B2W DIGITAL ANNOUNCES GMV UP 19% TO R$ 3.7 BILLION IN 4Q15

Transcription

1 B2W DIGITAL ANNOUNCES GMV UP 19% TO R$ 3.7 BILLION IN 4Q15 Marketplace continues rapid expansion, growing by 582% and achieving a share of 10% in total GMV Rio de Janeiro, Brazil, March 10, 2016: B2W Digital (Bovespa: BTOW3), the largest, most beloved and fastest growing digital company in Latin America, announces today its results for the 4th quarter and full year of MESSAGE FROM MANAGEMENT In 2015, B2W Digital completed its three-year Business Plan ( ) to build the strongest digital platform in Latin America with the customer at the center of the Company's strategy. During this phase, investments in supply chain, technology and user experience were made in order to construct a platform that connects people, businesses, products and services. These investments have yielded significant returns in market share (from 20% in 1H12 to 27% in 4Q15), Marketplace (10% of GMV in 4Q15, in less than two years of operation), mobile adoption (39% of traffic in 4Q15) and, most importantly, net new customers (+6 MM net new customers since 1H12). In addition, B2W s 4 sites are the only e-commerce sites in Brazil with the highest customer service reputation since 2014, according to the ReclameAqui website and other public indicators. As a result, the Company has more than doubled in size over the last three years, growing its GMV from R$ 5.4 billion in 2012 to R$ 11.3 billion in In the next five years ( ), B2W will continue investing in the digital platform it has built, monetizing all areas of the business, with the objective of generating free cash flow and value to its shareholders. KEY INDICATORS 4Q15 4Q14 Delta Delta GMV (R$ MM) 3,749 3, % 11,266 9, % Market Share 26.8% 26.1% +0.7 p.p. 25.5% 24.2% +1.2 p.p. Marketplace (R$ MM) % % Marketplace Participation (%) 9.6% 1.7% +7.9 p.p. 7.6% 1.0% +6.6 p.p. Mobile (% of Traffic) 38.7% 24.4% p.p. 34.3% 19.5% p.p. Net New Customers (K) 1,583 1,872 n.a. 1,583 1,872 n.a. 4Q15 BUSINESS HIGHLIGHTS Black Friday and Christmas: B2W had a strong performance during the main events of the year, driven by the investments made over the past several years in technology, logistics and distribution, contributing to rigorous commercial planning and excellent execution by the B2W team. B2W s brands were traffic leaders during the events, delighting customers by guaranteeing a wide product assortment and delivering merchandise within the promised delivery times. New partnerships in the Marketplace: The Marketplace (3P) continues its rapid development, reaching a base of more than 2,500 sellers in just two years of operation. In 4Q15, B2W Digital established important new partnerships with Samsung, Acer, Vaio, Claro, Época Cosméticos, Spicy and PetLove. B2W Digital won several awards for excellence in customer service and e-commerce: B2W Digital won the "Época Reclame Aqui" award in 2 categories: Americanas.com won in the category "E-Commerce: Electronics" and Submarino Finance won in the category "Credit Cards: Retail." B2W Digital also won the award "Marcas Cariocas", given by O Globo, and the awards "Marcas Mais" and "Melhores Serviços", both given by Estadão (awards in the e-commerce category for Americanas.com and Submarino). 1 1

