Good day, ladies and gentlemen, and welcome to Falabella earnings call. My name is Gigi, and I'll be your coordinator for today. At this time, all participants are in a listen only mode. In the first part, Mr. Alejandro González, Chief Financial Officer, will present a summary of the consolidated results for the fourth quarter of 2022. Following this, Mr. Gastón Bottazzini, Chief Executive Officer of Falabella S.A., will share some highlights on the performance of the company. Afterwards, we will open up the lines for questions. If you would like to participate in this part of the call, please press star followed by one one at any time during the conference. Now we'll start with the conference with Mr. Alejandro González.
Thank you, Gigi. Good afternoon, everyone, and welcome to Falabella's Q4 2022 earnings call. Joining me on today's call are Gastón Bottazzini, our CEO, Francisco Irarrázabal, our Department Store CEO, and Raimundo Monge, our new Head of Investor Relations. In this call, I will start with the main highlights for the quarter, then Gastón will make a few study remarks, and then we will go to Q&A. I'd like to remind you that numbers presented during the call will be according to IFRS, which express in U.S. dollars and rounded to millions. Therefore, certain small differences may arise with the published financial statements. Let us begin with reviewing the highlights of our physical digital ecosystem, and we should go to slide two.
The most relevant part here before we get into details of the other platforms, is the fact that we were able to finish fourth quarter with 36 million customers in the region. I'd also like to highlight the fact that we had 1.9 million sq uare meter dedicated to logistics, and we were able to dispatch over 37 million orders. If we go to the next slide related to digital banking, the most relevant key feature that we achieved is that our loan portfolio grew almost 18% to $7.7 billion across the region, achieving a 13.2% customer loan market share in Chile, our main market. If we go to the next slide related to the marketplace.
During the fourth quarter, our 3P online sales grew 24% year over year, showing that our marketplace strategy is certainly gaining traction. Overall, our e-commerce platform achieved $3.3 billion in GMV during 2022. Go to the next slide related to our Loyalty program. It does remain the most relevant program in the Andean region, reaching 18.6 million active participants, with an 18% growth year over year. When we go to the payments platforms, we were able to double our active digital wallet users to reach 935,000, while we achieve also $2.9 billion dollars in TPV.
Related to our Real Estate operations, we were able to achieve the highest quarterly revenue in its history with $120 million, which represents an increase of 12% year-over-year. Also relevant, and one of the main explanations for this achievement is the fact that visitor flow reached 76 million, fully recovering normalized pre-pandemic levels. If we go to slide eight, related to the expansion plan during fourth quarter 2022, we followed our selected physical growth plan, and during the quarter, we were able to open six stores. Two were in Brazil, two were in Mexico, and two were in Chile, including the second IKEA store, which was opened in Mallplaza Oeste.
Related to the announcement of the investment plan for 2023, 60% of this investment plan will be related to IT and logistics and increasing the capabilities that we already have in those platforms. In this case, I would like to highlight the relevant launching of falabella.com in Colombia. It's relevant to highlight a $98 million investment that will be dedicated to remodeling in order to improve our square footage allocation to higher margin categories. Around the digital e-physical ecosystem, I'd like to highlight the commitment that Falabella has taken to become net zero in 2035 under Scope 1 and Scope 2. This is done mainly by mitigating our greenhouse gas emissions and also the decarbonizing of our operations.
This will require an investment of $15 million in 2023. That's already been considered in the investment plan that we previously announced. Now going to the financial results. During the fourth quarter of 2022, the company's consolidated revenue reached $3.8 billion, a 4% decrease versus what we presented in 2021. This is mainly due to a 10% decrease in non-banking revenue, mostly related to the Home Improvement business in Chile, with a 23% reduction year-over-year. Also Department Stores in Chile with a 21% decrease year-over-year. This was partially offset by our retail businesses in Peru, which increased the revenue by 9%. This was also partially compensated by shopping centers, as I previously mentioned, the revenues in Mallplaza, which grew by 12%.
