FINANCIAL REPORT FOURTH QUARTER 2018 MARCH 2019

Transcription

1 FINANCIAL REPORT FOURTH QUARTER 2018 MARCH

2 Index 1. Executive Summary Summary of Consolidated Results 4 th Quarter Summary of Consolidated Results Highlights of the Period Consolidated Income Statement Analysis of Consolidated Results Analysis of Financial Statements Summary Table of Countries Data by Country and Business Consolidated Financial Statements- IFRS - Consolidated Balance Sheets Consolidated Income Statement Consolidated Cash Flows Statement Notes: All figures in dollars are calculated using the observed dollar exchange rate for January 2 nd,2019: (Ch$ per US$ 1). Symbols for periods in the year: Quarters: 1Q (first quarter), 2Q (Third Quarter), 3Q (third quarter) and 4Q (fourth quarter). 1S (First semester) and 9M (first nine months of the year), as applicable. Currency symbols: Ch$ or CLP: Chilean pesos; US$: U.S. dollars; M: millions. Other symbols: SSS (Same store sales). SG&A: Selling, General and Administration. YoY: Year on Year. DTC: Direct to Consumer. Sqm: square meters 2

3 Executive Summary During the fourth quarter of 2018 the company demonstrates once again the successful results of the ambitious plan to capitalize the international subsidiaries of Peru and Colombia (turn over plan), where both Peru and Colombia reached the highest quarterly figures in Ebitda and Operational Result since 2015, thus closing the year with the best Ebitda results also since In addition, for Colombia, there is an annual positive Ebitda after 3 years of negative Ebitda (during the years 2015 to 2017). The digital business maintained an excellent performance during the fourth quarter, showing a strong sales growth of 215% in Chile, in addition to achieving a 7.1% weight over Direct to Consumer (DTC) sales, increasing in 3 times compared to the weight of 2.3% of 4Q'17. We continue to strengthen our online presence and enhance the company's digital shopping experience, incorporating 4 new websites with e- commerce for our brands. Also, in this quarter, e-commerce was launched for the first time in Peru, inaugurating two e-commerce sites for the Billabong and Columbia brands, reaching 28 websites with e-commerce at a consolidated level in With this, we continue to consolidate our online presence in the 4 countries of the region, consistent with the digital growth strategy of the company. During this quarter Forus faced a challenging environment in Chile and Uruguay. In the case of Chile, it faced a stagnant market in terms of consumption growth, and with an aggressive promotions strategy held by the competition. On the other hand, Uruguay continues to face a complex scenario largely influenced by market and macroeconomic variables, which strongly affected its results during the quarter. At a consolidated level, sales remained stable compared to the previous year, but with a gross margin that contracted by 172 basis points, as well as an operating result and net income that decreased significantly. 3

4 Summary of Consolidated Results 4Q 2018 Consolidated Revenues of Ch$ 61,915 million (US$ 89.1 million) grew 0.5% with respect to 4Q'17. Digital business revenues in Chile grew 215% compared to 4Q'17. Gross margin decreased 172 basis points, reaching 53.3% compared to 55.0% in 4Q'17. Gross Profit of Ch$ 32,978 million (US$ 47.5 million) decreased 2.7% in the period. Operating Income of Ch$ 4,804 million (US$ 6.9 million) decreased 35.5%. The operating margin decreased by 433 basis points and reached 7.8% of revenues. Ebitda of Ch$ 6,940 million (US$ 10.0 million) decreased 22.0% with respect to 4Q'17. The Ebitda margin of 11.2% was reduced by 323 basis points. Earnings for the year amounted to Ch$ 5,159 million (US$ 7.4 million), which decreased 19.8% with respect to the same quarter of the previous year, with a result on revenues of 8.3%. The results of the international operations of Peru, Uruguay, and Colombia had a growth in the gross margin of 247 basis points, and a decrease in the operating result by 29%. The good performances of Peru and Colombia boosted all the results, while Uruguay affected them negatively. 4