2 STRATEGIC INITIATIVES ENHANCING THE DIGITAL PLATFORM Commercial and Marketing o For the 14th consecutive quarter, B2W Digital successfully grew above the market, resulting in further market share gain and consolidating the Company s leadership position in Latin America. Since the beginning of the investment plan, B2W has expanded its market share by 6.9 percentage points, from 19.9% in 1H12 to 26.8% in 4Q15. o Traffic leadership, with a market share of visits during 4Q15 of 32.7%, an increase of 1.4 percentage points compared to 4Q14. o B2W's strong sales performance is driven by excellence in operations and the management of the main commercial variables. Selling success, especially in important events like Black Friday and Christmas, depends on a number of factors, such as wide product selection, appropriate inventory levels, means and conditions of payment, and delivery times, among others. Below we highlight key indicators from 4Q15: Inventory management: B2W operates with a stock-out rate below 10%, and managed to improve this indicator by 8% in 4Q15, compared to 4Q14. Product assortment increased by 60% in relation to 4Q14. Efficiency in delivery time: Productivity gains in the Distribution Centers (DCs) of 11%, driven by process improvements and the implementation of automated billing lines, resulting in faster delivery times for customers. o In December 2015, the Company launched Submarino Prime, which offers customers a superior buying experience for a fixed annual fee. With Submarino Prime, the customer can purchase more than 100,000 items, with free shipping and fast delivery, as often as one wants. Also, the customer can participate in exclusive promotional events and receive dedicated customer service. The service, still in beta phase, is available for the city of São Paulo, with a promotional launch price of R$ Marketplace Evolution o The Marketplace continues its rapid development, reaching a base of more than 2,500 sellers in just two years of operation. o In 4Q15, B2W Digital established important new partnerships with Samsung, Acer, Vaio, Claro, Época Cosméticos, Spicy and PetLove. o During Black Friday 2015, the Marketplace grew by 700% compared to the previous year, achieving a GMV during the event equivalent to 15 days of sales. o With the integration of Shopgram, B2W s Marketplace sellers can now sell via new channels: Whatsapp and Instagram. In addition, Shopgram sellers can also offer their products on the largest and most beloved brands on the Brazilian internet: Americanas.com, Submarino and Shoptime. o With the goal of helping sellers boost sales in the Marketplace, B2W launched a comprehensive development program, with frequent workshops offering diverse training sessions for operational and commercial enhancements. Fulfillment Infrastructure o B2W Digital operates a total of 11 DCs throughout Brazil, with a total storage area of over 500,000 square meters, an increase of 35% compared to the end of o The Company opened three more hubs in 4Q15, totaling 142 hubs at the end of the year (+49% vs 2014), strategically located to support its verticalized delivery network. o In two years of operation, B2W Distribution Unit s participation in total deliveries has evolved from below 5% to 70% at the end of o During 4Q15, B2W developed a new transportation software (TMS), expanding its order tracking technology and improving communication with the customer across the entire delivery process from order processing to delivery in the customer s home. o The Company s verticalization of the last mile has made possible the creation of the Shipping Menu, which offers up to 6 delivery options for the whole country since its launch in 3Q14: Same Day, Next Day, Fast, Standard, Scheduled Delivery and, most recently, Click & Collect (available in 203 stores). o The Shipping Menu has been a great success with customers. In 2015, the number of Next Day deliveries per day increased by 5 times compared to 2014, benefiting the customer who receives the product faster, while increasing B2W s shipping coverage ratio (shipping revenue / shipping cost). o The new rule concerning the collection of the ICMS tax (VAT tax on goods and services), which became effective in early 2016, brought even more complexity to the country s e-commerce market. As a result, during the 4 th quarter of 2015, B2W implemented a new billing and invoice issuance system. The system was developed internally and allowed B2W to fully comply with the new rule, preventing any 2 2

