EARNINGS RELEASE 2Q17 and 1S17

Transcription

1 EARNINGS RELEASE 2Q17 and 1S17 CONSOLIDATED NET REVENUE OF R$ 7.7 BILLION IN THE 1S17 CONSOLIDATED EBITDA OF R$ 1.1 BILLION & EBITDA MARGIN OF 14.6% (+0.4 p.p) Rio de Janeiro, August 10th, 2017 Lojas Americanas S.A. [BOVESPA: LAME3 (common) and LAME4 (preferred)], one of the leading retail chains in Brazil. With 1,145 stores in 06/30/2017 and present in all Brazilian states, announces today its results for the 2 nd quarter of 2017 (2Q17) and 1 st semester of 2017 (1S17).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$). The comparisons refer to the 2 nd quarter of 2016 (2Q16) and 1 st semester of FINANCIAL AND OPERATIONAL HIGHLIGHTS Executive Summary 1S17 Comparison to 1S16 Consolidated Net Revenue (R$ MLN) CAGR +8.5% 8,074 7,876 7,671 7,023 5,773 4,690 4,904 1S11 Consolidated Gross Profit (R$ MLN) and Gross Margin (%NR) 1, S11 1S15 1S16 Consolidated Adjusted EBITDA (R$ MLN) and Adjusted EBITDA Margin (%NR) S S11 1S12 1, S S12 1S13 1, S13 1S14 CAGR +8.5% 2, S14 2, S15 2, S16 Evolution in Number of Stores 643 1S S S13 CAGR +11.6% S S S S15 1, S S16 1S17 2, S17 1, S S17 Net Revenue In the 1S17, the Parent Company s net revenue was R$ 4.8 billion, an increase of 5.1% in relation to the 1S16. Regarding the consolidated result, the net revenue was of R$ 7.7 billion, a variation of -2.6% in relation to the 1S16; Same Stores Net Revenue The growth in same stores net revenue was of 3.7% in the 1S17; Gross Margin The Parent Company s gross margin was of 34.9% of the net revenue in the 1S17, same level as in the 1S16. In the consolidated result, the gross margin reached 30.5% of the net revenue, an increase of 1.0 p.p.; Adjusted EBITDA The Parent Company s Adjusted EBITDA reached R$ million in the 1S17 and Adjusted EBITDA margin (%NR) was of 18.2%. For the consolidated result, the Adjusted EBITDA totaled R$ 1.1 billion in the 1S17 and the Adjusted EBITDA margin (%NR) was of 14.6% in the 1S17; Net Income The consolidated net income was of R$ 62.7 million in the 2Q17 and R$ million in the 1S17; Expansion 85 years in 5 Somos Mais Brasil : For the period between 2015 and 2019, we plan to open 800 new stores in Brazil; For 2017, we aim to open 200 new stores. Thus far, we have inaugurated 34 new stores (vs. 19 until 08/11/2016) and we have 160 scheduled stores yet to be opened. Convenience Stores For 2017, we have the goal to open 10 new convenience stores. +AQUI In June, we reached 1.1 million issued cards. B2W DIGITAL B2W Digital announces a total GMV of R$ 2.8 billion, a growth of 10.1% in the 2Q17; The B2W s Marketplace is still in fast developing and has already reached R$ 816 million of the GMV in the 2Q17 (105% growth), with a participation of 29.6% in the total GMV. GMV (Gross Merchandise Volume) is the consolidated gross sales and services revenue plus sales placed through B2W Digital s marketplace, after Parent Company Consolidated 1S17 1S16 Var. (%) Financial Highlights (R$ MLN) 1S17 1S16 Var. (%) 4, , % Net Revenue 7, , % 1, , % Gross Profit 2, , % 34.9% 34.9% - Gross Margin (%NR) 30.5% 29.5% +1,0 p.p % Adjusted EBITDA 1, , % 18.2% 18.2% - Adjusted EBITDA Margin (%NR) 14.6% 14.2% +0.4 p.p Net Income % 0.6% -2.1 p.p. Net Margin (%NR) -0.9% 0.3% -1.2 p.p. returns, and including taxes. Adjusted EBITDA - Operating profit before interest, taxes, depreciation and amortization, other operating income/expenses, equity accounting, minority participation. 1 / 20

2 COMMENTS ON OPERATIONAL PERFORMANCE EASTER EFFECT In 2017, the Easter event happened on April 16 th, whilst in 2016 it took place on March 27 th. Therefore, in 2017, the sales related to this important event were concentrated in the second quarter. GROSS MERCHANDISE VOLUME (GMV) GMV (Gross Merchandise Volume) represents the consolidated gross sales and services revenue plus the sales placed through B2W Digital Marketplace platforms and, consequently is part of the consolidated financial statements of Lojas Americanas. In the 1S17, the consolidated GMV reached R$ 10.5 billion, a growth of 4.2% in relation to the R$ 10.1 billion registered in the 1S16. GROSS REVENUE In the 1S17, the Parent Company s gross revenue was of R$ 5.6 billion, an increase of 3.9% in relation to the 1S16. In the consolidated result, the gross revenue reached R$ 9.1 billion, a variation of -3.6% when compared to the 1S16. In this period, the growth in gross revenue regarding the same stores concept was of 2.4% in relation to the first semester of / 20

