CONSOLIDATED NET REVENUE OF R$ 4.0 BILLION (+17.5%) IN 1Q18 CONSOLIDATED EBITDA OF R$ MILLION, EBITDA MARGIN OF 13.0% (RL)

Transcription

1 1

2 CONSOLIDATED NET REVENUE OF R$ 4.0 BILLION (+17.5%) IN 1Q18 CONSOLIDATED EBITDA OF R$ MILLION, EBITDA MARGIN OF 13.0% (RL) Rio de Janeiro, May 10th of 2018 Lojas Americanas S.A. [B3: LAME3 (common) and LAME4 (preferred)], one of the leading retail chains in Brazil. With 1,320 stores in 31/03/2018 and present in all Brazilian states, Lojas Americanas announces today its results for the 1 st quarter of 2018 (1Q18).The accounting information that serves as the basis for the comments that follow are presented in accordance with the international financial reporting standards (IFRS), and the rules issued by the Brazilian Securities Exchange Commission (CVM) and in Reais (R$). The comparisons refer to the 1 st quarter of 2017 (1Q17). Parent Company Consolidated 1Q18 1Q17 Var. (%) Financial Highlights (R$ MM)* 1Q18 1Q17 Var. (%) 2, , % Net Revenue 4, , % % Gross Profit 1, , % 38.4% 39.5% -1.1 p.p. Gross Margin (%NR) 33.3% 30.2% +3.1 p.p % Adjusted EBITDA % 17.7% 17.2% +0.5 p.p. Adjusted EBITDA Margin (%NR) 13.0% 11.2% +1.8 p.p (132.9) - Net Income 20.0 (132.9) - 0.8% -6.7% +7.5 p.p. Net Margin (%NR) 0.5% -3.9% +4.4 p.p. *Reflects the CPC 47/IFRS and the 15 e CPC 48/ IFRS 9 adjustments, as indicated in page 3 (accounting changes) Easter Effect In 2018, Easter happened on April 1 st, thus sales related to the event were concentrated in the first quarter of the year, positively impacting comparisons with the same period of last year. Net Revenue In the 1Q18, the parent company s net revenue was R$ 2.6 billion, a growth of 29.6% in relation to the 1Q17. For the consolidated result, the net revenue was of R$ 4.0 bilhões, a growth of 17.5% in relation to the 1Q17. Same Stores Net Revenue The growth in same stores net revenue was of 8.5% on the four first months of the year. Gross Margin The parent company s gross margin was of 38.4% of the net revenue in the 1Q18, a variation of -1.1 p.p. due to the calender effect related to Easter. For the consolidated result, the gross margin reached 33.3% of the net revenue, an increase of 3.1 p.p. due to B2W Digital s marketplace expansion. Adjusted EBITDA and EBITDA Margin The parente company s Adjusted EBITDA reached R$ million in the 1Q18 and the EBITDA margin (%NR) was of 17.7%, a variation of +0.5 p.p. reflecting the delution in expenses during the quarter. The consolidated Adjusted EBITDA totaled R$ million in the 1Q18 and the EBITDA margin (%NR) was of 13.0%, a growth of 1.8 p.p. due to B2W Digital s marketplace expansion. Net Income The consolidated net income was of R$ 20.0 million in the 1Q18. Expansion: 85 anos em 5 Somos Mais Brasil In the 1Q18, we have opened 14 new stores (vs. 7 stores in the 1Q17) and until the present date we have 130 stores with signed contracts. For 2018 we have the objective to open 200 new stores, in accordance with our expansion plan. Lojas de Conveniência For 2018, we announce the roll out of the model openning 30 new convenience stores. +AQUI In the 1Q18 we reached 1.6 million credit cards issued. B2W Digital B2W Digital announces a growth of 24.1% in the GMV and a reduction of R$ 669 million on cash consumption in the 1Q18. In addition, B2W s Marketplace has already reached R$ 1.4 bilion in GMV in the 1Q18 (growth of 86.5%), with a participation of 46.4% in the Total GMV. 2

3 ACCOUNTING CHANGES From 2018 onwards, the CPC 47/IFRS 15 Revenues from Customer Contracts and CPC 48/IFRS 9 Financial Instruments came into effect. In order to facilitate the analysis of the results presented in this report, as well as to guarantee transparency, the Company opted to restate the results for the same period of 2017 (Annex II), following the CPCs/IFRS orientations. The main impacts on the 1Q18 results are described below: Services: Previously, sales revenue, taxes and cost of sales were registered, currently, only commission on sales and taxes are recorded. Commercial Agreements with Suppliers (related parties): Previously were recorded as a deduction from selling expenses and currently recorded as a deduction from cost of sales. Intercompany operations: Previously, sales revenue, taxes and cost of sales were recorded and currently only the comission on sales and taxes are registered. Conditional Discounts: Previously registered as financial expenses and, currently, registered as a deduction from gross revenue. The 1Q18 and 1Q17 are presented over the press release in accordance with the new accounting standards. Historical data from 1Q12 to 1Q16 are in compliance with the standards in force at the time they were disclosed. 4M18 HIGHLIGHTS EASTER EFFECT In 2018, Easter happen on April 1st. Thus, sales related to this important event were concentrated in the first quarter of the year, positively affecting comparisons with the same period of last year. In order to facilitate analysis, we are anticipating the variation from selected main lines of the result considering the first four months of the year (4M18), as presented on the table below: Parent Company 4M18* Var. Net Revenue 11.7% Same Store Sales (NR) 8.5% Adjusted EBITDA 12% * CEstimated Growth On the first four months of 2018, the growth on the net revenue was of 11.7% compared to the same period of the previous year. The SSS net revenue grew 8.5% on the same period. The estimated Adjusted EBITDA growth for the first four months of the year was of 12%. *The information presented is an estimate subject to variations, calculated for the Parent Company, in Reais and in accordance with the current Corporate norm. It should be noted that these are only some of the data for the referred period. 3