3 operational impact on the Company. In addition, the system was also made available to the Marketplace sellers using the [B] Seller solution. Mobile and Technology o Traffic from mobile devices reached 38.7% of total visits in 4Q15, an increase of 14.3 percentage points compared to 4Q14. o During Black Friday, the Americanas.com app was ranked #1 for most downloads on the App Store and Google Play, and, in November, all of the Company s apps in aggregate were downloaded approximately 1 million times (4 times greater than the previous month). o During the fourth quarter, the number of mobile app downloads increased by over 280% compared to the same period last year. o During Black Friday and Christmas 2015, the Company registered uptime (percentage of the time the server is in operation) of 100% on all systems, despite recording a volume 15 times greater than a normal day. o The Company continues to boost its usage of big data and data science, which has generated significant gains in the areas of dynamic pricing and intelligent purchasing. Digital Services o The result of the acquisition of 11 companies (nine best-in-class IT companies and the two main providers of last mile transportation in Brazil), B2W Services offers the full suite of IT and logistics solutions to support Marketplace sellers and the online stores of large brands, including [B] Seller (webstore and ERP solution) and [BFF] B2W Fulfillment (storage, delivery and customer service). o With the creation of B2W Services, B2W now has several entry points for companies and brands in search of technology, logistics and distribution solutions. During the second half of 2015, the cross-sell level within B2W Services doubled (cross-sell defined as the use of more than one of B2W s portfolio of services by the same partner). o Another result of the creation of B2W Services was the choice by several large companies to use the following B2W Services brands in 2015: Sieve: Ambev, L'Oréal, Apple, Microsoft and Johnson & Johnson Admatic: Fnac, Sephora, Pirelli, Salfer, Drugstore Onofre, DPaschoal and Wine Site Blindado: Technos, Ambev and C&A o Online advertising services, which allow large brands to use the traffic and reputation of B2W s sites to access millions of customers, continue in rapid development, doubling in sales in 4Q15 compared to 4Q14. o The full commerce solutions of B2B (storage, delivery and customer service) continue to attract major brands. Recently, B2W was chosen to operate the online store of the Lenovo VIBE line of smartphones, launched in Brazil in December Other major brands that already use B2W's solutions are Ambev, BRF, Motorola, KM de Vantagens, and NET, among others. Financial Services o In 2015, B2W s credit card operations (Submarino Finance and Digital Finance) recorded total volume of R$ 2.5 billion in approved transactions, representing an increase of 50% compared to o Also in 2015, the portfolio of receivables exceeded the R$ 1.0 billion mark, an increase of 40% compared to o By the end of 2015, B2W s credit card operations had already issued 1.9 million cards: Submarino Finance: 1.5 million cards issued and 35% share of total sales on the Submarino.com site in Digital Finance: In just over a year of operation, Digital Finance has already issued over 350,000 credit cards. o The expertise gained from Submarino Finance, throughout its 10 years of operation, accelerated the learning curve for Digital Finance. The financial activation rates of the Digital Finance customer base have reached levels 75% higher than those observed at the beginning of the Submarino Finance operation. o Advantages to the customer include access to exclusive discounts, rewards program, and additional credit limit to purchase on B2W websites. Meanwhile, advantages for B2W include lower MDR, greater customer loyalty (2.1 times higher purchase frequency) and higher average ticket (+22%). o In 2015, the Insurance and Services platform gained traction by boosting the offer of Affinity insurance products (extended warrantee and insurance against robbery, theft and accidental breakage) and increasing the supply of additional services, such as air conditioning installation, ecological disposal, digital imaging and pet care. 3 3

4 o In line with its innovative and pioneering style, B2W launched its Insurance and Services platform for products sold by third parties, offering the portfolio for items purchased by sellers on the Marketplace and other market players. Customer Service o B2W Digital s 4 sites continue to be recognized as best-in-class in terms of customer service, having been awarded the highest rating by Reclame Aqui with the RA 1000 Seal since o Average grade of 7.0 for B2W given by customers who registered complaints according to Reclame Aqui, compared to just 5.2 for the competition. o Over the past three years (2012 to 2015), during which the Company has invested to be closer to the customer, the average grade of B2W s brands grew from 6.0 (end of 2012) to 7.0 (end of 2015). o 76% of customers who registered complaints on Reclame Aqui would shop again on B2W s sites, compared to just 53% of clients for the competition. o In 4Q15, B2W again won several customer service / e-commerce awards (e.g. Época Reclame Aqui, Marcas Cariocas, Marcas Mais). Digital Talent Magnet o In 2015, B2W Digital launched its International Summer Internship program, recruiting students from top North American universities to participate in innovative projects. o To promote the development of tech projects by entrepreneurs, B2W sponsored HackPuc at Puc-Rio, where important initiatives were developed through hackathons. o In November 2015, B2W sponsored EmTech (emerging technologies), the world s foremost meeting on emerging technologies and innovation. The event, organized by MIT Technology Review, was held in Rio de Janeiro. B2W Digital was also part of jury for the Innovation Award (under 35). The award is viewed as a main reference for discovering talents and projects which use technology to solve society s largest problems. o Continuing the activities of Digital LABs, B2W s collaborative partnership with two renowned international educational and research institutions (MIT and Harvard), B2W launched an advanced office of research and innovation in the city of Boston (USA) with the aim of developing disruptive projects, moving closer to the global centers of excellence in digital technology. Corporate Sustainability o For the second consecutive year, B2W Digital achieved the Sustainability Index Certification (ISE) of BM&FBOVESPA. The Company is the first and only e-commerce company included in the index. This achievement once again reflects the organization's commitment to sustainable development. o In 2015, B2W published for the first time the Annual Sustainability Report in a single report, showing the economic, social and environmental performance of the Company, according to the GRI standard (G4 version). o In partnership with CDI (Committee for the Democratization of IT) and with the support of the Secretary of Education of the State of Rio de Janeiro (SEEDUC), B2W Digital launched "TecEscola", an innovative project to train 150 teachers from 50 local schools, benefitting about 15,000 students. o B2W supported the development of six social projects focused on educational policies, vocational training and income generation of the Social and Environmental Stock Exchange (BVSA) of the Bovespa Institute. All projects are aligned with the UN Millennium Development Goals. 4 4

