August 2019 Q2 19 1 CONSOLIDATED RESULTS RESULTS BY 2 SEGMENT - PowerPoint PPT Presentation

August 2019

Q2 ’19 1 CONSOLIDATED RESULTS RESULTS BY 2 SEGMENT OTHER FINANCIAL 3 RESUL TS IFRS 16 BRIDGE AND 4 RECONCILIATION

1 Q2’19 CONSOLIDATED RESULTS

Q2’19 CONSOLIDATED FINANCIAL RESULTS Million Soles (S/ mm) Highlights Revenues Low single-digit growth in Revenues mainly explained by a  contraction in the MDM unit of our Pharma segment, despite 6,405 5,805 the solid Revenues growth in Food Retail and Shopping Malls +2.0% Solid growth in Adjusted EBITDA in our three segments  3,156 3,095 Consolidated Gross Margin, Adjusted EBITDA and Net Income  margin expansions due to good operating performance and Q2’18 Q2’19 YTD’18 YTD’19 absence of one-time expenses incurred in Q2 ’ 18 Gross 28.4% 30.0% 28.6% 29.6% Margin Adj. EBITDA (Pre-IFRS 16) 1/ Net Income (Pre-IFRS 16) 1/ 645 221 498 +631% +18.9% 110 324 272 15 Q2’18 Q2’19 YTD’18 YTD’19 -6 Q2’18 Q2’19 YTD’18 YTD’19 Margin 8.8% 10.3% 8.6% 10.1% Margin 0.5% 3.5% -0.1% 3.4% Note: YTD’18 consolidated figures include five months of Quicorp’s operation and one-time expenses related to the acquisition. 1/ Adj. EBITDA excludes mark-to-market gains from valuation of investment properties of Food Retail and Shopping Malls segments and IFRS 16 effect. Net Income excludes IFRS 16 effect. 4

LTM Q2’19 FINANCIAL AND OPERATIONAL SNAPSHOT Million Soles (S/ mm) Food Shopping Pharma Retail Malls 1/ + + = LTM Q2’19 figures (S/ mm; %) Revenues 5,487 6,939 519 12,847 % Revenues Contribution 42% 54% 4% Adj. EBITDA (Pre-IFRS 16) 2/ 368 656 314 1,330 % EBITDA Contribution 27% 49% 24% Adj. EBITDA Margin 6.7% 9.4% 78.9% 10.4% (Pre-IFRS 16) 3/ _ Market Position 1 st 1 st 1 st # of Stores 477 2,061 21 _ # of Employees 16,254 21,287 435 37,976 1/ Consolidated figures for InRetail include intercompany eliminations and consolidation adjustments. 2/ Adj. EBITDA excludes mark-to-market gains from valuation of investment properties in the Food Retail and Shopping Malls segments and IFRS 16 effect. 3/ InRetail Shopping Malls’ Adjusted EBITDA margin is represented here as our Net Rental Margin, calculat ed as Adj. EBITDA 5 (Pre-IFRS 16) /Net Rental Income.

2 RESULTS BY SEGMENT

FOOD RETAIL S/ mm Q2'19 Q2'18 Var % Revenues 1,360 1,223 11.2% Gross Profit 364 318 14.6% Adj. EBITDA 1/ (Pre-IFRS 16) 88 76 15.6% Gross Mg 26.8% 26.0% 80 bps Adj. EBITDA Mg 1/ 6.4% 6.2% 25 bps (Pre-IFRS 16) Net opening of 39k sqm (+11.7%) of sales area since Q2 ’ 18, excluding temporal closings of Cusco, Sullana and Zarate. 21 net Mass stores opened (+3.4k sqm) in Q2 ’ 19 SSS growth of 4.1% in Q2 ’ 19, despite high comparison basis of Q2 ’ 18 due to Peru’s participation in the FIFA World Cup Gross margin increased 80 bps in Q2 ’ 19, mainly due to lower weight of electronic categories of lower margins in the product mix, and higher rebates from higher sales volumes Adjusted EBITDA margin of 6.4% in Q2 ’ 19 % Revenues per format (Q2’19) 2/ 85% 5% 7% 3% 1/ Adjusted EBITDA excludes mark-to-market gains from valuation of investment properties and excludes IFRS 16 effect. 2/ Includes Mimarket sales. 7

