Financial statements Marisa Lojas S.A.

Transcription

1 Financial statements Marisa Lojas S.A. Independent auditor s report 7

2 Marisa Lojas S.A. Financial statements Contents Independent auditor s report on financial statements... 1 Audited financial statements Balance sheets... 3 Income statements... 5 Statements of comprehensive income... 6 Statements of changes in equity... 7 Statements of cash flows... 8 Statements of value added Notes to financial statements

3 Condomínio São Luiz Av. Presidente Juscelino Kubitschek, 1830 Torre I - 8º Andar - Itaim Bibi São Paulo - SP - Brazil Phone: (5511) ey.com.br A free translation from Portuguese into English of Independent Auditor s Report on financial statements Independent auditor s report on financial statements The Board of Directors and Shareholders Marisa Lojas S.A. São Paulo - SP We have audited the individual and consolidated financial statements of Marisa Lojas S.A. ( Company ), identified as Controlling Company and, comprising the balance sheet as of and the related income statement, statement of comprehensive income statement of changes in equity and cash flow statement for the year then ended, as well as the summary of significant accounting policies and other notes to the financial statements. Management s responsibility for the financial statements Management is responsible for the preparation and appropriate presentation of the individual and consolidated financial statements in accordance with the accounting practices adopted in Brazil and in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), as well as for the internal controls management determined as necessary to allow the preparation of these financial statements free of material misstatements, regardless of whether or not caused by fraud or error. Independent auditor s responsibility Our responsibility is to express an opinion on these financial statements based on our audit, conducted in accordance with the Brazilian and International auditing standards. These standards require that auditors comply with ethical requirements and that audit be planned and carried out to obtain reasonable assurance that the financial statements are free of material misstatements. An audit includes procedures selected to obtain evidence of the amounts and disclosures in the financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we considered internal controls relevant to the Company s preparation and presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company s internal control. An audit also includes the evaluation of the appropriateness of accounting practices used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a reasonable basis for our opinion. 1 A member firm of Ernst & Young Global Limited

4 Opinion In our opinion, the individual and consolidated financial statements referred to above present fairly, in all material respects, the individual and consolidated financial position of Marisa Lojas S.A. as of, and the individual and consolidated results of its operations and its cash flows for the year then ended in accordance with the accounting practices adopted in Brazil and International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). Other matters Statements of value added We have also audited the individual and consolidated statements of value added for the year ended, prepared under the management s responsibility, which presentation is required by the Brazilian Corporate Law for publicly held companies, and as supplementary information under the IFRS, whereby no statement of value added presentation is required. These statements have been subjected to the same auditing procedures previously described and, in our opinion, are presented fairly, in all material respects, in relation to the overall financial statements. São Paulo, February 12, ERNST & YOUNG Auditores Independentes S.S. CRC-2SP015199/O-6 Antônio Humberto Barros dos Santos Accountant CRC-1SP161745/O-3 Patricia Nakano Ferreira Accountant CRC-1SP234620/O-4 2

5 Trading Statistics AMAR3 on Dec/31/14: Price per share: R$ Number of Shares: Market capitalization: R$ million 4Q14 Results Conference Call: Date: February/13/15 Time: 12:00 (Brasília) / 9:00 (US ET) Dial in number: Portuguese: +55 (11) English: +1 (646) Access Code: Marisa Audio Conference will be broadcast live on the Internet, accompanied by slide presentation available on our website IR Team: Adalberto Pereira dos Santos Francisco Bianchi Gabriel Succar Francesco Lisa / 6191 dri@marisa.com.br São Paulo, February, 12, 2014 Marisa Lojas SA ( Marisa or Company ) (BM&FBOVESPA: AMAR3; Bloomberg: AMAR3:BZ), the largest women apparel and lingerie retailer in Brazil focused on the Brazilian emerging middle class, announces today the results of the 4th quarter 2014 (4Q14). The financial information, unless otherwise indicated, is based on consolidated figures in millions of Reais, according to International Financial Reporting Standards (IFRS). Comparisons refer to 4Q14 relative to 4Q13. Marisa Net Profit increases 73% and reaches R$ 44.5 million in 4Q % growth in EBITDA Retail Gross Margin rose 2.7p.p to 49.0% Retail SG&A Expenses fell 1.5%, representing 39.3% of Retail Net Revenue, reduction of 1.1p.p. Financial services again with solid results Opening of 3 new stores New expenses Allocation Format Operating and Financial Highlights (R$ million, except if otherwise noticed) 4Q14 4Q13 % chg % chg. Operating Highlights Number of Stores - end of period ,2% ,2% Sales Area ('000 m²) - end of period 425,7 412,1 3,3% 425,7 412,1 3,3% Sales Area ('000 m²) - average 423,3 403,9 4,8% 418,9 395,9 5,8% Retail Net Revenues Growth - SSS (1) -0,5% 3,2% -3,7 p.p. 0,2% 1,5% -1,3 p.p. Retail Net Revenues Growth - All stores (1) 1,3% 7,6% -6,3 p.p. 3,5% 4,8% -1,3 p.p. Retail SG&A Expenses / Sales Area (R$/m 2 ) 807,8 859,2-6,0% 2.696, ,2 4,6% Private Label Card (2) Eligible Accounts ('000 accounts) 9.995, ,1 5,8% 9.995, ,1 5,8% Active Accounts ('000 accounts) 2.569, ,4-14,7% 2.569, ,4-14,7% Co-Branded Card (2) Eligible Accounts ('000 accounts) 1.378, ,0 15,5% 1.378, ,0 15,5% Active Accounts ('000 accounts) 978,4 851,5 14,9% 978,4 851,5 14,9% Share of Total Retail with Marisa Cards 44,7% 49,6% -5,0 p.p. 45,3% 47,0% -1,7 p.p. Private Label Card 40,8% 45,9% -5,1 p.p. 41,3% 43,2% -1,9 p.p. Co-Branded Card 3,9% 3,7% 0,1 p.p. 4,0% 3,8% 0,1 p.p. Financial Highlights Net Revenues 1.055,0 999,6 5,5% 3.336, ,0 7,9% Operating Result (EBITDA) 146,4 93,8 56,0% 387,2 370,8 4,4% Retail 71,5 50,4 41,8% 100,1 160,3-37,6% FSP 74,9 43,4 72,6% 287,2 210,5 36,4% EBITDA Margin / Net Revenues 13,9% 9,4% 4,5 p.p. 11,6% 12,0% -0,4 p.p. EBITDA Margin / Retail Net Revenues 16,8% 10,9% 5,9 p.p. 14,9% 14,7% 0,1 p.p. Net Profit 43,8 25,7 70,6% 51,1 85,5-40,3% Notes: 1) Stores with more than 13 months of operation. 2) Eligible Accounts: total number of social security numbers (CPFs) registered, excluding, canceled and blocked. In the case of Private Label Cards, Active Accounts are those that shopped in Marisa within the past six months. In the case of Co-Branded Cards. Active Accounts are those that have debit balance in the month. On average, each Private Label Account contains 1.33 cards, whilst 1.16 cards in the case of Co-Branded Accounts. 3

