Ripley Corp January 2019 Over 60 Years of History Present in - - PowerPoint PPT Presentation

Ripley Corp January 2019

PHASE IV PROFITABILITY AND SELECTIVE GROWTH PHASE III SCALE PHASE II REPOSITIONING PHASE I BEGINNING

First store in Santiago Beginning

• f credit

business First department store Opening of Ripley Parque Arauco First store in Peru Opening of Ripley Bank Chile IPO of Ripley Corp Acquisition of 22.5% of Nuevos Desarrollos S.A. Opening of Ripley Colombia First bond placed by Ripley Bank Chile Closing Ripley Colombia Consolidation of Mall Aventura in Peru

Over 60 Years of History

1956 1985 1976 1993 1997 2005 2002 2009 2013 2015 2014 2016

Organic growth

2017- 2018

• Present in Chile and Peru
• Listed in Santiago Stock Exchange and a member of the 30 Largest Chilean

Companies included in S&P Index

Ripley by Segments

• Revenues: MMM$457
• MMUSD 725
• EBIT: MMM$70
• MMUSD 111
• Loan Portfolio: MMM$1,205
• MMUSD 1,911
• 82 branches
• 1,742 (Th) cards w/debt
• Revenues: MMM$1,225
• MMUSD 1,944
• EBITDA: MMM$37
• MMUSD 59
• 76 stores
• 484,803 m2
• Online channel: + 40% YoY

Retail

Chile 67% Peru 33%

Sep-18 LTM Revenues MMUSD 2,697 18% 60% 22%

Referential EBITDA(2)

27% 53% 20%

Assets

Real Estate Banking

Notes: Ripley’s functional currency is Chilean pesos. However for referential purposes, all amounts throughout the presentation are represented in USD at a fixed rate of 630.43 CLP/USD Data LTM as of September 2018. Segment details do not consider central offices Corp, Chile nor Peru. (1) Referential EBITDA considers the proportional EBITDA from non-consolidating investments properties (13%).

• Revenues: MMM$1,701
• MMUSD 2,697
• EBITDA: MMM$170
• MMUSD 269
• Market Cap: MMM$1,123
• MMUSD 1,781
• Employees: 24,122

Ripley Corp

• Revenues: MMM$26
• MMUSD 41
• Invest. properties: MMM$511
• MMUSD 810
• EBITDA(1): MMM$ 47
• MMUSD 75
• 13 malls
• GLA: 329,775 m2 owned

Ripley by Country

Real Estate

• 47 stores
• 291,919 m2
• EBITDA: MMM$22
• MMUSD 35
• Loan Portfolio: MMM$841
• MMUSD 1,334
• 1,273 (Th) cards w/debt
• EBIT: MMM$49
• MMUSD 78
• 11 malls (1 fully owned)
• Investment properties: MMM$312
• MMUSD 495
• EBITDA(1): MMM$33
• MMUSD 53
• 29 stores
• 192,884 m2
• EBITDA: MMM$15
• MMUSD 24
• Loan Portfolio: MMM$364
• MMUSD 577
• 469 (Th) cards w/debt
• EBIT: MMM$21
• MMUSD 34
• 2 malls fully owned
• Investment properties: MMM$199
• MMUSD 316
• EBITDA: MMM$14
• MMUSD 22

Ripley Chile Ripley Peru

Banking Retail Real Estate Banking Retail

Notes: Data LTM as of September 2018. Segment details do not consider central offices Corp, Chile nor Peru. (1) Referential EBITDA considers the proportional EBITDA from non-consolidating investments properties (13%).

Diversified Net Assets Structure Evolution

Note: Amounts do not include operation in Colombia. EBITDA: EBIT + Depreciation + amortization + interest expenses.

