Falabella S.A. (FALABELLA.SN) Earnings Call Transcript & Summary

So good morning, everyone, and thank you for joining us today on Falabella 2024 Investor Day. My name is Raimundo Monge, I'm the Head of IR of Falabella. Before we will begin, let me run through some operational details of the session. We have prepared a set of presentation that lasts 2 hours, okay? And with a 10-minute break after Falabella Retail presentation. And afterwards, we will begin the Q&A session as shown in this slide. We will be taking questions for both in person and participants on the webcast as well. For the webcast audience, please note that you can ask questions at any time and submit them via the interface of the platform. For those attending in person, in the slide is the WiFi network and password, one slide. I would like to remind you that during the presentation, management may make forward-looking statements relating to our company, its results, operations, expenses, strategy, potential restructuring and other matters alike. This will be characterized by the use of terms such as plan, pretend, expect, anticipates, estimates, hope and seek. Such statements are based on assumptions and expectations of future events that are uncertain and contain some risk. Therefore, and for further information of this matter, I kindly refer to the disclaimer on the forward-looking statements that is displayed on the screen. We will start with a short video, and then I will turn the floor over to Enrique Ostale, our Chairman. [Presentation]

Good morning. Thank you for those attending today in this room and also those that are through the streaming. It's an honor for me to welcome you today to our Investor Day and here in Santiago. Thank you for joining us to explore the journey that we have undertaken and the opportunities that lie ahead. So without a doubt, the last 2 years since our last Investor Day has been one of the most challenging in the history of the company. Of course, we -- as you know, we face a highly complex macroeconomic environment while navigating an ambitious transformation process in Falabella. It was a period that tested our resilience and demanded extraordinary adaptability. In a world defined of ever-increasing complexity, our response has been to embrace simplicity. This philosophy underpins our strategy, empowering us to navigate challenge with clarity, focus, consistency and agility. The recovery and turnaround are a testament of the dedication and determination of more than our 85,000 employees who put all the best effort into three key objectives: first, improving our customer experience, restoring profitability and strengthening our balance sheet. Their commitment and effectiveness, as you can see in the results of the company has been the cornerstone of our success -- of our late success. As a Board of Director, we are truly enthusiastic, to be honest, about the potential of our ecosystem, built around this growth of around five growth engines that operates across the countries where we are present and we still have many growth options in front of it. These engines are proactively offering increasing value to our customers, fostering collaboration and synergies and positioning us to capture sustainable growth in dynamic and diverse markets. Finally, I would like to thank you for your continued trust and partnership. I hope today, we can -- and today, we look forward to sharing more about our progress, our strategy and why we are confident that the bright future that lies ahead for our company, why we are confident in the bright future that lies ahead for our company and all of you. So as our value stakeholders. So thank you again. And now I would like to leave you with Alejandro Gonzalez, our CEO.

Hello, everyone. Good morning. Thank you for being here. [Foreign Language]. Last time we met was 2 years ago, as Enrique was mentioning. 2 years ago, the highlight of the presentation we made was not all the capabilities that we were building and we will share with you later on, but it was an operational leverage plan that we had. So the mood was totally different. And as Enrique has mentioned, we're coming from 2 of the most volatile years in which not only things were not as you market expected from Falabella, but also the performance that we had was worse than what we were expecting. And it's relevant because at the end of the day, the mood in which we are today is different. The outlook we see to the future is different. And this is one of the main highlights I would like you to get from here. Falabella today, you know what we are still a very relevant company in the markets in which we operate. With a few exceptions, we lead the main units in which we are, home improvement, fashion, electro products, food, financial services, digital banking, shopping malls. But the one point that I would like to make is that we're still a company that's preferred by our customers. And the highlight for this meeting is going to be the CEOs of the units that are driving growth moving forward for Falabella. Following what Enrique was mentioning, we did some twist in the strategy that we had. And we say that we have these 4 main pillars that we'll elaborate in a few minutes. But it's important that we highlight 5 business engines and the value that we're willing to create, the sustainable value that we're willing to create is coming from these 5 engines, the 5 different divisions. The other thing is the focus on our digital strategy, driving a more effective organization. And finally, a tight, more efficient capital allocation process, and I will elaborate on this later on. The 5 engines, I know that you've met this, you know this. But I'd like to highlight something that's so relevant for us. This is what we call the retailer units, home improvement. Falabella, Francisco is going to give you some detail on the evolution that we're having that and TOTTUS supermarket, shopping malls and digital banking, financial services. These are the same business that we had since 1990. And I mentioned this because the source of growth that we have from now on are not only coming from what we do here, but some adjacent capabilities that we've been able to create with some strategic enablers that we have, the loyalty program, home delivery talent, the people that we have, not only the amount of the talent density that we have, but also having an efficient organization of finding technology and data. And with that, it's impossible to go through this without tackling ESG as a relevant part of us. 20% reduction on Scope 1 and 2 emissions since '21, 73% of our energy from renewable sources. By the way, 73% because we have some stores and some units that are in places that do not have access to renewable energy. But the commitment that we have is to go as much as we can. More than 100,000 boys and girls have been educated in the educational institutions that we have sponsored by Falabella. Why this is relevant? Because we are thinking -- the company has been in business for 135 years. Our aim is to go for the very long run sustainable growth for us. This is a glimpse of what you're going to see later on. But keep in mind that part of the process that took us on a very hard moment given the macro environment was also the fact that we were building capabilities that when the pandemic came, we didn't have. Now we have those capabilities. Benoit will get further detail on that. So now we're in the moment in which we are leveraging on that. There are several sources of income that we have today that were not even close to be a reality pre-pandemic. As an example of the capabilities that we built, this is e-commerce. What you see on the right part of the slide, like for me, like for you, is what we had until 1.5 years ago, marketplace, 3 retail units. We twisted that. We changed that in order to have a more specialized marketplace but also a very specialist approach when it comes to home improvement and food. Why did we do this? Among other things, because the customer also was very clear saying that the same person, all of you, don't forget that the retail industry is the most democratic one. Everyone in the world buys or sells something, everyone, either in formal or informal. And I don't know you, but when I'm buying tools, the expectation, the attitude, the experience that I want to have totally different than the one that I'm expecting when I'm buying, I don't know, maybe a perfume, a shirt or food for lunch. That's what drives this, also partnering with the best brands and the best products that we've always had and with some cross-functional enablers that we have today, not only product, as I said, home delivery unit and also the digital capabilities that we've been able to build. Going to the more simple and focused structure and the way we work, there are some things that may sound very simple, but as Enrique was mentioning, when you become a company with more than 85,000 people, this is key. It's important to have empowerment to have ownership. Those are the things that we're promoting this year, alignment, incentives, very well established in order to make sure that everyone has the same objective that you are expecting for a company like Falabella. So that's why we're having leaner structure, a simpler organization, making sure the most of the effort is basically to face the consequence that we have. Another thing that we mentioned about our strategy of capital allocation. And in this sense, be very efficient. We a year ago, we lost our investment grade. But we've always been a company that has taken care of cash. We had $700 million when we were downgraded. We are close to $600 million today. We're taking care of that. And it's important not only take care of that, but also capital allocation, make sure that it goes in line to long-term value creation. Very simple things, things that we didn't do before, but continuously monitoring the value of the investments that we have. If there's an investment that's not performing as we are expecting, we either set a path to the performance that we are expecting or we might as well find a way to get rid of it. As I said before, we didn't meet the expectations that you had, but we learned lots of things. The first one, the one that I was mentioning about focusing where growth will come, be very tight in holding that. Second one, an agile organization, fail fast. We showed some examples of that last year. At some point, we had an on-demand application called Fazil, gone, the wallet that we had gone. So we are leveraging and we are allocating our resources where things can create further value in this ecosystem that we already built. The third one from the retail units, enhance inventory management. Francisco will get into that one, shorten the cycles, make sure that working capital requirements are lower or the most optimizations. And third one, data-driven decisions. Today, the level of information that we have is more than ever, and that's what are we using in order to supply and to bring personalized experience to our customers. This is a glimpse of what the team will share with you in further detail just for you to get -- I'm not going to get into too much detail, just to make sure that you are clear that what each of these 5 business units needs to do is very clear. It's in the hands of everyone. But as I said before, you're going to get more detail of that, but there's a lot of opportunities of growth within what we have today. It's not the growth of Falabella will have from going to a new business or a new region. These are clear examples of the main objectives that we have today. And before I end, I'd like to share with you some trends that we're seeing in the industry. These are the trends that we're taking into account in order to see what the next steps of Falabella will do. The first one, a lot of discussion when the pandemic ended if customers will be online physically. Well, there's some things that are not challengeable today are undeniable. The customer is omni-channel. The customer can and it will be omni-channel. And most of you, in some cases, you interact with the retailer with the app, sometimes it's physically. But the right of being omnichannel is in the customer and they have the power to that. The second I remember when I joined the company 18 years ago, the product was king. Well, today, product and experience are one thing. Sometimes the reason why you end up buying something is because the experience is better, sometimes it's the product. So today, it's something that you cannot divide. And that's relevant for you to be aware. And it's part of the things that we are seeing today. The third one, in this world, given the empowerment and the information that the customers have, loyalty is a thing really hard to keep unless you have a very strong loyalty program. And it's important to be a program, and we're going to see some part of that right at the end. And the fourth one, something I was sharing with you before, Francisco will go into further detail. But 5 years ago, there were so many sources of value within the core of what we do that we didn't have value-added services, fulfillment services. Those are things in which we're leveraging towards the future to see the numbers and the growth that we're expecting to have. And with that, I would like to leave you with Andrea, the best of Falabella.

