GMV (Gross Merchandise Volume) R$ MM Consolidated Parent ... · Submarino, Shoptime and Sou Barato)...

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2Q19 &1H19 Earnings Release

GROWTH OF 13.5% IN CONSOLIDATED GMV IN 1H19 AND GROWTH OF 104.8% IN NET INCOME IN 1H19

Rio de Janeiro, August 8th of 2019 – Lojas Americanas S.A. [B3: LAME3 (common) and LAME4 (preferred)], a Company that operates in the environment of physical stores (traditional, express and convenience - Local) and digital platform (B2W Digital with the brands Americanas.com, Submarino, Shoptime and Sou Barato) announces today its results for the 2nd quarter of 2019 (2Q19) and 1st semester of 2019 (1H19).The accounting information that serves as the basis for the comments that follow are presented in accordance with the international financial reporting standards (IFRS), and the rules issued by the Brazilian Securities Exchange Commission (CVM) and in Reais (R$). The comparisons refer to the 2nd quarter of 2018 (2Q18) and 1st semester of 2018 (1H18) adjusted by the CPC 06 (R2)/IFRS 16 effects.

Adjusted EBITDA - Operating profit before interest, taxes, depreciation and amortization, other operating income/expenses, equity accounting, minority/statutory interest.

EASTER EFECT

Easter was the event to be highlighted in the semester. Thus, because of the Easter mismatch (1H19 – 04/21 vs. 1H18 – 04/01), we recommend to analyze the result of the first half of the year (1H19).

CONSOLIDATED

GMV +13.5% B2W's GMV grew 18.6% and Lojas Americanas' gross revenue grew 7.2%. The B2W's GMV expansion was driven by strong Marketplace growth (+51.8%).

Gross Revenue +2.2% and Net Revenue +1.6% B2W's Gross Revenue presented a variation of -5.5% in the 1H19, impacted by the absence of the World Cup and the end of the “Lei do Bem”. It can be noted the reversal of trend in the 2Q19 with the growth of 0.1% (vs. -11.1% in the 1Q19).

Gross Profit +5.8% and +1.4 p.p. Gross Margin The gains in gross margin were driven by the increase of B2W Marketplace operation and better category management in Lojas Americanas.

Adjusted EBITDA +7.5% and +1.0 p.p. EBITDA Margin The operating leverage both in Parent Company and B2W, allowed growth of EBITDA above the revenue growth, generating margin expansion.

Net Income +104.8% and +0.3 p.p. Net Margin Growth driven by the improvement of EBITDA.

PARENT COMPANY

Gross Revenue +7.2% and Net Revenue +6.4% Lojas Americanas' growth reflects the good performance in the Back to School, Easter and Mother's Day events, which helped to surpass the strong comparison base with the 2018 World Cup.

Gross Revenue SSS +5.2% and Net Revenue SSS +4.4% Exceeded inflation (IPCA) in 1.8 p.p. (%GR) despite the comparison base due to the World Cup last year.

Gross Profit +6.6% and stable Gross Margin Despite the absence of World Cup, which pressured the margin in 2018, the end of “Lei do Bem” hampered the margin expansion.

Adjusted EBITDA +7.1% and +0.1 p.p. EBITDA Margin Driven by the usual expenses austerity and consequent operating levarage.

1H19 1H18 Var. (%) 1H19 1H18 Var. (%) 1H19 1H18 Var. (%)

GMV (Gross Merchandise Volume) 13,543.3 11,928.8 13.5% - - - 7,478.5 6,304.3 18.6%

Gross Revenue 9,481.6 9,277.1 2.2% 6,083.7 5,675.5 7.2% 3,451.9 3,652.6 -5.5%

Net Revenue 7,963.9 7,837.2 1.6% 5,252.7 4,935.2 6.4% 2,760.4 2,953.0 -6.5%

SSS (%RL) - - - 4.4% 9.4% - - - -

Gross Profit 2,784.7 2,632.2 5.8% 2,050.3 1,923.0 6.6% 745.4 717.7 3.9%

Gross Margin (%NR) 35.0% 33.6% +1.4 p.p. 39.0% 39.0% - 27.0% 24.3% +2.7 p.p.

Adjusted EBITDA 1,392.8 1,295.4 7.5% 1,199.5 1,119.7 7.1% 193.4 175.8 10.0%

Adjusted EBITDA Margin (%NR) 17.5% 16.5% +1.0 p.p. 22.8% 22.7% +0.1 p.p. 7.0% 6.0% +1.0 p.p.

Net Income 59.2 28.9 104.8% 59.2 28.9 104.8% (266.8) (227.8) 17.1%

Net Margin (%NR) 0.7% 0.4% +0.3 p.p. 1.1% 0.6% +0.5 p.p. -9.7% -7.7% -2.0 p.p.

R$ MMParent Company B2WConsolidated

LAME4R$ 16.47/share

NUMBER OF SHARES1,060,710,334

LAME3R$ 13.18/share

NUMBER OF SHARES539,943,630

MARKET CAPR$ 24.6 BI

CLOSINGJune 28, 2019

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STRATEGIC INITIATIVES

Lojas Americanas

Expansion: 41 stores opened in the 1H19 (vs. 27 in the 1H18), reaching 617 cities and a total of 1,518 stores throughout Brazil.

Convenience Store (Local):

Assortment enhancement including test of new categories and availability of new services such as Click&Collect, Click&Collect Now and Ship from Store.