6 Message from Management Our performance in 4Q14 was still affected asymmetrically by collection repositioning, with lower average tickets being supplied by higher volume of products sold. The focus on renovation and better inventory management was also a point of attention during the year, and the BlackFriday event contributed to this goal. The assertiveness of the strategy linked to good acceptance of the new collection by customers resulted in significant gain in retail gross margin, reversing the trend of 2Q14 and 3Q14. Considering the new dynamics involving sales and margin we started, timidly so far, to obtain the benefits of initiatives to increase efficiency in our organizational structure, with significant impact on SG&A and, therefore, EBITDA and Net Profit. Needless to say that this movement occurs even in unfavorable macroeconomic scenario, with key indicators that impacts our business with negative performances. The food inflation was 8.03% in the last 12 months, closing another year above IPCA (6.41%) and the Consumer Confidence fell to similar levels of those seen during 2008 and 2009 crisis. The macroeconomic outlook for 2015 remains cooled down and requires great caution for short and medium term decisions. Regarding this scenario, it is very important having a more adjusted product mix to downward trend of population available income. However, commonly opportunities arise during these times of heightened uncertainty. And to capture these opportunities, we must keep a stern attitude towards our operating expenses and investments. Expansion We opened 3 new stores in the quarter, increasing our sales area in 3,308 square meters (sqm). By the end of quarter, we had thousand sqm of sales area and 416 stores. Below we refer to the 4Q14 openings: Shopping Center Pátiomix Teixeira de Freitas BA, Marisa Feminine Format. Shopping Teresina Teresina PI, Marisa Expanded format. Mangabeira Shopping João Pessoa PB, Marisa Expanded Format. Relationship with Independent Auditors In the fiscal year ended in, Ernst & Young Auditores Independentes gave additional services totaling R$155 thousand which represents approximately 16% of the fees with Audit of the consolidated financial statements of Marisa Lojas SA in the same year. The additional services refer to due diligence and diagnosis of hedge accounting. In hiring these services, the politics adopted by the Company are based in principles that preserve the auditor s independence. Those principles consist, in accordance with internationally accepted standards: (a) the auditor should not audit their own work; (b) the auditor should not perform management function in your client, and (c) the auditor should not legally represent the interests of their clients. Ernst & Young Auditores Independentes stated that the provision of services was made in strict compliance with the accounting Standards that deal with the independence of the independent auditors on audit work and did not represent a situation that could affect the independence and objectivity of the performance of external audit services by Ernst & Young Auditores Independentes. 4

7 Retail Net Revenue: net revenue grew 1.3%, reaching R$ million. In same store sales, revenue fell by 0.5% resulted from a 5.2% increase in volume and reduction of 5.7% in average price. The quarter s most important events were: launch of summer collection and the Black Friday one. It is also worth to mention that our product mix continues to be adherent to Marisa s DNA what can be seen from those already mentioned developments of volume and average price. Retail Highlights 4Q14 4Q13 % Var % Var. Operating Results (R$ million) Net Revenues 870,2 859,1 1,3% 2.602, ,0 3,5% Cost of Goods Sold (443,8) (461,7) -3,9% (1.368,2) (1.331,4) 2,8% Gross Profit 426,4 397,4 7,3% 1.234, ,6 4,3% Selling Expenses (301,4) (311,0) -3,1% (1.003,1) (912,6) 9,9% General and Administrative Expenses (40,5) (36,0) 12,4% (126,4) (108,0) 17,0% Other Operating Revenues (Expenses) (13,0) 0, ,4% (5,2) (2,6) 96,7% Operating Result (EBITDA) 71,5 50,4 41,8% 100,1 160,3-37,6% Operating Margins Cost of Goods Sold -51,0% -53,7% -52,6% -52,9% Gross Profit 49,0% 46,3% 2,7 p.p. 47,4% 47,1% 0,4 p.p. Selling Expenses -34,6% -36,2% 1,6 p.p. -38,5% -36,3% -2,3 p.p. General and Administrative Expenses -4,7% -4,2% -0,5 p.p. -4,9% -4,3% -0,6 p.p. Other Operating Revenues (Expenses) -1,5% 0,0% -1,5 p.p. -0,2% -0,1% -0,1 p.p. Operating Result (EBITDA) 8,2% 5,9% 2,3 p.p. 3,8% 6,4% -2,5 p.p. Cost of Goods Sold: The Cost of Goods sold fell 3.9%, reaching R$443.8 million. Gross Margin and Gross Profit: Gross margin increased 2.7 p.p in relation to 4Q13 and gross profit grew 7.3%, totaling R$ million. This increase in gross margin is due to (i) increase of 2.3 p.p in merchandise margin, from the repositioning of product mix, already working with greater focus on volume and turnover and better inventory management; and (ii) improvement of 0.4 p.p in freight costs and merchandise handling, mainly from initiatives taken in second quarter. Selling Expenses: Selling expenses were decreased 3.1%, reaching R$ million, fell of 310 bps, as percentage of net revenue. This decrease reflects the beginning of the efforts in expenses optimization even considering investments in new channels (E-Commerce and Direct Sales). Considering only physical store channel, selling espenses would have been 31.5% of Net Revenue. In relation to the average sales area, selling expenses in Bricks & Mortars channel, per sqm, decreased 11.2%, to R$662.4/sqm. General and Administrative Expenses: General and Administrative expenses reached R$ 40.5 million, increase of 12.4%. As of 4Q13, we made reclassifications between segments of the Company's business from transferring expenses to the segments of Cards and Personal Loans, aiming to allocate shared costs according to the reality of our operations As of 4Q13, we made reclassifications between segments of the Company's business from transferring expenses to the segments of Cards and Personal Loans, aiming to allocate shared costs according to the reality of our operations. Thus, the previous methodology, general and administrative expenses would have increased 8.8%, similar to labor union increase. As a percentage of Retail Net Revenue, G&A expenses increased by 50 bps and totaled 4.7%. Other Operating Revenues (Expenses): other operating expenses were R$ 13.0 million, equivalent to 1.7% of retail net sales, compared to other operating revenues in 4Q13 of R$ 0.1 million, due to variation of the provision for contingencies. 5

