Earnings Release 1Q11

Transcription

1 B2W ANNOUNCES NET REVENUE OF R$ 1.03 BILLION IN, A GROWTH OF 13% COMPARING TO (VALUES IN CONSOLIDATED AND IN IFRS) Rio de Janeiro, May 5 th, 2011 B2W - Companhia Global do Varejo (BOVESPA: BTOW3), the leading online retail company in Brazil, formed from the merger between Americanas.com and Submarino, announces today its consolidated results for the 1 st quarter of 2011 (). The accounting information included in the Earning Results Release that follows was prepared and is presented in accordance with the international financial reporting standards (IFRS) and the norms issued by the Comissão de Valores Mobiliários (CVM), as well as the Novo Mercado listing rules, and in reais (R$). The comparisons refer to the 1 st quarter of 2010 () consolidated results, except where otherwise indicated. B2W s portfolio is composed of the brands Americanas.com, Submarino, Shoptime, B2W Viagens, Ingresso.com, Submarino Finance and Blockbuster Online, offering over 35 categories of products and services through the Internet, telesales, catalogs, TV and kiosks. Net Revenue (R$ million) % % 1,029 B2W FINANCIAL AND OPERATIONAL HIGHLIGHTS Executive Summary Comparison to Parent Company Consolidated Var. (%) Financial Highlights (R$ million) Var. (%) % Net Revenue 1, % % Gross Profit % 26.7% 26.0% +0.7 p.p. Gross Margin (%NR) 28.7% 28.3% +0.4 p.p % EBITDA % 10.0% 11.0% -1.0 p.p. EBITDA Margin (%NR) 11.1% 11.3% -0.2 p.p. (4.3) % Net Income (1.6) % -0.5% 1.3% -1.8 p.p. Net Margin (%NR) -0.2% 1.5% -1.7 p.p. Consolidated Gross Profit (R$ million) and Gross Mg (%NR) +14% 28.3% 28.7% Consolidated EBITDA (R$ million) and EBITDA Mg (%NR) +11% 11,3% 11,1% Consolidated Share of Submarino Card +4 p.p. 30% 26% % Subarino website sales Consolidated Results Net Revenue (NR): In, the net revenue reached R$ 1,028.7 million, representing a growth of 12.6% in comparison to R$ million registered in 1T10; Gross Profit The gross profit reached R$ million in 1T11, a growth of 14.0% comparing to R$ million registered in 1T10; Gross Margin The gross margin was 28.7% of net revenue in, an improvement of 0.4 p.p. when compared to 28.3% registered in ; EBITDA EBITDA reached R$ million in, a growth of 10.9%, compared to R$ million in. The EBITDA Margin was 11.1% of net revenue in ; Net Result Consolidated net result reached -R$ 1.6 million in ; International Expansion Following the international expansion plan, B2W started structuring the business model of online travel in Argentina; Submarino Card share reached 30% of the website The share of Submarino Card of the Submarino website s sales reached 30% at the end of March 2011; Exclusive pre-sale tickets to Rock in Rio Ingresso.com entered into a partnership as exclusive operator of the presale tickets to Rock in Rio Parent Company Results: Net Revenue: totaled R$ million in, growth of 12.0% in relation to R$ million registered in. EBITDA: totaled R$ 95.3 million in, increasing 1.8% compared to R$ 93.6 million registered in. 1

2 COMPANY STRUCTURE The B2W Companhia Global do Varejo, formed from the merger between Americanas.com and Submarino in 2006, has a portfolio with the brands Americanas.com, Submarino, Shoptime, B2W Viagens, Ingresso.com, Submarino Finance and Blockbuster Online, that offer more than 35 categories of products and services through the internet, telesales, catalogs, TV and kiosks distribution channels. The following chart presents an integrated vision of B2W: 2

