Grupo Casas Bahia S A : Q1'24 ITR

Individual and Consolidated

Interim Financial Information

Grupo Casas Bahia S.A.

Three-month period ended March 31, 2024 with Independent Auditor's Report

Interim financial information
Three-month period ended March 31, 2024
Contents
Performance Report	2
Executive Board's representation on the interim financial information	9
Executive Board's representation on the independent auditor's review report on interim financial information 10
Independent auditor's review report on interim financial information - ITR	11
Statement of financial position - Assets	13
Statement of financial position - Liabilities	14
Statement of profit or loss	15
Statement of comprehensive income (loss)	16
Statement of cash flows	17
Statement of changes in equity	18
Statement of value added	19
1.	Operations	20
2.	Presentation and preparation of individual and consolidated interim financial information	21
3.	Revised pronouncements and interpretations issued but not yet adopted	22
4.	Significant accounting policies	23
5.	Cash and cash equivalents	24
6.	Trade accounts receivable	24
7.	Inventories	28
8.	Taxes recoverable	28
9.	Related parties	30
10.	Investments	32
11.	Property and equipment	35
12.	Intangible assets	38
13.	Trade accounts payable, trade accounts payable - portal and trade accounts payable - agreement	40
14.	Loans and financing	40
15.	Financial risk management	43
16.	Taxes payable	47
17.	Current and deferred income and social contribution taxes	47
18.	Provision for contingencies	49
19.	Leases	52
20.	Deferred revenues	54
21.	Equity	54
22.	Sales and service revenue	56
23.	Expenses by nature	57
24.	Other operating income (expense), net	58
25.	Finance income (costs), net	58
26.	Earnings (loss) per share	59
27.	Insurance coverage	59
28.	Segment information	60
29.	Events after the reporting period	60

1

Performance Report

Three-month period ended March 31, 2024

In millions of reais, unless otherwise stated

Performance Report

Message from Management

The first quarter of 2024 was still characterized by a scenario of global economic and geopolitical uncertainties that had a direct or indirect impact on Brazilian retail. Interest rates in Brazil are still high but gradually declining. Despite this challenging macroeconomic scenario, we are pleased with the performance of this first quarter. In particular, we have the results of the quarter itself, reflecting the execution of the Transformation Plan ("Plan") and with the best free cash flow in the last 5 years, the structural reprofiling of debt and finally the opening of the megastore in the Aricanduva shopping center in a new store concept!

We can say that the first phase of the Plan has been executed, with immediate adjustments aimed at defining our strategy as a specialist omni-channel player, focusing on profitability and cash flow. Based on these definitions, we embarked on a series of initiatives through well-established and disciplined governance. We hired an internationally renowned consultancy and created a Transformation Office to monitor the execution of all these levers. We have constant reviews and updates with each initiative leader, making it a very dynamic and evolving process.

The discipline of execution and the results to date confirm that we are on the right track, both in terms of the concepts of the initiatives and the projections of impacts. The initiatives (individually) are not all moving at the same speed, but looking at the Plan as a whole, we are within expectations when compared to the release of this Plan on August 10, 2023. We haven't reached the halfway point of the Plan's execution and, therefore, we will continue to focus on the operating levers, maintaining our focus on profitability and cash flow with a high level of discipline in terms of the capital employed.

The first quarter of 2024 shows a gradual improvement in our results, after the second half of 2023 was marked by the implementation of many initiatives that generated non-recurring impacts. The evolution, as mentioned, has been gradual, month by month capturing new benefits and improving our efficiency.

Net revenue fell by 14% y/y due to the operational decisions associated with the Plan, which are expected to reduce revenue initially, but prioritize the profitability and sustainability of the operation in the long term. We saw a sequential improvement in the quarter gross margin to 30.0%, already at historic levels, remembering that in the third and fourth quarters of 2023 it was 23.0% and 27.6% respectively, largely due to the impact of the sales carried out in that semester to free up older, lower-turnover inventory.

We kept a tight rein on SG&A, with a reduction of 7.6% YoY, of which 14.6% in personnel expenses. These are significant reductions even in the face of inflationary pressure of around 5%. As an example, in personnel expenses, we reduced R$113 in the quarter compared to the previous year.

As a result of these measures, we had a sequential increase in the adjusted EBITDA margin (quarterly) to 6.1%, remembering that in the third and fourth quarters of 2023 it was (1.0)% and 2.2% respectively. EBT and net income still remain negative due to the capital structure, the high level of interest rates in Brazil and the partial capture of the Plan.