8 Operating Profit (EBITDA): operating profit raised 41.8%, totaling R$ 71.5 million and the EBITDA margin rose 2.3 p.p, to 8.2%. This increase results from a combination of factors explained above, the change in sales, the increase in gross margin and the efforts to reduce SG&A as percentage of net revenue. E-commerce and Direct Selling Channels are at the early stage and they require higher expenditures and investments than the generation of results, diminishing the retail segment results as a whole. When we exclude the increase in 4Q13 expenses for 4Q14 for the development of these new channels, EBITDA would have raised to R$82.7 million, increase of 64% with EBITDA margin of 9.5%, gain of 3.6 p.p. Products and Financial Services Financial Products Services (R$ mm) 4Q14 4Q13 %Chg %Chg. Private Label Card Interest Revenue, net of funding costs 65,4 66,2-1,2% 289,1 270,9 6,7% Financial Services Revenue 38,4 33,2 15,7% 159,0 121,8 30,5% Others (7,5) (27,4) -72,6% (39,9) (56,2) -28,9% Net Loss from Recovery (31,9) (30,7) 4,1% (185,8) (152,8) 21,6% Contribution Margin - P Label 64,4 41,3 55,9% 222,4 183,7 21,0% Personal Loans Interest Revenue, net of funding costs 48,6 40,1 21,2% 187,5 144,3 30,0% Net Loss from Recovery (12,7) (12,6) 1,0% (56,3) (42,6) 32,2% Contribution Margin - P Loans 35,9 27,5 30,4% 131,2 101,7 29,0% Co-Branded Card Contribution Margin - Co-Branded 26,4 17,2 53,3% 96,7 64,7 49,4% OpEx (51,8) (42,6) 21,5% (163,1) (139,6) 16,9% EBITDA - FPS 74,9 43,4 72,5% 287,2 210,6 36,4% Private Label Card: Revenue from financial intermediation, net of Funding Costs fell 1.2%, due to the reduction of receivables of retail activities. Revenue from Fees and Insurance increased 15.7%, due to the penetration of those products in the active customer base. Other Account decreased 72.6%, mainly due to the variation in the costs of loyalty program Programa Amiga, that now is part of loyalty program of Netpoints. The result of net losses in delinquency increased 4.1%. As a percentage of Receivables Portfolio the loss still little higher against previous year (4.9% in 4Q14 vs 4.5% in 4Q13), but improving as we could see in 3Q14 (+1.9 p.p). Personal Loans: Interest Revenues, Net of Funding Costs raised 21.2%, due to increased interest income of 25.6% and an increase in funding costs of R$ 0.7 million to R$ 2.7 million, reflecting a growth of 19.0% in granted volume, bringing the portfolio receivables to R$ million. The result of net losses in delinquency increased 1.0% to R$ 12.7 million. As a percentage of Receivables Portfolio the loss reached 6.3%, reduction of 150 bps versus 4Q13. Co-Branded Card: Operating Results grew 53.3%, mainly from the 82.1% rise of the operation result, due to the 14,9% increased in active base of this card and 10,2% decrease in revenue commission. Costs and operational expenses: increased 21.5% to R$ 51.8 million, due to the increase in Cost of Services. 6

9 Operational Result (EBITDA): the combination of the factors discussed above led the operating result of financial products and services division to R$ 74.9 million, increase of 150.4% over 4Q13. Sales throughout Marisa Cards Marisa Cards share in total sales was 44.7%, reduction of 490 bps. over 4Q13. This variation is due to the transfer of Loyalty Program Programa Amiga from Marisa to Netpoints, which maturation and customers learning curve will still take few more months. Receivables Portfolio Private Label Receivables portfolio decreased 5.3%, totaling R$ million. The variance of the portfolio reflects the variation of retail activity and the maintenance of Private Label card participation. We noted a 1.6 p.p. increase in overdue payment on the total portfolio. The roll-overs are 0.15 p.p. higher than 4Q13. The NPL over 90 days reached R$ 52.3 million (8.0% of portfolio) compared to R$ 48.9 million (7.1% of portfolio) as of December % 8% 6% 4% 2% 0% jan fev mar abr mai jun jul ago set out nov dez Private Label (R$ mm) 4Q14 %Total 4Q13 %Total %Chg. On time: 467,9 71,9% 505,4 73,5% -7,4% Overdues: 183,0 28,1% 182,2 26,5% 0,4% 1-30 days 85,2 13,1% 89,6 13,0% -5,0% days 25,4 3,9% 23,3 3,4% 9,3% days 20,0 3,1% 20,3 3,0% -1,8% days 18,7 2,9% 18,3 2,7% 2,2% days 16,6 2,6% 15,4 2,2% 8,0% days 17,0 2,6% 15,2 2,2% 11,6% Total 650,8 100,0% 687,6 100,0% -5,3% Personal Loans The amount granted increased 19.0%, due to a 7.4% increase in the volume of contracts and 10.7% average ticket. Receivables Portfolio Personal Loans The portfolio of SAX grew 24.9%, over 4Q13 reaching R$ million. We closed the portfolio in 3Q14 with R$ million. This growth is associated to the maturation of this business unit, driven by an increase in loan concessions to clients from our Marisa Card client base, which are preapproved by SAX. The NPL 90+ days totaled R$ 36.1 million (18.0% over portfolio), compared to R$ 25.2 million (15.7% over portfolio) presented in December The loss on portfolio was 6.3%, fell of 1.5 p.p. over 4Q13. 10% 8% 6% 4% 2% 0% jan fev mar abr mai jun jul ago set out nov dez SAX Personal Loans (R$ million) 4Q14 %Total 4Q13 %Total %Chg On time: 139,3 69,3% 115,0 71,5% 21,1% Overdues: 61,6 30,7% 45,9 28,5% 34,2% 1-30 days 11,3 5,6% 9,3 5,8% 21,5% days 7,5 3,7% 6,1 3,8% 23,0% days 6,7 3,3% 5,3 3,3% 26,4% days 6,4 3,2% 4,9 3,0% 30,6% days 5,9 2,9% 4,4 2,7% 34,1% days 5,6 2,8% 4,0 2,5% 40,0% days 9,5 4,7% 6,4 4,0% 48,4% days 6,1 3,0% 3,9 2,4% 56,4% days 2,6 1,3% 1,6 1,0% 62,5% Total 200,9 100,0% 160,9 100,0% 24,9% 7