3 NET REVENUE In the 1S17, the Parent Company s net revenue was of R$ 4.8 billion, an increase of 5.1% in relation to the 1S16. In the consolidated result, the net revenue was R$ 7.7 billion, a variation of -2.6% in relation to the 1S16. During this period, the growth in net revenue regarding the same store concept was of 3.7% in comparison to the first semester of GROSS PROFIT AND GROSS MARGIN In the 1S17, the Parent Company s gross margin was equivalent to 34.9% of the net revenue (NR), aligned with the 1S16 result. In the consolidated view, the gross margin in 1S17 represented 30.5% of the NR, an expansion of 1.0 p.p. in relation to the 29.5% gross margin achieved in the 1S16. The constant evolution regarding gross margin results is a consequence of continuous improvements in the operational efficiency of the stores and the maturing of several projects implemented by the Company, such as: Supply Chain, Private Label +AQUI and Pricing. 3 / 20

4 SALES, GENERAL AND ADMINISTRATIVE EXPENSES In 1S17, the Parent Company s sales, general and administrative expenses totaled R$ million, 16.8% of the NR. In the consolidated view, the sum was of R$ 1.2 billion, which corresponds to 15.9% of the NR. EBITDA AND EBITDA MARGIN In the 1S17, the Parent Company s Adjusted EBITDA reached R$ million, an increase of 5.2%, with a margin of 18.2% of the NR, maintaining the margin when compared to the same period of the previous year. In the consolidated view, the Adjusted EBITDA reached R$ 1.1 billion with a margin of 14.6% of the NR, an increase of 0.4 p.p. in relation to the 1S16. Adjusted EBITDA - Operating profit before interest, taxes, depreciation and amortization, other operating income/expenses, equity accounting, minority participation. EBITDA (CVM 527/12) In the 1S17, the Parent Company s Adjusted EBITDA reached R$ million. 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 1S17, representing 14.3% of the NR. In the consolidated view, the Adjusted EBITDA reached R$ 1.12 billion in the 1S17. 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$ 1.09 billion in the 1S17, representing 14.3% of the NR. 4 / 20

5 VARIATION IN THE WORKING CAPITAL In the 1S17, the variation in the Parent Company s net working capital was of R$ million over a variation of R$ million during the same period of the previous year. Comparing both periods we had a reduction in the working capital necessity in the amount of R$ million. Parent Company Working Capital - R$ MLN 1S17 1S16 Inventories (72.2) Suppliers (1,018.0) (1,042.5) 24.5 Gross Accounts Receivable from Credit Cards (159.2) (+/-) Working Capital (266.9) (505.6) NET FINANCIAL RESULT The Company s net financial expenses totaled R$ million in the 1S17, a variation of +15.3% compared to the R$ million reported in the 1S16. In the consolidated view, the net financial expenses were equal to R$ 1.0 billion in the same period, a variation of +11.8% in relation to the R$ million registered in the 1S16. The Company s net financial expenses totaled R$ million in the 2Q17, a variation of -1.8% compared to the R$ million reported in the 2Q16. In the consolidated view, the net financial expenses were equal to R$ million in the same period, a variation of -1.9% in relation to the R$ million registered in the 2Q16. The improvement observed in the 2Q17 financial result derives from the variation of the Company s net debt and the recent decreases in the CDI*. These positive effects were impacted by a decline in the volume of supplier payment anticipations which also had their rates influenced by the CDI* reduction. *CDI - Interbank Deposit Certificate: average rate of funding through the interbank market. FINANCIAL OPERATION Restricted Public Offering of Shares At the Company s Board of Directors meeting held on March 8, 2017, an effective capital increase in the total amount of R$ 2.4 billion with the primary distribution of 9,303,562 common shares and 142,925,334 preferred shares was approved. The price was fixed at R$ per preferred share and at R$ per common share. The Company s intention is to use the net resources from the offer to (i) support store expansion; (ii) capitalize B2W Digital and; (iii) strengthen capital structure. The physical and financial settlement of the shares occurred on March 14, B2W Digital Capital Increase At the Extraordinary Shareholders Meeting performed by the subsidiary B2W, on March 25, 2017, the capital increase of R$ billion was approved, through the private emission of 110 million nominative common shares at the price of R$ per share. The Company subscribed on March 27 th, 2017, 68,378,509 shares, contributing with the amount of R$ million, which corresponded to the Company's proportional participation in the subsidiary's share capital, at the date of the capital increase notice to the shareholders. 5 / 20