Autonomous Stores: In another IF – Inovação e Futuro initiative, we realized multiple tests with new store formats based on self-service purchases that uses artificial intelligence, computer vision, cameras and sensors, transforming the way we fulfill our client’s wishes, modernizing the purchase experience.

Ame Go: In the “Grab and Go” model, the client uses the Ame app to enter the store, pick the products, and, by leaving, the purchase is charged automatically, with no queues or checkout.

Smart Fridge: The solution of convenience purchase through an autonomous fridge follows the “Grab and Go” model, where the client uses the Ame app to open the door, pick his preferred beverage and, after closing the equipment, the charge is automatically made in his app.

Ame Box: In the store-in-store model, the space of this experience is delimited by glass walls and an automatic door that is opened with the Ame app. By entering the space, the client pick the selected product and get the charge right after leaving.

Venture Capital: First Venture Capital vertical iniciative of IF – Inovação e Futuro, in June/19, Lojas Americanas made an investment in Zippin (Vcognition Technologies, Inc), a Silicon Valley-based company that specializes in store automation technology through artificial intelligence, computer vision, cameras and sensors that is supporting the development of part of the above mentioned iniciatives. The agreement predict the exclusive use of technology in Brazil and a strategic partnership in the development of new technologies together.

+AQUI:

In the 1H19, +AQUI offered services to more than 6.5 million people in the stores with its operation, a growth of 63% versus the same period of the last year.

Partnership with Ame: the promoters demonstrate to customers how to download the app, communicate the current promotions and present the services that are available on the platform, contributing to increase the number of users and improve the experience of customers in stores.

Digital Lab:

The connection with academic knowledge is one of the ways of updating the business, putting the Company in touch with the most modern and innovative in the market and bringing new perspectives together with leading educational institutions, such as MIT, PUC and more recently, UFRJ.

In the 1H19, we started a partnership with UFRJ where we proposed challenges related to retail innovation for students of the Entrepreneurship discipline. The projects were carried out following the guidance of the teachers and the mentoring of the Company executives.

Our pricing laboratory at PUC-RJ continues to advance in modeling and refining studies of product lines that have the greatest impact on the results.

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IF – Inovação e Futuro

Ame: The mobile business platform, one of IF first initiatives, continues to accelerate and present impressive indicators.

Ame app reached 3.2 million downloads, in a little more than 1 year operation.

Ame continues to gain traction in B2W brands, optimizing the offering of discounts, generating greater purchase recurrence and increasing customer spending.

In Aug/18, Ame was integrated to the promotional feature of B2W Marketplace (Promo Seller), allowing the sellers to invest in offering additional cashback.

Lojas Americanas continues to invest in proprietary technology to enlarge the acceptance and improve the customer purchase experience with Ame in the stores. This way, is increasing the acceptance of Ame in a short time (form 6 stores in the end of Oct/18 to 774 in Jun/19), and developing exclusive features to the physical world. During 2019, Ame will be present in all Lojas Americanas and also in other merchants.

On July 30, 2019, Lojas Americanas and B2W released a Material Fact notifying the definition of Ame’s corporate structure to be built. The participation will be in the proportion of 56.92% for Lojas Americanas and 43.08% for B2W, those percentages were based on the evaluation of intangible and fixed assets prepared by independent company via cost approach, methodology selected among those widely used. The corporate structure will enable the acceleration of the development of Ame, maximizing its business fronts.

During the last months several features were released: o Cash in with credit card o Receive and transfer resources to other Ame accounts o Pay merchants off us (Ame Plus: other merchants of the physical world) o Cash out bank account (transfer to bank account, exclusive for Ame Plus) o Geomarketing (location of merchants with filter by type of establishment) o Pay bills (bank slip) o Cash in bank account (bank transfer) o Cash in invoice (bank slip) o Cash in Lojas Americanas (in store POS) o Cash out Lojas Americanas (in store POS, in Beta version) o Prepaid cell phone recharge o Private transportation (voucher Cabify) o Personal loan (in Beta version) o Public transportation (recharge of transport voucher, in Beta version) o E-Gifts (in Beta version) o Marketplace of services (in Beta version)

B2W Digital

In the 2Q19, the total GMV grew 21.8%. B2W’s marketplace continues to grow rapidly and reached a GMV of R$ 2.3 billion (+51.4%) in the 2Q19, with a stake of 58.7% in the total GMV.

B2W Digital generated R$ 6.4 MM of cash in the 2Q19, the best result in the last 9 years in a second quarter, representing an evolution of R$ 40.3 MM vs cash consumption of R$ 33.9 MM registered in the 2Q18.

B2W Marketplace connected more than 5,500 new sellers in 2Q19, from a base of 25,500 sellers in Mar/19 to over 31,000 sellers in Jun/19.

B2W Entrega connected more than 5,900 sellers in 2Q19, totaling a base of 28,400 sellers and representing 91.6% of sellers connected to B2W Marketplace.

B2W Marketplace realized 2019 Summit in July. In two days, the event allowed an immersion on B2W Marketplace universe, having more than 100 speakers and 6,000 participants among sellers, suppliers and strategic partners. During the event were announced several news, such as: O2O to Marketplace Sellers, VOE, Drone Delivery, Americanas Lockers and B2W Analytics.

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LET’S

Launch of O2O for marketplace sellers: the initiative converts sellers' stores into flexible fulfillment centers, allowing them to be integrated into the Company's delivery options: Click&Collect, Click&Collect Now (1 hour) and Ship from Store (2 hours).