4 COMMENTS ON OPERATIONAL PERFORMANCE GROSS MERCHANDISE VOLUME (GMV) The GMV (Gross Merchandise Volume) presents the consolidated gross sales and services revenue plus the sales placed through B2W Digital Marketplace platforms. In the 1Q18, the consolidated GMV reached R$ 5.8 billion, a growth of 26.5% in relation to the 1Q17. GROSS REVENUE In the 1Q18, the parent company s gross revenue was of R$ 3.0 billion, an increase of 29.3% compared to the 1Q17. For the consolidated result, the gross revenue reached R$ 4.7 billion, a growth of 16.2% compared to the same period of the previous year. NET REVENUE In the 1Q18, the parent company s net revenue was of R$ 2.6 billion, a growth of 29.6% compared to the 1Q17. For the consolidated result, the net revenue reached R$ 4.0 billion, an expansion of 17.5% compared to the 1Q17. The growth in the net revenue for the same store concept was of 8.5% considering the 4M18. 4

5 GROSS PROFIT AND GROSS MARGIN In the 1Q18, the Parent Company s gross profit totaled R$ million, a growth of 25.9%, with a margin equivalent to 38.4% of the net revenue (NR), a variation of -1.1 p.p. compared to the 1Q17. In the consolidated view, the gross profit was of R$ 1.3 billion, a growth of 29.5%, with a margin of 33.3% of the NR, an expansion of 3.1 p.p. compared to the 1Q17. The parent company s margin was impacted due to the calender effect related to the Easter event, which in 2018 happened fully on the first quarter of the year, whilst in 2017 the event mainly happened on the second quarter. SALES, GENERAL AND ADMINISTRATIVE EXPENSES In the 1Q18, the parent company s sales, general and administrative expenses totaled R$ million, 20.7% of the NR (vs. 22.4% of the NR in the 1Q17). On the consolidated view, the sum totaled R$ million, which corresponds to 20.3% of the NR. 5

6 ADJUSTED EBITDA AND EBITDA MARGIN In the 1Q18, the Parent Company s Adjusted EBITDA reached R$ million, an increase of 33.9%, with a margin of 17.7% of the NR (vs. 17.2% of the NR in the 1Q17). In the consolidated view, the Adjusted EBITDA reached R$ milhões, reaching a margin of 13.0% of the NR, an increase of 1.8 p.p. compared to the 1Q17. Adjusted EBITDA - Operating profit before interest, taxes, depreciation and amortization, other operating income/expenses, equity accounting, minority and statutory participation. EBITDA (CVM 527/12) In the 1Q18, the parent company s Adjusted EBITDA reached R$ million, representing 17.7% of the NR. According to CVM s 527/12 Instruction, if we exclude other revenues and operational expenses and equity accounting, the EBITDA would be equal to R$ million in the 1Q18, representing 14.7% of the NR. In the consolidated view, the Adjusted EBITDA totaled R$ million in the 1Q18, representing 13.0% of the NR. According to CVM s 527/12 Instruction, if we exclude other revenues and operational expenses, the EBITDA would be equal to R$ million in the 1Q18, representing 12.5% of the NR. VARIATION IN THE WORKING CAPITAL In the 1Q18, the parent company s net working capital was of 39 days, an improvement of 4 days in relation to the 1Q17, reflecting the better inventory management, which is a result of the continued pursuit to balance comercial and operation variables. 6

7 NET FINANCIAL RESULT The parent company s net financial expenses totaled R$ million in the 1Q18, an improvement of 36.2% compared to the R$ million registered in the 1Q17. In the consolidated view, the net financial expenses were equal to R$ million in the 1Q18, an improvement of 39.3% compared to the R$ million registered in the 1Q17. The financial result in the 1Q18 was positively impacted by CDI* reductions. *CDI - Interbank Deposit Certificate: average rate of funding through the interbank market. FINANCIAL OPERATION 12 th Issuance of Debentures On May 3rd 2018, the Company performed the public distribution of the 12th issuance of simple debentures, in a single serie, totaling R$ 1.0 billion with final maturity on April Compensatory interest corresponding to 116.0% of the CDI will be payed. The funds raised through the debenture were used to lengthen the Company's indebtedness profile within the scope of the ordinary management of its business. NO EXPOSURE TO FOREIGN EXCHANGE VARIATIONS The Company continues to reaffirm its commitment to a conservative cash investment policy, demonstrated by the use of hedge instruments in foreign currencies, and derivatives (swaps). The financial liability and the total cash position of the Company are fully protected against any foreign exchange fluctuations through these financial instruments, which offset the foreign exchange risk transforming the cost of debt to local currency and interest rate (as a percentage of CDI). In the same direction, it is worth remembering that the Company's cash is invested in the largest financial institutions in Brazil. NET RESULT In the 1Q18, the net result reached R$ 20.0 million (vs no 1Q17). The following table shows the main variations from the Adjusted EBITDA to the net result: Adjusted EBITDA - Operating profit before interest, taxes, depreciation and amortization, other operating income/expenses, equity accounting, minority and statutory participation. INDEBTEDNESS Parent Company Reconciliation of the Net Result - R$ MM 1Q18 1Q17 % 1Q18 1Q17 % Adjusted EBITDA % % (+) Depreciation / Amortization (105.4) (89.5) 17.8% (211.3) (180.0) 17.4% (+) Net Financial Result (204.2) (320.1) -36.2% (320.2) (527.7) -39.3% (+) Equity Accounting (68.5) (105.2) -34.9% (+) Other Operat. Income (Expenses)* (8.3) (6.0) 38.3% (19.5) (13.1) 48.9% (+) Minority Interest % (+) Income tax and social contribution (49.6) % (=) Net Result 20.0 (132.9) (132.9) - * In the old accounting rules, considered as "non-operating income", including expenditure on action plan. Consolidated Lojas Americanas consolidated short and long-term loans and debentures at 03/31/2018 totaled R$ 15,997.3 milion. If we deduct the cash position of R$ 11,291.6 million (cash + financial investments + accounts receivable from credit and debit cards) from the total loans, we reach a net debt position of R$ 4,705.7 milhões. 7