6 11 th Issuance of Debentures On May 2 nd, 2017, the Company made the public distribution of the 11 th issue of simple debentures in two series, totaling R$ 1.5 billion with final maturity in April On the first series remuneratory interest will be applied over 115.0% of the CDI* per year. On the second series the interest will be equivalent to the variation of the IPCA plus 1.70% per year. The funds raised through the debenture will be used to lengthen the Company's indebtedness profile within the scope of the ordinary management of its business. 3 rd Issuance of Promissory Notes On June 29 th, 2017, the Company performed the public distribution of the 3 rd issuance of commercial promissory notes, in a single series, totaling R$ 900 million with interest equivalent to % of the CDI* per year and maturity in June The funds raised through the promissory notes will be used to lengthen the Company's indebtedness profile, within the scope of the ordinary management of its business. *CDI - Interbank Deposit Certificate: average rate of funding through the interbank market. NO EXPOSURE TO FOREIGN EXCHANGE VARIATIONS The Company continues to reaffirms 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 2Q17, the consolidated net income reached R$ 62.7 million and in the 1S17 totaled R$ million. The following table shows the main variations from the Adjusted EBITDA to the net result: Reconciliation of the Net Result - R$ MLN 2Q17 2Q16 % 1S17 1S16 % Adjusted EBITDA % % (+) Depreciation / Amortization (112.4) (82.9) 35.6% (201.9) (158.4) 27.5% (+) Net Financial Result (222.3) (226.3) -1.8% (542.4) (470.4) 15.3% (+) Equity Accounting (65.8) (55.9) 17.7% (171.0) (117.7) 45.3% (+) Other Operat. Income (Expenses)* (8.5) (5.1) 66.7% (14.5) (10.2) 42.2% (+) Income tax and social contribution (64.9) (31.9) 103.4% (17.6) (50.8) -65.4% (=) Net Result % (70.2) * In the old accounting rules, considered as "non-operating income". Parent Company Adjusted EBITDA - Operating profit before interest, taxes, depreciation and amortization, other operating income/expenses, equity accounting, minority participation. 6 / 20

7 INDEBTEDNESS Lojas Americanas consolidated short and long-term loans and debentures at 06/30/2017 totaled R$ 15,627.0 million. If we deduct the cash position of R$ 10,209.8 million (cash + financial investments + accounts receivable from credit and debit cards) from the total loans, we reach a net debt position of R$ 5,417.2 million. R$ million Indebtedness 06/30/ /30/ /30/ /30/2016 Short Term Debt 1, , ,107.7 Short Term Debentures 1, , Short Term Indebtedness 2, , , ,467.2 Long Term Debt 3, , , ,517.0 Receivables Fund (FIDC) , Long Term Debentures 3, , , ,090.4 Long Term Indebtedness 7, , , ,564.4 Total Debt (1) 9, , , ,031.6 Cash and banks 1, , ,011.2 Financial investments 3, , ,642.4 Financial investments (BWU)* Accounts receivable from credit / debit cards 1, , , ,576.1 Total Cash (2) 6, , , ,229.7 Net Cash (Debt) (2) - (1) (3,491.7) (3,972.4) (5,417.2) (5,801.9) Net Debt / Adjusted EBITDA Average Maturity of Debt (in days) *Considers financial applications of BWU [NE 12 (a)] Parent Company Consolidated Adjusted EBITDA - Operating profit before interest, taxes, depreciation and amortization, other operating income/expenses, equity accounting, minority participation. In the consolidated view, the net debt was 1.9x the accumulated EBITDA from the last 12 months. The average debt maturity was 879 days in 06/30/2016 (29 months). In the Parent Company, the net debt was 1.6x the accumulated EBITDA from the last 12 months. The average debt maturity was 970 days in 06/30/2016 (32 months). To face the uncertainties and the volatility of the financial market, Lojas Americanas has the orientation of preserving the 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 accounts receivable in Lojas Americanas view is shown in the following table: R$ million Parent Company Consolidated Accounts Receivable Conciliation 06/30/ /30/ /30/ /30/2016 Gross credit-cards receivable , , ,553.0 Receivable discounts (494.9) (487.2) (2,781.0) (1,943.1) Electronic debits and checks receivables Receivables Fund (FIDC) Accounts Receivable from credit / debit cards 1, , , ,576.1 Present-value adjustment (15.6) (13.0) (16.4) (15.5) Allowance for doubtful accounts (1.0) (0.5) (27.8) (13.9) Other accounts receivable Net Accounts Receivable 1, , , , / 20