As I also mentioned, our businesses are fully coming back to normal levels. Also relevant to this is the fact that the revenues in the shopping mall business are indexed to the inflation rate whatever. Bank businesses revenue grew 47%, mainly driven by an 18% year-over-year increase in the regional loan book, reflecting that we are progressing towards our goal of becoming the leading bank in the Andean region. Our gross profit reached $1.2 billion in fourth quarter 2022, a decrease of 16% year-over-year, mainly explained by a reduction in contribution from the non-banking businesses, particularly in Chile.
Department stores and Home Improvement, both in Chile, contributed to a lesser extent, mainly explained by lower sales and higher purchases on margins due to markets and challenging competitive figures as they experienced strong demand for the products in 2021, despite zero markets. This was partially offset by the shopping centers in the region and Supermarkets in Peru. From the Banking business side, we did experience a reduction in contribution, mainly due to the business in Chile, which faced challenging competitive figures and a scenario with high risk provisions. Going to the next slide in terms of EBITDA net profit. Our EBITDA reached $262 million for the quarter, with a reduction of 54% compared to the $654 million for the same period last year.
This decrease was mainly explained by the 7% increase in SG&A, mainly impacted by expenses associated with developing our growth platforms, primarily marketplace and digital banking, as well as the new IPS stores. This was partially offset with lower variable expenses attributed to the decrease in commercial activity. It is worth noting that during this quarter, we incurred in some one-timers associated to the implementation of the efficiency plan that we announced in the last update that we did in October 2022. We're talking about an amount of $20 million for the quarter.
Finally, in terms of our net result for the fourth quarter of 2022, we had a loss of $26 million, which was impacted mainly in addition to the EBITDA impacts, by an increase in the net financial expenses of $36 million year-over-year, and also the accounting translation of U.S. denominated financial debt of our Real Estate business to Chilean pesos, which did not affect our cash position in the period, but did have a $30 million impact on earnings. From a contribution standpoint, businesses in Chile registered the highest decrease, in particular Department Stores and the Banking business and Home Improvement, our most relevant businesses. That, I will now let you with Gastón, which will bring join with us with some closing remarks. Gastón.
Thank you very much, Alejandro. I would like to make a short summary of how, you know, on top of what Alejandro described as our results for the year and quarter. I would like to highlight that these results are affected by several short-term impacts that have been particularly severe in the case of Chile. In the first place, a strong decline in consumption after a strong 2021, fueled by the withdrawals from pension funds. This combined with disruptions in our logistics chain, affecting the arrival of products to the markets with an impact both on inventories and margins. Additionally, combined with higher inflation and logistics costs that affected our SG&A with an impact in our, mostly in our retail operations.
In addition to this, we had a permanent increase or gradual increase in our funding costs in all of our three Banking operations, combined with a deterioration of our loan portfolio that was accentuated in terms of provision recognition by the relatively short duration of that portfolio. Despite this challenging scenario, I would like to highlight some less visible positive developments we have seen in our business. In the first place, our new market expansion has substantially improved operational leverage, with Brazil results turning positive for the last 12 months, and Mexico getting closer to breakeven, both in our Home Improvement and financial businesses. This means that our future investments in these two countries are supported by positive results operations. Secondly, with the launch of our marketplace in Colombia this month, we will have completed launching our six digital platforms in the region.
With this, our investment cycle completes a relevant milestone in terms of a focus that moves from building these platforms and launching them to optimizing their operations. For example, in the case of marketplace, we're using our unit shipping costs or improving seller services and revenues. All of this translates into better growth prospects going forward, which are taking place despite the challenging context. As examples, our marketplace sales increased 24% during the year 2022. This means that 3P sales now represent 25% of our digital GMV or our e-commerce sales.
We are also progressing substantially towards our goal of becoming the leading digital bank in the region, growing 18% our gross loans, but also growing substantially the usage of our products with our credit card becoming the number one credit card in usage during the last quarter in Chile, as well as us becoming the second-largest bank in terms of checking accounts during that quarter. Another signal of this is our loyalty program that has consolidated and closed the year with over 18.6 million participants, which triples our base of customers from three years ago and continues to be the preferred program in each one of the countries in which we operate.