10 Operating Results ( EBITDA) 4Q13 4Q14 y-o-y y-o-y Retail Gross Revenue ,8% ,4% 1,7% ,7% ,9% 4,4% Taxes on Sales ( ) -37,8% ( ) -38,4% 2,7% ( ) -37,7% ( ) -38,9% 6,7% Net Revenue ,0% ,0% 1,3% ,0% ,0% 3,5% SSS 3,2% -0,5% 1,5% 0,2% CoGS ( ) -53,7% ( ) -51,0% -3,9% ( ) -52,9% ( ) -52,6% 2,8% Gross Profit ,3% ,0% 7,3% ,1% ,4% 4,3% OpEx ( ) -40,4% ( ) -39,3% -1,5% ( ) -40,6% ( ) -43,4% 10,7% Selling Expenses ( ) -36,2% ( ) -34,6% -3,1% ( ) -36,3% ( ) -38,5% 9,9% G&A Expenses (36.032) -4,2% (40.486) -4,7% 12,4% ( ) -4,3% ( ) -4,9% 17,0% Other Operating Expenses / Revenues 61 0,0% (12.989) -1,5% ,2% (2.623) -0,1% (5.160) -0,2% 96,7% Retail EBITDA ,9% ,2% 41,8% ,4% ,8% -37,6% FPS EBITDA ,1% ,6% 72,6% ,4% ,0% 36,4% Total EBITDA ,9% ,8% 56,0% ,7% ,9% 4,4% D&A (43.540) -5,1% (49.034) -5,6% 12,6% ( ) -6,5% ( ) -7,3% 15,9% Equity Results (0) 0,0% (773) -0,1% (0) 0,0% (1.979) -0,1% Financial Expenses, net (12.260) -1,4% (28.342) -3,3% 131,2% (87.106) -3,5% ( ) -5,3% 58,7% Income Tax (12.328) -1,4% (24.422) -2,8% 98,1% (33.853) -1,3% (5.349) -0,2% -84,2% Net Profit ,0% ,0% 70,5% ,4% ,0% -40,3% Despite the time of transition experienced by the Company, with improved efficiency initiatives underway and the unfavorable macroeconomic environment, the association of positive performance in the retail (+ 41.8%) with recurrent solid results in PSF (72, 6%), allowed the Company to deliver a superior overall EBITDA by 56.0% over 4Q13. As a result, net profit increased 70.5%, offsetting the higher costs of leverage in the period Net Debt and Net Financial Results We ended the 4Q14 with net debt of R$ million, 17.8% higher than 4Q13. Net Debt (R$ million) 4Q14 4Q13 Net Debt Gross debt (A) 1.139,7 792,1 Short term debt 365,4 106,7 Long term debt 774,3 685,4 Cash and equivalents (B) 510,9 258,1 Net debt (A) 628,8 534,0 Shareholder equity (B) 1.155, ,7 Total capital (A+B) 1.784, ,7 Financial Leverage Gross debt /(Gross debt + Equity) 50% 42% Net debt /(Net debt + Equity) 35% 33% Net debt / EBITDA LTM (x) 1,62x 1,44x Average Interest in CDI (%) terms Loans & Borrowings 108,7% Cash and Cash&Equivalents 101,0% Net Financial Result: net financial result was of net expense of R$ 28.3 million, up 130%, mainly due to (i) the increase in income with applications meets the increase of cash position; (ii) the increase in SELIC; (iii) the financial hedge contracted for imported merchandise (iv) Present value adjustment of financial expenses and (v) from payment of debenture interest due to new issuance made in 2H14. Financial Expenses and Revenues 4Q14 4Q13 Financial Expenses (A) (48.307) (32.451) Interest on Loans (28.785) (18.314) For. Exchange Var. & Hegde (4.823) (1.069) Discounts granted (3.124) (2.232) Banking Fees & Tariffs (2.047) (2.073) Others (210) (228) APV (9.319) (8.535) Financial Revenues (B) Interest Income For. Exchange Var. & Hegde Discounts obtained Others Total (28.341) (26.855) 8

