LOJAS AMERICANAS S.A. January 2008. 1. Company Overview.

LOJAS AMERICANAS S.A. January 2008

1. Company Overview

“We Always Want More”

The Company

R$ 5.143 billion of Consolidated Gross Revenue until September 2007

Market Cap of R$ 10.2 billion – Jan. 18, 2008

Consolidated EBITDA Margin until September 2007: 10.5% of NR

Consolidated Net Income until September 2007: R$ 27.8 million

Brazilian leader in sales of CDs, DVDs and toys (*)

Prominent position in Brazil’s retail sector

Leading position in LATAM Internet (B2W – Companhia Global do Varejo) (**)

Personal loans and consumer credit offering (Financeira Americanas Itaú)

Awards:

Revista Exame - “Melhores e Maiores” (2005, 2006 and 2007)

Agência Estado Destaque Empresas 2005 (The Best performance for the shareholders)

Folha de São Paulo “Top of Mind 2005”

Forbes Brasil - “Platinum List 200”

(*) Source: Nielsen (**) Source: Reuters


1929 ’82 ’98 ’99’40

78 years old

’052001 ’03 ’06 ’07

Lojas Americanas Timeline

Lojas AmericanasFoundation

Lojas Americanas goes public

(IPO)

Garantia’s Bank partners

Focus in the core business

(IT/Logistics)

Lojas AmericanasTurnaround

Americanas.comCreation

AmericanasExpressProject

Record Organic Growth50 new stores

Acquisition of BWU and License

Agreement to use BLOCKBUSTER®

trademark in Brazil (Addition of 127 new stores)

37 new stores

Shoptime Acquisition

Americanas Taií Creation

45 new stores

B2W Creation(Americanas.com

+ Submarino)


Fronts of Growth

Bricks-and-Mortar

Multi-channel Retailer

Financial ProductsEcommerce, TV, Telephone Sales and Catalogues

Publicly Listed Company

Market Cap. R$10.2 billion

Publicly Listed Company

Market Cap. R$7.6 billion

53.73% 50.00%

(*) Market Capitalization as of January 18, 2008

2. Multi-Channel Retailer


Southeast284

CD PE

CD RJCD SP

North3

Mid West 34

South45

Northeast47

Multi-Channel Retailer

• Retail:– 413 stores*

• 211 Traditional – 1,500 m²• 22 Traditional BLOCKBUSTER®• 38 Express – 400 m²• 124 Express BLOCKBUSTER®• 18 BLOCKBUSTER®

– Movie Rental• Average Ticket: R$ 26.9

• Customer Profile**: – +1.8 MM customers/day in events– 77% women – Middle Class

(**) Source: Company data

Multi-Channel Retailer

(*) As of January 28, 2008

• eCommerce:– Ecommerce websites, telephone

sales, Catalogues and TV channel (reaches 14MM homes)

– LATAM - 1st in on-line sales*– Complementary Assortment – Exclusive and differentiated

products (travel agency and online tickets)

• www.americanas.com.br• www.americanasviagens.co

m•

www.shoptime.com.br• www.shoptimeviagens.com

•www.submarino.com.br

• www.submarinoviagens.com.br

• www.ingresso.com.br• www.blockbuster.com.br

CD SP

7 MILLION CLIENTS

+ 200 countries in

the world

North3

Midwest26

Sutheast174

South34

Northeast41

• Financial Products:– Joint-venture w/ Banco Itaú– 278 stores*

– Products:• Personal Loans• Private Label cards

(Consumer credit)• Co-branded cards

(national and international)

(*) Source: Reuters(*) As of January 28, 2008

http://www.americanas.com.br/

http://www.americanasviagens.com/

http://www.americanasviagens.com/

http://www.shoptime.com.br/

http://www.shoptimeviagens.com.br/

http://www.submarino.com.br/

http://www.submarinoviagens.com.br/

http://www.submarinoviagens.com.br/

http://www.ingresso.com.br/


Traditional Model Express Model

Bricks-and-Mortar

Sales Area: approximately 1,500 m2

Location (target):

