RAFAEL MATUTE SPEAKING:RAFAEL MATUTE SPEAKING:

Good afternoon and welcome to the Walmart de Mexico yCentroamérica earnings call for the third quarter of the year2010.

I would like to start this presentation by saying that we havebeen able to deliver good year to date results in a stillchallenging economic environment, and that we continue asalways to invest and improve our competitive position for thelong term, in order to take advantage of the multiple growthopportunities that we clearly have in the region.

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I will start with third quarter results for MexicoI will start with third quarter results for Mexico.

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Third quarter was a challenging quarter for Mexico.

Total sales were up 9.7% and 2.8% at comparable stores. Salesin September were affected by flooding in Nuevo Leon, Veracruz,Oaxaca and Tabasco.

Gross margin for the third quarter 2010 was 21 7% this year vsGross margin for the third quarter 2010 was 21.7% this year vs.21.9% last year. The decline compared to last year is related tothe recognition of the timing of supplier allowances and is a onetime event.

E th t t h ll i th t W hExpenses, were the greatest challenge in the quarter. We havedone a good job in maintaining our discipline in expenses andeven improving our distribution and store productivity measures,but our costs have been impacted by increases in electricitytariffs and depreciation If we take out utilities expenses would

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tariffs, and depreciation. If we take out utilities, expenses wouldhave grown less than sales.

Our effective Every Day Low Prices strategy, based on having thel t t t t i th k t ll t i t tl llowest cost structure in the market, allows us to consistently lowerprices. Our price gap vs. the rest of the market increased duringthe quarter as well as year to date.

This has certainly been well received by our customers, asreflected in our sales continuing to grow at a faster rate than themarket, both at comparable stores and for total stores, and in ourcase, on top of a much stronger growth last year.

We don’t have yet the numbers for September for the industry, buty p y,for the first eight months of the year Walmex comp store sales forself-service formats in Mexico grew 3.0%, more than double therate of growth of the industry as measured by the ANTAD, whichincreased 1.3% excluding Walmex.

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And in terms of total sales, our self-service formats in Mexico grew10.1%, which very positively compares with the 5.6% growth ofANTAD excluding Walmex.

Now, as I said before, expenses were the greatest challenge ofNow, as I said before, expenses were the greatest challenge ofthe quarter.

We have done a good job on expenses, but they have beenimpacted by two important line items: utilities and depreciation.

Our utility expense grew 25.6%. This is specifically related to anincrease of electricity cost. Tariffs in August were 17.2% higherthan last year.

If we take out the increases in utilities, expenses would have, pgrown 9.5% compared with the 9.7% increase in total income;and if we also exclude depreciation that increased 13.2%, theincrease in expenses was 8.9%.

We continue with our discipline with regards to expenses and itWe continue with our discipline with regards to expenses, and itshould allow us to continue to improve our leadership position.

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

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Central America clearly had a very strong quarter at every line:l i d th O ti i dsales, gross margin, expenses, and thus Operating margin and

EBITDA.

Total income was up 7.6%, with a very solid growth in sales atcomparable stores of 6.8%.

Gross margin had a very good performance, increasing 30 basispoints from last year.

Expenses increased only 3.4%, which very positively comparesith th 7 6% i i t t l i E i d 70with the 7.6% increase in total income. Expenses improved 70

basis points and represented 17.7% of total income vs. 18.4% lastyear.

The combination of good sales growth, improvement in gross

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margin and discipline in expenses allowed for Central America’sEBITDA to grow at a rate of 27%, more than three times fasterthan sales. EBITDA margin was 6.4% compared to 5.5% last year.

I am very pleased with the continuous improvements that we’veI am very pleased with the continuous improvements that we vehad in Central America.

Results have been good for the first nine months of the year, andthird quarter growth rates represent an improvement over the

th t hi d d i th fi t h lfgrowth rates achieved during the first half.

- Total income for the third quarter increased 7.6%, a niceimprovement compared to the 5.3% growth of the first half.

Gross margin continued to grow faster than sales- Gross margin continued to grow faster than sales.

- General expenses grew less than sales, and less than duringthe first half of the year.

- As a result, EBITDA for the third quarter grew 27.2%, aAs a result, EBITDA for the third quarter grew 27.2%, asignificant improvement vs. the already strong 12.8% increase ofthe first half of the year.

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Now let’s move into the consolidated results for Mexico andNow let s move into the consolidated results for Mexico andCentral America.

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Total income reached 82 billion pesos, 70.8 billion for MexicoTotal income reached 82 billion pesos, 70.8 billion for Mexicoand 11.4 billion for Central America.

Gross margin is 70 basis points higher in Central America thanin Mexico.

Expenses as a percentage of sales are 370 basis points higher inCentral America.

Operating Margin, and EBITDA margin are higher in theMexican Operation than in Central America, 300 and 320 basispoints respectively.

