Retail Grows 9.1% in February, according to ICVA

Leap year contributed to the result Negative effects of coronavirus were not relevant

in the month

Brazilian retail sales increased 5.2% in February, excluding inflation, compared to the same month last year, according to the Cielo Broad Retail Index (ICVA). In nominal terms, which reflect sales revenue received by retailers, the ICVA increased 9.1%.

An extra Saturday (a strong sales day), due to the leap year, contributed to the result. The performance would have been even better were it not for the fact that Carnival, a period of weak sales, fell in February, whereas last year the holiday was celebrated in March.

"February showed a growth rate higher than the one seen in previous months, even if we disregard calendar effects. This result was driven by Supermarkets and Hypermarkets, Furniture, Home Appliances, Department Stores, and Drugstores and Pharmacies. The impact of the coronavirus outbreak in February was not relevant, as the first cases in the country emerged at the end of the month," says Cielo's Director of Intelligence, Gabriel Mariotto.

Year on Year Retail Sales Performance

BRAZIL

8.0%

9.1%

7.6%

7.2%

7.6%

6.9%

5.7%

5.8%

6.1%

6.8%

5.4%

6.9%

4.6%

4.0%

4.7%

3.6%

5.2%

5.2%

5.2%

3.1%

1.9% 2.2%

2.0%

2.3%

2.6%

-0.7%

Feb-19

Mar-19

Apr-19

May-19

Jun-19

Jul-19

Aug-19

Sep-19

Oct-19

Nov-19

Dec-19

Jan-20

Feb-20

Nominal ICVA

Deflated* ICVA

*Adjusted by national Consumer Price Index (IPCA) according to the sectors contained in ICVA

For further information, please contact the Investor Relations area: ri@cielo.com.br

ir.cielo.com.br

Phone: +55 11 2596 8453

Year on Year Retail Sales Performance with Calendar Adjustment

BRAZIL

7.1%

6.9%

7.0%

7.5%

6.1%

6.1%

6.3%

6.6%

5.3%

4.9%

5.6%

5.1%

4.8%

4.8%

3.9%

3.7%

4.3%

3.8%

2.1%

2.5%

2.6%

1.4%

2.1%

1.9%

0.8%

0.6%

Feb-19

Mar-19

Apr-19

May-19

Jun-19

Jul-19

Aug-19

Sep-19

Oct-19

Nov-19

Dec-19

Jan-20

Feb-20

Nominal ICVA with Calendar Adjustment

Deflated* ICVA with Calendar Adjustment

*Adjusted by national Consumer Price Index (IPCA) according to the sectors contained in ICVA

INFLATION

The Broad Consumer Price Index (IPCA), calculated by the IBGE, moved up 4.01% in the 12 month- period ended February and rose 0.25% in the month, the lowest February figure since 2000. Cosmetics and Personal Hygiene, and Supermarkets and Hypermarkets played a major role in the index increase, while Tourism and Transport helped slow down this upturn.

Considering the IPCA weighted by sector and ICVA weights, broad retail inflation was 3.7%, up from 2.6% in January.

SECTORS

Discounting inflation and with calendar adjustments, Non-Durable Goods, Durable Goods and Semi-Durable Goods grew, while Services declined.

In the Non-Durable Goods group, the sectors that contributed most to the acceleration were Supermarkets and Hypermarkets and Drugstores and Pharmacies. The Furniture, Home Appliances and Department Stores sectors had a positive impact on Durable Goods and Semi- Durable Goods.

In the Services group, the decline was led by the Tourism and Transport sectors.

For further information, please contact the Investor Relations area: ri@cielo.com.br

ir.cielo.com.br

Phone: +55 11 2596 8453

REGIONS

All regions showed acceleration in the month, based on the deflated ICVA with calendar adjustment. The North region grew 9.3%, followed by the Midwest (5.9%), the Northeast (5.9%), the South (4.2%) and the Southeast (2.2%) regions.

According to the nominal ICVA - which does not discount inflation -, the highlight was the North region, up 15.7%, followed by the Midwest (11.3%), the South (10.0%), the Northeast (9.8%) and the Southeast (7.9%).

