Iguatemi S A : Dados Econômico-Financeiros

Individual and Consolidated Financial Statements

Iguatemi S.A.

(New name of Jereissati Participações S.A.)

December 31, 2021 with Independent Auditor's Review Report

A free translation from Portuguese into English of Independent Auditor's Report on Individual and Consolidated Financial Statements prepared in Brazilian currency in accordance with the accounting practices adopted in Brazil and the International Financial Reporting Standards (IFRS), issued by International Accounting Standards Board (IASB)

MESSAGE FROM MANAGEMENT

Operation and Sales Status

The year of 2021 was marked by the great result of our malls, which posted a strong improvement compared to 2019 in the main indicators, with increase in sales and rental revenues, resulting in a drop in delinquency and closing of vacant area when compared to the scenario seen in 2020.

Operational indicators

Our sales continued to perform very well, leading us to reach the quarterly sales record in our history. Total sales reached R$ 12.7 billion in 2021, which represents a growth of 46.1% compared to 2020. Same-Store sales (SSS) had a superior performance, reaching 34.7 % higher when compared to the same period in 2020.

We managed to improve same-store sales (SSS) in all categories, such as Fashion, Footwear and Leather Goods, which account for 32.0% of our GLA, increased 50.6% in same-store sales over 2019, and Food also have performed well, growing 35.6% in 2021 versus 2020.

Rent

With the return of movie and new releases schedule, entertainment operations improved, which positively impacted parking lot flow and restaurant and food court occupancy at night.

The positive sales result allowed us to continue with our policy of withdrawing discounts, generating a 67.2% growth over 2020 in same-store rent (SSR). Despite having increased collections, net delinquency fell to 2.4%, a value close to the pre-pandemic level and occupancy cost reached 12.6% in 2021.

Occupancy rate

With the strong pick-up of sales in our portfolio, we saw an increase in the search for our spaces and we signed 66 new rental agreements in 4Q21. As a result, December was the 6th consecutive month in which we closed vacant GLA in 2021, reaching an average occupancy rate of 90.8% in 2021. If we consider the end of December, the occupancy rate was 92.2%.

Restructuring

Continuing with the corporate restructuring, on October 1st and 13th, 2021, Jereissati Participações and Iguatemi, approved, respectively, at the EGM unanimously and with 65% of the minority shareholders' votes, the merger of the shares issued by Iguatemi owned by non-controlling shareholders by Jereissati. The Transaction aims to create Iguatemi SA, a new name to be adopted by Jereissati, which will bring together the shareholding bases of the two companies in a single company, and which will have shares traded, in the form of Units, in the Level 1 listing segment of B3 S.A., but with shareholder rights and governance practices substantially like those required by B3's Novo Mercado Regulation. In addition, the Company's new Bylaws implemented vetoes given to non-controlling shareholders on specific matters, in addition to the creation of 4 new committees formed by statutory members.

This new structure is a fundamental step for the company's future, as it allows the company to increase its investment and growth capacity, putting the company in a favorable position to participate in future opportunities for consolidation, business combinations and acquisition of strategic assets, increasing thus the relevance within the market.

Employees

In 4Q21, we reinforced the importance of our people being in the core of our customer experience.

In the organizational health front, we focused on dates targeted at disease prevention, such as Pink October and Blue November. We offered our employees the opportunity to have male and female health exams at the company and held lectures on preventive health with renowned professionals, such as Dr. Fernando Cotait Maluf and Dr. Antonio Carlos Buzaid.

Continuing the development of our leaders, we have developed the Lidera Iguatemi programs aimed at first-time leaders and training in future skills for middle-level leaders, comprising 2 modules: Problem Solving and Inova Iguatemi. Problem Solving being formed by 5 meetings with project presentation submitted to a panel. For Inova Iguatemi, 3 microlearning courses were launched (Innovation Mindset, Design Thinking and Agile Methodologies) with practical laboratories that will start in 2022.

We received GPTW recertification, in the Women and Retail categories, we built new action plans and achieved 86% completion of the climate actions foreseen in the organizational plan for 2021. We were recognized in the 24th HR TOP of mind, being among the five most remembered for managing people in the pandemic.

Reinforcing our commitment to generational diversity, we launched a program in partnership with Lets Code aimed at developers over fifty years of age. In the end, of the 800 people who signed up, 15 people were selected to participate in a training program fully financed by Iguatemi, lasting 24 weeks and 400 hours of full stack training.

We continue to expand our view on and affirmative initiatives towards diversity. As a signatory of the Women's Empowerment Principles (WEPs), Iguatemi joined UN's annual campaign - 16 Days of Activism against Gender-Based Violence. We carried out affirmative initiatives to support this cause, including information, workshops and using orange lighting in the facade of Iguatemi Brasília. A Workshop on the topic was also held, with more than 65 participants.

Iguatemi Digital

In the fourth quarter, we continued to make progress in important topics of Iguatemi's digital strategy: Acquisition of Etiqueta Única

On March 3, Iguatemi announced the acquisition of a 23.08% stake in Etiqueta Única, Brazil's largest e-commerce intermediating the sale of luxury second-hand items in the country. Amounting to R$27 million, the transaction ensures that Iguatemi has a purchase option to become the operation's controller for the next 3 years.

