Highlights of the Period

Transcription

1 B2W REPORTS A 39% GROWTH IN GROSS REVENUE, 50% IN EBITDA AND AN IMPROVEMENT OF 32 DAYS ON THE CASH CONVERSION CYCLE IN 1Q08. Rio de Janeiro, May 08, 2008 B2W Companhia Global do Varejo (BOVESPA: BTOW3), a company formed from the merger between Americanas.com and Submarino, announces today its results for the 1st quarter of B2W - Companhia Global do Varejo was formed in December of 2006, from the merger of Americanas.com and Submarino. On November 7, 2007, the merger was approved without restrictions by the Administrative Council for Economic Defense (in Portuguese, CADE), ratifying the opinions of the the Secretariat of Economic Law (in Portuguese, SDE) and the Secretariat for Economy Monitoring (in Portuguese, SEAE). The financial statements were prepared and are presented in accordance with the norms issued by the Securities Exchange Commission (known locally as CVM), including the instruction CVM 469/08, as well as the Novo Mercado listing rules. Except when otherwise specified, the analyses refer to the Parent Company (Americanas.com, Submarino and Shoptime). B2W s portfolio is comprised of the brands Americanas.com, Shoptime, Submarino, Blockbuster Online, Ingresso.com, Submarino Finance and B2W Viagens, offering over 30 product categories and services through the Internet, telesales, catalogues, TV and kiosks. FINANCIAL HIGHLIGHTS Results of the 1Q08 Gross Revenues (R$million) 39% 1, Q07 1Q08 EBITDA (R$million & % Net Revenue) 13.9% % 67 1Q07 1Q08 Cash Conversion Cycle (in days) -32 days Highlights of the Period Gross revenue: Growth of 39% in 1Q08 In 1Q08, gross revenue hit R$1,029 MM, representing a growth of 39% in relation to 1Q07. Gross Profit: Growth of 37% in 1Q08 Gross Profit soared from R$159 MM in 1Q07 to R$218 MM in 1Q08, representing a growth of 37% and reaching Gross Margin of 30.3%. Operating Expenses: Drop of 140 bps in 1Q % of net revenue, down 140 bps in 1Q08 compared with 1Q07. EBITDA: Growth of 50% EBITDA reached R$100 MM in 1Q08, up 50% in relation to the same period of the previous year. EBITDA Margin: Increase of 100 bps 13.9% of net revenue, growth of 100 bps in 1Q08 compared to same period in Cash Conversion Cycle: Improvement of 32 days In 1Q08, B2W's cash conversion cycle was 90 days against 122 days in the same period of the preceding year. 1Q08 Consolidated Results Gross Revenue growth of 39% (R$1,067 MM); EBITDA of R$104 MM, growth of 53%; EBITDA Margin of 13.9%, up 120 bps. Submarino Finance: More than 250 thousand cards issued Submarino Card surpassed the milestone of 13% in sales in Submarino website in March. 1Q07 1 1Q08 B2W Viagens: Growth of 155% in 1Q08 In 1Q08, Gross Bookings hit R$38.8 MM, representing a growth of 155% in relation to 1Q07. 1