20% 25% 24% 23% 61% 63% 59% 54% 55% 52% 22% 21% 21% 21% 21% 24% 17% 17% 2014 2016 2015 2017 Real Estate Banking Retail + Central offices Sep-18 2013

Net Assets EBITDA + Cash flows from/to JV shopping malls

Positive Operational Performance Evolution

Banking Retail + Central offices Real Estate + JV cash flows 62% 11% LTM sep-17 15% 73% 12%

• 8%

77% 30% 2016 15% LTM sep-18 7% 2015 4% 73% 11% 2017 16% 81% 15% 2014

• 1%

81% 21% 2013 27% 78%

Key Considerations

Over 60 years of experience in the retail industry in Chile and 20 years of experience in Peru, with vast knowledge of our clients and their purchase behavior

1

Continuous omnichannel development through strengthening the digitalization and e-Commerce channels in the retail and banking businesses

2

Profitable and low leveraged banking businesses, strongly integrated with the retail business. Banks are regulated by the SBIF(1) in Chile and SBS(1) in Peru

3

Stores in the best locations, along with modern distribution centers, allow the development of the retail business

4

Real Estate business with investments in various shopping centers, in the best locations and with projects at different levels of maturity

5

Solid financial stance with a healthy composition and controlled leverage indicators

6

(1) SBIF: Superintendence of banking and financial institutions; SBS: Superintendence of banking, insurance and pension funds.

Retail Business

Banking Business Real Estate Business

1 2 3

Index

Retail Business

Wide presence in Chile and Peru, with leadership in both countries

(1) Market-share calculated based on LTM sep-18 revenues, from companies with public information. (2) Does not consider Oechsle and other minor retailers since information is not publicly available.

Ripley 38,0% Falabella 54,9% Cencosud 7,0%

80% of our selling surface is located in main shopping centers in major cities

Chile Peru

Ripley 18,5% Falabella 34,8% Cencosud 24,4% AD Retail 7,5% Hites 4,8% La Polar 7,0% Tricot 3,0% Ripley 18,0% Falabella 34,3% Cencosud 24,5% AD Retail 8,4% Hites 4,9% La Polar 7,2% Tricot 2,8%

Market-share LTM sep-17 (1) Market-share LTM sep-17 (2) Market-share LTM sep-18 (1)

1

Ripley 37,0% Falabella 54,8% Cencosud 8,2%

Market-share LTM sep-18 (2)

Controlled growth of our selling surface

291.919 287.753 269.446 276.080 276.080 272.307 47 46 42 43 43 42 2017 2016 2015 2014 2013 Sep-18 N° of stores Selling surface (m2)

Selling surface Chile

192.884 192.884 192.884 177.799 173.189 156.842 29 29 29 27 26 22 Sep-18 2017 2016 2015 2014 2013 N° of stores Selling surface (m2)

Selling surface Peru

556 626 635 643 646 645 1.099 1.179 1.181 1.211 1.282 1.299 1.927 1.944 LTM sep-18 Chile Peru 2017 2013 1.656 2016 1.854 2015 1.816 2014 1.806

Sales evolution (MMUSD) SSS Evolution

• 6%
• 4%
• 2%

0% 2% 4% 6% 2014 2015 2016 2017 9M18 Chile Peru

Retail Business

1

Retail Business

Large logistic infrastructure in place

Ripley Chile’s distribution center has a surface of 67,000 m2. Meanwhile, Ripley Peru’s distribution center has a surface of 45,000 m2 Both distribution centers have growth potential for the online and physical channels

Stores in the best locations, along with self-sufficient distribution centers, allow the development of the retail business

1

B2C e-Commerce in Chile 1999 – 2017 (MMUSD)

• Greater emphasis in omnichannel experience and

digitalization

• Recent developments:
• Online virtual assistant, Mobile POS, Mobile

apps

• MercadoRipley.com (Ripley’s Marketplace) allows third

parties to sell their products through Ripley’s website

• Launched in 2017 in Chile and in 2018 in Peru
• Millions of visits to Ripley’s website in Chile and Peru

Awards

2015 2016 2016 2017

Source: Ripley Corp, Estimates from Santiago’s Chambers of Commerce. CAGR: compound annual growth rate.

