3Q18 Highlights. Consolidated Net Revenue of R$ 6.4 billion in 3Q18, up 4.4% over the same period of last year.

Transcription

1 3Q18

2 October 24, 2018 Via Varejo S.A., Brazil s largest electronics, home appliances and furniture retailer, announces its consolidated results for the third quarter of 2018 (3Q18). On January 1, 2018, the Company adopted the IFRS 9 standard, which affects how we recognize our impairment losses and consequently our provision for doubtful accounts (PDA). The following figures already include the impact of the new standard and the figures for 2017, which were adjusted in our Quarterly Information (ITR). For more information, please see Note nº 2-a to the ITR. 3Q18 Highlights o o o o Consolidated Net Revenue of R$ 6.4 billion in 3Q18, up 4.4% over the same period of last year. Net sales in physical stores reached R$ 5.2 billion in 3Q18 (+5.2% vs. 3Q17), with same-store sales growth of +4.2%. Online GMV in 3Q18 of R$ 1.6 billion, with growth of 13.6% and marketplace penetration of 26.2% (vs. 24.9% in 3Q17). Click&Collect in 3Q18 reached 31.3% of Online sales in the main categories¹, demonstrating consistency in the evolution of our multi-channel strategy. o Gross Profit of R$ 1,864 million, representing a margin of 29.2%. o Adjusted EBITDA of R$ 161 million in 3Q18, with a margin of 2.5%. o We ended the quarter with net cash, including undiscounted credit card receivables, of R$ 1.6 billion. o o o o Launch of the new Casas Bahia app, + 300% in orders only in September vs. the best month of the year. Partnership with a call option of Airfox for the development of the digital CDC and the digital wallet. Partnership with GetNet to develop the marketplace seller s portal with a wide range of financial services. Extension of the Partnership with Zurich: centralized a large part of the insurance portfolio by a single insurance company, contributing to the omnichannel strategy and envisaging greater efficiency and operational synergy. ¹Main Categories: Cell phones, Televisions, Long Tail Technology and Long Tail Portables. Penetration over quarters: 1Q17: 12.2%, 2Q17: 19.1%; 3Q17:26.1% and 4Q17: 27.0%. 2

3 Management Comments This quarter, we continued to register growth in revenue and market share in both channels, with our brick-and-mortar stores posting same-store sales growth of 4.2%, while invoiced GMV grew 13.6%. Consolidated net revenue grew 4.4% to R$6.4 billion. Adjusted EBITDA came to R$161 million, while EBITDA margin was 2.5%, and we ended the quarter with loss of R$79 million. Due to lower-than-expected sales performance in the previous quarter and the continuation of weaker demand in the post-world cup period, we faced a more competitive environment. Other factors that also impacted the quarterly results were the lower penetration of our CDC and services. It is also worth mentioning that this last period was marked by important implementations in critical systems of the company. They are profound changes, essential for the company to restructure its foundations. Once we have overcome the natural process of adoption and learning curve, we believe that this strategic decision will bring significant improvements in productivity and in the experience of our customers. In this context we would like to highlight: (i) New sales system. At the end of July 2018, we launched Via+. Via+ brings together all the tools that we developed in recent months (compensation model, Via Única /CRM and the entire Online catalog) in a much more agile and intuitive platform, transforming our salespeople into sales consultants. Via+ will also enable us to advance in the Online channel catalog at stores (~2 million SKUs), earlier restricted to the items available at the store (~3,000 SKUs). Approximately 60% of the transactions in the quarter were through the new system. With the rollout of Via+ combined with the unification of B&M and Online Inventories, and the offer of our CDC, was the first step towards the insertion of a significant range of the population in the Online market. The next step will be to connect them to our sites and introduce the digital CDC, a process that was accelerated with the partnership with Airfox, announced in September/18. (ii) Costumer`s New Apps. We launched new Casas Bahia app and the new augmented reality app for furniture (launches were phased out during the 3 rd quarter). The new purchase apps, together with Via Única (CRM), will enable us to further improve the customer experience by delivering personalized offerings, which result in greater efficiency and higher conversion rates. This quarter, mobile traffic (msite+app) increased significantly, representing ~70% of Online visits and approximately ~40% of Online sales. (iii) Sales Team New Apps. In the quarter, we also launched applications for our store team. In addition to the EVVA application, the virtual assistant of our team that offers tips on how to improve their 3