Launch of the crowd shipping platform VOE: in order to accelerate O2O initiatives, the app connects independent couriers (motorcycle, bicycle and others) in the logistic platform, enabling customers to deliver products within 2 hours from more than 1,500 Lojas Americanas stores and over 15,000 physical stores from B2W Marketplace sellers.

Begin of delivery tests with drones: B2W Digital is the first Company to conduct experimental drone delivery flights in Brazilian retail. It is expected that in 18 months the first deliveries of products on routes from the Company's distribution centers to Lojas Americanas stores will be made.

Launch of Americanas Lockers, stand-alone cabinets for product withdrawals: after the purchase confirmation on the Americanas.com website, the customer receives a QR Code to present on one of the lockers, which automatically opens for pickup. The model is still a pilot and the pickup points include high-flow stores, subway stations, buses and populous residential condominiums.

O2O (Online to Offline)

Using the “Everything, every time and anywhere” concept, Lojas Americanas and B2W's O2O initiatives have been enhancing customers' shopping experience. Over the last 12 months, more than 2 million customers held their purchases through these initiatives.

LASA Seller: up to 2Q19, we registered customer orders from over 3,800 Brazilian cities.

Click&Collect: The customer buys online and pick up in the physical store. Available in 1,315 Lojas Americanas (vs 580 stores in 2Q18), in all Brazilian states. In addition, the model is already available in 102 physical stores of B2W Marketplace sellers.

Click&Collect Now: Allows the product pick-up (store’s stock) up to 1 hour after the online purchase (with free shipping). Available in all 1,518 Lojas Americanas.

Ship from Store: Online purchase of the products of the closest Lojas Americanas’ store, receiving the delivery up to 2 hours in the requested address. Available in 12 cities, totaling 82 stores.

O2O for B2W Marketplace Sellers: Turns the seller’s physical stores into flexible fulfillment centers. Thereby, the Click&Colect, Click&Collect Now and Ship From Store initiatives can be expanded to over 15,000 physical stores of B2W Marketplace sellers.

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EXPANSION

Lojas Americanas reaffirms its commitment to maintain the pace of growth foreseen in the "85 anos em 5 - Somos Mais Brasil" Plan with the objective to open 800 new stores between 2015 and 2019. We believe that there is an opportunity for our bricks and mortar business to be present in a much more significant number of cities, especially considering Brazil has 5,570 cities.

In the 1H19, we opened 41 new stores (vs. 27 stores in the 1H18), reaching 1,518 stores. Beyond that, up to now, we have 180 signed contracts or in final stage of negotiation. During the semester, we also closed 13 stores, 2 traditional and 11 express, with an average age of 10 years.

On June 30, 2019, the Company had 24,963 associates and 1,518 stores, of which 868 were traditional, 606 express and 44 of the convenience format, reaching a sales area of 1,135.7 thousand square meters (vs. 1,081 thousand square meters in June 30, 2018). The total base of stores is distributed in the regions as follows: 52.8% in Southeast, 20.8% in Northeast, 10.7% in South, 8.6% in Midwest and 7.1% in North.

In this quarter, we reached presence in 617 cities in all Brazilian states, served by four Lojas Americanas distribution centers located in Minas Gerais, Pernambuco, São Paulo and Rio de Janeiro. The following table details the evolution of the number of stores in 1H19:

15

26

12/31/2018

-4

1Q19

-9

2Q19 06/30/2019

1,490

1,518

Openings Closures

14

13

1,306

0

1Q18

-4

2Q18 06/30/201812/31/2017

1,329

Openings Closures

1H19 STORES OPENINGS/CLOSURES1H18 STORES OPENINGS/CLOSURES

Region FormatNumber of

Stores

Sales Area

thousand m²

Average

thousand m²

1,490 1,126.2 0.8,

Traditional 1 0.4 0.4

Express 12 3.5 0.3

Convenience 6 0.3 0.1


Express 9 1.8 0.2

Traditional - - -

Express 2 0.7 0.4


Express - - -


Express 4 1.5 0.4


Express 27 6.3 0.3

Convenience 6 0.2 0.1

Refurbishment/Deactivation (13) (4.2) 0.3

1,518 1,135.7 0.7

South

North

Midwest

TOTAL

As of 06/30/2019

As of 12/31/2018

Southeast

Northeast

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COMMENTS ON RESULTS

IFRS 16

Since January 2019, the Company's income statements reflect the new accounting practices implemented by CPC 06 (R2) / IFRS 16. Therefore, to maintain the comparability of results (2Q19 vs 2Q18 and 1H19 vs 1H18), to facilitate the analysis of the data and to ensure the transparency of information, the Company decided to present in this report, part of the accounting demonstration ended June 30, 2018 (1H18) in comparable amounts. The presentation of the 2018 quarterly financial statements adjusted (Income Statement, Balance Sheet and Cash Flow) and the reconciliation of them are available in the Company's IR website (https://ri.lasa.com.br/en). The main effects of the new accounting practices are in the lines of expenses, depreciation and amortization, and financial result. In this way, the results of 1H18 were adjusted in the following lines:

Consolidated

o Selling Expenses: adjustment of R$ 194.0 MM, from R$ -1,417.9 MM to R$ -1,218.9 MM o Depreciation and Amortization: adjustment of R$ -139.1 MM, from R$ -444.2 MM to R$ -583.3 MM o Financial Result: adjustment of R$ -83.7 MM, from R$ -661.2 MM to R$ -744.9 MM o Minority Participation: adjustment of R$ 1.5 MM, from R$ 85.2 MM to R$ 86.7 MM o Income Tax and Social Contribution: adjustment of R$ 9.9 MM, from R$ 11.3 MM to R$ 21.2 MM o Net Result: adjustment of R$ -17.4 MM, from R$ 46.3 MM to R$ 28.9 MM.

