EARNINGS

4Q20 and 2020

videoconference: February 24th, 2021 access:www.gpari.com.br

São Paulo, February 23, 2021 - GPA [B3: PCAR3; NYSE: CBD] announces its results for the fourth quarter (4Q20) and full year 2020. All comparisons are with the same period in 2019, except where stated otherwise. The results include the effects of IFRS 16/CPC 06 (R2) - Leases, which eliminates the distinction between operating and financial leases and requires the recognition of a financial asset and liability related to future leases discounted to present value for virtually all lease agreements of our stores.

GPA - 4Q20 and 2020 Results

Due to the spin-off of the Cash & Carry operation, the activities of Assaí are treated as discontinued operations in the financial statements of GPA of December 31, 2020. As a result, the following comments consider the operations of GPA Brazil (Multivarejo), its complementary businesses and the operations of Grupo Éxito (Colombia, Uruguay and Argentina), except where stated otherwise. The 4Q20 and 2020 results of Assaí are presented separately athttps://ri.assai.com.br/.

Highlights

4Q20

  • Strong consolidated gross revenue growth of 51.4% and 12.9% in the pro forma view, reaching R$ 15.4 billion;

  • Growth of 'same-store' sales(1) to 11.5% in GPA Brazil (Multivarejo) and 7.8% in Grupo Éxito;

  • The highest EBITDA margin of GPA Brazil in recent years, reaching 9.0%, and a solid margin of 10.6% for Grupo Éxito. Consolidated adjusted EBITDA surpassed R$ 1.3 billion, with a 9.4% margin.

    2020

  • Gross revenue increase of 78.8%, and 12.7% pro forma, exceeding R$ 55.7 billion;

  • Growth in adjusted EBITDA of GPA Brazil (Multivarejo) and Grupo Éxito, which totaled R$ 3.9 billion for consolidated GPA, with a margin of 7.8% (+70 bps);

  • Leadership of food e-commerce operation in Brazil and Colombia, with annual sales growth of 203% and 166%, respectively;

  • Consolidated net income attributable to controlling shareholders, basis for dividend payment, reached R$ 2.2 billion in the year;

  • Low level of leverage: net debt/EBITDA of -0.1x at the end of 2020.

(1) 'Same-store' sales excluding gas stations and drugstores

  • Approval of requests for listing and admission to the trading of Sendas shares (Assaí) in the Novo Mercado segment of B3 and ADSs on the New York Stock Exchange;

  • The common shares issued by GPA will be traded with the right to receive shares issued by Sendas until February 26, and as of March 1, PCAR3 and ASAI3 shares will be traded separately;

  • ADSs of GPA held on March 2 will entitle their holders to receive Sendas ADSs.

Gross revenue of R$ 15.4 billion in the quarter and R$ 55.7 billion in the year, reflecting the operational increase of GPA Brazil (Multivarejo) and Grupo Éxito.

  • GPA Brazil (Multivarejo): Growth of 'same-store' sales, excluding gas stations and drugstores, to 11.5% in 4Q20 and 12.4% in 2020. Gross revenue totaled R$ 31 billion, driven by the maturation of stores renovated in the last two years - around 240 stores in the Pão de Açúcar G7, Mercado Extra, Compre Bem and the new concept Extra Hiper formats - and growth of the food e-commerce operation;

  • Grupo Éxito: robust 'same-store' performance, excluding gas stations, of 7.8% in the quarter and 7.3% in the year, in constant currency. Gross revenue of R$ 24.7 billion was mainly driven by the consistent growth of the Wow (+13.9%) and FreshMarket (+18.4%) formats and the expansion of the omnichannel approach in all the countries where the Company operates.

Strong expansion of e-commerce operation in all the countries of operation, with total revenue of R$ 3.3 billion.

  • GPA Brazil (Multivarejo): Revenue from the GPA platform exceeded R$1.1 billion in the year, three times higher than in 2019, while penetration increased to 5% of food sales. The robust customer database built through loyalty programs and the Stix coalition, the recently launched Marketplace GPA, and the expansion of the e-commerce delivery models are important levers that will support the growth of the GPA platform.

