EARNINGS RESULTS 2Q10 and 1H10 E 1S10

Transcription

1 EARNINGS RESULTS 2Q10 and 1H10 E 1S10 1H10 CONSOLIDATED GROWTH OF 17.4% IN NET REVENUES AND OF 21.3% IN EBITDA. NET INCOME OF R$ 91.9 MILLION. (RESTATEMENT) Rio de Janeiro, August 5, 2010 Lojas Americanas S.A. [BOVESPA: LAME3 (common) and LAME4 (preferred)], the company that is one of the leading retail chains in Brazil, with 481 stores as of today and a presence in 23 states plus the Federal District, today announced its results for the 2 nd quarter of 2010 (2Q10) and 1 st half of 2010 (1H10). The accounting information included in the Quarterly Information that follows, except where otherwise indicated, is presented according to the rules of the Brazilian Securities Exchange Commission (CVM) and in Reais (R$), and the comparisons refer to the first half of 2009 (1H09) Consolidated Gross Revenues (R$ million) CAGR = 24.9% Consolidated Operational Expenses SG&A (%NR) 21,4 20,0 20,3 20,4 19,6 19,6 18,6 Consolidated Operating Income (R$ million) CAGR = 32.0% Consolidated EBITDA CAGR = 28.9% 330,2 259,3 105,1 116,2 156,2 398,0 482,6 10,5% 10,0% 9,9% 10,3% 10,4% 11,1% EBITDA (R$ MM) EBITDA (%NR) 11,5% OPERATIONAL AND FINANCIAL HIGHLIGHTS Consolidated Restatement Parent Company 1H10 1H09 Var. (%) Financial Highlights (R$ MM) 1H10 1H09 Var. (%) 4, , % Gross Revenues 2, , % 4, , % Net Revenues 2, , % 1, , % Gross Profit % 30.0% 31.5% -1.5 p.p. Gross Margin (%NR) 28.5% 28.6% -0.1 p.p % EBITDA % 11.5% 11.1% +0.4 p.p. EBITDA Margin (%NR) 11.3% 10.5% +0.8 p.p % Net Income % 2.2% 0.7% +1.5 p.p. Net Margin (%NR) 3.5% 0.7% +2.8 p.p. Executive Summary 1H10 Comparison to 1H09: Growth in consolidated net revenues (NR) of 17.4% and 13.8% in the parent company; year; Growth of same stores net revenues of 11% during the first half of the Operating expenses (sales and general/administrative) of 18.6% of the NR in the consolidated results and 17.2% of the Parent Company s NR, representing a reduction of 1.8 percentage point (p.p.) in the consolidated results and a reduction of 0.9 p.p. for the Parent Company; Consolidated EBITDA of R$ million or 11.5% of the NR, equivalent to 21.3% growth. For the parent Company, the EBITDA was R$ million or 11.3% of the NR, representing growth of 22.3%; Consolidated Net Income of R$ 91.9 million, compared to R$ 26.3 million in 1H09, which represents a gain of 1.5 p.p. in the consolidated net margin. Net Income of R$ 80.4 million in the parent company, which represents a gain of 2.8 p.p. in the Parent Company s net margin; Working Capital (parent company) improvement of 19 days in net working capital; B2W Growth of 9% in consolidated gross revenues and 11% in consolidated EBITDA in 1H10; FAI - Financeira Americanas Itaú (FAI) closed the first half of 2010 with about 2.7 million cards issued and R$ 899 million in volume of receivables. At the end of June, the share of FAI cards (private label and co-branded) reached 15% of the Parent Company s sales; program. Schedule for store openings in 2010 in line with the SEMPRE MAIS BRASIL Charts 1H means the 1 st half of each year. Only the 1H09 and 1H10 data are presented according the IFRS. The historic data are in compliance with the corporate norms in effect for each period. 1 / 22

2 Multichannel Retail Structure: Clients are served through bricks-andmortar stores, Internet, telephone, catalogues, TV and kiosks. Financial services are offered through FAI. MULTICHANNEL RETAIL STRUCTURE Lojas Americanas operates through a multichannel service structure. In addition to the bricks-and-mortar store chain, the Company reaches customers with a wide range of products and services sold via Internet, telephone, catalogues, TV and kiosks. B2W Companhia Global do Varejo, the result of the merger of Americanas.com and Submarino in 2006, has a portfolio that includes the Americanas.com, Submarino, Shoptime, Blockbuster Online, Ingresso.com, Submarino Finance and B2W Viagens brands, which offer more than 30 categories of products and services through the Internet, telephone sales, catalogues, TV and kiosk distribution channels. Lojas Americanas stake in B2W at the close of the first half of 2010 was 56.62%. It is also worth mentioning the participation in Financeira Americanas Itaú (FAI), a joint venture with Banco Itaú, responsible for offering credit and financial products to clients. The following organizational chart illustrates the integrated approach of Lojas Americanas: Multichannel Retailer Bricks-and-Mortar Ecommerce, Telephone Sales, Catalogues, TV and kiosks. Financial Products Participation: 50% Results Consolidation: 50% Participation: 56.62% Results Consolidation: 100% 2 / 22

