Companhia Brasileira de Distribuição : Corporate Presentation - December 2019

CORPORATE

PRESENTATION

Dec/2019

SUMMARY

BANNERS AND FORMATS

DIGITAL TRANSFORMATION

PRIVATE LABEL

EARNINGS 3Q19

COMPANY STRUCTURE GLOSSARY

2

KEY STRATEGIC PILLARS

Portfolio Optimization

1. Renovated stores will account for 55% of Pão de Açúcar's EBITDA

1. 70% of Extra Super portfolio under the new concept

1. Focus on turnaround of Extra Hiper

1. Increase of sales and profitability in Proximity

1. Three-fold growth in Assaí revenues and market share gain of 840 bps in the last 5 years

*Source Nielsen

Private-Label Brands

1. 12.7% share of Multivarejo food sales

1. Market Share gain of Private-Label Brands:
   +430 bps*

1. Entry in new categories

1. Greater integration with suppliers and strengthening of differentials

1. Target of increasing share to 20% by 2021

Digital Transformation

1. 20 million loyalty customers and ~11 million active downloads

1. Growth of food e-commerce more than twice in the last 3 years, confirming our leadership in the sector

1. Strengthening of delivery models: "Express" and "Click-and-Collect" present in more than 100 stores

1. James Delivery already represents 50% of online orders where it operates

1. Acquisition of Cheftime and partnerships with startups

1. Launch of Stix Fidelidade

Operation and Efficiency

1. Optimization of logistics model

1. Process of reducing shrinkage

1. Increased use of digital means in marketing

1. Perishables as a differential

1. Active calendar of commercial actions

3

OVERVIEW OF GROUP

B R A N D S A N D F O R M AT S TO S E R V E A L L S E G M E N T S O F T H E P O P U L AT I O N

Comprehensive coverage of customers and markets

Brands and formats for all segments of the population

Premium

463 stores

Mainstream		703 stores

Cash & Carry	345 stores
Low Cost

860 stores(1)	535 stores	91 stores	25 stores	1.511 stores(1)
15% mkt share(2)	42% mkt share(2)	45% mkt share(2)	18% mkt share(2)

(1)	Does not include 123 drugstores and 71 gas stations	4
(2)	Souce: Abras Ranking, 2018

CONSISTENT GROWTH

In 5 years, sales grew ~3,3x

					24.923	30.000
				20.070
			15.736
		11.308
	8.983	19,1%
	12,0%	11,4%
9,1%	8,3%	6,0%
%SSS
2014	2015	2016	2017	2018	2019

Gross Sales (R$ million)

Continued Market Share gains in an increasingly competitive market

29.5%

21.1%

+ 840 bps

12/201408/2019

O V E R T H E Y E A R S
	A d j u s t e d E B I T D A
							1.379
						1.029
		681
346	441	4,7%			5,6%	6,0%
4,2%
4,2%
2014	2015	2016			2017	2018 *
	R$ million				% Net Sales	766
		N e t P r o f i t
						540
	171	283
120	2,0%	2,9%	3,3%
1,6%
1,4%
2014	2015	2016		2017	2018 *

5

PRODUCTIVITY OF

NEW STORES

Average monthly sales		EBITDA
(R$ million)			Margin
18.6	18.0	PRODUCTIVITY
	6.5%

13.1

3.3%

> Sales

			SUCCESSFUL
Mature Old	Mature	New Model	EXPANSION
Matured	Under
ture Old	Mature N w	ew Model
Modelodel	NewModelModel	undernder		maturation
		Maturation
		turation

	2014	2015	2016	2017	2018	9M19
Sales per m2
Vendas por m²
(R$ '000)	2.7	3.0	3.5	3.8	4.0	4.0
(R$ mil)

EXPANSION AND CONVERSIONS

E X PA N S I O N O F N AT I O N W I D E F O O T P R I N T

	2014	2019		2020
•	84 stores	•	166 stores	•	+ 20 stores
•	13 states	•	21 states		planned
• 317,000 m2 sales area	•	712,000 m2 sales area	•	10 stores
• Average store size: 3,800 m2	•	Average store size: 4,300 m2		currently under
	construction
•	16,000 employees	•	39 mil employees

7

P R I O R I T I E S

2020

2022

EXPANSION

• Consolidation of nationwide presence of Assaí
• Opening of approximately 20 Assaí stores per year
• Conversions of hiper into Assaí

FINANCIALSOLUTIONS

• Expansion and greater penetration of financial products and services

INCREASEOPERATINGEFFICIENCY

• Evolution of processes and systems
• Maintain discipline in expenses despite strong expansion
• Maintain positive working capital

7

Low Cost

• Low logistics costs: Perishables delivered directly to the store
• Local journals with offers and digital communication

Differential

• Excellence in customer service and services compatible with regional supermarkets
• Assortment of 7,000 products, focused on butchery, produce and bakery

P O S I T I O N I N G O F

COMBAT

TO R E G I O N A L N E T W O R K S

PRIORITIES2020-2022

• Consolidation of the Compre Bem model, increasing the format's relevance in its business segment in São Paulo
• Advance of the banner to the interior region of São Paulo

