Almacenes Éxito S.A.

Consolidated Financial Results

3Q22

Envigado, Colombia, November 3, 2022 - Almacenes Éxito S.A. (´Grupo Éxito´ or ´the Company´) (BVC: ÉXITO / ADR: ALAXL) announced its results for the third quarter period ended September 30, 2022 (3Q22). All figures are expressed in millions (M) or billion (B) of Colombian Pesos (COP) unless otherwise stated and expressed in long scale (COP B represent 1,000,000,000,000). Consolidated data include results from Colombia, Uruguay and Argentina, and eliminations.

Double-digit top line increase (22.6%) and cost efficiencies despite inflationary pressures, led to

Recurrent EBITDA growth (12.9%) above last 2-year levels

KEY BUSINESS HIGHLIGHTS

Financial Highlights

  • Consolidated Net Revenue grew by 22.6% to COP $5.1 B in 3Q22 and by 23.5% to COP $14.4 B in 9M22. Quarterly outcome is explained by retail sales growth of 23.1% driven by solid performance of innovative formats, omni- channel growth (24.4%) and commercial dynamism in all countries. Other revenue grew boosted from solid complementary businesses growth, mainly real estate (+35% in 3Q22 and +41% in 9M22).
  • Recurring EBITDA reached COP $398,998 M (+12.9%) to a 7.8% margin in 3Q22, driven by top line dilution of costs, improved retail performance and higher contribution of real estate. During 9M22, Recurring EBITDA grew 16.4% and reached COP $1,125,078 M to a 7.8% margin.
  • Net Income was of COP $49,937 M (1.0% margin) during 3Q22 and reflected the solid operating performance and lower non-recurring expenses partially offset by higher provisions of TUYA (+46% loans issued) and financial expenses (IBR 30d +778 bps vs 3Q21), the inflationary adjustment in Argentina, and a lower deferred tax basis (COP $23k M).
  • EPS was COP $113.1 per common share in 3Q22 (vs. the COP $282.2 reported in 3Q21).
  • Consolidated CAPEX was of COP $195,718 M, 74% focussed on expansion (retail and real estate), innovation, omni-channel and digital transformation activities.

Operating Highlights

  • Omni-channelshare on consolidated sales reached 9.5% in 3Q22 (Col 11.9%, Uru 2.6%, Arg 5.2%).
  • Boosted commercial performance favoured the loan portfolio of TUYA (+46%) and occupancy levels of real estate (96.3% in Colombia and 90.3% in Argentina).
  • Innovative formats reached a 39% share on Colombia sales (+340 bps vs 2Q22); the Fresh Market model represented 53.1% of Carulla segment in Colombia, 51.5% in Uruguay and 29% in Argentina.
  • Efficiencies in Colombia an Argentina allowed expenditure to grow below sales evolution during 3Q22.
  • LTM store expansion(1) was of 85 stores (75 Col, 5 Uru, 5 Arg) for a total of 602 stores in the region and 1.04 M sqm of sales area.

Outlook 2022

  • Top line growth benefited by innovation, omni-channel and complementary businesses.
  • To maintain Recurring EBITDA at consolidated level considering inflationary pressures on expenditure.
  • Omni-channelto represent a high-single digit share on consolidates sales.
  • Expansion(2) in Colombia of 60 to 70 stores (near to 35,000 sqm of additional sales area).
  • Sustainable cash flow generation to shareholders´.
  • ESG efforts focus on child nutrition and on improving sustainability of the procurement chain.

(1) Expansion from openings, reforms, conversions and remodelling; including the acquisition agreement of furniture and rights over 5 commercial spaces of La 14 in 2021 and 1 in 2022.

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I.ESG strategic pillars follow-up

Zero Malnutrition

  • In alliance with Fundación Éxito, the Company benefited 45,794 children from nutrition and complementary programs as well as delivered 164,192 food packages to children and their families. In a jointly work, there is presence in 186 municipalities in 26 states in Colombia.

