3 rd QUARTER OF 2015 EARNINGS RELEASE

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1 Continuation of measures to improve efficiency and optimize costs; Intensification of commercial initiatives to drive sales growth and gain market share. Net sales totaled R$4.095 billion in 3Q15, down 22.7%; Gross margin reached 32.8%, remaining stable in relation to 3Q14; Adjusted EBITDA margin was 4.0% in 3Q15, mainly impacted by lower dilution of fixed expenses; Excluding restructuring expenses, Net Income would reach R$33 million in 3Q15; Acceleration of Click & Collect, with sale of Via Varejo products on the casasbahia.com.br and pontofrio.com.br websites, allowing customers to collect the products in all stores; Roll-out of Crescer Mais Project: 100 under the new Mobile concept, 56 stores under the new furniture concept, 36 banner conversions and 5 new store openings, totaling 86 in the last 12 months; The Company continued its cost optimization measures throughout 3Q15, which enabled it to intensify its sales competitiveness efforts as from September 2015; More recently, the Company signed the 2016 Soccer Package with the Rede Globo TV network, which underlines Via Varejo commitment to recovering sales. A Highlights R$ million (1) 3Q15 3Q14 9M15 9M14 Gross Sales 4,634 5, % 15,621 18, % Net Sales 4,095 5, % 13,807 16, % Gross Profit 1,343 1, % 4,528 5, % Gross Margin - % 32.8% 32.8% 0 bps 32.8% 31.7% 110 bps EBITDA (2) % 800 1, % EBITDA Margin - % 1.1% 9.8% -870 bps 5.8% 9.2% -340 bps Net Income (46) % % Net Margin - % -1.1% 4.1% -520 bps 1.3% 3.6% -230 bps Adjusted EBITDA (3) % 887 1, % Adjusted EBITDA Margin - % 4.0% 10.1% -610 bps 6.4% 9.3% -290 bps Adjusted Net Income (4) % % Ajusted Net Margin - % 0.8% 4.3% -350 bps 1.7% 3.6% -190 bps (1) Totals and percentage changes are rounded off and all margins w ere calculated as percentage of net revenue (2) EBITDA = Earnings before interest, taxes, depreciation and amortization. (3) EBITDA excluding Other Operating Income and Expense (Note 22 to the Financial Statements) (4) Net Income excluding Other Operating Income and Expenses (Note 22 to the Financial Statements) 1 Totals and percentages may not add up in all tables presented in this document due to rounding. 1

2 Net Sales Performance R$ million 3Q15 3Q14 9M15 9M14 Net Sales 4,095 5, % 13,807 16, % Same-Store Sales Revenue % % B The third quarter of 2015 was marked by a strong decline in consumption, with the Consumer Confidence Index reaching its lowest level in the historical data series published by FGV IBRE (down 25.9% in September 2015 in relation to September 2014) In 3Q15, net sales totaled R$4.1 billion, down 22.7% from 3Q14 and 24.6% on a same-store basis. In 3Q15, five Casas Bahia stores were opened, bringing the total store openings to 26 in the year and 86 in the last 12 months; On the other hand, services such as extended warranties increased penetration due to initiatives such as training for 100% of sales force, pricing strategy and sales campaigns. Payment book sales remained stable in relation to other forms of payment; Initiatives under the Crescer Mais Project continued to deliver sales results that outperformed above the company s average: a) Renovation of the Furniture category: redesign of the sales area and revamp of product lines, already implemented in 56 stores which grew 1,600 basis points above the average of the non-renovated stores YTD. The Furniture category yields the highest gross margin for Via Varejo; b) Renovation of the Telephone category: complete revamp of the buying experience, with better service and options to try out products. In the 100 stores already renovated, growth was 3,800 basis points higher than the average of non-renovated stores YTD; c) Banner Conversion: conversion of 36 Pontofrio stores to Casas Bahia stores. Via Varejo should accelerate the conversion plan in order to drive sales growth and profitability; 1 In compliance with the Settlement (Performance Commitment Agreement) signed with Brazil's antitrust agency (CADE) after the Pontofrio and Casas Bahia association, the company has closed 51 stores since 2Q14. 2