5 Summary of Consolidated Result 2018 Consolidated Revenues decreased 0.4% excluding the effect of the conversion rate of the subsidiaries. With this effect, consolidated revenues of Ch$ 247,712 million (US$ million) decreased 1.3% with respect to Revenues from digital operations grew 191% in Chile compared to Gross margin increased 48 basis points, reaching 54.8% compared to 54.4% the previous year. Gross Profit of Ch$ 135,850 million (US$ million) decreased 0.4% compared to the previous year. Operating Income of Ch$ 31,245 million (US$ 45.0 million) decreased 9.8% with respect to Operating margin was 12.6% of revenues. Ebitda of Ch$ 37,541 million (US$ 54.0 million) decreased 7.5% with respect to The EBITDA margin decreased 101 basis points, reaching a margin of 15.2%. Earnings of Ch$ 25,550 million (US$ 36.8 million) decreased 4.3% with respect to 2017, and represented 10.3% of the revenues for the year The results of the international operations of Peru, Uruguay and Colombia in 2018 maintained their good performance, showing growth of 221 basis points in gross margin, increasing operating income by 122% and growing in net income by 43%. They represented 18% of the consolidated revenues of

6 Highlights of the Period Store Opening During the Fourth Quarter of 2018 the following 11 new stores were opened: Country # Stores Chain Store City Sq. meters Chile Columbia Plaza Tobalaba Santiago 69 Columbia Coyhaique Coyhaique 98 Merrell Coyhaique Coyhaique 117 Caterpillar Iquique Iquique 84 Merrell Puerto Varas Puerto Varas 80 Columbia La Fábrica Santiago 196 Caterpillar La Fábrica Santiago 205 Burton Puerto Varas Puerto Varas 44 Merrell Plaza La Serena La Serena 74 Azaleia Talca Talca 30 Total Uruguay Rockford Punta Carretas Montevideo Total E-commerce launched in Peru In Peru, e-commerce was launched with the opening of 2 e-commerce sites, of the Billabong brand (billabong.pe) in October and Columbia brand (columbia.pe) in December. With this, the company already has a business and digital strategy present in the 4 countries, continuing to strengthen the online business and increasingly strengthen the company's digital strategy. Incorporation of new websites with e-commerce During the fourth quarter, new websites with e-commerce of portfolio brands were incorporated. Chile In October, the brand Nine West (ninewest.cl) launched its e-commerce site, completing a total of 18 e-commerce sites in the country. 6

7 Highlights of the Period Colombia During November, Merrell (merrellcolombia.com) launched its e-commerce site, adding the third site in the country. In addition, in October there was a re-launch on new platforms of the Cat and Hush Puppies sites. New Burton Store in Chile In December 2018 the 1st Burton store in Forus opens in Chile. This 44 square meters store is located in the south of Chile, in the city of Puerto Varas. HIGHLIGHTS AFTER THE PERIOD Acquisition of the Brand Aldo in Uruguay In January 2019 Forus acquired the Aldo brand for Uruguay, a transaction that includes the acquisition of current and future inventories and two stores located in Montevideo, in the main commercial centers of the country: Punta Carretas and Montevideo Shopping. 7

8 Consolidated Income Statement IFRS FORUS S.A. & SUBSIDIARIES Consolidated Income Statement 4th Quarter expressed in Thousands of Chilean Pesos from October 1st to December 31st 4Q'18 % Revenues 4Q'17 % Revenues Var. % 18/17 Th Ch$ Th Ch$ Revenues ,5% Cost of Sales ( ) -46,7% ( ) -45,0% 4,3% Gross Profit ,3% ,0% -2,7% Selling, General and Administrative Expenses ( ) -45,5% ( ) -42,9% 6,6% Operating Income ,8% ,1% -35,5% Other incomes of total operation ,1% Other expenses of total operation ( ) -258,2% Financial Income (87.523) ,3% Financial Expenses (87.610) (93.466) -6,3% Participation in gains (losses) of joint venture businesses (43.299) -239,6% accounted by using the proportional value of participation Exchange Differentials ( ) -201,3% Result of Indexation units ,2% Other gains and losses ( ) -337,3% Non-Operating Income ,6% ( ) -1,1% -327,5% Profit before income tax ,3% ,0% -5,3% Income Taxes ( ) ( ) 292,4% Profit (Loss) ,3% ,4% -19,8% Profit (loss) attributable to equity holders of parent ,1% Profit (loss) attributable to minority interest ,5% Profit (loss) ,3% ,4% -19,8% EBITDA ,2% ,4% -22,0% 8