In summary, as we move forward, we see our Retail and Banking operations gradually improving in line with the rate of improvement of the macro context I just described, which is turning positive as we speak. We also see the efficiency plan that Alejandro referred to coming fully into effect during the next few months and being complemented by additional measures. Finally, we see our digital platforms start to gain traction and become sources of growth, of revenue, and of results as we move forward. We therefore see the overall performance of the company improving based on a much more solid set of businesses that we are constructing over the past few months, years. Thank you very much. With that, we move forward to our Q&A.
Thank you. Ladies and gentlemen, we are ready to open the lineup for your questions. If you wish to ask a question, please press star followed by one one on your touch tone telephone. If your question has been answered or you wish to withdraw your question, please press star one one again. Again, press star one one to ask a question. Please stand by for your first question. Your first question comes from the line of Andrew Ruben from Morgan Stanley.
Hi. Thanks very much for the question. It's always helpful to see the investment plan. I'm curious if you could comment more at the format level, which business segments, you think could be the focus for the OpEx part of the investments in 2023? Then if there's any early view you can share on how you think the investment intensity, could trend in, say, 2024, 2025 when compared to these 2023 levels. Thank you.
Andrew, thank you very much for the question. As we, you know, double-click on the investment plan, I'd say there are three main areas of investment as we, as we declared in it. In retail, or in our physical network, I should say, the focuses are completing the IKEA investments over the next two to three years, and that is particularly heavy over the shorter term and then starts to gradually decrease. The plan is also to continue and eventually ramp up the rate of growth in Brazil and Mexico. As the, you know, new physical store development decreases gradually, our plan is also to make more investments on square footage allocation toward higher margin categories.
Net-net, we think overall, and moving beyond 2023, as you asked, Andrew, there will be a gradual decrease in physical store development. The second area of focus is technology. Much of our investments in technology has had to do with building the digital platforms, as I have said before. I'd say going forward, the one platform that will continue to require relevant investments, is the marketplace, particularly on the seller services and seller value proposition side. But the other, the other platforms we see gradually getting to a more maturer state in terms of investment required, and therefore, what we think is we're gonna have overall a gradual decrease. In logistics, we think there will be a continuous requirement on investments.
This will move probably from an emphasis we have had in infrastructure over the past few years to a higher emphasis on technology and making the infrastructure more, more efficient, more optimal . Longer term, what we see is, we should gradually see gradually trending down the investments, but more or less at the levels we showed for 2023.
That's very helpful. Thank you.
Thank you. One moment for our next question. Our next question comes to the line of Antonio Hernández from Barclays.
Hi, good morning. Thanks for taking my question. We note you during investor day last year, you provided some guidance, some color of your expectations. You mentioned that it was going to be a tough consumer environment for the next quarters. Now, you know, with basically 2022 in the rear view mirror and almost and basically two months of the first quarter already as well, how are your expectations maybe changing? I know that you reiterated in your press release the 200 basis points margin improvement.
Overall, like, have your expectations changed maybe a little bit more cautious or maybe taking more of the improvement, instead of the second half of the year, more towards the last quarter of the year? Any more color that you could provide on that will be helpful? Thanks.
Thank you. Thank you, Antonio, for the question. When we announced our efficiency efforts and the impact they will have on margin, these of course had to do with lowering our expenses and as a result of that, improving margins. Of course, as we move into the first, you know, as you saw in the last quarter and we're moving into the first quarter, we're seeing that our top line and top line margins are still under pressure. Therefore, that requires that we reinforce what we announced in the investor day. Basically, what we are doing in that line is reinforcing that effort itself in terms of structure efficiencies and other additional efficiencies that can be gained in the business.
Also, looking at our operations, and I think I already mentioned in terms of our marketplace, looking at seller, services and revenue, looking at shipping recovery, looking at some of the key variables that are, you know, having an impact on top line margins. In addition to that, we are being a lot more selective on our technology CapEx with focus on improvements that have real impact on clients and sellers, and therefore have real impact on sustaining the growth we are seeing in our marketplace and maintaining our share in e-commerce and our physical stores. As our-
In addition to that, we're looking at physical CapEx also being selective in terms of the prioritization of that CapEx and making sure that we do the investments that actually have more impact, you know. That would be how we're looking at the year going forward, given what we are seeing versus what we announced in the investor day.