3 Operating Performance 3 rd QUARTER OF 2015 Operating Performance R$ million 3Q15 3Q14 9M15 9M14 Net Sales 4,095 5, % 13,807 16, % Gross Profit 1,343 1, % 4,528 5, % Gross Margin - % 32.8% 32.8% 0 bps 32.8% 31.7% 110 bps Selling Expenses (1,050) (1,090) -3.7% (3,238) (3,283) -1.4% General and Administrative Expenses (117) (125) -6.4% (370) (379) -2.4% Equity Income (28) 2 N/A (75) (2) N/A Other Operating Income (Expenses) (119) (17) N/A (87) (17) N/A Total Operating Expenses (1,314) (1,230) 6.8% (3,770) (3,681) 2.4% % of Net Sales Revenue 32.1% 23.2% -890 bps 27.3% 22.6% -470 bps Total of Adjusted Operating Expenses (1) (1,195) (1,213) -1.5% (3,683) (3,664) 0.5% % of Net Sales Revenue 29.2% 22.9% -630 bps 26.7% 22.5% -420 bps Depreciation (Logistic) % % EBITDA % 800 1, % EBITDA Margin - % 1.1% 9.8% -870 bps 5.8% 9.2% -340 bps Adjusted EBITDA (2) % 887 1, % Adjusted EBITDA Margin - % 4.0% 10.1% -610 bps 6.4% 9.3% -290 bps (1) Excludes Other Operating Income and Expense (2) EBITDA excluding Other Operating Income and Expense In 3Q15, Adjusted EBITDA was R$164 million. Adjusted EBITDA margin was 4.0%, decreasing 610 bps from 3Q14. EBITDA was the result of the following factors: Gross Margin stable in relation to 3Q14. o o o o Decrease of 150 bps in margin from goods to adjust sales competitiveness; Increase in penetration of services on the merchandise sale, due to sales force training programs, pricing strategy and sales campaigns; Maturation of new revenue streams from freight and assembling; Other gains, such as logistics and commercial synergies with other group companies, helped maintain Gross Margin; Adjusted Operating Expenses decreased by 1.5% from 3Q14 During the quarter, the Company intensified the cost reduction measures launched in 2Q15 to adequate the cost structure in the current level of sales and mitigate inflationary pressures and lower dilution of fixed expenses; o Optimization of headcount, with the reduction of approximately 6,000 jobs in 3Q15, for a total of around 11,000 job cuts in 9M15; o Closure of 31 stores with high operating costs and negative contribution margin in 3Q15, totaling 36 store closures in the year (excluding closures related to the decision of CADE); o In 9M15, one distribution center and five warehouses were closed to optimize the logistics network; o Renegotiation of approximately 40% of all lease agreements; o Decrease of R$30 million in equity income compared to 3Q14, which corresponds to a 70 bps increase in expenses as a percentage of net sales. 3

4 Other Operating Income and Expenses of R$119 million, mainly related to the costs with the Company's restructuring initiatives. It is noteworthy that the savings with the cost reduction initiatives have not been fully captured in the 3T15. In 9M15, adjusted EBITDA reached R$887 million, with adjusted EBITDA margin of 6.4%. Financial Performance R$ million 3Q15 3Q14 9M15 9M14 Financial Revenue % % Financial Expenses (166) (247) -32.8% (619) (743) -16.7% Cost of the Discount of Payment Book Receivables (79) (87) -9.5% (246) (251) -2.1% Cost of the Discount of Credit Card Receivables (20) (95) -78.9% (177) (311) -43.1% Other (67) (65) 3.5% (196) (181) 8.4% Net Financial Income (Expense) (69) (147) -53.1% (344) (474) -27.4% % of Net Sales Revenue 1.7% 2.8% 110 bps 2.5% 2.9% 40 bps Thanks to a solid financial structure, strong historical cash flow generation and efficient treasury management, the Company could mitigate the impacts of the interest rate hike in 3Q15. In 3Q15, the Company registered an improvement of 53.1% in net financial result compared to 3Q14, while accumulated CDI increased 29% AC in the same period. The net financial result in 3Q15 was composed primarily of the following items: Financial income totaled R$97 million, compared to R$99 million in 3Q14, due to the cash management strategy in the period. Cost of discounting of payment book receivables amounted to R$79 million, corresponding to 1.9% of net sales revenue, down 9.5% from 3Q14, mainly due to the increase in the CDI rate combined with the drop in sales during the period. Cost of sale of credit card receivables was R$20 million, down 78.9% from 3Q14 as a result of the strategy of reducing the sale of receivables in 3Q15 (balance of unsold credit card receivables was R$990 million). Thanks to a robust financial structure, the Company is capable of mitigating the effects of interest rate hikes, using different tactics each quarter. C A Source: Cetip 4