9 Consolidated Income Statement IFRS FORUS S.A. & SUBSIDIARIES Consolidated Income Statement expressed in Thousands of Chilean Pesos accumulated to December 31st 2018 % Revenues 2017 % Revenues Var. % 18/17 Th Ch$ Th Ch$ Revenues ,3% Cost of Sales ( ) -45,2% ( ) -45,6% -2,3% Gross Profit ,8% ,4% -0,4% Selling, General and Administrative Expenses ( ) -42,2% ( ) -40,6% 2,8% Operating Income ,6% ,8% -9,8% Other incomes of total operation ,0% Other expenses of total operation (83.909) ( ) -85,9% Financial Income ,5% Financial Expenses ( ) ( ) 4,7% Participation in gains (losses) of joint venture businesses ( ) ( ) 49,9% accounted by using the proportional value of participation Exchange Differentials ( ) -224,6% Result of Indexation units ,9% Other gains and losses ( ) -272,3% Non-Operating Income ,3% ( ) -0,1% -2124,2% Profit before income tax ,9% ,7% 0,0% Income Taxes ( ) ( ) 14,9% Profit (Loss) ,3% ,6% -4,3% Profit (loss) attributable to equity holders of parent ,2% Profit (loss) attributable to minority interest (37.784) ( ) -87,3% Profit (loss) ,3% ,6% -4,3% EBITDA ,2% ,2% -7,5% 9

10 Analysis of Consolidated Results Operating Results Consolidated Revenues of Ch$ 61,915 million (US$ 89.1 million) grew 0.5% with respect to 4Q'17. In Chile, sales of Ch$ 49,255 million (US$ 70.9 million) grew 0.9% and accounted for 79.5% of consolidated revenues in 4Q'18. As for the Retail business in Chile, sales continued to be affected by low levels of national consumption and lower sales of foreigners compared to the previous year, which continued to decrease in flow to the country and to our stores. In despite, sales managed to grow by 0.6%, thanks to the increase in the conversion rate. The SSS was only 0.2% -although it was the first positive SSS of the year- and the square meters only grew 1.0% with respect to In the Wholesale business, sales grew by 3.1% in the quarter, which is a change in trend, since this business sales had been decreasing since 3Q 17. Regarding the digital business in Chile, sales grew 215% in 4Q'18, boosted by the application of Stock App that had a total of 118 stores operating by the end 2018, and the incorporation of a new website with e-commerce for the Nine West brand. This good performance allowed the weight of the digital business over DTC sales to increase strongly again, going from 2.3% in 4Q'17 to 7.1% in 4Q'18. Regarding the subsidiaries, the results by country are as follows: In Peru, sales grew 3.9% compared to 4Q'17, boosted by a strong SSS growth of 11.2% in local currency. This growth in sales stands out considering that the square meters decreased by -6.9%, due to 4 fewer stores compared to December 2017, as a result of the execution of the profitability strategy of this operation, closing the unprofitable stores. In Uruguay sales in its local currency fell 3.6% with respect to 4Q'17, affected by a SSS of -9.4%, explained by the complex scenario that is experiencing regarding consumption. On the other hand, the square meters increased by 7.1% as of December In Colombia sales grew 3.5%, boosted by an excellent SSS of 6.4% as a result of the good commercial and retail strategies that are still carried out in the subsidiary, consistent with the company's profitability efforts. This growth in sales is remarkable, considering that the square meters decreased by -6.1% in

11 Analysis of Consolidated Results Gross margin decreased 172 basis points, reaching 53.3% compared to 55.0% in 4Q'17. Gross Profit of Ch$ 32,978 million (US$ 47.5 million) decreased 2.7% in the period. The Consolidated Gross Profit decreases given that the gross profit of Chile decreases 4.1%, while the subsidiaries as a whole grows 2.9%. The Gross Margin in Chile contracted by 275 basis points, while the subsidiaries showed an expansion of 247 basis points, mainly due to the good results in Peru and Colombia. Chile's gross margin was affected by both the retail business, with a decrease of 244 basis points, and by the wholesale business, where the margin was reduced by 520 basis points. The gross margin was affected by greater promotional activity in the market, where the company had to slightly reduced margins in order not to adversely affect the company's inventory levels, in fact, these were reduced by 7% in December 2018 compared to the previous year. Regarding the gross margin of the international subsidiaries, the breakdown by country is as follows: Peru: Gross profit grew by 6.7% and gross margin increased 145 basis points, reaching 54.4% at 4Q'18 compared to 53.0% in 4Q'17, boosted by the expansion of gross retail margin, as well as that of the wholesale business. This outstanding performance is the result of the profitability and margin maximization strategies that the subsidiary continues to carry out. Uruguay: The gross margin expanded by 181 basis points, reaching 59.9% in 4Q'18, compared to 58.0% in 4Q'17, in line with the company's brand value protection strategy. It is highlighted that this is the highest gross margin of the operations of the 4 countries and at the same time the highest that Uruguay has presented in a quarter, for the last 8 years. However, gross profit decreases by 4.6% in 4Q'18, given the sales drop of 7.5%. Colombia: The gross margin increased strongly by 996 basis points, reaching 52.2%, compared to 42.2% in 4Q'17, aligned with the strategies for maximizing margins, both in the retail business and in the wholesale business. This is the highest quarterly gross margin for the last 3 years. Gross profit grew by 27.9% during 4Q'18. 11