PHARMA Pharmacies 1/ MDM 1/ Total S/ mm Q2'19 Var % Q2'19 Var % Q2'19 Q2'18 Var % Revenues 1,231 1.2% 637 -11.4% 1,688 1,777 -5.0% Gross Profit 426 10.9% 87 -25.9% 511 490 4.2% Adj. EBITDA 2/ (Pre-IFRS 16) 131 21.7% 26 2.6% 161 126 28.0% Gross Mg 34.6% 31.5% 13.7% 16.4% 30.3% 27.6% 268 bps Adj. EBITDA Mg 2/ 10.7% 8.9% 4.0% 3.5% 9.5% 7.1% 246 bps (Pre-IFRS 16) Pharmacies Top line growth of 1.2% impacted by the closing of ~100 stores throughout Q2 ’ 18, as part of the synergies plan related to the acquisition of Quicorp SSS growth of 2.3% in Q2 ’ 19 Gross margin of 34.6%, 303 bps above Q2 ’ 18 Adjusted EBITDA margin of 10.7% MDM Lower revenues due to fine tuning of distribution business to focus on more profitable pharma lines Gross margin of 13.7% in Q2 ’ 19, which considers reclassification of logistic expenses related to the distribution of products, from operating expenses to cost of goods sold, implemented in Q4 ’ 18 as per IFRS 15 Adjusted EBITDA margin of 4.0% in Q2 ’ 19, above Q2 ’ 18 1/ Pharmacies refers to the retail pharma unit which operates mainly Inkafarma and Mifarma stores. MDM refers to the Manufacturing, Distribution and Marketing unit. Segment breakdown considers management figures. 8 2/ Adj. EBITDA excludes IFRS 16 effect.

SHOPPING MALLS S/ mm Q2'19 Q2'18 Var % Revenues 130 124 5.1% Gross Profit 87 83 4.8% Adj. EBITDA 1/ (Pre-IFRS 16) 78 74 4.7% Gross Mg 66.8% 67.0% -19 bps Net Rental Mg 2/ 78.0% 79.0% -95 bps (Pre-IFRS 16) Revenue growth of 5.1% in Q2 ’ 19, with tenant SSS growth of 2.9%, which was impacted by lower sales growth from anchor tenants due to the high comparison basis of Q2 ’ 18 in the context of Peru’s participation in the FIFA World Cup Maintained high occupancy rates in malls of ~96% in Q2 ’ 19 Net Rental Margin of 78.0%, lower than Q2 ’ 18 due to higher property taxes, and increased insurance and security expenses Mark-to-market 1/ gain of S/3.8 mm in Q2 ’ 19 vs S/5.5 mm in Q2 ’ 18 Puruchuco mall construction as of Jul’19. View from Javier Prado Avenue 1/ Adjusted EBITDA excludes mark-to-market gains from valuation of investment properties and excludes IFRS 16 effect. 2/ Net Rental Margin is calculated as Adj. EBITDA Pre-IFRS 16/Net Rental Income. Net Rental Income is defined as total income 9 minus reimbursable operating costs related to the maintenance and management of Shopping Malls.

QUARTERLY OPENINGS AND SSS BY SEGMENT Openings Same Store Sales (SSS) Food Retail Food Retail 2018: 7.9% Sales Area (‘000 sqm) YTD: 6.8% 375 372 361 10.2% 335 9.5% 324 9.1% 53 56 47 43 7.8% 36 23 23 Mass 4.1% 296 296 296 Economax 287 288 Spmkts Q2’18 Q3’18 Q4’18 Q1’19 Q2’19 Q2’18 Q3’18 Q4’18 Q1’19 Q2’19 N o Spmkts 104 104 106 106 106 N o Economax - 1 4 5 5 N o Mass 208 247 285 326 347 2018 : 5.3% Pharmacies Pharmacies YTD: 4.3% N o Stores 2,087 2,068 2,063 2,062 2,061 7.4% 6.3% 1,006 986 980 983 981 4.7% 4.8% Mifarma 2.3% Inkafarma 1,081 1,082 1,083 1,079 1,080 Q2’18 Q3’18 Q4’18 Q1’19 Q2’19 Q2’18 Q3’18 Q4’18 Q1’19 Q2’19 Shopping Malls Shopping Malls 1/ 2018 : 5.7% GLA (‘000 sqm) YTD: 4.0% 671 671 676 676 676 5.8% 5.3% 5.1% 5.0% 2.9% Q2’18 Q3’18 Q4’18 Q1’19 Q2’19 Q2’18 Q3’18 Q4’18 Q1’19 Q2’19 N o malls 21 21 21 21 21 1/ Shopping Malls’ tenant SSS include anchor stores. 10