Parent Company

o Selling Expenses: adjustment of R$ 166.2 MM, from R$ -914.4 MM to R$ -748.2 MM o Depreciation and Amortization: adjustment of R$ -115.6 MM, from R$ -233.8 MM to R$ -349.4 MM o Financial Result: adjustment of R$ -73.4 MM, from R$ -398.6 MM to R$ -472.0 MM o Equity Account: adjustment of R$ -2.4 MM, from R$ -143.8 MM to R$ -146.2 MM o Income Tax and Social Contribution: adjustment of R$ 7.8 MM, from R$ -102.1 MM to R$ -94.3 MM o Net Result: adjustment of R$ -17.4 MM, from R$ 46.3 MM to R$ 28.9 MM.

SALES, GENERAL AND ADMINISTRATIVE EXPENSES

Note: The 1H18 comparison base is adjusted according to IFRS16.

In the 1H19, in the consolidated view, this line presented a growth of 4.1% versus 1H18, mainly because of the increase of personnel expenses and the MDR (Merchant Discount Rate) costs related to the growth of the consolidated GMV.

In the parent company, the sales, general and administrative expenses had an increase of 5.9% comparing to the same period of the previous year. This variation reflects an increase in the personnel expenses due to the growth of number of stores.

1H19 1H18 ∆ % 1H19 1H18 ∆ %3Q1

SG&A (850.8) (803.3) 5.9% (1,391.9) (1,336.8) 4.1%0 0 0 0 0 0

Sales Expenses (794.0) (748.2) 6.1% (1,253.0) (1,218.9) 2.8%

% Net Revenue 15.1% 15.2% -0.1 p.p. 15.7% 15.6% +0.1 p.p.

General & Administrative Expenses (56.8) (55.1) 3.1% (138.9) (117.9) 17.8%

% Net Revenue 1.1% 1.1% - 1.7% 1.5% +0.2 p.p.

Operational Expenses (R$ MM)Parent Company Consolidated

https://ri.lasa.com.br/en

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NET FINANCIAL RESULT


In the 1H19, in the consolidated view, the variation was mainly due to the increase of accounts receivables, the smaller volume of payment to supplier’s anticipations and the lengthening of B2W’s debt deadline. In the parent company view, the net financial result presented a reduction of 4.2% comparing to the 1H18. This variation was mainly due to the decrease of the CDI* rate, the absence of new debts and the reduction of the average cost of debt due to the effort done during the last year of restructuring the debt portfolio.

*CDI - Interbank Deposit Certificate: average rate of funding through the interbank market.

NET INCOME

The following table shows the main variations from the Adjusted EBITDA to the net income:


Adjusted EBITDA - Operating profit before interest, taxes, depreciation and amortization, other operating income/expenses, equity accounting, minority interest.

Net Financial Result 1H19 1H18 ∆ % 1H19 1H18 ∆ %

Interest and monetary securities 131.2 116.1 13.0% 292.1 238.9 22.3%

Financial discounts obtained and monetary restatement 4.3 3.0 43.3% 5.6 34.5 -83.8%

Interest and monetary variations on securities and receivables

antecipation (360.5) (358.3) 0.6% (813.1) (771.5) 5.4%

Interest related to lease agreements (IFRS 16) (76.8) (73.4) 4.6% (87.5) (83.7) 4.5%

Bank expenses, taxes and others (86.7) (103.2) -16.0% (117.9) (142.9) -17.5%

Adjustment to present value of suppliers and accounts

receivable, monetary variation of tax liability and other

financial revenues

(63.8) (56.2) 13.5% (36.8) (20.2) 82.2%

Net Financial Result (452.3) (472.0) -4.2% (757.6) (744.9) 1.7%

Parent Company Consolidated

Reconciliation of the Net Result - R$ MM 1H19 1H18 ∆ R$ 1H19 1H18 ∆ R$

Adjusted EBITDA 1,199.5 1,119.7 79.8 1,392.8 1,295.4 97.4

(+) Depreciation / Amortization (393.4) (349.4) (44.0) (648.0) (583.3) (64.7)

(+) Net Financial Result (452.3) (472.0) 19.7 (757.6) (744.9) (12.7)

(+) Equity Accounting (157.2) (146.2) (11.0) - - -

(+) Other Operat. Income (Expenses)* (23.6) (28.9) 5.3 (46.6) (46.2) (0.4)

(+) Minority Interest - - - 102.7 86.7 16.0

(+) Income Tax and Social Contribution (113.8) (94.3) (19.5) 15.9 21.2 (5.3)

(=) Net Income 59.2 28.9 30.3 59.2 28.9 30.3

* In the old accounting rules, considered as "non-operating income", including expenditure on action plan.


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WORKING CAPITAL

In the 2Q19, the parent company’s net working capital was of 63 days, a variation of 1 day compared to the 2Q18. This variation was due to the increase of 1 day in the company’s accounts receivable.

INDEBTEDNESS

*The Adjusted EBITDA used in calculating the net debt / EBITDA ratio does not consider the effects of IFRS 16 in order to maintain the comparability of the indices.