8 R$ million Indebtedness 03/31/ /31/ /31/ /31/2017 Short Term Debt , Receivables Fund (FIDC) Short Term Debentures , ,182.6 Short Term Indebtedness 1, , , ,150.6 Long Term Debt 3, , , ,424.8 Receivables Fund (FIDC) ,238.8 Long Term Debentures 3, , , ,201.7 Long Term Indebtedness 6, , , ,865.3 Total Debt (1) 8, , , ,015.9 Cash and banks 2, , ,228.6 Money market investments 2, , , ,156.2 Money market investments (BWU)* Accounts receivable from credit / debit cards 1, , , ,658.7 Total Cash (2) 5, , , ,043.5 Net Cash (Debt) (2) - (1) (2,837.4) (2,942.7) (4,705.7) (4,972.4) Net Debt / Adjusted EBITDA Average Maturity of Debt (in days) *Considers financial applications of BWU [NE 12 (a)(i)] Parent Company Consolidated Adjusted EBITDA - Operating profit before interest, taxes, depreciation and amortization, other operating income/expenses, equity accounting, minority and statutory participation. In the consolidated view, the net debt was 1.7x the accumulated EBITDA from the last 12 months. The average debt maturity was of 795 days in 03/31/2018 (27 months). In the parent company, the net debt was 1.2x the accumulated EBITDA from the last 12 months. The average debt maturity was 906 days in 03/31/2018 (30 months). To face the uncertainties and the volatility of the financial market, Lojas Americanas has the orientation of preserving cash and prolonging the debt profile. Throughout the last few years, several measures have been taken to this end, which let us consolidate our plan of long-term growth for the Company. The accounts receivable considers receivables from credit cards, net of the discounted value, that have immediate liquidity and can be considered as cash. The breakdown of the accounts receivable in Lojas Americanas point of view is shown as follows: R$ million Parent Company Consolidated Accounts Receivable Conciliation - R$ MM 03/31/ /31/ /31/ /31/2017 Gross credit-cards receivable 1, , , ,317.9 Receivable discounts (506.2) (475.6) (3,671.9) (2,727.3) Electronic debits and checks receivables Receivables Fund (FIDC) Accounts Receivable from credit / debit cards 1, , , ,658.7 Present-value adjustment (12.9) (23.0) (15.9) (23.7) Allowance for doubtful accounts (1.1) (2.5) (36.0) (28.4) Other accounts receivable Consolidated Net Accounts Receivable 1, , , ,

9 SALES BY MEANS OF PAYMENTS The opening of sales by means of payments of the Parent Company in the 1Q18 and 1Q17 can be verified in the table below: Parent Company Means of Payment 1Q18 1Q17 Var. Cash 56% 54% +2 p.p. Credit Cards 44% 46% -2 p.p. INVESTMENTS In the 1Q18, the parent company invested a total of R$ million. Investments were focused on the opening of new stores, reforms and improvements in stores, as well as technology updates, operations and others. O investimento na expansão da rede de lojas é reflexo da aceleração do plano 85 anos em 5 Somos Mais Brasil, com o aumento do número de lojas inauguradas e em fase de construção. Investments R$ million % Openings / Improvements % Technology % Operations and Others % Total % EXPANSION Lojas Americanas reaffirms its commitment to maintain the pace of growth foreseen in the "85 anos em 5 - Somos Mais Brasil" Plan with the objective to open 800 new stores between 2015 and We believe that, there is an opportunity for our bricks and mortar business to be present in a much more significant number of cities, besides the cities where we already have stores, especially considering Brazil has 5,570 cities. In the 1Q18, we opened 14 new stores (vs. 7 in the 1Q17), reaching stores in 03/31/2018, and with presence in 525 cities. In 2018, year to date, we opened 18 new stores, in addition to more than 130 stores with signed contracts or in advanced stages of negotiations. The current phase of negotiations indicates that we are on the right track to successfully complete the scheduled 200 openings for the year. As in previous years, we will maintain our usual discipline in approving new points based on economic feasibility studies that consider several macroeconomic and operational assumptions, amongst them: population growth, per capita income, local economy evolution, logistics capacity, rent and expected return. 9

10 The following table details the types of stores opened in the 1Q18: Region Southeast Northeast South North Midwest TOTAL, Format As of 12/31/2017 Number of Stores Sales Area thousand m² Average thousand m² 1,306 1, Traditional Express Convenience Traditional Express Traditional Express Traditional Express Traditional Express Traditional Express Convenience Refurbishment/Deactivation - (0.3) 0.3 As of 03/31/2018 1,320 1,

11 DIGITAL PLATFORM ABOUT B2W DIGITAL B2W Digital is the leader in Latin America and its purpose is to CONNECT PEOPLE, BUSINESS, PRODUCTS AND SERVICES IN A DIGITAL PLATFORM. B2W Digital has the largest and most beloved Internet brands (Americanas.com, Submarino, Shoptime and Sou Barato) and the fastest growing Marketplace operation. The platform built over the years allows B2W to also offer technology, logistics, distribution, customer service and consumer finance services. Lojas Americanas is the controlling shareholder of B2W DIGITAL with a participation of 61.99%. The shares of the Company are negotiated through the ticker BTOW3 on B3, in the Novo Mercado segment, which has the highest Corporate Governance index in Brazil. B2W DIGITAL HIGHLIGHTS (1Q18): B2W Digital reduced cash consumption by R$ million in 1Q18. Cash consumption in 1Q18 totaled R$ million, down 58% from R$ 1,146.0 million in 1Q17. B2W Marketplace connected more than 2,400 new sellers in 1Q18, going from a base of 9,700 sellers in Dec/17 to over 12,100 sellers in Mar/18. The base of sellers increased by 2.4x from 1Q17 to 1Q18 (from 5,000 to 12,100 sellers). B2W Entrega (Delivery) connected more than 2,800 sellers in 1Q18, totaling a base of 7,700 sellers and representing 64% of sellers connected to Marketplace. In Nov/17, the platform was integrated into the loyalty program (Prime), allowing sellers to make their items available to program members. B2W Marketplace held Seller Day The third edition of the event was titled Changes of Tomorrow Are you ready? and was attended by more than 1,500 participants, including sellers, suppliers and strategic partners. B2W Digital is providing 105,000 m² in Itapevi's DC in São Paulo for Marketplace sellers. The Fulfillment service (storage + last mile) will be free of charge until the end of B2W Marketplace launched the Buy Box Split. The algorithm, which defines the best offer for the customer on the product page, allows up to 3 offers (with small deviations) to alternate in the Buy Box, increasing the chances for sellers to be included and growing their sales. B2W commenced the soft launch of AME DIGITAL, the digital payment account that will revolutionize the way people relate with money. Initially, the AME Digital customer can buy on Americanas.com with many more benefits as well as transfer and receive funds, all in an easy, modern and safe way. This new B2W business will have a roadmap of new service releases and additional features throughout AME DIGITAL is an initiative of IF Innovation and Future, whose mission is to create and accelerate disruptive businesses. For more information about B2W Digital, click here. 11