3 Sales Area (thousand m²) Number of Stores GENERAL CONSIDERATIONS We are presenting the performance comments relative to the second quarter and first half of 2010 of the Parent Company (Lojas Americanas) and the consolidated operations (Lojas Americanas, subsidiaries and jointly-controlled company). It should be noted that in 2010 the Easter event occurred on April 4, whereas in the previous year it occurred one week later, on April 12. Therefore, the sales related to this important event had a smaller impact in 2Q10 when compared to the same period of In order to eliminate this effect, the analyses of the results will be oriented towards the accumulated first half numbers. In the first half of 2010 we inaugurated 7 new stores. Besides the stores that were inaugurated through to the end of the first half, we have also opened another 2 stores. We have 49 additional openings scheduled and another 7 contracts for store openings in 2010 under preparation. The Company continues its operational strategy of preservation of cash and the first half of 2010, as was the year of 2009, was characterized by a better combination between the growth of sales, profitability, working capital and the Company s capital structure. Sales Area x Number of stores Position as of June Stores Stores Stores Stores Stores Stores Stores It is important to mention, for analysis of the Company s margins as a percentage of net revenue (NR), that the ICMS Tax Substitution Regime (ST) took effect in some Brazilian states, mainly in the state of São Paulo where most of our suppliers are located and where we have 185 stores. The ST, which changes the way the ICMS is collected for some product segments, registers the tax as Cost of Goods Sold (COGS) rather than as a tax on sales. 3 / 22

4 Consolidated Gross Revenues of R$ billion in 1H10 OPERATING PERFORMANCE Gross Revenues In the first half of 2010 (1H10), the Company s consolidated gross revenues totaled R$ billion, representing growth of 10.4% over the same period of 2009 (1H09). From the Parent Company s point of view, gross revenues for 1H10 totaled R$ billion, compared to R$ billion in 1H09, the equivalent to a 10.2% increase. 1,278 Consolidated Gross Revenues (R$ million) CAGR = 24.9% 1,528 2,075 3,376 4,211 4,388 4,844 Parent Company Gross Revenues (R$ million) CAGR = 16.7% 1,090 1,176 1,424 1,778 2,167 2,501 2,756 Consolidated Gross Revenues per Associate In 1H10, consolidated gross revenues per Associate was R$ 295 thousand, an increase of 4.7% compared to 1H09. Consolidated Gross Revenues per Associate (R$ thousand) % growth of same stores Net revenues in the 1H10 period vs. 1H09 Net Revenues In 1H10, consolidated net revenues of Lojas Americanas and its subsidiaries were R$ billion, compared to the R$ billion reported in 1H09, the equivalent to a 17.4% increase. The Parent Company s net revenues in 1H10 totaled R$ billion, compared to the R$ billion reported in 1H09, the equivalent to a 13.8% increase. In the same stores concept, the growth of net revenues in the first half of 2010 over 1H09 was 11%. 4 / 22

5 Gross Profit Consolidated gross profit in 1H10 was R$ 1,265.2 million. The consolidated gross margin in 1H10 was 30.0% of net revenues (NR), compared with a 31.5% margin posted in 1H09. The Parent Company s gross margin in 1H10 was 28.5% of the NR, compared to the margin of 28.6% of the NR in 1H09. In 2010, as well as during 2009, new categories were introduced into the tax substitution regime, mainly in the state of São Paulo, which affects the gross margin because under the tax substitution regime, the ICMS tax incurs on the Cost of Goods Sold (COGS) and no longer on tax on sales. Analyzing the gross margin over gross revenues, in order to expunge the tax substitution effect, the Parent Company gross margin in 1H10 was 24.1%, compared to 23.4% in 1H09, which represents a 0.7 p.p. gain between the periods. Consolidated Gross Profit (R$ Million) ,131.91, Parent Company Gross Profit (R$ Million) Consolidated Gross Margin (%NR) Parent Company Gross Margin (%NR) Operating Expenses In 1H10, the consolidated operating expenses (selling and general/administrative) totaled R$ million, or 18.6% of net revenues (NR), compared to R$ million, or 20.4% of NR in 1H09. It must be taken into consideration in this analysis the opening of 17 stores over the past 12 months; the evolution of sales through our e-commerce operations, which grew 9% in the first half of 2010; and Financeira Americanas Itaú, which grew its receivables portfolio by 54%, reaching a level of R$ 899 million (50% consolidated in Lojas Americanas). From the Parent Company point of view, the operating expenses (selling and general/administrative) in 1H10 totaled R$ million, or 17.2% of NR, a reduction of 0.9 p.p. (%NR) compared to 1H09. 5 / 22

6 Consolidated Operational Expenses SG&A (%NR) Parent Company Operational Expenses SG&A (%NR) H10 vs. 1H09 Growth of 29.0% in the consolidated operating income Operating Income In 1H10, the consolidated operating income* was R$ million, representing an increase of 29.0% over 1H09. 1H10 s operating margin (%NR) rose by 0.9 p.p. over 1H09 (%NR). The evolution of the operating performance of Lojas Americanas and its subsidiaries over the past six years presented a compound annual growth rate (CAGR) of 32.0%, which indicates that the Company s strategy is converging towards the consolidation of the competitive advantages and has been adding opportunities for increasing profitability in the long-term. The Parent Company s operating income in 1H10 was R$ 217,9 million, the equivalent to an increase of 37.7% when compared to 1H09. The operating margin (%NR) rose 1.7 p.p. over 1H09 (%NR). Consolidated Operating Income (R$ million) CAGR = 32.0% Parent Company Operating Income (R$ million) CAGR = 22.9% * Operating Income before Financial Income, Equity Accounting and Other operating revenues (expenses). EBITDA In 1H10, the consolidated EBITDA* totaled R$ million, representing 21.3% growth over the same period of The consolidated EBITDA margin was 11.5% of net revenues in 1H10, compared to 11.1% of NR in 1H09. In 1H10, the Parent Company s EBITDA totaled R$ million, the equivalent to a 22.3% increase over the same period of The Parent Company s EBITDA margin for the period was 11.3%, 0.8 p.p. higher than that presented in 1H09. The EBITDA by company is presented in the following table: 6 / 22

