities 11,194,717,616 9,894,148,078

Net Equity

Issued capital 919,419,389 919,419,389

Retained earnings 4,449,191,648 4,421,138,544

Share premium 93,482,329 93,482,329

Own shares in portfolio (43,873,784) (44,808,966)

Other reserves (278,098,555) (321,368,626)

Equity attributable to owners of the parent 5,140,121,027 5,067,862,670

Non-controlling interests 949,724,807 919,494,553

Total Equity 6,089,845,834 5,987,357,223

Total Equity and Liabilities 17,284,563,450 15,881,505,301


28

30-sept-19 30-sept-18 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 7,135,492,503 6,959,314,619

Classes of payments

Payment to suppliers for supplying goods and services (5,565,027,765) (5,517,039,241)

Payments to and on account of employees (792,436,851) (787,699,631)

Income taxes refunded (paid) (76,348,361) (126,479,544)

Other cash inflows (outflows) (291,642,383) (304,173,807)

Subtotal net cash flows provided by Non-banking Business operating activities 410,037,143 223,922,396


Consolidated net income (loss) for the period 188,799,674 173,730,807

Charges (credits) to income that do not involve cash movements:

Depreciation and amortization 25,046,097 15,415,148

Credit risk provision 171,214,932 250,594,019

Net profit from equity method investments (696,269) (453,266)

Other charges that do not involve significant cash flow movements 72,156,783 61,709,168

Net change in interest, indexations and fees accrued on assets and liabilities (21,428,953) (2,202,313)

Changes in assets and liabilities affecting operating cash flow: - -

Net decrease in bank borrowings

Net increase in loans and accounts receivable from clients (374,422,933) (404,052,212)

Net decrease in instruments held for trading (164,213,478) (13,060,367)

Increase in deposits and other demand obligations 38,574,959 69,862,328

Increase in deposits and other time deposits 100,613,814 229,089,485

Increase in obligations with banks (17,611,924) (26,668,038)

Other use of cash (62,342,497) (77,111,695)

Subtotal net cash flows provided by Banking Services operating activities (44,309,795) 276,853,064

Net cash flows provided by operating activities 365,727,348 500,775,460

Cash flows provided by (used in) investing activities

Non-banking Business (Presentation)

Cash flows from loss of control of subsidiaries or other businesses 1,898,806 -

Cash flows used to obtain control of subsidiaries or other businesses - (87,420,365)

Contributions made to related companies - (3,997,815)

Loans to related parties (13,493,342) (22,181,371)

Proceeds from disposal of property, plant and equipment 6,635,249 29,466,153

Additions to property, plant and equipment (272,291,749) (264,516,662)

Proceeds from disposal of intangible assets - -

Additions to intangible assets (41,550,975) (40,091,574)

Proceeds from other long-term assets - -

Additions to other long-term assets (111,914,866) (74,735,050)

Dividends received 10,876,718 5,622,538

Interest received 8,755,489 18,232,979

Other cash inflows (outflows) 530,937 (121,543)

Subtotal net cash flows used in investing activities in the Non-banking Business (410,553,733) (439,742,710)


Net (Increase) decrease in investment securities available for sale 256,550,842 14,464,882

Additions to property, plant and equipment (18,574,348) (22,331,845)

Contributions made to related companies - -

Dividends received from investments in companies 638,601 503,392

Other sources of cash 474,721 (2,941,056)

Subtotal net cash flows used in Banking Services investing activities 239,089,816 (10,304,627)

Net cash flows used in investing activities (171,463,917) (450,047,337)

Cash flows provided by (used in) financing activities

Proceeds from issuance of shares 1,729,584 5,645,105

Payments to acquire own shares 882,844 (14,881,439)

Proceeds from long-term loans 104,456,288 112,139,910

Proceeds from short-term loans 907,674,940 1,526,283,086

Total proceeds from loans 1,012,131,228 1,638,422,996

Loans (payment) received to related parties 1,993,652 6,062,399

Payment of loans (1,005,153,275) (1,386,491,229)

Payment of financial lease liabilities (24,846,339) (20,341,897)

Dividends paid (202,831,479) (149,506,050)

Interest paid (100,688,365) (112,551,323)

Other cash inflows (outflows) 8,730,426 (66,391,910)

Subtotal net cash flows provided by (used in) Non-banking Business financing activities (308,051,724) (100,033,348)


Retrieval of letters of credit (7,703,248) (8,153,229)

Bond Issuance (payment) (1,802,777) 26,474,051

Payments of bonds and other long-term liabilities (49,585,978) 87,350,000

Other cash outflows (2,799,847) (4,098,374)