12 FINANCIAL PRODUCTS AND SERVICES: +AQUI +AQUI is responsible for the management and promotion of financial products and services at Lojas Americanas and has been presenting fast growth and significant evolution in its strategic plan. Aiming to "realize dreams and meet people s consumption needs, providing credit, protecting their assets and exceeding their expectations with excellent service, +AQUI is present in 320 Lojas Americanas spread throughout 166 cities in 17 states of the country, in addition to the Federal District. +AQUI s premise is to offer services to clients through partnerships with specialized companies, that have outstanding performance in their sectors, such as BradesCard, Grupo Segurador BB/Mapfre Group, Banco CBSS, Portocred, Getnet, Claro, Serasa and Blackhawk Networks. The business is responsible for selling products, for the sales force management and for customer service. The partners are responsible for the existing portfolio management, funding, drafting of credit policies and management of the inherent risks in credit portfolios, insurances and the provision of their services. +AQUI operates in two strategic verticals of financial products and services: i) Assisted sales and; ii) Self-service. In the assisted sales front, customers can find in certain stores a service station specialized in financial products and services, such as credit card and personal loan. On the self-service front, the product portfolio, includes gift cards, prepaid digital content cards, technical assistance and installation services and can be found in specific areas of all stores. 1Q18 HIGHLIGHTS + AQUI positively influenced Lojas Americanas' result, adding financial products and services to an extensive portfolio available at the stores. Throughout the 1Q18, +AQUI offered financial products and services to more than 700 thousand people in the 320 stores where +Aqui is present. We highlight the following services: i. Control Plan: +AQUI offers the Claro Control Plan, which aims to meet the needs of clients who do not want to be surprised by their mobile bills. Customers will pay a fixed amount every month and have access to calls, internet and other sevices provided by Claro, that is, the ideal plan for those who want to know what they will pay at the end of the month. ii. Serasa Consultation: CPFs (own and third party) and CNPJ (National Register of Legal Entities) is a new service offered by +AQUI. In addition, we started to offer anti-fraud plans, which allow our clients to monitor their CPFs staying informed in case of any consultations or changes in their registrations. iii. Portocred Personal Loan: with the objective to augment credit options, +AQUI started a new partnership to offer personal loans. In 1Q18, +AQUI reached 1.6 million Lojas Americanas credit cards issued, with an increase of 47% on transactions vs. 1Q17. For 2018, Lojas Americanas remains enthusiastic about the opportunities that come with the progress of +AQUI. Throughout the year, the focus will be on increasing the productivity of the stores, expanding and diversifying the portfolio of financial products and services. 12

13 CONVENIENCE STORES Considering the initiative is a differentiated business and has great potential, we have developed a new brand: local. The objective is to have an individual identity as a convenience store and at the same time capture the value of the Lojas Americanas brand. local originates with a value proposition centered on proximity, aligned with the model s domination strategy and with the capacity of adapting to the locality in which the store is inserted. Existing stores will have their headers converted during the next three months. After defining the concept, the branding, and considering the results achieved, we announce the roll out of the model with 30 new local store openings in 2018.The results achieved so far, coupled with our capacity to execute and focus on sustainable growth, leave us confident and engaged to capture the great opportunities for growth and value creation. At the present time we have 9 stores in the state of Rio de Janeiro, all of which were placed between the neighborhoods of Copacabana and Centro. Following the domination strategy we created a space in which we intend to meet the needs of the local population, offering a new option of convenience. Quality, variety and practicality This is a new, differentiated and flexible store model with a carefully selected product mix aimed entirely at our customers' satisfaction. Throughout 2017, we conducted a series of experiments, refined existing routines and processes in our supply chain, using the Design Thinking methodology. We guaranteed the prompt delivery and replacement of items in the stores and in partnership with LET'S's complete service portfolio solution we will continue to improve supply efficiency. Our convenience stores have in average 100 m² of sales area and extended service hours from 7 am to 11 pm offering competitive prices and a mix of food-oriented products, especially dairy, sandwiches, salads, pre- prepared and frozen options, coffees, beers, wines, soda, water and juices. Circa of 80% of the assortment consists of food and beverages and approximately 20% by the complementary assortment traditionally found in Lojas Americanas, which brings a balance between important commercial variables such as sales and margins. In addition, this is a store model in which customers have a high-frequency purchasing profile. In certain categories, with only 9 stores, it was already possible to achieve impressive and surprising sales results considering the total sale of the Company s stores. 13