Thank you. Thank you, Alejandro. Good morning, everyone. It's really nice to see so many familiar faces and some new ones, and good morning to everyone who is listening on the webcast as well. CMR Puntos was first launched as a way to reward our best cardholder customers. But in 2017, we took a really bold decision. We opened the program to the whole Falabella ecosystem. This means that you can earn points by spending with your credit card, but also buying in any of our 454 stores in Chile, Peru and Colombia as well as in our e-commerce. With this, the program grew and it became a value creation catalyst for the group. So today, in Chile, we have the preferred loyalty program and it's second in Colombia and in Peru. This relies on a proposition that our customers love. We offer varied rewards as you can redeem your points on our ecosystem, but also on a network of partners of more than 100 commerce. We have special events to reward our best customers such as trips and we also offer flexibility. In 2023, we launched a new functionality. And with that, you can use your points as dollars on our e-commerce in Chile, in Falabella, in Sodimac and also in Sodimac in Colombia. So the program has grown dramatically in the last 5 years. We have tripled the number of participants. We have doubled the number of redeemers and we have almost tripled the number of redemptions every year. We put focus on this basically because as Alejandro already mentioned, the program is a key enabler of the ecosystem, and it serves basically two strategic objectives. On the one hand, through the program, we get access to data in a way which is transparent with our customers and that is safe. And on the other hand, it's a very relevant tool in boosting the customer life cycle. Clients who engage in our program, engage better with all of our ecosystem. So through the program, we get access to the data of more than 33 million customers. This is relevant because no single business unit on its own will have access to such a rich database. And also, it allows us to reach customers in a cost-effective way, sometimes even before they transact with us. How we have used this data is constantly evolving and will continue to evolve. We use it in multiple uses across the business cycle. Basically, we use it on our customer journey for customer acquisition. I think a really good example is what we do at the bank that Juan Manuel will share with more color shortly. For cross-selling, this year, for example, we had drive traffic to our Mallplaza malls by offering free parking to our elite customers and for retention. Whenever we see that our customers have been inactive for a while, we offer them personalized coupons to invite the customer back to the ecosystem. But I would say that most importantly is that we are using this data to fulfill new business objectives for risk assessment that Juan Manuel will also share shortly and for marketing savings and monetization. So this year, we started building audiences. This is very simple, but basically, through our own algorithms, we are able to segment our customer base in very specific segments, we can then use for example, to find, I don't know, it might be a good example, I want to have a segment of sports enthusiasm. And that database is then used for performance marketing. With that, we lower our performance marketing costs, but also we are able to share it with third parties. When we compare the databases built in Falabella compared to those that might be offered by Meta, Google, our own databases have performed 30% better. So there's still value to unlock in monetizing this data. Let me share a very simple example, but I think it's very illustrative of how we use this data with our customers. This is bank's app. And why this is relevant? It's basically because this is our most frequent use digital channel. So very recently, we started offering on the home of our bank -- of our app transactional offers. We did this for our own ecosystem. We have personalized these offers, and we have very relevant results. We had a 30% incremental sales on those offers. But also, we have done that with our -- with third parties and sales doubled. So here, we have a space on our app that we can further monetize as well. The program, as I mentioned, also fulfills a second objective, which is related to our customer life cycle. I would say that any successful loyalty program offers benefits to the clients, which have a higher perceived value than the actual cost of providing them. And we do this with our own ecosystem. You might earn points spending with our credit card outside the ecosystem, you earn points on our own ecosystem, but 80% of the points are redeemed internally. With that, we drive traffic back, so we generate a positive loop, but also we recover almost 20% of the spend in gross margin. But I would say that the most important or the most relevant thing of our loyalty program is how the behavior of our customers change once it becomes a redeemer. So for any given customer with the same characteristics, I would say that redeemers, once they see the benefit of the program, spend 40% more, transact 50% more and have a lower churn. So in summary, I would say that in the last 5 years, we managed to triple the number of participants and in other ways, we triple the number of customers we know better and that we can leverage the data on -- and we doubled the number of redeemers. So in other words, we doubled the number of customers which -- who -- sorry, who spend more, transact more and are more loyal to our own ecosystem. Provided we continue growing our loyalty program, we will continue giving more value to the whole Falabella proposition. Now I would like to invite Benoit, who will share some insights on home delivery and technology.

Good morning, everyone, and thank you for being here with us today. So I want to -- after loyalty, I want to talk to you about two other enablers, technology and home delivery, right? So first of all, in technology, for us, technology is key and it's part of the transformation that we're doing. And it's key because it's a key differentiator for our customer experience, and it will also allow us to unlock new revenue streams. We knew that retail is an evolving industry and we need to be on top of the new trends in technology. So first of all, how are we organized in terms of technology? We work across four different technological platforms. First of all, supply chain, where we leverage our group capabilities in terms of the synergies we can capture through our logistics network and our warehouses, for example, in order to improve delivery times. Second, digital commerce for which we have developed common capabilities to allow us to be more agile and to be more scalable. But with tailored solution, as Alejandro mentioned, for our specialized e-commerce value proposition in home improvement, supermarkets and specialty stores, as Francisco will mention in a moment. Third, stores and merchandising because we recognize that omni-channel is now the reality. Customers like to shop in physical stores but also in e-commerce, in our e-commerce solutions. So for example, we've been working on self-checkout in stores, omni-channel solutions in order to leverage our unique stores and e-commerce solutions. And fourth, banking and insurance to keep accelerating our digital banking capabilities. But as Alejandro mentioned, we've been evolving, and that's something really important for us to mention to you today because we really have been evolving through different phases in terms of the deployment of our technology in the last 5 years. Between 2018 and 2022, we built mainly in our digital banking capabilities, but also in e-commerce and marketplace. We built those capabilities. And now we've been able since last year to deploy these capabilities. This has allowed us, for example, to relaunch the TOTTUS and Sodimac stand-alone stores, as Alejandro mentioned. We've been accelerating our 3P sales. We've been deploying our logistics, managed network, and I will share with you in a moment what are the results of those deployments. We've been launching new in-store functionalities. We are accelerating in the way we are capturing and creating new value streams for retail media and value-added services, for example, and also the way we are now deploying artificial intelligence solutions in back-office processes, but also in customer-facing solutions such as, for example, chatbot with our customers and fraud management. So in a few words, we have been deploying our technology, and this has bring us some very good results. In our logistics solution, what we call home delivery, we consider logistics to be another enabler on which we are investing a lot and accelerating since together with the catalog depth and the competitiveness of prices, delivery times are a critical success factor for e-commerce. Therefore, from 2018, we have evolved from first using mainly third-party logistics players to develop our own facilities and leverage our supply centers, but also creating cross hubs and regional transfer centers. Then in 2022, we're accelerating in the deployment of our last mile own managed network that I will share with you in a moment now is fully deployed. And now we are starting to sell fulfillment and also logistics services to, for example, third-party sellers. So again, this is -- this has been an evolution in the past years and now we can say that we are developing and deploying those solutions and those solutions are becoming to their full capabilities and capacities. So what we do in order to leverage our unique capabilities for first-party products, the products from our retailers, but also third-party products, the products for the more than 20,000 sellers that operate with us. We leverage our distribution centers. We leverage the cross-stock hubs and the transfer centers, regional transfer centers that we developed across the region. We have now a dedicated fleet of transport of trucks, but we also have unique agreements with third-party logistic players. And this allowed us to deliver more than 35 million packages per year across our stores, but also with a network of more than 1,000 Click and Collect points and obviously, to the homes of our customers, leveraging cost efficiency, speed and very good customer service. One good example is click and collect. Now more than 53% of our customers choose to pick up their products in our stores. We have a network of more than 500 stores, but also more than 1,000 points of delivery points with third-party logistics. So as you can see, this is a screenshot of the checkout of one of our e-commerce and the customer can pick between delivery times, same day, 24 hours, 48 hours and also pick a date. And they can also choose if they want to receive that at home or at one of our stores or one of our partner network. So as a summary, we are accelerating in the deployment our solution. More than 84% of the orders are delivered by now our managed network, and we are still improving, especially with the third-party players. 71% of our customers received the orders in less than 48 hours, 61% of our customers received their products within 24 hours. And maybe you've seen also that we are doing, especially in those times before Christmas, we are doing same-day delivery and accelerating in same-day delivery. We have a customer service level of more than 95% and we've been able to reduce our last mile cost by more than 30%. Thank you very much. I will leave you now with Juan Pablo Harrison, our CFO.