Online sales YoY growth

40% 40% 40% 42% 23% 25% 75% 41% 2014 2015 2016 2017

Chile Peru

2018

4.000 3.074 2.480 2.036 1.592 1.275 1.066 730 514 447 353 294 203 94 72 48 36 24 15 2012 2011 2010 2009 2008 2007 2006 +25% +36% 2017 2016 2015 2014 2013 2005 2004 2003 2002 2001 2000 1999 CAGR CAGR

e-Commerce Business and Omnichannel Experience

1

Retail Business

1 2

CAMPAÑA #ElijoS ijoSerTest stigo igo No más Bully lying ing

What we have been working on:

• Increase traffic on our online and physical stores
• Marketplace
• Growing product availability in Ripley.com and

enhanced look and feel of the website

• Customer delivery focus
• Entertaining store
• Development
• f
• mnichannel

and digital experience

• Online virtual assistant
• Omnichannel new tools
• Mobile retail apps / digital store
• Emphasis in fashion & private brands
• Positioning of Ripley brand beyond retail
• Success in high impact social campaigns
• Women relevance
• Chile’s Telethon / social commitments
• Anti-bullying

1

Retail Business

Banking Business

Real Estate Business

1 2 3

Index

Banking Business

Chile Peru

• 47 branch offices
• #1 in credit card market-share
• #4 in the banking industry of credit card loans
• 3,8% ROA, the highest in the banking industry

Ripley 27% Cencosud + Scotiabank 17% Santander 14% Banco de Chile 13% Banco Estado 10% BCI 8% Others 11%

Source: SBIF and SBS, last available data. (1) As a percentage of the total credit cards in the industry.

Credit cards market-share(1) Credit cards market-share(1)

• 35 branch offices
• #2 in credit card market-share
• 3,0% ROA, second highest in the banking industry

Banco Falabella 17% Banco Ripley 15% Financiera Oh! 12% Interbank 11% BCP 11% Crediscotia 9% Banco Cencosud 8% Others 17%

2

500 520 497 498 504 469 1.170 1.288 1.270 1.293 1.339 1.273 Peru Chile Sep-18 1.742 2017 1.844 2016 1.792 2015 1.767 2014 1.808 2013 1.670

Cards w/debt

385 516 570 564 577 1.029 1.189 1.184 1.235 1.345 1.334 303 2017 1.909 2016 1.805 2015 1.699 2014 1.574 2013 1.332 Peru Chile Sep-18 1.911

Loan Portfolio (MMUSD)

163 195 223 234 223 353 411 435 446 469 502 143 Peru Chile LTM sep-18 725 2017 703 2016 669 2015 630 2014 575 2013 496

Revenues (MMCLP)

26 25 34 33 33 34 62 81 65 81 73 78 Chile LTM sep-18 Peru 111 2017 106 2016 114 2015 99 2014 106 2013 89

EBIT (MMUSD)

Note: Amounts in CLP currency, converted to USD for reference

Banking Business

2

Note: According to the information presented by the regulators SBIF in Chile and SBS in Peru

5 10 15 20 25 3Q18 2Q18 19,8 1Q18 Oct-18 1Q17 4Q17 3Q17 2Q17 2Q16 3Q16 4Q15 2Q15 3Q15 3Q14 4Q14 1Q15 1Q14 2Q14 1Q16 4Q16 Ripley Bank Ripley Bank’s average Chile’s Industry

ROE ROA

5 10 15 20 25 3Q18 Oct-18 17,6 2Q18 1Q18 4Q17 3Q14 2Q16 4Q16 1Q17 2Q17 3Q16 3Q17 4Q14 1Q15 2Q15 3Q15 1Q16 4Q15 2Q14 1Q14 Ripley Bank Peru’s Industry Ripley Bank’s average

ROE ROA

Chile Peru

Profitable business with low leverage and highly integrated with the retail business

2 4 6 8 3Q14 2Q14 1Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 Oct-18 4,5 2Q18 3Q18 1 2 3 4 5 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 Oct-18 3,5 2Q18 3Q18

% % % %

Banking Business

2

Healthy risk indicators in a more defiant macroeconomic scenario

(1) All Indicators shown as a percentage of total loan portfolio (2) In October 2016, Ripley Bank Chile changed its risk provisions model aligning it to the SBIF definitions.