5 FINANCIAL HIGHLIGHTS The financial information serving as the basis for the comments below refer to 4Q15 and full-year 2015, and are in accordance with international financial reporting standards (IFRS), with the standards issued by the Securites and Exchange Commission of Brazil (CVM), as well as the listing rules of the Novo Mercado and in Brazilian reais (R$). Definitions for adjusted financial metrics can be found in Annex IV and Annex VI. GMV: In 4Q15, GMV increased by 18.5%, reaching R$ 3,749.4 million, compared to the R$ 3,164.3 million registered in 4Q14. In 2015, GMV increased by 22.7%, reaching R$ 11,266.4 million, compared to the R$ 9,178.9 million registered in Net Revenue: In 4Q15, net revenue reached R$ 2,907.8 million compared to R$ 2,745.7 million in 4Q14, representing a growth rate of 5.9%. In 2015, net revenue reached R$ 9,013.8 million compared to R$ 7,963.8 million in 2014, representing a growth rate of 13.2%. Adjusted Gross Profit: In 4Q15, adjusted gross profit reached R$ million, a decline of 2.5% compared to R$ million in 4Q14. As a result, adjusted gross margin reduced by 1.9 p.p., decreasing from 23.6% in 4Q14 to 21.7% in 4Q15. In 2015, adjusted gross profit reached R$ 2,111.0 million, an increase of 9.5% compared to R$ 1,928.5 in As a result, adjusted gross margin reduced by 0.8 p.p., decreasing from 24.2% in 2014 to 23.4% in Adjusted Selling, General and Administrative (SG&A) Expenses: In 4Q15, adjusted selling, general and administrative expenses totaled R$ million, which represents 14.4% of net revenues, a reduction of 2.1 p.p. compared to 4Q14. In 2015, adjusted selling, general and administrative expenses totaled R$ 1,500.8 million, which represents 16.7% of net revenues, a reduction of 0.6 p.p. compared to Adjusted EBITDA: In 4Q15, Adjusted EBITDA reached R$ million, growing by 10.2% over the R$ million registered in 4Q14. During this period, Adjusted EBITDA margin was 7.3%, an increase of 0.3 p.p. in relation to the same period during the preceding year. In 2015, Adjusted EBITDA reached R$ million, growing by 9.7% over the R$ million registered in During this period, Adjusted EBITDA margin was 6.8%, a reduction of 0.2 p.p. in relation to the same period during the preceding year. Net Financial Result: In 4Q15, net financial result was R$ million, representing an increase of 95.8% in relation to the net financial result of R$ million in 4Q14. In 2015, net financial result was R$ million, representing an increase of 25.8% in relation to the net financial result of R$ million in Adjusted Net Result: In 4Q15, adjusted net result, excluding the effect of the partial reversal of the deferred income and social contribution tax asset, was R$ million, compared to the R$ 20.9 million obtained in 4Q14. In 2015, adjusted net result, excluding the effect of the partial reversal of the deferred income and social contribution tax asset, was R$ million, compared to the R$ million obtained in Considering the effect of the partial reversal of the deferred income and social contribution tax asset, the net result was R$ million in 4Q15 and R$ million in (see Annex IV) 5 5

