Good morning. My name is Juan Pablo, and I will be your conference operator. All lines have been placed on mute to prevent any background noise. This is Liverpool's 4th quarter 2022 conference call. There will be a question and answer session after the speaker's opening remarks. Instructions will be given at that time. Today, we have with us Mr. Enrique Güijosa, Chief Financial Officer, Mr. José Antonio Diego, Treasury and Investor Relations Director, and Mr. Enrique Griñan, Investor Relations Officer. They will be discussing the company's performance as per the earnings release for the 4th quarter and full year 2022 issued yesterday. If you did not receive the report, please contact Liverpool's IR department and they will email it to you.
Please note that this call is for investors and analysts only, and questions from the media will not be taken, nor should the call be reported on. Any forward-looking statements made during this conference call are based on information that is currently available. They are subject to risks and uncertainties that could cause actual results to differ materially from the expectations and assumptions discussed today. This may be due to a variety of factors, including the risks outlined in El Puerto de Liverpool's most recent annual report. Please refer to the disclaimer in the earnings release for guidance on this matter. I will now turn the call over to Mr. Enrique Güijosa. Please go ahead.
Thank you. Thank you very much. Good morning to everyone. Thanks for joining us. As usual, I'll start the call covering the highlights of our fourth quarter results, and then move on to the full fiscal year 2022 figures. Afterwards, I will provide our 2023 guidance for our key financial indicators. We will devote the rest of the call to answer your questions, although I would like to point out from the get go that since we will have our investor day in just a couple of weeks, I might defer the answer of some of your questions so they can be addressed properly that day. I'm glad to share with you that Q4 2022 was once again a strong quarter in terms of both revenue and profitability.
We delivered double-digit growth rates in terms of our top line, our EBITDA, and our net profit, continuing the sequential improvement that we observed throughout the year. Our total revenues during the fourth quarter grew 12.7%. Once again, our three business segments posted double-digit top line growth rates. Retail sales grew 11.7%, financial business income increased 28.8%, revenue from our shopping centers was 12.3% above year ago. In our previous conference call, we stated that we expected a slowdown versus the growth rates we have posted in our same-store sales during the first three quarters of the year. This was indeed the case. This was basically due to November, where we faced a very high base period as the previous year was very promotional.
Same-store sales for Liverpool grew 11.5%. Close to 60% of this increase was explained by higher traffic. Apparel, particularly formal and occasion wear, footwear, accessories, and cosmetics continue recovering the share they lost during the pandemic. In the case of Suburbia, same-store sales were only 1.7% above year ago. The key driver was traffic, which was -3.7% versus prior year. For perspective, ANTAD's department stores reported a 7.0% increase in same-store sales during the fourth quarter, while total ANTAD apparel and footwear categories grew comps 7.5%. In terms of new stores, on November 10th, we opened Liverpool Mexicana in Mexico City. Suburbia opened 9 new stores during the quarter. This brought the total number of openings during the year to 15, according to our store opening plan.
Retail gross margin of 32% was 65 basis points below year ago. The normalization of promotional activity was partially offset by a more favorable product mix in the Liverpool format. Our consolidated gross margin was virtually flat, decreasing only six basis points to 37.5%. This was mainly due to the above-mentioned effect in our retail gross margin. Operating expenses without bad debt provisions and depreciation grew 14.1% year-on-year. The main factors behind these results were, number one, the variable expenses that grow in line with sales, like commissions to our sales associates, credit card fees, and packaging materials. Number two, the 22% increase to the minimum wage at the start of the year. Number 3, above average salary increases on investment in new talent in logistics, technology, and digital. Number four, sales associate headcount increases in selected stores.
Number five, general inflation. We have pursued a more aggressive role in our credit card business in terms of origination, overdrafts, line increases, and cash withdrawals. In spite of these role strategies, we closed Q4 with a better than expected NPL ratio of only 2.4%, 12 basis points above year ago. The bad debt provision in our PNL during Q4 was MXN 1.2 billion, 11% below a year ago. Our Q4 EBITDA of MXN 11.8 billion was 14% above year ago, while our EBITDA margin was a very strong 18.7% compared to 18.4% in the same period of 2021. Furthermore, we move forward in all our key strategic initiatives to continue strengthening our omnichannel ecosystem.