– Shopping Centers / Places with high circulation

Headcount: 50-60 employees/store

Logistics: daily reposition

Assortment: average of 60,000 items

Sales Area: approximately 400 m2

Location (target): “Neighborhood Stores”

– High Traffic / premium locations

Headcount: 10 employees/store - low costs

Logistics: “Just-in-Time”

Assortment: approximately 15,000 items

Stores’ Layout - The World’s Concept

Leisure Beauty Household

Children Clothing Food (convenience

)


• Fast expansion of the chain of stores (127 stores/32 thousand m2 in sales area)

• Stores located in busy areas with access to the A-B income groups

• More assortment in the new stores

• Operational synergies (buying, logistics, systems)

• 330 thousand active clients

• Opportunities for professional development

The transaction

• Acquisition of BWU for R$ 184.6 million paid on April 17, 2007

• License agreement with Blockbuster International Inc. to use the

BLOCKBUSTER® trademark, for a term of 20 years

Value Creation for the Company

Acquisition of BWU

Bricks-and-Mortar


Americanas Express/BLOCKBUSTER® Model

Bricks-and-Mortar

Format created in 2003

Sales area of approximately 400 m2 per store

Selected assortment (15 thousand sku’s)

bomboniére, cookies, toys, beauty, household,

electronics, CDs/DVDs, among others.

Format created in 1995

Well located stores with access to A and B income groups

Stores with sales areas between 150-450 m2 (32 thousand m2)

DVDs/games rental and offer of entertainment products

Adjustment of the new stores’ assortment

Use of BLOCKBUSTER® trademark for movie rental

Integrated Rental Service among stores


108 Stores Refurbished

Bricks-and-Mortar


1058

10

4

SP (Metropolitan) 59

RJ (Metropolitan) 21

BH 6

Other cites 19

South-East +105

Fortaleza 4

North-East +4

Curitiba 6

Porto Alegre 3

Other cites 1

South +10

DC 6

Goiânia 2

Mid-West +8

Corporate Growth

Number of StoresSales Area

(thousand m²)

237 372.1

127 32.1

Total 364 404.2

Growth 53.6% 8.6%As of January, 2007

Bricks-and-Mortar


Leading e-commerce Company in Brazil

E-commerce

Product Categories

Brands

Distribution Channels TV Kiosks Internet Catalogs

Electronics Home appliances Cine & Photo Computers / IT

CD / DVD / VHS Books Telecom Bed & Bath

Sports & Leisure Tools Games Musical Instruments

Toys Babies Jewelry Office Supplies

Perfumes Wine Tennis Automotive

Fashion Vitamins Fine Gifts Pet-shop

Services Gift wrapping Wish List Personalization

Same Day Delivery Photo Printing

Ring Tones Online music Online Rental (coming soon)

Online Tickets Flowers


Financial Products

Co-Branded International Card (Visa/ MC) September, 2006

Co-Branded Card (Visa/ MC) September, 2006

Personal Loan Card May,2006

Private Label Card May,2006

Lojas Americanas (bricks) Consolidated

• Forms of Payment (9M07)

52%Cash 44%

Credit Cards

1% Checks3% Private-Label

Cards

37%Cash 60%

Credit Cards

1% Checks2% Private-Label

Cards

• Joint Venture LASA - BANCO ITAÚ

– JV enables credit access for over 40 million Brazilians without bank accounts

– Personal Loans, Private Label and Co-branded Cards– Over 1.5 million cards issued (January 2008)

• 905 thousand Private Label cards, 420 thousand Personal Loan cards and 206 thousand co-branded credit cards.

• Represents about 3% of total parent company sales

– First private label card accepted on the Internet.

• Benefits

– Selling Expenses reduction (fees)

– Improvement in consolidated Working Capital

– LASA´s Capital Gain: R$ 200 million (50% of JV)

3. Growth Potential


Brazil in Figures

• Population: over 191 million• Number of mobile phones: over 100 million• Credit cards: over 89 million• Internet users: over 46 million

Growth Potential

Over 5,500 Brazilian cities

* Sources: IBGE, Maxpress, Forrester Research and Folha de São Paulo


110170

5.220

Source: Company data.