Positioning

• Regional supermarkets
• Target public: B and C income segments
• Lower variation in prices

Expansion

• 15 new stores in 2019; total 28 stores

8

MERCADO EXTRA

KEY FORMAT

CHANGES

100 stores

120,000 m²

31 cities

Stores of 1,200 m²

Assortment and greater emphasis on quality and freshness of fruits and vegetables

Professional and personalized service at bakery, butchery and deli

Better price positioning

Greater penetration of Private-Label

100 stores

120,000 m²

31 cities

Stores of 1,200 m²

100	MERCADO
stores
renovated under
the new model
	KEY RESULTS IN 2019	Extra	Mercado
	Super	Extra

+8.7%+3.2%+13.1%

Improved	SALE	AVERAGE TICKET	CUSTOMERS
customer
satisfaction
level
+580 bps		Significant	Penetration of
		market	private-label
		share gain	brands above 18%

9

NEXT

MORE THAN THE EVOLUTION OF

SUPER, THE STRENGTHENING

OF THE EXTRA BRAND

All stores converted in 2020

Consolidation of model

Assessment of possible expansions/ conversions

1 0

s t o r e s

	1 5
	s t o r e s
	7 5
Conclusion of conversions:	s t o r e s
total 156 stores	10

EXTRA KEY DIFFERENTIALS

112

stores

683,000

m²

17

states

60%

penetration of Loyalty program

One-Stop-Shop

Power of choice: variety of assortment, stores with up to 40,000 SKUs

Perishables

Wide assortment, quality and freshness of food products every day

Non-food

Strong leverage of differentiation in home appliance, automotive, textile and home segments

Malls

Revitalization of commercial centers and use of spaces for events and advertising

Private-Label

Increased loyalty and stronger price image

Store in store

Partnerships that maximize sales and improve the shopping experience

Recognition

in 2019

11

EXTRA

PROFILE OF STORES AND NEXT STEPS

Protected location	Service as
with high	differential
customer traffic

Superior sales performance

Potential for

conversions into Assaí

~25 - 30 stores

~70 high

profitable stores

35-40 low profitable stores

Optimization of

assortment

Improved competitiveness of stores

Simplification of processes and operations

Strengthening of perishables to generate repeat purchases

Store

closures

~10 stores

Across-the-board initiatives	Private-label Store in Store project Strengthening of perishables	Commercial centers Omnichannel
	Strengthening of digital transformation and financial services	12

M U L T I - C H A N N E L , M U L T I - S E N S O R Y A N D M U L T I - S O L U T I O N S

HIGHLIGHTS OF 2019

185

stores

237,000

m2

13

states

82

Minuto stores

1

Adega stores

E-commerce channel:

1. Paodeacucar.com o 90 express stores

1. Increase of James Delivery share

86%

penetration of loyalty program

Evolution of G7 Value Proposition:

+EXPERIMENTAL

Shopping moments with

unique experiences

+SOCIAL

Social HUB with living and interaction spaces

+EXCLUSIVE

With personalized, special and healthy solutions

+FLUID

For a seamless shopping experience, thanks to digital technology driving customer service

SALES

900 bps

Non Refurbished Refurbished

CUSTOMERS

500 bps

Non Refurbished Refurbished

VOLUME

700 bps

Non Refurbished Refurbished

The 46 renovated stores

already account for

40% of sales and 2/3 of

EBITDA

High levels of customer satisfaction and loyalty

13

STRENGTHENING OF BANNER THROUGH

ORGANIC

EXPANSION

Restart expansion under the next-generationconcept(G7)

2020-2022

3 0 + s t o r e s

Places where Pão should expand to consolidate its presence and saturate the market

Potentially expanding locations to intensify Pão presence

RENOVATIONS

2020

Renovate all stores with potential, achieving

approximately 60 renovations, equivalent to 50% of total sales and 70% of EBIT

+15

G7 Renovations in 2020

46

Renovated stores

(2017-2019)

14

82

Minuto Pão de Açúcar

154

Mini Extra

57,000

m2

123

Drugstores

P R O X I M I T Y

K E Y I N I T I A T I V E S I N 2 0 1 9

Minuto Pão de Açúcar

Loyalty-building through perishables, Private-Label Brands and synergies with parent brand. Plan to expand ~10 stores in the second half and 50 stores in 2020.

Mini Extra	Aliados
Consolidation of	Launch of online
format's results, with	platform focused
increased sales,	mainly on groceries,
number of clients and	strengthening the
strong partnerships	format strategy, which
with suppliers, which	already has increased
significantly increased	revenue, customers
profitability.	and average ticket.

71

Gas stations

1

Minuto Adega

1

Minuto Office

Gas Stations and Drugstores

Drugstores

Adjustment of assortment and prices, development of bargain stores and new logistics solutions, positively impacting second half results.

Gas stations

Price perception, growth in customer traffic and volume. Reopening of 2 gas stations in NE and opening of 2 new stations in SP.