12 Analysis of Consolidated Results Operating Income of Ch$ 4,804 million (US$ 6.9 million) decreased 35.5%. The operating margin decreased by 433 basis points, and reached 7.8% of revenues. This decrease in Operating Income is mainly explained by its decrease in Chile, as well as to a lesser extent by Uruguay, given that the Operating Income of Peru and Colombia as a whole grew 271.8%. The Operating Result of Chile decreased by 36.5% due to the combination of the effect of the drop in gross profit of -4.1% and the increase of 6.2% in SG&A expenses. The increase in SG&A is due to the effect of non-dilution of costs given that sales remained almost constant, growing only 0.9%, and also due to the increase in costs in distribution and logistics of the digital business, and depreciation of the stores. The Operational Results by country are as follows: Peru: Operating Income grew by 182% in 4Q'18, due to the growth of the gross profit of 6.7% and the solid decrease in SG&A by -1.2%, which fell 246 basis points as a percentage of sales. This is the best operating result of the last 4 years (since 3Q'14). Profitability strategies, the positive impact of the process of reducing deficient square meters, and the positive effect of SSS growth allowed this remarkable performance. Uruguay: The Operating result decreased -83.3%, but in its local currency it decreased 49.1% in 4Q'18. This decrease is impacted by a fall in sales and higher operating costs, which increased by 10% in local currency in 4Q'18, mainly due to the increase in salaries. Colombia: The operating result grew an exceptional 698% compared to 4Q'17. This great improvement is due to the outstanding performance of the Retail and Wholesale businesses. Both explained by the growth in gross profit of 27.9%, together with the reduction of SG&A that decreased by 106 basis points as a percentage of sales, thanks to cost control strategies and the process of reducing square meters of low contribution carried out during the previous quarters. 12

13 Analysis of Consolidated Results Non-Operating Result The non-operating result increased 328%, obtaining a profit of Ch$ 1,591 million (US$ 2.3 million) compared to the loss of Ch$ 699 million (US$ 1.0 million) of 4Q'17. This growth in the Non-Operating Result is mainly explained by the Exchange Differentials account, which grew 201%, from a loss of Ch$ 891 million (US$ 1.3 million) in 4Q'17 to a gain of Ch$ 903 million (US$ 1.3 million) in 4Q'18. And to a lesser extent the growth is explained by the Other Gains and Losses account, which went from a loss of Ch$ 216 million (US$ 0.3 million) in 4Q'17 to a positive result of Ch$ 512 million (US$ 0.7 million) in 4Q'18. Net Profit and EBITDA Earnings for the year amounted to Ch$ 5,159 million (US$ 7.4 million), which decreased 19.8% with respect to the same quarter of the previous year, with a result on revenues of 8.3%. Earnings before taxes only decreased 5.3% for the year, obtaining a result on revenues of 10.3%. Therefore, the decrease in Earnings for the year is mainly due to the increase in the tax rate, where income taxes increased by 292.4%. On the other hand, this decrease in Net Profit is mainly due to the fall of Chile's Net Profit by 15% and to a lesser extent, due to the drop of net profit in Uruguay. At a consolidated level, this is explained by the drop in Operating Income of 35.5%, since the Non-Operating Result improves by 327.5%. Ebitda of Ch$ 6,940 million (US$ 10.0 million) decreased 22.0% with respect to 4Q'17. The Ebitda margin of 11.2% was reduced by 323 basis points. This fall in Ebitda is explained by 88% due to the fall in Ebitda of the Chilean business and the rest is explained by the drop in Ebitda in the business of Uruguay. On the other hand, the EBITDA growth in Peru and Colombia stands out, in line with its good operating results, which as a whole grows an extraordinary 108% compared to 4Q'17. 13