2 GENERAL CONSIDERATIONS B2W - Companhia Global do Varejo was formed in December of 2006, from the merger of Americanas.com and Submarino. On November 7, 2007, the merger was approved without restrictions by the Administrative Council for Economic Defense (in Portuguese, CADE), ratifying the opinions of the the Secretariat of Economic Law (in Portuguese, SDE) and the Secretariat for Economy Monitoring (in Portuguese, SEAE). The financial statements were prepared and are presented in accordance with the norms issued by the Securities Exchange Commission (known locally as CVM), including the instruction CVM 469/08, as well as the Novo Mercado listing rules. Except when otherwise specified, the analyses refer to the Parent Company (Americanas.com, Submarino and Shoptime). HIGHLIGHTS OF THE 1 ST QUARTER OF % growth in Gross Revenue. Gross revenue was R$1,029 million in the 1 st quarter of 2008 registering a growth of 39% when compared to the same period of the previous year. According to Forrester Research, an international consulting firm specialized in preparing e-commerce studies and projections, a market growth of 37% is expected for The boost in sales stemmed from an increasing number of new customers, an increase in the frequency of purchases and active client base, as well as a gradual increase in the average ticket. Growth of 37% in Gross Profit. Gross profit in the 1 st quarter of 2008 was R$218 million, generating a gross margin of 30.3% of net revenue, compared to the gross profit of R$159 million and gross margin of 30.7% in the 1 st quarter of The reduction in gross margin is the result of a change in product mix. Drop of 140 Basis Points in Operating Expenses. Operating expenses in the 1st quarter of 2008 were R$118 million, representing 16.4% of net revenue compared to operating expenses of R$92 million, or 17.8% of net revenue in the 1 st quarter of The reduction in SG&A in the period can be explained by the operating leverage, given that part of these expenses are fixed, as well as by the continuous capture of synergies related to the merger of Americanas.com and Submarino. Growth of 50% in EBITDA 1 and 100 Basis Points of EBITDA Margin. As a result of the growth in revenue, the optimization of the cost and expense structure, as well as the synergies related to the merger, EBITDA reached R$100 million in the 1 st quarter of 2008, up 50% in relation to the same period of The EBITDA margin rose from 12.9% in the 1 st quarter of 2007 to 13.9% in the same period of 2008, representing an increase of 100 basis points. Improvement of 32 days in the Cash Conversion Cycle. The cash conversion cycle was 90 days in the 1 st quarter of 2008, representing an improvement of 32 days when compared with the 122 days posted in the 1 st quarter of During the integration process, working capital optimization opportunities were identified and a team was created to lead this process. During this period, opportunities for improvements in internal processes and in the relationship with suppliers have been identified continuously as demonstrated in the evolution of the cash conversion cycle and we are certain that it will continue improving. New Distribution Center. The construction of the new Distribution Center, which will be leased to B2W, continues in motion, with a forecast to open in the 2 nd half of The union of the Distribution Centers will maximize operating efficiency, besides enabling the optimization of the inventory, which will improve working capital needs. 2

3 Ongoing Synergy-Capturing Process. A little more than one year after the merger of Americanas.com and Submarino, the process for identifying, mapping and implementing synergies is in an advanced stage and the capture of concrete gains continues to boost B2W s results as shown in the evolution of EBITDA margin and in the cash conversion cycle. Submarino Card. The amount of cards issued has passed the mark of 250 thousand cards in the end of the 1 st quarter of Purchases made with the Submarino Card have surpassed the milestone of 13% in total sales of the Submarino website in March This share increase confirms the appeal of the Card, which offers to its holders special discounts, purchase payments in up to 24 installments with interest and an exclusive Loyalty Program, called Submarine Leagues. For B2W, the card means an opportunity to leverage sales, particularly of big ticket items, reduce expenses related to credit card fees and discount of receivables, as well as profit from the consumer credit business. B2W Viagens. The gross bookings in the 1 st quarter of 2008 totaled R$38.8 million, up 155% in relation to the same period of EBITDA margin in the period reached 22.6% of net revenue, versus a negative margin of 3.6% in the same period of previous year. PERFORMANCE COMMENTS GROSS REVENUE [+39% in 1Q08] Gross revenue in the 1 st quarter of 2008 totaled R$1,029 million, up 39% in relation with the same period of 2007, when sales amounted to R$740 million. The sales volume was almost the same as that in the 4 th quarter of 2007, period in which the retail market registers a peak in sales due to Christmas and Children s Day. According to Forrester Research, an international consulting firm specialized in preparing e-commerce studies and projections, a market growth of 37% is expected for The boost in sales stemmed from an increasing number of new customers, an increase in the frequency of purchases and active client base, as well as a gradual increase in the average ticket. 39% 1,093 1, , Q07 1Q08 1Q07 2Q07 3Q07 4Q07 1Q08 Gross Revenue 3