Minuto Adega

The platform (online + flagship store) already accounts for 57% of online wine sales of Multivarejo, while stores account for 12% of wine sales of Proximity format.

Store in store Adega present in Pão de Açúcar G7 stores

Inauguration of second store, together with a Minuto, in Jan 2020

15

2019

Revenue	Volume	Clients
+16.7%	+20.6%	+3.9%

9M18

9M19

9M18

9M19

9M18

9M19

Market share

+100bps

9M189M19

Evolution of Profitability

Optimization of expenses, costs and logistics

Improved profitability, especially at Mini Extra:

+140 bps EBITDA Margin

Private-Label

Sales growth over 30%, up by ~ 300 bps yoy revenue share

Penetration above 17% in Mini Extra sales

Recognition in 2019

Elected the "Most Loved Brand in São Paulo" in the wine and cellars category (Veja Comer e Beber)

16

NEXT

Resumption of expansion in the coming years

Store portfolio

50+ stores per year over the next 3 years, with the focus on SP

Expansion outside of SP with Mini Hubs

Expansion of the Aliados model with prospecting new customers and diversification of the product portfolio.

82 154

Minuto	Mini
stores	Stores

229

lojas

17

535

stores

	853,000	Éxito	Carulla	Surtimayorista
	o Hyper and Proximity	o Super and Proximity	o Cash & Carry
	m2
	o 246 stores	o 97 stores	o 30 stores
		o 625,000 m2	o 85,000 m²	o 31,000 m2
COLOMBIA	42%
market share

20%	Surtimax	Super Inter	Viva
of	o Low Cost	o Low Cost	o Malls
consolidated	o 92 stores	o 70 stores	o 754,000 m2 GLA
revenue
LTM-Sep/19	o 45,000 m2	o 66,000 m2

18

éxito.wow

Perishables area

Co-working Space

Pet World

Digital and Gamer Universe

Dermo Space

Integration

NEW

o8 stores	o15.7% sales	o16.5% share of	oInauguration
	growth in 3Q19	banner's revenue	of 7 stores

in 2019

Carulla

Fresh Market

NEW

o9 stores	o14.9% sales	o17.3% share of	oInauguration
	growth in 3Q19	banner's revenue	of 7 stores

in 2019

Surti

Mayorista

NEW

o30	o17.5% sales	o4.4% market	oInauguration
stores	growth in 3Q19	share in	of 12 stores
		Colombia	in 2019

VIVA

LARGEST REAL ESTATE OPERATION IN COLOMBIA:

ÉXITO GROUP: 51% FONDO INMOBILIARIO COLOMBIA:49%

First year of operation of two

key shopping malls in Colombia

Éxito GLA: 754,000 m²

(of which 566,000 m² GLA in Viva Malls)

Viva

Envigado

1. 95.8% occupancy rate

1. 31+ million visitors since inauguration

1. Stores and brands well known in the region: Viva Motors; Cine Colombia; Miniso

Viva

Tunja

1. 94.0% occupancy rate

1. 3.2+ million visitors since inauguration

1. 47 new brands in the region: Arturo Calle; Velez

1. First Éxito hyper in the city

VIVA

LARGEST REAL ESTATE OPERATION IN COLOMBIA:

ÉXITO GROUP: 51% FONDO INMOBILIARIO COLOMBIA:49%

First year of operation of two

key shopping malls in Colombia

Éxito GLA: 754,000 m²

(of which 566,000 m² GLA in Viva Malls)

Viva

Viva

EnvigadoConcept

Differentiation and

innovation

o 95.8% occupancy rate

1. 31+ million visitors since inauguration

1. Stores and brands well known in the region: Viva Motors; Cine Colombia; Miniso

VivaInternational

TunjaBrands

1. 94.0%Gatewayoccupancyfor internationalrate

players due to market o 3.2+ million visitors since

leadership inauguration

1. 47 new brands in the region: Arturo Calle; Velez

1. First Éxito hyper in the city

SALES GROWTH

DRIVEN BY STRENGTHENING OF PORTFOLIO

Total sales growth (*)	5,6%
	2,2% 2,5% 3,4%
	0,6%

3Q17

4Q17

1Q18

2Q18

3Q18

4Q18

1Q19

2Q19

3Q19

-1,5%-0,8%

-4,1%-4,1%

(*) Excludes calendar effect

Contribution of formats

Total sales			1.2%	2.6…
					1.0%
			1.9%	0.3%	0.7%
2.544

3Q18	Éxito	Carulla	Surti Omnichannel Others 3Q19
	WOW	Fresh	Mayorista
		Market

Best sales performance in the past

3 years

New models and omnichannel represent 3.9% of the 5.1% increase in the quarter

19

91

stores

90,000

m2

45%

URUGUAY market share

4%

of consolidated revenue LTM-Sep/19

Devoto	Disco	Géant
o Super and	o Supermarket	o Hypermarket
Proximity	o 29 stores	o 2 stores
o 60 stores	o 33,000 m2	o 16,000 m2
o 40,000 m2