Hello, everyone. Thank you for joining us today. In this section of the presentation, I will show you how the strategic adjustments that Alejandro just mentioned have been translated into our financial position and results. First, I would like to start saying that we are very happy to report that when we see our operations, all of our business units have shown significant improvements compared with last year results. Those are very good news for us, but we think we recognize that we still have opportunities for further improvements across all of our business units. To talk more in detail about that in the next sections of the presentation, our CEO will share the strategy and the specific actions that they are following in their respective business units. Looking at our performance progress since our last Investor Day in October '22 when we launched our efficiency plan, we can see that the trajectory regarding profitability and financial positioning has been improving significantly. Regarding the profitability, when we see the numbers of the third quarter, we reached an 11.6% of EBITDA margin. This number has been achieved through the implementation of various initiatives in the context of our efficiency plan, being the most relevant ones, the drastically reduction in our inventory levels, the more optimized marketing activities, our logistic management enhancement and finally, we streamlined our corporate structures. As a summary, the implementation of our efficiency plan allow us to save approximately $400 million in SG&A compared with very favorable with the $250 million that we originally announced. When it comes to leverage, it's important to notice that almost 90% of the positive trend that we have seen since June last year is a direct consequence of the improvement on the profitability that I already mentioned. However, this positive effect has been complemented this year with the very selective CapEx plan and with the successful implementation of our noncore assets monetization plan, which already achieved approximately $700 million. Here, we have to highlight -- I would like to highlight that all the initiatives that we include in this plan has been executed at very attractive conditions and valuations for Falabella. Finally, when we're looking forward, we set a target between 2.5x and 3x in our long-term leverage. We think that with this level of leverage, we will have the flexibility that we need for the future for capitalizing on any growth opportunity that our business unit could offer across the region. Here in Falabella, we are committed with maximizing the value for our shareholders. And in that line, we see three key financial priorities. First, continue strengthening our financial position, aiming to capture any growth opportunity that could appear in the future. Second, focusing our investment plan and capital allocation strategy to enhance and boost the organic growth in our business units. And finally, continue improving the profitability levels in the company. Regarding our financial position and debt, first, it's important to mention that from a corporate point of view, we have allocated our debt in 2 companies. 60% of our debt is allocated at the holding company level in Falabella S.A. and 30% is allocated in Mallplaza, which today has a very strong financial position. When we take a look into our maturity, today, we feel pretty comfortable with the maturity profile that we have for the future. However, I would like to explain more in detail three relevant obligations that we are going to face during the next years. First, we have a club deal signed with three international banks that is going to have a maturity in November 2026 for $300 million. And second, we have the remaining balance of two international bonds, the first one with maturity in January 2025 for $200 million and the other in November '27 for $300 million. Here, I would like to highlight that we already having cash in our balances, the full amount of money that we are going to need for the payment of the January '25 maturity. Regarding our investments priorities here, we are presenting our CapEx plan for 2025. It will totalize $650 million representing a growth -- a significant growth of 30% compared with this year. It's important to highlight that with this kind of CapEx plan, Falabella is recovering the historical level that we invested in previous years. Talking about the composition of the brand, it's important to notice that we allocated -- we have allocated more than $450 million to open, expand and transform our stores and shopping malls. With this amount of investment, we are looking for boosting the organic growth across all of our business units. Regarding the growth, we are aiming to open 15 new stores during the next year, focusing on Sodimac stores in Mexico and supermarket stores in Peru, most of them under the brand of Precio Uno”, which is the discounter format that we manage in this country. Regarding the expanding and transformation food and transforming our footprint, I would highlight two items. First, the plan that Mallplaza has for enhancing the assets in Peru and transforming TRI shopping malls in Chile. Regarding our stores, we have allocated a significant amount of CapEx for remodeling our stores, aiming adapt them to our current strategy and, of course, enhance our customers' experience in the stores. In the next section, Alejandro, Renato and Fernando will explain in more detail their expansion strategy. In terms of the profitability, we think that with this CapEx plan, combined with a gradual recovery in the consumption levels, we will be very well positioned for continue expanding our margins for the next years. This will be supported by a mid-to-high single-digit growth in the top line, the recovery in Sodimac operations, continue growing in our digital bank business and better economics from our e-commerce operations, which, by the way, we expect to reach the breakeven by 2026. All of this will be supported by our focus in keeping stable our SG&A expenses in real terms. In this line, we have set a target of expanding our margins between 200 and 300 basis points by the end of 2026. Finally, as key takeaways, first of all, reinforce that we already have the funds for covering the January '25 international bond maturity. Second, that we expected to reach breakeven in our e-commerce operation by 2026. And finally, and the most relevant one, I would say, is that we are in the middle of a process of recovering our investments, and we think that we are very well positioned for continue expanding our margins and for reaching our profitability targets. From a financial point of view, here in Falabella, we are focusing on recovering growth, profitability and our investment levels to achieve a balanced and successful digital and physical future. Thank you very much. And I leave you with Alejandro, which is going to give some insights in Sodimac strategy.