11 To assist the process of analysis and reading of our financial information, we included the opening of our financial expenses, as described below. It is worth noting that since September, we started to account the hedge of imports operations by the CPC Hedge Accounting. Thus, as of dez/31/14, we had position of US$ 84.2 million in with an average dollar value of R$ Although our cost of funding is at 108.7% of CDI, this operation generates variations in the value of financial expenses for their marking to market. Capex Capex (R$ million) 4Q14 4Q13 %Chg %Chg. New stores 6,3 31,3-79,7% 37,8 128,6-70,6% Stores remodeling 10,7 26,5-59,7% 55,1 71,5-23,0% Logistics 6,0 3,4 79,0% 7,3 17,2-57,7% IT 8,0 4,8 68,5% 34,8 24,1 44,3% Others 13,6 9,7 40,2% 59,4 24,7 140,8% Netpoints Acquisition - - na 26,0 - na Total 44,6 75,5-41,0% 220,4 266,1-17,2% Our investments in the period decreased 48.7% (i) by slowing the opening of new stores in 3Q14 and 4Q14 and; (ii) which was offset by investments in IT and Others, mainly in Company projects (Somar and Store Operational Efficiency), in E-commerce and Direct Sales. New Expenses Allocation Format for 2015 Considering the organizational reestructuring changes we announced in 3Q14 Earnings Release, particularly those related to the consolidation of the operations of Marisa Cards (Private Label and Marisa Itaucard) and personal loans area (SAX), which now is called FPS Financial Products and Services, we are changing the allocation of our expenses to better reflect the contribution of each area (FPS and Retail) to the total income of Company, up from the 1Q15. This change increases the comparability between companies in our industry and brings greater flexibility in any future strategic moves that our Company may evaluate. The model below provides a comparison of effects of this change on the results of Its importante to mention that during the year 2015, in each Quarter Releases we will release a calculation memory, indicating where such values and accounts were in the previuous disclosure model of results. Retail P&L (R$ mm) Real 2014 Before Reallocation Real 2014 After Reallocation Gross Revenue 3.615,1 138,9% 3.615,1 138,9% Taxes on Sales (1.012,2) -38,9% (1.012,2) -38,9% Net Revenue 2.602,9 100,0% 2.602,9 100,0% SSS 0,2% 0,2% CoGS (1.368,2) -52,6% (1.368,2) -52,6% Gross Profit 1.234,7 47,4% 1.234,7 47,4% OpEx (1.129,4) -43,4% (1.025,1) -39,4% - Selling Expenses (1.003,1) -38,5% (898,7) -2,1% - G&A Expenses (126,4) -4,9% (126,4) -4,9% Other Oper. Expenses and Revenues (5,2) -0,2% (5,2) -0,2% Retail EBITDA 100,1 3,8% 204 7,9% FPS EBITDA 287,2 11,0% 182,8 7,0% Total EBITDA 387,2 14,9% 387,2 14,9% 9

12 Appendix Financial Statements¹ Income Statement (R$ thousand) 4Q14 4Q13 Chg. % Chg. (%) Net Revenues ,5% ,9% Net Revenues - Retail ,3% ,5% Net Revenues - Marisa Card ,9% ,9% Net Revenues - PL ,6% ,7% Cost of Goods and Financial Services ( ) ( ) 0,8% ( ) ( ) 8,0% Cost of Goods Sold - Retail ( ) ( ) -3,9% ( ) ( ) 2,8% Cost of Financial Services - Marisa Card (80.263) (63.727) 25,9% ( ) ( ) 23,7% Cost of Financial Services - PL (23.474) (17.839) 31,6% (90.911) (56.405) 61,2% Gross Profit ,2% ,8% Gross Profit - Retail ,3% ,3% Gross Profit - Marisa Card ,0% ,7% Gross Profit - PL ,0% ,7% Operating Expenses ( ) ( ) 1,2% ( ) ( ) 10,0% Selling Expenses - Retail ( ) ( ) -3,1% ( ) ( ) 9,9% General & Administrative Expenses - Retail (40.486) (36.032) 12,4% ( ) ( ) 17,0% General & Administrative Expenses - Marisa Card (8.399) (10.897) -22,9% (35.559) (35.573) 0,0% General & Administrative Expenses - PL (907) (4.702) n.a. (6.997) (14.682) -52,3% Other Operating Revenues (Expenses)- Retail (12.989) 61 n.a. (5.160) (2.623) 96,7% Other Operating Revenues (Expenses)- Marisa Card (344) n.a (3.759) n.a. Other Operating Revenues (Expenses)- PL ,1% ,8% Equity accounting results (773) - (1.979) - n.a. Depreciation and Amortization (49.034) (43.540) 12,6% ( ) ( ) 15,9% Operating Profit Before Financial Results ,1% ,7% Financial Results (28.342) (12.260) 131,2% ( ) (87.107) 58,7% Financial Expenses (48.307) (32.451) 48,9% ( ) ( ) 52,2% Financial Revenues ,1% ,6% Net Profit Before Taxes ,5% ,7% Income and Social Contribution Taxes - Current (17.425) (10.154) 71,6% (82.161) (66.249) 24,0% Income and Social Contribution Taxes - Deferred (6.997) (2.174) 221,8% ,1% Net Profit ,6% ,3% Net Profit (Loss) per Share 0,24 0,14 0,28 0,46 Number of Shares (in Thousand) EBITDA ,0% ,4% Retail EBITDA ,8% ,6% Marisa Card EBITDA ,4% ,8% PL EBITDA ,6% ,6% 1) The allocation of income between business units (Retail and Financial Products and Services) in this release presents small differences of income by business units presented in ITR of 31/12/14. These differences come from managerial adjustments reflected in the release of (1) G&A expenses of Marisa Cards unit in ITR that were in the Retail Unit (R$ 2.2 million and R$ 2.9 million, no 4Q14 and 4Q13 respectively) and (2) G&A expenses of SAX unit in ITR that were launched in the Marisa Cards unit (R$ 0.7 million and R$ 0.6 million in 4Q14 and 4 Q13 respectively). 10

13 Balance Sheet Balance Sheet 4Q14 4Q13 Chg. (%) ASSETS 4Q14 4Q13 Chg. (%) CURRENT ASSETS Cash and cash equivalents ,0% Securities ,5% Financial Instruments ,0% Accounts receivable ,1% Inventories ,9% Recoverable taxes ,1% Other credits ,1% Total current assets ,9% NONCURRENT ASSETS Def. income and social c. taxes ,4% Recoverable taxes ,6% Judicial deposits ,3% Securities ,9% Related parties ,0% Investments n.a. PP&E ,4% Intangible assets ,4% Total noncurrent assets ,1% LIABILITIES 4Q14 4Q13 Chg. (%) CURRENT LIABILITIES Accounts payable ,8% Loans and financing ,4% Accrued payroll and related charges ,5% Taxes payable ,3% Intercompany payables ,2% Rentals payable ,8% Dividends payable ,3% Deferred revenues ,3% Other payables ,1% Total current liabilities ,7% NONCURRENT LIABILITIES Loans and financing ,0% Provisions for judicial contingencies ,4% Deferred revenues ,3% Total noncurrent liabilities ,4% SHAREHOLDER EQUITY Paid in capital ,0% Earnings reserve ,9% Stock Option Reserve Other comprehensive income n.a. Subtotal ,3% Total shareholder equity ,3% TOTAL ASSETS ,2% TOTAL LIABILITIES AND SHAREHOLDERS EQUITY ,2% 11

