FALABELLA S.A. Quarter 2022
Management Comments
Second Quarter 2022 Earnings
Gaston
Bottazzini
CEO of
Falabella S.A.
We achieved record group sales during the second quarter, US$ 3,299 million, up 16% YoY (highest ever for a second quarter), driven mainly by our banking business with our loan portfolio growing by 47% YoY, our Department Store sales across the region, and revenue recovery at our shopping centers.
We continue to strengthen our physical-digital ecosystem, which now serves more than 37 million customers (+17% YoY), with a strong focus on attracting customers and strengthening our relationship with them by leveraging our loyalty program.
The performance of our physical stores recovered, with regional sales growing by 7% during the quarter (totalizing US$ 2,609 million), which reaffirmed their role within the consumer shopping experience.
We continued to reap the benefits of our accelerated investments in technology over the last few years.
Our digital banking platform grew by 47% YoY in gross loans, totalizing US$ 7,307 million), strongly supported by our digital loan origination and product opening capabilities, which are fueling growth with lower customer acquisition costs. These capabilities continue to give traction to new card openings as we opened over 225,000
digital cards in Chile, Peru and Colombia during the quarter (+16% YoY). Online channels were used to process 61% of financial product origination over the last 12 months.
On August 16, we launched the falabella.com integrated platform in Peru. This was a significant event that positioned us as the largest e- commerce company in Peru. This platform sold US$ 684 million over the last twelve months. We focus on providing the widest range of products, the best browsing experience that makes shopping easy through our website and app, and fast delivery.
On August 10, we opened the first IKEA store in South America, which is a 15,000 sqm store in Santiago, Chile. The integration of IKEA into our retail proposition reaffirms our commitment to a unique and differentiated value proposition. IKEA has a brand with a unique hallmark and value proposition, which are fully complementary with our physical-digital ecosystem. People have rediscovered their homes in the last couple of years, which enhances the value of our home decoration retail proposal.
We also opened our tenth Sodimac store in Mexico. This market holds tremendous potential for us, as it has a fragmented and under- penetrated home improvement segment that offers an attractive growth opportunity.
Our loyalty program continues to grow, which is driving increased interaction with our customers throughout the region and reached
17.5 million participants (+34% YoY). Redemptions grew by 61% YoY during the quarter to reach 2.7 million, where 25% were fully digital.
Our financial performance experienced a challenging quarter, as we began with a high comparative base, evidenced by global and local difficulties, but our margins also faced pressure due to decelerating consumption in Chile and increasing expenditure as a result of universally high inflation.
Expenses also increased as a result of our investments in our digital marketplace and payment platforms, increased remuneration driven by higher remuneration at stores and inflationary pressures, increased marketing and loyalty expenditure due to business volume and loyalty program growth, and higher logistics costs mainly due to product deliveries. Platform development accounts for one-third of the increase in our total expenses. When excluding the ones associated to investment, expenses grew by +20% YoY. EBITDA reached US$ 263 million, -32% YoY.
Net income was US$ 70 million, which was affected mainly by accounting for the translation of UF- denominated financial debt at our subsidiary Mallplaza to Chilean pesos, which did not affect our cash position in the period, but did have a US$ 42 million impact on earnings.
Despite having to navigate this challenging environment and the
impacts on our financial performance, we see our businesses returning to normal. Accordingly, we can now look beyond the pandemic and refocus on increasing our business efficiency. Going forward, we will focus on leveraging the improvements to our Marketplace and payment platforms as they mature and generate critical mass that expands our ecosystem.