20

25

stores

106,000

m2

	18%	Libertad	Malls	Mini Libertad
ARGENTINA	o 15 stores	o 170,000 m2 GLA	o 10 stores
	market share	o Hyper	o Malls	o Proximity
		o 104.000 m2	o 93.4% of	o 2,000 m2
			occupancy rate
	2%
	of consolidated		Positive
	revenue LTM-
	Sep/19		contribution to
			EBITDA Margin

21

FOOD RETAIL IN LATIN AMERICA

LTM19 Before IFRS 16 - Reported

1. Stores: 535

1. Net Sales: R$ 13.9 bn o EBITDA(*): R$ 824 mn o EBITDA Margin: 6.0%

1. Stores: 25

1. Net Sales: R$ 1.1 bn o EBITDA(*): R$ 37 mn o EBITDA Margin: 3.4%

Note: Brazil considering the consolidation of GPA, Currency translation based on the rate of Colombian peso on Nov, 30 (parity of 0.001197)

1. Considers Adjusted EBITDA, calculated at the discretion of each country,

1. Stores: 1,054

1. Net Sales: R$ 53.3 bn o EBITDA(*): R$ 2,868 mn o EBITDA Margin: 5.4%

1. Stores: 91

1. Net Sales: R$ 3.1 bn o EBITDA(*): R$ 238 mn o EBITDA Margin: 7.8%

Share of sales

2%

25% 4%

20%

75%

Recurring EBITDA

1%

28% 6%

21%

72%

22

CONSOLIDATED VISION - LATIN AMERICA

Pro forma Income Statement - R$ million

LTM Sept/19 - After IFRS 16	GPA	Éxito -	GPA
Pro Forma	Consolidated
Net Sales	53,326	18,051	71,377
Gross Profit	11,714	4,645	16,359
Gross Margin	22.0%	25.7%	22.9%
EBIT Margin	4.2%	4.5%	4.2%
Adjusted EBITDA Margin	7.4%	8.3%	7.6%
Net Income - continuing operations	943	282	1,226
Net Margin	1.8%	1.6%	1.7%

Amounts prior to GPA consolidation including the effects of IFRS 16. Classification may be changed

Same Stores Sales Growth Trend - 9M19

35,5%

4,0% 3,8%

1,1%

Bra

Col

Arg

Uru

Working Capital - days of cogs	Capex / Net Revenue
	~55			3,7%	3,7%	3,7%
		Approx.	~30
		2,000
~20
2019 E GPA	Éxito	Consolidated	2019 E GPA	Éxito	Consolidated

Currency translation based on average rate of Colombian peso in 2019 (parity of 0.0011986)

23

REFLECTION OF LATAM RESTRUCTURING

Leverage

	Net Debt /EBITDA				~2.9
	1,3				1,3				1,8	1.4-1.6
	0,9 1,1
			0,5	0,9			1.2-1.4
				0,3
	1Q181	2Q182	3Q183	4Q184	1Q195	2Q196	3Q197	3Q198	4Q19e9	2020e10	2021e11	12
								pro forma

Operating cash flow, enabling:

1. Reduction in leverage

1. Maintenance of high capex in recent years in GPA and Éxito

1. Distribution of dividends pursuant to Bylaws

96.6%

of Éxito was acquired

R$ 9.5 bn

was acquisition cost

Less than 2x of leverage in 4Q19

Opportunities to monetize assets:

o Lands and buildings valued at R$3.3 billion (book value)

o Share of 34% in the subsidiary Cdiscount

24

P R I O R I T I E S F O R T H E C O M I N G Y E A R S :

EXPANSION AND OPTIMIZATION

OF THE PORTFOLIO IN ALL COUNTRIES

CASH & CARRY	HIPER
Acceleration of	Focus on high-performance,
expansion and profitability	high-return stores

MAINSTREAM

Commercial success of new concepts

PREMIUM

Continuous improvement of value proposition

1. Opening of ~20 organic stores a year over the next 3 years

1. Potential conversion
   of approx, 25 to 30 stores from
   Hyper in the next 2 years

1. Sales uplift: 2.5x to 3.0x

1. 2020: expansion of 13 stores
   (11 conversions and 2 organic)

Maintenance of 60% of stores:

1. Portfolio of 70 stores with healthy sales performance, focused on increasing profitability and value proposition for clients

1. Potential conversion of 25 to 30 stores into Assaí: +40 bps EBITDA margin in Multivarejo

1. Closing of up to 10 stores (which represents 5% of sales and EBIT consumption of R$ 15 MM/ year): +30 bps EBITDA margin in Multivarejo

1. 2020: + 8 stores
   (7 conversions and 1 organic)

1. Double-digitsales growth and increased profitability

1. 2020: renewal of
   1 store in the Wow model

1. Conclusion of conversions: 45 Mercado Extra stores in 2020, totaling 145 stores

1. Result: 145 Mercado Extra Stores and 28 Compre Bem stores:

1. Post-renovationsales uplift of 10% at Mercado Extra and 30% at Compre Bem

1. 2020: Roll-out of the new Super Inter concept with renewal of
   10 stores

1. 15 to 20 conversions into Pão de Açúcar G7

1. 5 to 10 openings Pão de Açúcar
   G7
   and 50 openings of Minuto Pão de Açúcar in 2020, with acceleration of both formats in the coming years