  • Grupo Éxito: omnichannel in Colombia grew 2.7times, reaching R$ 2 billion in sales in 2020 - R$ 1 billion in food sales - and increase of penetration to 12% (vs. 4% in 2019), leveraged by the marketplace, expansion of the Company's Click & Collect and home delivery. The strong coalition program (Puntos Colombia), in a growing trend of customers and partners, with 75% of the total points redemptions of the program being made in Grupo Éxito.

Adjusted EBITDA was R$ 3.9 billion, with EBITDA margin of 7.8% (+70 bps).

  • GPA Brazil (Multivarejo): Adjusted EBITDA of R$ 676 million, with significant increase in EBITDA margin in 4Q20 to 9.0% (vs. 6.3% in 4Q19). In 2020, EBITDA grew R$ 364 million to reach R$ 2.3 billion, with EBITDA margin of 8.0%, strong growth of 80 bps

  • Grupo Éxito: Adjusted EBITDA of R$ 679 million and margin of 10.6% in 4Q20. In 2020, adjusted EBITDA totaled R$ 1.8 billion, increasing R$ 277 million, with EBITDA margin of 8.3%, driven by strong retail performance.

  • Net debt/EBITDA ratio was -0.1x at the end of 2020. Solid financial position, represented by cash balance of R$ 8.7 billion.

  • Maintenance of Capex level in the coming years, sustained by operational cash generation.

Message from Management

2020 proved to be a year of many challenges and a new reality of life imposed by the global pandemic. However, we made important progress on strategic fronts that were decisive in consolidating the Group's footprint and business performance in South America.

We ended the period with approval for the spin-off of the Cash & Carry operation, which enabled the creation of two entirely independent companies - Assaí and GPA - and drive growth in their respective markets.

We retained our position as South America's largest food retail group, with a diversified portfolio of banners and brand leaders in Brazil, Colombia, Argentina and Uruguay.

However, the period demanded agility, resilience and adaptability, and our multichannel, multiformat and multiregional approach helped us to quickly adapt ourselves to the scenario. We brought forward initiatives in record time, maintaining the operation fully functional while ensuring the safety of our customers and employees.

At GPA, adjusting the portfolio of brick-and-mortar stores was one of the priority actions during the year: our new commercial actions at Extra Hiper were successful, with 23 stores already adapted and rollout planned for the remainder of the portfolio in 2021.

We practically concluded the conversions of Extra Super to Mercado Extra stores, with a more competitive positioning for the regional market. And Pão de Açúcar, which remains resilient, will move forward with the expansion of the main concepts of the G7 store model and the resumption of organic store openings in the second half of this year. Proximity stores demonstrated excellent adherence to the new consumption reality in which people seek neighborhood stores: expansion of the Minuto Pão de Açúcar format is among our priorities for 2021.

An important driver of building loyalty and profitability for the business, Private-Label Brands achieved 20% share of Brazil's food business in the year, with new products and revised assortment, which resulted in a very high penetration of 80% among our customers.

It was a year of profound transformation in how we live and consume, and food e-commerce played an important role and received significant impetus from the expansion of our logistics solutions, backed by exclusive warehouses, stores dedicated to e-commerce and Click & Collect deliveries, as well as the last mile option.

Our e-commerce sales in 2020 surpassed R$1.1 billion, a threefold growth from the previous year, expanding its share of both the food business and the e-commerce market in Brazil. Our database of omnichannel customers, who consume on average 2.7 times more than customers who purchase only from brick-and-mortar stores, doubled in 4Q20 compared to 4Q19.

We took an important step towards consolidating the GPA digital platform with the launch of Marketplace last year. In 2021, we plan to significantly expand the assortment for both 1P and 3P, offering an increasingly more comprehensive purchase basket through our electronic channels.

Stix, the largest coalition rewards program in Brazil's retail sector, in partnership with Raia Drogasil, was another tool to build customer loyalty, alongside the existing loyalty programs Pão de Açúcar Mais and Clube Extra, which have over 20.6 million registered customers.

Grupo Éxito maintained its customer-centric strategy and, notably, successfully innovated and adapted itself to the evolving needs triggered by the pandemic. The business registered gross revenue of R$24.7 billion in the year, driven

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CBD - Companhia Brasileira de Distribuição published this content on 24 February 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 24 February 2021 00:07:07 UTC.