Growth Potential

Cities with opportunity of opening one store

Cities with LASA stores

OPTION VIA INTERNET, TELESALES, CATALOGS AND TV TO A POTENTIAL

PUBLIC OF 43 MILION BRAZILIANS.


22

35

74

16

37

2001 2002 2003 2004 2005 2006 2007 2008

Bricks-and-Mortar

4550

Signed contracts

Stores opened

Under negotiation

As of January 28, 2008

May change during the year

Growth Potential

ExpansionPillars

Number of inhabitantsNumber of inhabitants

Integration of Integration of locations and logisticslocations and logistics

Presence of other Presence of other playersplayers

Consumer ProfileConsumer Profile

24


Bricks-and-Mortar Organic Expansion2007

Northeast Region – 6

Southeast Region – 35

South Region – 5

Growth Potential

No. of stores

FORMAT

Midwest Region – 4

6Express

8Traditional

Express BLOCKBUSTER® 16

Traditional BLOCKBUSTER® 20

TOTAL 50


Teresópolis SHC - Teresópolis / RJ - March 2007

Plaza SHC – Osasco/SP - November 2006 SHC Cariri – Juazeiro do Norte/CE - November 2006

New Stores

Marechal Floriano – Curitiba/PR - June 2006


eCommerce

B2W – Growth Opportunities

POSITIVE FACTORS*:

• Brazil has approximately 46 million Internet users. In 2010 there will be more than 67 million users.

• Brazil has 6 million broad band users – CAGR of 54% since 2004

• Increase in the number of Internet shoppers

MERGER BENEFITS**:

• More than R$2.3 billion in gross revenue

• Structure and scale capable of competing with Brazilian traditional retail companies

• Biggest retail company listed in Novo Mercado (Bovespa)

• Infra-structure ready to support the demand

• Increase in the product offer

• Know-how in traditional retail and eCommerce* Source: IBGE, Forrester Research, and IDC Brasil

** Company data

4. Lojas Americanas in Figures


Better Operating Efficiency ( 9M07 vs. 9M06)

• Consolidated Gross Revenue of R$ 5.1 billion - an increase of 61%;

– “Same Store Sales” growth of +13.1%;

• Gross Margin of 31.6% of NR - 170 basis points higher;

• Consolidated Operating Income of R$ 293.1 million – up 56.6%;

• Consolidated EBITDA of R$ 402.9 million – up 61.7%;

– Consolidated EBITDA margin of 10.5% of NR - 20 basis points higher;

