B2W Companhia Digital : announces 1Q21 Results

B2W DIGITAL ANNOUNCES TOTAL GMV OF R$ 8.7 BILLION IN 1Q21, AN INCREASE OF 90.4%.

The result demonstrates the strength of our hybrid platform, with expressive growth in 1P (+69%) and a strong acceleration in the Marketplace (+105%).

GMV Growth

+98%

+90%

+83%

+38%

4Q20

JAN/21

FEB/21

MAR/21

MESSAGE FROM MANAGEMENT

In the integrated strategic plan of the Americanas Universe (2020-2022), we aim to be more relevant in the daily lives of customers, offering: Everything. Anytime. Anywhere. Following the rapid transformation in consumption habits throughout 2020, we began the second year of the plan with the optimization of our growth algorithm, and a focus on maximizing the customer experience through 3 elements: Awareness, Shopping Experience, and Loyalty.

To this end, in Jan/21 we announced the new Marketplace platform to improve the service level of Sellers and generate more competitiveness in the commercial variables of the 3P. We also announced the expansion of the Americanas Mais loyalty program, which is now free for the entire customer base, offering free shipping on millions of products, fast delivery within 24 hours and other benefits. The program also expanded its coverage to include 100% of the national territory of Brazil. Accordingly, a strong growth acceleration is already being observed (+90% in 1Q21 vs +38% in 4Q20), reaching GMV of R$ 8.7 billion in 1Q21.

The new Marketplace platform made it possible to reconcile expressive growth with an important operational evolution in the service levels of Sellers. As a result, we experienced an improvement on conversion rates, a reduction in order cancelations and product shipment delay indicators, in addition to an evolution in automated resolution, without customer service intermediation ("one click resolution").

As a result of these initiatives, the customer continues to recognize our brands as the most beloved on the Brazilian internet. We have the highest NPS in the eCommerce sector (8.7 - Source: Reclame Aqui), both in the 1P and 3P operations, and recently were recognized as the top Marketplace, with the RA 1000 seal from Reclame Aqui for the americanas.com brand.

Reinforcing our commitment to offering the best shopping experience on the Brazilian internet, we continue innovating to offer an increasingly interactive shopping experience, including Live Commerce (Americanas ao Vivo), which combines shopping and entertainment. In 1Q21, we completed more than 100 Lives, and in May/21, we will launch a new program with the objective of engaging Sellers on the platform, creating a new front of sales and profitability, through integration with B2WADS.

Another important initiative to improve the shopping experience is O2O (Online to Offline), which continues to grow rapidly and is already present in more than 6 thousand stores of Americanas and Marketplace Sellers, generating GMV of R$ 1.0 Bn in 1Q21 (+90% vs. 1Q20). The integration with Americanas allows for the acceleration of our fast delivery initiatives, including deliveries within 3 hours, which totaled 2.1 MM orders in 1Q21 (13.7% of total). The Ultra Fast Delivery model is one of our priorities for 2021. With this, in Apr/21, we announced the acquisition of Shipp, a delivery on demand startup that completes deliveries in approximately 36 minutes.

We also continue to invest and develop high frequency shopping categories. One year after the acquisition of Supermercado Now and its integration into Americanas, the grocery category represented more than half of the units sold by B2W Digital in 1Q21 (52.8%), with sales growth of 8x in the period. Throughout 2021, we will continue to expand the category, which is already present in 8 states, including the integration with strategic partners such as Pão de Açúcar, Carrefour, Grupo Big, among others.

Ame, our fintech and mobile business platform, is developing rapidly as well, surpassing the mark of 19 MM downloads and 3 MM accredited Merchants. Accordingly, the TPV of Ame in 1Q21 reached R$ 5.1 Bn, an increase of 350% in relation to 1Q20. Ame also continues to enhance its operations in banking solutions, expanding the offer of financial solutions. With this, following the acquisitions of Bit Capital (Core Banking) and Parati (Banking as a Service), Ame announced in May/21 the acquisition of Nexoos, a fintech that connects small and medium- sized businesses (SMBs) with investors.

These achievements leave us motivated to deliver all of our goals in 2021, with a firm commitment to accelerate growth and continue generating cash. Accordingly, on 04/28, we disclosed a material fact about the proposed business combination with Lojas Americanas, for the creation of americanas sa. We are pleased with this new stage in our evolution, allowing for a new journey of value creation, maximizing the customer experience.

We take the opportunity to thank our team for their engagement and dedication. We also thank our suppliers, Marketplace Sellers, our shareholders and, above all, our Customers.

Marcio Cruz, CEO

B2W Digital

KEY INDICATORS1Q211Q20Delta

Total GMV (R$ MM)	8,681	4,558	+90.4%
Marketplace (R$ MM)	5,594	2,728	+105.1%
Marketplace (% of Total GMV)	64.4%	59.8%	+4.6 p.p.
Assortment (Items/MM)	99.0	31.7	+67.3
# Sellers (New/Thou)	9.1	8.6	+0.5
# Sellers (Base/Thou)	96.3	55.4	+40.9
Mobile (% of Traffic)	83.0%	81.6%	+1.4 p.p.

1Q21 HIGHLIGHTS

Operational Combination of Businesses

On 04/28, B2W and Lojas Americanas disclosed a material fact about the proposed business combination, creating americanas sa, which will be voted upon at the Extraordinary Shareholders Meeting on 06/10. The combination is a unique opportunity to accelerate the evolution of the business, maximizing the customer experience.

Acquisition of Shipp Delivery

B2W Digital announced the acquisition of Shipp, a delivery on demand startup that offers convenience to customers with deliveries from supermarkets, pharmacies, restaurants, and pet shops, among others. The acquisition will allow us to enter the Ultra Fast Delivery model (delivery in a few minutes).