Digital GMV in the fourth quarter was 30% of year ago, and our digital share was 24.4%, 310 basis points above the same period last year. Monthly active users of our Liverpool Pocket in Q4 increased 42%, and Liverpool Pocket downloads grew 45%. Our marketplace GMV grew almost 70% year on year, and we closed the year with 28 more sellers, percent more sellers and 60% more SKUs. For perspective, almost 40% of our digital catalog comes from our marketplace. Importantly, during the fourth quarter, we launched our marketplace in Suburbia with basically the same catalog that you can find in Liverpool. During the fourth quarter, the digital orders that we delivered in 48 hours or less grew 40% year on year and accounted for 38% of total orders, almost five percentage points above year ago.
The share of Click & Collect was 37%, also five percentage points above the same period last year, and direct store deliveries were 24% of total home deliveries, 10 percentage points above year ago. Moving on to the full year results, I am glad to report that we achieved excellent results across the board. Total revenue of MXN 176 billion was MXN 25 billion, or 16.6% above year ago. The retail business had an increase of 16.3% versus 2021, contributing with MXN 159.1 billion, or 90% of our total consolidated sales. Liverpool same store sales grew 16.4%, while Suburbia posted a 9.0% increase.
To note, like-for-like sales growth for ANTAD department stores and softline categories for the year were 11.9% and 14.4% respectively. Our financial services business increases revenue 18.5%, reaching MXN 13.2 billion or 7.5% of our total consolidated revenues. As stated above, we closed the year with an NPL ratio of only 2.4%, 13 basis points above year ago. The bad debt provision in our PNL for the full year was MXN 1.8 billion, a 3.7% year-over-year decrease. Our bad debt reserve coverage ratio at the end of the year was 9.6% of the gross portfolio, 1.7 percentage points below a year ago.
The plus 90-day bad debt coverage stands at 4.1 times, and we think that both coverage ratios are above market standards. Our net credit portfolio grew 20.8%, and the total cardholder base closed the year at almost 6.7 million cardholders, 10.1% above a year ago. Our shopping centers posted MXN 3.7 billion in revenue, with an increase of 20.4% compared to 2021 due to the normalization of customer traffic and 150 basis points increase in our occupancy rate, which closed the year at 90.3%. This includes the relatively new Santa Anita Shopping Center, which is still in the stabilization phase, and significant expansions in both Galerías Monterrey and Galerías Insurgentes.
On the retail gross margin front, we closed the year at 32.4%, and this was 110 basis points above a year ago. This reflects a subdued promotional activity during the first semester and a more favorable merchandise mix as our softline categories recover the ground they lost during the pandemic. Operating expenses, excluding bad debt reserves and depreciation, increased 14.9%. The drivers of this increase were the same ones that I mentioned above for the fourth quarter. Our operating profit of MXN 25.5 billion was 36.2% above a year ago, while our EBITDA reached MXN 30.7 billion, a 28.3% increase. EBITDA margin of 7.4% was 160 basis points ahead of 2021.
For perspective, our EBITDA margin in 2019 was 16.6%. Net profit of MXN 17.4 billion was 35% above a year ago. Turning to our balance sheet, total inventories grew 22% year-on-year. We do not think this level represents a risk to our 2023 profitability as the end position in 2021 still reflected supply chain issues due to the pandemic in several categories. For perspective, if we compare our inventory position against 2019, it is 21% above, while our retail sales have grown 25% over that period. Cash flow from operations during the year was MXN 15.8 billion, this was MXN 7 billion below 2021.
Our largest uses of cash flow in the year were working capital, mainly the growth in our credit portfolio and inventories, and the normalization of our income tax payments. CapEx during the year was MXN 7.9 billion, 32% above a year ago, and represented 4.5% of our total consolidated revenues. Close to 40% of this amount was allocated to logistics and technology projects. We completed phase 1 of our Arco Norte project, this allow us to handle all big-ticket merchandise receipts and home deliveries from this strategic location for all our retail business units. Importantly, we started the remodeling of our Liverpool Santa Fe, one of our flagship stores. During Q4, we invested close to MXN 700 million for a 50% participation in the Fashion Mall, which is being built across Galerías Metepec by GICSA.