14 Analysis of Financial Statements Consolidated Balance Sheet Assets (in millions of Ch$) Dec-2018 Dec-2017 Var. M Ch$ M Ch$ M Ch$ % Current Assets ,8% Non-Current Assets ,7% Total Assets ,4% Current assets show significant variations in: inventories, which shows a decrease of Ch$ 3,504 million (US$ 5.0 million), due in part, to the rationalization of purchases due to the economic environment; and other current financial assets, with an increase of Ch$ 8,083 million (US$ 11.6 million), as a result of the lower disbursement for the payment of merchandise, and the investment of these temporary cash surpluses in mutual funds. Non-current assets show significant variations in the item of property, plant and equipment, which is due to the acquisition of several floors of the building of Av. Las Condes, where the company's headquarters will be moved soon, with a positive variation in the amount of Ch$ 11,814 million (US$ 17.0 million). Liabilities (in millions of Ch$) Dec-2018 Dec-2017 Var. M Ch$ M Ch$ M Ch$ % Current Liabilities ,1% Non-Current Liabilities ,2% Shareholder's Equity ,1% Total Liabilities ,4% The decrease in current liabilities of Ch$ 1,274 million (US$ 1.8 million) is mainly due to the payment of financial liabilities, which decreased by Ch$ 505 million (US$ 0.7 million), and the decrease of other current provisions, which decreased by Ch$ 437 million (US$ 0.6 million), as a result of the payment of obligations that were provisioned at the closing of the previous year. Non-current liabilities, meanwhile, do not suffer variations that are different from the reexpression of obligations due to variation of the currency in which they must be paid and / or the reclassification of the installments of obligations that are due in the short term. 14

15 Analysis of Financial Statements Shareholder s Equity The balance of Equity as of December 31st, 2018 and December 31, 2017 is as follows: Dec-2018 Dec-2017 Var. M Ch$ M Ch$ M Ch$ % Paid-in capital ,0% Other reserves ,2% Retained earnings ,2% Non-controlling interest ,5% Total Equity ,1% Equity presents a total increase of Ch$ 16,556 million (US$ 23.8 million), mainly due to the integral result of the period. The variation of the Other Reserves corresponds to the differences in the conversion of subsidiaries according to the following detail: M Ch$ Perú Forus S.A. 953 Uruforus S.A. 274 Forus Colombia S.A.S. 35 Lyfestyle Brands of Colombia 84 Total Conversion Differentials

16 Analysis of Financial Statements Financial Ratios Liquidity Ratios Units Dec-18 Dec-17 Var. Current liquidity times 6,63 6,25 0,39 Acid ratio times 4,01 3,62 0,39 The current liquidity index shows a positive variation with respect to the previous year and, the acid ratio shows the same effect, that goes from 3.62 times registered at December 2017 to 4.01 times registered at the end of this fiscal year, which are mainly explained by the increase in other financial assets and a decrease in current liabilities. Debt Ratios Units Dec-18 Dec-17 Liabilities composition Current Liabilities % 94,8% 94,7% Non-Current Liabilities % 5,2% 5,3% 5,2% 5,3% 94,8% 94,7% Dec-18 Dec-17 Non-Current Liabilities Current Liabilities Units Dec-18 Dec-17 Var. Leverage times 0,14 0,16-0,02 Interest Coverage times 63,30 69,25-5,95 16

17 Analysis of Financial Statements Profitability Ratios Units Dec-18 Dec-17 Var. ROA % 10,1% 11,3% -1,13% ROS % 10,3% 10,6% -0,32% ROE % 11,6% 13,1% -1,50% EPS $ 98,85 103,29-4,44 Regarding profitability, the Company shows a negative variation of $ 4.44 in earnings per share with respect to the same period of the previous year, which represents a decrease of 4.3%. Consolidated Cash Flow Dec-2018 Dec-2017 Var. M Ch$ M Ch$ M Ch$ Cash Flow from Operating Activities Cash flows from (used in) investment activities Cash flows from (used in) financing activities Operating activities generated a positive variation of Ch$ 25,548 million (US$ 36.8 million) compared to the previous year, whose main variation is due to a lower disbursement for payment to suppliers and other accounts of the operation for Ch$ 27,264 million (US$ 39.2 million). The negative variation in the flows of investment activities is mainly due to the higher disbursement for the purchase of properties, plants and equipment, which shows a negative variation of Ch$ 10,853 million (US$ 15.6 million), compared to 2018, due to the acquisition of the new offices where the company will move soon. Finally, the negative variation in the flow of financing activities is mainly due to lower use of bank guarantees or letters of credit for the payment of merchandise. 17