6 Cash Management: o Working Capital: Net working capital days as of the end of December 2015 was 30 (the same level as the end of December 2014). When compared to the end of December 2012, when the Company announced its 3-year investment cycle, net working capital days improved by 44 days against the 74 days registered on that date. This result reinforces the Company s efforts to manage the main variables of working capital and its commitment to maximize shareholder value. o Capex: B2W uses its cash generation prioritizing investments that present optimal returns to shareholders. Thus, in 2015, consolidated investments in plant, property and equipment and intangibles (development of websites and systems) totaled R$ 808 million, or 9.0% of net revenue, a 1.2 p.p. reduction compared to 2014, when capex was 10.2% of net revenue. Accordingly, Adjusted EBITDA in 2015 covered 75.5% of Capex, compared to 68.4% in Financial Debt: B2W s cash balance at 12/31/2015 amounted to R$ 3,282.5 million, 5.9 times the sum of the Company's short-term debt and debentures, which totaled R$ million. During 4Q15, B2W reduced its leverage level (defined at Net Debt / Adjusted EBITDA LTM) from 2.5x, on 09/30/2015, to 1.5x, on 12/31/

7 ANNEX I: ABOUT B2W DIGITAL B2W is a digital company, leader in Latin America, whose history coincides with the development of e-commerce in Brazil. The Company operates in the following areas: e-commerce through the brands Americanas.com, Submarino, Shoptime and SouBarato; consumer finance platforms (Submarino Finance and Digital Finance); technology platform; logistics platform, distribution and customer service; and Marketplace. With the objective of connecting people, businesses, products and services on a single digital platform, B2W constantly invests in its strategy of being closer to the customer, offering the best shopping experience, attracting the best talent, and creating barriers to entry. As a result of these developments, the Company continues to gain market share, year by year. The following chart illustrates the current organizational structure of B2W: Evolution of the business platform: Companies comprising the Sieve Group, acquired during 2Q15 Description Back-office Systems Frontoffice Systems SEO, Algorithms Delivery (large packages) Delivery (small packages) Magento Technology Marketing Campaigns Pricing Intelligence (online /offline) Online Security Marketplace Integration Marketplace Whatsapp / Instagram Tracking software (TMS) A - TECHNOLOGY Scalable IT Patform Customer Eperience Intelligence/Analytics Marketplace Integration LOGISTICS B - LOGISTICS [BFF] Management Systems Last Mile Solution/ Delivery A+B B2W SERVICES [B] Seller [BFF] B2W Fulfillment IT/Online Solutions Full suite of value-added services to support marketplace sellers and online vendors, including BFF (B2W Fulfillment) and [B] Seller (technology services) 7 7