Okay. Thanks, Gastón and Alejandro . Thanks.
Thank you. One moment for our next question. Our next question comes from the line of Nicolás Larrain from JP Morgan.
Hey, good afternoon, Gastón, Alejandro. Thank you for taking my question. I had two specifically on Chile. I wanted to see if you could comment maybe on how you've seen January and February, especially in the core formats here, thinking, on a Home Improvement, Department Stores and maybe some qualitative comments on the Bank. Also still on Retail, if you could add some color on how are you seeing inventory levels in the industry. We're seeing, of course, adjustment by many players. I wanted to see your view there. Lastly thinking on leverage, you know, it reached high levels now. I wanted to get your input on where do you see...
...how this is trending throughout the year and what's the level you would feel comfortable with, going forward? Thank you.
Great. Thank you, Nicolás, for the questions. We will distribute with the group we have here since you touched on several topics. I'll give you a general view on the first quarter, and then I will pass the word to Francisco, who will tell you more about retail and inventory levels. Then finally, Alejandro can cover on leverage and our perspective going forward. In terms of the first quarter, we're seeing a continuation and more or less in line with expectations of what you see during the last quarter in terms of the pressure on revenues and in terms of, you know, not further deterioration, but relatively stable level, but at relatively high levels of provisions in the bank.
I would say there's a continuation with a positive perspective at the macro level with exchange rates, particularly yuan to peso, helping us with inflation gradually coming down, which reinforces the effect of the previous variable. Also, logistics costs, coming down actually quite drastically. We see some positive effects during this quarter, still not a rebound in demand, or in the-
In the provision levels. As we become or actually became a lot more restrictive in credit origination, we are seeing a higher quality of new credits originated, which will translate into better quality of our portfolio going forward. With that. In terms of your question about inventories, we actually don't have visibility of inventories, but we do have visibility of imports, and we see imports drastically coming down by the retail industry in general, and at levels that are around 50% of what they were a year ago. That should translate into a decrease in overall industry inventories quite fast over the next few months. Francisco will add some color on what we're seeing in retail.
Thanks, Gastón. Thanks, Nicolás, for your question. Let's talk for a second about inventories and margins. If I may, I would like to split the question into two buckets, at least. One about electronics and the other one about garments, okay? On the electronic side, as you may know, last year, we moved from a very high demand to a below historical level of demand in a very short period of time. That did put us a bit of pressure on the electronics margin. By the end of Q4 2022, we have achieved the desired level of inventory, even considering the current or actual demand. We shouldn't observe in the future that low level of margin on the electronics. Actually, we stopped importing low-margin categories on electronics because it's very hard to do that at the import base.
We ship all that purchasing power to local sourcing at each country. On the garment side, which is the most relevant for the Department Store business, during the last quarter, we did significantly reduce inventory level by the end of the year. During this quarter, we have continued pushing some seasonal and obsolete garments through discounts, so you will see indeed a reduced margins on garments in the current period. Finally, I think that this is maybe the most important part. During the post-pandemic period, due to the delays on the international supply chain, as you may know, we added an extra 30 days to the buying cycle, just to be sure we have the inventory on hand at time.
By the second half of last year, the international supply chains started to normalize, so we're moving back to the standard buying cycle. That means we are postponing 30 days all the purchase orders. That is going to have a significant impact on the inventory level that you will see in the coming future. Of course, it will reduce the cost of the durational cost of handling more inventory. I think that the other good side of that is it's gonna allow us to have a higher fashion content on the private labels, which is a key to differentiate ourselves and to achieve a higher level of margins.
Adding to what Gastón says, other than the exchange rate that is more favorable, we also are observing a lower cost level on the producing side in terms of the raw material prices and on the international shipping freight costs. As you may know, the container costs of the cost of pricing a container has dropped down significantly as well. We are foreseeing a better cost to sales price ratio.