4 GROSS PROFIT [+37% in 1Q08] Gross profit in the 1 st quarter of 2008 amounted to R$218 million (30.3% of net revenue) against the R$159 million (30.7% of net revenue) posted in the same period of the previous year, representing a 37% growth. The gross margin was 40 basis points lower than in the 1 st quarter of 2007, but grew 30 basis points in relation to the 4 th quarter of It is worth pointing out that this variation in gross margin is a result of the changes in product mix. 37% 30.7% 30.1% 29.9% 30.0% 30.3% Q07 1Q08 1Q07 2Q07 3Q07 4Q07 1Q08 Gross Profit (R$ MM) Gross Margin (% NR) OPERATING EXPENSES [Drop of 140 bps in 1Q08] Selling, general and administrative (SG&A) expenses reached R$117.9 million in the 1 st quarter of 2008 representing 16.4% of net revenue. When compared to the same period of the preceding year, the efficiency gain reached 140 basis points. The drop in operating expenses recorded in the period reflects the operating leverage and the continuous capture of synergies resulting from the merger of Americanas.com and Submarino, besides our culture to always strive for more and reach new levels of results. 17.8% -140 bps % Q07 1Q08 R$ MM % NR 4

5 EBITDA and EBITDA MARGIN [+50% and +100 bps in 1Q08] As a result of the growth in revenue, the optimization of the cost and expense structure, as well as the synergies related to the merger, EBITDA amounted to R$100 million in the 1 st quarter of 2008, representing a 50% growth over the same period of The EBITDA margin in the 1 st quarter of 2008 reached 13.9% of net revenue, up 100 basis points from the 12.9% recorded in the same period of EBITDA is based on the company s operating result before financial result and it excludes depreciation, amortization and non-recurring expenses bps 13,9% 12,9% 100,0 66,6 1Q07 1Q08 EBITDA (R$ MM) EBITDA Margin (%) The steady evolution of EBITDA margin ratifies the company s strategy to convert its competitive advantages identified through the growth in sales associated to high operating efficiency standards. FINANCIAL RESULT In the 1 st quarter of 2008, net financial expenses reached R$51.3 million (7.1% of net revenue), compared to a net financial expense of R$33.7 million posted in the same period of 2007 (6.5% of net revenue). The capital reduction of R$441 million on January 30, 2007 distorts the base of comparison with the 1 st quarter of If the capital reduction had occurred on January 1, 2007, the net financial expense in the 1 st quarter of 2007 would be R$37.8 MM (7.3% of net revenue) and, therefore, would register an efficiency gain of 20 bps. Its worthwhile pointing out that during the past 12 months, B2W repurchased R$152.3 million of its own shares, and even with this impact, the financial result would have registered an efficiency gain in relation to the 1 st quarter of EQUITY RESULT [Positive contribution of R$63 thousand in 1Q08] The equity result includes, basically, the subsidiaries Ingresso.com, B2W Viagens and Submarino Finance. In the 1 st quarter of 2008, the equity result reported a net gain of R$63 thousand, despite the impact of Submarino Finance operations, which are still in the investment stage. The results posted by the company s subsidiaries are exceeding our expectations and making us very optimistic regarding their growth outlook. NON OPERATING (EXPENSE) REVENUE Non-operating expenses of R$10.4 million posted in the 1 st quarter of 2008 refer mainly to the amortization of goodwill (non cash item) on investments and expenses related to company restructuring after the merger. 5

6 NET INCOME Net income in the 1 st quarter of 2008 totaled R$15.0 million (2.1% of net revenue) compared with the R$12.6 million (2.4% of net revenue) posted in the same period of If the goodwill in the 1 st quarter of 2008 and 2007 and the non-cash tax effects of accumulated losses of Shoptime before the acquisition were not considered, net income in the 1 st quarter of 2008 would have been R$23.4 million, 64% higher than the adjusted net income of R$14.3 million obtained in the 1 st quarter of Adjusted Net Income 1Q08 1Q07 Delta Net Income 14,962 12,639 18% Adjusting for Goodwill Amortization (non-cash) 6,405 2,205 Adjusting for Tax benefit 2,073 (560) Adjusted Net Income 23,440 14,284 64% Besides that, not considering the repurchase of shares of the last 12 months, and considering the capital reduction of R$441 million occurring on January 1, 2007 (instead of January 31, 2007), the net income of the 1 st quarter of 2008 would have been, even higher, at R$32.4 million (4.5% of net revenues), compared with R$11.1 million in the 1 st quarter of 2007 (2.1% of net revenues), representing a gain of 240 bps. REPURCHASE OF SHARES [B2W repurchased R$52.7 MM in 1Q08] On May 25, 2007, the Board of Directors approved a program for the repurchase of shares of its own issuance with the purpose of maintaining them in the treasury or subsequent cancellation. The program predicts the repurchase of up to the limit of 5,297,897 shares, which corresponded to 10% of the outstanding shares in the market at the approval date. In the 1 st quarter of 2008, the company repurchased shares amounting R$52.7 million. In the total of the past 12 months, the company repurchased shares amounting R$152.3 million. SHAREHOLDER VALUE CREATION B2W and its subsidiaries has as priority the maximization of shareholder s return. Therefore the company uses EVA (Economic Value Added) as a tool on the decision making process. Based on this methodology we have adopted practices that allow a combination of the ideal capital structure (use of debt and optimization of shareholders capital invested in the operation for the reduction of the weighted average capital cost WACC) with a consistent improvement in operating margins and working capital management, with the objective of maximizing the return on invested capital. Therefore B2W has been showing sound evolutions in the operating variables, as presented on the graphs below: 13,9% 14,6% 15,4% ,9% 11,3% 13,4% 12,0% 12,6% 13,2% Q 2Q 3Q 4Q EBITDA Margin (% NR) 1Q07 2Q07 3Q07 4Q07 1Q08 Cash Conversion Cycle (in days) 6