1. Post-renovationsales uplift: approx, 10%

1. 2020: + 8 Carulla Fresh Market stores
   (7 conversions and 1 organic)

1. Double-digitsales
   growth and increased profitability

1. 2020: opening of 4 stores in the Fresh Market model

25

BANNERS AND FORMATS

DIGITAL TRANSFORMATION

PRIVATE LABEL

3Q19 RESULTS

COMPANY STRUCTURE

GLOSSARY

26

MAIN PILLARS I N S T R AT E G I C P L A N N I N G

O F D I G I TA L T R A N S F O R M AT I O N

i n o v a t i o n

+ Add	- Reduce	+ Improve	+ Scalability for
costumer
revenue	costs	business
experience (UX)

Consumer	Lojas físicas

Needs

Driven

Culture/ Integration with the Business

Data

Infrastructure

27

PHYSICALPRIVATE

STORESLABELS

ECOMMERCE /	FINANCIAL SERVICES
& PAYMENTS
MARKET PLACE

Extended Warranty

& Services

E C O S S I S T E M A

LOYALTY

REAL ESTATE

LOGISTICS	DATA
& DELIVERY	ANALYTIC
	S & BI

Ship-from-StoreClique-e-Retire

28

Platform of goods and services to earn and redeem points

It is the first loyalty coalition with nationwide presence in Brazil's retail sector

More than 56 million active customers

in its base and approximately 3,000 points of sale

Stix will offer accessible and frequently redeemable awards to members (micro- rewards). Stix overcomes important barriers of loyalty

programs, such as:

1. Accessible = accrue points on day- to-day purchases at diverse partners that Brazilians are already used to

1. Simple = direct redemption at stores for rewards (micro rewards) of high perceived value

Stix enables customers to rapidly accumulate enough points to be able to redeem rewards

Transparency is a differential at Stix:

1 stix is worth at least R$ 1 upon redemption

Rollout in the second half of 2020, may

earn Stix points in a single account.

Stix will evolve constantly with the entry of new retail partners from different segments

66.7%

Ownership structure

33.3%

Commercial partner

29

GMV JAMES ( R E T A I L )

VS

(COMPARABLE MONTHS)

GMV previous provider

GMV James

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11

• Net amounts of James (without promotion) • Gross amounts of previous provider (with promotion)

30

CITIES

•	Aracajú	•	Palmas
•	Brasilia	•	São Paulo
•	Belo Horizonte	•	Rio de Janeiro
•	Curitiba	•	Recife
•	Cuiabá	•	Santos
•	Campo Grande	•	Sorocaba
•	Fortaleza	•	Salvador
•	João Pessoa	•	Teresina
•	Niterói	•	Uberlândia

31

CHEFTIME

COMPANY

13x

BIGGER

190 + brick-and-mortar stores in Brazil and e-commerce

Since the launch of the strategic alliance: 350k + meals/ portions served

Strategy of accelerating modernization rotisserie (Ready-to-cook, Ready-to-Eatand Ready-to-Gosolutions)

Ready-to-Cook"pra

cozinhar"

Kits and content to prepare recipes at home

Ready-to-Go"pra levar"

Ready-to-eat dishes to take home or to work (Grab & Go)

Ready-to-Eat"pra já"

• Education Academy

Develop the Cheftime brand (group asset)

Accelerate the modernization of Rotisserie (Grocerants)

32

ESTRATEGIC-COMMERCEPLANNING

Mkt Share	Growth in		sale captured
leader of food	YTD		at Black Friday
e-commerce*								vs 2018

Of orders and	Shipping from	Share in Apps	Bottles sold in 2019
60MM of	Store share	(mobile-first)
products sold

TO BE

1. Aggressive targets for 2020 to maintain leadership of food e-commerce

1. Expansion of Shipping from Store and e-store nationwide

1. Expansion of new Picking app + continuous improvement of OTIF service level

1. Launch of Marketplace

* Nielsen Ebit	33
data

STRATEGIC PLANNING

LOYALTY

Approx.	Approx. share		MV
number of	of MV sales		identified
downloads						sale

Launch	Insight monetization	Media
	growth	monetization

TO BE

1. App focused in commerce (MD + E-commerce)

1. GPA suitability for LGPD implementation

1. Expansion of media and insights monetization

1. Integration between the apps James x PdA Mais and Clube Extra

34

STRATEGIC PLANNING

FRICTIONLESS

o Use of IT to reduce friction and operation costs in services areas

1. Testing and launching of new digital products (Self-checkout, pre- scan, scan & go, POS mobile, shop & go, virtual menu, express checkout)

