Liverpoool Annual Report 2016

Total income for 2016 amounted to Ps.100,441 million, representing an increase of 10.0% over our 2015 income.

In the midst of a challenging consumer environment and with a high basis of comparison, retail sales and services reached a total of Ps. 87,897 million, a growth of 10.9% for total stores, while same-store sales reflected an increase of 7.6%, both in comparison with the prior year.

Credit card income increased by 3.7%; the credit portfolio increased by 5.5%. During the year, 45.2% of commercial sales were made through financing provided by the Company.

Income from activities related to the leasing of commercial spaces recorded an increase of 5.2% in comparison with the prior year, reaching a total of Ps. 3,179 million. Occupancy levels remained constant, at levels of 96%.

Operating expenses increased by 10.0% during the year, as a result of the Company’s growth.The EBITDA (earnings before interest, taxes, depreciation and amortization) for the year recorded Ps. 16,051 million, for a growth of 7.9% when compared to 2015.

Expenses for financing and related concepts were affected during the year by increased levels of debt, and the volatility of the peso/dollar exchange rate. Net financial expense in 2016 was Ps. 259 million including an exchange gain of Ps. 750 million.

Income taxes amounted to Ps. 3,673 million, representing a 12.6% increase over the prior year. Other taxes withheld and paid, import taxes and duties as well as contributions to the IMSS (Mexican Social Security Institute), SAR (Savings Retirement Fund) and INFONAVIT (Federal Workers’ Housing Fund) amounted to Ps. 9,831 million.

Net earnings reached Ps. 10,191 million, for an increase of 10.6% over the prior year.

So as to finance our expansion plans and due dates, this year we placed a bond for US$ 750 million in international markets, maturing in ten years. We have complete coverage in Mexican pesos for the principal and for the interest, as well as a fixed interest rate.

Dividends

The General Shareholders’ Meeting held on March 3, 2016 declared a dividend of Ps. 1,288 million on the 1,342,196,100 shares representing the Company’s capital stock.

Final Considerations

This year will be remembered for several significant events in the development of our Company: a record level of openings of ten Liverpool and Fábricas de Francia stores; the consolidation of the electronic platform key to the Omnicanal strategy; the start-up of operations of the CAT (call center) in Morelia; the announcement of the investment for the new Logistics Center located in the “Arco Norte” highway; the communication of the intention of the partnership with Ripley Corp S.A., as well as the acquisition of Suburbia; and, most importantly, for having been able to successfully deal with the difficult conditions in the markets.

We appreciate the support of our shareholders and the preference of our clients, suppliers, tenants and collaborators during yet another year in which Liverpool continued to demonstrate profitable growth.

Sincerely,

The Board of Directors

Mexico City; December 31, 2016

Operating

Summary

Dividends

Final Considerations

The Board of Directors