At the end of the quarter, cash on hand was MXN 24.5 billion, and our net debt to EBITDA ratio was only 0.08 times. Over the year, we paid our LIVERPOL 12-2 and LIVERPOL 17-2 local bonds for a total amount of MXN 3.4 billion with our own cash. Short-term debt is not a risk as the next maturity is until October 2024. Our shareholders agreed to pay a dividend of MXN 1.70 per share on their March 10, 2022 general assembly. The first installment of MXN 1.02 per share was paid back on May 27, and the remainder of MXN 0.68 per share was paid on October 14. On the ESG front, I would like to highlight an important foundational item.
On December 19th, Dow Jones announced that El Puerto de Liverpool is now included in the sustainability indexes for the Latin American integrated market, or MILA in short. This reflects the progress we have made on ESG in the past several months. In November, we made a capital infusion of $40 million into Grupo Unicomer. The loan was matched by our partners in the JV and will be used to partially finance the acquisition of CrediScotia business in Peru, which, by the way, is still awaiting the approval from the banking regulator. I want to pause and express my gratitude to all members of our team, some of whom are listening into this meeting today. You have delivered industry leading results over the last couple of years while taking care of our customers and each other.
Importantly, during that time, you have made El Puerto de Liverpool a much stronger company. I would like to also thank our customers for their continued preference and loyalty, and our shareholders, of course, for their trust. That's it in terms of reviewing our performance during Q4 2022 and the full fiscal year 2022. Let me now share with you how we see 2023. As you all know, the macroeconomic environment, not only in Mexico but across the world, is full of uncertainties. Probably the most important one has to do with the effect of the increases in interest rates to bring down inflation to the central bank's objectives on economic activity, particularly consumption and unemployment. Having said that, we're expecting our top line to accelerate versus the levels we observed in 2022.
Same-store sales for Liverpool and Suburbia should increase in the 7%-8% range. Store openings for Liverpool will be only one. In fact, this has already happened as we opened a new Tepic store just a few weeks ago on January 24th. With this new location, we now have 22 Liverpool stores in the metro area of Mexico City. For Suburbia, we're expecting to open 15 new stores, most of them in Q4. NPLs at the end of the year should be close to 3%, and the bad debt provision in our P&L should be around MXN 2.4 billion. This will represent a 33% increase above 2022. Our net debt grade portfolio should be growing at 13% year-on-year.
The normalization of our promotional calendar and our bad debt provision, together with continued headwinds from our payroll expenses and general inflation, will certainly put pressure on our profitability. We're expecting our EBITDA margin to be in the 16.4%-16.9% range, very much in line with the 2019 level. Our CapEx for the year should be in the MXN 10.5 billion-MXN 11.5 billion range, and close to 50% of the total CapEx will be allocated to supply chain and technology projects. We have already started phase two of our Arco Norte project with the construction of the new building for softlines, and we are planning to open our first three omnichannel fulfillment centers throughout 2023. Before I take your questions, let me quickly recap a few important points.
Our company delivered very strong financial results in 2022, and the foundations that have been laid out in the past years have put El Puerto de Liverpool in solid footing. We are confident in our ability to overcome the challenging economic environment and deliver another set of strong results during 2023. Thank you very much, and we can now move to your questions.
Thank you. We will now conduct a Q&A session. If you would like to ask a question, please press the Raise Your Hand button located at the bottom of the screen. If you are connected via telephone, please dial star nine. We remind you that all lines have been placed on mute. When it is your turn to ask a question, you will be unmuted. If you have placed yourself on mute, you will need to unmute yourself to ask a question. We will be stopping the Q&A session at 9:55 Mexico time. We will now pause for questions. Our first question comes from the line of Sergio Matsumoto. Please state your company name and ask your question.
Yes. Hi, good morning. Thank you, Enrique, for taking my question. Enrique, the credit card business is seeing a momentum. Is there any way you can capitalize on that strength to stimulate demand or maybe perhaps, the better way to say it is sustain demand, in the core retail business?
Yes. Thank you, Sergio. Yes. As you're saying, I mean, we are seeing very nice growth in our financial business unit. As I said, the credit card portfolio grew almost 21% year-over-year, revenues are growing almost 30% year-over-year as the proactive part of our portfolio has been increasing a little bit. We have also been reflecting some of the increases that, you know, the interest of interest rates that the central bank in Mexico has been implementing throughout the past several months. We have known some of the pass-through of those increases into our own interest rates.