7 Restatement 1H10 %NR 1H09 %NR Var. ($) Var. (%) EBITDA % % % LOJAS AMERICANAS % % % B2W % % % FAI, BWU AND OTHERS (5.9) - (19.8) % It is important to note that the EBITDA has grown constantly at a pace that is higher than the increase registered by gross revenues. During the period comprising 1H04 and 1H10, the compound annual growth rate (CAGR) in the consolidated EBITDA was 28.9%, compared to a rate of 24.9% in consolidated gross revenues. For the Parent Company, in the same period, the CAGR was 20.8% in the EBITDA and 16.7% in Gross Revenues. Consolidated EBITDA CAGR = 28.9% % 10.0% 9.9% 10.3% 10.4% 11.1% EBITDA (R$ MM) EBITDA (%NR) 11.5% Parent Company EBITDA CAGR = 20.8% % % % 9.9% 9.2% 8.6% 8.7% EBITDA (R$ MM) EBITDA (%NR) * EBITDA Earnings before interest, taxes, depreciation and amortization and excluding other operating revenues/expenses is presented as additional information because we believe it represents an important indicator of our operating performance, as well as being useful for the purpose of comparison of our performance with that of other retail sector companies. However, no number should be considered by itself as a substitute for net income calculated according to Brazilian Corporate Law and the rules of the Brazilian Securities Exchange Commission (CVM) or, furthermore, as a measure of the profitability of the Company. Moreover, our calculations may not be compatible with similar measures adopted by other companies. Sales by Means of Payment The sales by means of payment from the first halves of 2010 and 2009 can be seen in the following table: Sales by Means of Payment Mean of Payment Parent Company Consolidated 1H10 1H09 Chg. 1H10 1H09 Chg. Cash 54% 53% +1 pp 39% 38% +1 pp Check 1% 1% - 1% 1% - Credit Card 31% 32% -1 pp 47% 51% -4 pp Private Label Cards* 14% 14% - 13% 10% +3 pp *Considers the Financeira Americanas Itaú and Submarino Finance private label cards. 7 / 22

8 Working Capital [gain of 19 days in net working capital in 2Q10 vs. 2Q09] Gain of 19 days in the To maintain comparability in the analysis, in the old accounting rules the Parent Parent Company s net Company s net working capital in 2Q10 improved by 19 days when compared to the working capital in 2Q10 second quarter of At the end of 2Q10, the net working capital in IFRS was 10 vs. 2Q09 days. The improvement in Lojas Americanas net working capital in 2Q10 demonstrates the constant striving to improve our operating processes and the development of partnerships with our suppliers. better Net Working Capital (Parent Company) days Q09 2Q09 3Q09 4Q09 1Q10 2Q10 2Q10 IFRS Days of net working capital: (days of inventories days of suppliers + days of accounts receivables) Financial Result In 1H10, net financial expenses totaled R$ million, from the consolidated viewpoint. In 1H09, the same indicator was R$ million. From the Parent Company viewpoint, the net financial expenses in 1H10 totaled R$ million against R$ million in 1H09. It is important to emphasize that for better evaluation of the Parent Company s net financial income, we must consolidate the financial revenues and expenses of the non-operating subsidiaries (Klanil, Louise, BWU and others). Thus, in the following table we present a view of the financial income with the aforementioned effects. Restatement Breakdown of the Net Financial Result - R$MM 1H10 1H09 Variation R$ MM % (+) Interest and monetary variation on money market investments % (+) PV adjustment on sales (10.0) -38.2% (=) Total Financial Revenues % (+) Interest and monetary variation on loans and financing (129.8) (139.6) % (+) Monetary variation on tax liabilities (4.8) (5.6) % (+) Bank charges and taxes on financial transactions (6.7) (6.4) (0.3) 4.7% (+) PV adjustment on suppliers (41.3) (47.3) % (=) Total Financial Expenses (182.6) (198.9) % Parent Company Net Financial Result (before non-operating subsidiaries and FAI) (128.2) (149.2) % (+) Net Financial Result of Non-Operating Subsidiaries and FAI % Parent Company Net Financial Result (after non-operating subsidiaries and FAI) (108.1) (138.6) % (+) B2W Net Financial Result - consolidated (138.2) (120.9) (17.3) 14.3% Consolidated Net Financial Result (246.3) (259.5) % 8 / 22