7 Besides that, since its constitution, B2W searches the optimal capital structure through the repurchase of shares of its own issuance, distribution of dividends and capital reduction. Throughout this period R$152.3 million were repurchased and R$500 million in dividends and capital reduction were paid Dividends and capital Reduction Repurchase of Shares As a result, B2W ended the 1 st quarter in 2008 with net debt of R$21 million, a change of R$159.6 million when compared with the net cash registered on March 31, We continue with a conservative capital structure (net debt / EBITDA LTM of 0.1) and as previously discussed the change in our capital structure is part of our strategy to aggregate value to our shareholders, boosting the company s growth through use of debt. Indebtness (R$ thousand) 3/31/2008 3/31/2007 Short Term Debt 763, ,822 Long Term Debt 147, ,791 Total Debt (1) 910, ,613 Cash and Equivalents 680, ,360 Account Receivables 208, ,849 Total Cash (2) 889, ,209 Net Cash (Debt) (2) - (1) (21,028) 138,596 Accounts receivables from clients are basically comprised of credit card receivables (excluding the discount of receivables) that have liquidity. It is worth to point out that the risk for delinquency in accounts receivable for credit cards is exclusively that of the card issuing bank and therefore is risk free for B2W. 7

8 WORKING CAPITAL [Improvement of 32 days in Cash Conversion Cycle in 1Q08] B2W, ratifying its commitment to maximize value to its shareholders, continues evolving in the management of working capital variables, reaching an improvement of 32 days in the cash conversion cycle of the 1 st quarter of 2008 compared to the 1 st quarter of During the integration process, working capital optimization opportunities were identified and a team was created to lead this process. During this period, opportunities for improvements in internal processes and in the relationship with suppliers have been identified continuously, as demonstrated in the evolution of the cash conversion cycle and we are certain that it will continue improving, as can be confirmed in the graph of cash conversion cycle below: days Q 2Q 3Q 4Q Despite the 39% growth in gross sales and 50% in EBITDA in 1Q08, the net working capital used in our operation grew only 17% in the same period. This shows an efficiency gain in the use of capital. The opportunities to improve, which have already been identified and are still in the process of implementation, naturally encourage and give us the certainty that we can reach even higher levels. The graph below shows the evolution of working capital, in days, detailed by variable: Q07 2Q07 3Q07 4Q07 1Q08 Processing Period (Inv) Payment Period (A/P) Credit Card Collection Period 8