8 SALES BY MEANS OF PAYMENTS The opening of sales by means of payments of the Parent Company in 1S17 and 1S16 can be verified in the table below: Parent Company Means of Payment 1S17 1S16 Var. Cash 57% 56% +1 p.p. Credit Cards 43% 44% -1 p.p. AWARDS AND RECOGNITIONS AWARDS AND RECOGNITIONS Lojas Americanas invests in actions that improve its management processes such as advances on customer service, quality control of our products and services, supplier audits, operation of distribution centers and computerization of all our internal processes. As a result of this effort, the Company received several awards and recognitions that reinforced the brand s value, reputation and commitment to customers. Among the awards and recognitions of the first semester of 2017, the highlights were: Reputation Pulse For the second consecutive year, Lojas Americanas was ranked as the most reputable retail company, being the 1 st retailer in the Brazilian rank. Poderosos do Varejo Global 2017 Deloitte A study by Deloitte Consulting, which identified the 250 largest global retail companies. Lojas Americanas is the only Brazilian brand to be included in the international rank. Reponsabilidade Social Corporativa - IBEF Lojas Americanas received a special honor from IBEF, as a company with Corporate Social Responsibility. O Melhor de São Paulo - Serviços Lojas Americanas was ranked as 1 st in the Department Stores category. The study published by Folha de São Paulo and organized by Datafolha does an x-ray of the best services in São Paulo analyzing more than 30 categories. Estudo Varejo Eletro CVA Solutions Lojas Americanas was ranked as 1 st in the Brand Strength category of the Retail Eletro 2017 study, in which consumers across the country rate retailers according to attractiveness of promotions, payment facilities, freight cost, shop hours, variety of products, courtesy in service and time in line. Social Media During this semester, we surpassed 1 million followers in Lojas Americanas Instagram account. This is a milestone that reflects our striving digital presence and ability to integrate the digital culture to our traditional sales model. Through posts that address product launches, tips and recipes, we create interactive content that enables the depth, along with Big Data and Analytics tools, of our consumer knowledge - promoting the Company s sales potential. This result reflects our excellence in always being close to our customers offering the best service through a multiple and complementary sales platform. 8 / 20

9 INVESTMENT INVESTMENTS In 1S17, Lojas Americanas Parent Company invested a total of R$ million, with emphasis on expansion, improvements in the stores and technology. The investment made towards the opening of new stores reflects the acceleration of the 85 em 5 SOMOS MAIS BRASIL plan with a higher number of stores being inaugurated and in construction phase. Investments R$ million % Openings / Improvements % Technology % Operations and Others 4.3 1% Total % EXPANSION EXPANSION OF STORE NETWORK With the aim to open 800 new stores in the period between 2015 and 2019, the Company maintains its expansion plan: "85 years in 5 - Somos Mais Brasil". We believe that, at this time, there is the possibility of our physical retail to be present in a much more significant number of cities, besides the 450 cities that we currently have stores in. Our commitment is to meet the consumption needs of our customers, exceeding expectations. Lojas Americanas reaffirms its commitment to maintain the pace of business growth foreseen in the "85 years in 5 - Somos Mais Brasil" Program with the objective of opening 200 new stores in Until now, we opened 34 new stores (vs. 19 until 08/11/2016). We already have 1,156 stores in operation, in addition to another 160 new stores scheduled for 2017, being 51 stores under construction, 45 contracted stores and 64 stores in an advanced stage of negotiation. The current phase of negotiations indicates that we are on the right track to successfully complete the scheduled openings for the year. As in previous years, we will maintain the 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. SUPPLY CHAIN During the first semester of 2017, Lojas Americanas continued to advance in the development of new supply strategies throughout the chain. Due to this, the Supply Chain area has been contributing for the success of the Company s expansion plan and by supplying both the Traditional and Express store models. The implementation of new practices of buying and distributing has reduced logistics costs, as well as the levels of stock and has improved service by guaranteeing a greater presence and variety of products in the stores. In the distribution centers the optimization of processes generated greater efficiency in the picking activity, whilst the implementation of new processes brought significant advances for transportation safety and kept stores supplied. 9 / 20

10 CONVENIENCE STORE Lojas Americanas continues with its strategy to enter the convenience store market. At the end of 2016, we launched our first store of the new format in Rio de Janeiro. Beyond the traditional and indispensable assortment to our customers, the store offers a mix of products focused on food convenience, especially dairy products, sandwiches, savory, pre-prepared and frozen foods, coffees, beers and wines. All products are carefully selected taking into consideration analysis regarding local buying and consumption behavior. By doing so, we reach ideal and adaptable assortments for each and every entry region of this new business front. Reiterating our commitment in being ever so close to our customers, and after the success of our first full concept convenience store, we announce that we will open circa of 10 new convenience stores in We are confident on the vast potential of the convenience market, that aligned to our execution and logistics capability, provides growth and value capture opportunities for the Company. 10 / 20

