Consolidated Net Revenue from Products

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2 2 Disclaimer This presentation contains forward-looking statements relating to the prospects of the business. estimates for operating and financial results. and those related to growth outlook of Guararapes-Riachuelo. These statements are merely forecasts and as such are based exclusively on the expectations of Guararapes- Riachuelo s management concerning the future of the business and its continuous access to capital to finance the Company s business plan. These forward-looking statements depend substantially on changes in market conditions. government regulations. competitive pressures. the performance of the Brazilian and international economies and the industry. among other factors. as well as the risks presented in the documents filed by Guararapes Riachuelo. and are therefore subject to change.

3 3 Consolidated Net Revenue from Products Consolidated Net Revenue from Products (R$MM) +10.8% +5.3% +7.1% +3.3% 2, , , Q14 3Q15 3Q16 9M14 9M15 9M16-2.1% Same Store Sales (%) +0.9% -1.2% -2.2% 3Q14 3Q15 3Q16 9M14 9M15 9M16

4 4 Average Ticket and Total Cards Riachuelo Card Average Ticket (R$) +6.2% +9.9% % +9.0% Q14 3Q15 3Q16 9M14 9M15 9M16 Total Cards (MM) +5.7% +10.1% Q14 3Q15 3Q16

5 5 Sales Breakdown - Riachuelo Card 3Q16 3Q15 Thirdparty Cards 26.8% PL without Interest 38.3% Private Label 46.7% Thirdparty Cards 26.3% PL without Interest 37.1% Private Label 45.6% Cash 26.4% PL with Interest 8.5% Cash 28.0% PL with Interest 8.5% 9M16 9M15 Thirdparty Cards 27.0% PL without Interest 37.2% Private Label 45.8% Thirdparty Cards 28.1% PL without Interest 37.7% Private Label 45.9% Cash 27.2% PL with Interest 8.6% Cash 26.0% PL with Interest 8.2%

6 6 Financial Operation Performance Loss Levels from Personal Loan and Riachuelo Card Operation 10.8% 11.1% 11.4% 11.7% 6.7% 6.5% 5.9% 6.2% 19.9% 18.6% 17.1% 15.6% 13.3% 7.7% 8.2% 8.6% 8.7% 8.6% sep/14 dec/14 mar/15 jun/15 sep/15 dec/15 mar/16 jun/16 sep/16 Riachuelo Card Personal Card September PDA (%) Minimum Required by Central Bank Period of Overdue (days) Risk Portfolio PDA Balance PDA Balance (%) Risk PDA Balance (%) performing A 1,622,760 29, % A 0.5% B 140,706 8, % B 1.0% C 136,987 15, % C 3.0% D 96,109 16, % D 10.0% E 82,432 28, % E 30.0% F 76,782 47, % F 50.0% G 74,901 65, % G 70.0% H 432, , % H 100.0% September 2016 Total 2,663, , % Up to 180 days 2,230, , % Coverage ratio (overdue more than 90 days) * 96.6% PDA X Minimum Required by Central Bank 112.8% * Total PDA for credits overdue more than 90 days (E-H) R$ thousand

7 Financial Operation Performance R$ thousand EBITDA from Financial Operations 3Q16 3Q15 Chg. (%) 9M16 9M15 Chg. (%) Gross Revenue 433, , % 1,248,082 1,062, % Financial Revenue from Interest-Bearing Sales, Fines & Timely Interest Payments 305, , % 886, , % Revenue from Personal Loans and Saque Fácil 76,710 79, % 200, , % Revenue from Commissions on Financial Products 31,346 28, % 90,953 78, % Revenue from Commissions from Branded Cards 20,010 28, % 70,394 70, % Tax Expenses (22,795) (21,136) 7.8% (66,236) (57,757) 14.7% Net Revenue 411, , % 1,181,846 1,004, % Costs (65,589) (52,367) 25.3% (181,652) (133,463) 36.1% Discounts on Loan Operations (61,766) (49,061) 25.9% (169,979) (124,540) 36.5% Expenses with Card Brand Fees (3,824) (3,306) 15.7% (11,673) (8,922) 30.8% Gross Profit 345, , % 1,000, , % PDA Expenses (153,212) (185,928) -17.6% (494,114) (379,245) 30.3% Financial Transaction Contribution Margin 192, , % 506, , % Operating Expenses (84,707) (82,078) 3.2% (264,739) (231,586) 14.3% EBITDA from Financial Operations 107,655 50, % 241, , % % of Consolidated EBITDA 87.5% 44.5% 43.0 p.p. 70.7% 55.8% 14.9 p.p. 7

8 8 Sales Area Sales Area Period 3Q16 Sales Area X Operational Area (1,000 m²) 4% 10% Under 1 year + 255% mil m² % 17% From 1 to 2 years From 2 to 5 years From 6 to 10 years Over 10 years % Q16