My Planet

  • 470,000 trees were donated by customers, suppliers and employees for the target of one million of native trees set to be planted jointly with Celsia by 2023.
  • The Company managed to collect 15,382 tons of material at the operation and 672 tons of recyclable material post-consumption.
  • Grupo Éxito reduced by 14,000 tons its carbon footprint (Scope 1 and 2) year-to-July, which corresponds to near 5% of the total CO2 footprint of the Company. At Carulla Fresh market stores, the Company implemented sustainable refrigeration systems and post consumption model ´Soy Re´.

Sustainable trade

  • The operation in Colombia purchased 90% of fruit and vegetables locally, COP $12,060 million purchased in fruits and vegetables from 23 associations.
  • In alliance with Estratek and Endeavor Colombia, Grupo Éxito is looking to help and boost the development of start-ups and co-create together to fulfil clients and stakeholders´ requirements through innovative solutions that can create value in 7 fronts of the company, from omni-channel solutions to consolidating a sustainable retail operation.

Governance & Integrity

  • On September 5, 2022, Grupo Éxito informed the market about a ´Capital Reduction Project´ presented by GPA aimed to distribute approximately 83% of its stake on Éxito to its shareholders. Thus, GPA would keep a share of approximately 13% in Éxito, while Casino, main GPA shareholder, would retain a stake of approximately 34%.
    Through this operation, GPA shareholders would directly hold Éxito through ADRs II or BDRs II (whose underlying securities would be ordinary shares). To do so, Éxito Board of Directors authorized management to implement the registration of the Company´s securities in Brazil and the modification of its DR (Depositary Receipt) program in the United States. In addition, Grupo Éxito´s General Shareholders Assembly, approved a share split to a par value of COP$ 3.3333333334 from COP$ 10, for GPA to deliver non-fractioned shares to its shareholders. Finally, Éxito share will be dematerialized, mainly to level up the Company to the global

trading operating standard, to promote and facilitate the secondary trading of its securities and to reduce

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securities´ physical risk of counterfeiting and alteration.

The Company expects the delivery of ADRs II and BDRs II as well as to complete the implementation of the Project to take place during the first half of 2023, subject to the time required by procedures and from obtaining corporate and governmental authorizations by competent bodies and entities.

Among other purposes, with this Project, GPA intends to generate value for all Éxito shareholders by (i) generating a clear understanding about Éxito's businesses and strategies, (ii) increasing the visibility of its business, (iii) facilitating the assessment of the asset and favour the recognition of its value, (iv) increasing liquidity of the share in the market, and (v) broaden the Company's shareholders base.

  • On September 23, Mrs. Susy Midori Yoshimura resigned as member of the Company´s Board of Directors and Mr. Guillaume Michaloux was appointed as new member.

Our people

  • The Board of Directors appointed Mr. Jorge Jaller Jaramillo as VP of Retail, starting from August the 1st. Mr. Jaller work will focus on the development, growth, and leadership of Éxito and Carulla banners, with an omni- channel vision and a customer-centred strategy, supported on innovation, differentiation, sustainability, and social commitment. Mr. Jaller has a degree in Law from Pontificia Bolivariana University and holds a Master's degree in Marketing from Concordia University in Canada. Mr. Jaller has experience in retail, organizational transformation, customer experience and innovation. He has worked at Grupo Éxito over the last 24 years and has held positions as Director of Sales and Operations of the Éxito brand, Corporate Manager of Apparel and Home lines and lately worked as Corporate Manager of the Éxito Brand, where he was recognized for his great charisma, capacity for innovation and focus on results.
  • Grupo Éxito celebrated ´ Diversity Month´ with over 30 activities.

Healthy lifestyle

  • Over 30 ingredients eliminated from Taeq products as part of the Company´s commitment to consumers´ health.