SELF CHECKOUTS	PRE	SCAN & GO
	SCAN

TO BE

POS MOBILE

1. Roll-outof solutions kit to reduce store friction

SHOP & GO	VIRTUAL	EXPRESS
	MENU	CHECKOUT

1. Constant UX improvement in all digital products

35

Functionalities that drive frequency of use

My Discount

Functionality

Del Vino

Community

Events

Suggestions

of products

Recipes

Engagement proves the importance of omnichannel strategy

2 times avg. ticket vs. brick-and-mortar store

1.5+ million

downloads

540,000+

Clients using My

Discount

2nd in sales in Colombia (considering the app

as a store)

SUCCESS

OF THE MY DISCOUNT FUNCTIONALITY

36

STRENGTHENING OF

LOYALTY

Joint Venture with Bancolombia

50% / 50% share

61 million

transactions

3.1 million

customers with HabeasData

54 top

partners

66%

share of redemption in Éxito Group

Gas stations,

debit card, travel options and marketplace

37

BANNERS AND FORMATS

DIGITAL TRANSFORMATION

PRIVATE LABEL

3Q19 RESULTS

COMPANY STRUCTURE

GLOSSARY

38

Private Label: a strategic pillar for the Company

Price Perception

Quality Perception

Differentiation

Innovation

Democratization

Why do we produce Private-Label?

Prices about 25-30% lower than the benchmark/leader in the category

Same or superior quality as the benchmark/leader in the category

Iconic products and brands that are attractive to consumers

New and exclusive products in our stores

Guaranteed high-quality products and low prices for all

Loyalty

Improved

Competitiveness

Profitability higher than national brands

How we operate	Partnership	Communication	Specialized	Quality
with Private-	with	/ Creation of
Team	Assurance
Label Brands?	Industry	Brands

46

Private Label
our brands
Day by day	Stylish clothes
for everyday
Healthier life	A stylish
house
A chef's	Celebrate the
touch to the	good times in
routine	life

47

Private Label: Priorities

Increase of the penetration	Extension of	Pipeline of	Building new
private-labeland
to12.7% in 3Q19,	integrated	constant
strengthening
aiming to reach 20%	suppliers model	innovation at 500
current brands
of ​​share by 2021	INTEGRATED: TOTAL PARTNERSHIP |	SKUs p.a.
Increase Taeq sales, democratizing	OPENBOOKMODEL
TRANSACTIONAL: TRADITIONAL MODEL
healthy foods

48

BANNERS AND FORMATS

DIGITAL TRANSFORMATION

PRIVATE LABEL

3Q19 RESULTS

COMPANY STRUCTURE

GLOSSARY

42

R$14.6 billion

revenue +9.5%

Consistency in

expansion strategy

and accelerated maturation of Assaí stores

Strengthening

of the value

proposition of

Multivarejo banners,

through store

renovation and digital

transformation

projects

3Q19 HIGHLIGHTS

	5NEWSTORES	Strong growth of
Remarkable performance by	sales and
12 months
addition to improved
renovated Pão de Açúcar stores,		profitability, with
as well as Mercado Extra and		expansion of 19
	stores in the last
Compre Bem conversions, in
performance by Proximity format
Robust growth above			Increase in
		penetration:
30% in food	PRIVATE-LABEL BRANDS	Growth of
e-commerce and
		110bps to reach
continuous evolution
		12.7% share of
of omnichannel
		the food
initiatives
		categories in
			Multivarejo

Optimization of store portfolio:

Substantial increase in sales at the 82 stores converted into Mercado

Extra, 13 Compre Bem stores and 28 renovated Pão de Açúcar stores

43

DIGITAL

TRANSFORMATION

Growth above 30% in food e-commerce: evolution of Express (107 stores) and Click & Collect (113 stores) delivery models

More than 20 million loyal customers and 10 million active downloads of "Pão de Açúcar Mais" and "Clube Extra" apps

Operation in 12 cities, in line with the expansion plan, which already represents around 50% of the online orders in the stores where it is present

More than 80,000 meals sold in the year

Expansion of ready-to-eat solutions and sales ~5 times more than in 1H19

Strong consumer adhesion to time optimization initiatives at store: Self-checkout,Pre-scan, Scan&Go

Over 65 products offered as a result of partnerships with food startups and implementation of new concepts and services at stores and apps

Partnerships with major technology players in the market to improve digital products

51

3Q19 RESULTS - GPA FOOD POST IFRS 16

Substantial growth in net income

Gross Revenue

• Maintenance of strong growth trend, despite the 240bps decrease in food inflation compared to 1H19

Gross Profit

• Gross margin reflected: o higher share of Assaí
  o continuation of promotional investments in Multivarejo

Expenses

• Dilution of 80 bps, due to initiatives to control and reduce expenses at Multivarejo and Assaí

EBITDA(*)

• Strong growth:

• 1. consistent results of Assaí o improved profitability of
     Multivarejo compared to 2Q19
• Ex-IFRS16, EBITDA margin was 5.7%, stable in relation to 3Q18.

9.5%

5.8%

-80 bps

10.0%

(*) Adjusted by Other Operating Income and Expenses.