Thank you, Nicolás, for your question. This is Alejandro. Talking about the leverage, I think it's important to clarify first that the main reason why we are presenting these levels of leverage is because we ended up facing an unexpected slowdown in the economy. This is mainly a reduction of EBITDA more than, I would say, a gross debt increase that we had. That said, just for everyone to be aware, this is not the first time that Falabella goes through a situation like this. 2009, after Lehman Brothers went down, we had a net debt to EBITDA of 6.5.
In the pandemic, we had a similar situation, but we were able, in both cases, to recover relatively fast, and go back and take that back to the normal levels, which, by the way, just for everyone to be aware, 3 x is something in which we tend to feel comfortable with. Now, how does this relationship forward? We're taking several proactive actions, you know, as I said before, to increase the EBITDA. First one is basically we are committed to improve profitability by executing our efficiency plan. As Gastón mentioned, we're reinforcing that plan in order to make sure the success of that. As I mentioned before, we are not planning to materially increase the borrowings. The only activity that we're gonna be having this year in terms of debt will be to refinance the upcoming maturities.
We're also planning to resume asset sales that we were evaluating during the pandemic, making sure that we basically succeed in going back to this level. If it's not gonna be during this year, it's gonna be coming years. It's part of the plan of the company and the commitment to make sure that we keep our financial strength as we have in the past.
See you guys. Thank you very much.
Thank you. One moment for our next question. Our next question comes from the line of Irma Sgarz from Goldman Sachs.
Yeah, thanks. Some of my key questions have been answered, but I wanted to follow- up with two quick things on the credit business. I understand that you mentioned that in the short term, provisioning level would probably still remain high, but I was wondering, it did sound like you feel that you've probably gotten sort of towards a peak and that we should start seeing some improvement later on, maybe this year.
I was wondering if you could shed some more light on how you're seeing that situation sort of evolve throughout the year, and how we should think about returning to maybe sort of resuming higher credit limits and growth, maybe sort of in terms of timing or shape of that curve going forward and recovering, obviously, the overall profitability of that business, whether that was already on the cards for this year or maybe more for next year, understanding that there's also an element of funding cost obviously involved. Then the second question, it's interesting, like, as you now sort of see for the Department Stores, the online penetration stabilized sort of in the high 20 % rate.
How do you think about sort of the gap of profitability between the online and the offline channel and how fast are you progressing to really sort of starting to be channel agnostic? If you can just sort of talk a little bit about different levers of sort of evening out profitability across the two channels.
Thank you, Irma, for your question. This is Gastón. I will cover the question on our financial business, and then Francisco will talk about digital versus physical sales in our Department Stores. By the way, just as a clarification, our Department Stores themselves are about 40% digital sales. The 20% is the overall, including Supermarkets and Home Improvement. As you know, it has a very big impact with the economics of online sales on that particular business. I'll let Francisco expand on that. Going back to the financial business. Today we have NPLs that are substantially higher than a year ago, depending on the country.
In the case of Chile, is where we have the highest increase going from 1.4%, which was a very, very low level historically, to 4.1%, which is higher than historical by probably half a point or so. In Peru, we went from 1.8%- 3.1%, in Colombia, from 1.6% - 3.3%. All of the Banking operations had substantial increases in NPLs, which of course translated to higher provisions and higher losses. As a result of that, of course, we became more restrictive in our credit, particularly consumer loan credit.
What we are seeing is that our credit card usage is actually continuing to grow, not at the level it was growing, but it's continuing to grow. Why? While our consumer credit, or free disposal, credit stock is the one that is contracting more. That's good news in terms that customers continue to enjoy the benefits of the product and use the product in the whole ecosystem that has more impact, which is the credit card. As a result of this risk mitigation that we did, we will see, as I said, a lower growth in credit stock. We also are implementing some level of renegotiations, particularly for customers that had good credit history.
We are also improving and developing number one, more frictionless payment processes for recovery as well as better and digitally enabled communication with customers on bad loan recoveries. In addition to this, as you mentioned, one of the factors that is affecting the performance of the business is the cost of funding. Therefore, we're putting a lot more emphasis in the short term in growing the base of current account holders, and as a result of that, our sight deposits. The focus of the financial business is moving from credit to sight deposits in the short term sites substantially, and that will allow us also to improve gradually cost of funding going forward.
