November 2018 AGENDA Q3 1 8 CONSOLIDATED 1 RESULTS RESULTS BY 2 - PowerPoint PPT Presentation

November 2018

AGENDA Q3 ’1 8 CONSOLIDATED 1 RESULTS RESULTS BY 2 SEGMENT OTHER FINANCIAL 3 RESUL TS

1 Q3’18 CONSOLIDATED RESULTS

Q3’18 CONSOLIDATED FINANCIAL RESULTS Million Soles (S/ mm) Highlights Revenues +56.3%  Significant growth in Revenues and adjusted EBITDA due to the acquisition of Quicorp and a solid growth in the Food 8,896 Retail and Pharma segments 5,690  Gross and adjusted EBITDA margins impacted by the +61.7% incorporation of the MDM unit within the Pharma segment, compensated by the execution of synergies 3,091 1,912  Net Income in Q3 ’ 18 free of one-time expenses related to the acquisition, growing in line with revenues and EBITDA despite Q3’17 Q3’18 YTD’17 YTD’18 the higher financial expenses related to the incremental debt Gross 31.0% 30.2% 30.5% 29.1% Margin Adj. EBITDA Net Income +41.9% -48.4% 816 183 +60.7% 575 +59.0% 101 95 318 63 200 Q3’17 Q3’18 YTD’17 YTD’18 Q3’17 Q3’18 YTD’17 YTD’18 Margin Margin 10.5% 10.3% 10.1% 9.2% 3.3% 3.3% 3.2% 1.1% Note: YTD’18 consolidated figures include eight months of Quicorp’s operation and one-time expenses related to the acquisition. 4

Q3’18 FINANCIAL AND OPERATIONAL SNAPSHOT Million Soles (S/ mm) Food Shopping Pharma Retail Malls 1/ + + = Q3’18 figures (S/ mm; %) Revenues 1,228 1,777 123 3,091 % Revenues Contribution 39% 57% 4% Adj. EBITDA 2/ 75 168 75 318 % EBITDA Contribution 24% 53% 24% Adj. EBITDA Margin 3/ 6.1% 9.5% 79.4% 10.3% _ Market Position 1 st 1 st 1 st # of Stores 366 2,068 21 _ # of Employees 14,908 461 22,244 37,733 1/ Consolidated figures for InRetail include intercompany eliminations and consolidation adjustments. 5 2/ Adjusted EBITDA excludes mark to market gains from valuation of investment properties in the Food Retail and Shopping Malls segment. 3/ InRetail Shopping Malls’ Adjusted EBITDA margin is represented here as our Net Rental Margin, calculated as EBITDA/Net Rental Income.

2 RESULTS BY SEGMENT

FOOD RETAIL S/ mm Q3'18 Q3'17 Var % Revenues 1,228 1,100 11.7% Gross Profit 328 290 12.9% 1/ Adj. EBITDA 75 66 14.6% Gross Mg 26.7% 26.4% 28 bps Adj. EBITDA Mg 6.1% 6.0% 15 bps Strong SSS growth of 10.2% in Q3 ’ 18 Opened Economax Cusco (+4.5k sqm) and 39 net Mass stores (+5.7k sqm) in Q3 ’ 18 Gross margin increased 28 bps in Q3 ’ 18, mainly due to higher supplier rebates associated to store openings Adjusted EBITDA margin increased 15 bps with respect to Q3 ’ 17 Construction of our new production facility and fresh food warehouse scheduled to be operational by year end Opening of Economax Cusco 2/ 1/ Adjusted EBITDA excludes mark to market gains from valuation of investment properties. 7 2/ Three additional Economax stores (2 reconversions and 1 new store) have already been opened in October and November (Q4’18).

PHARMA 1/ Q3'18 S/ mm Q3'17 Var % 2/ Pharmacies MDM Adj. Total Revenues 1,256 703 -183 1,777 705 151.9% Gross Profit 443 106 -12 537 232 131.3% EBITDA 134 34 -1 168 63 167.1% Gross Mg 35.3% 15.1% - 30.2% 32.9% -269 bps EBITDA Mg 10.7% 4.9% - 9.5% 8.9% 54 bps Revenues, Gross Profit and EBITDA more than doubled with the acquisition of Quicorp Gross margin impacted by the incorporation of the MDM unit that operates with lower margins, compensated by continued gross margin improvement in Pharmacies EBITDA margin increased 54 bps versus Q3 ’ 17, positively impacted by the execution of synergies in Pharmacies and cost saving initiatives in the MDM unit Pharmacies: • SSS growth of 4.7% in Q3 ’ 18 • Strong gross margin of 35.3% in Q3 ’ 18 due to an increase in private-label penetration • EBITDA margin of 10.7% in Q3 ’ 18 MDM: • Gross margin of 15.1% in Q3 ’ 18 • EBITDA margin in Q3 ’ 18 positively impacted by the reduction in overhead and operational expenses, and the recovery and reversal of provisioned receivables and others 1/ Pharmacies refers to the retail pharma unit which operates mainly Inkafarma and Mifarma stores. MDM refers to the 8 Manufacturing, Distribution and Marketing unit. Segment breakdown considers management figures. 2/ Corresponds to holding accounts, consolidation adjustments and intercompany eliminations.