4 performance with internal benchmarks, we also launch the Via + application. The application will offer greater agility to our team and a better consumer experience with an agile sales process. (iv) Partnership with Airfox. We announced a partnership with a payment technology start-up located in Boston for the development of a mobile payment solution app. The partnership will develop an mpos (Mobile Point of Sale) technology solution that will enable Casas Bahia clients to authenticate and scan bills, as well as digitally pay Casas Bahia payment books directly through a mobile app. The solution will also provide other digital functionalities through a virtual portfolio, such as: a) the possibility of paying bills (water, electricity, gas, Internet, telephone, and others); b) collection and receipt of amounts directly in the user's virtual portfolio; c) instant reloads of prepaid mobile and public transportation cards; d) transfer of credits and funds to other users, including via QR code; e) user authentication through facial biometry and f) transactions in P2P Lending platform. Also in order to expand the advantages resulting from the partnership and betting on the success of this innovative solution in the Brazilian market, Via Varejo ensured the option to buy up to eighty percent (80%) of the capital stock of AirFox, valid for up to three (3) years and subject to certain price adjustments and compliance with conditions typical to such transactions. (v) Partnership with Getnet. Our partnership with Getnet, Santander's technology company, will help Via Varejo to offer to its marketplace partner a broad portfolio of financial products, including sale of receivables service, antifraud system, safe, recurring payment, sales reconciliation, acceptance and generation of bank payment slip, safe digital checkout, consulting and cloud infrastructure. In addition, the partnership complies with the new regulation of the Central Bank of Brazil. (vi) Renewal of the partnership with Zurich. Until 2025, the company will have exclusivity in the distribution of extended warranty, robbery, theft, life, lender and residential insurance in all channels (B&M and online) of Ponto Frio brand and in the online channel of Casas Bahia brand and exclusivity distribution of extended warranty, robbery and theft insurance for all physical stores of Casas Bahia brand. In this way, Via Varejo will centralize part of the insurance products portfolio into a single insurance company, contributing to the omnichannel strategy (same products and offers in all channels), aiming greater efficiency and operational synergy. With regard to store expansion, in 3Q18 the Company opened 15 new stores, 11 of them in the Smart format and 4 Kiosks. It is worth mentioning that the new Smart format stores, inaugurated since November 2017, continue to report results above expectations. On the other hand, as a result of poor performance, we closed 23 stores in the period. Regarding kiosks, due to their positive performance, we accelerated the expansion of this model and expect to end the year with 20 units. 4

5 This quarter, we also opened 44 new Mini-Hub Stores, reaching a total of 62 units (last-mile store delivery) and over 6,000 Postal agencies with the Click&Collect service, resulting in a significant improvement in the quality of service offered to our customers, while reducing logistics expenses. We are continuing our efforts to accelerate the implementation of other mapped stores and to expand our Click&Collect services to more post offices, as well as other goods collection points. We continue to invest in our full-commerce platform. We expect to add more and more partners who will not only have access to our websites and our unique logistics infrastructure (DCs and delivery) but also to our entire store network, which includes Click&Collect and over 20,000 salespersons. Finally, we took another important step towards accelerating the digital transformation of Via Varejo with the arrival of the new Chief Digital Officer (CDO) Maurizio de Franciscis, who joined the team in September. He will be responsible for the marketing, marketplace, full-commerce and IT areas. Maurizio has vast experience in the digital world: he was CEO of Submarino Viagens and CDO of the CVC Group. He was also CEO of Hotel Urbano and COO of KaBuM! Previously, he was an executive at GE and a digital entrepreneur with over 20 years of management experience gained in Brazil, USA and Europe.We are certain that the new structure will speed up decision-making and foster a proactive approach among all our teams. The vision for the future based on transformational projects we have been putting into practice will make Via Varejo a reference in Omnichannel retailing and a business platform that delivers excellence in customer experience, while serving as the ideal partner for suppliers and sellers. The Management 5