9 The net financial expenses of the Parent Company in the first half of 2010, taking into account the aforementioned effects and before B2W, totaled R$ million, presenting a reduction of 22.0% when compared to the R$ million expenses registered in 1H09. The Company continues to reaffirm its commitment to a conservative cash investment policy, manifested through the utilization of hedge instruments, in foreign currencies, to offset eventual foreign exchange rate fluctuations, whether relative to financial liabilities or total cash position. These instruments offset the foreign exchange risk, transforming the cost of the debt to local currency and interest rates (as a percentage of the CDI*). Similarly, it is worth mentioning that the Company s cash is invested with Brazil s largest financial institutions. * CDI Interbank Deposit Certificate: average rate of funding through the interbank market. Net Income and Earnings Per Share Consolidated net income for the first half of 2010 totaled R$ 91.9 million, compared to R$ 26.3 million reported for the same period of Parent company s net income for the first half of 2010 totaled R$ 80.4 million, compared to R$ 13.3 million reported for the same period of It is important to emphasize that in 1H10, net income per outstanding share (excluding shares in treasury), was R$ , significantly higher than the amount presented in the previous year, of R$ Parent company s net income per outstanding share, was R$ , significantly higher than the amount presented in the previous year, of R$ The following table presents the main variations from EBITDA to net income, in the Parent Company: RECONCILIATION OF THE NET INCOME R$MM Lojas Americanas (Parent Company) Restatement 1H10 1H09 Var. ($) Var. (%) EBITDA % (+) Depreciation/Amortization (45.0) (56.8) % (+) Parent Company Financial Result (128.2) (149.1) % (+) Equity Accounting (B2W) (0.2) -1.3% (+) Equity Accounting (FAI) (5.5) (15.1) % (+) Equity Accounting (other subsidiaries) / Other Operating Income* % (+) Income Tax and social contribution (31.7) (3.4) (28.3) 832.4% NET INCOME % EARNINGS PER SHARE R$ R$ R$ % OUTSTANDING SHARES 725, ,965 * In the old accounting rules, considered as "non-operating income". 9 / 22

10 INDEBTEDNESS Lojas Americanas uses its cash flow to prioritize its investments that generate the best returns for shareholders. Thus, we have listed below the main actions carried out in the July 1, 2009 to June 30, 2010 period: Investments made by Lojas Americanas and B2W in property and intangible assets (development of websites and systems) in the amount of R$ million; Payment of dividends in the amount of R$ 38.4 million, paid on April 12, 2010 referring to 2009 s earnings; Share buy-backs (LAME3 and LAME4) in the amount of R$ 0.3 million; Lojas Americanas consolidated short- and long-term loans and debentures on June 30, 2010 totaled R$ 4,084.2 million. If we deduct the cash position of R$ 2,935.0 million (cash + money market investments + accounts receivable from credit and debit cards + 50% of FAI s consumer financing) from total loans, we arrive at a net debt position of R$ 1,149.2 million. Consolidated Indebtedness 06/30/10 03/31/10 06/30/09 Short-term loans and financing ,427.5 Short-term debentures Short-term indebtedness 1, , ,527.1 Long-term loans and financing 2, , ,513.4 Long-term debentures Long-term indebtedness 2, , ,176.4 Gross indebtedness 4, , ,703.5 Cash and banks Money market investments 1, , ,331.0 Receivables from clients (credit/debit cards) Customers financing - FAI (50%) Total Cash and Cash Equivalents 2, , ,293.2 Net Cash (Debt) (1,149.2) (1,186.2) (1,410.3) Average Maturing Term of the Debt In order to face the uncertainties and volatility of the financial market, Lojas Americanas is guided by the principle of preserving cash and extending its debt profile. During 2009 and the beginning of 2010, a number of measures were taken with this objective in mind, permitting us to consolidate the Company s growth plan over the long-term. As can be seen in the previous table, gross consolidated short-term debt declined by R$ million from June 30, 2009 to the same period of In counterpart, the long-term debt rose R$ million. In the same period, there was a reduction of R$ million in the net debt and an improvement of the average debt maturity from 609 days to 782 days (from 20 to 26 months), extending the average maturity by 28.4%. 10 / 22

11 Capital expenditures from the Parent Company s viewpoint totaled R$ 38.6 million in 1H10, focused on the opening and refurbishment of stores CAPITAL EXPENDITURES AND EXPANSION Parent Company Investments Lojas Americanas, from the Parent Company s viewpoint, invested through 1H10 a total of R$ 38.6 million, with emphasis on: expansion and refurbishment of the store network and technological upgrade. Included in this total are investments in goods for rental in the amount of R$ 8.4 million. The following table shows the details of Lojas Americanas Parent Company investments in 1H10: R$ million % Openings and Refurbishment % Goods for rental % Technological upgrade % TOTAL % Opening of 9 stores as of today 6 in the Traditional model and 3 in the Express model. Expansion of the Chain of Stores We intend to create value for our shareholders, following our internal motto We Always Want More. The Lojas Americanas expansion project takes place on three main fronts: Lojas Americanas (brick-and-mortar retail), B2W (Internet, telephone sales, catalogues, TV and kiosks) and Financeira Americanas Itaú (financial products). In the past nine years, Lojas Americanas increased its network of stores five times through its organic expansion program and the acquisition of BWU, the company that owned the BLOCKBUSTER trademark in Brazil. In 2010, until today, in step with our SEMPRE MAIS BRASIL program, we inaugurated 9 new stores and decided to transfer four BLOCKBUSTER stores to Lojas Americanas stores. Besides the stores that were opened, we have another 49 openings scheduled and another 7 contracts for store openings in 2010 under preparation. Openings in the 1 st Half/2010: State Traditional Stores Express Stores Sales Area (m²) CE 2-1,912 MA 1-1,147 PA 1-1,334 RJ SP TO 1-1,166 Total 5 2 6, / 22