SHOPPING MALLS S/ mm Q3'18 Q3'17 Var % Revenues 123 117 4.8% Gross Profit 83 81 1.7% 1/ Adj. EBITDA 75 73 2.6% Gross Mg 67.4% 69.4% -199 bps 2/ Net Rental Mg 79.4% 79.5% -13 bps Revenue growth of 4.8% in Q3’18 with solid tenant SSS growth of 5.0% in Q3’18 Maintained high occupancy rates in malls of ~96% in Q3’18 Lower gross margin vs Q3´17 due to an insurance reimbursement in Q3´17 related to 2017 coastal floods, and to the increase in the minimum wage which impacted cleaning and security personnel expenses Mark-to-market 1/ gain of S/3.0 mm in Q3’18 vs S/0.7 mm in Q3’17 Construction of Real Plaza Puruchuco on schedule, with expected opening in Q4’19 Puruchuco mall construction site 1/ Adjusted EBITDA excludes mark to market gains from valuation of investment properties. 9 2/ Net Rental Margin is calculated as EBITDA/Net Rental Income. Net Rental Income is defined as total income minus reimbursable operating costs related to the maintenance and management of Shopping Malls.

QUARTERLY OPENINGS AND SSS BY SEGMENT Openings Same Store Sales (SSS) 2017: 5.9% 43k sqm Mass Food Retail Food Retail 4.5k sqm Economax YTD’18: 7.9% Sales Area (‘000 sqm) 335 327 329 319 324 10.2% 9.1% 6.0% Mass 4.7% 3.9% 298 299 297 287 288 Economax Spmkts Q3’17 Q4’17 Q1’18 Q2’18 Q3’18 Q3’17 Q4’17 Q1’18 Q2’18 Q3’18 N o Spmkts 106 107 106 104 104 N o Economax - - - - 1 N o Mass 1/ 125 161 180 208 261 Pharmacies 2017: -3.6% Pharmacies N o Stores YTD’18 : 5.4% 2,186 2,087 2,068 7.4% 4.7% 4.5% 1,051 1,006 986 1,155 1,153 Mifarma Inkafarma 1,135 1,081 1,082 -1.2% Q3’17 Q4’17 Q1’18 Q2’18 Q3’18 -4.5% Q3’17 Q4’17 Q1’18 Q2’18 Q3’18 Shopping Malls 2017: 2.6% Shopping Malls 2/ YTD’18 : 5.6% GLA (‘000 sqm) 671 671 671 633 6.9% 627 5.1% 5.0% 1.8% 1.3% Q3’17 Q4’17 Q1’18 Q2’18 Q3’18 Q3’17 Q4’17 Q1’18 Q2’18 Q3’18 N o malls 19 19 21 21 21 1/ Includes 14 Mimarket stores. 10 2/ Shopping Malls’ SSS include anchor stores.

3 OTHER FINANCIAL RESULTS

CONSOLIDATED NET INCOME Million Soles (S/ mm) Net Income Net Income Breakdown -48.4% 183 -21 -7 -11 +60.7% -17 118 -24 101 95 63 101 63 Net EBITDA Higher Net Lower Higher Higher Higher Net Q3’17 Q3’18 YTD’17 YTD’18 Income Growth Financial Mark to FX Loss D&A Tax Income Q3’17 Expenses Market Q3’18 Margin 3.3% 3.3% 3.2% 1.1% Net Income excluding one-time financial expenses, FX and mark-to-market 1/ +68.3% 288 +80.0% 171 115 64 Q3’17 Q3’18 YTD’17 YTD’18 Margin 3.3% 3.7% 3.0% 3.2% 1/ Net income adjusted for (i) one-time financial expenses related to the acquisition and associated liability management of S/102 mm in Q1’18 and S/73 mm in Q2’18, (ii) FX loss/gain 12 and (iii) mark-to-market income from the valuation of investment properties.

CAPEX AND CASH-FLOW BREAKDOWN Million Soles (S/ mm) Consolidated CAPEX Cash-Flow Breakdown 2/ 2017: S/541 mm YTD’18: S/754 mm 1/ 335 -754 949 684 254 -163 180 280 482 223 196 159 133 130 119 -1,874 1,509 155 Q1’17 Q2’17 Q3’17 Q4’17 Q1’18 Q2’18 Q3’18 Starting Operating CAPEX Quicorp Debt Nexus Financial Other Ending Cash Cash Acquisition Increase Equity Expenses Non- Cash Balance Flow Operating Balance 2018 Investing Q3’18 Activities Free Cash Flow LTM Q3’18 : S/433 mm 1/ Q1’18 CAPEX includes ~S/180 mm of the acquisition of Real Plaza Pucallpa and Estación Central, disclosed in the previous Earnings Report. 13 2/ Debt increase is presented net of structuring costs.

CONSOLIDATED FINANCIAL DEBT Million Soles (S/ mm) Consolidated Financial Debt 1/ USD Exposure Net Debt/EBITDA Debt/EBITDA 4.5x 4.3x 4.0x 3.6x 39% 40% 42% 3.3x 3.3x 4.0x 3.7x 49% 3.6x 3.2x 2.8x 2.5x 23% 22% 3% 23% 48% 38% 38% 35% 2014 2015 2016 2017 LTM Q2’18 LTM Q3’18 Dec-15 Dec-16 Dec-17 Sept-18 Hedge USD PEN Debt 2,446 2,670 2,659 2,704 5,010 5,056 Cash 285 325 432 599 565 694 Net 2,160 2,344 2,227 2,105 4,445 4,362 Debt 1/ LTM Q2’18 and LTM Q3’18 consider a normalized EBITDA, which includes LTM EBITDA for Quicorp and excludes one-time expenses related to the acquisition of Quicorp. Includes treasury stock as 14 cash equivalent. Since 2015, ratios are adjusted for currency hedge effect.