6 Operating Performance Highlights 3Q18 3Q17 % 9M18 9M17 % Net Revenue ,4% ,7% Gross Margin 29,2% 32,8% (356bps) 30,2% 31,7% (153bps) Adjusted EBITDA¹ (61,6%) (9,4%) Adjusted EBITDA Margin 2,5% 6,9% (433bps) 4,9% 5,8% (88bps) Net Earnings (79) 46 na (78,6%) Net Cash with receivables not discounted² (211) (211) (¹) Excluding other operational revenues and expenses (¹) 2017 Adjusted by IFRS 9 Operation 3Q18 3Q17 % 9M18 9M17 % Bricks and Mortar - SSS (%) 4,2% 18,6% 6,9% 10,3% Net GMV (y/y % growth) 13,6% 23,0% 10,1% 17,1% Net GMV (B2C+MP) ,6% ,1% Net Marketplace GMV ,5% ,2% Marketplace Penetration (% Net GMV) 26,2% 24,9% 129bps 27,6% 24,4% 313bps Click'n Collect Penetration² (% Net GMV) 31,3% 27,6% 365bps 30,2% 20,4% 980bps (²) Main Categories Performance of Revenue Net Sales - R$ million 3Q18 3Q17 % 9M18 9M17 % Bricks and Mortar ,2% ,7% Online ,0% ,3% Net Revenue ,4% ,7% Brick-and-mortar stores In 3Q18, same-store sales growth stood at 4.2%, even with a stronger comparison base of 18.6% in 3Q17. Net revenue from brick-and-mortar stores grew 5.2% in 3Q18 compared to 3Q17, which resulted in a significant market share gain in the period. Online Invoiced GMV grew 13.6% to R$1.6 billion in the period. We show an evolution of growth throughout the year, in line with the maturation process of the integration between the channels. Important projects, such as Via Única and the new apps, have yet to contribute their full potential to the results in this period. GMV invoiced in the marketplace accounted for 26.2% of Total Invoiced GMV in 3Q18, registering significant growth of 19.5% in the quarter. Net revenue from the Online business, which includes not only merchandise and marketplace, but also our services (ehub) and sales in the wholesale segment, grew 1.0% in 3Q18 compared to 3Q17. 6

7 Services During 3Q18, revenue from payment books, services, assembly and freight decreased 1.5% from 3Q17, due to a more restrictive credit policy, which resulted in lower revenue from financial services. This reduction will result in an increase in the company s profitability. R$ million 3Q18 3Q17 % 9M18 9M17 % Merchandise ,2% ,9% Freight and Assembly Services ,2% ,0% Services (2,9%) ,2% CDC/Credit Cards (1,0%) ,1% Net Revenue ,4% ,7% Freight, Services, CDC/Credit Card and Assembly (1,5%) ,7% % Total Net Revenue 11,5% 12,2% (69bps) 12,0% 12,3% (22bps) Breakdown of sales by payment means: Gross Profit Sales by means of payment 3Q18 3Q17 % Cash/Debit Card 24,0% 25,2% (120bps) CDC (Payment Book) 10,5% 11,8% (127bps) Co-branded Credit Card 11,1% 13,2% (210bps) Third-party Credit Card 54,4% 49,8% 456bps R$ million 3Q18 3Q17 % 9M18 9M17 % Gross Profit (6,9%) ,5% Gross Margin 29,2% 32,8% (356bps) 30,2% 31,7% (153bps) Gross margin closed 3Q18 at 29.2%, 356bps lower than 3Q17 due to a more challenging sales environment and lower penetration of profitable products such as CDC and services. In addition, in 3Q18 we reclassified part of our labor expenses to cost. It is worth mentioning that we added new implementations in critical systems of the company, an important step to improve your future performance. The changes were deep but essential for the company to restructure its foundations. The adoption process and learning curve for the new systems negatively impacted the margin during the quarter. However, the transition phase has been successfully completed and, therefore, we expect the reversal of this effect going forward. 7