3 CONSOLIDATED PERFORMANCE COMMENTS NET REVENUE Consolidated net revenue in the 1 st quarter of 2011 totaled R$ 1,028.7 million, a growth of 12.6% against R$ million reached in the 1 st quarter of % 913 1,029 GROSS PROFIT The consolidated gross profit in the 1 st quarter of 2011 was R$ million, with margin of 28.7% of net revenue, a growth of 14.0% when compared with R$ million, with margin of 28.3% of net revenue achieved in the 1 st quarter of % 28.3% 28.7% SELLING, GENERAL AND ADMINISTRATIVE EXPENSES The consolidated selling, general and administrative expenses (SG&A) reached R$ million in the 1 st quarter of 2011, equivalent to 17.5% of net revenue, representing an increase of 0.5 p.p. in comparison to the 17.0% obtained in 1 st quarter of p.p. 17.0% 17.5% 3

4 EBITDA The consolidated EBITDA totaled R$ million in the 1 st quarter of 2011, representing an increase of 10.9% in comparison to the R$ million obtained in the 1 st quarter of The EBITDA margin presented a reduction of 0.2 p.p., from 11.3% in the 1 st quarter of 2010 to 11.1% in the 1 st quarter of % 11.3% 11.1% FINANCIAL RESULT In the 1 st quarter of 2011, the net financial expenses totaled R$ 78.7 million, versus the net financial expenses of R$ 62.3 million in the 1 st quarter of The net financial result was impacted by the reversal of Present Value Adjustments. This impact in the financial result can be seen in the following table: Breakdown of Net Financial Results - R$ MM Δ% Net Financial Result without PV Adjustments (85.5) (67.9) 25.9% (+) Reversion of PV Adjust. on Sales and Taxes % (+) Reversion of PV Adjust. on Suppliers (22.2) (14.2) 56.3% (=) Reversions of Present Value Adjustments % Net Financial Result (78.7) (62.3) 26.3% Excluding the Present Value adjustments, the consolidated net financial result in presents an increase of 25.9% in relation to. The Company s financial expenses are comprised of interest over loans and financing, cost of discounting receivables, taxes over financial transactions and other expenses. The Company continues to reaffirm its commitment to a conservative policy for investment of cash, manifested through the use of foreign denominated currency hedge instruments to mitigate the eventual exchange fluctuations, both for financial liabilities and its total cash position. These instruments offset the exchange risk, transforming the cost of the debt for local currency and interest rates (as a percentage of the CDI*). Similarly, it should be remembered that the Company s cash is invested in the largest financial institutions in Brazil. CDI - Certificado de depósito interbancário: average rate of borrowing in the interbank market. 4

5 FUNDO DE INVESTIMENTO EM DIREITOS CREDITÓRIOS (FIDC) By the end of February 2011, the structuring of the Fênix Fundo de Investimento em Direitos Creditórios do Varejo ( Fênix FIDC do Varejo ), a credit rights investment fund, was concluded. The purpose of this fund is to acquire the receivables held by B2W and by Lojas Americanas they are electronic transactions that are received and processed by acquiring systems and are originated from credit cards used in buying and selling products and services carried out between the Companies and their customers. The Fênix FIDC do Varejo is a new financial instrument of the Company that has a more attractive cost and a longer financing term for receivables discount operations. NET RESULT AND RESULT PER SHARE In, the net result reached -R$ 1.6 million, versus R$ 14.0 million obtained in the preceding year. The earnings per share were -R$ compared to R$ in. Reconciliation of the Net Income - R$ Million Δ% EBITDA % Depreciation / Amortization (19.3) (11.5) 67.8% Net Financial Result (78.7) (62.3) 26.3% Other operating income* (19.1) (6.8) 180.9% Income tax and social contribution 1.0 (8.6) % Net Income (1.6) % Earnings per share (R$ ) R$ % Outstanding shares (thousand) 110, ,194 * In the old accounting rules, considered as "non-operating income". The Present Value (PV) Adjustments had a negative effect of R$ 3.1 million in, same effect observed in the. As noted in the table below, excluding the Present Value effects, net income was R$ 1.5 million in. Present value effects Δ% Accounted Net Income (1.6) % (A) Operational Present Value Adjustments* (11.5) (10.3) 11.7% (B) Financial Present Value Adjustments % Net Present Value Adjustments (A + B) (4.7) (4.7) 0.0% Fiscal Effects % Present Value Adjustments in Net Income (3.1) (3.1) 0.0% Net Income excluding Present Value Adjust % Net Margin without PV adjustment (%NR) 0.1% 1.8% % * Include PV adjustments on sales and taxes and PV adjustments on inventories. 5