8 ANNEX II: MARKET SHARE MARKET SHARE EVOLUTION Source: e-bit (market) and public filings (#2 player). 8 8

9 ANNEX III: FINANCIAL STATEMENTS INCOME STATEMENT EXCLUDING THE EFFECTS OF THE CONSOLIDATION OF B2W S TRANSPORTATION SUBSIDIARIES AND THE PARTIAL REVERSAL OF THE DEFERRED INCOME AND SOCIAL CONTRIBUTION TAX ASSET A B B2W - Companhia Digital Consolidated Consolidated Income Statements Period ended on December 31 Period ended on December 31 (in million of Brazilian reais) 4Q15 4Q14 Variation Variation Gross Merchandise Volume (GMV) 3, , % 11, , % Gross Sales and Services Revenue 3, , % 10, , % Taxes on sales and services (526.7) (373.6) 41.0% (1,495.8) (1,130.7) 32.3% Net Sales and Services Revenue 2, , % 9, , % Cost of goods and services sold (2,277.1) (2,098.8) 8.5% (6,902.8) (6,035.3) 14.4% Gross Profit % 2, , % Gross Margin (% NR) 21.7% 23.6% -1.9 p.p. 23.4% 24.2% -0.8 p.p. Operating Revenue (Expenses) (482.1) (497.5) -3.1% (1,740.8) (1,520.9) 14.5% Selling expenses (386.6) (415.1) -6.9% (1,361.0) (1,256.3) 8.3% General and administrative expenses (31.6) (38.9) -18.9% (139.8) (116.2) 20.4% Depreciation and amortization (63.9) (43.4) 47.0% (239.9) (148.4) 61.7% Operating Result before Net Financial Result and Equity Accounting % % Net Financial Result (269.8) (137.8) 95.8% (818.3) (650.5) 25.8% Financial revenues % % Financial expenses (401.7) (159.8) 151.4% (1,204.1) (934.1) 28.9% Other operating income (expenses) (13.1) % 41.9 (41.0) % Income tax and social contribution % % Net Result (17.2) % (274.6) (163.3) 68.2% Net Margin (% NR) -0.6% 0.8% -1.4 p.p. -3.0% -2.1% -0.9 p.p. Adjusted EBITDA % % Adjusted EBITDA Margin (% NR) 7.3% 7.0% 0.3 p.p. 6.8% 7.0% -0.2 p.p. A: Effects of the consolidation of B2W Digital s transportation subsidiaries. B: Effects of the partial reversal of the deferred income and social contribution tax asset, in the amount of R$ MM (4Q15 and 2015). INCOME STATEMENT (NON-ADJUSTED) B2W - Companhia Digital Consolidated Consolidated Income Statements Period ended on December 31 Period ended on December 31 (in million of Brazilian reais) 4Q15 4Q14 Variation Variation Gross Merchandise Volume (GMV) 3, , % 11, , % Gross Sales and Services Revenue 3, , % 10, , % Taxes on sales and services (526.7) (373.6) 41.0% (1,495.8) (1,130.7) 32.3% Net Sales and Services Revenue 2, , % 9, , % Cost of goods and services sold (2,391.4) (2,098.8) 13.9% (7,226.3) (6,035.3) 19.7% Gross Profit % 1, , % Gross Margin (% NR) 17.8% 23.6% -5.8 p.p. 19.8% 24.2% -4.4 p.p. Operating Revenue (Expenses) (367.8) (497.5) -26.1% (1,417.3) (1,520.9) -6.8% Selling expenses (272.3) (415.1) -34.4% (1,037.5) (1,256.3) -17.4% General and administrative expenses (31.6) (38.9) -18.9% (139.8) (116.2) 20.4% Depreciation and amortization (63.9) (43.4) 47.0% (239.9) (148.4) 61.7% Operating Result before Net Financial Result and Equity Accounting % % Net Financial Result (269.8) (137.8) 95.8% (818.3) (650.5) 25.8% Financial revenues % % Financial expenses (401.7) (159.8) 151.4% (1,204.1) (934.1) 28.9% Other operating income (expenses) (13.1) % 41.9 (41.0) % Income tax and social contribution (140.8) % (12.2) % Net Result (161.1) % (418.4) (163.3) 156.2% Net Margin (% NR) -5.5% 0.8% -6.3 p.p. -4.6% -2.1% -2.5 p.p. Adjusted EBITDA % % Adjusted EBITDA Margin (% NR) 7.3% 7.0% 0.3 p.p. 6.8% 7.0% -0.2 p.p. 9 9

10 BALANCE SHEET B2W - Companhia Digital Balance Sheet (in million of Brazilian reais) ASSETS CURRENT ASSETS Consolidated 12/31/ /31/2014 Cash and banks Marketable securities 2, ,315.9 Accounts receivable Inventories 1, ,366.2 Recoverable taxes Prepaid expenses and other accounts Total Current Assets 5, ,027.9 NON CURRENT ASSETS Deferred income tax and social contribution Recoverable taxes Escrow deposits and other receivables Plant, property and equipment Intangible assets 2, ,071.2 Total Non-Current Assets 4, ,607.1 TOTAL ASSETS 9, ,635.0 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Suppliers 2, ,145.4 Loans and financing Debentures Salaries and social contribution Taxes payable Deferred income tax and social contribution Other accounts payable Total Current Liabilities 3, ,107.3 NON-CURRENT LIABILITIES Loans and financing 3, ,135.0 Debentures Related parties Provision for contingencies and other accounts payable Total Non-Current Liabilities 3, ,448.2 SHAREHOLDERS' EQUITY Capital 3, ,605.3 Capital reserves Equity valuation adjustment (0.4) (0.4) Accumulated income (losses) (957.3) (538.1) Minority interest Total Shareholders' Equity 2, ,079.5 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 9, ,