Awards & Recognitions

  • The Carulla FreshMarket store ´Tesoro´ in Medellin, was recognized by IGD Retail Analysis as one of the best stores in the world, for its innovative layout and being one of the 21 stores certified as Carbon Zero by ICONTEC. Its nomination was made by the British organization and the assessment included main wholesale and retail companies in the world.
  • Grupo Éxito was recognized with the ´Sustainable Fashion Label´ by CO2CERO and Claudia Bahamón for its commitment with the environment, society and economy, when developing private labels Bronzini, Arkitect and People. Out of the Company´s clothes sold in Colombia, 94% was sourced locally, as well as 80% was the

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share of private label produced in the country.

  • Grupo Éxito worked to generate new opportunities for former inmates by donating COP $150 million in redeemable cards, to support the social reinsertion of 1,000 former inmates, as well as is committed to hire 80 of them at the end of 2022. Since 2019, 50,000 apparel items have been tailored by reinserted inmates as part of the Company´s plan to support this segment of the population.
  • Grupo Éxito ranked 8th as the Colombian company with the highest reputation standards according to Merco.

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II. Consolidated Financial and Operating Performance

´We remained committed to our customers and offered the best experience, as well as accesible prices on basic food, cleaning and personal care products. Amidst a challenging inflationary envrionment, in advance purchasing was done to hedge costs and our food portfolio, registered 5.7 percentual points below food inflation. Prices of apparel also remained competitive as 94% was locally sourced to protect against the impact of devaluation. Our efforts in strenghtening innovation, digital platforms, and complementary businesses also contributed to the Company´s solid performance. Our social focus continued in line with superior purpose of "Nourishing Colombia with Opportunities´: the Company provided more than 45,000 boys and girls with 164,000 nutritional packages, as well as promoted recycling and sustainable livestock. Moreover, 470,000 trees have been donated by clients, employees, suppliers and allies as part of #UnÁrbolALaVez initiative of Grupo Éxito and Celsia, to increase forest coverage, restore hydrographic sources and protect biodiversity in Colombia, stated Carlos Mario Giraldo Moreno, CEO of Grupo Éxito.

in COP M

3Q22

3Q21

% Var

9M22

9M21

% Var

Net Sales

4,901,047

3,982,284

23.1%

13,806,433

11,108,912

24.3%

Other Revenue

202,798

181,573

11.7%

616,594

570,804

8.0%

Net Revenue

5,103,845

4,163,857

22.6%

14,423,027

11,679,716

23.5%

Gross Profit

1,303,681

1,061,678

22.8%

3,665,051

3,037,846

20.6%

Gross Margin

25.5%

25.5%

5 bps

25.4%

26.0%

(60) bps

Total Expense

(1,058,171)

(845,573)

25.1%

(2,981,716)

(2,476,004)

20.4%

Expense/Net Rev

20.7%

20.3%

43 bps

20.7%

21.2%

(53) bps

Recurring Operating Income (ROI)

245,510

216,105

13.6%

683,335

561,842

21.6%

ROI Margin

4.8%

5.2%

(38) bps

4.7%

4.8%

(7) bps

Net Group Share Result

49,937

126,315

(60.5%)

176,740

262,016

(32.5%)

Net Margin

1.0%

3.0%

(206) bps

1.2%

2.2%

(102) bps

Recurring EBITDA

398,998

353,514

12.9%

1,125,078

966,765

16.4%

Recurring EBITDA Margin

7.8%

8.5%

(67) bps

7.8%

8.3%

(48) bps

EPS

113.1

282.2

(59.9%)

400.4

585.4

(31.6%)

Note: Consolidated data include results from Colombia, Uruguay and Argentina, eliminations and the FX effect (1.4% at top line and 3.3% at recurring EBITDA in 3Q22 and 1.1% and 2.9% in 9M22, respectively). EPS considering the weighted average number of outstanding shares (IFRS 33), corresponding to 441,389,202 shares, after the buyback operation as of June 30, 2022 (total outstanding shares are 432,621,453).

  • Consolidated Net Revenue in 3Q22 grew 22.6% to COP$ 5.1 billion and grew 23.5% to COP$ 14.4 billion during 9M22.

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Almacenes Éxito SA published this content on 03 November 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 03 November 2022 21:47:57 UTC.