6 COMMENTS ON PARENT COMPANY PERFORMANCE PARENT COMPANY INDEBTEDNESS B2W has adopted and practiced a strict policy of preserving cash and making the debt profile longer. B2W s cash balance at the end of, which amounted R$ million, continues to be higher than the Company's short-term gross debt, which totaled R$ million. At the end of the Company s net debt was R$ million, or 1.5x accumulated EBITDA in the last 12 months, same level observed in the. The average maturity went from 813 days at the end of March 2010 to 948 days at the end of March 2011 (from 27 to 31 months). R$ million Parent Company Indebtedness 3/31/2011 3/31/2010 Short Term Debt Long Term Debt 1, ,057.2 Total Debt (1) 1, ,318.2 Cash and Equivalents Accounts Receivable net of Discounts Total Cash (2) 1, Net Cash (Debt) (2) - (1) (722.9) (664.2) Net Debt / EBITDA LTM Average Maturity of Debt Accounts receivable consist of credit card receivables, net discounted value, which have immediate liquidity and can be considered as cash. The breakdown of B2W s accounts receivable, from the Parent Company point of view, is demonstrated in the table below: Accounts Receivable Conciliation 3/31/2011 3/31/2010 Gross Credit-Cards Receivable 1, ,337.9 Receivable Discounts (1,041.9) (1,029.1) Accounts Receivable net of Discounts Present value adjustment (16.0) (9.3) Alowance for doubtful accounts (20.9) (21.5) Other accounts receivable Net Accounts Receivable - Parent Company Because of the adoption of the new CPCs / IFRS, in particular the CPC 38 and its corresponding IAS 39, the Company began to write off (derecognize) receivables from credit card administrators the moment they were effectively advanced (according to the publication of the explanatory notes of the financial statements). However, to better demonstrate the volume of receivables anticipated on the base-dates analyzed, in the following chart the Company presents the Accounts Receivable adjusted by the advances made until the base-dates under analysis. 6

7 NO FOREIGN CURRENCY EXPOSURE At the close of, B2W s balance sheet recorded foreign currency denominated debt. Such debt, however, is FULLY PROTECTED against any foreign exchange fluctuations through derivative (swap) operations that replace the exchange risk for the variation in the basic Brazilian interest rate (CDI). CAPITAL INCREASE An increase in the Company s capital stock was approved within the limit of its authorized capital stock, pursuant to Article 5, 2 of the Company's Bylaws, by R$ 1,0 billion, through issuance, for private placement, of 46,253,470 new shares, all nominal, registered and without par value, at an issue price of R$ per share. The increase in Capital Stock is designed to improve the Company's capital structure, enabling a significant increase in investments for technological innovation and development of logistics and operations, enabling faster growth and the consolidation of the market leadership position. On April 26, 2011 the deadline ended for the first subscription phase of the capital stock increase. A total of 41,729,862 shares were subscribed in the amount of R$ million. Of this amount, Lojas Americanas, the Company s controlling shareholder, subscribed to R$ million, to which it had preference rights, while minority shareholders subscribed to R$ million. Over 90% acceptance during this first phase demonstrates our shareholders trust in the Company s business plan. SALES BY MEANS OF PAYMENT Sales by means of payment in and in can be seen in the following table: Means of Payment % Cash 27% 21% +6 p.p Credit Card 73% 79% -6 p.p *Considers the Financeira Americanas Itaú and Submarino Finance private label cards. NET WORKING CAPITAL The Cash Conversion Cycle of the Parent Company was 114 days in the 1 st quarter of 2011, representing a reduction of 12 days compared to 126 days in the 1 st quarter of days BETTER (Net Working Capital = Days of Stock + Days of Accounts Receivable Days of Suppliers) B2W, confirming its commitment to maximizing shareholder value, continues to manage working capital variables. Opportunities of improvement in internal processes and negotiation with suppliers continue being implemented and we are certain that better levels can be achieved. 7