1,0% 1,5% 2,0% 2,5% 3,0% 3,5% 4,0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 0,0% 0,2% 0,4% 0,6% 0,8% 1,0% 1,2% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2015 2016 2017 2018

Provision expenses(2)

(Does not consider contingent nor additional provisions)

Chile Peru

Over 90 days NPLs Provision expenses Over 90 days NPLs

0,0% 0,3% 0,6% 0,9% 1,2% 1,5% 1,8% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2015 2016 2016 Old model 2017 2018 3,0% 3,5% 4,0% 4,5% 5,0% 5,5% 6,0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Banking Business(1)

2

What we have been working on:

• Digitalization
• New Home Banking
• Banking App
• Strengthen loyalty programs
• Puntos Go
• Growing number of alliances
• Data analytics
• Growth of loan portfolio and cards, maintaining

risk under control

• Increase preference and use
• Launch of current accounts and debit cards
• Growth of Ripley’s credit card outside Ripley store

Banking Business

2

Retail Business Banking Business

Real Estate Business

1 2 3

Index

Strength of the segment and its solid evolution

Ripley Corp’s ownership in real estate businesses (sep-18) EBITDA LTM sep-18 (MMUSD)

16 21 17 10 21 22 22 10 17,8% 31,3% 5,7% 27,6% 4,7% Total 75 64 Nuevos Desarrollos S.A.

• Inmob. Mall

Vina del Mar S.A. (2) Mall Aventura S.A. Mall Concepción & leased properties LTM sep-18 LTM sep-17 Non-consolidating investments More Details about the investment properties in the appendix. (1) On July 2016, the division of Aventura Plaza S.A. was executed and Ripley began to consolidate the operation of Mall Aventura S.A. (2) On April 2016 Ripley’s ownership of Inm. Mall Vina del Mar came up to 50% after the purchase of an extra 16.67% of it. (3) Amounts equivalent to the total of assets weighed by the percentage of Ripley Corp’s ownership. 2018 2017

Ownership Country Investment properties(3) (MMUSD) EBITDA LTM(3) (MMUSD) Net Income LTM(3) (MMUSD) GLA(3) (m2) Malls GLA(3) (m2) Malls Mall Concepcion & leased properties 100% Chile 121 10 10 36,800 1 26,000 1 Nuevos Desarrollos S.A. 22.5% Chile 240 21 44 105,075 8 76,605 6

• Inm. Vina del Mar S.A.

50% Chile 134 22 18 59,700 2 58,500 2 Mall Aventura S.A. 100% Peru 316 22 13 128.200 2 122,900 2 Total 810 75 85 329.775 13 284,005 11

Real Estate Business: Shopping Malls

3

What we have been working on:

• Recent openings in Chile
• Mall Concepcion

 Office Tower (GLA 10,975 m2)

• Nuevos Desarrollos

 Mall Los Dominicos (GLA 93,000 m2)  Mall Arica (GLA 34,000 m2)

• Extensions in Chile and Peru:
• Inmobiliaria Mall Vina del Mar
• Marina Arauco (est. 2H18)

(GLA 27,000m2)

• Curico (est. H18)

(GLA 8,000 m2)

• Mall Aventura
• Arequipa (est. 2H18)

(GLA 7,000 m2)

• Santa Anita (est. 2H19)

(GLA 30,000 m2)

• Greenfield projects:
• Iquitos (est. 2H21)

(GLA 52,000 m2)

• San Juan de Lurigancho (est. 2H21)

(GLA 64,000 m2)

Note: Estimated opening dates

Real Estate Business: Shopping Malls

Appendix

Recent Highlights

• The stock of Ripley Corp is part of the new S&P Chile index, which considers a

group of publicly listed companies with high levels of presence and liquidity in the Chilean stock market

• Partial opening of Mall Marina Arauco’s expansion:
• Expansion’s GLA: 27.000 m2
• Total GLA(1): 97.000 m2
• NCD issuance by Banco Ripley Peru
• PEN 65 million, one-year debt issuance
• On Premise to Cloud migration for online sales of retail and

launching of Ripley’s MarketPlace in Peru

(1) Includes Mall Marina, Boulevard Marina and expansion

• Ripley was able to maintain its place as one of the best companies to work in Chile

according to the Great Place to Work ranking.