12 Openings after the 1 st Half/2010: State Traditional Stores Express Stores Sales Area (m²) MA 1-1,056 RJ Total 1 1 1,721 Expansion Plan for the next four years SEMPRE MAIS BRASIL For the next four years (period between 2010 and 2013), we are planning to open 400 new stores in Brazil. Currently, all of the Company s stores are located in only 154 of the more than 5,500 cities in the country, which demonstrates the opportunity Lojas Americanas has for opening new stores in cities that are at a greater distance from Brazil s large urban centers. As illustrated in the following chart, based on economic feasibility studies and analysis conducted internally using the EVA (Economic Value Added) tool, together with socio-economic data (population, income, access to basic services, access to consumer goods, among others), we believe that at this moment there is the possibility that our brick-and-mortar retail stores could be present in another 200 cities, besides the ones in which we already have operations. Current cities with Lojas Americanas Cities with potential for opening a new store 5,150 Nationwide distribution At the end of 2009 our stores were located in 22 states of the country plus the Federal District, with distribution as follows: 66% in the Southeast region, 19% in the South/Midwest and 15% in the North/Northeast. Coupled with our confidence in the development of the country, the expansion plan for these new cities could especially benefit the North/Northeast/Midwest regions, as demonstrated in the projection of our openings that follows. 12 / 22

13 Store Distribution by Region Dec/2009 % Openings % Dec/2013* % Southeast % % % Northeast 61 13% 90 22% % North 9 2% 40 10% 49 6% Midwest 38 8% 40 10% 78 9% South 52 11% 30 8% 82 9% TOTAL % % % *Estimate of the number of stores by region by the end of As occurred historically, the growth should be in the proportion of 70% Traditional stores (average sales area between 1,300 m 2 and 1,500 m 2 ) and 30% Express stores (average sales area between 300 m 2 and 500 m 2 ). The following table shows the estimate of store openings in the next four years: Year Number of Stores to to to to 130 Moreover, in order to support the distribution of merchandise to the stores, we are preparing the opening of two new Distribution Centers, to be located in the Midwest and South regions. It is important to mention that the Company s current cash position and the future cash generation, pegged to the elongation of the debt profile, let us in a comfortable position to make the expected investments, which should be approximately R$ 1.0 billion. Investment (2010 to 2013) - R$MM Openings/Refurbishment 720 Technology/Logistics/Operation 280 Total 1,000 In 2006, a loan for approximately R$ 220 million was approved by the BNDES, earmarked for expansion, refurbishment and standardization of the store network along with technological modernization during the last three years. As we have done in the past, we are presenting a project to the BNDES for our expansion program for the period, which we are calling SEMPRE MAIS BRASIL. Finally, we would like to reinforce that, We will continue to pursue our learning path and to overcome obstacles, and this makes us enthusiastic since it will enable us to achieve new levels of results, always seeking to better meet our customer s needs. 13 / 22

14 B2W 0.8 p.p. gain in 2Q10 EBITDA margin (%GR) B2W International expansion of ticket sales. The company already operates in 239 rooms in México and 74 rooms in Argentina B2W COMPANHIA GLOBAL DO VAREJO We are presenting below the highlights of the results for the second quarter (2Q10) and first half (1H10) of our subsidiary B2W - Companhia Global do Varejo (BOVESPA: BTOW3). The financial statements that serve as the basis for the following comments were prepared in accordance with the norms issued by the Securities Exchange Commission (CVM), as well as the Novo Mercado listing rules. Except when otherwise specified, the analyses refer to the consolidated results. Gross Revenue (GR): +3% in 2Q10 and +9% in 1H10 In 2Q10, GR reached R$1,059.1MM, representing a growth of 3% in comparison with 2Q09. The growth in 1H10 was of 9% versus 1H09. Net Revenue (NR): +11% in 2Q10 and +20% in 1H10 NR increased from R$858.7MM in 2Q09 to R$953.8MM in 2Q10, a growth of 11%. In 1H10, NR reached R$1,867.1MM, +20% versus 1H09. Selling, General and Administrative Expenses: -6% in 2Q10 SG&A expenses totaled R$140.0MM in 2Q10, a reduction of 6% comparing to 2Q09. In 1H10, SG&A expenses increased 5% versus 1H09. EBITDA: +11% in 2Q10 and in 1H10 EBITDA reached R$122.4MM in 2Q10, representing a 11% growth. In 1H10 reached R$225.6MM, growth of 11% versus 1H09. EBITDA Margin: +0.8 p.p. in 2Q10 The EBITDA Margin was 11.6% of GR in 2Q10, an increase of 0.8 p.p. comparing to 10.8% of GR in 2Q09. In 1H10, the EBITDA Margin was 10.9% of GR, versus 10.7% of GR in 1H09. Cash Conversion Cycle: 96 days in 2Q10 The cash conversion cycle of the Parent Company was 96 days in 2Q10, an improvement of 1 day compared to 2Q09, and an improvement of 10 days in relation to 1Q10. In IFRS the cash conversion cycle was 116 days. International expansion of tickets sales B2W continues expanding the online sales of movie tickets, and besides the presence in over 1,100 cinema s rooms across Brazil, already operates in 239 rooms in Mexico and 74 rooms in Argentina. Submarino Card: penetration reached 29% The participation on sales made on the Submarino website reached 29% in June 10. Parent Company Results: Gross Revenue: Reached R$1,005.2MM in 2Q10, with growth of 2% in relation to 2Q09. In 1H10 the growth was 9% comparing to 1H09. EBITDA Margin: Reached 11.3% of GR in 2Q10, increasing 0.8 p.p. in relation to 2Q09. In 1H10 the margin was 10.7% of GR comparing to 10.5% of GR in 1H / 22