investors.falabella.com
02
Highlights for the period
Main
Indicators
(2Q22 LTM)
Our Physical-Digital Ecosystem
Loyalty | |||||||||||||
17.5 million active | |||||||||||||
participants across the | |||||||||||||
region | |||||||||||||
34% YoY | |||||||||||||
Marketplace | |||||||||||||
US$ 3.1 billion GMV | |||||||||||||
US$ 592 million GMV 3P | |||||||||||||
21% online penetration | 37 million | ||||||||||||
+8 million SKUs | |||||||||||||
14.000 Sellers | |||||||||||||
47% app penetration in | customers1 | ||||||||||||
Chile | in the region | ||||||||||||
Logistics | (+17% YoY) | ||||||||||||
+34 million dispatches | |||||||||||||
60% of deliveries <48 hours in Chile | |||||||||||||
1.6 million sqm dedicated to logistics |
Online Payments
US$ 2.6 billion TPV +600,000 active Digital Wallet users (4x YoY)
Digital Banking
US$ 7.3 billion loan portfolio Fully online products opened
~860,000 credit cards +710,000 checking accounts
61% fully online loan origination
Omni-channel Retail
US$ 11.4 billion total sales at physical stores
~1.000 Click&Collect points
Key Financial | 2Q21 | 2Q22 | Var (%) | |
Indicators2,3 | ||||
Total sales | ||||
US$ Million | GMV Online | 946 | 808 | -14,6% |
GMV own products (1P) | 760 | 639 | -15,9% | |
GMV third-party products (3P) | 186 | 168 | -9,3% | |
Total sales of physical stores | 2.442 | 2.609 | 6,9% | |
Total sales | 3.388 | 3.417 | 0,9% | |
TPV | 625 | 693 | 10,8% | |
Financial Results | ||||
Non-Banking Revenue | 2.565 | 2.812 | 9,6% | |
Financial Services Revenue | 277 | 487 | 76,1% | |
Total Revenue | 2.842 | 3.299 | 16,1% | |
EBITDA | 385 | 263 | -31,7% | |
Net (Loss) Income | 145 | 70 | -51,7% | |
Balance Sheet | ||||
Cash (non-banking) | 874 | 587 | -32,9% | |
Gross Loan Book | 4.961 | 7.307 | 47,3% | |
Total Net Debt (Exc. Banking) | 2.766 | 4.149 | 50,0% |
-
Customers are people who made at least one purchase at our retailers, either online or in-store, or one transaction in our banking business over the last 12 months.
2 Values are in the functional currency of Chilean pesos converted to US dollars at constant exchange rates.
3 Total sales are the total value of merchandise sold, including our own products (1P) and those of third parties (3P), through our omni-channel platform covering both physical and online stores. Includes value-added taxes. Calculated with neutral exchange rates.
03
Highlights for the period
Digital Banking
Our loan portfolio grew by 47% YoY
34,7%
47,3%
$5.426 | $4.961 | $7.307 |
jun.-20 | jun.-21 | jun.-22 |
Gross Loans (US$ mn)
We maintained our third place in consumer loans in Chile, as of June 30, 2022, with a market share of over 14%
Chile
+33.5% YoY
local currency US$ 4,830 million
Colombia
+57.0% YoY
Local currency
US$ 1,509 million
Peru
+46.8% YoY
local currency US$ 968 million
REGIONAL
+47.3% YoY
US$ 7,307 million
Our digital banking customer base continues to grow
5.2 million active app customers and growth of 38% YoY
Our total number of customers has already surpassed pre- pandemic levels to reach 6.8 million active customers. This represents growth of 17% YoY.
Our online product origination journeys continue to drive growth
During 2Q-2022 we issued:
+225,000 digital cards
Growth of 16% YoY.
~200,000 passive digital accounts
Growth of 3.8x YoY.
We currently open more credit cards and checking accounts using online channels than physical channels. Online product openings are currently 57% of total product openings.
We continue to deepen relationships with our customers and increase their preference for our services
34% YoY in credit card purchases
Credit card purchases from merchants outside our ecosystem represent 63% of the flow.
1.3 million customers with simultaneous products
We increased the number of customers with credit cards and active checking accounts by 72%.
We achieved the second place by active checking accounts in Chile as of May 2022, after previously being in fifth place.
We have more than 1.3 million active checking accounts in Chile, 2.1x YoY
04
Highlights for the period
Marketplace
Falabella.com launched in Peru
A major target for our second most important market, which has attractive growth potential.
Falabella.com's integrated
platform combines the ecommerce businesses of our
Department Store, Home Improvement, and Supermarket formats, and adds thousands of Sellers from our Marketplace.
Our online sales are currently
US$684mn
GMV 2Q22 LTM
Online sales continue to grow, despite the slowdown
Online Penetration
Regional total
12% 2019
21% 2Q22 LTM
US$3,087
GMV 2Q22 LTM
Falabella.com app penetration
Chile
47% 2Q-2022
12% | 36% | 28% | 24% |
+167%
$946 | $808 | ||||
$684 | |||||
$302 | |||||
2Q19 | 2Q20 | 2Q21 | 2Q22 | ||
GMV (US$ mn) | Online Penetration | ||||
The year | on year slowdown in | Current sales are 2.7x our pre- | |||
e-commerce growth is becoming | pandemic sales. | ||||
tangible in | Chile. However, online |
sales are consolidating in terms of scale and penetration.
05
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Falabella SA published this content on 30 August 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 August 2022 21:39:13 UTC.