9 The inventory processing period reached a level of 44 days in the 1 st quarter of 2008, which represents a significant gain of 12 days when compared with the same period of the previous year. The improvements obtained are the result of actions such as: Alignment of the working capital outlook with the commercial area Development of automated in-house processes to better manage items Creation of promotional hotsites in partnership with suppliers to boost the performance of items with low turnover rates The payable payment period increased by 11 days in relation to the 1 st quarter of 2007 reaching 86 days. Some of the actions that contributed towards these results are highlighted below: Alignment of the commercial strategies among the brands Improvement of purchase management processes and distribution centers The credit-card receivable collection period, excluding the effect of receivable discounts, reached a level of 132 days in the 1 st quarter of 2008, representing an efficiency of 9 days in relation to the 1 st quarter of The main measures that contributed towards this improvement were: Constant monitoring of the competition Intelligent use of the installment tool Improvement in the sales process The table shows a summary of the working capital in the first quarters of 2008 and 2007, in R$and days: Working Capital 3/31/2008 3/31/2007 Inventories (in R$) 242, ,556 Inventories Processing Period (in Days) Payables (in R$) 476, ,560 Payable Payment Period (in Days) Gross Receivables from Credit-Card (in R$) 1,350,357 1,033,114 Net Receivables from Credit-Card (in R$) 81,617 93,076 Receivable Discounts (in R$) 1,268, ,038 Credit-Card Receivables Collection Period (in Days) Net Working Capital (in R$) 1,115, ,110 Cash Conversion Cycle (in Days) The formulas for calculation of the Cash Conversion Cycle are shown below: Inventory Processing Period: [ 90 / (CMV in past 3 months / Inventory balance) ]; Payable Payment Period: [ 90 / (CMV in past 3 months / Suppliers balance) ]; Credit-Card A/R Collection Period: [360 / (Gross revenue in past 12 months / Gross Receivable from Credit Cards)] 9

10 SUBSIDIARIES KEY METRICS AND HIGHLIGHTS Ingresso.com 1Q08 1Q07 % Tickets Sold 310, ,105 31% Gross Revenues 1,524 1,433 6% EBITDA (R$ thousand) % EBITDA (% N.R.) 43.8% 42.6% 111 bps B2W Viagens 1Q08 1Q07 % Gross Bookings(R$ mil) 38,816 15, % Gross Revenues (R$ mil) 5,384 2, % EBITDA (R$ thousand) 1,149 (75) EBITDA (% N.R.) 22.6% -3.6% 2,627 bps Submarino Finance 1Q08 1Q07 % Gross Revenues (R$ thousand) 44,214 11, % EBITDA (R$ thousand) (1,238) (3,427) -64% Number of Cards Issued 47,346 35,502 33% Ingresso.com In the 1 st quarter of 2008, Ingresso.com registered a growth of 31% in the amount of movie tickets sold and 6% in gross revenue against the same period of the previous year. The EBITDA margin hit 43.8% of net revenue versus 42.6% in the previous year, representing an increase of 111 basis points. Another highlight of 1Q08 is the startup of sales for soccer game tickets at the Beira Rio stadium owned by the Internacional Club of Rio Grande do Sul state through the following channels: site, television sales and kiosks. B2W Viagens. The gross bookings in the 1 st quarter of 2008 totaled R$38.8 million, up 155% in relation to the same period of EBITDA margin in the period reached 22.6% of net revenue, versus a negative margin of 3.6% in the previous year. Submarino Card. Submarino Finance surpassed the mark of 250 thousand cards issued at the end of the 1 st quarter of The company continues investing in the expansion of the customer base through an aggressive marketing campaign through both (i) its rewards program, which grants to card users Submarine Leagues that can be exchanged for products, and (ii) the Super Power Program, which offers special discounts for products under the main categories of the site. In March 2008, we reached a 13% sales share at the Submarino site versus 3.5% in the same month of

11 COMMENTS ON CONSOLIDATED PERFORMANCE Consolidated Result (R$ thousand) Parent Company Consolidated 1Q08 1Q07 Delta 1Q08 1Q07 Delta Gross Revenue 1,029, ,384 39% 1,066, ,887 39% EBITDA 100,007 66,589 50% 103,950 67,848 53% EBITDA Margin 13.9% 12.9% +1.0 p.p. 13.9% 12.7% +1.2 p.p. GROSS REVENUE [39.4% Growth in Consolidated Result vs 39.0% in Parent Company] In 1Q08, gross revenue in the consolidated result hit R$1,067 million, representing a growth of 39.4% in relation to the same period of This boost in growth reflects the accelerated pace of our subsidiaries, which make us very optimistic in relation to the future results. EBITDA [53.2% Growth in Consolidated Result vs 50.2% in Parent Company] In 1Q08, EBITDA in the consolidated result hit R$104.0 million, representing a growth of 53.2% in relation to 1Q07. EBITDA in the consolidated result stood at R$3.9 million above the EBITDA of the parent company. This result shows that our subsidiaries contribute to the cash generation of the Company, despite Submarino Finance still being in the investment stage. EBITDA MARGIN [Growth of 120 bps reaching 13.9% in the Consolidated Result] In 1Q08, the EBITDA Margin for the consolidated result reached 13.9%, up 120 basis points in the comparison with the previous year, 20 basis points over that obtained by the parent company. It is worth pointing out the Submarino Finance does not yet contribute positively to the EBITDA of the company, therefore, showing the potential future generation of value from subsidiaries to the consolidated result. 11