We had the best free cash flow for a first quarter in 5 years! Although still negative due to the seasonality of the sector, we managed to balance the cash flow by adjusting the capital needs (working capital and capex) along with the execution of the Plan. We remain focused on monetizing tax credits and paying attention to the costs of labor lawsuits. As a result, liquidity closed at R$2,900, down on the fourth quarter but up on the second and third quarters of last year.

The non-accounting figures, comprised in this report have not been reviewed by independent auditors

2

Performance Report

Three-month period ended March 31, 2024

In millions of reais, unless otherwise stated

Precisely because of the progress of the initiatives and the confidence of the main creditors in the Plan, the Company, in agreement with these creditors, in a safe, effective and transparent manner presented the reprofiling of the financial debts. It covers R$4,079 of debt, with an increase in the average term from 22 to 72 months and a reduction in the average cost by 1.5 p.p. We would like to emphasize that the scope is limited to this perimeter, in other words, we are carrying on with business as usual, with no impact on clients, employees, suppliers, sellers and partners, who will continue to have their commitments honored at their respective maturities, without any interruption or discontinuity. This reprofiling brings about a structural change in the company's cash flow for the coming years. There will be R$4,331 preserved in cash flow over the next four years, with R$1,550 billion in 2024. A very important aspect of this structure is that it is a "prepack" model, meaning that when the structure was filed, we already had the formal adherence of most of the creditors (our main financial partners) for approval.

The city of São Paulo has just gained a Casas Bahia megastore, which was inaugurated at Shopping Aricanduva on May 8, with more than 3,500 m², following the company's concept of modernization. In a differentiated environment, with a strong presence of the main manufacturers in the segment, this megastore will feature the "Personal Tech" service, dedicated to presenting the latest trends and novelties in technology for the home and personal devices, and will also have a "Technical Assistance Counter" for specialized product assistance and repair services, even the purchase of items such as device protection items. Another novelty is the "Smart Home", which simulates a voice-controlled home, allowing customers to explore the possibilities of home automation, with products that can be found right there. And an experimental kitchen has also been planned in the new store for incredible culinary experiences, including classes with renowned chefs and tastings. In short, we have created a unique experience for our customers and consumers that we will gradually replicate in another 150 stores in Brazil.

We couldn't fail to mention what is happening in Rio Grande do Sul. We regret these unprecedented floods, which has left countless families in a very difficult situation. In addition to specific support for our employees who were impacted, we are helping the state as a whole through our Casas Bahia Foundation.

Finally, we would like to stress that there is a lot to accomplish in the Transformation Plan. It's just a start, but it's a great start! We're increasingly excited about the results and initiatives we're working on. We are very aware that it is a long journey and that we are far from reaching the full potential of this company. We thank all our stakeholders for their partnership in this journey!

Renato Horta Franklin

Chief Executive Officer

The non-accounting figures, comprised in this report have not been reviewed by independent auditors

3

Performance Report

Three-month period ended March 31, 2024

In millions of reais, unless otherwise stated

Financial and operational highlights

Gross revenue

In 1Q24, consolidated gross revenue was R$7,541 (R$8,788 in 1Q23), despite the growth in marketplace revenue by 13.1%, revenue from brick-and-mortar stores and online sales reduced, resulting in a variation of (14.2%) in the balance of gross revenue for the period.

Revenue from goods showed a variation of (16.9%) due to the decline in GMV of 1P online and brick-and- mortar stores.

The performance of brick-and-mortar stores reflects the change in mix with a focus on profitability, a more restrictive demand scenario, reduced availability of credit for consumers and store closures.

Service revenue grew 10.4% due to greater penetration of insurance sales, extended warranties and assembly.

Our credit facility (CDCI) remains an important tool for customer loyalty and a competition differential, with penetration of 15.4% in consolidated gross revenue, an increase of 3.1p.p. as compared with 1Q23.

Brick-and-mortar stores

Online

1P

3P

Gross sales revenue, net of returns and cancellations by channel

03.31.2024	03.31.2023
4,899	5,536
2,642	3,252
2,445	3,077
197	175
7,541	8,788

Throughout the quarter, in line with the Transformation Plan, we closed 2 stores due to performance below expectations, ending 1Q24 with 1,076 stores.

Gross Profit

			03.31.2024	03.31.2023
Operating revenue, net	6,347	7,354
Cost of sales and services		(4,445)	(5,041)
Gross Profit		1,902	2,313
Gross margin			30.0%	31.5%

Despite the decline in net operating revenue, the healthy gross margin at historical levels is explained by the better combination of product mix and profitable sales, after the reduction of older and non-core inventories, as per the Transformation Plan initiative.