11 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 consumption needs, providing credit, protecting their assets and exceeding their expectations with excellence", +AQUI is present in more than 300 Lojas Americanas spread throughout 140 cities in 17 states of the country, plus the Federal District. +AQUI operates in two strategic verticals of products and services: i) Assisted sales and; ii) Self-service. Assisted Sales The stores with the presence of +AQUI have a service station specialized in financial products and services adherent to the retail business, offering increasing benefits, and convenience for all of our clients. In 2017, +AQUI started offering personal loans in all its service stations, providing yet another credit solution for our customers. In June 2017, +AQUI reached 1.1 million issued Lojas Americanas credit cards. The main advantages for customers who have the card are: exclusive discounts and differentiated installments in several departments of Lojas Americanas, in addition to a special credit limit for payment in installments in any establishment. For the Company the main advantages are: the commission received for every issued card, lower card fee costs, increased purchase frequency and average ticket. In the Insurance front, the product portfolio that counts with the Extended Warranty and insurance against Theft or Robbery of mobile devices continues to show strong growth due to the increase in conversion of eligible products and the aforementioned increase in the average ticket per sale. We believe that the expansion of the portfolio of insurance offered at Lojas Americanas and at the +AQUI service stations will allow us to reach new levels of results. Self-service Present at all Lojas Americanas, the portfolio of products within the self-service format are an option for customers interested in several financial products and services. Currently, the portfolio includes prepaid credit cards, gift cards, themed gift certificates, licensed prepaid digital content cards, technical assistance for installation of air conditioners, TVs installation service, helpdesk and digital recharge of prepaid cell phones. In the 2Q17 we added new contents to our already comprehensive list of options for customers. We have prepaid cards from Playkids, UBER, Hotel Urbano - with a bonus of 20% - and Minecraft as well as prepaid public utility cards such as the Zona Azul - only in São Paulo - and the Toll Stop Sem Parar. For 2017, Lojas Americanas continues enthusiastic about the opportunities presented by the evolution of + AQUI allowing us to reach new levels of results. 11 / 20

12 PRIVATE LABEL Lojas Americanas has 16 private labels, that offer quality products at fair prices in all of the departments of the store, with emphasis on the categories of food, sweets, household goods, apparel, stationery and toys. In the first semester of 2017 we continued with the strategy of expanding our private label by increasing our product portfolio. For the Leven brand, we launched Granola Snacks, Whole Grain Biscuits and Cereal Bars. For the D'elicce brand, in addition to Easter s sale success with a wide variety of chocolate eggs, mini chocolate eggs and Easter cakes, we launched a variety of Chocolate Gifts for Mother's Day and Valentine's Day. The apparel brand, Basic+, shows a strong presence in the winter season with options such as coats, jackets and blouses for adults, children and toddlers. Likewise, the Home Basics brand guarantees presence in the winter with the launching of blankets with single and double size options. Altogether, in the first half of the year, more than 6,000 items were sold in the 16 brands and for the second half of the year we are ready to offer our customers a diversity of new options! SUSTAINABILITY For the third consecutive year, we conquered a participation in the BM&FBOVESPA Corporate Sustainability Index (ISE) portfolio that will be in effect for the whole year of This way, we have been able to strengthen our commitment to social and environmental development, coupled with good economic performance. We also received, for the third consecutive year, the "Green Seal - Chico Mendes Award" in the category "Socio-Environmental Responsible Management. Through a partnership with the State Secretary of Education (Seeduc) and Senac, Lojas Americanas idealized and inaugurated logistics and high technology laboratories at São João State College, in Queimados, in Rio de Janeiro State. The inauguration of the project was in April 2017 and, with this, the students can now count on a professional course of Logistics Technician integrated to High School. In the second semester, a similar laboratory will be inaugurated at a public school in Mesquita, Rio de Janeiro. In May of 2017, the project Galpão Aplauso, sponsored by Lojas Americanas, opened a new class of professional logistics course. The project serves low-income young professionals between the ages of 17 and 29, residents of Baixada Fluminense and neighborhoods in the west zones of Rio de Janeiro. The partnership has already contributed to the graduation of more than 300 students. Lojas Americanas supports projects of the Socio-environmental Stock Exchange (BVSA), operated by the BM&FBOVESPA Institute and the Brazil Foundation. In 2016, the Company completed the goal of supporting 10 BVSA projects throughout the years of 2015 and All projects were selected based on the UN Sustainable Development Goals. Altogether, these projects will benefit about 5,000 people in four states of Brazil. Lojas Americanas also sponsors the Grael Project, reinforcing support for sports and a healthy lifestyle by encouraging the inclusion, training and democratization of sports practice. In 2017, new classes were opened in the project that assists per year about 400 young people for free in sailing courses and professional workshops in the nautical sector. In 2017, the "Livros nas Praças" project, sponsored by Lojas Americanas, will be present in 10 different spaces in Rio de Janeiro and will make special visits to the Benjamin Constant Institute. The bus-library has already impacted about 20,000 people, promoting free access to a diverse collection of children's, and adult's works. For the fourth consecutive year, Lojas Americanas has promoted the "Todo mundo vai" race and walking circuit. The objective of the event is to promote the practice of physical exercises - that bring greater well-being and quality of life to clients, associates and society in general. The 4K and 8K courses brought together 5,000 people at Aterro do Flamengo in Rio de Janeiro. 12 / 20

