C&A Modas S A : Dados Econômico-Financeiros

Earnings Release 4Q22

Results Videoconference:

• Portuguese/English

• Date: 03/02/2023

• Time:

Brasília: 11:00 a.m. New York: 09:00 a.m.

London: 02:00 p.m.

• Webcast: ri.cea.com.br

4Q22 Earnings Release

20% increase in adjusted EBITDA in 4Q22 and +67% in full year, strong cash position enabling drop in leverage

HIGHLIGHTS

• 4.7% increase in net revenue compared to 4Q21, and +20.0% compared to FY2021
• Digital GMV up 54.7% in 4Q22 and 30% in the full year to more than R$ 1 billion
• Gross Merchandise Margin up 2.6 percentage points to 51.2% in 4Q. In the year it was 49.1%, up 3.3 percentage points and above pre-pandemiclevel
• Adjusted EBITDA post-IFRS16 was R$ 364.3 million, 20.1% above 4Q21. Y-o-yincrease of 66.5% to R$ 750.1 million
• Capex discipline, with R$ 373 million invested in 2022 in our growth levers
• 0.9x net debt / EBITDA leverage (vs 1.3x at end-December 2021)

	Indicators (R$ million)			4Q22			4Q21			△			2022			2021			△
Net Revenue	1,948.7		1,862.1		4.7%		6,183.5		5,153.2		20.0%
Net Revenue from Merchandise	1,879.6		1,833.1		2.5%		5,904.5		4,960.6		19.0%
Same Store Sales (SSS)1 (%)	1.0%		5.8%			-4.8p.p.	15.9%		24.7%			-8.8p.p.
Digital Gross Revenue (GMV2	396.7		256.4		54.7%		1,170.7		900.7		30.0%
1P+3P)
Total Gross Margin (%)	51.7%		48.3%			3.4p.p.	50.2%		46.5%			3.7p.p.
Gross Merchandise Margin (%)	51.2%		48.6%			2.6p.p.	49.1%		45.8%			3.3p.p.
Operating Expenses3	(497.1)		(535.0)		-7.1%		(2,131.8)		(1,749.4)		21.9%
Adjusted EBITDA (post-IFRS16)4	364.3		303.4		20.1%		750.1		450.4		66.5%
Adjusted EBITDA margin (post-	18.7%		16.3%			2.4p.p.	12.1%		8.7%			3.4p.p.
IFRS16) (%)
Net Income	212.9		154.4		37.9%		0.8		329.0		-99.8%
Investments	110.8		347.2		-68.1%		373.4		682.1		-45.3%

1. SSS: Growth in same store sales. This is comprised of sales in stores in activity for more than 13 months compared to the same period in the previous year. It includes e-commerce and all types of sales delivered (100% online, ship-from-store and click-andpick-up).
2. GMV - Gross Merchandise Value: 1P - first-party relationship or direct sales, 3P - third-party relationship or marketplace sales
3. Excludes depreciation and amortization, including right-of-use (lease) depreciation and net credit loss from C&A Pay to facilitate the analysis.
4. Adjustments include: (i) other net operating revenue (expenses); (ii) trade financial revenue; e (iii) Recovery of tax credits.

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4Q22 Earnings Release

Message from Management

C&A posted a solid fourth quarter and full-year performance in 2022 despite a challenging environment, with net sales and profitability increasing, reflecting the relevance of our strategic choices and our strong focus on efficiency and financial discipline.

C&A recorded net revenue growth of 4.7% in the fourth quarter, even though the period was marked by unusual weather conditions, the soccer World Cup that impacts traffic, notably on days on which the Brazilian national team was on the field, and an overall subdued consumption environment in election days. Gross Merchandise Margin improved by 2.6 percentage points and adjusted EBITDA was up by 20.1%, with margin improving by 2.4 percentage points.

Looking at these same metrics for the full year, the performance was even better, with net revenues up 20%, Gross Merchandise Margin improving by 3.3 percentage points and adjusted EBITDA up in strong double-digits, rising 66.5%, with a 3.4-point gain in margin.

Our sustainability initiatives received important recognition this quarter. For the 5th consecutive year C&A was the best-positioned brand (#1) in the Brazilian Fashion Transparency Index (ITM), an initiative of Fashion Revolution Brazil that measures the extent to which policies, practices, and the social and environmental impact of each value chain of the largest Brazilian retailers are disclosed. We were the only fashion retailer to achieve a score of 73%, which is 3% higher than in 2021.