5 Net Income R$ million 3Q15 3Q14 9M15 9M14 EBITDA % 800 1, % Depreciation (Logistic) (16) (11) 45.5% (42) (31) 35.5% Depreciation and Amortization (45) (35) 28.6% (132) (103) 28.2% Net Financial Income (Expense) (69) (147) -53.1% (344) (474) -27.4% Income before Income Tax (85) % % Income Tax 39 (111) % (102) (309) -67.0% Net Income (46) % % Net Margin - % 1.1% 4.1% -300 bps 1.3% 3.6% -230 bps Other Operating Income and Expense (119) (17) N/A (87) (17) N/A Income Tax on Other Operating Income and Expense 40 6 N/A 30 6 N/A Adjusted Net Income (1) % % Ajusted Net Margin - % 0.8% 4.3% -350 bps 1.7% 3.6% -190 bps (1) Net Income excluding Other Operating Income and Expenses In 3Q15, the Company posted a net loss of R$46 million. The decrease in net income was mainly due to the drop in sales and the lower dilution of fixed expenses and expenses related to the company's restructuring process. In 9M15, net income came to R$180 million, with margin of 1.3%, down 230 bps from 9M14. Adjusted net income in the period stood at R$237 million, with margin of 1.7%. Indebtedness R$ million Loans and Financing Short Term (372) (51) Debentures Short Term - (819) Loans and Financing Long Term (402) (163) Debentures Long Term - - Total Debt (774) (1,033) Cash and Cash Equivalents 1,441 3,528 Net Cash (Debt) 667 2,495 Net Cash / EBITDA (last 12 months) #N/D 0.42x x - Payment Book (CDCI) Short Term (2,153) (2,627) Payment Book (CDCI) Long Term (122) (120) Total Payment Book (CDCI) (2,275) (2,747) Net Cash (Debt) with CDCI (1,608) (252) Net Cash (Debt) with CDCI / EBITDA (last 12 months) (1.02x) (0.09x) On balance Credit Card receivables Net Cash, including credit card receivables (1) 1,657 2,537 Net Cash / EBITDA (1) (last 12 months) 1.05x 0.92x Net Cash (Debt) with CDCI, including credit card receivables (1) (618) (210) Net Debt with CDCI (1) / EBITDA (last 12 months) (0.39x) (0.08x) (1) For comparisson purpose, 3Q15 includes on balance R$990 million credit card receivables unfactored. In 3Q15, the Company maintained a positive net cash position and a positive supplier/inventory ratio, which enables growth combined with cash flows. 5

6 Net cash was R$667 million, lower than the net cash of R$2.495 billion in 3Q14, mainly due to the lower sale of credit card receivables in the quarter. On comparable basis, i.e. recomposing the balance of credit card receivables (not discounted), net cash would be R$1.657 billion. The company remains committed to its business model based on long-term cash flow and an efficient quarterly management of working capital, which enables it to maintain a healthy and safe balance sheet even in a more challenging macroeconomic environment. Capital Expenditure In 3Q15, Via Varejo s capital expenditure totaled R$ 70 million, divided as follows: R$ million 3Q15 3Q14 9M15 9M14 New Stores Stores Renovations and Conversions Infrastructure Fleet and Logistic Technology Others Non Cash Effect Technology - Leasing Total (1) Softw are leasings, non cash effect In 3Q15, five Casas Bahia stores were opened in Northeast, Southeast and South of Brazil, bringing total store openings to 26 in the year and 86 in the last 12 months. 6