8 EQUITY ACCOUNTING The equity accounting includes, basically, the Ingresso.com, B2W Viagens and Submarino Finance subsidiaries. In the 1 st quarter of 2011, the equity accounting was a net gain of R$ 2.8 million, compared to the gain of R$ 2.2 million in 1 st quarter of The results posted by the company s subsidiaries is gradually evolving, leading us to be optimistic about their growth prospects. INVESTMENT AND INNOVATION During, B2W invested a total of R$ 74.0 million in the Parent Company. These investments were mainly concentrated in the technological and logistical/operational fronts. Following its path of innovation, B2W continues to invest in new features aimed mainly at improving the purchase experience, increasing conversion rates and strengthening brand positioning. Over the year of 2010 we launched important tools to improve the purchase experience of the consumer, as the new Americanas.com website, which is much more modern and makes purchasing even easier; the Drag and Buy tool, which lets clients add various products to their shopping carts without changing pages and the Augmented Reality tool, a pioneering service that allows the client to virtually display works of art on the walls of their homes. Among the latest innovations, we can highlight: Product Recommendations by Submarino. Based on the client s historical site use and purchase history, Submarino recommends products of interest each time the Submarino virtual store is accessed. With this tool it is possible to focus on the consumer experience, offering products according to each client s needs and desires. Cross Sell Submarino. With this tool, upon accessing the shopping cart the client receives recommendations of products related to the selected item. This way, besides offering personalized customer service, the tool stimulates impulse purchases. Caixa Expresso of Americanas.com. The quickest way to make purchases over the Internet now is available through Brazil s largest e-commerce site. This tool shortens the distance between the client and the thousands of products offered by Americanas.com. Using the Caixa Expresso, clients register their delivery address and credit card number one time only and, after the identification process, they can conclude their orders in a single operation, making the purchase experience much quicker and easier. Android application for Submarino. Submarino s thousands of offers and products now are available through smartphones and tablets that use the Android operating system. The Submarino store is now accessible wherever a client may be, also offering a quick and practical purchase experience through Compra com 1 Click (the 1-Click Buy). iphone application for Ingresso.com. Ingresso.com created an application that makes the purchase of movie tickets even easier. Using it, clients can more comfortably check out the schedules of the major movie theater chains, purchase tickets and reserve seats directly from their iphones. 8

9 SUBSIDIARIES KEY METRICS AND HIGHLIGHTS Ingresso.com. Following its expansion plan, B2W continues increasing its presence in other countries, being already present in 286 movie theaters in Mexico, 108 in Chile and 83 in Argentina through a partnership with Cinemark. The Company continues searching for new countries to replicate its business model. In Brazil, Ingresso.com operates in about 2,000 movie theaters, maintaining a strong level of growth, boosted by the sale of tickets to blockbuster films, in theaters with reserved seating and by the growing market for 3D films. Furthermore, Ingresso.com continue investing in ticket s sale for concerts, establishing partnership to the exclusive ticket s sales for all Paul McCartney s concerts in Brazil and to be the exclusive operator of the pre-sale tickets to Rock in Rio B2W Viagens. In line with the Company s international expansion plan, in B2W Viagens started structuring the business model of online travel in Argentina. In Brazil, the travel operations continue presenting high growth rates. Moreover, we continue investing in innovation and service quality, always offering the best services through our three brands: Submarino Viagens, Americanas Viagens and Shoptime Viagens. Submarino Finance. Purchases made with the Submarino Card have been gradually rising, reaching 30% of the Submarino website s total sales at the end of. Currently, the Submarino Card has a base of more than 620,000 cards issued. 9