Good morning. My name is Alejandro Arze and I'm going to talk to you about the home improvement business that we run here. Sodimac is today present in 7 countries. We have more than $5.7 billion in revenues. We serve more than 20 million customers with more than 260 stores, and we are #1 in market share in Chile, Uruguay, Peru and Colombia. We have been facing a global slowdown in the construction industry in the last couple of years has been very tough for the industry, but we see that the interest rates are starting to go down that will accelerate the sales of homes and that will foster the construction business. As a matter of fact, the official projections for the main countries we operate are starting to go better, and we see how the sales of new homes and the construction GDP is projected to grow next year. With that, we are projecting that our sales are going to recover in the second semester of next year. During this period, we have been working on our margins and we have been reducing our SG&A so that we feel that, that would leave us in a lot better position to capture that growth of the market. So we are prepared to grow and recover profitability. We have a winning strategy for our three customer segments: the consumers, the professionals and the business-to-business. Our value proposition is to offer all products and services at the best price and in the right quantity. The right quantity is very important for the professionals. They need to have job lot quantity, all of this in one place with a seamless omni-channel experience. Our strategy has resulted in a strong brand awareness. In our main countries, we have more than 90% brand awareness in Chile, Peru and Colombia and more than 60% top-of-mind awareness in Chile and Colombia. To lead the home improvement market in the main countries we operate, we have -- our strategy is focused in four pillars. We're focusing on the Pro. We're focusing on our private labels, the growth in omni-channel and also the product and experience innovation. The professional customer is very important for us. He has a lot larger frequency than our regular customers and a bigger ticket. So we are building the relationship with them through a loyalty program and a specific loyalty program for the Pro that is called the CES that is aimed to build a relationship, giving them the right product at the right price at the speed they need the products to be on their job site and with the proper financing. We're also improving the experience that our professionals are having with us. One example is we set up a new app. So when you subscribe yourself in our loyalty program and you log into your regular app, that app will automatically lead you to a customized professional app that has your professional products, has your loyalty scheme details, has customized discounts, and we are also building every day more capabilities for the customer. And this is something that we did with some of the capabilities that Benoit mentioned that we built. We were able to launch this in a very short period of time. We're also improving the service that we give to the customers within their experience at the store. We are personalizing services for our best loyalty scheme customers at the store. We assign one salesman that the customer can call, he can ask the salesman for quotations. He can ask that salesman to pick up the items, so he can just go to the store, pay, collect them and go to the job site. And we can even deliver those to the job site right away without the customer don't even go to the store. We also set up some co-workspaces at our stores where our professional customers can go, can quote for their customers and then purchase the products and go directly to a job site. We have already done this in 95 out of our 260 stores. Our second pillar is private labels. Private labels are very important for us. They already account for around 30% of our sales. And they're very important because they give us some important things. They allow us to differentiate from the market. When you have a private brand, it's a brand that no one else in the market can have. So we differentiate from our competitors. It's very important for us in terms of profitability, just for you to know, the all-in margin of our private brands are around 10% higher than the regular brands that we run. It also gives us the possibility to have product authority when you develop your own products, considering the needs of our customers that we know of them at the stores, you can have products that are especially designed for them and gives you product authority within the different categories. And finally, when you have strong private brands, they also give you a stronger supplier negotiation or more negotiation power. When you have a power brand in certain category, you can have better negotiation with the other suppliers of that category. The third pillar is to grow in omnichannel, and we are doing that to become a specialty superstore in home improvement, basically leveraging 5 strategic access. The first one is assortment dominance. As we have mentioned before, we are planning to increase our 3P offering through 3P sellers, and that will allow us to have all the long tail and become key players in different categories. All of that with frictionless purchasing experience. We are working on improve our aftersales services. We are differentiating the product client functionalities, as I already mentioned 2 slides ago, and increase the profitability mainly through Sodimac Media and also through the selling value-added services. I want to share with you that at the end of the last semester, we relaunched sodimac.com to position ourselves as the home improvement leaders in Latin America. With that, we were able to strength the brand, improve our value proposition through a more specialized home improvement website, and we also benefit from the research online effect that has on offline purchases. As an example, our GMV on the third quarter growth grew 30% and our monthly active users grew 84%. The fourth pillar is that we are strengthening the in-store exhibitions to improve our customer experience. And I'm going to share with you 3 examples of what we are doing. The first one is that we are moving from -- in some categories to have inventory, to have exhibition to get more showrooming. One example is in flooring. We used to have in the flooring department like the exhibition and the inventory all in the same place. And given the size restrictions that we have, we were able to show only a certain amount of SKUs. With the capabilities that we have been developed for the home delivery, what we did is we put all the inventory in a centralized warehouse. We use the space at the store instead of having inventory for those items to use them as a showroom. So we increased the amount of tiles, for example, that we show to the customers, improving their experience. In every single store where we did that, the sales of flooring increased in more than 30%. Other thing that we are doing is in the last year, we have been transforming some Maestro stores in Peru to Sodimac. We just transformed 4 stores. And in each one of those stores, once we finish the transformation, we grew 50% in each one of them. The third initiative that I want to share with you is we are developing a compact format. With this format, we're aiming to target either small cities or urban areas where you cannot find the proper lot to install a big store. So we already opened 3 of those, and we base this format in the experience that we have in our smaller stores in Brazil. We already opened 3 stores, 2 in Mexico in urban areas and in Sincelejo in Colombia, which is a small store. With all this, we are well positioned to capture growth in our main markets. In Chile, our objective is to maintain our leadership position. We have a strategy that is defined category by category to recover growth, margins and profitability, maintaining a strict expense control without affecting the consumer experience. In Colombia, we're aiming to expand the footprint in new cities, maintaining the operational efficiency. And we have also some potential areas of growth improving our value proposition in the business-to-business market. And in Peru, we're going to continue with the transformation of some Maestro stores to Sodimac. This year, we plan to transform between 9 and 10 new stores -- Maestro stores to Sodimac, enhancing the customer experience and innovating via showrooming. Mexico is the highest growth potential for Sodimac. We have been here over 6 years. We have 15 stores in 7 cities. We're selling more than $200 million and 36% of our customers are professional customers. Most of them are already enrolled in our loyalty program. In Mexico, we have been optimizing and standardizing our stores that allow us to capture efficiencies and improve profitability and also allow us to grow faster and open new stores in a better way. We have been enhancing also our loyalty program in Mexico, and we are looking for the benefit of skills with new stores in relevant cities. With that, I will move to my takeaways. We're going to keep developing the professional value proposition in order to increase that segment's loyalty. We are going to improve our assortment to become an omnichannel home improvement superstore. We are prepared to resume growth and increase profitability in our main countries, and we will continue expanding our footprint in Mexico. With that, I'll leave you with Francisco Irarrazaval.