14 PRIVATE LABEL Lojas Americanas has 15 private labels, offering quality products at fair prices in various categories such as food, sweets and candies, household goods, clothing, stationery, toys, among others. The first quarter of 2018 was marked by several launches that had a significant participation in the sales of the Company's main events. The first big event was the Back to School, important for both School Basics and Office Basics brands. With a wide assortment of products, customers had excellent options such as backpacks, notebooks, stationery, agendas, among others. Then there was Carnival, with a strong presence of the Brink+ brand, with accessories and costumes. In addition, Basic+ developed T-shirts with exclusive prints for the event, with several humorous sayings. For the Leven private label, we launched mini granola cookies and whole-grain snacks, but the Company s big bet was the launch of the Leven water bottles available in the 510 ml version (with and without gas) and the 1 liter version (without gas). Also considering bevareges, we launched juices boxes in the 200 ml and 1 liter versions in flavors such as passion fruit, peach, orange and grape to increasing the offer of quality products in all segments. At the end of the quarter, we had a great event: Easter. This time, the protagonist private label was D'elicce, with great emphasis on licensed chocolate eggs, with incredible gifts that were a great success with children. In addition, we developed chocolat eggs focused on a more mature audience, mini chocolat eggs, Easter cakes and buttery biscuit cans to diversify product offering during the Biggest Easter in the World. LET S LOGISTICS AND DISTRIBUTION The shared management platform for the logistics and distribution assets of Lojas Americanas and B2W. LET'S is building a flexible fulfillment model (Flexible Fulfillment Platform) to maximize each company's competencies to capture every opportunity of cross-platform operation. In this sense, several initiatives are already underway, including the acceleration of the important O2O fronts (Online to Offline): Lojas Americanas in B2W Digital s Marketplace: In 4Q17, Lojas Americanas was connected to B2W's Marketplace, making its products available for delivery in the states of RJ, SP and MG. By the end of 2018, deliveries will be extended to all Brazilian states. Delivery to Store (Click and collect): Currently available at 400 Lojas Americanas Stores for deliveries of 1P products and will be expanded to 800 stores by the end of the year, and include the assortment from sellers connected to B2W Entrega (Delivery). The offering will be the only Click and Collect operation with presence in all Brazilian states. Every Store as a Seller: The initiative enables any physical store to be a seller in the B2W Marketplace, with product withdrawal (store inventory) within 1 hour after purchase online. Throughout 2018, all of the current 1,320 Lojas Americanas locations, plus those that will be opened by the end of the year, will be connected to the program. B2W Entrega - Drop off: By the end of 2018, B2W Entrega will make available a new order picking template for Marketplace sellers who can post their products at Lojas Americanas. AME DIGITAL An important highlight of the quarter was the soft launch of AME DIGITAL (AME), the digital payment account that will revolutionize the way people relate with money. Initially, the AME Digital customer can buy at Americanas.com with much more benefits, and also transfer and receive funds. This new business is an initiative of IF - Innovation and Future, whose mission is to create and accelerate disruptive businesses. AME Digital is an important part of B2W's consolidation as a digital platform that connects people, businesses, products and services, always with the goal of better serving customers and creating value for shareholders. 14

15 DIGITAL LAB With the objective to encourage research, to execute experiments and to search for solutions for the Company s current and future challenges, as well as to develop new talents, we created a laboratory at the Pontifical Catholic University of Rio de Janeiro (PUC-RJ). In 2016, we started the Pricing Project, which is designed to carry out research regarding statistical analysis of data, quantitative methods and casual interference. Since its inception, the project has been generating content necessary for the implementation of dynamic pricing and demand forecasting technology. The initiative brings systemic solutions through the intensive use of technology and the fostering of the entrepreneurial spirit. Pricing In order to intermediate the cooperation program between PUC-RJ and the Lojas Americanas commercial department, the Company has created a new business department, with the objective of transforming theoretical solutions into practices that bring measurable results for the Company. In the project, we follow five steps to select the department to be studied: 1) we set up descriptive statistics; 2) we create algorithms; 3) we execute price elasticity experiments per item and region; 4) we research the effects of promotions; 5) we research the effects of marketing on sales and profitability. The first line chosen to be studied was sweets and candies. We developed price-by-region experiments and tested promotion/marketing effects in the stores (test vs. control), evaluated the cross-effects of the price changes in the main substitute items, and developed a diagnoses related to our competitor s prices. Through the use of econometrics and big data, models that establish the behavior of items in the stores were defined and thus, we identified the competitive prices for determined items in order to maximize profit or revenue. The first results show both increases in volume and margins. Continuing with the project, we started developing pricing models for the audio and video category. The next challenge is to expand the project to new lines, where we intend to maintain the scope of the initial project and broaden the focus of the studies for a better understanding of the effects of cross-demand of items and the analysis of performance and price positioning by region between Lojas Americanas and its competitors. Store Laboratory Still under the scope of PUC-RJ s research laboratory, we created a project to implement a store laboratory on PUC-RJ s campus. The project consists of a multidisciplinary elective class for undergraduate and master's students and subsequentially, opening and operating a store that will serve as a laboratory developed through the technical cooperation between Lojas Americanas and PUC-RJ, involving research, education and practice. The project covers students and professors from various departments of the university, such as Architecture, Engineering, Economics, Administration and Design in combination with the Lojas Americanas team. The class began in March and each class has a workshop format. The challenges are related to the architectural model and structure of the store, new processes and new technology. Furthermore, the purpose of the class is to foster ideas that aim to improve the experience inside stores, creating differentiated spaces capable of providing advantages to our customers. 15

16 APP AMERICANAS.COM GET THE APP GET A DISCOUNT The Lojas Americanas discount area on the Americanas.com app showed a strong expansion of use by customers in our more than 1,300 stores. After 7 months of operation, offered discounts have been accessed more than 6 million times, meeting a variety of in-store consumption needs and reducing the need for re-markings. During this period we launched the new visual communication in the app, as well as, inside large stores, in order to publicize this new front of discounts. All the discounts campaign proposals are crafted based on the use of Big Data tools that generate insights for more assertive negotiation with suppliers. This way, we managed to offer the best discounts to customers. SOCIAL MEDIA Lojas Americanas continues to grow its presence in the digital world. We have recently reached the significant number of 2 million followers on Instagram, and on Facebook we are close to reaching the mark of 11 million followers. Currently we are among the 50 biggest pages of Brazil on Facebook, being the first retailer. Globally, we are among the top 5 physical retailers and Top 100 brands. We believe that by strengthening our presence in social networks, we broaden the contact with our customers, increase the dissemination of the assortment, offers and news. In this way, we create strategies of wide reach and interaction with the client, that integrate the digital culture to our sales model, aiming to expand the growing database and to increase the knowledge about the consumer. AWARDS AND RECOGNITIONS Lojas Americanas invests in actions that improve its management processes such as improvements in customer service, quality control of products and services, supplier audits, operation of distribution centers and optimization of internal processes. As a consequence of this effort, the Company has received several awards and recognitions that reinforce the brand's value, its reputation and its commitment to customers. Among the awards and recognitions received in the first quarter of 2018, the highlights were: Global Powers of Retailing Deloitte Lojas Americanas is the only Brazilian brand included in Deloitte's international ranking, which identified the 250 largest global retail companies. In addition, the Company reached the 5th place among companies in Latin America. The ranking is based on retail revenues for fiscal year 2016, by surveys in Deloitte's annual reports and analysis. Reputation Pulse Reputation Institute For the fourth consecutive year, Lojas Americanas was ranked as the Brazilian retail company with the best reputation. At the beginning of each year, the Reputation Institute researches the reputation of thousands of companies around the world, generating a robust database and enabling sectoral analyzes that are part of the strategy of hundreds of customers and partners. In Brazil, more than 300 companies are researched, with results that reinforce the importance of good reputation management to influence public perceptions about organizations. Os Mais Amados do Rio - Veja RJ In partnership with MindMiners, Veja Rio published, for the first time, the survey "Os Mais Amados do Rio", interviewing more than 1,700 consumers about the most beloved brands of Rio. Lojas Americanas reached the 1st place in the Houesehold Store category. RA 1000 Lojas Americanas S.A. maintains its RA 1000 certification, created by the claim registration website, Reclame Aqui, with the objective of rewarding companies that have excellent customer service rates. The Company received the certification for having excellent rates on Response, Solution and Customer Reviews reflecting its commitment to serve its customers with excellence. 16