13 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 1,100 square meters, a daily replacement and an assortment of 60 thousand items while the second format has an average sales area of 400 square meters, just-in-time logistics and an assortment of 15 thousand items, selected according to each location s needs. Lojas Americanas assortment is in continuous evolution, always aiming to exceedclients expectations when meeting their needs. In 06/30/2017,the 1,145 stores 739 in the Traditional format and 406 in the Express format equivalent to a thousand square meter sales area are present in 446 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 are distributed as follows: 54.9% in Southeast region, 18.8% in the South/Midwest and 26.3% in the North/Northeast. Lojas Americanas shares are listed on the BM&FBOVESPA through ticker symbols LAME3 (common) and LAME4 (preferred). For more information of the multiple and complementary platform of the Company, click here. ABOUT B2W DIGITAL B2W Digital is the leader in Latin America and has the propose of connecting people, businesses, products and services on a digital platform. B2W has the largest and most beloved internet brands (Americanas.com, Submarino, Shoptime and SouBarato) and a marketplace operation in fast growing. The platform that was constructed during the last years allows B2W to offer technology services, logistics, distribution, customer service and consumer finance. Lojas Americanas is the controlling shareholder of B2W DIGITAL, with a participation of 62.16%. The shares of the Company are negotiated through the ticker BTOW3 on BM&FBOVESPA, in the Novo Mercado segment, which has the highest Corporate Governance index in Brazil. For further access to the financial information of B2W, click here. CORPORATE GOVERNANCE Lojas Americanas S.A. has been listed on the Brazilian Stock Exchange (BM&FBOVESPA) since The Company has a shareholder base composed of common shares (LAME3) and preferred shares (LAME4). 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. MIGRATION TO THE LEVEL 1 Accordingly to the administration s proposal released in August 2 nd, 2017, the Company summoned an Extraordinary General Meeting to take place on August 17 th, 2017 in order to submit to shareholder s approval the Company s migration to the special listing segment of Level 1of Corporate Governance. To access the minutes of the board of directors, click here. We Always Want More 13 / 20

14 APPENDIX I CONSOLIDATED INCOME STATEMENT Lojas Americanas S.A. Income Statement Consolidated Period ended in June 30 Consolidated Period ended in June 30 (in million of Brazilian reais) 2Q17 2Q16 Variation 1S17 1S16 Variation Gross Merchandise Volume (GMV) 5, , % 10, , % Gross Sales and Services Revenue 4, , % 9, , % Taxes on sales and services (718.6) (728.6) -1.4% (1,387.4) (1,524.1) -9.0% Net Sales and Services Revenue 4, , % 7, , % Cost of goods and services sold (2,802.3) (2,708.4) 3.5% (5,328.8) (5,550.7) -4.0% Gross Profit 1, , % 2, , % Gross Margin (% NR) 31.7% 31.3% +0.4 p.p. 30.5% 29.5% +1.0 p.p. Operating Revenue (Expenses) (819.3) (775.0) 5.7% (1,593.9) (1,505.7) 5.9% Selling expenses (584.9) (586.7) -0.3% (1,137.6) (1,125.0) 1.1% General and administrative expenses (40.6) (37.0) 9.7% (82.4) (80.3) 2.6% Depreciation and amortization (193.8) (151.3) 28.1% (373.9) (300.4) 24.5% Operating Income before Net Financial Result % % Net Financial Result (430.0) (438.3) -1.9% (1,024.4) (916.4) 11.8% Other operating income (expenses)* (16.0) (25.1) -36.3% (29.1) (41.1) -29.2% Minority interest % % Income tax and social contribution (13.0) % Net Income of the Period % (70.2) Net Margin (% NR) 1.5% 1.3% +0.2 p.p. -0.9% 0.3% -1.2 p.p. Adjusted EBITDA % 1, , % Adjusted EBITDA Margin (% NR) 16.4% 15.5% +0.9 p.p. 14.6% 14.2% +0.4 p.p. *Under the old accounting norm, called "non-operational result" Adjusted EBITDA - Operating profit before interest, taxes, depreciation and amortization, other operating income/expenses, equity accounting, minority participation. 14 / 20