Subtotal net cash flows provided by (used in) Banking Services financing activities (61,891,850) 101,572,448

Net cash flows used in financing activities (369,943,574) 1,539,100

Net decrease in cash and cash equivalents, before the effect of changes in the exchange rate (175,680,143) 52,267,223

Effects of changes in the exchange rate on cash and cash equivalents

Effects of changes in the exchange rate on cash and cash equivalents 4,593,444 7,178,068

Net decrease in cash and cash equivalents (171,086,699) 59,445,291

Cash and cash equivalents at beginning of period 689,411,677 494,958,665

Cash and cash equivalents at end of period 518,324,978 554,403,956


29

Cash Flow – Chilean Operations (CLP thousand)

Cash Flow – International Operations (CLP thousand)

September 2019 Department Stores Home Improvement Supermarkets Banco Falabella Plaza S.A.

Cash flow from operating activities (32,739,469) 202,837,354 66,561,051 (230,172,557) 168,218,882

Cash flow from investing activities (127,082,533) (69,628,976) (35,536,578) 273,427,852 (68,475,995)

Cash flow from financing activities 153,504,420 (138,246,024) (32,738,487) (117,239,898) (117,835,257)

Increase (decrease) in cash and cash equivalents (6,317,582) (5,037,646) (1,714,014) (73,984,603) (18,092,370)

Impact of exchange rate differences on cash and cash equivalents 127,741 (1,713,326) (160,939) - (84,062)

Cash and cash equivalents at the beginning of the period 57,456,946 26,498,167 15,210,245 253,159,175 51,555,592

Cash and cash equivalents at the end of the period 51,267,106 19,747,195 13,354,896 179,174,572 33,379,160

September 2018 Department Stores Home Improvement Supermarkets Banco Falabella Plaza S.A.

Cash flow from operating activities 16,139,180 36,105,880 15,898,192 153,699,243 146,931,303

Cash flow from investing activities (62,947,867) (62,794,568) (27,141,072) (47,388,028) (58,706,477)

Cash flow from financing activities 31,451,520 26,801,442 8,470,287 38,729,362 (83,075,893)

Increase (decrease) in cash and cash equivalents (15,357,167) 112,754 (2,772,593) 145,040,577 5,148,933

Impact of exchange rate differences on cash and cash equivalents (78,779) (224,191) (9,044) 288,451 (142,924)

Cash and cash equivalents at the beginning of the period 49,713,345 21,759,631 11,855,790 171,059,127 28,040,367

Cash and cash equivalents at the end of the period 34,277,399 21,648,194 9,074,153 316,388,155 33,046,375

September 2019 Peru Colombia Argentina Brazil

Cash flow from operating activities 120,635,256 (52,005,140) 63,790,939 (5,552,718)

Cash flow from investing activities (107,246,726) (17,945,003) (3,894,963) (14,478,845)

Cash flow from financing activities (40,488,133) 86,344,964 (55,597,385) 20,260,288

Increase (decrease) in cash and cash equivalents (27,099,603) 16,394,821 4,298,591 228,725

Impact of exchange rate differences on cash and cash equivalents 5,412,947 (189,593) (1,266,298) (18,273)

Cash and cash equivalents at the beginning of the period 145,502,008 45,133,440 3,634,593 2,754,969

Cash and cash equivalents at the end of the period 123,815,352 61,338,670 6,666,886 2,965,421

September 2018 Peru Colombia Argentina Brazil

Cash flow from operating activities 96,651,479 25,893,998 (48,222,490) (18,715,646)

Cash flow from investing activities (27,424,542) (2,994,488) (6,140,704) (50,323,249)

Cash flow from financing activities (61,659,580) 10,130,655 53,397,706 68,407,4370 0 0 0

Increase (decrease) in cash and cash equivalents 7,567,357 33,030,165 (965,488) (631,458)

Impact of exchange rate differences on cash and cash equivalents 7,114,385 1,112,574 (1,478,275) (282,728)0 0 0 0

Cash and cash equivalents at the beginning of the period 151,861,441 39,887,477 4,952,531 2,339,4580 0 0 0

Cash and cash equivalents at the end of the period 166,543,183 74,030,216 2,508,768 1,425,272


30

Definitions for the Financial Business Units


31

Address:

Manuel Rodriguez Norte 730

Santiago, Chile

Contacts:

Andrea González Bayón

Pablo Muñoz Norero

Investor Relations

E-mail: [email protected]

Website:

https://investors.falabella.com

Date post:	12-May-2020
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