9 Real Estate Midway Mall (R$ thousand) 3Q16 3Q15 Chg. (%) 9M16 9M15 Chg. (%) Rental and Key Money Net Revenue (R$ '000) 15,910 14, % 46,679 42, % EBITDA (R$ '000) 14,213 13, % 41,697 38, % EBITDA Margin 89.3% 93.7% -4.4 p.p. 89.3% 90.9% -1.5 p.p. GLA (thousand m2) % % EBITDA/GLA (R$/m2) % % NOI (R$ '000) 14,852 14, % 43,737 40, % NOI Margin 90.0% 94.3% -4.3 p.p. 90.2% 91.7% -1.5 p.p. Quantity (%) Own 46 16% Mall 8 3% Street 38 13% Rented % Mall % Street 11 4% Total % 9

10 10 Net Revenue Consolidated Net Revenue (R$MM) +19.3% +8.7% +17.7% +5.5% 3, , , , , , Q14 3Q15 3Q16 9M14 9M15 9M16 Midway Financeira (R$MM) +11.0% +57.7% Midway Mall (R$MM) +7.5% +9.6% Q14 3Q15 3Q16 3Q14 3Q15 3Q16

11 Consolidated Gross Profit +7.0% +18.8% 2, , , % +4.8% Q14 3Q15 3Q16 9M14 9M15 9M16 Gross Profit (R$ MM) Consolidated Gross Margin (%) Gross Margin on Revenue from Products (%) 11

12 12 Operating Expenses +15.6% Without payroll taxes impact, increase would be 6.6% % 1, % 1, % Without payroll taxes impact, increase would be 6.4%. 1, Q14 3Q15 3Q16 9M14 9M15 9M16 Operating Expenses (R$MM) (%) / Net Revenue Operating Expenses without payroll taxes per m² +6.9% -0.2% +2.2% +1.1% 3Q14 3Q15 3Q16 9M14 9M15 9M16

13 13 Productivity Gain +42.8% BETTER

14 14 Adjusted EBITDA EBITDA Reconciliation (R$ thousand) 3Q16 3Q15 Chg.(%) 9M16 9M15 Chg.(%) Net Income 17,813 32, % 65, , % (+) Income and Social Contribution Taxes (30,286) (39,238) -22.8% (79,172) (11,919) 564.2% (+) Financial Revenue (Expense) 46,294 48, % 108,877 79, % (+) Depreciation and Amortization (Expenses + Costs) 73,098 64, % 210, , % EBITDA 106, , % 305, , % (+) IR Tax Benefits 16,048 6, % 35,292 21, % EBITDA Adjusted 122, , % 341, , % Adjusted EBITDA Margin on Net Revenue 8.8% 8.5% 0.3 p.p. 8.4% 12.4% -4.1 p.p. Adjusted EBITDA Margin on Net Revenue from products 12.7% 12.0% 0.7 p.p. 12.0% 17.3% -5.3 p.p. *The Company now reconciles EBITDA in line with CVM Instruction 527, i.e. EBITDA = net income plus income taxes, the net financial result, amortization, depreciation and depletion. Also, in accordance with paragraph 4 of the same Instruction, we opted to use ADJUSTED EBITDA because we understand that the adjustment related to «income tax benefits» contributes to the Company s gross cash generation, since it does not represent any cash outflow.

15 15 Consolidated Net Income % % -44.4% Q14 3Q15 3Q % M14 9M15 9M16 Net Income (R$ MM) Net Margin on Revenue from Products (%) Net Margin (%)

16 16 Financial Cycle Financial Cycle (days) - 18% Inventory (days) % Q15 4Q15 3Q16 3Q15 4Q15 3Q16 Clients (days) Service Providers (days) + 5.4% % Q15 4Q15 3Q16 3Q15 4Q15 3Q16

17 17 Indebteness Indebtedness (R$ Thousand) 09/30/ /30/ /30/2015 Cash and Cash Equivalents 630, , ,097 Loans and Financing (1,915,198) (2,009,632) (1,634,287) Short Term (974,050) (1,356,089) (821,897) Long Term (941,148) (653,543) (812,391) Net Debt (1,284,387) (1,266,056) (1,254,190) Net Debt/EBITDA (LTM)

18 18 Capex 9M16 Total Group million Total Riachuelo million Guararapes 13% Riachuelo 87% 2% 7% 6% 7% 8% 9% 20% 29% Remodeling IT General Rebuildings Others Mobile Project Distribution Center New

19 19 Employees 39, % 37, % 37, % +0.7% 22,912 23,590 23,745 Riachuelo Guararapes -17.7% -3.0% 16,275 13,394 12,987 Sep/14 Sep/15 Sep/16 * Includes Midway Mall, Midway Financeira and Transportadora Casa Verde

20 CONTACT Flávio Rocha CEO Tulio Queiroz CFO Marcelo Oscar Controller and IR