The non-accounting figures, comprised in this report have not been reviewed by independent auditors

4

Performance Report

Three-month period ended March 31, 2024

In millions of reais, unless otherwise stated

Selling, General and Administrative Expenses

			03.31.2024		03.31.2023
Selling expenses	(1,279)		(1,429)
General and administrative expenses		(296)	(275)
Selling, General and Administrative Expenses			(1,575)	(1,704)

Selling, general and administrative expenses in 1Q24 decreased by 7.6% and increased in relation to NOR (24.8%). The lower expense is explained by the reduction of (10.5%) in sales expenses, with emphasis on personnel reduction (14.6%), reduction in credit facility losses (20.7%), in addition to a general improvement in cost containment in the period.

Net income (loss)

			03.31.2024	03.31.2023
Loss before income and social contribution taxes (EBIT)	(502)	(553)
% Net revenue	-7.9%	-7.5%
Income and social contribution taxes (IRPJ and CSLL)	241	256
Net loss	(261)	(297)
Net margin - %			-4.1%	-4.0%

In the quarter ended March 31, 2024, EBIT was R$(502), a reflection of market performance and the decline in sales

Financial cycle

			03.31.2024	03.31.2023
(+/-) Inventories	4,355	6,501
Inventory days¹	78	111
(+/-) Goods' suppliers and portal	6,350	7,602
Trade accounts payable - agreement	1,919	1,381
Service providers	632	617
Total days of trade accounts payable	114	129
Financial cycle variation			36	18

(¹) Days in COGS

In terms of inventory, we maintained the level of R$4,355 achieved in 4Q23, but in comparison with 1Q23 we presented a reduction of R$2,146, mainly due to the reduction of old and/or slower-moving items, as mentioned in previous quarters.

The non-accounting figures, comprised in this report have not been reviewed by independent auditors

5

Performance Report

Three-month period ended March 31, 2024

In millions of reais, unless otherwise stated

Capital structure

		03.31.2024	12.31.2023
(+) Casas Bahia Credit Facility	5,343	5,355
(-) Transfers to financial institutions - CDCI		(5,243)	(5,383)
(=) Credit sale installment plan balance - CDCI, net		100	(28)
(-) Loans and financing - Current (*)	(1,327)	(2,332)
(-) Loans and financing - Noncurrent (*)		(2,695)	(1,651)
(=) Gross debt		(4,022)	(3,983)
(+) Trade accounts payable - agreement	(1,919)	(1,765)
(=) CDCI net balance + gross debt + trade accounts payable agreement		(5,841)	(5,776)
(+) Cash and short-term investments	1,868	2,573
(+) Credit card companies	387	273
(+) Other accounts receivable and B2B accounts receivable		645	733
(=) Cash and cash equivalents (Management purposes)		2,900	3,579
Equity		3,202	3,454

(*) Transfer balances to financial institutions - CDCI are not considered

The Company's gross debt for purposes of covenants and understanding of capital structure does not consider Trade accounts payable - agreement (Note 13) and Transfer to financial institutions - CDCI (Note 14).

After the re-profiling announced on April 28, 2024, the balance of gross debt will be paid in full in the long term (see details in Note 29).

.

Capex

			03.31.2024		03.31.2023
Logistics		3	5
New stores		1	7
Store renovation		2	6
Technology			28	90
Total				34	108

Human resources

In the three-month period ended March 31, 2024, the Company had a workforce of 35,068 (thirty-five thousand and sixty-eight) employees and a turnover rate of 13.9% (8.3% in the three-month period ended March 31, 2023). The increase in turnover was largely due to the Transformation Plan, which aims to simplify the Company's structures.

Balance at beginning of period Hires

Terminations

Balance at end of period

Employees changes

(in units)

03.31.2024 03.31.2023

37,958 46,052

1,8452,706

(4,735) (3,854)

35,068 44,904

In the three-month period ended March 31, 2024, 50,281 hours of training were completed, which represents around 4 hours of development per employee on average.

The non-accounting figures, comprised in this report have not been reviewed by independent auditors

6

Performance Report

Three-month period ended March 31, 2024

In millions of reais, unless otherwise stated

ESG Highlights

Environmental

SLB (Sustainability Linked Bonds): Advancement in the renewable energy target established in the SLB (Sustainability Linked Bonds), acquiring 72.8% of energy from clean and renewable sources. We are committed to reach 90% by the end of 2025.

REVIVA Recycling Program: Destined more than 704 tons of waste for recycling, benefiting 12 partner cooperatives. With 593 electronics collectors distributed across the Group's stores and operations, we collected more than 1.6 tons of electronics items for proper disposal and recycling.