11 CASH FLOW STATEMENT B2W - Companhia Digital Cash Flow Statement (in million of reais) Consolidated Operating Activities 12/31/ /31/2014 Variation Net Result for the Period (418.4) (163.3) (255.1) Adjustment to the Net Result: Depreciation and amortization Deferred income tax and social contribution (21.9) (123.9) Interest, monetary and currency changes (39.3) Gain on sale of subsidiaries (99.2) - (99.2) Others Minority participation (0.1) - (0.1) Adjusted Net Result (172.3) Change in Working Capital: Accounts receivable (59.3) Inventories (61.6) (253.4) Suppliers (149.1) (401.7) Change in Working Capital: 72.0 (60.0) Change in Assets: Prepaid expenses (47.9) (1.9) (46.0) Escrow deposits Recoverable taxes (394.9) (256.4) (138.5) Other accounts receivable (current and non-current) (114.4) (24.3) (90.1) Change in Assets: (546.5) (282.5) (264.0) Change in Liabilities Salaries and social security charges (3.1) Recoverable taxes (current and non-current) Other liabilities (current and non-current) (66.8) Change in Liabilities: (54.3) Cash Flow from Operating Activities (257.2) (382.6) Investing Activities Marketable securities (925.0) (1,389.8) Purchases of property, plant and equipment assets (144.6) (173.2) 28.6 Intangible assets (576.7) (639.3) 62.7 Value paid for the acquisition of subsidiaries (186.3) (55.5) (130.8) Value received for the sale of subsidiaries Cash Flow from Investing Activities (1,554.2) (403.2) (1,151.0) Financing Activities Funding 2, ,316.2 Payments (1,053.1) (1,767.7) Debentures - (400.0) Capital increase in cash ,412.0 (2,381.4) Capital reserves Valuation adjustments - (0.3) 0.3 Cash Flow from Financing Activities 1, ,053.8 Change in cash balance Beginning Cash Balance Ending Cash Balance

12 ANNEX IV: NOTE REGARDING THE INCOME STATEMENT Effects in the consolidation of B2W Digital s transportation subsidiaries Click-Rodo and Direct (subsidiaries of B2W Digital) provide merchandise distribution services to the Company, generating an elimination effect in consolidated gross revenue and selling, general and administrative expenses (distribution expenses), according to the present accounting rules. The consolidated gross profit is reduced in an amount equal to the positive effect observed in the selling, general and administrative expenses, but with no effect on Adjusted EBITDA and Adjusted EBITDA Margin. Adjusted EBITDA On October 4th, 2012, Brazilian Securities Exchange Commission (CVM) enacted Instruction 527/12, regarding the voluntary disclosure of non-accounting information such as EBITDA. The Instruction aims to standardize the disclosure, in order to improve the understanding of this information and make it comparable among publicly listed companies. To keep the consistency and the comparability between previous periods, we present the reconciliation of EBITDA. In 4Q15, Adjusted EBITDA reached R$ million. Including other operating income and expenses, EBITDA, according to CVM Instruction 527/12, would be R$ million in 4Q15, representing 10.8% of net revenue. In 2015, Adjusted EBITDA reached R$ million. Including other operating income and expenses, EBITDA, according to CVM Instruction 527/12, would be R$ million in 2015, representing 7.2% of net revenue. Effects of the partial reversal of the deferred income and social contribution tax asset In December 2006, B2W was created as a result of the merger between Americanas.com and Submarino, bringing together the sites Americanas.com, Submarino, Shoptime and other business units. B2W was thus born as the largest e-commerce company in Latin America and continues as the market leader today. After the merger, B2W began a phase of operational integration and the construction of a singular platform to face the challenges of e-commerce in Brazil. At the end of this phase, in 2012, B2W Digital prepared a three-year business plan ( ), which included a new investment cycle. The main focus of the plan was the customer, the cornerstone of the Company's strategy. The platform built over the past several years prepared B2W to capture the growth opportunities in the e-commerce market and allowed for the consolidation of the Company as a digital platform, where the Marketplace operation and digital services will gain increasing importance, and will contribute significantly to the profitability of all business units of the Company. In line with the evolution of the Company s operations and the future performance expectations of the e-commerce market, which is still in early stages of development in the country, the Company, as already disclosed in previous financial statements, has internal estimates for growth and margin trends, which result in the expectation of the full utilization, between 2017 and 2021, of the company s deferred income tax and social contribution asset. At the end of 2015, in light of the more challenging macroeconomic environment, the Company conducted a sensitivity analysis using much more conservative growth assumptions, including sales growth in line with inflation (i.e. no real growth), and gross margin held flat until This scenario was subjected to an impairment test by external and independent experts. As a result of this test, as a conservative measure, the Company reversed, on December 31, 2015, the amount of R$ million which would not be used until 2025, in accordance with current accounting standards. This reversal of deferred income and social contribution tax is merely an accounting adjustment, with no cash or tax impact, i.e. the tax credit remains unchanged. The Company's management reiterates its confidence in its Business Plan and will continue to monitor internal and external indicators in order to better assess the development of its estimates