Net income
attributable to		R$ 216 million, up 42.8% from the same period a
controlling		year ago, with margin expansion of 40 bps.
shareholders

52

FINANCIAL RESULT AND DEBT - POST IFRS 16

Leverage remained low, underlining the solid financial structure

Financial Result

(R$ million and % of net sales)

-110bps

2.2%

1.1%

265

147

3Q18

3Q19

Other Highlights

CASH & EQUIVALENTS

• Cash position Sep/19: R$12.7 billion, including funds to be allocated to the tender offer
• R$900 million in pre-approved/ confirmed credit lines

Net Debt

Net Debt (1)/ EBITDA(2)

-1,27x

-1,12x

-0,90x

-1,10x

-0.82x

-0,47x

2018

2019

-0,32x

1Q

2Q

3Q

4Q

(1)Includes unsold credit card receivables. Excludes lease liabilities related to IFRS 16. (2)EBITDA in the last 12 months, ex-IFRS 16.

CAPEX

• R$723 million in 3Q19, +48.2% vs. 3Q18 due to higher dispersion of openings throughout the year
• Level maintained in approximately R$ 1.8 billion in 2019

53

MULTIVAREJO - POST IFRS 16

Continuity of investments in competitiveness and greater control over expenses

Gross Revenue

Gross Profit

Expenses

EBITDA(*)

• Strong performance by renovated Pão de Açúcar, Mercado Extra and Compre Bem stores, as well as acceleration of sales in Proximity formats
• Impact of stores closed for conversion and continuation of weak economic scenario

• Gross margin level reflects the continuation of competitiveness efforts in a still-cautious consumption environment

• Higher dilution of expenses, without impacting the quality of services offered to consumers through:
  o increased use of digital means, with less marketing expenses
  o renegotiation of IT and general service agreements

• Reflects the investments in price and initiatives to reduce expenses, resulting in an EBITDA margin of 7.6%, higher than in 2Q19
• Ex-IFRS16, EBITDA margin was 5.0%

0.8%			-3.6%
		1.796	1.731
6.925	6.982	28,1%	26,3%

3Q18

3Q19

3Q18

3Q19

(*) Adjusted by Other Operating Income and Expenses.

-80bps

1.313	1.299
20,5%	19,7%
3Q18	3Q19

-5.2%

528501

8,3%7,6%

3Q183Q19

54

MULTIVAREJO

Balanced portfolio to meet consumption demands

hiper	super
112 stores	174 stores	185 stores	236 stores (**)

• Performance impacted by the strong comparison base of 3Q18
• Resumption of growth in non-food category: strong commercial activations
• Evolution of "Express" and "Retira Extra" delivery models, strengthening the e-commerce operation
• Continuation of store-in-store initiatives, with the new partnership with Ri Happy and Daiso

• Mercado Extra: Growth of 7%, despite the strong comparison base of 3Q18 (24.9%), with market share(*) gains in the last 15 months
• Strong growth above 30% of sales of Compre Bem, in line with the performance of recent quarters
• 82 stores converted into Mercado Extra and 13 into Compre Bem
• Approximately 70% of Extra Super stores will be converted by the end of 2019

• Improved sales performance, with higher volume
• Success and acceptance of renovated stores:
  o Same-store growth of 12%; o Total of 28 stores renovated,
  accounting for around 25% of the banner's revenue;
  o By the year-end, about 50 stores will have been renovated, accounting for approximately 40% of sales
• Increased market share(*) in the quarter
• Continuation of substantial online sales growth

• Continuity double-digit sales growth for the 5th consecutive quarter: +17.5% in 3Q19
• Increase in volume and customer traffic
• Continued market share gains (*) in proximity formats
• Increase in Private-Label Brands: penetration above 15% in Mini + Minuto formats
• Resumption of expansion: 1 store opened in 3Q19 and other 9 stores to inaugurate in 4Q19

1. Source: Nielsen.

1. Does not include the 123 drug stores, 71 gas stations and Aliado Mini Mercado stores

55

ASSAÍ - POST IFRS 16

Significant sales growth, with increased customer traffic and accelerated maturation of new stores

Gross Revenue

Gross Profit

Expenses

EBITDA (*)

 Strong growth, with addition of 2	 Gross margin mainly reflected:	 Maintenance of control over
million new customers per	o opening of stores in regions	expenses, stable at 9.6% as a ratio of
month, resulting from:	where Assaí already operates,	sales, despite the strong store
o expansion of 19 stores in the	contributing positively to gross	expansion process
last 12 months	margin
o healthy 'same-store'	o accelerated maturation of new
performance	stores inaugurated in the last 2
	years

18.9%		24.1%		+10 bps
	7.587	1.152
			663
6.382
	928
		559
		16,6%	9,5%	9,6%
		15,8%

• Strong EBITDA growth of 31.3% with substantial margin increase, which reached 7,1%
• Ex-IFRS16, EBITDA margin was 6.3%

31.3%

494

376

6,4%7,1%

3Q18

3Q19

3Q18

3Q19

3Q18

3Q19

3Q18

3Q19

(*) Adjusted by Other Operating Income and Expenses.