17 SUSTAINABILITY For the fourth consecutive year, Lojas Americanas won the Business Sustainability Index (ISE) of B3 SA - Brasil, Bolsa, Balcão, and once again achieved the Selo Verde Certification of the Chico Mendes Socio-environmental Award, granted by the Chico Mendes Institute. For 2018, the Company's private social investment in third sector organizations, as well as the strategic sustainability plan, is being defined in accordance with the 2030 Brazil UN Agenda, which has as its guidelines the Sustainable Development Objectives (ODS). Strengthening the Company's commitment to ethics, the Board of Directors approved in March 2018 the update of the Code of Ethics and Conduct and the Company's Compliance and Anti-Corruption Policy, developed and reviewed by a multidisciplinary working group throughout In 2018, the Company aims to disseminate the concept of the code, as well as the policy, based on a structured communication and training program. The project will be led by the top leadership team and the goal is to reach all associates and stakeholders. Also reaffirming its public commitment to the theme, in April 2018, Lojas Americanas became a signatory of the Integrity and Anti-Corruption Business Pact, an initiative developed by the Ethos Institute, whose objective is to unite companies and promote a more ethical market and eradicate bribery and corruption. Continuing its support for culture, the Company will continue sponsoring the Livros nas Praças project for the 5 th consecutive year, providing free and accessible literature to 10 communities in Rio de Janeiro, as well as expanding its operations in São Paulo. 17

18 GENERAL CONSIDERATIONS ABOUT LOJAS AMERICANAS S.A. Lojas Americanas, one of the main retail chains in Brazil, is present all over the national territory through its multichannel chain, which comprises bricks-and-mortar stores, e-commerce, kiosks, telesales, TV channel and catalogues operations. The Company operates with two store formats: Traditional and Express. The first one has an average sales area of 1,000 square meters, an automated replenishment model and an assortment of 60,000 items while the second format has an average sales area of 400 square meters, just-in-time logistics and an assortment of 15,000 items, selected according to each location s needs. Additionally, the Company is developing the new convenience store model with a mix of products directed to food convenience. Lojas Americanas assortment is in continuous evolution, always aiming to exceed clients expectations when meeting their needs. In 03/31/2018, the 1,320 stores 816 in the Traditional format, 495 in the Express format and 9 Convenience stores have an equivalent to 1,074.7 thousand square meter sales area. In addition, they are present in 525 cities on all Brazilian states and are served by four distribution centers, located in Minas Gerais, Pernambuco, São Paulo and Rio de Janeiro. Our stores aredistributed as follows: 53.4% in Southeast region, 19.5% in the South/Midwest and 27.1% in the North/Northeast. Lojas Americanas shares are listed on the B3 through ticker symbols LAME3 (common) and LAME4 (preferred). For more information of the multiple and complementary platform of the Company, click here. CORPORATE GOVERNANCE Lojas Americanas S.A. has been listed on the Brazilian Stock Exchange (B3) since The Company has a shareholder base composed of common shares (LAME3) and preferred shares (LAME4). In addition, the Company approved in an Extraordinary General Meeting held on August 17th, 2017 the proposal to migrate to the special listing segment of the Level 1of Corporate Governance. The Company has a Board of Directors composed by seven members five appointed by the controllers and two appointed by the Board of Directors. Lojas Americanas also has a Fiscal Council formed by four members, two indicated by the controllers and two indicated by the minority shareholders. We Always Want More 18

19 APPENDIX I INCOME STATEMENT Lojas Americanas S.A. Income Statement Parent Company Period ended in March 31 Consolidated Period ended in March 31 (in million of Brazilian reais) 1Q18 1Q17 Restated Variation 1Q18 1Q17 Restated Variation Gross Merchandise Volume (GMV) 6, , % Gross Sales and Services Revenue 2, , % 4, , % Taxes on sales and services (389.9) (306.9) 27.0% (723.2) (660.0) 9.6% Net Sales and Services Revenue 2, , % 4, , % Cost of goods and services sold (1,587.0) (1,201.4) 32.1% (2,684.0) (2,390.0) 12.3% Gross Profit % 1, , % Gross Margin (% NR) 38.4% 39.5% -1.1 p.p. 33.3% 30.2% +3.1 p.p. Operating Revenue (Expenses) (637.1) (533.5) 19.4% (1,025.7) (830.0) 23.6% Selling expenses (504.6) (421.6) 19.7% (751.1) (608.2) 23.5% General and administrative expenses (27.1) (22.4) 21.0% (63.3) (41.8) 51.4% Depreciation and amortization (105.4) (89.5) 17.8% (211.3) (180.0) 17.4% Operating Income before Net Financial Result % % Net Financial Result (204.2) (320.1) -36.2% (320.2) (527.7) -39.3% Equity accounting (68.5) (105.2) -34.9% Other operating income (expenses)* (8.3) (6.0) 38.3% (19.5) (13.1) 48.9% Minority interest % Income tax and social contribution (49.6) % Net Income of the Period 20.0 (132.9) (132.9) - Net Margin (% NR) 0.8% -6.7% +7.5 p.p. 0.5% -3.9% +4.4 p.p. Adjusted EBITDA % % Adjusted EBITDA Margin (% NR) 17.7% 17.2% +0.5 p.p. 13.0% 11.2% +1.8 p.p. *Under the old accounting norm, called "non-operational result" The accompaning notes are an integral part of these financial statements Adjusted EBITDA - Operating profit before interest, taxes, depreciation and amortization, other operating income/expenses, equity accounting, minority and statutory participation. 19

