This material references Disclosure 102-14 of GRI 102: General Disclosures 2016

Dear Shareholders:

In the face of an extraordinarily challenging 2020, our priority at Grupo Chedraui has been to safeguard the well-being of our customers, suppliers, and employees. Thanks to our business model’s resilience and the timely deployment of mitigation strategies, we were able to effectively contain the effects of the COVID-19 pandemic. By falling within the regulatory definition of essential business under the framework of the nation’s response to the health contingency, we were able to keep pursuing our mission: to provide our customers with outstanding value by offering the products they desire at the lowest possible price.

In this regard, I would like to underscore the Company’s ability to adapt and duly comply with the specific regulations of the jurisdictions where our stores are located, as this greatly contributed to stable operating performance.

Looking at our results by segment, reflecting once again our commitment to our mission, we moved forward with our expansion plan by achieving 15 net store openings in Mexico. This accomplishment took place despite the difficult backdrop we navigated this year, once again attesting to the determination and value of our core asset: our associates.

As a result, we managed to expand our sales floor in Mexico by 1.8% year-over-year, reaching a total of 321 stores in this segment, consolidating our position as the country’s third largest supermarket chain by sales. In addition, the 5.5% growth in same-store sales for the year, a figure higher than that reported by the Mexican retailers’ association (ANTAD), allowed us to offset the adverse effects of the pandemic, mainly reflected in lower customer traffic at tourist areas where Grupo Chedraui has a strong presence.

We are proud to highlight the momentum achieved in online sales, which in 2020 tripled compared to 2019, accounting for 3.6% of sales in Mexico. This growth is the result of the Company's commitment to its omnichannel strategy, which we will continue to push forward in the coming years to further promote its development.

EBITDA from Mexico’s operations increased 8.6% year-over-year, while achieving an EBITDA margin of 7.4%, a 20-basis point expansion compared to 2019.

On the other hand, in the United States, high demand from our El Super and Fiesta customers fueled a 7.7% growth in same-store sales in U.S. dollar terms during 2020. Efforts aimed at standardizing, automating, and optimizing processes in the Fiesta operation paid off this year, resulting in a year-over-year EBITDA growth of 49.6% for U.S. retail segment.

These figures illustrate the expansion capacity of the U.S. division following the acquisition of Fiesta in 2018, and we expect that this segment will continue to be a key driver of our consolidated performance in the coming periods. Here it is worth noting the inherent benefit of having a significant share of our sales denominated in a hard currency such as the U.S. dollar, as it provides us with a natural hedge, and thus greater leeway to take on debt in this currency.

As for our Real Estate Division, temporary decreases in rent payments from our tenants due to the current pandemic resulted in an 18.7% reduction in 2020 revenue. We are confident that COVID-19 vaccination progress will boost economic activity that, coupled with the incorporation of over 10,000 m2 of leasable area (+2.8% year-over-year), will contribute to the operating normalization of this segment.

Consequently, consolidated revenue and EBITDA increased 13.0% and 18.2% on an annual basis, to MXN $ 146,287 million and MXN $ 10,788 million, respectively. Regarding leverage, net debt decreased 59.0% year-over-year, from MXN $ 9,517 million at the end of 2019 to MXN $ 3,903 million at the end of 2020, mainly due to the higher cash balance recorded, on the back of strong cash flow generation. As a result, net bank debt to EBITDA ratio was 0.36x as of December 31, 2020 vs. 1.04x as of December 31, 2019.

Following our focus on cash flow generation, our cash balance amounted to MXN $ 5,445 million at the end of 2020, increasing 453% and significantly boosting the Company's liquidity. This led net debt for our retail division in Mexico to post a negative balance of MXN $ 769 million at year-end.

In line with our store expansion strategy, the majority of the MXN $ 2,527 million Capital Expenditure for the year was allocated to store openings in Mexico.

Turning to our environmental, social, and corporate governance endeavors, the Company focused primarily on helping the communities where it operates to cope as best as possible with the effects of the health contingency, investing close to MXN $ 300 million together with the Chedraui Foundation. These efforts were earmarked for: i) the donation of food to the general population through 75 food banks and institutions; ii) MiChedraui e-wallets that were granted to 8,142 volunteer packers who were unable to continue supporting our customers due to the pandemic; iii) the distribution of 73,288 food baskets to employees, interns and volunteer packers; and, iv) alliances forged with 5 other foundations and associations to support vulnerable groups affected by the contingency, which benefited 36,473 families.

Here it is important to emphasize that one of Grupo Chedraui's priorities since the onset of the pandemic has been to protect the well-being of its employees, reason why, since March 2020, nearly 4,000 employees identified as at-risk have been sent home without any impact on their salaries.

Well aware of the importance of education, Grupo Chedraui and Chedraui Foundation continued to promote the programs of Liceo de Artes y Oficios, an academic institution with campuses in Veracruz, Villahermosa and Xalapa, through online courses, with 4,078 students of all ages graduating from technical careers and advance courses, 30.7% more than in 2019.

Concerning our carbon footprint, reducing our emissions as much as possible without affecting the operation of our stores continues to be our goal. During 2020, the use of solar energy was introduced to complement the use of wind energy, along with the investment of MXN $ 40 million for the installation of energy-saving luminaires in the Company's stores.

Recognizing the challenges of this new year, we will continue to strive for the greatest operational stability, prioritizing the preservation of the well-being of our employees and customers, and the soundness of our financial position.

Wrapping up, I would like to express my recognition to our employees for their outstanding commitment, as the results we achieved would not have been possible without their efforts. Last but not least, I want to take this opportunity to thank our shareholders for their trust, whose support has been crucial in these dire times.