Operating summary

At the end of 2014, total income amounted to Ps. 81,027 million, which surpasses the one recorded in 2013 by 9.3%.

The income from retail sales and services reached Ps. 72,123 million, for an increase of 9.7% in total stores and 6.2% in same stores, both compared to the prior year.

Customer financing income grew by 6.2%, while the portfolio also increased by 1.8%. At the yearend, 48.2% of the commercial sales were made through financing provided by the Company.

Income from the leasing of commercial spaces increased by 6.0% compared to the prior year, for a total of Ps. 2,735 million.

Operating expenses increased by 12.7% during the year as a result of the Company’s growth, and to the initiatives mentioned in this document, as well as to the increase in reserves for non-performing loans debts.

Earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to Ps.13,024 million, for a growth of 3.9% as compared to 2013.

Financing expenses were affected during the fourth quarter of the year, by the volatility of the peso/dollar exchange rate, originating an increase in this caption, of 10.8% over the prior year.

Income taxes amounted to Ps. 2,797 million, for an increase of 3.6% over the prior year.

Net profits reached Ps. 7,763 million, for an increase of 0.8% over the prior year.

The association with Regal Forest, a company of renowned prestige in Central and South America and the Caribbean, specialized in furniture, electronics and home appliances, continues on its positive course and continues to generate value.

At the end of the year, our CEO, Mr. Jorge Salgado, reached retirement age and left the Company. The Board of Directors wishes to express special recognition and appreciation to Mr. Salgado for his career in Liverpool and for the Company’s development during the time he occupied that position. The Board of Directors named Mr. Graciano Guichard as the Company’s new CEO.

Sustainability

The more efficient use of resources, combined with the offer of environmentally friendly products and materials has been fundamental for Liverpool and its sustainable growth.

Our commitment with the environment is reflected through a series of activities, one of the most important being the reduction of the use of paper, client statements being sent electronically, the use of LED luminaries, the re-use and recycling of water through ten water treatment plants in different locations, reforestation, landscaping and care of wildlife in the areas in which we open our stores, as well as the use of biodegradable materials in all of our bags and packaging.

Final considerations

All of our efforts are focused on satisfying our clients. We continue to introduce omni-channel platforms that generate expanded shopping experiences and make us more aware of what the client expects and wants of us.

We appreciate our clients’ preference, as well as the support of our shareholders, suppliers, tenants and collaborators during yet another year in which Liverpool continued to grow profitably and in which we reached 101 operational stores.

Sincerely,

The Board of Directors
Mexico City, December 31, 2014