In terms of your last question about when we see growth starting to take place, I don't think we're going to return to the growth we saw a year ago or so, because that was a combination of commercial growth as a result of being commercially active, but also as a result of a rebound from a lot of prepayment of debt that took place during the pandemic as a result of the pension fund disbursement. That type of growth I don't think we're gonna see in the short term. We do think probably going towards the third and fourth quarter of this year, we're gonna start to see an uptake again in the growth of this, of this business. Francisco.
Okay, thanks, Gastón. Irma, just Go a little bit deeper on the question. Year 2021, the Department Store had almost 40% penetration on the online. As Gastón said, 23% was the overall... Last year, 2022, we had 33%, so it did went down as the stores opened back. What we are foreseeing for the future is that number to go up again, maybe reaching 35% this year. That is our expectation. The mix of what we are planning to sell online is going to change. The strategy here is to do the operation mainly focus on the high rotation items and let the long tail a little bit more in hands of the marketplace itself.
We do want to focus on the high rotation items, especially in garments, where we see we have a differentiation which is relevant in the industry. We're gonna keep pushing the growth of garments online. On the electronic side, I would say we're gonna just keep the market share that we already have, which is high enough. On the offline, we're planning to, as Gastón also said, to relocate the square footage towards the more higher margin categories. Mainly, we're talking about garments and fashion here. In general, we're going to move the stores out of the highly online penetration categories of electronic, furniture, and mattresses. That's something we wanna keep doing. The other thing is that we're continuing with our physical store footprint optimization. That means resizing stores or some foreclosures, as we have talked in the past.
Thank you.
Thank you. One moment for our next question. Our next question comes from the line of Eugenia Cavalheiro from JP Morgan.
Good morning, everyone. Thank you for taking my question. Actually, I have a follow-up to Nicolás questions on your short-term debt and your refinancing plan. I want to understand better how do you plan to refinance, if you plan to go to local markets or international markets, and how do you see a solution for your current problem on liquidity? Thank you.
Thank you, Eugenia, for your question. The most relevant maturity we have during this year, is the first international bond that we issued in 2023. Just for you to be aware, and everyone to be aware, we've already secured a committed credit line to fund that, so we have a term loan for that maturity, and that's the most relevant. Everything aside of that are relatively small maturities. In that sense, the plan, as it has been historically, has been first to go to the local market. Usually the local market in Chile and Peru, which is where most of this debt basically matures, is still, for small amounts, liquid. That's the first option that we have today as we speak.
As I said before, we already have secured the funding for the most relevant maturity that we have. If it's not the case, we have open, as you mentioned, international options. The first, I would say, plan that we have, as by the way, I don't know if you saw that, but during January we issued close to $180 million that we already used to refinance for some debt. That's the plan that we have for today. The most relevant maturity already taken care of. I don't know if there's a second part to your question because That's what I got.
No, that's that addressed my question. Thank you.
Thank you.
Thank you. One moment for our next question. Our next question comes from the line of Nicol Helm from MetLife.
Hi. I wanted to follow- up on the debt question as well. I wanted to understand how committed the company is to maintaining the investment grade. I know you mentioned that you had already achieved a fixed line leverage before.
Pardon me. It appears that she disconnected. We will move on to the next question. One moment for our next question. Our next question comes from the line of Antonio Luiz Gomes from Ninety One.
Hi there. Thank you for your time. I was three questions from my side. First of all, I kind of wanted to understand what your outlook for 2023 is. You mentioned that, you know, the driver of your leverage going up to 6 x was driven by, you know, operational weakness. I just wanted to understand what's the delta from EBITDA achieved this year to 2023. Where's this gonna come from? It seems like your Department Store business, particularly in Chile, has been very weak, and just wanted to understand where you're seeing the growth for that.
As a corollary to that, I wanted to understand how you're gonna get back to the 3 x net leverage figure that you said you're comfortable with and, you know, what your conversations with the rating agencies are, given that you're on negative outlook from Fitch as well as the other ratings agencies. You know, what's your comfort that you're gonna be able to maintain that IG rating this year? My third question was on refi, but that's been answered. Thank you.