14 Cash Flow Cash Flow (R$ Thousand) 4Q14 4Q Net Cash from Operating Activities Cash from Operations Net Income for the Year Depreciation and Amortization Net Book Value of Fixed Asset Disposal Equity accounting results Provision for doubtful accounts (6.029) (15.458) (16.021) Provision for inventory loss (8.075) (12.237) (9.492) Stock Option Plan (Gain) Loss from Investments, Net (11) - (66) - Financial Instruments (6.927) (11.328) (11.328) Financial Charges and Exchange Var. on Financing, Loans and Tax Liabilities Deferred Income Tax and Social Contribution (76.812) (32.397) Deferred Income (3.000) (12.000) Provision for Risks (8.656) Changes in Assets and Liabilities Trade receivables ( ) ( ) (87.280) Inventories (37.449) Securities 108 (443) (6.124) (14) Taxes to Offset (468) Escrow Deposits (901) (755) (10.453) Other Receivables (1.963) Suppliers (9.729) Taxes Payable Salaries, Provisions and Social Charges (6.228) (1.874) Relates Parties (466) Provision for Litigation and Lawsuits 110 (156) (591) Rent Payable Other Payables (6.248) Other (10.086) (16.517) (67.582) (67.901) Income Tax and Social Contribution Paid (10.086) (16.517) (67.582) (67.901) Net Cash from Investing Activities (44.567) (84.887) ( ) ( ) Investments Added - - (26.026) - Acquisition of Fixed Assets (27.773) (68.971) ( ) ( ) Acquisition of Intangible Assets (16.794) (15.917) (53.708) (48.264) Net Cash from Financing Activities (81.513) (80.454) New Financing - Third Parties Payment of Dividends and Interest on Equity - - (20.306) (21.435) Payment of Dividends and Interest on Equity (39.954) (7.931) (75.192) (73.991) Interest Paid (51.802) (32.728) (92.727) (62.996) Capital increase through the exercise of call option Increase (Decrease) in Cash and Cash Equivalents (27.436) At the Beginning of the Period At the End of the Period

15 A free translation from Portuguese into English of financial statements prepared in Brazilian currency in accordance with accounting practices adopted in Brazil Marisa Lojas S.A. and Subsidiaries Balance sheets and 2013 (In thousands of reais - R$) Controlling Company Note 12/31/ /31/ /31/ /31/2013 Assets Current assets Cash and cash equivalents 6 380, , , ,883 Marketable securities Financial instruments 31 14,609 11,328 14,609 11,328 Trade accounts receivable 8 409, , , ,974 Inventories , , , ,277 Transactions with related parties 13 73,627 83, Taxes recoverable 11 23,045 31,096 51,091 52,699 Other receivables 20,821 9,582 49,928 47,965 Total current assets 1,291,885 1,004,115 1,979,467 1,691,343 Noncurrent assets Deferred income and social contribution taxes 12.a) 129,885 67, , ,987 Taxes recoverable 11 16,240 14,134 16,271 14,195 Judicial deposits 22 51,249 42,860 55,299 44,846 Marketable securities 7 13,693 7,604 14,010 7,874 Transactions with related parties ,174 1,174 Investments , ,701 6,562 - Property and equipment , , , ,326 Intangible assets , , , ,926 Total noncurrent assets 1,326,664 1,343, , ,328 Total assets 2,618,549 2,347,140 2,968,588 2,573,671 13

16 Controlling Company Note 12/31/ /31/ /31/ /31/2013 Liabilities and equity Current liabilities Trade accounts payable , , , ,977 Loans and financing ,202 12, , ,697 Salaries, provisions and social contributions 19 54,420 51,342 59,543 55,929 Taxes payable , , , ,887 Transactions with related parties 13 10,919 43,296 6,047 5,915 Rents payable 32 21,876 19,372 22,899 20,299 Dividends and interest on equity payable 13 12,132 20,306 12,132 20,306 Deferred revenue 21 1,000-13,000 12,000 Other liabilities 46,976 25,771 58,837 65,084 Total current liabilities 701, , , ,094 Noncurrent liabilities Loans and financing , , , ,387 Provision for contingencies 22 43,087 35,398 54,716 45,452 Deferred revenue 21 18,250-53,250 47,000 Total noncurrent liabilities 760, , , ,839 Equity Capital 23.a) 661, , , ,493 Income reserve 478, , , ,932 Stock option reserve 8,413 6,313 8,413 6,313 Other comprehensive income 7,090-7,090 - Total equity 1,155,878 1,107,738 1,155,878 1,107,738 Total liabilities and equity 2,618,549 2,347,140 2,968,588 2,573,671 See accompanying notes. 14

17 Marisa Lojas S.A. and Subsidiaries Income statements Years ended and 2013 (In thousands of reais, except for net income per share) Note Controlling Company 01/01/2014 to 12/31/ /01/2013 to 12/31/ /01/2014 to 12/31/ /01/2013 to 12/31/2013 Net operating income 24 2,603,120 2,513,366 3,344,593 3,096,990 Cost of goods sold, credit card and financial operations and provision of services 25 (1,371,093) (1,353,503) (1,778,405) (1,659,548) Gross profit 1,232,027 1,159,863 1,566,188 1,437,442 Operating income (expenses) Selling expenses 26 (1,008,381) (932,402) (1,008,755) (917,033) General and administrative expenses 27 (128,530) (113,620) (168,888) (158,282) Depreciation and amortization expenses (182,313) (156,998) (190,572) (164,364) Other operating income (expenses), net 28 (2,652) 12,605 (1,307) 8,694 Equity pickup , ,225 (1,979) - Income before financial income (expenses) 107, , , ,457 Financial expenses 29 (145,588) (116,842) (200,519) (131,717) Financial income 29 21,345 36,395 62,263 44,610 Income (loss) before income and social contribution taxes (16,583) 50,226 56, ,350 Income and social contributions taxes Current 12.b) - - (82,161) (66,249) Deferred 12.b) 67,665 35,272 76,812 32,397 Net income for the year 51,082 85,498 51,082 85,498 Attributable to: Controllers 51,082 85,498 51,082 85,498 51,082 85,498 51,082 85,498 Earnings per share for the year Per share basic R$ Per share diluted R$ See accompanying notes. 5