Well, thanks, Alejandro. Hello, everybody. Thanks for coming Today, I'll be talking to you about one single idea, but I think it's a very powerful idea. It's this idea of how we are going to become -- or how we are becoming an omnichannel multi-specialist, how we're undertaking this journey and why we think we can actually win there and how we're going to partner with our best brands and how we're going to provide our customers with an omnichannel partnership that is going to be super hard to replicate. So first, we're very proud to tell you that we are #1 in market share in the countries where we operate. We have the #1 brand measured by Kantar as a brand index. Last year, we had 20 million clients, and those clients bought us on average 4x each, which is a very high number for our format. And out of those 20 million clients, 55% of them belong to our loyalty program. So that provides us with a very powerful base to do more and more business with them. As you may know, we used to have more square meters. Today, we are a little bit below 700 square meters. We believe we are okay in that number. We've been closing stores, yes. We've been reducing store, yes. But we think that today we are in the right places with the right sizes. Nevertheless, of course, we're always measuring performance. So you cannot be sure, but we're about okay. So overall, we have 105 stores under Falabella brand. We have 74 stores under a third-party brand as Aldo, Mango, Banco or other best brands that we carry. And of course, our 3 e-commerce websites which account for about 40% of our sales and most of our growth. So as you may know, we've been pushing a lot this idea of e-commerce. We are really focusing on making the e-commerce bigger and bigger. And these are some figures that I think will help to tell the story. Last 12 months, we sold $2 billion online that's roughly 40% of what we sell. And that is a very high number for this format. We had 1.6 billion visits. That is 4.4 million visits per day. So that is, I believe it's the most visited web page in the region. And out of what we sell, we delivered 38% of our -- sorry, 60% of our items in less than 48 hours. And this is important because as you may have bought in Falabella, you know that you can choose a date in the future. And actually, between 10% or 15% of our clients will be choosing a date in the future. So for us, the roof here is not 100%. It's more like 80% or 85%. Then we have Click & Collect growing very fast, and we expect it to grow even more, as Benoit mentioned, we are between 65% and 70% today. That is last 12 months. And we're growing on the 3P at 15% rate on the last 12 months. And this is something that is very fascinating for us because we are shifting a little bit from a more generalist marketplace into what we call a more curated marketplace. And in this process, we are partnering up with the best brands. And those are the brands with whom we have a long-term relationship. And those are the brands that actually are willing to have the same services that we will provide them as omnichannel services. Those are the brands that care about the brand, care about the story, care about the experience, care about the point of sales. So those are the things that we will be able -- we will be able to provide to them. And those are very hard to replicate services. So last 12 months, for instance, 1.6% of our sales. became a Falabella Retail Media income. And as you may know, there's marginal no cost there. So it's straight to the profit. We are running today 5 stand-alone websites. So if you enter Crate and Barrel Top CL, Carter Top CL or Aldo Top CL and Sam Peru. Those pages are run by Falabella. It's our technology, and we are starting to provide those services as full commerce sort of services. We have fulfillment services running today, 20% of our sales are fulfilled -- 20% of 3P sales are fulfilled by Falabella. And as Benoit also mentioned, 80% of the deliveries are under our own delivery network. So offering a Click & Collect network for free for everyone. And this is new. This is f.plus+, f.plus+ is like a loyalty program for the best brands. So the more you sell, the better we'll treat you, the faster you deliver, the faster we will pay you to really align our interest with the best brands in our e-commerce. So now what's this concept of becoming an omnichannel multispecialist and how we're transferring ourselves from more generally store into what we call an omnichannel multispecialists. And we don't want to be a specialist in everything. We want to be specialists in apparel, beauty, footwear, home and technology. So for the next minutes, I'll be talking about each category, what's the strategy and how we're planning to become a specialist or how we have become a specialist. First, this is the frame we're going to use brand strategy. So there's 3 corners there. Any brand you can think of as an exclusive brand. That is a brand that we buy the items already designed and manufactured, but those brands can only be -- we're going to be the sole buyers of it, right? So we're going to be the only one selling that item in our countries. Private labels, those are brands that we designed, we manufacture, we air freight and we sell in our channels. And local brands are brands that we can buy locally, usually have less inventory, so you had actually negative capital there. So what does specialists do? Usually specialists will be here, right? They will be they own the brand, they will manufacture and they will control the experience. And this is something we think we have already achieved. But of course, the challenge here is that specialists are very fast. They're super fast or manufacturing items. And the time it passes from the idea to the ITB that the store is very short. That is what we have been doing lately with a lot of success. We have increased a lot of the margins in our private labels. We have increased buying cycle. So we are being able to keep up with the trends and we have been able to have low ultimo Primera and Falabella. And this is very important because about 80% of what we sell in apparel can only be bought in Falabella. It's nowhere else you can buy it. It might be the case that it's a similar brand, yes, but it's not the best brand, it's not the same quality. And in terms of channel strategy, this is going to be a lot offline, this is going to be a lot about experience, it's going to be a lot about profitability. So where's the growth going to come from, we believe 3P here has a super high potential because we are actually being able to sell every style for every brand, for every color, for every size at virtually no marginal cost. And that is growing, as mentioned in the previous slide, 78%. So this is what we do. We have brands. We are trying to cover all the space at different price labels at different life styles. And there are some white spaces there are still that we are planning to go after them. One recent example was ActiveWoman, which we launched September last year. It's like a yoga lifestyle for females who want to do exercise or would like to do exercise, and it's been super, super successful. Beauty is totally different. Beauty is well about global brands. But still, if those are global brands, it is still the case that you can have exclusive items, exclusive launch. And the last 12 months, 35% of our sales were items from brands that were only being able -- that were only being sold in Falabella. Channel-wise, this is going to be much more online and much more 3P. We have 50% market share here, and this is a market that is growing 10% per year. So there's a huge opportunity to keep that market share and benefit from the growth. This is very interesting because there are other brands there, more trendy small brands that actually not present in the country. And in the last 12 months, we doubled the number -- the amount sold to international marketplace. So those brands are only available in Falabella through the 3P international cross-border process. And for instance, the ordinary, which is a very successful one, since it's been successful next year, we're going to bring it over to our stores exclusively again. So this is becoming like a lot to look for trends and to capture the brands before they become someone else's. Footwear, a lot alike beauty, but much more omnichannel. Here, we do plan to become about 50% online. And this is very important because specialists on footwear what they really offer to you is every single size, every single color, all the brands in the same place. That's what the clients want. So it's very, very compatible with the online and with the stores. So here, the opportunity is huge because we are including every single brand, exclusive or not, in our web page with all the assortment, with all the sizes. And even some brands as Nike who have different segmentation for channels, we're going to create a specific channel for those brands for the urban kind of lifestyle. So this is a huge opportunity that we're also going to go after. How much you may know is a lot about local brands, a lot about furniture and mattresses? It's a lot about online. That's going to be there, but we do see opportunity on the more soft goods on the offline. So this is a good concept. This concept we launched this year which is a very inspirational space, very aspirational at a very, very low price, like very entry price, and we're going to provide this experience through our own brands. Last not least, technology, as you may know, technology is not about private labels. We don't want to compete with Amazon, sorry, with the Amazon, yes, but not with Samsung or Apple. So here is a lot about the online. It's going to be a lot about 3P and it's going to be a lot about financial services, right? This is the thing we do very good as someone was going to tell you, we have this huge, huge user base. And with Sodimac together, we have like 42% of market share here. So this is a very, very big opportunity. We're going to keep doing that. But in the stores, we aim to move them into what we call a more experiential technology store. So you're going to start seeing more emerging technologies, more peripherical products and less core products. So to wrap up, we have a specific study for each product category. All of them will be different. Even the way page is going to feel different if you're buying something from apparel or you're buying something from shoes, we do want to become a specialist in each category. And the role of the channel won't be the same. The role of the private label won't be the same. So we do want to behave 5 different specialty stores. So that's what we call the omnichannel multi-specialist retailer. And 3 ideas for you to take home, so you can forget all the rest and just remember this. We're going to be putting a lot of focus on the omnichannel e-commerce, both 1P and 3P and that is going to be very hard to replicate. We are going to leverage our relationship, our long-term relationship with the best brands in each country because we believe those brands have the interest aligned with us, those -- because those brands care about the same things that we care. And finally, since Falabella has a super powerful high attribute, high-quality attribute brand, we're going to keep growing and building small niches for private labels wherever we find a white space. And as the ActiveWoman example that I mentioned, we're going to have some more in the next months. So that's the end. Thank you.

Now we will have 10 minute break, so we'll meet again at 11.25.

Good morning. Let's keep going forward. Talk about the food retail, okay? For whom that doesn't know me. My name is Renato Giarola. I've been working in food retail more than 20 years. I am Brazilian. I used to work for [indiscernible] Dia, Spanish discount formats, GPA with premium supermarket, supermarkets, hypermarkets, proximity, premium, proximity, 1A99, it's dollar store, Brazilian dollar stores. After that, supermarkets, Brazilian supermarkets and I joined the Falabella group last year. It's 1 year now. It's been 1 year that I'm working in TOTTUS, it's been a very interesting challenge, and we are doing -- we are achieving some very good results this year. Let's talk about, we at TOTTUS. We have only 2 countries, 9 stores in Peru, its 32 hand discount stores [indiscernible] stores. 58 TOTTUS and 73 TOTTUS in Chile. We are the second in the market in Peru. We are the fourth in Chile and we achieved $2.6 billion in revenues. When we compare to Falabella and when you compare to Sodimac, seems lower and seems smaller than when you compare $2.6 billion in Brazil is the [indiscernible] change in Brazil. It's quite a huge company also. The revenues, okay, we started -- we have accumulated this year around 5% in increasement. But the last quarter, it's 7% in Chile and 8% in Peru because of all the leverages we are implementing in the whole year. In the transformation, we are still implementing in the projects -- in outer the project that we have forward for 2025. The EBITDA, we reached 2 points more, more 2 points in reaching 7.1% this year. In improving with sales, promotions, margin negotiations with suppliers and efficiency all the time, implementing projects with efficiency -- better efficiency to deliver the foods. Foods, it's interesting because it's basic. It's very stable and essential demand. If we see the household spending, in Chile, it's 21%, when we see local assets 31.6% of the spend. And in Peru, it's even more, it's 42.5% when you see the lower classes is 53%. It's half of the household spending in Peru is with food. And another thing, another characteristic very interesting in the supermarkets is the frequency. We have 1.6 -- around 1.5 more [indiscernible] when we compared to another business. We have the clients every week or twice a month in our stores. This is we can engage these clients with all the leverages we are implementing. And also the first one to leverage that we are implementing and reinforcing is perishables to bring the clients every week in our stores. The new TOTTUS, why the new TOTTUS? We started the year looking over the value proposed and understand that Chilean clients and the Peruvian clients and what are their needs and their expectations also. And we are doing this transformation, we define the value proposed in the first semester. We started to implement in the second semester, and we have the whole next year to finish all the implementation that we define in the first semester. A better price experience equation. Why this? We are super markets. We are not discounter -- [indiscernible] is another thing. We are a supermarket. We need, we should deliver a better experience all the time and perishables, a very good perishables category. And prices also. It's a basic -- it's basic needs, it's basic client needs. We need to lower prices all the time with efficiency and better negotiations with the suppliers. We have 3 pillars: experience with low price perception, we're going to talk forward, customer engagement and depreciation in operational excellence. About the price, we started that year doing new negotiations with the suppliers and getting closer with the suppliers, changing the way TOTTUS used to negotiate with the suppliers. We call the structured negotiations. It's a model, it's methodology that brings more from the supplier and work closer with the supplier. Aggressive pricing model, we dropped down 5% of our prices here in Chile and also in Peru, a dynamic promotional model decision, it's the clients of foods they are all the time thinking promotion, and we started on May to increase the promotional in the stores. And we started to increase much more the sales. When we talk about differentiation, we have some leverage that we are preparing and we are implementing. The portfolio, we have 15% more SKUs this year comparing the last year 2023. Percivals, Percivals, we are working on bakery. We are working on bakery, fruits and vegetables and bringing the best quality we can offer for the clients. This is food. Every time we try to sell very cheap products, we know that the clients doesn't want this, the clients want all the time, quality, quality, quality, and quality. Private label. Let's talk about the private label. Private label, we are reevaluating all the private label we have, and we are going to launch in the next year, another private label with more modern attitude and with a lot of differentiation and high quality. We hired some people from Europe, some people from Brazil to help us to do this, to put the private label in another level with cost benefit, a better cost benefit and to be one of the best loyalty leverage that we have. And also the corporate loyalty program because of the frequency that we have with the clients in our stores, it's a strength -- it's a strength that we have, and we are going to go along with this. Also, experience, we launched it last week a new store in Peru, in Punta Hermosa, with a total different experience when we talk about the store, when we talk about the layouts, when we talk about the perishables, when we talk about the services. And these stores got 15 points more percentage in participation in perishables and the NPS also 5 points more. It's inspiration in some formats, European formats and Brazilian formats also and it's working very well. Next week, the last week in December, we're going to launch a store here in Chile [indiscernible] Chile also with the same model with much more -- much more perishables. These kind of stores, the participation of perishables is around 35%. Also the Internet, the e-commerce. It's very, very important for us, but the most important for food is this, 9 minutes to deliver for the clients. And we have a very good structure. We are improving all the -- our application, and we are relaunching our web with a stand-alone web with a better SEO and marketing. And also, we're going to start to monetize and do the retail and sell the retail in our both channels, web and also the application. I will promise in 19 minutes and 24 hours and 48 hours for no food, we are completing around about 85%, 87%. We are delivering in a very fast way. It's working very well. When we talk about Peru, we have discount formats. This discount format, we got a transformation this year. Turning to a food discount format with a very low price, and it's working well. It's growing around 15% and 20% within since July, when we start to implement a very strong format in this. It's a food format. It's very cheap, 10% less than the market, with a lot of rotation and basic goods. All the time basic goods. Rice, oil and promotions, and communication also. In top of those, we are continuing to enhance the profitability, efficiency and a better store, better experience and better prices also. In [indiscernible] next year, we are going to start to expand again, okay, fast-growing demand because we have 70% of the market in Peru, it's a traditional markets, and we know that we can get -- we can deliver a better offer for the clients with a better places and a better quality also. Lower prices 10% less comparing with the market, even with the cash and carries and even with the traditional markets, we can deliver them with 10% less in prices. We have now 5 stores to open in 2025 but we are seeking to open more stores next year, okay? The key takeaways introduced next year, we have a lot of projects that we need to deliver for the client to implement in the stores. Here are some highlights. The new private label brands attitude with a more modern way to do private label into British loyalty. The clients want it. There's some in-store experience, we're going to change the layouts and bring much more food and much more perishables to entrance of the store and to be a real food retail, expanding, as I said, 6 stores 5, 6 stores in the next year, but we are sourcing and looking for new sites to open stores in Peru, in the whole Peru, in Lima, in countryside. Our format is working well because we have a format -- a discount format also for low density. When we talk about our competitors with very small stores like Mass, like in Colombia, Le Uno, like Mexico 3B, Mexico, they have small stores only for high density. We have stores that comes from 800 square meters to 2,500 square meters, and then we usually do very well in low density also and drive operational excellence all the time, cutting costs and seeking for new methodologies. We have a huge team from European and Brazil, working with us to change all the logistics that we have all the operational in stores, methodology in commercial area and sinking all the time, operational excellence okay? That's it. Thank you very much. Now let's talk about Mallplaza, Fernando de Pena.