On June 30, 2019, the consolidated net indebtedness reduced R$ 172.4 MM comparing to the prior year, an improvement of 0.1x EBITDA. In the parent company the reduction of the net indebtedness was R$ 256.4 MM, an improvement of 0.2x EBIDA. On June 30, 2019, the consolidated average debt maturity was from 33 months to 40 months and in the parent company was from 39 months to 42 months due to the Company strategy of focusing in long-term opportunities.

The accounts receivable considers receivables from credit cards, net of the discounted value, that have immediate liquidity and can be considered as cash.

R$ million

Indebtedness 06/30/2019 06/30/2018 06/30/2019 06/30/2018

Short Term Debt 266.3 1,220.5 1,726.7 2,746.1

Short Term Debentures 504.4 187.7 504.4 187.7

Receivables Fund (FIDC) 360.1 - 549.8 -

Short Term Indebtedness 1,130.8 1,408.2 2,780.9 2,933.8

Long Term Debt 2,896.0 3,398.3 9,629.5 8,599.7

Long Term Debentures 5,169.7 4,595.8 5,169.7 4,595.8

Long Term Indebtedness 8,065.7 7,994.1 14,799.2 13,195.5

Total Debt (1) 9,196.5 9,402.3 17,580.1 16,129.3

Cash and banks 3,258.5 2,485.9 6,573.4 5,201.9

Money market investments 1,118.6 1,966.9 4,009.5 4,193.9

Money market investments (BWU)* 257.3 278.1 - -

Accounts receivable from credit / debit cards 1,063.5 916.4 1,516.5 1,080.4

Total Cash (2) 5,697.9 5,647.3 12,099.4 10,476.2

Net Cash (Debt) (2) - (1) (3,498.6) (3,755.0) (5,480.7) (5,653.1)

Net Debt / Adjusted EBITDA* 1.5 1.7 2.0 2.1

Average Maturity of Debt (in days) 1,274 1,182 1,216 1,018

*BWU financial applications [EN 13 (b)(i)]


9


The breakdown of the “accounts receivable” in Lojas Americanas’ point of view is shown as follows:

SALES BY MEANS OF PAYMENTS

The opening of sales by means of payments of the Parent Company in the 1H19 and 1H18 can be verified in the table below:

INVESTMENTS

In the 1H19, the parent company invested a total of R$ 441.8 MM. This investments were focused on the opening of new stores, refurbishment and maintenance, technology updates, operations and others.

R$ million

Accounts Receivable Conciliation - R$ MM 06/30/2019 06/30/2018 06/30/2019 06/30/2018

Gross credit-cards receivable 1,019.4 894.3 5,327.3 4,335.0

Receivable discounts (360.1) - (4,404.7) (3,276.7)

Electronic debits and checks receivables 44.1 22.1 44.1 22.1

Receivables Fund (FIDC) 360.1 - 549.8 -

Accounts Receivable from credit / debit cards 1,063.5 916.4 1,516.5 1,080.4

Present-value adjustment (4.1) (8.5) (10.9) (11.2)

Provision for doubtful accounts (0.9) (1.3) (45.0) (37.1)

Other accounts receivable 37.6 6.0 115.5 94.5

Consolidated Net Accounts Receivable 1,096.1 912.6 1,576.1 1,126.6


Means of Payment 1H19 1H18 ∆

Cash 54% 54% -

Credit Cards 46% 46% -

Parent Company

Investments 1H19 1H18 ∆ %

Openings / Improvements 349.7 352.7 -1%

Technology 88.6 68.5 29%

Operations and Others 3.5 3.7 -5%

Total 441.8 424.9 4.0%

10


GENERAL CONSIDERATIONS

ABOUT LOJAS AMERICANAS S.A.

Lojas Americanas is a Company that adopts a unique approach in order to better serve its clients offering its different formats of stores (traditional, express and convenience – Local) and its digital platform (through B2W Digital, with the brands Americanas.com, Submarino, Shoptime and Sou Barato) and Ame, the mobile business platform (financial products and several services). Regarding physical stores, Lojas Americanas operates with three store formats: traditional, express and convenience. Considering the existing stores, the first format has an average sales area of 1,000 m², an automated replenishment model and an assortment of up to 60,000 items. The second format has an average sales area of 400 m², just-in-time logistics and an assortment of 15,000 items, selected according to the location need. The third format has an average of 100 m² of sales area, daily stock replenishment and mix of products oriented to food convenience with assortment of up to 3,000 items. Lojas Americanas’ assortment is in continuous evolution, always aiming to meet clients’ needs exceeding their expectations. IF – Inovação e Futuro was created in 2018, in the context of accelerated transformation of the physical and digital worlds, and aiming to capture the opportunities generated by this new businesses environment, outside Lojas Americanas and B2W operations. IF was born with the mission to build disruptive businesses and leverage various initiatives in Lojas Americanas and B2W. Its main acting verticals are: incubate new businesses, accelerate existing initiatives, invest in startups (venture capital), lead the O2O fronts and prospect new opportunities, including M&A opportunities. Ame, one of the first initiatives of IF – Inovação e Futuro, is a mobile business platform (financial products and several services) that Lojas Americanas and B2W decided to develop together. Initially operating in Lojas Americanas physical stores and in B2W websites (Americanas.com, Submarino, Shoptime and SouBarato), the Ame app has already 3.2 million downloads. Ame continues to gain traction in Lojas Americanas and B2W, exceeding all initial expectations. The platform has a key functionality (cashback) that causes customers to buy more frequently and with bigger tickets, generating greater spending. According to the Material Fact released on June 30, 2019 the corporate structure to be built to Ame will be in the proportion of 56.92% for Lojas Americanas and 43.08% to B2W Digital. B2W Digital is the leader in Latin America e-commerce and aims to connect people, businesses, products and services in a digital platform. Has the greatest and most beloved internet brands (Americanas.com, Submarino, Shoptime and Sou Barato), a rapidly growing Marketplace operation, in addition to offering technology services, logistics, distribution, customer service and payments. Lojas Americanas is the controlling shareholder of B2W DIGITAL, with participation of 61.51%. B2W shares are traded through BTOW3 ticker in B3, in the Novo Mercado segment, that has the highest corporate governance level in Brazil. LET´S – Logística e Distribuição is a shared management platform for the logistics and distribution assets of Lojas Americanas and B2W, that aims to optimize the Companies’ operations through a flexible fulfillment model.