8 Selling, General and Administrative Expenses R$ million 3Q18 3Q17 % 9M18 9M17 % SG&A (1.729) (1.609) 7,5% (4.987) (4.805) 3,8% % Net Revenue (27,1%) (26,3%) (77bps) (25,6%) (26,3%) 71bps In 3Q18, sales, general and administrative expenses in relation to net revenue reached 27.1% vs. 26.3% in 3Q17. We continue to seek opportunities in optimizing and reducing our operating expenses, without losing operational and administrative efficiency in our structure. We reduced our personnel expenses, the estimated losses for doubtful accounts - PDA. However, in the period, we had an increase in legal expenses and higher marketing expenses (stimulus and promotion of the new app and greater use of mass media). Adjusted EBITDA EBITDA - R$ million 3Q18 3Q17 % 9M18 9M17 % EBITDA (66,8%) (0,1%) EBITDA Margin 2,1% 6,5% (441bps) 4,4% 4,7% (30bps) Other Operational (Expenses) Revenues (30) (24) 25,0% (113) (212) (46,7%) Adjusted EBITDA (61,6%) (9,4%) Adjusted EBITDA Margin 2,5% 6,9% (433bps) 4,9% 5,8% (88bps) Adjusted EBITDA came to R$161 million, down 61.6% from the previous year. Adjusted EBITDA margin reached 2.5% in 3Q18, 433bps lower than in 3Q17. Financial Performance Net Financial Results - R$ million 3Q18 3Q17 % 9M18 9M17 % FinancialRevenues 9 9 0,0% (51,5%) Financial Expenses (188) (220) (14,5%) (555) (643) (13,7%) Debt Financial Expenses (24) (22) 9,1% (59) (67) (11,9%) CDC Financial Expenses (62) (83) (25,3%) (199) (273) (27,1%) Credit Card Receivables' Discounting Expe (102) (115) (11,3%) (297) (303) (2,0%) Financial Results pre monetary (179) (211) (15,2%) (522) (575) (9,2%) % Net Revenue (2,8%) (3,5%) 65bps (2,7%) (3,2%) 47bps Monetary Variation (25) (28) (10,7%) (53) 1 na Net financial results (204) (239) (14,6%) (575) (574) 0,2% % Net Revenue (3,2%) (3,9%) 71bps (3,0%) (3,1%) 19bps In 3Q18, net financial result before updates stood at 2.8% as a ratio of net revenue, down 65bps from 3Q17, reflecting the lower financial expenses with both consumer credit - CDCI and selling expenses, as well as sales of receivables. 8

9 Net Income R$ million 3Q18 3Q17 % 9M18 9M17 % EBT (151) 81 na (43%) % Net Revenue (2,4%) 1,3% (369bps) 0,1% 0,2% (11bps) Taxes* 72 (35) na (12) 14 na Net Earnings (79) 46 na (78,6%) Net Margin (1,2%) 0,8% (199bps) 0,1% 0,3% (25bps) *3Q18 considers the recognition of deferred tax assets arising from temporary differences of subsidiary Cnova Brasil, in the amount of R$56 million, due to the project of partial Split-off and incorporation of operations of this subsidiary in Via Varejo. (see note 14-a from quarterly information ITR). The Company posted net loss of R$79 million in 3Q18, compared to net income of R$46 million in 3Q17. This result, despite sales growth, was due to the lower gross margin and higher SG&A (% of net revenue), in the period. Working Capital R$ million (+/-) (+/-) Inventory Days of Inventory days (+/-) Suppliers¹ Total Days of Suppliers days Working Capital Change (¹) Suppliers + Suppliers ('Forfait') We closed 3Q18 with an increase in working capital compared to 3Q17. Our strategy is to continue holding high inventories (financed by our suppliers), since we are entering a period of high sales for the company, with Black Friday and Christmas. Debt R$ million (+/-) Availability (110) On Balance Credit Card Receivables Not Discounted¹ (238) Financial Debt (518) (726) +208 Net Debt with CC Receivables not Discounted (140) LTM Adjusted EBITDA Net cash/ltm EBITDA 1,1x 1,3x (¹) Credit Card Receivables Short Term and Long Term, 2017 Adjusted by IFRS 9 We ended the quarter with a solid Adjusted Net Cash position of R$1,625 million, including not discounted receivables portfolio of R$1,714 million. 9

10 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 3Q18 Delinquency in payment book portfolio (% of Portfolio) 16,3% 13,9% 13,3% 11,6% 16,3% 14,4% 13,1% 7,7% 9,1% 7,6% 7,2% 7,5% 9,5% 8,3% Over 90 days Over days Delinquency in our payment books portfolio exceeding 90 days is within the parameters of a sustainable business. We continue to invest in risk control processes and systems and in improving our customer experience. In May 2018, we adopted a new credit policy with new analysis and segmentation models that enable us to mitigate risks and reduce approval/denial time. In 3Q18, we reached 75% of decisions made automatically. Investments In 3Q18, Via Varejo s capital expenditure totaled R$191 million, broken down as follows: R$ million 3Q18 3Q17 % 9M18 9M17 % Logistics ,1% ,2% New Stores 37 0 na 70 2 na Stores Renovation (15,0%) ,5% IT ,3% ,1% Others ,3% 23 6 na Total ,0% ,7% 10