10 CORPORATE GOVERNANCE AND CAPITAL MARKETS B2W is subject to the listing rules of the São Paulo Stock Exchange (BM&FBOVESPA) and the Novo Mercado, the highest Corporate Governance level in Brazil. It includes an ownership structure exclusively comprised of common stock and the election of independent members to the Board of Directors. B2W s Board of Directors is comprised of seven members, four of whom are appointed by Lojas Americanas, and another three independent members. The requests to be registered as a publicly-traded company and the listing of its shares under the Novo Mercado were approved by the Brazilian Securities Exchange Commission (CVM) and the BM&FBOVESPA on July, 25 and 26, 2007, respectively. B2W s common shares are listed on the BM&FBOVESPA and have been traded under ticker symbol BTOW3 since August 8, Below is a short description of the main events of the last quarters: On January 6, 2011 a meeting of the Board of Directors was held to nominate Mr. Marcio Cruz Meirelles and Mr. Thiago Mendes Barreira to be Commercial Officers for a term of office that ends upon the holding of the General Shareholders Meeting of On January 27, 2011 a meeting of the Board of Directors was held to approve the conditions for setting up a Fundo de Investimento em Direitos Creditórios ( FIDC or credit rights investment fund) designed to acquire credit rights belonging to the Company and others, pursuant to the Regulations, originated through credit cards used in product purchase and sales operations carried out by the Company. On March 22, 2011 a meeting of the Board of Directors was held to elect Mr. François Pierre Bloquiau as Investor Relations Officer and Mr. Murilo Corrêa to be Chief Financial Officer in substitution of Mr. José Timotheo de Barros who was elected to the position of Chief Operating Officer, for mandates that shall expire as of the holding of the General Shareholders Meeting in On March 23, 2011 a meeting of the Board of Directors was held to approve an increase in the capital stock of the Company within authorized limits, pursuant to the terms of Article 5, 2, and the Company s Bylaws, by R$ 1,000,000,021.40, through the issuance in private subscription of 46,253,470 in new common shares, all nominal, registered and with no par value, at an issue price of R$ per share. On April 30, 2011 the Company s General and Extraordinary Shareholders Meetings were held, at which the following resolutions were approved: 1- To take recognizance of the accounts prepared by the managers and related financial statements for the fiscal year ended December 31, Allocation of the net income reported for the fiscal year ended December 31, Proposal for the adoption of the Capital Budget for the fiscal year of Election of Mssrs. Miguel Gomes Pereira Sarmiento Gutierrez, Celso Alves Ferreira Louro, Jorge Felipe Lemann and Osmair Antônio Luminatti as members of the Board of Directors and Mssrs. Carlos Eduardo Rugani Barcellos, Luiz Carlos Di Sessa Filippetti and Mauro Muratório Not as independent members of the Board of Directors. 5- Installation of the Fiscal Council and the election of Mssrs. Carlos Alberto de Souza, Pedro Carvalho de Mello and Peter Edward Cortes Marsden Wilson as full members and Mssrs. Ricardo Scalzo, Márcio Luciano Mancini and Marcos Duarte Santos as alternate members. Minutes of the last meetings and other financial or corporate information about B2W are available on our website ( 10

11 EXHIBIT I CONSOLIDATED INCOME STATEMENT B2W - Companhia Global do Varejo Consolidated Income Statements Period ended on March 31 (in million of Brazilian reais, except earnings per share) Delta Gross Sales and Services Revenues 1, , % PV adjustment on sales (42.8) (34.2) 25.1% Taxes, returns and discounts on sales and services (119.5) (107.9) 10.8% PV adjustments on taxes % Net Sales and Services Revenues 1, % Cost of goods and services sold (755.6) (669.4) 12.9% PV adjustments on inventories % Gross Profit % Gross Margin (% NR) 28.7% 28.3% 0.4 p.p. Operating Revenues (Expenses) (199.8) (167.1) 19.6% Selling Expenses (166.6) (139.0) 19.9% General and Administrative Expenses (13.1) (16.2) -19.1% Expenses with stock options plan (SOP) (0.8) (0.4) 100.0% Depreciation and amortization (19.3) (11.5) 67.8% Operating Income before Financial Expenses and Equity Accounting % Net Financial Result (78.7) (62.3) 26.3% Reversion of PV adjust. on sales and taxes % Reversion of PV adjust. on suppliers (22.2) (14.2) 56.3% Other operational income (expenses) (19.1) (6.8) 180.9% Income tax and social contribution (0.7) (9.0) -92.2% Fiscal effects by Law 11, % Net Income (1.6) % Net Margin (% NR) -0.2% 1.5% -1.7 p.p. EBITDA % EBITDA Margin (% NR) 11.1% 11.3% -0.2 p.p. Total shares (thousand) 113, ,535 Treasury shares (thousand) 3,280 3,341 Total outstanding shares (thousand) 110, ,194 Net Income per Outstanding Share (R$) * In the the old accounting rules, considered as "non-operating income". ( ) % 11