18 Analysis of Financial Statements Market Risk Analysis Regional Risk: Chile continues in an unfavorable scenario, maintaining the low levels of market dynamism, and with the levels of consumer confidence and business confidence falling further during the quarter, noting their lower levels during the year. In addition, unemployment remained high, and the consumption figures of trade and footwear decreased during the period. Uruguay continues to present a challenging environment for business growth. While consumer confidence increases slightly, it remains at the pessimistic level. Peru maintains its recovery trend, moderating the level of the economic expectations index, which falls with respect to the second and third quarters, but improving the consumer confidence index, reaching its highest point during the quarter. Finally, Colombia maintains its current economic scenario, with inflation levels that remain stable, but with unemployment that increases slightly, and consumer confidence indexes that fell again. The environment remains challenging in the country. Foreign Exchange Risk: In Chile, the volatility of the exchange rate increased, showing a depreciation of the Chilean peso against the dollar towards the end of the period, generating an unfavorable effect of the exchange rate for our operation. With respect to the subsidiaries, exchange rate volatility also increased in all the subsidiaries during the quarter, with increases in the exchange rate of local currencies compared to the same period of the previous year. Financial Risk: The company continues with the policy of conservative management of its cash, increasing its volume of investment fund during 2018 and maintaining a very low level of indebtedness. 18

19 Summary Table of Countries Revenues (Millions Ch$) 4Q '18 4Q '17 Var % Var % Local Currency Var % Var % Local Currency Chile ,9% 0,9% ,1% -1,1% Colombia ,5% 2,6% ,5% -3,3% Peru ,9% 0,5% ,6% 3,6% Uruguay ,5% -3,6% ,6% 2,5% Total Filiales ,6% ,5% Same Store Sales Data in nominal values (in local currency) Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY Chile 3,8% 7,3% 4,7% -1,8% -2,9% -5,0% -5,3% 0,2% 3,5% -3,3% Colombia 4,3% -9,4% -5,8% -7,7% -6,9% 11,2% 6,3% 6,4% -5,1% 4,3% Peru -9,1% 1,1% 4,1% -4,9% 8,0% 7,5% 13,8% 11,2% -2,4% 10,2% Uruguay 3,2% 4,5% 4,6% 10,6% 8,6% -7,6% 3,3% -9,4% 6,1% -3,1% Number of stores and surfaces of square meters December 2018 December 2017 # StoresSurface of sqm # StoresSurface of sqm Chile Colombia Perú Uruguay Total

20 Data by Country and Business CHILE Retail (Million Ch$) P&L 4Q '18 % Revenues 4Q '17 % Revenues Var. % Revenues ,6% Cost of Sales ,2% Gross Profit ,3% ,8% -3,8% SG&A ,6% ,0% 4,5% Operating Income ,7% ,8% -29,0% (Million Ch$) P&L 2018 % Revenues 2017 % Revenues Var. % Revenues ,4% Cost of Sales ,1% Gross Profit ,9% ,0% -0,6% SG&A ,5% ,9% 5,9% Operating Income ,4% ,1% -18,0% Same Store Sales Growth Data in nominal values (in local currency) FY 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q SSS 3,8% 7,3% 4,7% -1,8% -2,9% -5,0% -5,3% 0,2% 3,5% -3,3% Stores Openings / Closings Date Chain Stores Sq.meters Opening oct-18 Columbia Plaza Tobalaba 69 Opening oct-18 Columbia Coyhaique 98 Opening oct-18 Merrell Coyhaique 117 Opening oct-18 Caterpillar Iquique 84 Closing oct-18 We Love Shoes Plaza La Serena 60 Opening nov-18 Merrell Puerto Varas 80 Closing nov-18 Nine West Estado 29 Opening dic-18 Columbia La Fábrica 196 Opening dic-18 Caterpillar La Fábrica 205 Opening dic-18 Burton Puerto Varas 44 Opening dic-18 Merrell Plaza La Serena 74 Opening dic-18 Azaleia Talca 30 Closing dic-18 7Veinte Principe de Gales 180 Closing dic-18 We Love Shoes Plaza Norte 80 Total