11 Store Activity by Format Casas Bahia Opening Closure Street Shopping Malls Kiosk Consolidated (total) Sales Area ('000 m2) Total Area ('000 m2) Pontofrio Opening Closure Street Shopping Malls Kiosk Consolidated (total) Sales Area ('000 m2) Total Area ('000 m2) Consolidated Opening Closure Street Shopping Malls Kiosk Consolidated (total) Sales Area ('000 m2) Total Area ('000 m2)

12 Accounting Information Audited Income Statement R$ million 3Q18 3Q17 9M18 9M17 Gross Sales ,7% ,0% Net Sales ,4% ,7% Cost of Goods Sold (4.496) (4.088) 10,0% (13.536) (12.398) 9,2% Depreciation (Logistic) (17) (18) (5,6%) (50) (60) (16,7%) Gross Profit (6,9%) ,5% Selling Expenses (1.474) (1.388) 6,2% (4.243) (4.233) 0,2% General and Administrative Expenses (255) (221) 15,4% (744) (572) 30,1% Equity Income ,6% ,3% Other Operating Income (Expenses) (30) (24) 25,0% (113) (212) (46,7%) Total Operating Expenses (1.750) (1.626) 7,6% (5.079) (5.001) 1,6% Depreciation and Amortization (61) (57) 7,0% (199) (173) 15,0% Earnings before Interest and Taxes - EBIT (83,4%) (2,8%) Financial Revenue ,1% (56,9%) Financial Expenses (244) (275) (11,3%) (678) (813) (16,6%) Net Financial Income (Expense) (204) (239) (14,6%) (575) (574) 0,2% Earnings before Income Tax (151) 81 na (42,9%) Income Tax 72 (35) na (12) 14 na Net Income (79) 46 na (78,6%) Earnings before Interest and Taxes - EBIT (83,4%) (2,8%) Depreciation (Logistic) (5,6%) (16,7%) Depreciation and Amortization ,0% ,0% Earnings before Interest, Taxes, Depreciation, Amortization-EBITDA¹ (66,8%) (0,1%) Other Operating Income (Expenses) ,0% (46,7%) Adjusted EBITDA (61,6%) (9,4%) % of Net Sales Revenue 3Q18 3Q17 9M18 9M17 Gross Profit 29,2% 32,8% (3,6 p.p.) 30,2% 31,7% (1,5 p.p.) Selling Expenses (23,1%) (22,7%) (0,4 p.p.) (21,8%) (23,2%) 1,4 p.p. General and Administrative Expenses (4,0%) (3,6%) (0,4 p.p.) (3,8%) (3,1%) (0,7 p.p.) Equity Income 0,1% 0,1% 0,0 p.p. 0,1% 0,1% 0,0 p.p. Outras Despesas e Receitas Operacionais (0,5%) (0,4%) (0,1 p.p.) (0,6%) (1,2%) 0,6 p.p. Total Operating Expenses (27,4%) (26,6%) (0,8 p.p.) (26,1%) (27,4%) 1,3 p.p. Depreciation and Amortization (1,0%) (0,9%) (0,1 p.p.) (1,0%) (0,9%) (0,1 p.p.) Earnings before Interest and Taxes - EBIT 0,8% 5,2% (4,4 p.p.) 3,1% 3,4% (0,3 p.p.) Net Financial Income (Expense) (3,2%) (3,9%) 0,7 p.p. (3,0%) (3,1%) 0,1 p.p. Earnings before Income Tax (2,4%) 1,3% (3,7 p.p.) 0,1% 0,2% (0,1 p.p.) Income Tax 1,1% (0,6%) 1,7 p.p. (0,1%) 0,1% (0,2 p.p.) Net Income (1,2%) 0,8% (2,0 p.p.) 0,1% 0,3% (0,2 p.p.) EBITDA 2,1% 6,5% (4,4 p.p.) 4,4% 4,7% (0,3 p.p.) Adjusted EBITDA 2,5% 6,9% (4,4 p.p.) 4,9% 5,8% (0,9 p.p.) (¹) EBITDA, Ajdusted EBITDA and EBIT are not revised by External Audit. 12