In terms of your question on whether, you know, we can use our, this momentum to help us on the retail business side, I think that has already been the case. I mean, as I pointed out in my initial remarks, I mean, we have been more aggressive in terms of origination. We have been more aggressive in terms of overdrafts. We also have been aggressive in increasing our credit lines and also in terms of, you know, allowing our customers to withdraw cash from our ATM.
In general terms, we, given the fact that the NPLs have stayed on very low levels, basically at the half of the rate that we had prior to the pandemic, we have been feeling comfortable to be more aggressive in our front. That will continue to be the case throughout 2023. The fact that NPLs are still on the low side will allow us to be, you know, still aggressive. We hope 2023, with an NPL of still only 3%. That will allow us to put, let's say, some additional energy on the retail side to sustain demand.
Great. Thank you. If I can ask another question, Enrique. The, the environment for the high-low pricing, as you know, in the past few quarters, the markdowns weren't as necessary. Would the pricing strategy be more normalized, this year in 2023 with more marked sequence of full price and promotions?
Yes. I think that, well, the pandemic and the, you know, the applications of the pandemic on the supply chain resulted, as you're knowing, in some lack of merchandise in some categories or the fact that the merchandise arrived to Mexico late, particularly imports. In general terms, we were able, you know, to achieve, especially in the first semester of 2022, the markdowns from the fall/winter season of 2022, 2021, which fell in the early part of 2022, were still, you know, low. We didn't have a lot of merchandise after the high season of 2021 to mark down.
That's why we saw high levels of gross margin in the first semester of 2022. We have seen now in the second semester and starting 2023, that we are, you know, back to the normal level. Our ability to, you know, to have a high gross margin because our full price, we have markdowns is now gone, I think, and we are now, you know, to the normal game of using our promotional strategies to move the merchandise.
Great. Thanks, Enrique. I'll see you in a couple of weeks.
Sure. Thank you. Thank you.
Thank you. Our next question comes from the line of Alan Alanis. Please state your company name and ask your question.
Hello, good morning, and congratulations for the results. Can you hear me again?
Yes, Alan. Loud and clear.
Perfect. Couple of questions. One of them regarding with e-commerce, the other one regarding dividend policy. The e-commerce growth that you saw of 30%, could you explain a bit more what were the drivers behind such strong growth and how much... In general terms, I know you'll get into the specifics in the Investor Day. How much did it contribute in terms of profitability? It almost sounds like the part of the improvement in profitability came from e-commerce. If you're guiding for lower profitability, maybe you expect some deceleration on e-commerce as we go into 2023. That'll be the first question. The second question is you have a very strong balance sheet.
I mean, what's the dividend policy, if you can remind us that, and what's the outlook for the use of cash in terms of returning more cash to shareholders? That's it. Again, congratulations on the results. Very impressive.
Thank you, Alan. When I say that, you know, as you pointed out, I mean, e-commerce performed very well in Q4. We post a 30% increase year-on-year. If you see the breakdown of that 30%.
Mm-hmm.
There are two, you know, things that stand out. As you know, we consider the sales that are done in the store with our with our iPads in the hands of our sales associates of merchandise that is not in the sales floor, both can be sold to our customers through the use of the digital technology in the in the in the mobile point of sale. That's what we call extended catalog. We, you know, account for those sales into the digital channel because they are enabled by technology. We saw almost a 50% increase in the quarter-on-quarter on that particularly, let's say, part of the our digital GMV. That was certainly impressive.
I think it shows two things that, you know, our customers were returning to our stores, as we have seen basically quarter after quarter. On the other hand, the, you know, the potential that this way of selling has for us. I mean, the ability to use and combine the advice that our sales associates can provide in our store with the fact that we can sell through extended catalogs, things that the customer cannot see physically in the stores. I think that that is a very, you know, like, potent example of the of the omnichannel model. The other thing that stood out in the digital channel was marketplace.
Marketplace, which is the way we call our 3P offering, of course, grew almost 70% year-on-year in Q4. I think that those two things were the ones that allow us to post the 30% growth rate that we saw in Q4. In terms of profitability, I think that frankly, I mean, the things that helped a lot our EBITDA margin in Q4 2022 was, I would say, the mix of our businesses.
I think that the growth rates that we saw in our financial services segment, which was almost 30%, and the growth rate that we saw in the revenues coming from our real estate business or shopping centers, which were 12.3%, were ahead of the growth rate that we saw on the retail segment, which was 11.7%. Still it was strong, but below the other two business segments. As you know, the EBITDA margins that we have in those two segments, financial services and shopping centers, are well above the EBITDA margins that we have in the retail side, of course.