15 APPENDIX II PARENT COMPANY INCOME STATEMENT Lojas Americanas S.A. Income Statement Parent Company Period ended in June 30 Parent Company Period ended in June 30 (in million of Brazilian reais) 2Q17 2Q16 Variation 1S17 1S16 Variation Gross Sales and Services Revenue 3, , % 5, , % Taxes on sales and services (398.1) (352.2) 13.0% (727.3) (756.1) -3.8% Net Sales and Services Revenue 2, , % 4, , % Cost of goods and services sold (1,759.1) (1,387.3) 26.8% (3,142.0) (2,987.9) 5.2% Gross Profit % 1, , % Gross Margin (% NR) 35.2% 37.5% -2.3 p.p. 34.9% 34.9% - Operating Revenue (Expenses) (532.7) (463.9) 14.8% (1,010.7) (928.3) 8.9% Selling expenses (397.2) (359.6) 10.5% (763.3) (727.0) 5.0% General and administrative expenses (23.1) (21.4) 7.9% (45.5) (42.9) 6.1% Depreciation and amortization (112.4) (82.9) 35.6% (201.9) (158.4) 27.5% Operating Income before Net Financial Result % % Net Financial Result (222.3) (226.3) -1.8% (542.4) (470.4) 15.3% Equity accounting (65.8) (55.9) 17.7% (171.0) (117.7) 45.3% Other operating income (expenses)* (8.5) (5.1) 66.7% (14.5) (10.2) 42.2% Income tax and social contribution (64.9) (31.9) - (17.6) (50.8) -65.4% Net Income of the Period % (70.2) Net Margin (% NR) 2.3% 2.3% % 0.6% -2.1 p.p. Adjusted EBITDA % % Adjusted EBITDA Margin (% NR) 19.8% 20.4% -0.6 p.p. 18.2% 18.2% - *Under the old accounting norm, called "non-operational result" Adjusted EBITDA - Operating profit before interest, taxes, depreciation and amortization, other operating income/expenses, equity accounting, minority participation. 15 / 20

16 APPENDIX III BALANCE SHEET Lojas Americanas S.A. Balance Sheet Parent Company Consolidated (In Million Reais) 06/30/ /31/ /30/ /31/2016 ASSETS CURRENT ASSETS Cash and equivalents 1, , Marketable securities 3, , , ,838.9 Clients accounts receivable 1, , , ,135.9 Inventories 1, , , ,688.1 Recoverable taxes Dividends receivable Prepaid expenses Other accounts receivable , Total Current Assets 8, , , ,680.7 NON-CURRENT ASSETS Marketable securities Loans e advances to subsidiaries companies Receivables from stockholders - Stock Option Plan Deferred income tax and social contribution Escrow deposits Recoverable taxes , ,364.9 Other non-current Investments 3, , Property, plant and equipment 2, , , ,888.3 Intangible assets , ,634.6 Total Non-Current Assets 6, , , ,095.3 TOTAL ASSETS 15, , , ,776.0 LIABILITIES AND SHAREHOLDER S EQUITY CURRENT LIABILITIES Suppliers 1, , , ,546.5 Loans and financing 1, , ,097.1 Debentures 1, , Payroll and related charges Taxes payable Income tax and currents social contribution Dividends and participations proposed Provisions for contingencies Accounts payable Other Current Total Current Liabilities 4, , , ,472.8 NON-CURRENT LIABILITIES Long term liabilities: Loans e advances to subsidiaries companies Loans and financing 3, , , ,155.3 Debentures 3, , , ,693.4 Taxes payable Contingencies provision Accounts payable Other non-current Total Non-Current Liabilities 7, , , ,148.0 SHAREHOLDER'S EQUITY Share capital 3, , , ,441.7 Capital reserves Goodwill on capital transactions (5.3) (5.3) (5.3) (5.3) Profit reserves Treasury shares (44.5) (44.5) (44.5) (44.5) Adjustment of equity valuation Profit/ loss for the period (70.2) - (70.2) - Minority interest - - 1, ,164.7 Total Shareholders' Equity 4, , , ,155.2 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 15, , , ,776.0 The accompanying notes are an integral part of these financial statements 16 / 20