15 FINANCEIRA AMERICANAS ITAÚ - FAI Financeira Americanas Itaú (FAI) is dedicated to the financing of purchases via private label and co-branded (Visa and Mastercard) credit cards, the supply of personal credit and other financial products and services (insurance and extended guarantees). Share of FAI cards (private label and cobranded) was 15% of the Parent Company s sales at the close of June It operates through points of sale in the Lojas Americanas stores, through the Internet (Americanas.com and Shoptime) and the Shoptime TV channel. During the second half of 2008, a new strategy was implemented for offering the private label and co-branded credit cards as being the best means of payment in Lojas Americanas stores and Internet operations, as well as slowing down the offer of personal loans. This new way of operating led to a need for investing in the client base (private label and co-branded cards), and at the end of the second quarter of 2010, FAI already had issued about 2.7 million cards, of which 2.2 million were private label, 437,000 were co-branded and 15,000 were for personal loans. Financeira Americanas Itaú closed 2Q10 with about 2.7 million cards issued and R$ 899 million in receivables. At the end of June 2010, the share of FAI cards (private label and co-branded) reached 15% of the Parent Company s sales. The receivables portfolio in June 2010 reached R$ 899 million, representing a 54.2% increase over June The mix of the current portfolio is composed of 5.6% personal loans and 94.4% credit cards, which in the same period of the previous year was 19.6% personal loans and 80.4% credit cards. This transformation helped to improve the portfolio s losses index, which went from 8% in 2Q09 to 6% in 2Q10. When compared to the same period of the previous year, we can observe the growth of the operation, resulting in an increase of 110% of the Gross Financial Revenues added to Services Revenues Portfolio of Receivables FAI (R$ million) % Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q Private Label + Co-Branded Personal Loans Glossary: Revenues: Purchases conducted using Americanas cards, either cash or installments, and liberation of personal loans. Receivables portfolio: Amounts to receive from sales. Gross financial and services revenues: Revenues from the receivables portfolio stemming from the allocation of interest, and services and insurance tariffs, net of financial mediation expenses and the provision for doubtful accounts. 15 / 22

16 About Lojas Americanas S.A. Lojas Americanas was founded in 1929, in Niterói, Rio de Janeiro, and is presently in all of the regions of the country (23 states plus the Federal District), with 481 stores 286 in the Traditional format, 193 in the Express format, and 2 in the BLOCKBUSTER format equivalent to 512 thousand square meters of sales space. The average sales space of traditional stores is 1,500 square meters, with daily stock replacement and an offer of approximately 60,000 items. The Express model follows the smaller store concept, with an average size of 400 square meters, justin-time logistics and a selected product range of about 15,000 items, appropriate for each location and client profile of these stores. Lojas Americanas assures its clients competitive prices with respect to its competition and offers quality products in its Home, Leisure, Beauty, Children s, Confectionary and Convenience Foods worlds. Lojas Americanas brick-and-mortar stores are serviced by three distribution centers, located in São Paulo, Rio de Janeiro and Pernambuco. Lojas Americanas shares are listed on the BOVESPA through ticker symbols LAME3 (common) and LAME4 (preferred). We always want more 16 / 22

17 ATTACHMENTS Parent Company Income Statements INCOME STATEMENTS PERIODS ENDED ON JUNE 30 PARENT COMPANY (R$ MM) 2Q10 Restatement 2Q09 Restatement Var % 1H10 Restatement 1H09 Restatement Gross Sales and Services Revenues 1, , % 2, , % Taxes, returns and discounts on sales (217.4) (245.7) -11.5% (430.9) (457.4) -5.8% Net Sales and Services Revenues 1, , % 2, , % Cost of goods and services sold (834.6) (832.7) 0.2% (1,661.4) (1,458.8) 13.9% Gross Profit % % Var % Gross Margin (% of Net Revenues) 28.1% 26.6% +1.5 p.p. 28.5% 28.6% -0.1 p.p. Operating Revenues (expenses) (223.3) (218.1) 2.4% (445.5) (426.3) 4.5% Sales (181.3) (168.9) 7.3% (366.9) (334.6) 9.7% General and administrative (18.5) (20.7) -10.6% (33.6) (34.9) -3.7% Depreciation/Amortization (23.5) (28.5) -17.5% (45.0) (56.8) -20.8% Operating Expenses (% of Net Revenues) 19.2% 19.2% % 20.9% -1.7 p.p. Operating Income before financial expenses and equity accounting % % Operating Margin (% of Net Revenues) 8.8% 7.3% +1.5 p.p. 9.4% 7.7% +1.7 p.p. Financial Expenses - Net (61.8) (69.9) -11.6% (128.2) (149.1) -14.0% Equity Accounting % % Other operating Income (expenses)* (0.5) (0.5) Income Tax and Social Contribution (14.0) (5.1) 174.5% (31.7) (3.4) 832.4% Net Income % % Net Margin (% of Net Revenues) 3.2% 1.0% +2.2 p.p. 3.5% 0.7% +2.8 p.p. EBITDA % % * Under the former accounting system, called non-operating income. EBITDA Margin (% of Net Revenues) 10.9% 9.8% +1.1 p.p. 11.3% 10.5% +0.8 p.p. 17 / 22