CORPORATE GOVERNANCE

Lojas Americanas S.A. has been listed on the Brazilian Stock Exchange (B3) since 1940. The Company has a shareholder base composed of common shares (LAME3) and preferred shares (LAME4). In addition, since August/17, the Company is part of Level 1, a B3 special segment of Corporate Governance. The Company has a Board of Directors composed by eight members – five appointed by the controllers and three appointed by the Board of Directors. Lojas Americanas also has a Fiscal Council formed by four members, two indicated by the controllers and two indicated by the minority shareholders.

“We Always Want More”

11


APPENDIX I – CONSOLIDATED INCOME STATEMENT


Lojas Americanas S.A.

Income Statement

(in million of Brazilian reais)2Q19

2Q18

w/ IFRS 16Variation 1H19

1H18

w/ IFRS 16Variation

Gross Merchandise Volume (GMV) 7,325.7 5,890.9 24.4% 13,543.3 11,928.8 13.5%

Gross Sales and Services Revenue 5,235.0 4,532.3 15.5% 9,481.6 9,277.1 2.2%

Taxes on sales and services (823.4) (716.8) 14.9% (1,517.7) (1,439.9) 5.4%

Net Sales and Services Revenue 4,411.6 3,815.5 15.6% 7,963.9 7,837.2 1.6%

Cost of goods and services sold (2,854.1) (2,521.0) 13.2% (5,179.2) (5,205.0) -0.5%

Gross Profit 1,557.5 1,294.5 20.3% 2,784.7 2,632.2 5.8%

Gross Margin (% NR) 35.3% 33.9% +1.4 p.p. 35.0% 33.6% +1.4 p.p.

Operating Revenue (Expenses) (1,060.3) (941.4) 12.6% (2,039.9) (1,920.1) 6.2%

Selling expenses (661.3) (583.3) 13.4% (1,253.0) (1,218.9) 2.8%

General and administrative expenses (64.2) (54.6) 17.6% (138.9) (117.9) 17.8%

Depreciation and amortization (334.8) (303.5) 10.3% (648.0) (583.3) 11.1%

Operating Income before Net Financial Result 497.2 353.1 40.8% 744.8 712.1 4.6%

Net Financial Result (372.5) (382.3) -2.6% (757.6) (744.9) 1.7%

Other operating income (expenses)* (25.9) (26.7) -3.0% (46.6) (46.2) 0.9%

Minority interest 49.1 42.1 16.6% 102.7 86.7 18.5%

Income tax and social contribution (35.2) 18.9 -286.2% 15.9 21.2 -25.0%

Net Income of the Period 112.7 5.1 2109.8% 59.2 28.9 104.8%

Net Margin (% NR) 2.6% 0.1% +2.5 p.p. 0.7% 0.4% +0.3 p.p.

Adjusted EBITDA 832.0 656.6 26.7% 1,392.8 1,295.4 7.5%

Adjusted EBITDA Margin (% NR) 18.9% 17.2% +1.7 p.p. 17.5% 16.5% +1.0 p.p.

*Under the old accounting norm, called "non-operational result"

Consolidated

Quarters ended in June 30

Consolidated

Semesters ended in June 30

12


APPENDIX II – PARENT COMPANY INCOME STATEMENT



Income Statement

(in million of Brazilian reais) 2Q192Q18

w/ IFRS 16Variation 1H19

1H18

w/ IFRS 16Variation

Gross Sales and Services Revenue 3,412.2 2,711.0 25.9% 6,083.7 5,675.5 7.2%

Taxes on sales and services (460.4) (350.5) 31.4% (831.0) (740.3) 12.3%

Net Sales and Services Revenue 2,951.8 2,360.5 25.0% 5,252.7 4,935.2 6.4%

Cost of goods and services sold (1,788.8) (1,425.2) 25.5% (3,202.4) (3,012.2) 6.3%

Gross Profit 1,163.0 935.3 24.3% 2,050.3 1,923.0 6.6%

Gross Margin (% NR) 39.4% 39.6% -0.2 p.p. 39.0% 39.0% -

Operating Revenue (Expenses) (647.7) (560.3) 15.6% (1,244.2) (1,152.7) 7.9%

Selling expenses (412.6) (345.6) 19.4% (794.0) (748.2) 6.1%

General and administrative expenses (28.5) (28.0) 1.8% (56.8) (55.1) 3.1%

Depreciation and amortization (206.6) (186.7) 10.7% (393.4) (349.4) 12.6%

Operating Income before Net Financial Result 515.3 375.0 37.4% 806.1 770.3 4.6%

Net Financial Result (219.2) (230.5) -4.9% (452.3) (472.0) -4.2%

Equity accounting (74.6) (76.6) -2.6% (157.2) (146.2) 7.5%

Other operating income (expenses)* (14.3) (20.6) -30.6% (23.6) (28.9) -18.3%

Income tax and social contribution (94.5) (42.2) 123.9% (113.8) (94.3) 20.7%

Net Income of the Period 112.7 5.1 2109.8% 59.2 28.9 104.8%

Net Margin (% NR) 3.8% 0.2% +3.6 p.p. 1.1% 0.6% +0.5 p.p.