In terms of dividends, we don't have a really an explicit policy in terms of dividend, but I see that you, what you can expect, I mean, it will be discussed in the shareholders', the general assembly, which is scheduled for early March. Is that we should be paying around 80% of our net profit in terms of dividends. That's what you can expect going forward. We should be reinvesting around 80% of our net profit and pay as dividends something in the neighborhood of 20%.
Those are very clear answers. Thank you so much. I really appreciate them. Again, congratulations.
Thank you, Alan.
Our next question comes from the line of Andrew Ruben. Please state your company name and ask your question.
Hi, Andrew Ruben with Morgan Stanley here. Thank you for the question. I was hoping you could provide a bit more detail on the EBITDA margin guidance. You mentioned some of the expense headwinds and a bit of the normalization in top line growth. Just trying to understand perhaps what some of the offsets would be, some of the tailwinds, in order to hold the margins at 2019 levels. Thank you.
Yes, thank you, Andrew. I mean, the headwinds I mentioned that one which is very significant and has to do with the with our payroll expenses. As you can imagine, the fact that the that the minimum wage increase once again in high numbers. In this case, the January 2023 increase was 20% after the 22% that we observed in January 2022. That puts pressure in our payroll expenses, of course. Not only because we need to make sure that nobody in the company is earning less than the minimum wage, of course, but also because of the lower ranks of our the people, particularly in operations and logistics.
We also need, you know, to push their salaries upwards in order to maintain, let's say, the competitiveness in the market and the differential against the people that earn the minimum wage. That is certainly one of our big headwinds in terms of SG&A. The other one, also related to our payroll expenses, has to do with two new reforms in terms of the number of vacations and the premium that we have to pay for vacations. That will impact 2023, of course.
The other one is that the approval of pension reform that was approved almost two years ago and became effective in January last year, this year, in terms of basically pushing, like, 0ne percentage point each year for the next several years, the contribution that the company makes into the forests or the pension plans of our employees. Those two things also will put pressure to our, to our SG&A. And of course, we are seeing still, you know, like a salary inflation in several functions of the company, particularly on the supply chain side, logistics in particularly. On the digital and technology functions, we are seeing, you know, like a war in terms of talent.
Salaries are increasing well above the average for the rest of the functions of the company. That's it in terms of headwinds, in terms of SG&A. In terms of gross margin, the fact that, as I was explaining before, we will not have the benefit that we foresaw in the first semester of 2022, with being able to sell particularly in the softline category, a lot of merchandise at full price. We will be seeing more normalized promotional environment basically throughout the year. That will also be a headwind in terms of EBITDA margin. In terms of tailwinds, actually, we don't have that many.
I mean, one of the big tailwinds in 2022 was of course the double-digit growth rate that we saw in basically, our three business segments. In 2023, the retail segment, which is of course, the big one with 90% of our total revenues, will probably be growing in just the, you know, the high single digits. That will not help us much in terms of operational leverage as what we saw in 2023. The tailwind will be, as I said before, the aggressiveness, let's say, that you can expect in terms of our financial services business. Even the very good performance of our in terms of NPL.
I think that that will also be a tailwind, in terms of our revenues and of course in terms of profitability due to the high EBITDA margin that we have in that in that segment. We're also expecting, you know, that the occupancy rates and the revenues from our shopping centers will continue to grow a little bit ahead of what we are seeing in retail, and also that helps us in terms of of the, you know, EBITDA margin. I will say, Andrew, those are a quick recap of both the headwinds and the tailwinds that we expect in in terms of profitability for 2023.
It's an extremely helpful rundown, so thank you. I appreciate it.
Thank you, Andrew.
Thank you. Our next question comes from the line of Rodrigo Alcántara. Please state your company name and ask your question.
Hi, good morning, Enrique. Thanks for taking my questions. Have two quick ones here, if I may. On the acquisitions in, you know, in the fourth quarter, I guess that the shopping center Metepec makes a lot of sense to do. Nice transaction there. Just curious your thoughts on the acquisition, on the capital increase in Unicomer. Just curious if you can share with us the... I mean, what's the plan with the stake of Unicomer? You can remind me or you can remind us, like, what has been so far the IRR you have, you know, received from having this stake.