Active Customers: 22.9 MM

B2W Digital reached 22.9 MM active customers (at least one purchase in LTM) in 1Q21 (+6.2 MM vs. 1Q20).

Fast Delivery

In 1Q21, we completed 2.1 MM deliveries within 3 hours (13.7% of total). The deliveries within 24 hours (Same Day), represented 44.0% of the total.

OOOOO Partnership

B2W Digital signed a commercial agreement with mobile social commerce platform OOOOO for the launch of an innovative live commerce platform in Brazil, allowing for the acceleration of the advertising and entertainment verticals of the Company.

Americanas Mercado: represented 52.8% of items sold in 1Q21

Americanas Mercado continues to expand rapidly. For the first time, the category reached more than half of the items sold by B2W Digital in 1Q21, with a share of 52.8% of the total and continues to grow quickly.

New B2W Marketplace Platform

In Feb/21, we launched the new Marketplace platform, allowing us to reconcile a strong growth acceleration with an important operational evolution in the service levels of Sellers. As a result, we improved conversion rates, and reduced both order cancellations and delayed shipments.

B2WADS: +410% in advertisements served and +185% in GMV in 1Q21

Presenting a differentiated value proposition, with exclusive features developed to better suit the needs of the Seller, B2WADS has been gaining increased relevance with 410% growth in the number of ads served in 1Q21. In addition, we observed a 225% increase in conversions, contributing to 185% growth in GMV (vs. 1Q20).

Ame continues its rapid development: TPV of R$ 5.1 Bn in 1Q21

Ame surpassed the mark of 19 MM downloads and 3 MM accredited Merchants. The TPV of Ame reached R$ 5.1 billion, an increase of +350% in relation to 1Q20.

Ame: Acquisition of Nexoos

Ame continues to expand its operations in banking solutions, expanding the offer of financial solutions and becoming an even more complete super app. Accordingly, following the acquisitions of Bit Capital (Core Banking) and Parati (Banking as a Service), Ame announced in May/21 the acquisition of Nexoos, a fintech that connects small and medium-sized businesses (SMBs) with investors.

FINANCIAL HIGHLIGHTS

The financial information serving as the basis for the comments below refer to 1Q21, and are in compliance with international financial reporting standards (IFRS), the standards issued by the Securities and Exchange Commission of Brazil (CVM), as well as the listing regulations of the Novo Mercado and in Brazilian reais (R$). Definitions for adjusted financial metrics can be found in Annex III and Annex V.

• Total GMV: In 1Q21, total GMV of R$ 8,680.5 MM, an increase of 90.4% compared with the R$ 4,558.0 MM registered in 1Q20.
• Gross Revenue: In 1Q21, gross revenue totaled R$ 3,648.8 MM, an increase of 73.3% compared with the R$ 2,105.4 MM registered in 1Q20.
• Net Revenue: In 1Q21, net revenue totaled R$ 2,942.2 MM, an increase of 73.5% compared with the R$ 1,696.2 MM registered in 1Q20.
• Adjusted Gross Profit: In 1Q21, the adjusted gross profit totaled R$ 937.5 MM, an increase of 77.9% vs. the R$ 526.9 MM registered in 1Q20. The adjusted gross margin was 31.9% in 1Q21 vs. 31.1% in 1Q20.
• Adjusted Selling, General and Administrative (SG&A) Expenses: In 1Q21, SG&A expenses totaled R$ 808.1 MM, which represented 9.3% of GMV, an increase of 0.5 p.p. in relation to 1Q20. The increase in selling expenses is mainly related to investments in the Americanas Mais free shipping program, always associated with the service level of the Seller through a co-participation model, and investments in awareness.
• Adjusted EBITDA: In 1Q21, Adjusted EBITDA reached R$ 129.4 MM, an increase of 1.4% compared with the R$ 127.6 MM registered in 1Q20.
• Other operating income (expenses): In 1Q21, the other operating income (expenses) reached R$ 19.2 MM vs. the R$ 14.8 MM registered in 1Q20. The growth in the other operating income (expenses) line is related to non-recurring expenses due to COVID-19, including employee testing, distribution of PPE, donations, among others.
• Net Financial Result: In 1Q21, the net financial result was R$ -115.2 MM vs. R$ -110.0 MM in 1Q20, an increase of 4.7%.
• Net Result: In 1Q21, the net result was R$ -163.6 MM vs. R$ -108.0 MM in 1Q20. The net margin showed an evolution of 0.8 p.p., from -6.4% in 1Q20 to -5.6% in 1Q21.
• Cash Management
• • Cash Generation: In 1Q21, cash consumption was R$ 897.4 MM vs. R$ 645.7 MM in 1Q20 (+38.9%). Cash consumption in the quarter is associated with the seasonality of the retail business in Brazil and the increase in inventories in 1Q21 (+68.9% vs. 1Q20), in line with the sales growth of the 1P platform. For the next quarters and for the year as a whole, we reinforce our commitment to continue generating cash. As a way of capturing all the effects, cash generation or consumption is measured by the variation in net debt in relation to the previous quarter, always disregarding any resources from capital increase operations.
  • Working Capital: -14 days in Mar/21. This result reflects the curation and review process of the 1P assortment, the optimization in the purchase and planning of merchandise, as well as the continuous growth of the 3P (Marketplace). The Marketplace (whose credit card transactions are approved on the B2W platform and make up the gross balance of receivables) does not demand Working Capital (B2W is an intermediary and receives a commission on realized sales).
  • Investments: B2W uses its cash generation by prioritizing investments that present optimal returns to shareholders. Accordingly, total investments including CAPEX, acquisitions, and capital increase in affiliates totaled R$ 289.0 MM in 1Q21.