Adjusted EBITDA 721.9 561.7 28.5% 1,199.5 1,119.7 7.1%

Adjusted EBITDA Margin (% NR) 24.5% 23.8% +0.7 p.p. 22.8% 22.7% +0.1 p.p.

*Under the old accounting norm, called "non-operational result"

Parent Company

Quarters ended in June 30

Parent Company

Semesters ended in June 30

13


APPENDIX III – BALANCE SHEET


Balance Sheet

(In Million Reais)06/30/2019 12/31/2018

w/ IFRS 16

06/30/2019 12/31/2018w/ IFRS 16

ASSETS

CURRENT ASSETS

Cash and cash equivalents 3,258.5 3,693.2 6,573.4 6,813.8

Marketable securities and other financial assets 1,064.8 1,227.3 3,948.0 3,295.8

Clients accounts receivable 1,096.1 1,713.4 1,576.1 1,870.1

Inventories 2,271.6 2,626.9 3,123.9 3,506.7

Recoverable taxes 365.3 404.9 886.7 906.8

Dividends receivable 0.5 0.3 - -

Prepaid expenses 52.5 21.7 83.3 59.0

Other accounts receivable 605.6 617.0 978.8 1,061.4

Total Current Assets 8,714.9 10,304.7 17,170.2 17,513.6

NON-CURRENT ASSETS

Marketable securities and other financial assets 53.8 - 61.5 -

Loans e advances to subsidiaries companies 41.6 21.0 - -

Receivables from stockholders - Stock Option Plan 46.7 51.0 46.7 51.0

Deferred income tax and social contribution 61.5 133.2 1,370.4 1,316.6

Escrow deposits 324.6 320.5 423.7 404.7

Recoverable taxes 461.0 400.2 1,756.7 1,655.8

Other non-Current - - 70.9 70.9

Investments 2,795.4 2,945.3 - -

Property, plant and equipment 3,370.7 3,211.6 3,782.3 3,647.7

Intangible assets 456.7 422.4 3,845.7 3,763.2

Right of real estate use 1,729.3 1,595.8 1,938.6 1,840.0

Total Non-Current Assets 9,341.3 9,101.0 13,296.5 12,749.9

TOTAL ASSETS 18,056.2 19,405.7 30,466.7 30,263.5

LIABILITIES AND SHAREHOLDER´S EQUITY

CURRENT LIABILITIES

Suppliers 1,558.2 2,967.3 3,520.4 4,973.6

Leasing to pay 318.9 282.8 388.1 348.8

Loans and financing 626.4 1,080.5 2,276.5 1,807.6

Debentures 504.4 483.2 504.4 483.2

Payroll and related charges 93.8 93.9 156.5 152.2

Taxes payable 80.3 123.1 127.0 181.3

Income tax and currents social contribution 46.0 127.1 51.1 144.6

Dividends and participations proposed 22.6 126.2 22.6 126.2

Provisions for court proceedings and contingencies 25.6 33.7 25.6 33.7

Accounts payable - business combination - - 0.9 1.5

Other current liabilities 152.2 157.1 476.8 498.8

Total Current Liabilities 3,428.4 5,474.9 7,549.9 8,751.5

NON-CURRENT LIABILITIES

Long term liabilities:

Loans e advances to subsidiaries companies 24.5 60.4 - -

Leasing to pay 1,687.7 1,627.2 1,866.1 1,840.8

Loans and financing 2,896.0 3,235.5 9,629.5 9,156.5

Debentures 5,169.7 4,233.5 5,169.7 4,233.5

Taxes payable - - 0.3 0.3

Provisions for court proceedings and contingencies 51.1 59.7 199.4 211.7

Provisions for loss on investiments 12.9 11.6 - -

Accounts payable - business combination - - 8.0 7.8

Other non-current liabilities - - 3.9 6.0

Total Non-Current Liabilities 9,841.9 9,227.9 16,876.9 15,456.6

SHAREHOLDER'S EQUITY

Social capital 3,958.0 3,958.0 3,958.0 3,958.0

Capital reserves 159.9 134.9 159.9 134.9

Goodwill on capital transactions (20.1) (20.1) (20.1) (20.1)

Profit reserves 643.8 643.8 643.8 643.8

Treasury shares (44.5) (44.5) (44.5) (44.5)

Adjustment of equity valuation 29.6 30.8 29.6 30.8

Profit/ loss for the period 59.2 - 59.2 -

Minority interest - - 1,254.0 1,352.5

Total Shareholders' Equity 4,785.9 4,702.9 6,039.9 6,055.4

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 18,056.2 19,405.7 30,466.7 30,263.5