Year on Year Retail Sales Performance by Region

6.9%

5.9%

6.3%

5.7%

5.9%

6.9%

6.6%

5.3%

6.2%

6.9% 5.7%

SOUTHEAST

7.9%

6.2%

2.8%

3.5%

1.8%

-0.2%

5.0%

5.

5.2%0%

3.6%

0.8%

0.6%

0.6%

-1.6%

4.8%

4.7%

4.0%

4.3%

3.2%

3.0%

1.9%

3.2%

-0.1%

1.7%

0.6%

5.8%

5.9%

3.1%

2.1%

1.8%

1.7%

6.3%

5.7%

3.8%

2.4%

2.2%

2.0%

-0.9%

-1.7%

-0.9%

-2.8%

Feb-19

Mar-19

Apr-19

May-19

Jun-19

Nominal ICVA

Nominal ICVA with Calendar Adjustment

Deflated*

ICVA

Deflated*

ICVA with Calendar Adjustment

Jul-19

Aug-19

Sep-19

Oct-19

Nov-19

Dec-19

Jan-20

Feb-20

*Adjusted by national

Consumer Price Index (IPCA) according to the sectors contained

in ICVA

For further information, please contact the Investor Relations area: ri@cielo.com.br

ir.cielo.com.br

Phone: +55 11 2596 8453

Year on Year Retail Sales Performance by Region

10.5%

8.6%

8.7%

7.8%

8.3%

7.5%

8.0%

6.3%

6.4%

6.0%

4.7%

4.9%

4.3%

4.3%

3.5%

1.4%

9.9%

8.3%

8.8%

8.0%

7.0%

7.2%

7.4%

7.8%

6.9%

6.8%

7.0%

6.7%

6.8%

5.5%

5.6%

6.0%

4.6%

4.6%

4.1%

4.1%

8.4%

7.6%

6.1%

6.4%

5.8%

5.7%

2.1%

1.8%

SOUTH 10.0%

7.5%

6.2%

6.6%

5.6%

4.2%

2.2%

1.6%

Feb-19

Mar-19

Apr-19

May-19

Jun-19

Jul-19

Aug-19

Sep-19

Oct-19

Nov-19

Dec-19

Jan-20

Feb-20

Nominal ICVA

Nominal ICVA with Calendar Adjustment

Deflated*

ICVA

Deflated*

ICVA with Calendar Adjustment

*Adjusted by national

Consumer Price Index (IPCA) according to the sectors contained

in ICVA

Year on Year Retail Sales Performance by Region

NORTHEAST

9.9%

9.8%

8.1%

7.6% 7.7%

8.4%

7.9%

7.8%

9.0%

7.3%

7.3%

7.2%

7.7%

6.1%

7.2%

5.9%

4.1%

5.9%

4.4%

4.5%

5.3%

2.7%

2.7%

4.5%

3.2%

3.8%

3.4%

2.7%

1.8%

6.8%

6.1%

4.5%

6.2%

5.3%

4.6%

6.4%

6.8%

5.8%

6.3%

3.6%

3.0%

7.3%

6.7%

5.9%

4.7%

4.2%

1.3%

1.9%

2.4%

1.8%

1.1%

-0.7%

Feb-19

Mar-19

Apr-19

May-19

Jun-19

Jul-19

Aug-19

Sep-19

Oct-19

Nov-19

Dec-19

Jan-20

Feb-20

Nominal ICVA

Nominal ICVA with Calendar Adjustment

Deflated*

ICVA

Deflated*

ICVA with Calendar Adjustment

*Adjusted by national Consumer Price Index (IPCA) according to the sectors contained in ICVA