7 Balance Sheet Assets R$ million Current Assets 7,949 9,445 Cash and Cash Equivalents 1,441 3,528 Accounts Receivable 2,793 2,236 Credit cards Payment Book 1,834 2,206 Other Allowance for doubtful accounts (223) (214) Inventories 2,678 2,798 Recoverable Taxes Amounts Receivable from Related Parties Noncurrent Assets Held for Sale 7 13 Expenses in Advance and Other Accounts Receivable Noncurrent Assets 5,705 4,918 Long-Term Assets 2,563 1,990 Accounts Receivable Payment Book Allowance for doubtful accounts (10) (9) Recoverable Taxes 1, Deferred Income Tax and Social Contribution Amounts Receivable from Related Parties Judicial Deposits Expenses in Advance and Other Accounts Receivable Investments Property and Equipment 1,386 1,238 Intangible Assets 1,075-1,030 - TOTAL ASSETS 13,654 14,363 Liabilities and Shareholders' Equity R$ million Current Liabilities 7,062 8,259 Taxes and Social Contribution Payable Suppliers 2,882 2,998 Loans and Financing Payment Book (CDCI) 2,153 2,627 Debentures Fiscal Obligations Dividends 1 - Debt with Related Parties Tax Installments - 3 Advanced revenue Other Long-Term Liabilities 1,746 1,576 Loans and Financing Payment Book (CDCI) Deferred Income Tax and Social Contribution 29 3 Tax Installments - 39 Provision for lawsuits Advanced revenue Shareholders' Equity 4,846 4,528 Capital 2,895 2,895 Capital Reserves Profit Reserves 1,624 1,278 Cumulative translation adjustments (49) - LIABILITIES AND SHAREHOLDERS' EQUITY 13,654 14,363 7

8 Income Statement R$ million 3Q15 3Q14 9M15 9M14 Gross Sales 4,634 5, % 15,621 18, % Net Sales 4,095 5, % 13,807 16, % Cost of Goods Sold (2,752) (3,557) -22.6% (9,279) (11,120) -16.6% Depreciation (Logistic) (16) (11) 45.5% (42) (31) 35.5% Gross Profit 1,343 1, % 4,528 5, % Selling Expenses (1,050) (1,090) -3.7% (3,238) (3,283) -1.4% General and Administrative Expenses (117) (125) -6.4% (370) (379) -2.4% Equity Income (28) 2 N/A (75) (2) N/A Other Operating Income (Expenses) (119) (17) N/A (87) (17) N/A Total Operating Expenses (1,314) (1,231) 6.7% (3,770) (3,682) 2.4% Depreciation and Amortization (45) (35) 28.6% (132) (103) 28.2% Earnings before Interest and Taxes - EBIT (16) % 626 1, % Financial Revenue % % Financial Expenses (166) (247) -32.8% (619) (743) -16.7% Net Financial Income (Expense) (69) (147) -53.1% (344) (474) -27.4% Income before Income Tax (85) % % Income Tax 39 (111) % (102) (309) -67.0% Net Income (46) % % Earnings before Interest, Taxes, Depreciation, Amortization-EBITDA % 800 1, % % of Net Sales Revenue 3Q15 3Q14 9M15 9M14 Gross Profit 32.8% 32.8% 0 bps 32.8% 31.7% 110 bps Selling Expenses -25.6% -20.6% -500 bps -23.5% -20.2% -330 bps General and Administrative Expenses -2.9% -2.4% -50 bps -2.7% -2.3% -40 bps Equity Income -0.7% 0.0% -70 bps -0.5% 0.0% -50 bps Other Operating Income (Expenses) -2.9% -0.3% -260 bps -0.6% -0.1% -50 bps Total Operating Expenses -32.1% -23.2% -890 bps -27.3% -22.6% -470 bps Depreciation and Amortization -1.1% -0.7% -40 bps -1.0% -0.6% -40 bps Earnings before Interest and Taxes - EBIT -0.4% 9.0% -940 bps 4.5% 8.4% -390 bps Net Financial Income (Expense) -1.7% -2.8% 110 bps -2.5% -2.9% 40 bps Income before Income Tax -2.1% 6.2% -830 bps 2.0% 5.5% -350 bps Income Tax 1.0% -2.1% 310 bps -0.7% -1.9% 120 bps Net Income -1.1% 4.1% -520 bps 1.3% 3.6% -230 bps EBITDA 1.1% 9.8% -870 bps 5.8% 9.2% -340 bps 8