18 Marisa Lojas S.A. and Subsidiaries Statements of comprehensive income Years ended and 2013 (In thousands of reais, except for net income per share) Note Controlling Company 01/01/2014 to 12/31/ /01/2013 to 12/31/ /01/2014 to 12/31/ /01/2013 to 12/31/2013 Net income for the year 51,082 85,498 51,082 85,498 Other comprehensive income Hedge accounting gains ,742-10,742 - Income and social contribution taxes on gains from cash flow hedging 31.3 (3,652) - (3,652) - Total comprehensive income (losses) 58,172 85,498 58,172 85,498 See accompanying notes. 6

19 Marisa Lojas S.A. and Subsidiaries Statements of changes in equity (Controlling Company and ) Years ended and 2013 (In thousands of reais - R$) Note Capital Income reserve Legal Retained Stock option Other comprehensive income Hedge accounting gains Retained earnings Total Equity Balances at December 31, ,159 35, ,001 4, ,039,049 Capital increase 1, ,334 Net income for the year ,498 85,498 Stock option plan 23.e) , ,163 Income allocation: Legal reserve 23.d) - 4, (4,275) - Dividends proposed (R$ per share) 23.d) (20,306) (20,306) Retained profit reserve 23.c) , (60,917) - Balances at December 31, ,493 40, ,918 6, ,107,738 Net income for the year ,082 51,082 Stock option plan 23.e) , ,100 Other comprehensive income ,090-7,090 Income allocation: Legal reserve 23.d) - 2, (2,554) - Dividends proposed (R$ per share) 23.d) (12,132) (12,132) Retained profit reserve 23.c) , (36,396) - Balances at 661,493 42, ,314 8,413 7,090-1,155,878 See accompanying notes. 7

20 Marisa Lojas S.A. and Subsidiaries Statements of cash flows Years ended and 2013 (In thousands of reais - R$) Controlling Company 12/31/ /31/ /31/ /31/2013 Cash flow from operating activities Net income for the period 51,082 85,498 51,082 85,498 Adjustments to reconcile net income for the period to net cash used in operating activities Depreciation and amortization 182, , , ,364 Net book value of property and equipment and intangible assets written off 11, , Equity pickup (197,509) (161,225) 1,979 - Allowance for doubtful accounts (15,458) (16,021) Provision for inventory losses 7,136 (9,492) 7,136 (9,492) Investment (gain) loss, net (66) - (66) - Stock option plan 2,100 2,163 2,100 2,163 Financial instruments 3,809 (11,328) 3,809 (11,328) Financial charges and exchange difference on financing, loans and tax liabilities 98,695 60, ,747 71,053 Deferred income and social contribution taxes (67,665) (35,272) (76.812) (32,397) Deferred revenue 19,250-7,250 (12,000) Provision for contingencies (8,656) 110,733 89, , ,069 (Increase) decrease in operating assets: Trade accounts receivable (4,105) (24,079) 14,068 (87,280) Inventories (31,097) 35,700 (37,449) 34,795 Marketable securities (6,077) (38) (6,124) (14) Taxes recoverable 5,945 29,696 (468) 16,378 Related parties 9,635 (70,640) - - Judicial deposits (8,389) (1,209) (10,453) 5,209 Dividends received 326, , Other receivables (11,239) 19,689 (1,963) 37,938 Increase (decrease) in operating liabilities: Trade accounts payable 1,446 4,508 (9,729) 7,218 Taxes payable (2,334) 39,133 68, ,138 Salaries, provisions and social contributions 3,078 (2,429) 3,614 (1,874) Related parties (32,377) 17, (466) Provision for contingencies 7,273 2,097 8,848 (591) Lease payable 2,504 3,477 2,600 4,068 Other liabilities 8,981 1,852 (6,247) 19,062 Cash from operations 380, , , ,650 Income and social contribution taxes paid - (1,061) (67,582) (67,901) Net cash used in operating activities 380, , , ,749 Cash flow from investing activities Acquisition of investments (26,026) - (26,026) - Acquisition of property and equipment (129,838) (211,645) (134,825) (208,468) Acquisition of intangible assets (52,679) (43,255) (53,708) (48,264) Net cash provided by investing activities (208,542) (254,900) (214,559) (256,731) 8

21 Marisa Lojas S.A. and Subsidiaries Statements of cash flows Years ended and 2013 (In thousands of reais - R$) Controlling Company 12/31/ /31/ /31/ /31/2013 Cash flow from financing activities Loans and financing taken out 213,304 14, ,216 76,634 Repayment of loans and financing (12,057) (27,173) (75,192) (73,991) Interest paid (89,543) (59,414) (92,727) (62,996) Capital increase per stock option exercised - 1,334-1,334 Dividends and IOE paid (20,306) (21,435) (20,306) (21,435) Net cash from (used in) financing activities 91,398 (92,219) 201,991 (80,454) Increase (decrease) in cash and cash equivalents 262,957 (66,916) 252,797 (27,436) Cash and cash equivalents At the beginning of year 117, , , ,319 At end of year 380, , , ,883 Increase (decrease) in cash and cash equivalents 262,957 (66,916) 252,797 (27,436) See accompanying notes. 9