14


APPENDIX IV – CASH FLOW STATEMENT


CASH FLOW STATEMENT - INDIRECT METHOD

(In Million of Brazilian Reais)06/30/2019 06/30/2018

c/ IFRS 16

06/30/2019 03/31/2018

c/ IFRS 16

Net income (loss) for the semester: 59.2 28.9 (43.5) (57.8)

Adjustments to net income:

Depreciation and amortization 239.1 349.5 460.2 584.6

Depreciation right of real state 154.3 - 189.3 -

Residual and deferred value of fixed assets write-off 9.3 9.5 9.7 9.6

Equity accounting 157.2 146.3 - -

Income tax and social contribution current 42.1 73.9 48.7 80.8

Income tax and social contribution referred 71.7 20.4 (64.6) (101.9)

Interest on credits and debits 1.9 2.0 2.0 3.1

Interest and variations financing 425.7 397.9 726.8 641.9

Adjustment in provision for contingencies - - 16.5 2.6

Reversal of provision for court proceedings and contingencies (5.7) (5.7) (26.0) (34.2)

Stock option plan 18.3 18.3 29.2 23.4

Provision for estimated credit losses - credit cards - 0.3 (1.0) 1.8

Provision for losses in inventories (34.6) (22.7) (44.1) (26.2)

Others (6.1) (12.9) (20.3) (6.7)

Adjusted net income (loss) 1,132.4 1,005.7 1,282.9 1,121.0

Decrease (increase) in operating assets:

Clients accounts receivable 644.8 659.4 317.5 858.2

Inventories 443.3 108.7 473.7 447.1

Recoverable taxes (17.3) (6.7) (65.4) (14.7)

Prepaid expenses (29.2) (12.6) (5.8) (12.2)

Escrow deposits (4.1) (29.3) (19.0) (44.0)

Other accounts receivable 10.6 (21.8) 81.8 (135.6)

1,048.1 697.7 782.8 1,098.8

Increase (decrease) in operating liabilities:

Suppliers (1,485.5) (1,049.2) (1,520.2) (1,672.1)

Payroll and related charges (0.1) 5.8 4.3 12.4

Taxes payable (43.3) (29.9) (55.5) (42.6)

Current income tax and social contribution (127.1) (125.2) (146.2) (133.4)

Contingencies payments (14.3) (16.3) (14.3) (35.9)

Loans and advances from subsidiaries (56.5) (200.1) - -

Interest settlement on loans and debentures (330.5) (333.9) (589.2) (585.2)

Interest over leasing right to use of real state (76.8) (73.4) (87.5) (83.6)

Other accounts payable (4.8) (99.6) (25.7) (114.4)

(2,138.9) (1,921.8) (2,434.3) (2,654.8)

Net cash provided (used) by operating activities 41.6 (218.4) (368.6) (435.0)

Cash Flow from Investing Activities

Marketable securities 57.5 1,137.6 (766.4) 2,504.0

Investiments on subsidiaries - (0.1) - -

Plant, property and equipment (361.3) (374.5) (366.9) (380.1)

Intangible (80.5) (50.4) (301.9) (178.4)

Dividends received - 4.1 - -

Net cash provided (used) by investment activities (384.3) 716.7 (1,435.2) 1,945.5

Cash Flow from Financing Activities

Loans e financing (current and non-current):

Borrowings 360.7 575.0 2,809.1 1,778.7

Liquidations (1,101.7) (860.7) (1,862.6) (1,881.5)

(741.0) (285.7) 946.5 (102.8)

Debentures (current and non-current)

Borrowings 1,000.0 1,000.0 1,000.0 1,000.0

Liquidations (62.5) (562.5) (62.5) (562.5)

937.5 437.5 937.5 437.5

Leasing right to use real state (191.2) (93.0) (223.3) (110.5)

Receivables from Stock Option Plan 6.3 1.3 6.3 1.3

Interest on equity and dividends paid (103.6) (101.7) (103.6) (101.7)

Net cash provided by financing activities (92.0) (41.6) 1,563.4 123.8

Net increase in cash and cash equivalents (434.7) 456.7 (240.4) 1,634.3

Cash at the begining of the semester 3,693.2 2,029.2 6,813.8 3,567.5

Cash at the end of the semester 3,258.5 2,485.9 6,573.4 5,201.8

Net increase in cash and cash equivalents (434.7) 456.7 (240.4) 1,634.3


15


APPENDIX V – CONCILIATION OF ADJUSTED EBITDA

EBITDA (CVM 527/12)

The table below shows the reconciliation of adjusted EBITDA that includes other operating income/expenses and equity accounting and the EBITDA according to CVM 527/12. If we consider the EBITDA (CVM 527/12), the consolidated EBITDA margin was 16.9% of NR (vs.17.5% of NR adjusted EBITDA margin) and the parent company was 19.4% of NR (vs. 22.8% of NR adjusted EBITDA margin).

1H19 1H18 ∆ % 1H19 1H18 ∆ %

(=) Adjusted EBITDA 1,199.5 1,119.7 7.1% 1,392.8 1,295.4 7.5%

(+) Other operating income (expenses)* (23.6) (28.9) -18.3% (46.6) (46.2) 0.9%

(+) Equity accounting (157.2) (146.2) 7.5% - - -

(=) EBITDA (CVM 527/12) 1,018.7 944.6 7.8% 1,346.2 1,249.2 7.8%

*In the old accounting rules, considered as "non operating income".

Parent Company ConsolidatedEBITDA Reconciliation - R$ MM

16


EARNINGS RESULTS CONFERENCE CALL

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

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