56

ASSAÍ

Strong brisk store openings, in line with the banner's nationwide expansion plan

ASSAÍ

153 stores

• Opening of 5 stores, totaling 19 stores in the last 12 months
• Over 10 openings scheduled for 4Q19, adding approximately 20 stores in the year
• Continuous growth in the issue of Passaí cards: total of ~930,000 cards, with penetration above 5% of sales
• Winner of Estadão award "Empresas Mais", among the 1,500 largest companies in the country and also from retail category

57

BANNERS AND FORMATS

DIGITAL TRANSFORMATION

3Q19 RESULTS

PRIVATE LABEL

COMPANY STRUCTURE

GLOSSARY

51

EVOLUTION OF CORPORATE GOVERNANCE PRACTICES AND SIMPLIFICATION OF

CORPORATE

ownership structure	58.4%
Free Float

96.6%

34.1%

100	100	62,5%
%	%

Membership of highest corporate governance segment of B3

1:1

Parity of conversion

PN to ON shares

Feb/20

Start of trading on

Novo Mercado

58.4%

of free float

Best corporate governance practices

1. 100% of shares with voting rights

1. 100% tag along rights

1. At least 20% of the Board consists of independent members

1. Committees: Finance, Audit, Governance & Sustainability, HR & Compensation and Innovation
2. • Digital Transformation

1. Adhesion to the
   Market Arbitration Chamber

52

GOVERNANCE AT

GPA Controlling Shareholder

Acquisition of 96.6%

Next steps

• Jan 2020: Board of Directors Meeting and Shareholders Meeting to approve the Governance structure, as disclosed in the offering memorandum in Colombia
• Participation of GPA members in the Committees, following the current governance rules of Éxito:
• • Finance
  • Appointments, Compensation and Corporate Governance
  • Sustainability
  • Expansion
• Audit and Risks Committee: 100% independent members

53

BANNERS AND FORMATS

DIGITAL TRANSFORMATION

PRIVATE LABEL

3Q19 RESULTS

COMPANY STRUCTURE

GLOSSARY

54

Glossary

Food Segment: Represents the combined results of Multivarejo and Assaí, excluding equity income (loss) from Cdiscount, which is not included in the operating segments reported by the Company.

EBITDA: EBITDA is calculated in accordance with Instruction 527 issued by the Securities and Exchange Commission of Brazil (CVM) on October 4, 2012.

Adjusted EBITDA: Measure of profitability calculated by excluding Other Operating Income and Expenses from EBITDA. Management uses this measure in its analyses as it believes it eliminates nonrecurring expenses and revenues and other nonrecurring items that could compromise the comparability and analysis of results.

Compre Bem: Project involving the conversion of stores in order to enter a market niche currently occupied by regional supermarkets. The store model is better adapted to the needs of the consumers in the regions where the stores are located. The service and assortment of the perishables category will be reinforced, while other categories will have a leaner assortment. Compre Bem is managed independently from the Extra Super banner with the focus on streamlining operating costs, especially logistics and IT.

Mercado Extra: Project aims to renovate Extra Super by reinforcing the quality of perishables and customer service, with the focus on the B and C income groups. There will be no change in the operating model of the stores, which will continue to be managed under the Extra banner.

James Delivery (last miler): Multiservice platform for ordering and delivering in minutes of diverse products selected by our customers, including restaurants and integration with our supermarkets and drugstores.

Cheftime: pioneering startup in the Foodtech segment, offering online subscription services and sales of gastronomic kits.

Same-storegrowth: Same-store growth, as mentioned in this document, is adjusted by the calendar effect in each period.

Growth and Changes: The growth and changes presented in this document refer to changes from the same period last year, except when stated otherwise.

55

Investor Relations Team

Tel.: [phone] [e-mail] www.gpari.com.br

About GPA: GPA is Brazil's largest retailer, with a distribution network comprising over 2,000 points of sale as well as electronic channels. Established in 1948 in São Paulo, it has its head office in the city and operations in 18 Brazilian states and the Federal District. With a strategy of focusing its decisions on customers and better serving them based on their consumer profile in the wide variety of shopping experiences it offers, GPA adopts a multi-business and multi-channel platform consisting of brick-and-mortar stores and e-commerce operations, divided into the following business units: Multivarejo, which operates the supermarket, hypermarket and Minimercado store formats, as well as fuel stations and drugstores under the Pão de Açúcar, Extra and Compre Bem banners; Assaí, which operates in the cash-and-carry wholesale segment; and GPA Malls, which is responsible for managing the Group's real estate assets, expansion projects and new store openings.

Disclaimer: Statements contained in this release relating to the business outlook of the Company, projections of operating/financial results, growth prospects of the Company and market and macroeconomic estimates are merely forecasts and are based on the beliefs, plans and expectations of Management in relation to the Company's future. These expectations are highly dependent on changes in the market, Brazil's general economic performance, the industry and international markets, and hence are subject to change.

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