12 SYNERGIES LEVERS IMPLEMENTATION PROCESS AT ACCELERATED PACE The process of identification, mapping and implementation of the synergies is continuous and the capture of concrete gains, as occurred in 2007, continues to positively impact B2W s results in the 1 st quarter of During the past months, the multi-disciplinary working group appointed to be part of the integration team has attempted to improve the efficiency standards and benchmarks. So far, they have identified many operating and financial levers, which when used, will improve the company s efficiency and constantly enhance the services provided to our customers. The lever implementation process, as well as the attainment of efficiency gains, is a working process which will extend over the next few months. Among the implemented synergies it is worth mentioning (i) the call center and customer service center unification, (ii) back-office systems integration and (iii) standardization of the administrative and operational processes. CORPORATE GOVERNANCE AND CAPITAL MARKETS B2W is subject to the listing rules of Novo Mercado, the highest Corporate Governance level of the Sao Paulo Stock Exchange. The latter includes an ownership structure exclusively comprised of common shares and the election of independent members to the Board of Directors. B2W s Board of Directors is comprised of nine members, five of whom are appointed by Lojas Americanas and four are independent members. Lojas Americanas and B2W have entered into a Voting and Assumption of Debt Agreement, which rules corporate governance and stock ownership matters. For a 4-year period as of December 13, 2006, Lojas Americanas is forbidden from acquiring additional shares of B2W in excess of 10% of the free float, without the prior approval of the majority of the independent members of the Board of Directors. Additionally, Lojas Americanas is not allowed to sell its B2W s shares for 2 years as of the same date. The request to be registered as a publicly-traded company and the listing of its shares under the highest corporate governance level, Novo Mercado, were approved by the Brazilian Securities and Exchange Commission (CVM) and the São Paulo Exchange (Bovespa) on July, 25 and 26, 2007, respectively. B2W shares are listed on the São Paulo Exchange (Bovespa) and have been traded under ticker BTOW3 (common shares) since August 8,

13 EXHIBIT I QUARTERLY INCOME STATEMENT B2W Income Statement In thousand of Reais Parent Company Period ended in March 31 Consolidated Period ended in March 31 1Q08 1Q07 Delta 1Q08 1Q07 Delta Gross Revenues % ,4% Taxes, returns and rebates ( ) ( ) 39% ( ) ( ) 39% Net Revenues % % Cost of goods sold ( ) ( ) 40% ( ) ( ) 40% Gross Profit % % Gross margin (% n.s.) 30,3% 30,7% -0,4 p.p. 30,6% 30,9% -0,3 p.p. Operational expenses ( ) (98.486) 36% ( ) ( ) 38% Selling ( ) (79.065) 32% ( ) (83.434) 33% General and administrative expenses (13.446) (12.967) 4% (14.409) (14.352) 0% Depreciation and amortization (15.811) (6.454) 145% (22.754) (9.290) 145% Operating profit before net financial results % % Operational margin (% n.s.) 11,7% 11,6% +0,1 p.p. 10,9% 10,9% -0,1 p.p. Net financial result (51.272) (33.679) 52% (53.945) (35.859) 50% Equity result in subsidiaries 63 (1.461) Non-operating expenses, net (10.350) (3.874) 167% (3.945) (1.530) 158% Income tax and social contribution (7.675) (8.484) -10% (8.344) (8.530) -2% Net Income % % EBITDA % % EBITDA margin (% n.s.) 13,9% 12,9% +1,0 p.p. 13,9% 12,7% +1,2 p.p. Total Shares (thousand) Treasury Shares (thousandl) Free Float (thousand) Earnings per Share (R$) 0,1345 0, % 13

