SCOT RANK SPEAKING:SCOT RANK SPEAKING:Good afternoon and welcome to our first quarter 2011conference call. Here with me is Rafael Matute, CFO ofWalmart de Mexico y Centroamerica.Fi t t lt i li ith t ti d thFirst quarter results were in line with our expectations and theinvestment activities included in our 2011 business plan.• Same store sales growth was below 2010 due to the change

in the Easter calendar.• We had positive trends in gross margins, and• Our expenses reflected the investments that we are making

in new stores and distribution infrastructure.

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We’ll start with MexicoWe ll start with Mexico.

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We are on track to meet our new store expansion program forWe are on track to meet our new store expansion program forthis year.This program includes 365 new stores in Mexico, and is a keycomponent of our historic annual capex investment of $14 billionpesos.pesos.During the first quarter we added 79,000 m2 of new store sellingspace, and more than twice as many stores and selling area aswe did last year in the same period of time.We opened 38 stores: 5 Bodegas Aurrera 7 Mi Bodegas 19We opened 38 stores: 5 Bodegas Aurrera, 7 Mi Bodegas, 19Bodegas Express, 3 Walmart Supercenters, 3 Sam’s Clubs, anda Restaurant.Now Rafael will comment on the details of the financial results.

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RAFAEL MATUTE SPEAKING:Th k S t d d ftThank you Scot and good afternoon.Sales in Mexico, as Scot mentioned were challenging as theeconomic environment was slightly soft, and we had a negativeEaster calendar effect. This effect should revert in April.A f th till thi k th h i ill l lAs for the consumer, we still think the purchasing power will slowlyrecover. We are working on being more relevant for our customers,offering an appropriate assortment at the best possible prices, andat the same time we are investing to drive future sales: buildingnew stores, and remodeling existing ones so as to guaranty thenew stores, and remodeling existing ones so as to guaranty thebest shopping experience for our customers.In the meantime, we have been able to protect and even improvegross margin.Also, our discipline in expenses will allow for more future leverage.

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Also, our discipline in expenses will allow for more future leverage.Expenses in Mexico grew more than sales, but if we consider onlyretail expenses and we exclude depreciation, they grew less thansales, despite investments in remodels, and more than double thenumber of openings during the quarter compared to last year.

Now let’s move from Mexico into Central AmericaNow let s move from Mexico into Central America.

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SCOT RANK SPEAKING:A lot is going on in Central America and we are making strong investments inA lot is going on in Central America and we are making strong investments ingetting the region to be more like a true Walmart operation.Being more Walmart means different things:• First of all, our associates: we aligned compensation schemes and

introduced cash bonus based on individual store performance for the firsttime.

• The Launching of Every Day Low Prices, which started yesterday inHonduras, and the other countries that will follow in the coming month.Every Day Low Prices is a fundamental part of how we go to market, and it willhelp us to generate trust, and loyalty for the long term with our customers.In this first stage we lowered the prices on 3,000 items. Price reductions gofrom 2% to 25%.

• Yesterday we launched the first Walmart Supercenter in Central America inHoduras. We are remodeling at the time all of our hypermarkets andlaunching in parallel EDLP program in all of this new stores which will bebranded Walmart Supercenter. We are improving the assortment andi d i i i i ll 3 04 k Thi b ill i h 4 400introducing initially 3,504 new skus. This number will increase to reach 4,400new items by the end of the year. Particularly important is the number ofgeneral merchandise and apparel products.

• Improving supermarkets and bring the value proposition of Superama Mexicoto Central America.E D L C t i t f W l t DNA A d t ki

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• Every Day Low Costs is part of Walmart DNA. And we are taking measuresto gradually reduce our expenses throughout Central America.

• Integration of Central America is key: our systems implementation programis on track. We currently operate with Walmart systems fully in 2 countries.

Being more Walmart should translate in the medium term in serving better ourcustomers increasing sales and reducing expenses but in the short term it

RAFAEL MATUTE SPEAKING:RAFAEL MATUTE SPEAKING:In Central America the negative Easter calendar effect on oursales is even stronger than in Mexico.Excluding this effect, same store sales trend for 2011 has beenstrong with January and February growing at an average ofstrong, with January and February growing at an average of5%.Even in March, the trend prior to the Easter comparison waseven stronger than the 5 percent recorded in the first twomonths of the yearmonths of the year.

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Total sales grew 5%, affected as I mentioned by the Easter shift.Gross margin was slightly down as we did markdowns in thehypermarkets in order to clean inventories and add the newassortment for the launching of Supercenters.Expenses grew more than sales, as a result of our strategicp g , gdecision, as Scot explained, to make strong investments ingetting the region to be more Walmart.

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Now let’s move into consolidated resultsNow let s move into consolidated results.

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Last year we consolidated only March information for CentralLast year we consolidated only March information for CentralAmerica.Gross margin showed and improvement vs. last year driven byMexico.E id b f th l ltExpenses, as we said before grew more than sales, as a resultof our planned investments, both in Mexico and CentralAmerica to improve the operation and drive future sales.EBITDA margin was slightly lower than last year as a result ofthe consolidation of Central America. This is the last quarterthat we have this effect, as since March we have a comparablebasis last year.Pro forma numbers would show an EBITDA margin of 9.5 last

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year, compared with 9.7 this year, thus an improvement thisyear of 16 basis points.Now lets move on to the balance sheet.

As of the end of the quarter our cash position amounted to $21 3As of the end of the quarter our cash position amounted to $21.3billion Mexican pesos, $4.2 billion pesos more than last year.During the first quarter of this year the Company invested $2,317million pesos in fixed assets, and repurchased 4.4 million sharesfor an amount of $153 million pesos.for an amount of $153 million pesos.Inventories increased 9.6% vs. last year, a good numberconsidering that we opened 325 units during the last 12 months.Scot, we also received some recognitions this quarter …

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SCOT RANK SPEAKING:That’s correct Rafael.1 The Euromoney Magazine awarded us recognition as:1. The Euromoney Magazine awarded us recognition as:

• The company with the best corporate governance in Mexico.• The company with the most convincing & coherent strategy in

Mexico; and in the consumer goods sector in Latin America.2. In Mexico we were granted, for the eleventh year in a row, the2. In Mexico we were granted, for the eleventh year in a row, the

Socially Responsible Company distinction from the MexicanPhilanthropy Center and the Alliance for Socially ResponsibleCompanies in Mexico. We are one of ten companies and the onlyretailer that has obtained this distinction from the moment it wascreatedcreated.

3. The “ganar-ganar” magazine, that specializes in subjects related toSocial Responsibility and sustainable development, awarded usrecognition for the best Corporate Social Responsibility event, inrelation to our first sustainability forum “Together for a better planet”

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relation to our first sustainability forum Together for a better planet4. And finally, The National Institute for Adult Education, and the Public

Education Secretary, awarded us recognition for the commitmentwith the future in Mexico, thanks to the support for education that weoffer our associates.

RAFAEL MATUTE SPEAKING:RAFAEL MATUTE SPEAKING:

Before we finish, I would like to remind you that this year ordinaryand extraordinary dividends of $0.38 pesos and $0.17 pesos pershare, approved at our last Shareholders’ Meeting will be paid onApril the 29th.

With this we are ending our Conference call, thanks again, and Iremind you that we will be available to receive any calls withquestions that you may havequestions that you may have.

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