Also comment a bit about the rationale of acquiring CrediScotia in Peru. If I'm not mistaken, Unicomer doesn't have operations in Peru. Just to understand a bit more on that. The second question would be delivery times. It's very nice to see close to 40% of your orders two days delivery. Just curious, hear your thoughts, how this number, how much could it increase as we go through year-end? Those would be my two questions. Thank you.
Yes. Thank you, Rodrigo. Well, let me provide some color in terms of the acquisition of the Metropark, which as you said, we also of course think that it makes a lot of sense. We have the opportunity. This is a shopping center that's being built as we speak, basically just across the street from Galerías Metropark shopping center. That shopping center is one of our, you know, like crown jewels in the real estate business. It has very high occupancy rates, almost 100%. Also for the retail business, the Libra story, there is one of our most successful. It's always we need to protect that location.
As Hixse had some, you know, issues in terms of liquidity, the opportunity came up for us to invest and become, you know, make a joint venture with Hixse. With the investment I just announced, we will have 50% of that new shopping center. Hixse will keep the other 50%. We will call that shopping center also Galerías to basically, for our customers, they should feel that it's only one shopping center, instead of two separate ones. We also agreed with Hixse that we will be in charge of the commercialization and the administration of that shopping center. That's another plus for us.
The idea is to work with the government authorities to be able to improve the infrastructure, so our customers can move from one side from the current shopping center that we have there, to the new part of the shopping center as just one unit. We will see what's the most creative way to address the street that is in the middle of it. I think that we're very happy. This will basically make us the owners of almost 75% of the combined shopping center, which we will treat basically as just one big shopping center, and again, in a very strategic location for us. That's it in terms of Metropark.
In terms of Unicomer, basically it has been a long time since we made a capital infusion for Unicomer. This one is 100%, has 100% to do with the acquisition of the CrediScotia business in Peru. As you pointed out today, we don't have any operation in Peru. If we are able to close the transaction, which we are still waiting for the approval from the banking regulator, we are positive that we will receive it sometime by the middle of this year. That will allow us to have a presence in this important country in the space where Unicomer operates.
Traditionally, we enter a country on the retail side. This will be, you know, the first time that we enter a country with the Unicomer operation, first with the financial side and on the retail side. We are seeing that, you know, we saw, you know, the volume of business that CrediScotia represents in Peru. We saw that as a big opportunity to put our foot in Peru and we were, you know, able to win the bidding process. The $40 million I announced have been matched by our partners in the JV.
The total amount that we have, $80 million, that will be used entirely to finance part of the acquisition price. The other part will be financed through a banking loan. We feel very comfortable, you know, with the 50% that we have, the 50% stake that we have in Unicomer. The company has grown very nicely since we, you know, became partners with the Siman family. It's a big business now. It sells, you know, several billion dollars in consolidated revenues. It has presence in a lot of countries in Central America, the Caribbean, lately in South America.
It has been a growth engine for us in the past several years. It allows us to have international exposure. We only participate at the board level. We don't have any, you know, day-to-day roles. Those are done by the people on the ground, led by the Siman family. That's more or less the color that I can provide on the Unicomer, on the Unicomer business.
Finally, in terms of the delivery times, I would like to, you know, to wait for you, I mean, to hear, you know, the perspective on that, what we're planning to do in order to continue improving, you know, the speed with which we deliver, you know, the merchandise to our customer homes. We think that we are making good strides in terms of the speed in the past couple of years. We have, you know, several, you know, opportunities that we need to capitalize. I'm sure you will hear the detail on that on the upcoming investor day.
Yeah. That's great to hear, see you there, Enrique. Thank you.
Thank you, Rodrigo.
Thank you. Our next question comes from the line of Alvaro García. Please state your company name and ask your question.
Hi, good morning, Enrique. Alvaro Garcia from BTG Pactual. Two questions. The first on your coverage ratio. It feels like your guidance of MXN 2.4 billion peso provision and 3% NPL implies once again a very high coverage ratio. Just wondering how you're feeling about that. Why not come back down to some more normal levels like we saw pre-COVID? Is this a new normal, I guess is the question. Then two, on the CapEx figure, sort of I mean, it's probably the highest CapEx figure we've seen from you guys ever. Sort of if you can break it down, you provided some breakdown in supply chain and logistics, but sort of how we should think about Arco Norte within this CapEx figure would be very helpful.