18 Consolidated Income Statements INCOME STATEMENTS PERIODS ENDED ON JUNE 30 CONSOLIDATED (R$ MM) 2Q10 Restatement 2Q09 Restatement Var % 1H10 Restatement 1H09 Restatement Gross Sales and Services Revenues 2, , % 4, , % Taxes, returns and discounts on sales (321.3) (414.1) -22.4% (629.1) (797.0) -21.1% Net Sales and Services Revenues 2, , % 4, , % Cost of goods and services sold (1,500.8) (1,409.5) 6.5% (2,949.3) (2,458.8) 19.9% Gross Profit % 1, , % Var % Gross Margin (% of Net Revenues) 29.6% 29.7% -0.1 p.p. 30.0% 31.5% -1.5 p.p. Operating Revenues (expenses) (414.7) (418.3) -0.9% (838.6) (801.2) 4.7% Sales (344.2) (341.1) 0.9% (708.7) (659.7) 7.4% General and administrative (41.3) (42.7) -3.3% (73.9) (74.2) -0.4% Depreciation/Amortization (29.2) (34.5) -15.4% (56.0) (67.3) -16.8% Operating Expenses (% of Net Revenues) 19.5% 20.9% -1.4 p.p. 19.9% 22.3% -2.4 p.p. Operating Income before financial expenses and equity accounting % % Operating Margin (% of Net Revenues) 10.1% 8.9% +1.2 p.p. 10.1% 9.2% +0.9 p.p. Financial Expenses - Net (127.6) (131.3) -2.8% (246.3) (259.5) -5.1% Other operating Income (expenses)* (13.2) (6.9) 91.3% (22.3) (11.3) 97.3% Profit sharing for employees / minority interest (7.8) (8.3) -6.0% (13.9) (13.2) 5.3% Income Tax and Social Contribution (23.8) (14.1) 68.8% (52.2) (20.4) 155.9% Net Income % % Net Margin (% of Net Revenues) 2.0% 0.9% +1.1 p.p. 2.2% 0.7% +1.5 p.p. EBITDA % % EBITDA Margin (% of Net Revenues) 11.5% 10.6% +0.9 p.p. 11.5% 11.1% +0.4 p.p. Total outstanding shares (thousand) 725, , , ,965 Net income per outstanding share R$ R$ R$ R$ * Under the former accounting system, called non-operating income. 18 / 22

19 Balance Sheets Parent Company Consolidated LOJAS AMERICANAS S.A. BALANCE SHEETS ON JUNE 30, 2010 AND /30/ /30/ /30/ /30/2009 In Thousand Reais Restatement Restatement Restatement Restatement Parent Company Consolidated 06/30/ /30/ /30/ /30/2009 Restatement Restatement Restatement Restatement TOTAL ASSETS LIABILITIES CURRENT CURRENT Cash and banks 74, ,392 94, ,791 Temporary cash investments 690, ,017 1,540,697 1,326,353 Trade accounts receivable 523, ,762 1,394, ,419 Inventories 696, ,336 1,207,711 1,057,788 Recoverable taxes 160, , , ,171 Deferred income tax and social contribution Dividends and Interest on own capital receivable Prepaid expenses 12,164 6,298 42,673 27,681 Other accounts receivable 153, , , ,184 2,309,604 1,691,179 4,731,310 3,885,387 NON-CURRENT Suppliers 988, ,439 1,524,022 1,312,956 Loans and financing 508, , ,754 1,427,468 Debentures 156,809 78, ,720 99,649 Payroll and related charges 25,190 19,786 38,373 32,867 Taxes payable 82,739 79, ,087 96,467 Dividends and participations proposed Provisions for contingencies 9,736 15,507 15,579 19,062 Other current liabilities 62,801 43, , ,526 1,834,357 1,593,451 3,070,911 3,135,399 NON-CURRENT Long-Term Assets Temporary cash investments - - 6,131 4,679 Loans and advances to subsidiary companies 4, Receivables from stockholders - Stock Option Plan 33,259 50,196 33,259 50,196 Deferred income tax and social contribution 37,993 57, , ,468 Escrow deposits 40,117 41,340 64,377 61,377 Prepaid expenses ,616 Recoverable taxes and other accounts receivable 8,545 11,659 8,585 11, , , , ,035 Long-Term Liabilities: Loans and advances from subsidiaries 2,567 2, Loans and financing 1,344,243 1,107,671 2,358,513 1,513,396 Debentures 222, , , ,965 Taxes payable 53,951 52,813 83,429 78,664 Provision for contingencies 51,690 47,286 72,769 55,103 Allowance for Loss on Investments 17, Advance for cession in mining usage rights 26,010 27,540 21,675 22,950 Other accounts payable ,618 14,044 1,718,450 1,538,208 3,138,208 2,347,122 Investments 546, , Property and equipment 392, , , ,889 Intangible 443, , , ,427 Deferred assets 61,673 88, ,568,214 1,587,329 1,839,856 1,736,351 STOCKHOLDERS' EQUITY Capital 242, , , ,845 Capital reserves 6,502 3,932 6,502 3,932 Income reserves 181,806 68, ,806 68,210 Treasury stock's (157,918) (157,584) (157,918) (157,584) Equity valuation adjustments Retained earnings 51,044 (10,622) (9,465) (92,411) Comprehensive income Capital transactions goodwill Retained losses Minority Interest ,545 74, , , , ,217 3,877,818 3,278,508 6,571,166 5,621,738 The accompanying notes are an integral part of these financial statements 3,877,818 3,278,508 6,571,166 5,621, / 22