20 APPENDIX II INCOME STATEMENT (COMPARATIVE BETWEEN THE OLD AND NEW MODEL) Lojas Americanas S.A. Income Statement Parent Company Period ended in March 31 Consolidated Period ended in March 31 (in million of Brazilian reais) 1Q17 Restated Adjustments Adjusted EBITDA - Operating profit before interest, taxes, depreciation and amortization, other operating income/expenses, equity accounting, minority and statutory participation. 1Q17. 1Q17 Restated Adjustments Gross Merchandise Volume (GMV) 4,774.2 (156.6) 4,930.8 Gross Sales and Services Revenue 2,292.9 (148.3) 2, ,082.7 (156.6) 4,239.3 Taxes on sales and services (306.9) 22.3 (329.2) (660.0) 8.8 (668.8) Net Sales and Services Revenue 1,986.0 (126.0) 2, ,422.7 (147.8) 3,570.5 Cost of goods and services sold (1,201.4) (1,382.9) (2,390.0) (2,526.6) Gross Profit ,032.7 (11.2) 1,043.9 Gross Margin (% NR) 39.5% +5.0 p.p. 34.5% 30.2% +1.0 p.p. 29.2% Operating Revenue (Expenses) (533.5) (55.5) (478.0) (830.0) (55.5) (774.5) Selling expenses (421.6) (55.5) (366.1) (608.2) (55.5) (552.7) General and administrative expenses (22.4) - (22.4) (41.8) - (41.8) Depreciation and amortization (89.5) - (89.5) (180.0) - (180.0) Operating Income before Net Financial Result 1Q (66.7) Net Financial Result (320.1) - (320.1) (527.7) 66.7 (594.4) Equity accounting (105.2) - (105.2) Other operating income (expenses)* (6.0) - (6.0) (13.1) - (13.1) Minority interest Income tax and social contribution Net Income of the Period (132.9) - (132.9) (132.9) - (132.9) Net Margin (% NR) -6.7% -0.4 p.p. -6.3% -3.9% -0.2 p.p. -3.7% Adjusted EBITDA (66.7) Adjusted EBITDA Margin (% NR) 17.2% +1.1 p.p. 16.1% 11.2% -1.4 p.p. 12.6% *Under the old accounting norm, called "non-operational result" The accompaning notes are an integral part of these financial statements 20

21 APPENDIX III BALANCE SHEET Balance Sheet Parent Company Consolidated (In Million Reais) 03/31/ /31/ /31/ /31/2017 ASSETS CURRENT ASSETS Cash and banks 2, , , ,567.5 Marketable securities 2, , , ,517.5 Clients accounts receivable 1, , , ,977.9 Inventories 2, , , ,608.5 Recoverable taxes Dividends receivable Prepaid expenses Other accounts receivable , ,062.4 Total Current Assets 8, , , ,604.7 NON-CURRENT ASSETS Receivables from stockholders - Stock Option Plan Deferred income tax and social contribution , ,012.0 Escrow deposits Recoverable taxes , ,430.9 Other non-current Investments 3, , Property, plant and equipment 2, , , ,283.0 Intangible assets , ,749.3 Total Non-Current Assets 7, , , ,931.7 TOTAL ASSETS 15, , , ,536.4 LIABILITIES AND SHAREHOLDER S EQUITY CURRENT LIABILITIES Suppliers 2, , , ,466.6 Loans and financing 1, , , ,096.5 Debentures , ,048.9 Payroll and related charges Taxes, fees and contributions Income tax and currents social contribution Dividends and participations proposed Provisions for contingencies Accounts payable - business combination Other current liabilities Total Current Liabilities 4, , , ,655.1 NON-CURRENT LIABILITIES Long term liabilities: Accounts payables from related parties Loans and financing 3, , , ,124.3 Debentures 3, , , ,355.1 Taxes, fees and contributions Provisions for contingencies Provisions for loss on investiments Accounts payable - business combination Other non-current liabilities Total Non-Current Liabilities 6, , , ,775.0 SHAREHOLDER'S EQUITY Social capital 3, , , ,926.5 Capital reserves Goodwill on capital transactions (8.0) (8.0) (8.0) (8.0) Profit reserves Treasury shares (44.5) (44.5) (44.5) (44.5) Adjustment of equity valuation Profit/ loss for the period Minority interest - - 1, ,484.6 Total Shareholders' Equity 4, , , ,106.3 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 15, , , ,536.4 The accompanying notes are an integral part of these financial statements 21

22 APPENDIX IV CASH FLOW STATEMENT Lojas Americanas S.A. CASH FLOW STATEMENT - INDIRECT METHOD Parent Company Consolidated (In Million of Brazilian Reais) 12/31/ /31/ /31/ /31/2017 Cash Flow from Operating Activities Net Income for the Period: 20.0 (132.9) (23.9) (199.8) Adjustments to Net Income: Depreciation and amortization Residual and deferred value of fixed assets write-off Equity accounting Income tax and social contribution current Income tax and social contribution referred 14.1 (47.3) (45.1) (145.5) Interest on credits 1.4 (0.4) 2.1 (0.4) Interest and variations financing and other debits Adjustment in provision for contingencies Reversal of provision for contingencies (2.6) - (3.5) - Stock option plan Allowance for doubtfull accounts (0.1) Provision for losses in inventories (15.6) 1.9 (15.8) 0.8 Others Adjusted Net Income Decrease (Increase) in Operating Assets: Trade accounts receivable Inventories (122.9) Recoverable taxes (6.0) 37.6 Prepaid expenses (32.6) (28.3) (27.8) (22.9) Escrow deposits (14.6) 0.1 (21.8) (1.2) Other accounts receivable 99.0 (124.3) 45.6 (171.1) Increase (Decrease) in Operating Liabilities: Suppliers (647.6) (340.0) (1,094.7) (1,289.3) Payroll and related charges Taxes payable (26.9) (24.2) (40.5) (68.0) Current income tax and social contribution (125.2) (116.9) (131.7) (122.4) Contingencies payments (6.6) (13.1) (6.6) (16.1) (95.6) (15.5) - - Interest settlement on loans and debentures (132.6) (230.2) (227.0) (344.7) Other accounts payable (25.8) (97.8) (43.0) (197.4) (1,052.3) (830.9) (1,535.3) (2,035.8) Net Cash Provided (or Used) by Operating Activities (467.5) (147.9) (1,337.0) Cash Flow from Investing Activities Marketable securities (170.3) 1,348.3 (317.3) Investiments on subsidiaries - (752.2) - - Plant, property and equipment (188.4) (201.9) (190.5) (203.5) Intangible (16.9) (32.0) (92.2) (96.1) Dividends received Net Cash Provided (or Used) by Invest Activities (1,151.6) 1,065.6 (616.9) Cash Flow from Financing Activities Loans e financing ( current and non-current): Borrowings , Liquidations (194.9) (292.2) (201.8) (489.7) (194.9) (276.6) Debentures (current and non-current) Borrowings Liquidations (500.0) - (500.0) - (500.0) - (500.0) - Receivables from Stock Option Plan Goodwill of the subsidiaries shares subscription Capital Increase - 2, ,312.2 Net Cash Provided (or Used) by Financing Activities (694.8) 2, ,659.0 Net Increase (Decrease) in cash , Cash at the begining of period 2, , Cash at the end of period 2, , ,228.5 Net Increase (Decrease) in cash , The accompanying notes are an integral part of these financial statements 22