Thank you very much.
Yes. Alvaro, thanks for your questions. In terms of the first one, the coverage ratios that we're expecting by year-end 2023, I agree with you. They're still conservative. They're still above the market standards. I think that that basically reflects, you know, the uncertainty levels. I think that we prefer to be on the safe side. I originally thought, you know, like coming out of the pandemic that things will be looking normal and we will be able, you know, to bring down our coverage ratios to something more in line with the historical ones.
As you know, before IFRS 9, we used to work basically, you know, with a rearview mirror and we managed our coverage ratio based on the bad debt level. Basically, our policy was to basically have a ratio of 2.3 times our bad debt ratio. That of course has increased a lot. You see, the number for that ratio at the end of 2022 was basically four times. You might argue that we are operating today with almost two times of what we had before. If you see, you know, the coverage in terms of expected write-offs for the next 12 months.
Before the pandemic, we used to run the business at 1.3, 1.4 times the expected write-offs for the next 12 months. We closed 2022 at 2.05 times. It's like a 50%-60% increase in terms of our coverage ratio. I, we're planning to bring down the those very conservative coverage ratios to 2023. As I said in my opening remarks, the coverage ratio that is measured against the gross portfolio closed at 9.6 at the end of 2022. That was 1.7 percentage points below the ratio that we had at the end of 2021.
We expect that to bring it down, point or 80 basis points to 8.8, but are still conservative. I think that that will give us some, you know, breathing room and see where this uncertainty on whether we are going to have a, you know, like a recession, it is going to be a deep recession, it is going to be a prolonged recession. What is going to be the effect on that on our NPLs? Given the uncertainty, we prefer to be, as usual, on the conservative side. In terms of CapEx, a big chunk of the around MXN 11 billion pesos that I announced for CapEx for 2023, is going to be devoted to Arco Norte.
I would say that, probably around, MXN 4 billion of close to 40% of the total investment will be, you know, for the development of the supply and facility which we're calling phase 2 of Arco Norte project, basically.
Great. Super clear. Thank you very much, Enrique.
Thank you, Alvaro.
Thank you. We have time for one last question today, which comes from the line of Emiliano Hernández. Please state your company name and ask your question.
Hi. Good morning, Enrique. This is Emiliano Hernández from GBM. Thanks for taking my questions, and congrats on the results. Very impressive. Most of my questions have already been asked, so maybe my question would be: Have you seen any consumer slowdown during the beginning of the year, and what are your expectations for the coming months? Also, can you give some directional color on the same-store sales guidance in terms of maybe the composition on average ticket and transactions?
Yes, Emiliano. Thank you. The short answer is no. We have not seen any, you know, like material slowdown in the first month in January. Was strong, still strong, still, I think that for both for Liverpool and Suburbia, we saw nice figures in January. You can infer those basically from the entire numbers that they published for January. If I recall correctly, they reported 11% growth in same-store sales for department stores in January. You can infer from that that our number was also strong. I think the combination between traffic and average ticket was basically well-balanced, more or less half and half.
I would like to point out, though, that this nice start to the year has a lot to do with the fact that in 2022, we didn't have a lot of merchandise to go through the end-of-season, you know, markdowns, the promotional Gran Barata. It was a lot of relatively easy comparison for the start of the year. I think that we think based on what I was providing you as guidance, that things are gonna get more complicated as we move on throughout the years, and particularly in the second semester.
That's what we can say in terms of how we started the year and how we're seeing the balance between transactions and average ticket.
Thank you, Enrique. Very clear, and congrats again on the results.
Thank you, Emiliano.
Thank you. We have run out of time for questions today. That concludes our question and answer session. I would now like to hand the call back over to Mr. Enrique Güijosa for some closing remarks.
Yes. Thanks a lot. I mean, thanks for your questions. Thank you for your interest, and I'll hope we are gonna be seeing most of you, if not all, on our next Investor Day, which is scheduled for Thursday, March the 9th at 9:00 A.M. Mexico City time. This time, finally, we will be able to do it this in presence. No? We will be holding that Investor Day finally in our corporate offices in Santa Fe in our auditorium. We look forward to receiving you and hosting you here in Mexico City. Thank you very much and have a good day.
That concludes today's call. You may now disconnect. Thank you.