Strong Momentum | Mass Hidden Value

Research evidence excerpt

Strong Momentum | Mass Hidden Value

ount (Mass), and cash & carry (Makro), allowing InRetail to address multiple

customer segments while maintaining a strong value proposition. We continue to view Mass as

the largest long-term opportunity within the group. The chain operates roughly 1,600 stores today, Peru: BCRP's Macro Dashboard

and the concept could reach 3,000+ locations. Mass built a highly differentiated model centered on

proximity, simplicity, and private label that accounts for c50% of sales and could rise to 70% over

time. Store economics remain attractive, cUS$1m sales and $100k capex per unit, inventory days

target low 20s, 4-5% mature store EBITDA margin.

Pharma: High Cash Conversion and Margin Expansion. The pharmacy division remains a

stable and highly cash-generative business, with margin expansion driven by operational changes

implemented in 2025 in the lower margin distribution business. While revenue growth is expected .

to remain in the low single digits, EBITDA should grow at an MSD pace, supported by favorable Source: Jefferies, BCRP

mix and margin expansion. With c2,500 locations already in operation, the pharmacy business is

substantially more mature than food retail but continues to offer attractive returns and strong cash

conversion.

Balance Sheet Strength Supports Continued Growth. Following elevated investment in distribution

infrastructure in the last two years, capex is expected to moderate to cPEN900m in 2026 and

leverage to decline to 1.5x this year, supported by strong operating cash flow and working capital

Pedro Baptista * | Equity Analyst

normalization. We believe valuation remains attractive on 11.7x 2027E PER and 5.6x EV/EBITDA +44 (0) 207 029 8351 | pbaptista@jefferies.com

at >20% ROIC.

Alex Wright ^ | Equity Analyst