Thank you, Renato. Good morning, everybody. I'm going to talk about the 3 strategic pillars of Mallplaza. One is the value we deliver to our customers, of these stores. Second is the value we get from our omnichannel proposal. And third, growth, growth and growth. First, I want to make 2 statements. Mallplaza is the best platform for investors to invest in the undisputed. Because of the quality of the assets and because of the quality that the markets we serve. And second, Mallplaza is the best gateway to the global brands to get into the Andes region or to expand in the Andes region. We are the largest operator in the Andes with a unique portfolio of top-tier assets. We have 2.3 million square meters, and our market plan in the U.S. is $3.7 billion. And we have 20 assets that delivered 60% of the complete EBITDA. We have presence in 3 countries. Colombia, Peru and Chile with 37 shopping centers in 23 cities. What is a tier A asset? A tier A asset is a shopping mall that leads a big market, a market with a high potential of growth, and it leads in terms of sales and visitors. For example, in Chile, the 10 best assets or shopping mall, 6 of them are Mallplaza malls. So we have 350 million visitors per year. We have almost 5,000 stores and 47% of GLA is focused in experience and convenience. What is this? Convenience delivers us daily use. So it brings people every day to our projects and experience, it's how people socially buy, socialize in our projects. Saying that, we are the gateway in the region, in the Andes regions for global brands and for investment. Let's see a video with our 10 tier A assets. Play the video please. [Presentation]

I will say that there's not a company in Latin America that such amount of tier A projects. Okay. In terms of our first strategic pillar, it's the value that we delivered to our visitors. This 2.3 million square meters, 38% is convenience. Convenience is supermarket, hypermarket, cash and carry, home improvement, public services, private services, gym, et cetera. That gives us a daily, daily visit to our projects. Then we have fashion. Fashion is 43%, half is department stores and half is especially retailers. In terms of department stores in the last 5 years, we have -- we lower up this percentage, this 22 percentage, and we are increasing, especially stores percentage, mainly with international brands. We are the most important operator in Latin America with H&M, Decathlon, we are growing a lot with Inditex group, mainly with Zara and other brands and also with regional plans by [ Casares ]. So we are rebalancing the mix between specialty retail and department stores. Then we have our 15% in entertainment and F&B. Since the COVID, we pushed very hard this percentage from 10%, 11% to 15%. Today, the U.S. market has a 10%, and they're willing to have 15% in the next 5 years. But it is -- this is social deviation. This is where people really meet people, see people, connect with people. So really with people connect with people. This is very important because human beings, we are socially animals, so people or whatever. Then we have a 10% of big use mainly in healthcare and education. That is the same role that the convenience they bring us people every day to our projects. So at the end, we have 38% of our proposal is to bring people. And then we have a 4% of mainly automotive I would say that 50% of the new cars in Chile they are sold in Mallplaza. So our value proposition is very diversified, but also it has very strong reason to visit our places. In terms of the value that we get from our omnichannel proposition, I will say that we have 2 drivers. First, omnichannel services and then new revenue streams. In terms of omnichannel services, we have 19 Click and Collect. This Click and Collect generate digital floor to our shopping malls. But this Click and Collect, they are absolutely agnostic. They're not only for the stores that they are present in the mall, there for every retailer, every marketplace and every last mile company because at 10 minutes of each of our malls leave too many people. We are really very dense locations. So then the mall, it's a hub to consolidate packages and people can come to the mall to get them and visit them more. But also, we are -- increases our sales in same-store with the same idea, not only the stores that are present in the mall, so we have some backstores so we can deliver packages for stores that are present in the mall and other retailers they are not in the mall. So people can come to the mall or we can send them packages to their house. All these generate us a lot of data and data that we really have a better understanding of our customers, and we can give value also to the stores that are present with us. I will say that up to date, we have 560,000 contactable clients. And there are 330 stores that they're using all this to have a better transaction and conversion in the store with a huge amount of people that visit us. By other hand, we have these new revenue streams. The first is on and off-site marketing media services. I will say that today, we have 1.5% of our revenue comes from here. If we see Brazil, for example, it's 6% of the revenue. So we have a very big ramp-up over there. We are working on that. We are really in a kind of exponential ramp up. So we think that we will be in 6% and 7% of the revenue with our BIS proposals. And then frictionless parking. We digitalized all our parkings in the 3 countries. Today, we have 25% of our clients that have free flow. So our NPS increased a lot, but we have a check in. So each time you get a car into our projects, we know that and as we know you, we can deliver you the best experience you want. So we are working very hard on that. And in terms of growth, we will have 2 drivers of growth: brownfield and M&A. In terms of brownfield, we have -- we will grow in Chile, about 135,000 square meters and the last the next 5 years; and in Peru, at least 100,000 meters in the next 5 years. I will say that brownfield has been very, very strong in the history of this company. Today, this 2.3 million square meters, 50% of that comes from brownfield. So we're really, really -- we know how to do brownfield. Brownfield has a fast-stated low-risk execution. It's cost attractive because it all -- there's a lot of investment that the mall has already done. It's marginal and improve the market share of that particular mall because we have better reason to visit our mall. But also, we have a lot of amount of available land in almost all our tier A malls. So we have the capability to continue doing brownfield in the time. In terms of M&A, today, we have 31% of market share in Chile, 21% market share in Peru after the OPA that we finished last week and 4% in Colombia. So we plan to continue increasing our market share in Peru and Colombia. And we have 2 stories about this. First is more presence in Quese. More presence is Quese, we bought this small [ Calima ] in a very good market, in a very good location in Bogota, but was mainly convenience. So we bought it in 2020. We simplified the navigation of the mall. We add fashion, we add entertainment. We add F&B. We add socialization. And today, we have 1.3 million visitors per month. When we bought it, there was -- or before epidemic, there was 300,000 visitors per month. So the value that we create there is enormous. Today, in Quese is 1 of the 3 best malls in Bogota. And as I told you, next week, we finished the OPA. And in Peru, we bought 66% of Mallplaza Peru and 100% of old plaza Peru. And it's all the same history in Quese, in the sense that -- there's a lot of projects in very good markets with very good location. So we will deliver a better experience. How? First, we will simplify the navigation. We will add on Tom a very good convenience proposal, fashion, entertainment, F&B certification. So we plan that in the next 5 years, in Peru, we will go from 1 tier A in [indiscernible] to 4 tier As in Peru. So in Peru, we will deliver this opportunity in the next years with a very, very strong value that we will get from that. I will say that Mallplaza is really a very strong platform of tier A. But also in middle markets, like [indiscernible] et cetera, Los Angles, we're the leaders of those mid-markets. So we have a very strong tier A proposal, but also in mid-markets, we are leading mainly all of our middle market. Now I will give you Mr. Manuel.

