Forus S A : (English) Quarterly Report 4Q 2022

EARNINGS RELEASE

4Q22

March 2023

Fourth Quarter 2022

Table of Contents
I. Executive Summary……………………………..….………....…...............................................................................2
II. Summary of Consolidated Results…….…………………………………	3
III. Highlights of the Period..………...........………….……	4
IV. Consolidated Income Statement……………...….……...…............................................................................6

1. Consolidated Income Statement Analysis…..….......................................................................................9 VI. Balance Sheet & Cash Flow Statement Analysis …………………………………………………………….…………………15

VII. Data by Country	20
VIII. Consolidated Financial Statements - IFRS

• Consolidated Balance Sheet………………………….………....….............................................................31
• Consolidated Income Statement………....…..................................................................................32
• Consolidated Cash Flow Statement.….........................................................................................33

Notes:

• All figures in dollars are calculated using the observed dollar exchange rate for January 3rd, 2022: $855.86/US$.
• Quarters: 1Q, 2Q, 3Q y 4Q.
• Periods ending March 31st, June 30th, September 30th and December 31st: 3M, 6M, 9M, 12M.
• Currency symbols: Ch$, CLP or $: Chilean pesos. US$: U.S. dollars. COP: Colombian pesos. UYU: Uruguayan
  pesos. PEN: Peruvian sol.
• Units: M: millions, TH: thousands.
• DTC (Direct-to-Consumer) sales: revenue from Forus' brick & mortar stores and Forus' e-commerce websites, as well as Forus' sales on third-party marketplaces.
• Digital sales: revenue from Forus' e-commerce websites + Forus' sales on third-party marketplaces.
• Wholesale: traditional wholesale channel.
• Sqm: square meters.
• Other symbols: SSS: Same store sales. SG&A: Selling, General & Administration. YoY: Year over Year.

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Fourth Quarter 2022

I. Executive Summary

Forus continues to demonstrate the validity of our transformation strategy, as we are becoming an increasingly phygital, agile and diversified company, constantly innovating to enhance the consumer experience, in a profitable and sustainable way. Both this 4Q22 and in 2022, our results were driven by our subsidiaries, which continued to set records in sales and profitability, and by Chile, which delivered a solid performance within the context of a very high comparison base. As a result, Forus reported our second best 4Q ever, measured in Revenues, EBITDA and Profit. Also, 2022 was a record year in terms of sales, and we achieved healthy margins that were very much in line with 2018 (pre-pandemic and pre social unrest). These results are particularly noteworthy if we compare macroeconomic scenarios: in 2018 the average CLP/USD was $642; inflation was 2.6%; and GDP growth, 4.0%; while in 2022 we face an average CLP/USD of $873, inflation of 12.8% and GDP growth of 2.5% (estimated).

Our Consolidated Revenues reached Ch$ 87,407 million in 4Q22 and Ch$ 315,055 million in 2022, down -9.6% YoY and up +6.9% YoY, respectively, and our EBITDA recorded Ch$ 18,167 million in 4Q22 and Ch$ 62,158 million in 2022, with an EBITDA margin of 20.8% and 19.7%, respectively. Net Income, in turn, was Ch$ 10,157 million in 4Q22 and Ch$ 31,543 million in 2022, a variation of -26.9% YoY and -19.9% YoY, respectively, with a net margin of 11.6% in 4Q22 and 10.0% in 2022. Consolidated digital sales represented 18% of total consolidated sales (24% of total DTC) in 2022. Store performance stands out, with increased sales per sqm in all the countries in which we operate: on a consolidated basis, sales per sqm was up 13.8% YoY in 4Q22 and 25.9% YoY in 2022 (in CLP); in 2022, our subsidiaries' sales per sqm increased 72.6% YoY and Chile's was up 14.2% YoY.

The subsidiaries were an important driver of revenue growth and profitability throughout the year: the subsidiaries revenues increased 37.4% YoY in 4Q22 and 75.3% YoY in 2022, while their EBITDA was up 41.0% YoY in 4Q22 and 111.7% YoY in 2022, with EBITDA margins of 20.7% and 19.9%, respectively. We highlight that Peru, Colombia and Uruguay achieved YoY increases in revenues and EBITDA in each quarter of the year. This profitable growth trajectory is the result of i) the incorporation of new brands (UA in Colombia and Uruguay; MANGO in Uruguay); ii) the consolidation of our business in Colombia, with the acquisition of WWW's stake in the JV that we previously operated together in that country; iii) the closure of underperforming stores (71 closures in 3 years); and iv) continued investments in people, innovation and technology in order to strengthen our phygital model in all our markets. As a result, our subsidiaries increased their contribution to consolidated results, representing 25.0% of Consolidated Revenues and 25.2% of Consolidated EBITDA in 2022, compared to 15.2% and 10.3%, respectively, in 2021. Our subsidiaries' digital sales represented 15% of their total revenue (20% of DTC) in 2022.