3 OTHER FINANCIAL RESULTS

CONSOLIDATED NET INCOME Million Soles (S/ mm) Net Income (Pre-IFRS 16) 1/ Net Income Breakdown (Pre-IFRS 16) 1/ 221 -12 23 -6 +631% -39 78 110 110 51 15 15 Net EBITDA Lower Net Lower Net FX Higher Higher Net -6 Income Growth Financial Mark to Effect D&A Taxes Income Q2’18 Q2’19 YTD’18 YTD’19 Q2’18 Expenses Market Q2’19 Margin 0.5% 3.5% -0.1% 3.4% Net Income excluding one-time financial expenses, FX and mark-to-market 2/ (Pre-IFRS 16) 211 173 +11.1% 104 94 Q2’18 Q2’19 YTD’18 YTD’19 Margin 3.0% 3.3% 3.0% 3.3% 1/ Net Income excludes IFRS 16 effect. 2/ Net Income adjusted for (i) one-time financial expenses related to the acquisition of Quicorp and associated liability management of S/102 mm in Q1’18 and S/73 mm in Q2’18, (ii) FX loss/gain , (iii) mark-to-market income from the valuation of investment properties and (iv) IFRS 16 effect. 12

CAPEX AND CASH-FLOW BREAKDOWN Million Soles (S/ mm) Consolidated CAPEX Cash-Flow Breakdown 2018: S/998 mm 2019: S/336 mm 1/ 335 -336 501 45 -204 243 180 643 223 196 -127 183 152 -113 409 155 Q1’18 Q2’18 Q3’18 Q4’18 Q1’19 Q2’19 Starting Operating CAPEX Financial Financial Dividend Other Non- Ending Cash Cash Flow Debt and Expenses Distribution Operating Cash Balance Lease Investing Balance 2019 Liability Activities Q2’2019 1 / Q1’18 CAPEX includes ~S/180 mm of the acquisition of Real Plaza Pucallpa and Estación Central.. 13

CONSOLIDATED FINANCIAL DEBT Million Soles (S/ mm) Consolidated Financial Debt 1/ USD Exposure Net Debt/Adj. EBITDA Debt/Adj. EBITDA 4.8x 4.0x 4.0x 4.0x 3.9x 3.6x 39% 40% 42% 4.3x 47% 49% 3.3x 3.3x 3.6x 3.5x 3.5x 3.4x 3.2x 2.8x 2% 23% 3% 22% 2.5x 23% 51% 48% 38% 38% 35% 2014 2015 2016 2017 LTM 2018 LTM LTM Dec-15 Dec-16 Dec-17 Dec-18 Jun-19 Q1’18 PF Q1’19 Q2’19 Hedge USD PEN Quicorp acquisition Debt 2,446 2,670 2,659 2,704 5,089 5,069 5,187 5,181 2/ InRetail Peru distributed a US$ 35mm Cash 285 325 432 599 497 671 700 575 dividend in Q2’19 Net 2,160 2,344 2,227 2,105 4,592 4,398 4,487 4,606 Debt 1/ Periods of 2018 consider a normalized Adj. EBITDA, which includes LTM Adj. EBITDA for Quicorp and excludes one-time expenses related to the acquisition of Quicorp. Includes cash equivalents as cash. Since 2015, ratios are adjusted for currency hedge effect. Adj. EBITDA excludes IFRS 16 effect. 2/ Cash includes S/33.5 mm and S/83.8 mm of short term loans from SPSA and InRetail 14 Pharma to a related party, which were repaid on August 14th, 2019.