22 Marisa Lojas S.A. and Subsidiaries Statement of value added Years ended and 2013 (In thousands of reais - R$) Controlling Company 12/31/ /31/ /31/ /31/2013 Income Goods and services sold 3,612,289 3,457,800 4,379,085 4,066,417 Allowance for doubtful accounts (100) (148) (216,249) (185,257) Other operating income 14,806 34,918 63,200 70,141 3,626,995 3,492,570 4,226,036 3,951,301 Input products acquired from third parties Cost of goods sold and services rendered (1,790,528) (1,744,887) (1,962,467) (1,863,898) Materials, energy, third-party services and other expenses (491,962) (477,855) (573,788) (501,916) Recovery of asset values 37,621 26,410 37,621 26,410 (2,244,869) (2,196,332) (2,498,634) (2,339,404) Gross value added 1,382,126 1,296,238 1,727,402 1,611,897 Depreciation and amortization (182,313) (156,998) (190,572) (164,364) Net value added produced by the Company 1,199,813 1,139,240 1,536,830 1,447,533 Value added received in transfer Equity pickup 197, ,225 (1,979) - Financial income 21,345 36,395 62,263 44, , ,620 60,284 44,610 Total value added to be distributed 1,418,667 1,336,860 1,597,114 1,492,143 Distribution of value added Personnel and related charges 412, , , ,290 Direct compensation 327, , , ,346 Benefits 58,058 46,377 67,000 54,970 FGTS 27,345 20,051 29,522 21,974 Taxes, charges and contributions 587, , , ,423 Federal 326, , , ,521 State 260, , , ,190 Local ,065 3,712 Interest and rentals 367, , , ,932 Interest 102,923 88, ,767 88,313 Rent 264, , , ,619 Equity remuneration 51,082 85,498 51,082 85,498 Dividends 12,132 20,306 12,132 20,306 Retained earnings 38,950 65,192 38,950 65,192 Total distributed value added 1,418,667 1,336,860 1,597,114 1,492,143 See accompanying notes. 10

23 Notes to financial statements 1. Operations Marisa Lojas S.A. ( Company or Marisa ), with head office located at Rua James Holland, 422, in the city of São Paulo, state of São Paulo, incorporated in Brazil on April 28, 1959, is a publiclyheld corporation and is listed on the São Paulo stock, commodities and futures exchange (BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros) under ticker AMAR3, at Novo Mercado level of Corporate Governance. Marisa and its subsidiaries (together referred to as the Company or ) operate mainly in retail and wholesale markets of consumption goods, e-commerce, direct sales, administration of Marisa Card, loans granted to individuals, among other activities. Subsidiaries are listed in Note 14, and further details on the market where they operate are provided in Note Acquisition of interest in Netpoints Fidelidade S.A. ( Netpoints ) On April 22, 2014, the Company acquired 20% of the capital of Netpoints, a loyalty program for customers of large retail chains. The acquisition value was R$ 26, Approval of financial statements The Board of Directors meeting held on February 11, 2015 authorized the completion of these financial statements. 2. Presentation of financial statements 2.1. Basis of preparation and presentation The Company's financial statements include: a) financial statements The Company's consolidated financial statements were prepared based on the International Financial Reporting Standards ( IFRS ), issued by the International Accounting Standards Board ( IASB ), and interpretations of standards issued by the International Financial Reporting Interpretations Committee ( IFRIC ), implemented in Brazil through the Brazilian FASB ("CPC") and its technical interpretations ( ICPC ) and guidance ( OCPC ), approved by the Brazilian Securities and Exchange Commission ( CVM ). 10

24 2. Presentation of financial statements (Continued) 2.1. Basis of preparation and presentation (Continued) b) Individual financial statements - Company The Company's individual financial statements were prepared according to the accounting practices adopted in Brazil, which comprise the provisions of corporate legislation, provided by Law No. 6404/76, amended by Law No /07 and Law No /09, and accounting pronouncements, interpretations and guidance issued by the Brazilian FASB ("CPC"), approved by CVM. Until December 31, 2013, these practices were different from the IFRS - applicable to the separate financial statements - solely with respect to the measurement of investments in subsidiaries, affiliates and jointlycontrolled subsidiaries under the equity method, while such investments would be measured at cost or fair value for IFRS purposes. With review or pronouncement IAS 27 (Separate Financial Statements), reviewed by IASB in 2014, separate financial statements in accordance with IFRS allowed the use of the equity pickup method for evaluation of investments in subsidiaries, affiliates and jointly-controlled entities. In December 2014, CMV issued Decision No. 733/2014, approved the Review of Technical Pronouncements No. 07, referring to Pronouncements CPC 18, CPC 35 and CPC 37, issued by the Brazilian FASB ( CPC ), receiving the note for review of IAS 27, and enabling its adoption for years ended. Accordingly, the individual financial statements of the controlling entity are in compliance with the IFRS as of this year Basis of consolidation Subsidiaries are consolidated as of acquisition date, which is the date the Company obtained control over them, and continue to be consolidated until the date such control ceases to exist. The consolidation of the balance sheet and P&L accounts is consistent with their nature, complemented by eliminating the following items: Company s interest in capital, reserves and accumulated losses and retained income in consolidated companies; Asset and liability balances held between consolidated companies; and 11

25 2. Presentation of financial statements (Continued) 2.2. Basis of consolidation (Continued) Revenue and expenses arising from transactions held between consolidated companies Functional and reporting currency The Company s and subsidiaries financial statements, included in the consolidated financial statements, are presented in reais, which is the currency of the main economic environment where they operate ( functional currency ). 3. Summary of significant accounting practices The significant accounting practices described below were consistently applied for the years presented and for the Company s individual (BR GAAP) and consolidated (IFRS) financial statements: a) Transactions and balances denominated in foreign currency Transactions in foreign currency are translated into the Company s functional currency (Real) at the exchange rates in force on transaction dates. Balance sheet account balances in foreign currency were translated at the exchange rate in force as of the balance sheet date. Exchange gains and losses resulting from settlement of these transactions and translation of monetary assets and liabilities denominated in foreign currency are recognized in P&L for the year. b) Cash and cash equivalents These include cash, on-demand bank deposits, short-term highly-liquid investments, convertible into a known cash amount and are exposed to insignificant risk of change in value. Short-term investments are recorded at cost, plus earnings through the balance sheet date, which does not exceed their market value or realizable value. 12