14 EXHIBIT II BALANCE SHEETS B2W - Companhia Global do Varejo Balance Sheet In thousand of Reais Parent Company Consolidated ASSETS 3/31/ /31/2007 3/31/ /31/2007 CURRENT ASSETS Cash and equivalents 680, , , ,219 Accounts receivables 208, , , ,872 Inventories 242, , , ,637 Recoverable taxes 16,295 2,344 17,631 2,659 Deferred tax income and social contribution 27,504 24,533 27,504 24,533 Prepaid expenses and others 188, , , ,443 Total Current Assets 1,363,892 1,252,229 1,462,716 1,389,363 NON-CURRENT ASSETS Long-term assets Deferred tax income and social contribution 32,746 35,513 34,716 37,326 Escrow deposits 3,692 2,719 3,693 2,719 Other receivables 97-1,621 1,585 Investments 16,082 14, Property and Equipment 43,932 40,212 44,819 41,142 Intangible Asset 255, , , ,834 Deferred charges 82,710 85,392 84,140 86,320 Total Non-Current Assets 435, , , ,926 TOTAL ASSETS 1,799,062 1,676,954 1,892,189 1,810,289 LIABILITIES AND SHAREHOLDERS EQUITY 3/31/ /31/2007 3/31/ /31/2007 CURRENT LIABILITIES Suppliers 476, , , ,021 Loans and financing 763, , , ,955 Salaries and social charges security 4,611 11,819 8,909 15,024 Taxes payable 26,722 32,716 28,765 33,402 Advances from customers - 2,833-3,712 Dividends proposed 14,774 14,774 14,774 14,774 Other accounts payable 64,709 92,255 73,026 94,743 Total current liabilities 1,351,055 1,233,941 1,444,182 1,365,631 NON-CURRENT LIABILITIES Long-term liabilities Loans and financing 147, , , ,573 Related parties 538 7, ,583 Provisions for contingencies 2,680 1,880 2,680 1,880 Other accounts payable 12,651 3,457 12,651 5,102 Total Non-Current Liabilities 163, , , ,138 SHAREHOLDERS' EQUITY Capital 174, , , ,767 Capital Reserve 200, , , ,000 (-) Treasury stock (152,341) (99,677) (152,341) (99,677) Income Reserve 47,430 47,430 47,430 47,430 Accumulated profit (loss) 14,962-14,962 - Total Shareholders'equity 284, , , ,520 TOTAL LIABILITIES AND SHAREHOLDERS EQUITY 1,799,062 1,676,954 1,892,189 1,810,289 14

15 EXHIBIT III CASH FLOW STATEMENT B2W - Companhia Global do Varejo Cash Flow Statement Thousand of reais Operating Activities Parent Compnay 3/31/2008 Consolidated 3/31/2008 Net Income Adjust for non cash and non operating items: Depreciation and Amortization Deferred income tax and social contribution Interest, monetary and currency changes Equity result in subsidiaries (63) - Others Adjusted Net Income Change in Working Capital Account Receivable Inventory Suppliers ( ) ( ) Change in Working Capital: ( ) (74.749) Change in Assets: Prepaid Expenses Other current assets (974) (974) Other accounts receivable (current and non-current) (54.339) (55.590) Change in assets: (53.465) (54.715) Change in Liabilities Salaries and social charges security (7.208) (6.115) Other liabilities (current and non-current) (34.225) (29.560) Change in liabilities: (41.433) (35.675) Cash flow from operating activities ( ) (78.131) Investing Activities Cash Flow from investing activities (34.251) (32.902) Financing Activities Share repurchase (52.664) (52.664) Net Loans and financing Discount of receivables Cash Flow from financing activities Change in cash balance Beginning cash balance Ending cash balance

16 INFORMATION ABOUT CONFERENCE CALLS Conference calls with simultaneous translation into English, followed by a bilingual Q&A session will be held as follows: 1 EBITDA - Earnings before Interest, Tax, Depreciation and Amortization, and excluding extraordinary expenses and non operating expenses, is presented as additional information because we believe that it is an important indicator of our operating performance, besides being useful to compare our performance with other companies of the e-retail sector. However, no figure should be considered alone as a substitute to net income calculated in accordance with Brazilian Generally Accepted Accounting Principles (BR GAAP) or yet as a measure of the Company s profitability. In addition, our calculations may not be comparable to other similar methods 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. 16