13 Balance Sheet Assets R$ million Current Assets Cash and Cash Equivalents Accounts Receivables Credit Card Payment Book Others Accounts Receivables B2B Allowance for doubtful accounts (510) (539) Inventories Recoverable Taxes Financial Instruments - Fair Value Hedge 10 4 Amounts Receivable from Related Parties Expenses in Advance and Other Accounts Receivable Noncurrent Assets Long-Term Assets Accounts Receivables Credit Card Payment Book Allowance for doubtful accounts (33) (23) Others - 3 Recoverable Taxes Financial Instruments - Fair Value Hedge 5 - Deferred Income Tax and Social Contribution Amounts Receivable from Related Parties Judicial Deposits Other Accounts Receivable Investments Property and Equipment Intangible Assets TOTAL ASSETS Liabilities and Shareholders' Equity R$ million Current Liabilities Taxes and Social Contribution Payable Suppliers Suppliers ('Forfait') Loans and Financing Payment Book (CDCI) Fiscal Obligations Debt with Related Parties Advanced revenues Onlending of third parties Other Long-Term Liabilities Loans and Financing Payment Book (CDCI) Debt with Related Parties - 16 Deferred Income Tax and Social Contribution 6 6 Provision for lawsuits Anticipated Revenue Tax Obligations Other Liabilities 8 - Shareholders' Equity LIABILITIES AND SHAREHOLDERS' EQUITY

14 Audited Cash Flow (R$ million) R$ million Net Income Adjustment for Reconciliation of Net Income Deferred Income Tax - (166) Depreciation and Amortization Interest and Exchange Variation Equity Income (21) (16) Provision for lawsuits Gain (loss) with fixed and intangible assets 51 7 Share-based Payments 6 8 Allowance for doubtful accounts Provision for Obsolescence and Retail Loss Deferred Revenue (206) (191) Others 1 (3) Asset (Increase) Decreases Accounts Receivable (471) (1.783) Inventories (1.239) (1.175) Taxes to Recover (578) (432) Other Assets 50 (30) Net Related Parties (65) 92 Judicial Deposits 12 (177) (2.291) (3.505) Liabilities (Increase) Decreases Suppliers (191) (710) Payroll and Charges (123) 177 Lawsuits (676) (242) Deferred Revenue 100 (10) Other demandability (103) 168 (993) (617) Asset and Liabilities - Others (Increase) Decreases Dividends Received - 44 Income Tax Paid (156) (1) (156) 43 Net Cash (used) in Operating Activities (2.075) (2.881) Cash Flow from Investment Activities Acquisition of fixed and intangible assets (407) (204) Sale of Property and Equipment Net Cash (used) in Operating Activities (380) (193) Cash Flow from Financing Activities Proceeds from borrowings Repayments of borrowings (4.386) (4.014) Payments of Interest (269) (329) Payments of Dividend (15) - Capital Increase 3 1 Net Cash (used in) Financing Activities (675) (417) Cash and Cash equivalents at the Beginning of the Period Cash and Cash equivalents at the End of the Period Change in Cash and Cash Equivalents (3.130) (3.491) 14

15 Earnings Conference Call and Webcast: October 25, p.m. (Brazil) / 1 p.m. (New York) / 6 p.m. (London) Portuguese / English (simultaneous translation): +55 (11) / +1 (646) Webcast: Replay +55 (11) Code: Via Varejo Glossary: Click&Collect (Retira Rápido): Products purchased Online that can be picked up by customers at our stores or our partner stores. Digital Store: Store model with approximately 150 m 2 that we use to test new technologies to improve the customer experience. GMV (Gross Merchandise Value): Amount transacted in Brazilian real on our website, including the Marketplace (third-party products). Kiosk Store: Store model that not only enables the testing of new regions, but also the penetration of Via Varejo in more competitive areas. Marketplace: Products of partners ( sellers ) offered for sale on our websites. MOVVE (Via Varejo Excellence Operational Model): Store management model implemented in Version 1.0 is responsible for the new management model and version 2.0 is responsible for the new compensation model. Same-Store Sales: Revenue from stores operating for more than 12 months. Smart Store: Store model that employs more technology and spaces ranging from 500m 2 to 1,000m 2. Via+: Web-based Sales System that unifies all the tools we developed in recent months (compensation model, Via Única/CRM and Online channel catalog). Via Única/CRM Single Path : Project developed in partnership with Accenture to create a single database (Brick-and-Mortar Stores, Online and Payment Book), segmented by the profiles of our 60 million customers. 15

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