21 Data by Country and Business Change in Total square meters December 2018 December 2017 Var. 18/17 Var. % N Stores ,2% Square meters sales area + window ,0% Wholesale (Million Ch$) P&L 4Q '18 % Revenues 4Q '17 % Revenues Var. % Revenues ,1% Cost of Sales ,7% Gross Profit ,5% ,7% -7,7% SG&A ,3% ,2% 21,2% Operating Income ,8% 482 9,5% -130,2% (Million Ch$) P&L 2018 % Revenues 2017 % Revenues Var. % Revenues ,1% Cost of Sales ,9% Gross Profit ,6% ,6% -2,2% SG&A ,6% ,3% -6,6% Operating Income ,9% ,3% 3,0% Total Chile (Retail + Wholesale) (Million Ch$) P&L 4Q '18 % Revenues 4Q '17 % Revenues Var. % Revenues ,9% Cost of Sales ,1% Gross Profit ,4% ,1% -4,1% SG&A ,0% ,8% 6,2% Operating Income ,4% ,3% -36,5% (Million Ch$) P&L 2018 % Revenues 2017 % Revenues Var. % Revenues ,1% Cost of Sales ,4% Gross Profit ,7% ,6% -0,8% SG&A ,2% ,2% 4,2% Operating Income ,5% ,5% -12,6% 21

22 Data by Country and Business COLOMBIA (Million Ch$) P&L 4Q '18 % Revenues 4Q '17 % Revenues Var. % Revenues ,5% Cost of Sales ,4% Gross Profit ,2% ,2% 27,9% SG&A ,5% ,6% 0,8% Operating Income ,7% 25 1,6% 697,5% (Million Ch$) P&L 2018 % Revenues 2017 % Revenues Var. % Revenues ,5% Cost of Sales ,6% Gross Profit ,2% ,7% 7,7% SG&A ,3% ,5% -12,1% Operating Income -54-1,1% ,8% -90,3% Same Store Sales Growth Data in nominal values (in local currency) FY 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q SSS 4,3% -9,4% -5,8% -7,7% -6,9% 11,2% 6,3% 6,4% -5,1% 4,3% Store Openings / Closings Date Chain Store Sq.meters Closing oct-18 D House Viva Wajira 104 Total 104 Change in Total square meters December 2018 December 2017 Var. 18/17 Var. % N Stores ,6% Square meters sales area + window ,1% 22

23 Data by Country and Business PERÚ (Million Ch$) P&L 4Q '18 % Revenues 4Q '17 % Revenues Var. % Revenues ,9% Cost of Sales ,7% Gross Profit ,4% ,0% 6,7% SG&A ,2% ,7% -1,2% Operating Income 337 6,2% 120 2,3% 181,6% (Million Ch$) P&L 2018 % Revenues 2017 % Revenues Var. % Revenues ,6% Cost of Sales ,1% Gross Profit ,1% ,4% 7,1% SG&A ,4% ,9% -6,6% Operating Income 517 2,7% ,6% -161,0% Same Store Sales Growth Data in nominal values (in local currency) FY 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q SSS -9,1% 1,1% 4,1% -4,9% 8,0% 7,5% 13,8% 11,2% -2,4% 10,2% Store Openings / Closings There were no openings or closings during this quarter Change in Total square meters December 2018 December 2017 Var. 18/17 Var. % N Stores ,8% Square meters sales area + window ,9% 23

24 Data by Country and Business URUGUAY (Million Ch$) P&L 4Q '18 % Revenues 4Q '17 % Revenues Var. % Revenues ,5% Cost of Sales ,5% Gross Profit ,9% ,0% -4,6% SG&A ,5% ,9% 18,3% Operating Income 134 2,4% ,1% -83,3% (Million Ch$) P&L 2018 % Revenues 2017 % Revenues Var. % Revenues ,6% Cost of Sales ,9% Gross Profit ,6% ,6% -3,8% SG&A ,8% ,7% 4,8% Operating Income ,8% ,9% -44,6% Same Store Sales Growth Data in nominal values (in local currency) FY 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q SSS 3,2% 4,5% 4,6% 10,6% 8,6% -7,6% 3,3% -9,4% 6,1% -3,1% Store Openings / Closings Date Chain Store Sq.meters Opening dic-18 Rockford Punta Carretas 93 Total 93 Change in Total square meters December 2018 December 2017 Var. 18/17 Var. % N Stores ,1% Square meters sales area + window ,0% 24