17 APPENDIX IV CASH FLOW STATEMENT Lojas Americanas S.A. CASH FLOW STATEMENT - INDIRECT METHOD Parent Company Consolidated (In Million of Brazilian Reais) 06/30/ /30/ /30/ /30/2016 Cash Flow from Operating Activities Net Income for the Period: (70.2) 26.6 (179.5) (79.3) Adjustments to Net Income: Depreciation and amortization Residual and deferred value of fixed assets write-off Subsidiaries Participation Income tax and social contribution current Income tax and social contribution diferred (141.5) (125.7) Interest on credits and debits 0.7 (6.2) 2.7 (5.3) Interest and variations in financing Adjustment in provision for contingencies Reversal of provision for contingencies (5.8) - (13.8) - Stock option plan Provision for doubtfull accounts (1.2) (1.3) (0.8) (9.7) Provision for losses in inventories (19.6) (5.5) (7.3) (5.2) Others (1.9) (2.6) (23.8) (5.3) Adjusted Net (Loss) Income Decrease (Increase) in Operating Assets: Trade accounts receivable Inventories (71.0) (84.9) Recoverable taxes 31.4 (96.6) 67.1 (314.6) Prepaid expenses (1.5) (4.0) Escrow deposits 2.7 (6.1) (6.0) (4.8) Other accounts receivable (242.7) (76.5) (414.9) (138.7) Increase (Decrease) in Operating Liabilities: (23.4) 1,283.9 (0.5) Suppliers (1,141.5) (1,071.0) (2,390.2) (1,743.0) Payroll and related charges 5.7 (2.0) 3.7 (5.9) Taxes payable (70.2) (52.3) (120.6) (83.0) Current income tax and social contribution (116.9) (78.1) (123.0) (92.6) Contingencies payments (29.3) (24.0) (29.3) (24.0) Related party transactions (124.9) (14.0) - - Interest settlement on loans and debentures (371.3) (399.3) (624.9) (641.1) Other accounts payable (132.6) (79.3) (259.0) (216.9) (1,981.0) (1,720.0) (3,543.3) (2,806.5) Net Cash Provided (or Used) by Operating Activities (526.1) (931.5) (1,353.5) (1,844.0) Cash Flow from Investing Activities Marketable securities (1,513.5) 1,082.2 (1,946.2) 1,883.8 Investiments on subsidiaries (752.2) (457.7) - - Plant, property and equipment (342.9) (183.7) (345.2) (201.4) Intangible (57.0) (41.0) (215.9) (258.5) Dividends received Capital reduction of direct subsidiary Net Cash Provided (or Used) by Invest Activities (2,660.9) (2,507.3) 1,423.9 Cash Flow from Financing Activities Loans e financing ( current and non-current): Borrowings , Liquidations (333.4) (367.2) (313.8) (389.1) , Debentures (current and non-current) Borrowings 1, , Liquidations , , Receivables from Stock Option Plan Capital increase 2, , Non-Controller Input Resources Dividends and payed participation (102.2) (101.9) (102.2) (101.9) Repurchase of shares - (14.0) - (14.0) Net Cash Provided (or Used) by Financing Activities 4,282.7 (19.9) 6, Net Increase (Decrease) in cash 1,095.7 (242.2) 2,627.7 (314.9) Cash and cash cash equivalent at the begining of period ,326.1 Cash and cash cash equivalent at the end of period 1, , ,011.2 Net Increase (Decrease) in cash and cash cash equivalent 1,095.7 (242.2) 2,627.7 (314.9) The accompanying notes are an integral part of these financial statements 17 / 20

18 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 Consolidated Period ended in June 30 Consolidated Period ended in June 30 (in million of Brazilian reais) 2Q17 2Q16 Variation 1S17 1S16 Variation Gross Merchandise Volume (GMV) 5, , % 10, , % Gross Sales and Services Revenue 4, , % 9, , % Taxes on sales and services (718.6) (728.6) -1.4% (1,387.4) (1,524.1) -9.0% Net Sales and Services Revenue 4, , % 7, , % Cost of goods and services sold (2,765.0) (2,645.9) 4.5% (5,236.3) (5,407.8) -3.2% Gross Profit 1, , % 2, , % Gross Margin (% NR) 32.6% 32.9% -0.3 p.p. 31.7% 31.3% +0.4 p.p. Operating Revenue (Expenses) (856.6) (837.5) 2.3% (1,686.4) (1,648.6) 2.3% Selling expenses (622.2) (649.2) -4.2% (1,230.1) (1,267.9) -3.0% General and administrative expenses (40.6) (37.0) 9.7% (82.4) (80.3) 2.6% Depreciation and amortization (193.8) (151.3) 28.1% (373.9) (300.4) 24.5% Operating Income before Net Financial Result % % Net Financial Result (430.0) (438.3) -1.9% (1,024.4) (916.4) 11.8% Other operating income (expenses)* (16.0) (25.1) -36.3% (29.1) (41.1) -29.2% Minority interest % % Income tax and social contribution (13.0) % % Net Income of the Period % (70.2) Net Margin (% NR) 1.5% 1.3% +0.2 p.p. -0.9% 0.3% -1.2 p.p. Adjusted EBITDA % 1, , % Adjusted EBITDA Margin (% NR) 16.4% 15.5% +0.9 p.p. 14.6% 14.2% +0.4 p.p. * In the former accounting rules, considered as "non-operating income". Adjusted EBITDA - Operating profit before interest, taxes, depreciation and amortization, other operating income/expenses, equity accounting, minority participation. 18 / 20

19 APPENDIX V NUMBER OF STORES EVOLUTION Period Number of Stores Sales Area Number of Associates 06/30/2016 1, thousand m² 19,822 Opened 11 Transfered/Deactivated -2 09/30/2016 Opened 67 Transfered/Deactivated -3 12/30/2016 Evolution of the number of stores, associates and sales area - Lojas Americanas Opened 7 Transfered/Deactivated -2 1, thousand m² 20,234 1, thousand m² 21,166 03/31/2017 1, thousand m² 20,898 Opened 16 Transfered/Deactivated -3 06/30/2017 1, thousand m² 20, / 20

20 EARNINGS RESULTS CONFERENCE CALL EBITDA (CVM 527/12) Net income of the period plus income taxes, net financial expenses of financial revenues and depreciation, amortization and depletion. Adjusted EBITDA (Operating profit before interest, taxes, depreciation and amortization, other operating income/expenses, equity accounting, minority participation, statutory participation and discontinued operations) is presented as additional information because we believe it represents an important indicator of our operating performance, besides being useful for keeping the comparability with previous reported results. 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. 20 / 20