These numbers and achievements are the reflection of sound execution of our strategy and our efforts to improve the profitability of our operations. For 2022, this meant focusing on growth drivers, cost efficiency and overall financial discipline. We continued our digital transformation, with GMV exceeding 1 billion Reais for the year, saw solid growth in our double-door ACE stores and further rolled out our credit offering, notably through C&A Pay, which is growing strongly. At the same time, in a difficult consumption and macro-economic environment, we showed discipline in store openings, reduced our investments by 45% over the year and lowered leverage to below 1 time through strong cash generation.

Brazil's environment in 2023 remains uncertain. In this context, our priorities remain to focus on results and protect our cash. We will strictly control investments in 2023, with limited store openings and targeted technology projects. We will closely monitor expenses and working capital, continuing to benefit from financial discipline in order to create value for our stakeholders.

The Management of C&A Modas S.A.

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4Q22 Earnings Release

Growth Plan Levers

Our growth plan levers played a relevant role in the results we posted in 2022. The main highlights were the opening of 17 new stores and closure of 4. We advanced meaningfully in our WhatsApp sales, offering an assisted purchase experience to our clients that results in higher conversion and average ticket. The investment in eCommerce supply chain allowed us to figure among the best in delivery service level. And with C&A Pay, we gave access to 2.5 million card holders to buy in our stores.

New Stores and Formats

Only one new store was opened in 4Q22, a 1,477 m² unit in Shopping Boulevard Rio, in Rio de Janeiro, as a consequence of adjusting capex to protect cash. We continue to focus on our strategy to open stores in so called tier 3 cities (population around 500,000) in which we become the main fashion option to the region. From the 43 stores opened in the last 2 years, 27 are located in tier 3 cities and 11 had no competitors in the area.

In 4Q22, we focused on transforming 10 stores into a double door format to accommodate our ACE sportswear brand. So far, we have 13 stores operating in this format, and they consistently deliver solid growth in the sales - on average ACE sales on these stores increase by two times after the transformation. Annual ACE sales increased by 23%.

DOUBLE DOOR ACE STORES

Shopping Parque Dom Pedro - Campinas/SP

Shopping Iguatemi Fortaleza - Fortaleza/CE

Shopping Anália Franco - São Paulo, SP

Shopping Recife - Recife/PE

Shopping Iguatemi Macedo/ Maceió/AL

Midway Mall - Natal/ RN

Plaza Shopping Niterói - Niterói/RJ

Shopping Iguatemi Bahia - Salvador/BA

Amazonas Shopping - Manaus/AM

Shopping Conjunto Nacional - Brasília/DF

Park Shopping Brasília - Brasília/DF

Minas Shopping - Belo Horizonte/ MG

Shopping Aricanduva - São Paulo/ SP

At the end of 4Q22 we had 332 stores across the country, 279 (84%) of which have been in operation for over four years. Our sales area exceeds 615,000 m².

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4Q22 Earnings Release

Breakdown of stores by age

		4Q22			4Q21					2022			2021
					△						△
Stores	332		319		13		332		319		13
New	1		11		-10		17		26		-9
Closed	0		0		0		4		2		2
Sales area	616		597		3.1%		616		597		3.1%
(thousand m2)

Digital Transformation

WhatsApp sales again boosted online revenue - our digital GMV reached over R$ 1 billion in the year. This channel contributed to increased profitability, better gross margin, and lower delivery costs. Most WhatsApp sales are comprised of inventory available in our stores. Customers prefer to pick up their purchases, which increases store traffic, reduces shipping costs, and leads to higher tickets.

Our C&A&VC (C&A and You) Relationship Program had over 24 million registered customers, accounting for 72% of total sales. In the past 12 months, our total customer base grew 4%, while our e-Commerce (including omnichannel) customer base increased 7%. Our multichannel customers are now 10% of the total, having grown 18%, spending on average almost 2.5 times as much as other customers in the last 12 months.

Modernizing the Supply Chain

The state-of-the-art dedicated eCommerce distribution center in operation since November 2021 - equipped with OSR Shuttle from KNAPP and integrated to the Warehouse Management System by Manhattan, allowed for reduction in expenses related to the distribution center operation. Additionally, we achieved excellence in service levels regarding delivery time given the automation and error elimination with the new operation - in 2022, 51% of our orders were delivered across Brazil within two days. Considering 4Q and focusing on Southeast region, where most of our orders originate, 57% of all orders were delivered within two days.

As for the adoption of push pull distribution model of products to the stores, after important investments in the last two years to set the structure: three new sorters to handle products on a SKU level, the new warehouse management system by Manhattan, and the algorithm to

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