25 Consolidated Balance Sheets ASSETS Current Assets December 2018 December 2017 Th Ch$ Th Ch$ Cash and cash equivalents Other financial assets, current Other non-financial assets, current Trade and other account receivables Accounts receivables from related companies Inventories Tax Assets, current Total Current Assets Non-Current Assets FORUS S.A. & SUBSIDIARIES CONSOLIDATED BALANCE SHEETS expressed in Thousands of Chilean Pesos, as for Other financial assets, Non-current Other non-financial assets, Non-current Fees receivables, Non-current Investments in Associated Net intangibles assets Goodwill Property, plant and equipments Deferred tax Assets Total Non-Current Assets TOTAL ASSETS LIABILITIES Current Liabilities Other financial liabilities, current Current trade and other current accounts payable Current accounts payable to related companies Other current Provisions Current Provisions for employees benefits Other non-financial liabilities, current Total Current Liabilities Non-Current Liabilities Other non-current financial liabilities Other non-financial non-current liabilities Total Non-Current Liabilities TOTAL LIABILITIES SHAREHOLDER'S EQUITY Paid-in capital Retained earnings Issue Premium Other reserves ( ) ( ) Equity attributable to equity holders of the parent Non-controlling interest Total Net Equity TOTAL NET EQUITY AND LIABILITIES

26 Consolidated Income Statement FORUS S.A. & SUBSIDIARIES CONSOLIDATED INCOME STATEMENT expressed in Thousands of Chilean Pesos for the end of the periods of and for the quarters December 2018 December Q'18 4Q'17 Th Ch$ Th Ch$ Th Ch$ Th Ch$ Revenues Cost of Sales ( ) ( ) ( ) ( ) Gross Margin Other incomes of total operation Logistic costs ( ) ( ) ( ) ( ) Administrative Expenses ( ) ( ) ( ) ( ) Other expenses of total operation (83.909) ( ) ( ) Other gains or (losses) ( ) ( ) Financial Income (87.523) Financial Expenses ( ) ( ) (87.610) (93.466) Participation in gains (losses) of joint venture businesses accounted ( ) ( ) (43.299) by using the proportional value of participation Exchange Differentials ( ) ( ) Result of Indexation units Profit before income tax Income Taxes ( ) ( ) ( ) ( ) Profit (loss) Profit (loss) attributable to equity holders of parent Profit (loss) attributable to minority interest (37.784) ( ) Profit (loss) Income per Share Commom shares $ 98,9 $ 103,3 $ 20,0 $ 24,9 26

27 Consolidated Cash Flow Statement FORUS S.A. INDIVIDUAL CASH FLOWS STATEMENT expressed in Thousands of Chilean Pesos, as for December 2018 December 2017 Th Ch$ Th Ch$ Cash Flows Originating from (used in) Operating Activities Types of Earnigns from operating activities Earnigns from sales of goods and rendering of services Earnigns from Premiums and benefits, annual payments and other benefits of subscribed policies Other earnings from operating activities Types of Payment Payments to suppliers for the supply of goods and services ( ) ( ) Payments to and on behalf of employees ( ) ( ) Payments for premiums and benefits, annuities and other obligations derived from the policies subscribed ( ) (59.936) Other payments for operating activities ( ) ( ) Net cash flows originating from (used in) the operation Income taxes paid (reimbursed), classified as operating activities ( ) ( ) Other cash inflows (outflows), classified as operating activities ( ) ( ) Cash flows from (used in) operating activities Cash Flows Originating from (used in) investment activities Purchases of property, plant and equipment, classified as investment activitie ( ) ( ) Cash flows from sales of intangible assets, classified as investment activities - - Purchases of intangible assets, classified as investment activities (43.395) ( ) Purchases of other long-term assets classified as investment activities ( ) ( ) Dividends received, classified as investment activities Interest received, classified as investment activities Other cash inflows (outflows), classified as investment activities ( ) ( ) Cash flows from (used in) investing activities ( ) ( ) Cash Flows Originating from (used in) financing activities Amounts from short-term loans Loans Reimbursements, classified as financing activities ( ) ( ) Dividends paid, classified as financing activities ( ) ( ) Interest paid, classified as financing activities (65.361) (24.337) Other cash inflows (outflows), classified as financing activities Cash flows from (used in) financing activities ( ) ( ) Increase (decrease) in cash and cash equivalents, before the effect of the changes in the exchange rate Effects of the Exchange Rate Variation on Cash and Cash Equivalents Effects of the Exchange Rate Variation on Cash and Cash Equivalents ( ) Increase (decrease) of the Cash and Cash Equivalents Cash and Cash Equivalents (Initial Balance) Cash and Cash Equivalents (Final Balance)

28 Forus S.A. Address: Av. Departamental Nº La Florida Santiago, Chile Contact: Ricardo San Carlos Investor Relations Telephone: (56 2) ir@forus.cl Website: Go to the Investors menu. 28