9 Cash Flow from Operating Activities R$ million 9M15 9M14 Net Income for the period Adjustment for Reconciliation of Net Income Deferred Income Tax Depreciation and Amortization Interests and Exchange Variation Equity Income 75 2 Provision for lawsuits Gain (loss) with fixed and intangible assets (7) (3) Share-Based Compensation 7 2 Allowance for doubtful accounts Provision for Obsolescence and Retail Loss 45 9 Other (39) (5) 1,258 1,561 Asset (Increase) Decreases Accounts Receivable (834) (426) Inventories 261 (471) Taxes recoverable (319) 2 Other Assets (31) (62) Net Related Parties Judicial Deposits (86) (93) Prepaid expenses (62) - Financial Investments - 24 (1,012) (936) Liability Increase (Decrease) Suppliers (1,250) (152) Payroll and Charges (24) 254 Lawsuits (178) (47) Income tax paid (75) (156) Other Liabilities (276) 223 (1,803) Net Cash Generated from (Used in) Operating Activities (1,557) 748 Cash Flow fom Investment Activities R$ million 9M15 9M14 Acquisition of fixed and intangible assets (250) (241) Sale of Property and Equipment Net Cash Generated from (used in) Investment Activities (232) (213) Cash Flow from Financing Activities R$ million 9M15 9M14 Proceeds from borrowings 3,465 3,639 Repayments of borrowings (4,144) (3,859) Payment of interest (302) (268) Financial leasing payments (15) (27) Dividends Payment (222) - Net Cash Generated from (used in) Financing Activities (1,218) (516) Cash and Cash Equivalents at the Beginning of the Year 4,448 3,509 Cash and Cash Equivalents at the End of the Year 1,441 3,528 Change in Cash and Cash Equivalent (3,007) 20 9

10 Breakdown of Gross Sales by Format R$ million 3Q15 % 3Q14 % 9M15 % 9M14 % Pontofrio % 1, % -29.2% 3, % 4, % -21.3% Casas Bahia 3, % 4, % -20.7% 12, % 14, % -14.1% Breakdown of Net Sales by Format R$ million 3Q15 % 3Q14 % 9M15 % 9M14 % Pontofrio % 1, % -30.4% 2, % 3, % -20.7% Casas Bahia 3, % 4, % -20.6% 10, % 12, % -13.6% Sales Composition % of Net Sales Revenue 3Q15 3Q14 9M15 9M14 Cash 26.3% 25.3% 100 bps 25.6% 26.1% -50 bps Cards 59.1% 59.7% -60 bps 60.6% 59.4% 120 bps Payment Book 14.6% 15.0% -40 bps 13.8% 14.5% -70 bps Stores per Format Casas Bahia Conversions Opened Closed Street Shopping Total Sales Area ('000 m 2 ) Total Area ('000 m 2 ) 1, ,225 Pontofrio Conversions Opened Closed Street 236 (28) Shopping 128 (2) Total (30) Sales Area ('000 m 2 ) 236 (19) Total Area ('000 m 2 ) 316 (25) Consolidated (Total) Conversions Opened Closed Street Shopping Total 1, ,016 - Sales Area ('000 m 2 ) 1, ,100 Total Area ('000 m 2 ) 1, ,490 10

11 The Company ended the quarter with 53,855 employees, 47,353 of whom were full-time employees based on the full-time equivalent (FTE) criterion. D Ownership Structure The capital stock of Via Varejo is composed of 1,291 million shares, of which 656 million are common shares and 635 million are preferred shares. GPA is the controlling shareholder of the Company, holding 43.3% of its total capital and 62.6% of its common stock. Free float corresponds to 29.3% of all the shares issued by Via Varejo. Free float 29.3% 43.3% GPA Klein Family 27.3% D Including Bartira employees, the Company ended the quarter with 55,641 employees, 49,058 of whom were under the FTE criteria 11

12 3Q15 Earnings Conference Call and Webcast Thursday, October 29, :00 a.m. (Brasília) 9:00 a.m. (New York) 1:00 p.m. (London) Conference call in Portuguese (original language) +55 (11) Conference call in English (simultaneous translation) +1 (646) Webcast: Replay +55 (11) Code for audio: Via Varejo The statements contained in this release relating to the Company's business prospects, projected operating and financial results and growth potential are merely forecasts and were based on the Management's expectations for the Company's future. These expectations are highly dependent on changes in the market and on the performance of the Brazilian economy, the industry and international markets and therefore are subject to change. CONTACTS Investor Relations Telephone: +55 (11) Fax: +55 (11) Website: 12