20 Cash Flow Statements LOJAS AMERICANAS S.A. CASH FLOW STATEMENT - INDIRECT METHOD Parent Company Consolidated PERIODS ENDED ON JUNE 30 1H10 1H09 1H10 1H09 In Thousand Reais Restatement Restatement Restatement Restatement Cash Flow From Operating Activities Net Income for the period 80,424 13,285 91,937 26,261 Adjustments to net income: Depreciation and Amortization 54,713 56,856 65,772 67,324 Write-off of the residual and deferred value of fixed assets 2,675 3,286 19,367 8,007 Equity in subsidiaries and affiliates (22,873) (7,613) - - Deferred income tax and social contribution 18,383 (562) 26,349 9,936 Interest on credits (2,007) (2,032) (2,007) (2,032) Interest and variations on financing and other debt 117, , , ,397 Provision for contigencies adjustment - - 5,540 2,666 Stock Option Plan , Allowance for doubtful accounts 1, ,384 45,794 Others (6,846) (6,746) (2,242) (35,790) Minority interest ,844 6,883 Adjusted Net Income 244, , , ,997 Decrease (increase) in Operating Assets: Trade accounts receivable 148, ,780 (15,875) 233,236 Inventories 74,744 (25,476) 43,119 (68,133) Recoverable taxes (42,250) (29,090) (37,810) (34,224) Prepaid expenses (current and non-current) (3,539) (1,769) (38,330) (9,028) Escrow deposits 404 (1,425) (1,787) (5,934) Other accounts receivable (current and non-current) (17,888) (2,167) (19,986) (7,315) 159,810 91,853 (70,669) 108,602 Increase (decrease) in Operating Liabilities: Suppliers (261,457) (234,855) (270,944) (259,260) Payroll and related charges 1,972 (2,075) 3,616 (1,768) Taxes payable (current and non-current) (63,327) (43,822) (81,520) (62,693) Contingencies payments (current and non-current) (8,644) (3,114) (10,688) (4,946) Loans and advances from subsidiaries 2,730 1, Other accounts payable (current and non-current) (32,885) (17,591) (9,486) (8,144) (361,611) (299,709) (369,022) (336,811) Net Cash provided (or used) by Operating Activities 42,561 (24,865) 36, ,788 Cash Flows from Investing Activities Temporary cash investments 447, , , ,632 Property and equipment (33,861) (15,531) (57,207) (33,081) Intangible (4,756) (6,528) (147,330) (89,249) Dividends received 6,403 10, Net Cash Flow provided (or used) by Investing Activities 415, , , ,302 Cash Flow from Financing Activities Loans and Financing (current and non-current): Borrowings 150, , , ,864 Liquidation (236,144) (539,014) (555,519) (908,026) (86,144) (218,860) 67,284 (416,162) Debentures (current and non-current) (16,945) (97,299) (36,160) (127,748) Accounts Receivable Discounts (315,566) (62,886) (390,768) (213,975) Receivables from Stock Option Plan 4,483 2,219 4,483 2,219 Capital Increase Dividends and participations paid (43,467) (37,400) (48,497) (44,981) Share buy-back (125) (2,342) (125) (2,342) Net Cash provided (or used) by Financing Activities (457,764) (416,568) (403,783) (802,989) Net increase (decrease) in Cash 75 36,686 (47,335) 63,101 Cash at the beginning of the period 74,001 55, , ,690 Cash at the end of the period 74,076 92,427 94, ,791 Net Increase (decrease) in Cash 75 36,686 (47,335) 63,101 The accompanying notes are an integral part of these financial statements 20 / 22

21 Evolution of the number of stores, associates and sales areas Lojas Americanas Number of Stores Sales Areas Number of Associates June 30, ,000m² 13,098 Opened Closed/Transferred 13 (6) March 31, ,000 m² 13,441 Opened Closed/Transferred 4 (1) June 30, ,000 m² 13,535 This table contemplates the number of stores, sales areas and number of associates of the Parent Company and BWU. Stores transferred: the product assortment of the stores in the BLOCKBUSTER format were transferred to the nearest Lojas Americanas stores. 21 / 22

22 EARNINGS CONFERENCE CALL Statements relating to the prospects of the business, estimates for operating and financial results, and those related to growth prospects of Lojas Americanas, eventually expressed in this report are merely projections and, as such, are based exclusively on the expectations of Lojas Americanas management concerning the future of the business and its continued access to capital to fund the Company s business plan. Such statements depend, substantially, on changes in market conditions, government regulations, competitive pressures, the performance of the Brazilian economy and the industry, among other factors and are, therefore, subject to change without prior notice. MSCI Brand logo: The use of Morgan Stanley Capital International Inc. registered trademarks and indices ("MSCI") does not constitute any type of sponsorship, endorsement or promotion on the part of MSCI, its affiliates, its suppliers or other parties involved or related in the compilation, computation or creation of any MSCI index. MSCI s indices are registered trademarks of MSCI or its affiliates and Lojas Americanas S.A. has been granted a license to use these trademarks for given purposes. 22 / 22