Social - Diversity

Women - Gender Equity: The Mulheres Potência [empowered women] program was reinforced in March, due to the celebration of the International Women's Day, unifying all gender equity actions with a focus on the Company's women.

We held dialogue, literacy sessions and inspirational testimonials from women who are part of the Group, totaling 20 days of actions and more than 1,350 women impacted. The program will continue to impact employees throughout the year, with actions involving leadership and other stakeholders, reinforcing female empowerment and the fight against discrimination and gender-based violence.

Partnership - G10 Favelas and Favela Express: In 1Q24, more than 16 thousand orders were delivered by Favela Express, a startup that supports low-income communities.

Social - Casas Bahia Foundation

Youth Protagonism: In partnership with PROA Institute, we had 1,750 young undergraduates in the first class, 14 of which were hired by the Casas Bahia Group.

We renewed the partnership with AFESU, to facilitate the Employability and Digital Insertion Program, with the projection of benefiting 75 girls in the Basic Technology and First Job courses.

We also renewed the partnership with the Vini Jr. Institute, to monitor the impact of the 3 Base Educational Technology Centers supported in 2023 (Novo Hamburgo/RS, Cabrobó/PE and Recife/PE), in addition to the implementation of the Educational Technology application for other five Elementary Schools level 2.

Fostering Entrepreneurship: Expansion of the Jornada Dona de Si to train women entrepreneurs, in partnership with the Dona de Si Institute. In total, 800 women will benefit in the states of RJ, RS, SP and BA.

Social Engagement: On the volunteering front, we highlight the holding of PROA Tech, a lecture for students at the PROA Institute, with the participation of professionals from the Group's Technology area.

With respect to humanitarian aid, we respond to calamity situations, donating 300 mattresses, 3000 liters of water and 300 hygiene kits to families affected by the rains in RJ.

Calamity Status in the South region: We are actively working to alleviate this very difficult time, both for our employees in these regions, and for all citizens in the South of Brazil, affected by the heavy rains. Through the partnership between Fundação Casas Bahia, ADRA and EmCompre, we will donate 500 mattresses, 500 blankets and 500 pillows.

The non-accounting figures, comprised in this report have not been reviewed by independent auditors

7

Performance Report

Three-month period ended March 31, 2024

In millions of reais, unless otherwise stated

Governance

New composition of the Statutory Board, which now has 4 members, namely:

• Renato Horta Franklin
• Sérgio Augusto França Leme
• Elcio Mitsuhiro Ito
• Tiago Celso Abate

As part of their work to evaluate our annual financial statements, our independent auditors issue, at the end of the engagement, a letter with their considerations regarding the Company's internal controls. This was the 4th year that the Company did not have any deficiency considered significant, demonstrating the focus and commitment to internal processes and to the quality of its financial information.

Investments in associates and subsidiaries

The Company is part of an economic group in which 17 (seventeen) subsidiaries (direct and indirect interest) and 3 (three) associates participate.

In the three-month period ended March 31, 2024, the Company did not invest in the acquisition of equity interests.

Dividend distribution policy

The Company's bylaws provide for dividends of no less than 25% of annual net income, adjusted by 5% representing the setup of a legal reserve until this reserve is equivalent to 20% of the paid-in capital.

Ownership structure

Number of shares

(in thousands)

			03.31.2024	12.31.2023
Goldentree Fundo de Investimentos em Ações	7,462	7,462
Twinsf Fundo de Investimento Multimercado CP	6,604	6,604
EK-VV Limited	3,279	3,279
Michael Klein	1,603	1,603
BlackRock	6	246
Others	76,031	75,669
Treasury shares	99	220
			95,084	95,083

The non-accounting figures, comprised in this report have not been reviewed by independent auditors

8

Executive Board's Representation on the interim financial information

Three-month period ended March 31, 2024

Executive Board's representation on the interim financial information

In compliance with the provisions contained in article 27, paragraph 1, item V of Ruling No. 80/2022, as amended, the Officers of Grupo Casas Bahia S.A. (the "Company") represent that they have reviewed, discussed, and agreed on the Company's individual and consolidated interim financial information for the period ended March 31, 2024, authorizing its completion on that date.

São Paulo (SP), May 08, 2024.

Renato Horta Franklin

Chief Executive Officer

Sérgio Augusto França Leme

Administrative Vice President and Investor Relations Officer

Elcio Mitsuhiro Ito

Financial Vice President

Tiago Celso Abate

Chief Financial Solutions Officer

9