13 APPENDIX V: INDEBTEDNESS Consolidated Indebtedness - R$ MM 12/31/ /30/2015 Short Term Debt Short Term Debentures Short Term Indebtedness Long Term Debt 3, ,446.9 Long Term Debentures Long Term Indebtedness 3, ,646.9 Total Debt (1) 4, ,184.1 Cash and Equivalents 2, ,208.3 Credit Card Accounts Receivables Net of Discounts Total Cash (2) 3, ,664.4 Net Debt (Cash) (2) - (1) ,519.7 Net Debt (Cash) / Adjusted EBITDA LTM Average Maturity of Debt (days) Accounts receivable are mainly composed of credit card receivables, net of the discounted value, which have immediate liquidity and can be considered as cash. The breakdown of B2W s accounts receivable is demonstrated in the following table: Consolidated Accounts Receivable Reconciliation - R$ MM 12/31/ /30/2015 Gross Credit-Cards Receivable 2, ,771.5 Receivable Discounts (1,458.7) (1,315.4) Credit Card Accounts Receivables Net of Discounts Present Value Adjustment (2.9) (2.4) Allowance for Doubtful Accounts (21.7) (17.9) Other Accounts Receivable Net Accounts Receivable - Consolidated

14 APPENDIX VI: DEFINITIONS Adjusted EBITDA: Operational earnings before interest, taxes, depreciation and amortization and excluding other operational revenues/expenses and equity accounting. Adjusted Gross Profit: Gross profit excluding the effects of the consolidation of B2W Digital s transportation subsidiaries. Adjusted Net Result: Net Result excluding the effect of the partial reversal of the deferred income and social contribution tax asset, in the amount of R$ MM (4Q15 and 2015). Adjusted SG&A: SG&A excluding the effects of the consolidation of B2W Digital s transportation subsidiaries. GMV (Gross Merchandise Volume): Sales of own merchandise, sales realized on the Marketplace, and other revenues (excluding commissions from Marketplace sales), after returns and including taxes. Market Share: Total sales on B2W sites, including those made on the Marketplace, divided by total market sales (source: e-bit). Market Share of Traffic: Total visits on B2W sites divided by total visits on the sites of the principal players in Brazil e-commerce (source: ComScore). Marketplace Participation: Marketplace sales as a percentage of total consolidated GMV. Net Debt (Cash): Calculated as the sum of short-term and long-term indebtedness, less the sum of cash & equivalents and credit card accounts receivables (net of the discounted balance). Net New Customers: Increase in active customer base during the trailing 12 months. Net Working Capital Days: Calculated as the sum of credit card accounts receivable days (using GMV as the base) and inventory days, less accounts payable days; considering GMV and COGS over the past 12 months

15 INFORMATION ABOUT THE WEBCAST AND THE CONFERENCE CALL Conference calls with simultaneous translation into English, followed by a bilingual Q&A session will be held as followed: 15 15