Shareholders and Management

Involved shareholders and an executive team with vast experience

Name Position Years in Ripley Felipe Lamarca President 13 Michel Calderon Vice-president 22 Mauricio Balbontin Director

1

Debora Calderon Director 7 Andres Calderon Director 23 Veronica Edwards Director 7 Laurence Golborne Director 4 Alejandro Rosemblatt Director

1

Hernan Uribe Director 14

Main Executives (1)

Exp: 4 years RIPLEY BANK PERU CEO Rene Jaime Exp: 3 years RIPLEY BANK CHILE CEO Alejandro Subelman Exp: 7 years CORPORATE RETAIL CEO Francisco Irrarazaval Exp: 10 years MALL AVENTURA CEO Javier Postigo Exp: 7 years COMPTROLLER Miguel Nuñez Exp: 35 years CORPORATE VP Sergio Hidalgo Exp:2 years CFO Rafael Ferrada 35 years of experience

RIPLEY CORP CEO Lazaro Calderon Calderon Volochinsky Family 50% Calderon Kohon Family 10% Pension Funds 22% Mutual Funds 5% Others 13%

Board Members Shareholders (nov-18)

(1) Years in Ripley Corp.

• Net income reached MM$34,319 (+10.5%), while the operational result grew

21.7%:

• Significant improvement in the retail segment in Peru and the banking segment in Chile
• Greater SG&A efficiencies at a consolidated level
• Strength of the real estate segment
• Depreciation of the PEN (-3.8%) had a negative impact on results measured in CLP

RIPLEY CORP

(amounts in MMCLP)

9M18 9M17 Var % Total revenues 1,194,826 1,169,044 2.2% Gross profit 447,948 432,242 3.6% SG&A (402,822) (395,153) 1.9% EBIT 45,126 37,089 21.7% Income/loss before taxes 45,370 37,848 19.9% Income/loss from continued operations 34,307 31,133 10.2% Income/loss from discontinued operations 13 (62) Non-controlling interest (0) Net income 34,319 31,071 10.5% EBITDA 110,055 101,826 8.1% Accumulated

Ripley Corp’s 9M18 Results Summary

143 55 126 121 258 141

• 8

171 132 269

• 1,2%

+35,8% +8,9% +4,2% +2,0% +2,9% Net Income Discontinued

• perations

EBT EBIT EBITDA Gross Profit 1.002 983 Revenues 2.697 2.622 LTM sep-18 LTM sep-17

Sep-18 LTM Net Results (MMUSD)

Leverage

Excludes banking businesses

Bonds 56% Banks 39% Other 5%

Non-banking businesses: Financial Debt Decomposition (sep-18) Non-banking businesses: NFD / Equity

Excludes banking businesses

(1) Includes hedging liabilities and financial leasings. (2) Considers only capital, Nov-18. 0,48 0,52 0,39 0,45 0,27 0,36 0,43

• 7,1%
• 13,6%

Sep-18 Sep-17 2017 2016 2015 2014 2013 1,23 1,25 1,18 0,99 0,78

• 1,6%

2017 2016 2015 2014 2013

Ripley Corp: NFD / Equity Ripley Corp

Includes all Ripley Corp’s businesses

3 1 34 64 75 1 1 16 27 Total 564 2021 + 343 4Q20 3Q10 2Q20 1Q20 4Q19 3Q19 2Q19 1Q19 4Q18

Non-banking businesses: Debt calendar(2)

Excludes banking businesses (MMUSD)

Real Estate Business

Ownership Country GLA (m2) Mall Concepcion & leased properties 100% Chile 36,800 Nuevos Desarrollos S.A. 22.5% Chile 105,075 Mall Plaza Alameda 22.5% 59,100 Mall Plaza Sur 22.5% 76,900 Mall Plaza Mirador Bio Bio 22.5% 45,000 Mall Las Americas 21.0% 24,000 Mall Plaza Egana 22.5% 92,000 Mall Plaza Copiapo 22.5% 46,100 Mall Plaza Los Dominicos 22.5% 91,500 Mall Plaza Arica 22.5% 34,000

• Inm. Vina del Mar S.A.

50% Chile 59,700 Marina Arauco 50% 70,000 Mall del Centro de Curico 50% 49,400 Mall Aventura S.A. 100% Peru 126,000 Mall Aventura Arequipa 100% 68,600 Mall Aventura Santa Anita 100% 57,400 Total 716,800 Total Ripley 327,575

This presentation contains forward-looking statements, including statements regarding the intent, belief or current expectations of the Company and its

• management. Investors are cautioned that any such forward-looking statements

are not guarantee of future performance and involve a number of risks and uncertainties including, but not limited to, the risks detailed in the company’s financial statements, and the fact that actual results could differ materially from those indicated by such forward-looking statements.

Disclaimer