OPERATING HIGHLIGHTS – 9M07


Operating Highlights

R$MM

GROSS REVENUE - CONSOLIDATED

ACCUMULATED GROSS REVENUE - CONSOLIDATED

R$MMGROSS REVENUE - PARENT COMPANY

ACCUMULATED GROSS REVENUE - PARENT COMPANY

CAGR

32.5% 18.6%

CAGR

R$MM R$MM

5,143

3,199

2,3251,949

1,4991,260

9M02 9M03 9M04 9M05 9M06 9M07

2,666

2,146

1,7611,637

1,2991,138

9M02 9M03 9M04 9M05 9M06 9M07

5,020

3,640

2,949

2,3251,9181,765

2001 2002 2003 2004 2005 2006

CAGR

23.3%

3,374

2,7382,465

2,012

1,7211,663

2001 2002 2003 2004 2005 2006

15.2%

CAGR


%NR

GROSS MARGIN - CONSOLIDATED

ACCUMULATED GROSS MARGIN - CONSOLIDATED%NR

%NRGROSS MARGIN - PARENT COMPANY

ACCUMULATED GROSS MARGIN - PARENT COMPANY %NR


31.6

29.929.630.530.3

29.5

9M02 9M03 9M04 9M05 9M06 9M07

29.029.3 29.6

29.3 29.1 29.2

9M02 9M03 9M04 9M05 9M06 9M07

30.830.3

30.930.2

29.5

28.1

2001 2002 2003 2004 2005 2006

27.7

28.929.4

30.2 30.3 30.3

2001 2002 2003 2004 2005 2006


197.6

154.1123.9123.8

95.371.3

9M02 9M03 9M04 9M05 9M06 9M07

402.9

249.2

178.1157.8

118.8

81.2

9M02 9M03 9M04 9M05 9M06 9M07

EBITDA - CONSOLIDATEDR$MM

EBITDA - PARENT COMPANY R$MM

ACCUMULATED EBITDA - CONSOLIDATED ACCUMULATED EBITDA - PARENT COMPANY


CAGR

37.8% 22.6%

R$MM R$MM

CAGR

7.6% NR

9.5% NR

7.9% NR

10.5% NR

455.1

330.9

274.7

217.6

142.8

90.1

8

2000 2001 2002 2003 2004 2005 2006

CAGR

96.1%

0.6%NR

12.0%NR

305.6

245.9

222.7186.4

133.3105.7

50.9

2000 2001 2002 2003 2004 2005 2006

3.8%NR

11.6%NRCAGR

34.8%


R$MM

NET INCOME

R$MM

ACCUMULATED NET INCOME


27.8

76.2

127.9

18.6

51.740.2

9M02 9M03 9M04 9M05 9M06 9M07

18.4 20.2

7.513.0

62.0

8.5

3Q02 3Q03 3Q04 3Q05 3Q06 3Q07


Performance

(1) Pro-forma (Submarino and Americanas.com)

B2W – Highlights

EBITDA(R$ million)

Growth

GROSS REVENUE(R$ million)

0

500

1.000

1.500

2.000

2.500

3.000

135

220

0

50

100

150

200

250

2,301

1,583

0

500

1.000

1.500

2.000

2.500

1.7 p.p.

45%

12.0% NR

13.7% NR

9M06 9M079M06 9M07


Performance

(1) Pro-forma (Submarino and Americanas.com)

B2W – Highlights

EBITDA(R$ million)

Growth

GROSS REVENUE(R$ million)

500

1.000

1.500

2.000

2.500

3.000

53

84

0

10

20

30

40

50

60

70

80

90

3Q06 3Q07

2.0 p.p.

821

598

0

100

200

300

400

500

600

700

800

3Q06 3Q07

37%

12.6% NR

14.6% NR


50

47

16

3537

45

2001 2002 2003 2004 2005 2006 2007

Dividends Payment and Share Buy-back Program (R$ million)

Share buy-back

Dividend paymentStore Opening Evolution

* 2005 – Shoptime acquisition R$ 117 million

Total Total

2001-2006:2001-2006:

R$ 580.2 MMR$ 580.2 MM

38% EBITDA38% EBITDA

69.0 110.0 60.0

14.6

88.8 90.0 89.2

42.6

34.2

11.1

28.5

0.4

18.1

35.3

2001 2002 2003 2004 2005 2006 2007

CAPEX

Expansion Program and InvestmentsTechnology and Operations Store openings and remodeling People - capacitating the associates

Share Buy-Back and Dividends Program Oriented by the EVA® methodology


This presentation contains forward-looking statements. Such statements are not statements of historical fact, and reflect the beliefs and expectations of the Lojas Americanas’ management. The words "anticipates", “wishes”, “expects”, "estimates", “intends", "forecasts", "plans", "predicts", "projects", "targets" and similar words are intended to identify these statements, which necessarily involve known and unknown risks and uncertainties. Known risks and uncertainties include, but are not limited to, the impact of competitive products and pricing, market acceptance of products, regulatory environment, currency fluctuations, supply difficulties, changes in product sales mix, and other risks. Forward-looking statements speak only as of the date they are made, and the Company does not undertake any obligation to update them in light of new information or future developments.

“WE ALWAYS WANT MORE”

“We will continue to pursue our learning path and to overcome obstacles, and this makes us enthusiastic since it will enable us to achieve new levels of results, always seeking to better meet our customer’s needs”.

LOJAS AMERICANAS S.A. January 2008. 1. Company Overview.

Documents

Transcript of LOJAS AMERICANAS S.A. January 2008. 1. Company Overview.