12 EXHIBIT II PARENT COMPANY INCOME STATEMENT B2W - Companhia Global do Varejo Parent Company Income Statements Period ended on March 31 (in million of Brazilian reais, except earnings per share) Delta Gross Sales and Services Revenues 1, % PV adjustment on sales (42.8) (34.2) 25.1% Taxes, returns and discounts on sales and services (100.0) (94.0) 6.4% PV adjustments on taxes % Net Sales and Services Revenues % Cost of goods and services sold (721.2) (645.4) 11.7% PV adjustments on inventories % Gross Profit % Gross Margin (% NR) 26.7% 26.0% 0.7 p.p. Operating Revenues (Expenses) (181.0) (142.7) 26.8% Selling Expenses (150.5) (115.0) 30.9% General and Administrative Expenses (8.3) (12.6) -34.1% Expenses with stock options plan (SOP) (0.8) (0.4) 100.0% Depreciation and amortization (21.4) (14.7) 45.6% Operating Income before Financial Expenses and Equity Accounting % Net Financial Result (70.1) (58.4) 20.0% Reversion of PV adjust. on sales and taxes % Reversion of PV adjust. on suppliers (22.2) (14.2) 56.3% Equity accounting % Other operational income (expenses) (14.6) (6.8) 114.7% Income tax and social contribution 2.0 (5.0) % Fiscal effects by Law 11, % Net Income (4.3) % Net Margin (% NR) -0.5% 1.3% -1.8 p.p. EBITDA % EBITDA Margin (% NR) 10.0% 11.0% -1.0 p.p. Total shares (thousand) 113, ,535 Treasury shares (thousand) 3,280 3,341 Total outstanding shares (thousand) 110, ,194 Net Income per Outstanding Share (R$) * In the the old accounting rules, considered as "non-operating income". ( ) % O S 12

13 EXHIBIT III BALANCE SHEET B2W - Companhia Global do Varejo Balance Sheet (in million of Brazilian reais) ASSETS CURRENT ASSETS Parent Company Consolidated 3/31/2011 3/31/2010 3/31/2011 3/31/2010 Cash and Banks Marketable Receivables Accounts receivable Inventories Recoverable taxes Prepaid expenses and other accounts Total Current Assets 1, , , ,456.0 NON CURRENT ASSETS Marketable Receivables Deferred income tax and social contribution Escrow deposits and other receivables Investments Plant, property and equipament Intangible assets Deferred assets Total Non-Current Assets 1, TOTAL ASSETS 2, , , ,128.0 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Suppliers Loans and financing Debentures Salaries and social contribution Taxes payable Dividends payable Other accounts payable Total Current Liabilities 1, , NON-CURRENT LIABILITIES Long-term liabilities: Loans and financing , Debentures Recoverable taxes Provision for contingencies and other accounts payable Total Non-Current Liabilities 1, , , ,098.1 SHAREHOLDERS' EQUITY Capital Capital Reserves Equity valuation adjustments Income reserves and others Total Shareholders' Equity TOTAL LIABILITIES AND SHAREHOLDERS EQUITY 2, , , ,