Okay, thanks, Antonio. This is Francisco from Department Stores. I think that we may be a little optimistic about the second half of the year, mainly because of two reasons. One is the inventory level. We hope we're gonna achieve the numbers that we're looking for with somewhere between... I think after Mother's Day, we should reach that number. With a lower inventory level, we may be able to achieve a higher margin and a higher rotation on all those things we are optimistic about. The other thing is about the context itself. lower inflation, better exchange rates for, to buy merchandise, lower cost on the merchandise production, and lower shipping costs.
We looking forward in second half, we think the macro context is going to be more positive for us, and also the inventory level will be at the number that we need it to be. Okay. That plus all the efficiencies that we are doing as we speak, we think is going to be a positive change for this business.
Complemented what Francisco was saying. Antonio, this is Alejandro. You asked how committed we're Falabella with the investment grade. We're absolutely committed to that. In that sense, when you ask about the trend that we see for the net debt to EBITDA, through this first quarter, as Gastón and Francisco already shared during this conference call, we're switching with a relatively high first quarter of 2021. There could be some level of deterioration from what we have today. What we see moving forward for the second half of the year with the full introduction of all the efficiency plan that we announced on the Investor Day last year in October, we are certainly expecting fast improvements of this rate.
It's hard for me to give you a date where we're gonna feel comfortable, with the 3x that I mentioned, but it's gonna be either this year or next one.
You know, the implication is your net debt close 2022 at $6.1 billion. To get to that 3x, you either die, either has to double or your net debt level has to go down, you know, below $5 billion, $4 billion.
Yeah. More than my debt level, as I mentioned before, my EBITDA should go up. Don't forget the EBITDA on the fourth quarter, 2022 went down 50%, roughly speaking, 54%. That's what we're working. That's why I mentioned the cases we had in 2009 and in 2020. We had a very similar situation, external condition. It doesn't matter, any reason, but we were able to quickly react to that. It's exactly what we're doing today. We're gonna put most of our efforts into increasing the EBITDA generation of the company. Certainly, as Gastón also mentioned, we already announced an efficiency plan. We're going hard on that efficiency plan just to make sure that we succeed on that.
What I can tell you this far during the first month of January this year, we are seeing the impacts of that, and we're gonna keep making sure that we are successful in that in order to make sure that we increase the EBITDA. Listen, it's gonna be mainly driven by EBITDA growing. As I said before, incremental that is not in our plan, is more related to refinancing the actions that we're gonna be having this year.
Okay, that makes sense. Thank you for your time.
Thanks a lot.
Thank you. One moment for our next question. Our next question comes from the line of Jorge Luis Mauro from Fundamenta Capital .
Yes. Hello. Thanks for the time. Can you hear me?
Yes.
My question is on the results by business unit, when you break out Chile, international, and others, and then on the others you have the other elimination and annulment. For the year we saw this at the operating profit level, it was a negative result of roughly CLP 200 billion, $250 million, versus $11 billion last year. I just wanted to understand what are you booking in this line? I mean, at the EBITDA level, you are roughly burning CLP 200 billion. For the margin improvement first, what are you booking here and what should we expect going forward?
Thank you, Jorge, for your question. This is basically the way IFRS forces you to present the numbers, accounted wise. We need to present different segments. Each one has to be up to 10 segments and this is basically to show the most relevant. That said, what's in the others is basically the insurance company that we have. We also have the payment platform that we have. It's the marketplace that we have. We also have, I would say, the holding company of Falabella. That's the main driver for that. The expectations of that for the numbers that goes into others should be to improve in line to what we have been describing here about.
Because most of the impact that we have on the digital assets are basically driven to the investment OpEx, mainly, that we've been doing in the last two or three years in order to achieve the levels of growth. Big part of that was done last year. You should expect moving forward that number to trend down in terms of the negative number that we have.
Thank you. Sir, we will now turn to Raimundo Monge for closing remarks.
We would like to thank everyone for joining us on this Falabella fourth quarter earnings call. Our investor relations team will remain available for any follow-up question you may have. Thank you and have a nice day.
Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Good day.