Thank you very much, Fernando, and thank you all for giving us the opportunity to present our digital banking strategy. We are extremely excited about our digital banking strategy. We feel that our value proposition is really gaining traction with our customers. And we really think that we have done a lot of progress in the implementation of this strategy. Consequently, we are also very optimistic in the future and I will try to show you why. First, our aspiration is become the #1 digital bank in the countries we operate. Today, we have we process USD 23.5 billion in our credit card purchases per year. We have a $6.5 billion loan book, consumer loan book portfolio. And we have 7.8 million customers. 76% of them are active monthly users in our app. Chile is the leading country in our digital strategy in implementation. And as you will see in Chile, our strategy has clearly outperformed the market and will continue to do so. For example, we are already #1 in credit cards in the country. We are also #1 in current accounts in the country. We have been able to increase in credit card purchases as more and more customers choose [indiscernible] as their preferred and main credit card. In terms of current accounts during the last 5 years, we have multiplied by 5x the number of current accounts that our customers have in the bank. And the good news is that we have also multiplied by 5 the debit card purchases that these customers do. So we are able to open and attract customers, but we are also able to make these customers transact with our cards. In terms of consumer loans, we have remained stable all through this period. That was given our prudent approach to create risk in a challenging credit risk market. But the good news is that during the last few months, we were able to start growing again our consumer loan book, which will drive top line increase for the bank. We were able to accomplish this given our digital strategy that allow us to reduce our number of branches by half during these last 5 years. As I mentioned, our strategy is gaining traction with our customers, and we think that we are sure to deliver profitable growth going forward. I will quickly go through the main 5 pillars of our strategy, being the first, a mobile-first experience to our customer with a strong presence in our high-traffic retail stores of the Falabella ecosystem. We also offer a reduced portfolio of very simple and intuitive products, which are enhanced by benefits that only the Falabella ecosystem can provide. Third, we have accurate risk prediction and personalized offers that we can do, leveraging the consistent data and also our AI models. In terms of technology and in terms of organization, we have been working during the last, I would say, 10 years. in achieving the capital, modular and API-oriented IT architecture, combined with an agile organization to shorter time to impact. These days, we are benefit of the job done through all of these years and we believe that we'll be able to actually put in hands of the customers more products, better services, more quickly. And all of this complemented with a low spending discipline. So now let me provide a little bit more color on each of these pillars. During the last 5 years, we have been working hard in the digitalization of our sales and service model. We have been adding a wide range of features to our app. Maybe there are a couple that is worth to comment in it. The first one is the instant credit card and account opening journey that we have. We are able to actually open a credit card for a customer who is in falabella.com for example, looking for a TV, offer the customer the credit card allowing the customer to open the credit card in a few minutes. I'm purchasing a few minutes after with also a discount, a benefit that help us have the highest activation level or opening of products. Lately, we have been adding debt payment alerts and refinancing products within our app. This has shown a very high impact in improving our credit risk management capabilities. All of this that I've been telling you have driven a significant increase in the number of active app users that we have. We were able to multiply it by 2.4x the number of active monthly users in our app reaching to 5.9 million. Going forward, we think that we can even boost our service proposal to our customer by the adoption of Gen AI solutions in our service model. We have been using AI for 10 years now, but we have recently implemented Gen AI, not only in our back office, but also we are leveraging on AI to improve the quality of service we provide. What you're seeing here is an example of using AI in our bot for transaction disputes. Transaction disputes is one of the most required services that customers have in a digital bank, and we were able to actually accomplish 3 things at the same time. We are today more accurate in that fraud prevention, fraud detection through this tool, but we are also able to improve satisfaction of our customers with this adoption and also to accomplish more efficiency given the adoption of this technology. Now we are going to start rolling out Gen AI solutions as we have been creating the basis through this use case to actually adopt new use cases. I already mentioned that our value proposition is gaining traction. And I think that, that's the result of 2 things. The first one that I already told you about, that is a digital, simple, intuitive offer, but this offer is complemented by all of the benefits that only the Falabella ecosystem can provide to customers. First, we offer promotions within our ecosystem. We give what we call Oportunidades Únicas. Customers can acquire products with a discount for our cardholders. Second, we also provide promotions with the business partners, which prefer us in all of the countries that we operate given the large customer base we have. Whenever a partner joined us, the impact in their sales, it's massive given the quantity of customers that we actually provide to the partnership. And finally, we complement this Oportunidades Únicas or discounts with the best loyalty program in the region, CMR Puntos that Andrea has already told you about. The good news here is that as a consequence of these benefits, we have been accomplishing a very, very challenging objective for Banco Falabella. We were born as the credit card of our retailers. So in our origin, our customers just use our credit card whenever they wanted to go to Falabella, Sodimac or Tottus. And with these benefits and with these proposals we are actually increasing the card purchases. We more than doubled the card purchases during these last 5 years, and we almost doubled the number of purchases that customers do with our credit card, mainly through an expanded use of our products outside of the ecosystem in the day-to-day life of the customers. More and more customers are adopting our cards as their main cards. And that will continue to provide growth for us. Being a part of the Falabella ecosystem has lots of benefits. One of those is the possibility to leverage the data that this ecosystem has. Of course, we use the data of our customers back in products, their loans, their assets, et cetera. We also -- and of course, we use the transactional data of the credit card, of the debit card, but we complement that data with the purchases that customers of ecosystem do in Falabella, in Tottus, in Sodimac, so we can actually know the purchases that customers do as an SKU level. We know this specific product and that allow us to really learn and understand the customer. Being a part of CMR Puntos also give us the consent of the customer to use this data for several purposes. We complement all of the ecosystem data with external sources, and we process this data with the AI models that we have developed -- been developing for the last 10 years. Today, we use more than 15,000 different variables because in some cases, we have some information from one customer, in other cases, we have other information, but these models actually give us a lot of value in several things. The first one is superior credit risk assessment. The second one, solid fraud management capabilities. It also allows us to have a low customer acquisition cost and also to present personalized offers. This last part is something that we have been working in the recent past and that we are really excited that we can actually take to the next level. Now let me show some figures of that impact. There are some things that are extremely important in banking, one is consumer banking, one is risk management. Given all of the data that I just showed to you, we see that in almost all of the countries, we have NPL levels lower than our peers. That's what you see on your right side of the chart, okay? Another thing that is very important in consumer banking is customer acquisition cost being part of the ecosystem with the data, with the traffic that Falabella, Sodimac or Tottus stores have and the traffic that falabella.com have, we are able to actually get customer acquisition costs that are 1/3 of our competitors. And finally, and in the center, there is something really very important for our e-commerce, that is processing payments in the e-commerce. They are the challenges to accomplish 2 things: one, to have low fraud index, but also high acceptance rates of the purchases. As you see here, we are outperforming the market by far, and that's because of the data we have. Another consequence of our digital model has been to actually increase productivity. We have achieved much higher productivity per employee. And also in the recent past, we were able to stabilize our IT spending given the -- how advanced we are in the implementation of our new architecture. And why do I think that we are really very well positioned for the future? We have been going through really very challenging times during the last 5 years. We faced social unrest, we faced pandemic, we face post-pandemic inflation, and now we see that these are industry data that risk levels are starting to go down that will allow us to actually to start to grow again in consumer loans. In Chile, we believe that we will be able to grow given more and more customers choosing us as the primary bank, and also, as I mentioned, to increase the loan portfolio. In Peru, this year, we were able to gain profitability -- to recover profitability and given structural changes that we have done in the business. In Colombia, we faced last year, changes in regulation, especially in the cap of the interest rates and we have actually rethought our business model to generate more fee income and actually downside our structure again to regain profitability. In Mexico, we think that we will be able to keep on acquiring new customers and making these customers transact. And we are also adding new products such as personal loans that we are adding in the next following months, but also we're changing the legal entity in Mexico to a SOFIPO that will allow us to hold customer deposits. In brief, the key takeaways I would like you to take home are: first, our value proposition has traction among customers. Second, our customer base benefits and ecosystem data generate a competitive advantage for us. Third, we see a more stable or normal credit risk context that will allow us to accelerate growth. So that's why we think that we are really very well positioned for the future. Thank you very much. I will leave you with Alejandro again for his closing remarks before the Q&A.