For further information, please contact the Investor Relations area: ri@cielo.com.br

ir.cielo.com.br

Phone: +55 11 2596 8453

Year on Year Retail Sales Performance by Region

10.5%

9.9%

8.5%

7.9%

7.8%

7.6%

7.3%

7.4%

7.4%

5.2%

4.3%

5.5%

3.5%

3.4%

4.7%

2.9%

7.8%

6.4%

5.7%

5.0%

5.3%

2.7%

7.5%

7.4%

7.7%

7.0%

6.9%

6.5%

6.8%

7.0%

5.7%

6.2%

5.5%

5.3%

5.0%

4.6%

2.8%

MIDWEST

11.3% 10.0%

7.9%

7.5%

7.2%

5.9%

3.5%

3.2%

3.0%

2.7%

0.8%

3.5%

2.5%

2.7%

3.1%

Feb-19

Mar-19

Apr-19

May-19

Jun-19

Nominal ICVA

Nominal ICVA with Calendar Adjustment

Deflated*

ICVA

Deflated*

ICVA with Calendar Adjustment

Jul-19

Aug-19

Sep-19

Oct-19

Nov-19

Dec-19

Jan-20

Feb-20

*Adjusted by national Consumer Price Index (IPCA) according to the sectors contained in ICVA

Year on Year Retail Sales Performance by Region

NORTH 15.7%

14.4%

11.8%

11.3%

11.9%

12.1%

11.2%

11.3%

8.8%

9.1%

11.6%

10.5%

8.1%

9.8%

10.0%

9.6%

10.3%

9.4%

11.1%

8.8%

9.6%

10.2%

10.0%

7.8%

8.7%

8.8%

7.1%

7.3%

7.8%

7.1%

9.3%

6.2%

6.9%

9.5%

5.9%

8.4%

7.9%

8.0%

7.1%

6.4%

4.9%

4.4%

6.6%

5.7%

5.6%

5.7%

5.6%

3.2%

4.1%

4.5%

3.4%

Feb-19

Mar-19

Apr-19

May-19

Jun-19

Jul-19

Aug-19

Sep-19

Oct-19

Nov-19

Dec-19

Jan-20

Feb-20

Nominal ICVA

Nominal ICVA with Calendar Adjustment

Deflated*

ICVA

Deflated*

ICVA with Calendar Adjustment

*Adjusted by national Consumer Price Index (IPCA) according to the sectors

contained in ICVA

For further information, please contact the Investor Relations area: ri@cielo.com.br

ir.cielo.com.br

Phone: +55 11 2596 8453

ABOUT THE ICVA

Cielo Broad Retail Index (ICVA) monitors the evolution of Brazil's retail on a monthly basis, according to sales in 18 segments mapped by Cielo, from small shopkeepers to large retailers. They account for 1.5 million retailers accredited by the Company. The weight of each sector in the index's general result is defined by its performance in the current month.

Cielo Broad Retail Index (ICVA) was developed by Cielo's Intelligence area and had the purpose to present a monthly picture of Brazil's retail performance from actual information.

HOW IT IS CALCULATED

Cielo's Intelligence unit developed mathematical and statistical models which were applied to the company's database with the purpose to isolate the effects of the competitive behavior of the acquiring market, such as market share variation, as well as to exclude the effects of check and cash replacement for debit cards. Therefore, the index represents not only retail consumption with cards but actual consumption at the point-of-sale.

This index is in no way a preview of Cielo's financial results, which are impacted by several other factors related to both revenues and cost and expenses.

UNDERSTAND THE INDEX

Nominal ICVA - Indicates the growth of nominal sales revenue at broad retail in the period, compared to the same period of the previous year. It reflects what retailers see in their sales.

Deflated ICVA - Nominal Cielo Broad Retail Index less inflation. Therefore, a deflator is adopted, which is calculated from the Extended National Consumer Price Index (IPCA) calculated by IBGE, adjusted to the mix and weights of sectors comprised in the Cielo Broad Retail Index (ICVA). It reflects retail's actual growth, excepting inflation.

Nominal/deflated ICVA with calendar adjustment - ICVA with calendar adjustment - Cielo Broad Retail Index excluding the calendar effects which impact a certain month/period when compared to the same month/period of the previous year. It reflects the pace of growth, measuring the index's rises and falls.

Barueri, March 16, 2020.

Gustavo Henrique Santos de Sousa

Chief Financial and Investor Relations Officer

For further information, please contact the Investor Relations area: ri@cielo.com.br

ir.cielo.com.br

Phone: +55 11 2596 8453

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Cielo SA published this content on 16 March 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 16 March 2020 12:06:30 UTC