14 EXHIBIT IV ANNUAL CASH FLOW STATEMENT B2W - Companhia Global do Varejo Cash Flow Statement (in million of reais) Parent Company Consolidated Operating Activities Delta Delta Net Income (4.3) 11.3 (15.6) (1.6) 14.0 (15.6) Adjust for non cash and non operating items: Depreciation and amortization Deferred income tax and social contribution (3.7) 3.6 (7.3) (4.0) 4.5 (8.5) Interest, monetary and currency changes (12.1) (13.7) Equity result in subsidiaries (2.8) (2.2) (0.6) Others Adjusted Net Income (Cash Earnings) (27.0) (29.4) Change in Working Capital: Accounts receivable (31.8) (130.9) 35.1 (166.0) Inventory (52.5) (44.2) Suppliers (134.5) (233.7) 99.2 (139.9) (227.9) 88.0 Change in Working Capital: (98.1) (113.0) 14.9 (237.7) (115.5) (122.2) Change in Assets: Prepaid expenses (2.6) (0.7) (1.9) (2.3) (0.7) (1.6) Escrow deposits (0.3) (0.3) - (6.6) (0.3) (6.3) Other current assets (4.1) (2.5) 5.7 (8.2) Other accounts receivable (current and non-current) (18.6) (2.1) (16.5) (13.5) 1.6 (15.1) Change in assets: (21.4) 1.1 (22.5) (24.9) 6.3 (31.2) Change in Liabilities Salaries and social charges security (0.2) 0.2 (0.4) Taxes recevable - (3.5) 3.5 (2.3) (7.0) 4.7 Other liabilities (current and non-current) (0.2) (7.8) 7.6 (1.9) (8.6) 6.7 Change in liabilities: (0.4) (11.1) 10.7 (3.7) (15.2) 11.5 Cash flow from operating activities (66.8) (42.9) (23.9) (206.1) (34.8) (171.3) Investing Activities Purchases of property, plant and equipment and intangible assets (78.7) (39.6) (39.1) (84.0) (42.8) (41.2) Cash Flow from investing activities (78.7) (39.6) (39.1) (84.0) (42.8) (41.2) Financing Activities Additions (49.7) Payments (38.5) (20.6) (17.9) (72.9) (24.6) (48.3) Debentures (22.6) (19.2) (3.4) (22.6) (19.2) (3.4) Marketable securities (78.1) (160.1) Discount of receivables 74.2 (184.0) (190.3) Cash Flow from financing activities Change in cash balance (3.0) (48.9) 45.9 (7.2) (46.5) 39.3 Beginning Cash Balance Ending Cash Balance

15 INFORMATION ABOUT THE WEBCAST AND THE CONFERENCE CALL Conference calls with simultaneous translation into English, followed by a bilingual Q&A session will be held as follows: EBITDA Earnings before interest, taxes, depreciation and amortization and excluding other operating revenues/expenses is presented as additional information because we believe it represents an important indicator of our operating performance, as well as being useful for the purpose of comparison of our performance with that of other retail sector companies. However, no number should be considered by itself as a substitute for net income calculated according to Brazilian Corporate Law and the rules of the Brazilian Securities Exchange Commission (CVM) or, furthermore, as a measure of the profitability of the Company. Moreover, our calculations may not be compatible with similar measures adopted by other companies. We make forward-looking statements that are subject to risks and uncertainties. These statements are based on the beliefs and assumptions of our management, and on information currently available to us. Forward-looking statements include statements regarding our intent, belief or current expectations or that of our directors or executive officers. Forward-looking statements also include information concerning our possible or assumed future results of operations, as well as statements preceded by, followed by, or that include the words ''believes,'' ''may,'' ''will,'' ''continues,'' ''expects,'' ''anticipates,'' ''intends,'' ''plans,'' ''estimates'' or similar expressions. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions because they relate to future events and therefore depend on circumstances that may or may not occur. Our future results and shareholder values may differ materially from those expressed in or suggested by these forward-looking statements. Many of the factors that will determine these results and values are beyond B2W ability to control or predict. The operational information presented in this press release were not revised by the independent auditors. MSCI Brand logo: The use of Morgan Stanley Capital International Inc. registered trademarks and indices ("MSCI") does not constitute any type of sponsorship, endorsement or promotion on the part of MSCI, its affiliates, its suppliers or other parties involved or related in the compilation, computation or creation of any MSCI index. MSCI s indices are registered trademarks of MSCI or its affiliates and B2W Companhia Global do Varejo. has been granted a license to use these trademarks for given purposes. 15