The partnership with Iguatemi S.A. strengthens the importance of innovation and conscious consumption in the fashion market. Currently, Etiqueta Única is Latin America's largest online luxury platform specialized in collaborative and circular economy, growing 40% per year on average.

Since its expansion, the entity counts with above 600 national and international labels in its portfolio, and 65 thousand authentic products, with iconic and desired luxury brands such as Gucci, Chanel and Louis Vuitton.

Besides being aligned with Iguatemi's business goals and a player on the rise, Etiqueta Única has always recorded profits since its creation in 2013. Through this new investment, the company intends to triple its GMV in the coming years.

Iguatemi 365

2021 was a year of great expansion for Iguatemi 365. Out of the four main movements planned (1) Logistics - expansion in Brazil; (2) Selection - increase in categories and SKUs; (3) Omnichannel - opening of 365 Pop Up and (4) app launch, only the last one was postponed to the 1st half of 2022.

In (1) Logistics, we began to deliver to all Brazilian states, covering 91% of the Brazilian GDP. Even with the national expansion, we reduced our delivery lead time by 13% and kept the percentage of orders delivered on time above 90%. As a result, the GMV for cities without the presence of Iguatemi shopping malls now represents 47% of the website's total GMV (versus 30% in 2020).

In (2) Selection, through the development of non-fashion categories (such as home, decor and beauty) and the entry of 185 new brands, such as Golden Goose, Burberry and Michael Kors, we reached 407 active brands (+83% YoY) and 22.4k SKUs (+ 38% YoY). Even with the growth in non-fashion categories share, with lower prices and now representing 13% of total GMV (+5 p.p. YoY), we kept the average ticket stable YoY.

In (3) Omnichannel expansion, we opened our Pop Up store in 4Q21, with more than 400 sqm at Shopping Iguatemi SP, reinforcing our omnichannel DNA. Also, in 4Q21, with a greater optimization of investments in traffic and exposure of offline fronts, we had organic traffic growing 3x more than paid traffic compared to 4Q20, while cost per session fell 42%. From a GMV standpoint, 4Q21 was the best sales quarter in our history and December - month when we opened 365 Pop Up store and the new Private Client Relationship structure - our best month, with Offline operations (sales at the Baroneza store, assisted sales at 365 Pop Up and direct sales to Private Clients) accounting for 19% of the month's total GMV.

With this expansion and increased operation efficiencies, versus 2020, we closed 2021 with traffic up by 117%, an 82% increase in customers making purchases, and a 17% reduction in cost per session.

In 2022, we plan to (1) reduce delivery times; (2) maintain the expansion of non-fashion category and continue bringing in Top Brands; (3) develop new offline sales models - such as new temporary operations and Private Client; and (4) launch the app. As a result, we plan to double our GMV versus 2021.

Iguatemi One

Iguatemi One had important progress in the last quarter. The number of customers increased more than 3 times, and the number of partners doubled, bringing innovations such as discounts and experiences inside and outside our malls. We made experiences more convenient to our customers, such as the participation in the Christmas promotion through the app itself, avoiding queues and providing a more fluid interaction. Also, through the app, we offered customers the option to contribute to a more charitable Christmas, by making donations in an easy and simple way.

The connection between physical and digital environment also provides information that helps us improve the journey of Iguatemi's customers and such data enables us to offer the best experience in line with each customers' profile and needs, in addition to even more tailored communication and initiatives.

For the coming months, we have several actions to even further customize the user experience, making it remarkable; We will offer relevant benefits, new features and a more dynamic environment, encompassing all steps of the new relationship concept between Iguatemi and the customer.

Iguatemi institutional Mondrian for Children

Sound, image resources and a good dose of special effects were part of the immersive exhibition "Mondrian for Children", which Galleria Shopping brought to Campinas from October 1st to 31st, in celebration of Children's Month. The show was a tribute to the Dutch painter Piet Mondrian (1872-1944), creator of the Neo-Plasticism movement and known for an abstract aesthetic, with the predominant use of black, white, and primary colors (red, blue and yellow), in addition to many forms. geometric shapes, especially square and rectangular shapes.

Customers were able to take their children to enjoy unforgettable moments in six very visual and fun environments.

Fashion Week Kids

On October 2nd and 3rd, Pátio Higienópolis hosted another edition of Fashion Weekend Kids, a fashion show in the children's segment for brands that wish to relate to their final consumer.

The fashion show was produced by the clothing and accessories brands, with the participation of the clients' children as models. For guests to access the event, they should donate a toy to an NGO.

Impressionist Landscapes by Claude Monet

Iguatemi promoted the "Impressionist Landscapes by Claude Monet" experience at Pátio Higienópolis, between August 13 and October 17, Iguatemi Campinas, from October 29 to December 14 and Shopping Praia de Belas, from January 21 to October 22. February 2022. Visitors experienced an immersive and sensorial experience in Monet's paintings, such as the aroma of his garden, the atmosphere of the Paris cafes of the effervescent Belle Époque.

Sensory Experience that, through eight seasons, introduced the colors, the techniques, the works of Monet and the environment in which he lived. Claude Monet was born in Paris in 1840, and from an early age he began to study painting and is considered the most famous impressionist painter - the term "impressionism" came from one of his paintings, "Impression: Sunrise". Occupying an area of approximately 380 meters.

Visitors had access to eight stations, which introduced the colors, techniques, works and the environment in which the artist lived.