Falabella (FALABELLA) Investor Day 2024 summary

Strategic direction and transformation

• Focused on five business engines—retail, home improvement, supermarkets, shopping malls, and digital banking—to drive sustainable value creation, supported by digital strategy and efficient capital allocation.

• Embraced simplicity, operational focus, and organizational effectiveness, prioritizing clarity, agility, and resilience for recovery and future growth.

• Four key priorities: enhance core business value, refocus digital strategy, drive organizational effectiveness, and prioritize capital allocation for profitability.

• Shifted to a leaner, more empowered organization with tighter capital allocation, continuous investment monitoring, and a willingness to divest underperforming assets.

• Enhanced ESG commitments, achieving a 20% reduction in Scope 1 and 2 emissions since 2021, sourcing 73% of energy from renewables, and leading in diversity and social impact in LatAm.

Financial performance and guidance

• Achieved significant improvements in all business units, with an 11.6% EBITDA margin in Q3 and a 10.6% LTM Sep-24 margin, targeting 12.5–13.5% by end of 2026, driven by efficiency initiatives and $400 million in SG&A savings.

• Monetized non-core assets for $700 million, reducing net debt/EBITDA to 3.6x, with a long-term leverage target of 2.5x–3x.

• 2025 CapEx plan totals $650 million, up 30% from the prior year, prioritizing technology, logistics, store expansion (15 new stores), and Mallplaza asset enhancements.

• Targeting margin expansion of 200–300 basis points by 2026, with e-commerce expected to reach break-even by year-end 2026 and a focus on stable SG&A in real terms.

• Confident in returning to investment-grade metrics, maintaining close engagement with rating agencies, and securing funds for Jan-25 bond maturity.

Business unit strategies and developments

• Home improvement (Sodimac) expects sales recovery in H2 2025, focusing on professional customers, private labels (now 30% of sales), omnichannel growth, and expansion in Mexico.

• Retail (Falabella) is transitioning to an omnichannel multi-specialist model, leveraging exclusive brands, private labels, and 3P marketplace growth.

• Supermarkets (Tottus) are enhancing customer experience, expanding perishables, launching a new private label, growing discount formats in Peru, and strengthening price competitiveness.

• Mallplaza is leveraging Tier A assets for brownfield growth, expanding 225,000 sqm in Chile and Peru, ramping up new revenue streams, and pursuing M&A in the Andean region.

• Digital banking aims to be the top digital bank, leveraging ecosystem data and AI for risk management, customer acquisition, and personalized offers, with strong growth in credit/debit cards and low acquisition costs.