23 APPENDIX V EFFECTS IN THE CONSOLIDATION OF B2W DIGITAL S TRANSPORTATION The Click-Rodo and Direct (subsidiaries of B2W Digital) provide merchandise distribution services to B2W, generating an elimination effect in the consolidated gross revenue and selling, general and administrative expenses (distribution expenses), according to the present accounting rules. The consolidated gross profit is reduced on the same proportion to the positive effect observed in the selling, general and administrative expenses, but with no effect on Adjusted EBITDA and Adjusted EBITDA Margin. Below is the adjusted consolidated result of Lojas Americanas, without the aforementioned effects on B2W Digital results and consequently on Lojas Americanas consolidated results: Lojas Americanas S.A. Income Statement Parent Company Periods ended in March 31 Consolidated Period ended in March 31 (in million of Brazilian reais) 1Q18 1Q17 Restated Variation 1Q18 1Q17 Restated Variation Gross Merchandise Volume (GMV) 6, , % Gross Sales and Services Revenue 2, , % 4, , % Taxes on sales and services (389.9) (306.9) 27.0% (723.2) (660.0) 9.6% Net Sales and Services Revenue 2, , % 4, , % Cost of goods and services sold (1,587.0) (1,201.4) 32.1% (2,638.6) (2,334.1) 13.0% Gross Profit % 1, , % Gross Margin (% NR) 38.4% 39.5% -1.1 p.p. 33.3% 30.2% +3.1 p.p. Operating Revenue (Expenses) (637.1) (533.5) 19.4% (1,071.1) (885.9) 20.9% Selling expenses (504.6) (421.6) 19.7% (796.5) (664.1) 19.9% General and administrative expenses (27.1) (22.4) 21.0% (63.3) (41.8) 51.4% Depreciation and amortization (105.4) (89.5) 17.8% (211.3) (180.0) 17.4% Operating Income before Net Financial Result and Equity Accounting % % Net Financial Result (204.2) (320.1) -36.2% (320.2) (527.7) -39.3% Equity accounting (68.5) (105.2) -34.9% Other operating income (expenses)* (8.3) (6.0) 38.3% (19.5) (13.1) 48.9% Minority interest % Income tax and social contribution (49.6) % Net Income of the Period 20.0 (132.9) (132.9) - Net Margin (% NR) 0.8% -6.7% +7.5 p.p. 0.5% -3.9% +4.4 p.p. Adjusted EBITDA % % Adjusted EBITDA Margin (% NR) 17.7% 17.2% +0.5 p.p. 13.0% 11.2% +1.8 p.p. * In the former accounting rules, considered as "non-operating income". The accompaning notes are an integral part of these financial statements Adjusted EBITDA - Operating profit before interest, taxes, depreciation and amortization, other operating income/expenses, equity accounting, minority and statutory participation. 23

24 APPENDIX VI NUMBER OF STORES EVOLUTION Evolution of the number of stores, associates and sales area - Lojas Americanas Period Number of Stores Sales Area Number of Associates 03/31/2017 1, thousand m² 20,898 Opened 16 Transfered/Deactivated -3 06/30/2017 1, thousand m² 20,704 Opened 38 Transfered/Deactivated -3 09/30/2017 1,180 1,006 thousand m² 21,195 Opened 134 Transfered/Deactivated -8 12/31/2017 1,306 1,070 thousand m² 23,125 Opened 14 Transfered/Deactivated 0 03/31/2018 1,320 1,075 thousand m² 23,030 24

25 EARNINGS RESULTS CONFERENCE CALL EBITDA (CVM 527/12) Resultado líquido do período, acrescido dos tributos sobre o lucro, das despesas financeiras líquidas das receitas financeiras e das depreciações, amortizações e exaustões. O EBITDA Ajustado (LAJIDA) Lucro operacional antes de juros, impostos, depreciação e amortização, outras receitas/despesas operacionais, equivalência patrimonial e participação minoritária é apresentado como informação adicional porque acreditamos se tratar de um indicador importante de nosso desempenho operacional e como forma de manter a comparabilidade com os resultados anteriormente divulgados. Considerações referentes às perspectivas do negócio, estimativas de resultados operacionais e financeiros, e às perspectivas de crescimento da Lojas Americanas, eventualmente expressas neste relatório, se constituem apenas em projeções e, como tal, baseiam-se exclusivamente nas expectativas da administração da Lojas Americanas em relação ao futuro do negócio e seu contínuo acesso a capitais para financiar o plano de negócios da Companhia. Tais considerações dependem, substancialmente, de mudanças nas condições de mercado, regras governamentais, pressões da concorrência, do desempenho do setor e da economia brasileira, entre outros fatores e estão, portanto, sujeitas a mudanças sem aviso prévio. Logomarca MSCI: O uso de marcas registradas e índices da Morgan Stanley Capital International Inc. ( MSCI ) não constituem patrocínio, endosso ou promoção por parte da MSCI, de suas filiadas, de seus fornecedores de informação ou de outros terceiros envolvidos ou relacionados em compilar, computar ou criar qualquer índice da MSCI. Os índices MSCI são marcas registradas da MSCI, ou de suas filiadas, e Lojas Americanas S.A. teve concedida licença para uso dessas marcas para determinados fins. 25