Operating margin is 7.7% for Mexico, 4.7% for Central America,and 7 3% for Walmex

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and 7.3% for Walmex.

EBITDA is 9.6% for Mexico, 6.4% for Central America, and 9.2%for Walmex.

Consolidation has a clear positive effect in growth rates DuringConsolidation has a clear positive effect in growth rates. Duringthe third quarter we had a total income growth of 27%.

Consolidated gross margin grew 27%, and went from 21.9% lastyear to 21.8%.

The toughest effect of consolidation is reflected in generalexpenses as a percentage to total income, that as we consolidateboth regions increased 70 basis points compared to last year’slevel that only include Mexico.

Consolidated EBITDA increased 18%, and Net Earningsincreased 10%.

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We have a strong balance sheet with no debt and our cash positionWe have a strong balance sheet with no debt, and our cash positionis continuously generated by our operation, and allows us to invest innew stores, remodel existing ones, invest in distribution, andaggressively invest in prices, all at the same time, and with a longterm view.

As of September 2010 our cash position amounted to $15.3 billionpesos.

Now I leave you with Scot Rank to share with you his views on somehighlights that have to do with our three main priorities.

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SCOT RANK SPEAKINGSCOT RANK SPEAKING

Thank you Rafael.

Starting with our Store Expansion Plans. I’d like to highlight thatso far this year we have opened 120 stores and restaurants inMexico and 13 stores in Central America. We are on target tomeet our expansion program for the full year, which contemplatesan increase in installed capacity of 12% for self-service formats inMexico, 11% increase for total capacity in Mexico and 3.5% inCentral AmericaCentral America.

As of today we have 2,122 stores and restaurants in Mexico andCentral America.

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A th k t ti fit bl th i ffi i tAnother key to our continuous profitable growth is our efficientlogistics network, and it continues to improve. This year weopened a new distribution center in Villahermosa, Tabasco withautomated sorters. We also automated an existing distributioncenter in Mexico City.

Automated sorters allow us to increase case throughput up to40%, and total DC productivity up to 31%. At the same time weincreased 33% the number of stores served allowing us toincreased 33% the number of stores served, allowing us topostpone future investments in distribution.

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Now moving into our people, a few weeks ago Eduardo Solorzano,President of Walmart Latin America announced that MarcosSamaha has been named President and CEO of Walmart Brazil.Marcos, previous President of Walmart Central America, is a verytalented executive who as head of Central America has been keyin the success of the initial steps for the integration process.Marcos will undoubtedly be successful in his new responsibilitiesin Brazil. We have named Alberto Ebrard as Executive VicePresident and Managing Director for Central America. Alberto wasg gSenior Vice President for Bodega Aurrera in Mexico and he hasbeen with the company for 17 year. His knowledge of thecompany, vision and leadership will certainly be key tostrengthening Central America operations and drive synergiesstrengthening Central America operations and drive synergiesbetween the two regions.

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Regarding Corporate SociaI Responsibility I am very proud toRegarding Corporate SociaI Responsibility, I am very proud toshare with you that Walmart de Mexico Foundation has beenhonored as a winner of the World Business and DevelopmentAwards 2010 presented by the United Nations DevelopmentProgram (UNDP) the International Chamber of Commerce (ICC)Program (UNDP), the International Chamber of Commerce (ICC)and the International Business Leaders Forum (IBLF). TheFoundation’s Indigenous Product Commercialization Program wasselected as one of ten winners, out of 170 initiatives submittedf d th ldfrom around the world.

The indigenous Product Commercialization Program offerstraining, funding, and the opportunity to sell products fromindigenous communities in our storesindigenous communities in our stores.

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Our commitment to sustainability continues and last month weOur commitment to sustainability continues, and last month weorganized a “Sustainability Forum”, with our suppliers to exchangebest practices in: energy efficiency, water savings, waste, andsustainable strategy execution.

More than 120 companies presented best practices and newtechnologies. We had very active participation from the CEOs ofleading companies in Mexico, and we also had the presence ofthe Minister of Economy and the Minister of the Environment.t e ste o co o y a d t e ste o t e o e t

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Our strongest season is starting and although we expect theOur strongest season is starting, and although we expect theeconomic environment to be challenging, we are ready with avery good assortment of unique products in all of our differentformats, and with excellent prices for our customers.

On example is Walmart Supercenter: We have prepared with avery good assortment for different purchasing occasions relatedto Christmas season including:

fAt home entertaining; Travel; cold weather; decoration; gifts;Christmas trees and nochebuenas; and holiday time dinners.

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With this we are ending this earnings call. Thanks again forjoining us today, and I remind you that the presentation we justfinished is available at our website.

And as al a s e are a ailable to recei e calls ith q estionsAnd as always, we are available to receive calls with questionsthat you may have.

Thank you.

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