In Chile, we recorded revenues of Ch$ 64,060 million in 4Q22 and Ch$ 236,287 million in 2022, a decline of -19.6% YoY and -5.4% YoY, respectively. This negative revenue growth was mainly the result of the slowdown in consumption in 2022, as well as our very high comparison base, after extraordinarily high liquidity levels in 2021. Even so, Chile's revenues in 4Q22 and 2022 were the second best in our history, with solid EBITDA margins: 20.8% in 4Q22 and 19.7% in 2022. These results reflect the leadership and innovation of our brands, our increased scale (addition of UA and Vans brands), store optimization (109 closures in 3 years), distribution center automation and process digitalization, and the implementation of our phygital model. Digital sales in Chile represented 19% of Chile's total revenue (26% of DTC) in 2022.

Forus, once again, ended the quarter with a solid balance sheet in 4Q22, with Ch$ 53,606 million in cash and cash equivalents (Ch$ 5,033 million in negative net financial debt).

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Fourth Quarter 2022

II. Summary of Consolidated Results

Fourth Quarter 2022

• Revenues from subsidiaries grew 37.4% YoY and represented 26.7% of Consolidated Revenues in 4Q22. Our subsidiaries' EBITDA increased 41.0% YoY and represented 26.5% of Forus' EBITDA.
• Consolidated Revenue in 4Q22 reached Ch$ 87,407 million, -9.6% YoY (+41.2% compared to 4Q18).
• Gross profit came in at Ch$ 47,644 million in 4Q22, -10.6% YoY (+44.5% vs. 4Q18), with a gross margin of 54.5%, down -64 basis points YoY (+125 basis points vs. 4Q18).
• Adjusted Operating Income in 4Q22 was Ch$ 11,795 million, down -41.5% YoY (+117.2% compared to 4Q18), with an adjusted operating margin of 13.5%, a margin contraction of -735 basis points (+472 basis points vs. 4Q18).
• EBITDA in 4Q22 reached Ch$ 18,167 million, a decline of -28.9% YoY (+161.8% compared to 4Q18). The Ebitda margin of 20.8% was down -566 basis points YoY (+958 basis points compared to 4Q18).
• Net income in 4Q22 reached Ch$ 10,157 million, down -26.9% YoY (+96.9% vs. 4Q18), with a net margin of 11.6%, a deterioration of -275 basis points YoY (+329 basis points compared to 4Q18).
• Digital revenues decreased -11.9% YoY and represented 18% of consolidated sales (22% of DTC).

2022

• Revenues from subsidiaries grew 75.3% YoY and represented 25.0% of consolidated Revenues in 2022. Our subsidiaries' EBITDA increased 111.7% YoY and represented 25.2% of total EBITDA.
• Consolidated Revenue in 2022 reached Ch$ 315,055 million, an increase of 6.9% YoY (+27.2% vs. 2018), a new annual sales record.
• Gross profit came in at Ch$ 171,412 million in 2022, up 5.1% YoY (+26.2% vs. 2018), with a gross margin of 54.4%, down -93 basis points YoY (-43 basis points vs. 2018).
• Adjusted Operating Income in 2022 was Ch$ 39,661 million, down -25.9% YoY (+24.4% compared to 2018), with an adjusted operating margin of 12.6%, a margin contraction of -557 basis points (-28 basis points vs. 2018).
• EBITDA reached Ch$ 62,158 million in 2022, a decline of -13.2% YoY (+65.6% compared to 2018) with an Ebitda margin of 19.7%, down -457 basis points YoY (+457 basis points compared to 2018).
• Net income reached Ch$ 31,543 million in 2022, down -19.9% YoY (+23.5% vs. 2018), with a net margin of 10.0%, a deterioration of -335 basis points YoY (-30 basis points compared to 2018).
• Digital revenues decreased -25.9% and represented 18% of consolidated sales (24% of DTC).

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Fourth Quarter 2022

III. Highlights of the Period

Store footprint optimization plan: openings/closures

As of the beginning of 2020, we began implementing a plan to improve the profitability of our store channel, by closing underperforming stores and very selectively opening additional stores (primarily associated with new brands). In 4Q22 we closed 11 stores and opened 4, resulting in 59 closures and 8 openings in 2022. As a result, we have closed a total of 180 stores in our four markets since the beginning of 2020 (140 net closures), which is equivalent to a 26% reduction in the number of Forus stores (see table). With this store optimization strategy, we have become a more efficient, leaner company (with fewer fixed expenses indexed to inflation), more agile (to adapt to an ever-changing industry) and more flexible (in the way we manage our stores).

Forus Stores	2019	2020	2021	2022	Var.
Beginning of period	517	529	507	440
Chile	341	345	336	300
Subsidiaries	176	184	171	140
Openings	35	8	24	8	40
Chile	22	6	18	3	27
Subsidiaries	13	2	6	5	13
Closures	-23	-30	-91	-59	-180
Chile	-18	-15	-54	-40	-109
Subsidiaries	-5	-15	-37	-19	-71
Openings/Closures, Net	12	-22	-67	-51	-140
Chile	4	-9	-36	-37	-82
Subsidiaries	8	-13	-31	-14	-58
End of period	529	507	440	389	-26%
Chile	345	336	300	263	-24%
Subsidiaries	184	171	140	126	-32%

Footwear News names Merrell as Brand of the Year 2022

At its prestigious 36th Footwear News Achievement Awards gala held in November, often referred to as "The Oscars of Footwear," the renowned Footwear News magazine named Merrell as Brand of the Year 2022. Merrell, which is known for having the best Trail and Hike products, "has led the way promoting a more diverse vision of the outdoors," said the magazine.

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