Well, I don't have any slides. It's basically just a couple of things before we start the Q&A. You are right, we have a slide. There's some degree of improvisation here, but a couple of things I would like to share with you before we get into the Q&A. The first one, I'd like to thank the team. We just shared a very thoughtful and very, I would say, relevant presentations of the Falabella that you see moving forward. You saw not only the enablers at the beginning, you also saw the 5 different business lines. Those are not concepts, those are at actionable pathways of recovering first value and then turning back to growth. And I think that's key. We also saw in the first part all the different capabilities that we've been able to build during this, I would say, 3.5 years or so, that's key. That's key because that's the base that will allow us to face this customer. We have an omnichannel customer, then we have to have a omnichannel response for that. And the complementary sources of value that we also share with Benoit are a big part of the profit recovery. We know, as I said before, 30, 40 years ago, we were having -- we're selling products, apparel. We've added new categories. We were lending money from 1980, then we got into shopping mall business, but 4 decades almost, we've been doing something relatively similar. We've added new channels. And that's part of the point I'm trying to make. We're going to generate a lot of value from complementary sources of what we have. So that's key for what's coming in Falabella. And the other thing is that we came, as Enrique mentioned and I emphasized after that. We're coming from 2 very, I would say, volatile years with a roller coster in a way, but we're back, and we're back strong as you saw in the presentation we had. And we're going to make sure that we tackle all the opportunities the market is going to be presenting to us. And this is just this region. We're going to be the leading company in the [indiscernible] region, and we're going to take it from there. So with that, I'd like to -- Q&A. So I'd like to invite the team. Please boys, Andrea.

So before we turn to the Q&A, I wanted to comment that in-person attendees have received a paper sheet with survey for your feedback of today's events. We would be very grateful if you can complete this for us, and we will be collecting after the -- we finish the Q&A. For those who are joining us today in the webcast, the only -- the survey is available under the reserves tab. And thank you very much. And with that, let's turn the question first with in-person, and then we can move to the webcast.

Alonso Aramburu from BTG Pactual. First of all, thank you very much for providing guidance for the next couple of years. Very helpful. I wanted to ask about the culture of Falabella. Enrique started the presentation talking about the transformation and embracing simplicity at the company. And just wondering how ingrained has all this become in Falabella, and has the culture needed to change for this to happen -- for this to be sustainable over the long term?

Rios was supposed to be here, but he's a Head of HR, but it doesn't matter. I don't think the culture needs to change. I think we need to embrace what has always been the culture of Falabella. Every business has its different flavors, but there are some common things that we all share. And part of that is, I would say that this entrepreneurial spirit that we have. And I think that's what we -- I would say -- I won't say recovery, but at some point, just to be very open with you guys, 4 quarters of negative results was something that, as I said before, you didn't expect, we didn't expect. And I think based on that lack of expectation, probably the reaction was not the one that you would have expected with that. But now we realize what we had to do, and now it's basically going back to action. We used to have several, I would say, sentences that would reflect the culture of Falabella, one of those was making things happen. And I think that's key. But then again, I wouldn't say this is a cultural change. Maybe if you want to say at some point during this 4 quarters we had, we were a bit, I don't know, not down. Maybe we were probably surprised with this belief, but it's basically going back to that, which is the spirit that I've seen the company today, by the way.

Andrew Ruben at Morgan Stanley. Thanks very much for the presentations and all the detail. I'd like to dig in with a couple of follow-ups on the guidance, if I may. When thinking about the 12.5% to 13.5% target, I'm curious how you think about a breakdown between gross margin and SG&A? And within the context of you've had SG&A control, over the years, you're talking about flat in real terms while also increasing the investment plan. So I'm interested how to bridge those figures. And then second would be within the low end to the high end of the range? What do you see as some of the swing factors to get between those 2?

Thank you, Andrew. Regarding the improvement, the expanding of our margins, I would say this is a combination of effects. First, on the revenue side, we are expecting to reach mid- to high single-digit growth for the next years. This is going to be mostly a consequence of the improvement in Sodimac operations and revenues and the better results and growth in our e-commerce business, okay? So this is on the revenue side. On the SG&A expenses, as Alejandro mentioned in his presentation, we are pretty focused on transforming Falabella into a very, very effective company. So although we don't have any additional efficiency plan, we expect to keep our SG&A expenses growing below the inflation. So if you -- if we can make our revenues growth over the inflation, which is in the countries we operate, is around 4%. It will mean that we are going to improve, expand margins for the next years. This is mostly the [indiscernible] expansion.

If I can complement Juan Pablo, when he says e-commerce is part of what we've been discussing here about this, let's say, adjacent source of income, like value-added services, fulfillment services. Those are things that we're starting to do. They are gaining traction. Those are things that we didn't have 5 years ago. But it's part of that. And that's part of the -- as he mentioned of the objective that we have to make this breakeven because we're getting some other sorts of more than just saying that we're going into different pathways of income.

Felipe Ballevona from Santander. I have 2 questions. First one for Juan Manuel. You mentioned that -- I mean, the question is how do you expect the bank's profitability to behave with the growing loan portfolio? And the second question is for Alejandro -- Sodimac Alejandro, sorry. it's about you mentioned that you expect revenues to start recovering in the second half of next year. So my question is, if you could give us a little bit of more color on like it should be the beginning of the second half, later second half? And like what are the specific drivers for this? Like what in order for us to start seeing recovery in Sodimac? Also, by the way, thank you for the presentation. Very helpful call.

Okay. We think that is going to begin in the -- at the beginning of the second half of the year. We are already seeing some trends of recovering. So we think it's going to be at the beginning of the second half of the year. I didn't hear the second part of your question, sorry. Your question had 2 parts.

What we should see in order for -- what are the drivers?

It's basically how fast it's going to start the home market selling and also the recovering of the construction in the country. But we are seeing some of those trends already happening.

You already see the...

A little bit. yes.

Regarding the banking business, let me split it in parts. First, in Chile, I'm guessing that you're asking specifically about Chile. In Chile, what we see going forward is an increase in top line. As I mentioned, we believe that we are going to recover our consumer loan portfolio growth. We are already doing that. So we're going to increase top line. And also, we are going to see an increase in the cost of risk. And that's because, in 2024, we actually improved significantly the health of our portfolio and that drove liberation of cost of risk provision. But in the mix, we are expecting to see some growth in net profit. In terms of banking business outside of Chile, we're very optimistic. In the case of Mexico, 2024 was the first year in which we had profits, and we are expecting those profits to grow significantly given operational leverage. We already achieved the volume that is going to actually create this operational leverage. In the case of Peru and Colombia, as I mentioned, 2024 was a year of a lot of rethinking in Peru coming back to profitability, and we expect an important profitability growth in 2025 and so on. In the case of Colombia, we are going to go back to profitability or we expect our plans are to go back to profitability in 2025.

You have 2 questions from online. Okay. Now it's working. So one question is from Hector Maya from Scotiabank. Considering the lessons learned from the past few years, what would have you done differently in e-commerce? And could you give more details on what do you mean by becoming a more curated marketplace? And the second one is Irma Sgarz from Goldman Sachs, how should we think about the trajectory of GMV growth from here? Feels like a lot of pieces are now in place, or is there anything specific that you feel can trigger this? Also within this, how we should think about the mix between 1P and 3P going forward?