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Conference Call2Q08 and 1H08 Earnings Release
Friday, August 08, 2008
Time: 01:00 p.m (US EDT) 02:00 p.m (Brasília)
Connection:+1 (888) 700.0802 (USA)+1 (786) 924.6977 (Other countries)
Code: LASA
Replay: +55 (11) 4688.6312
Code: 535
Bricks-and-Mortar Internet, TV, Telesales, catalogues and kiosks Financial Products
Multi-channel Retailer
1
419 stores as of August 07, 2008 – total sales area of 448 thousand m2;
2008: 9 Inaugurations, 4 traditional stores, 5 express stores;
Besides inaugurated stores, we already have 44 openings scheduled, 28 in the Traditional format and 16 in the
Express format ;
Gross revenue reached R$ 2.1 billion in 1H08, a 39% growth compared to 1H07.
EBITDA growth of 50% in 1H08, reaching an EBITDA margin of 14.2% (+1.0 pp) in 1H08;
More than 1.6 million cards issued and 100% of total receivables volume of R$330 million (LASA’s participation is
equivalent to 50% of the total volume);
Americanas Taií Cards represented 9.6% of Lojas (parent company) sales by the end of July 2008;
Bricks-and-Mortar
E-commerce
Financial Products
2Q08 and 1H08 Overview
Consolidated Gross Revenue (R$ million)
2
Consolidated Gross Revenue (R$ million)
3,376
4,323
1H07 1H08
Growth “SSS” NR
14.7%in the first half of 2008
23.4 %
1,778
2,194
1H07 1H08
Parent Company Gross Revenue (R$ million)
28.1%
CAGR 1H02 to 1H08 = 31.6% CAGR 1H02 to 1H08 = 19.2%
28.7 27.9
1H07 1H08
3
- 0.8 pp
Parent Company Gross Margin (%NR)
Gross Margin and EBITDA - Parent Company
19.5 18.8
1H07 1H08
Parent Company Operating Expenses without Depreciation & Amortization (%NR)
- 0.7 pp
162.1
127.5
9.2% 9.2%
1H07 1H08
EBITDA (R$ million and %NR) Parent Company
27.1 %
EBITDA Margin stands at the same level, even with the following effects:
Greater participation in sales of IT products
Change in
ICMS tax
system
Greater
Easter sales
4
Operating Income - Parent Company
• Inauguration of 52 new stores over the last 12 months• Expansion of the Distribution Centers• Remodelling of Blockbuster ® stores
Parent Company Operating Income 1H07 %NR 1H08 %NR
Gross Profit 398.8 28.7% 493.1 27.9%
Operating Expenses SG&A -271.3 19.5% -331.0 18.8%
Deprec. & Amort. excl. amort. goodwill -36.1 -2.6% -47.1 -2.7%
Op. Income excl. goodwill effect 91.4 6.6% 115.0 6.5%
Goodwill Amort. from merger/repurchase B2W -5.5 -0.4% -12.0 -0.7%
Parent Company Operating Income 85.9 6.2% 103.0 5.8%
351.4
259.3
156.2
116.2105.175.9
52.4 10.8%10.3%9.9%10.0%10.5%
7.7%9.4%
1H02 1H03 1H04 1H05 1H06 1H07 1H08
30.529.429.630.529.731.730.5
1H02 1H03 1H04 1H05 1H06 1H07 1H08
- 1.2 pp
Consolidated Gross Margin (%NR)EBITDA (R$ million and % NR) Consolidated
CAGR = 37.3 %35.5%
Change in
ICMS
tax System
Consolidated Operating Income 1H07 %NR 1H08 %NR
Gross Profit 798.2 31.7% 997.4 30.5%
Operating Expenses SG&A -539.0 -24.5% -646.0 -23.2%
Deprec. & Amort. excl. amort. goodwill -63.9 -2.5% -87.0 -2.7%
Op. Income excl. goodwill effect 195.3 7.8% 264.4 8.1%
Goodwill Amort. from merger/repurchase B2W -14.1 -0.6% -24.8 -0.8%
Parent Company Operating Income 181.2 7.2% 239.6 7.3%
Gross Margin and EBITDA - Consolidated
6
Financial Result
Net Financial Result 1H08, considering subsidiaries effects and before B2W:
growth of 12.3% vs. Growth of Parent Company’s Net Revenue of 27.0%
R$ 77.2 million in the opening/refurbishment of stores, expansion and modernization of our Distribution centers, payment of dividends, repurchase of LAME4 e LAME3 by Lojas Americanas and repurchase BTOW3 by B2W.
Breakdown of the Net Financial Income - R$MM 1H08 1H07R$ MM %
(=) Total Financial Revenue 29.2 22.9 6.3 27.5%
(=) Total Financial Expenses (120.5) (85.6) (34.9) 40.8%
Parent Company Financial Result (before Klanil, Louise, BWU, Pandora, others) (91.3) (62.7) (28.6) 45.6%
(+) Equity accounting of Klanil, Louise, Pandora and other subsidiaries (14.1) (16.6) 2.5 -15.1%(+) Net Financial Result BWU 11.2 (4.6) 15.8 -343.5%
Parent Company Net Financial Result (after Klanil, Louise, BWU, Pandora, others) (94.2) (83.9) (10.3) 12.3%
(+) B2W Net Financial Result - consolidated (112.9) (74.0) (38.9) 52.6%
Consolidated Net Financial Result (207.1) (157.9) (49.2) 31.2%
Variation
Indebtedness 1H08
7
From 07/01/2007 to 06/30/2008: • Consolidated Investments in fixed, deferred and intangible assets of R$ 379.7MM• Payment of dividends of R$ 50.0MM• Share buy-backs (LAME3 and LAME4) in the amount of R$ 20.7MM• Purchase of BTOW3 in the amount of R$ 98.5MM
Consolidated Indebtedness6/30/2008 3/31/2008 06/30/2007
Short-term loans and financing* 1,733.2 1,912.4 745.8 Short-term debentures 85.1 85.2 13.0
Short-term indebtedness 1,818.3 1,997.6 758.8 Long-term loans and financing 897.8 725.5 868.4 Long-term debentures 367.9 367.9 441.6
Long-term indebtedness 1,265.7 1,093.4 1,310.0 Gross indebtedness 3,084.0 3,091.0 2,068.8
Cash and banks 521.8 381.7 209.3 Money market investments 985.9 1,468.0 992.7 Receivables from clients (credit/debit cards) 255.5 195.0 162.6 Credit cards/Customers financing - FAI (50%) 163.9 107.8 111.4 Total Cash and Cash Equivalents 1,927.1 2,152.5 1,435.4
Net Cash (Debt) (1,156.9) (938.5) (633.4)
Reconciliation of the net incomeParent Company
8
RECONCILIATION OF THE NET INCOME
R$MM 1H08 1H07 Var. ($) Var. (%)
EBITDA 162.1 127.5 34.6 27.1%
(+) Depreciation/Amortization (without goodwill) (47.1) (36.1) (11.0) 30.5%
(+) Financial Result Parent Company (91.3) (62.7) (28.6) 45.6%
(+) Amort. of goodwill (merger/Lojas purchase of BTOW3) (8.6) (5.5) (3.1) 56.4%(+) Amort. of goodwill (B2W repurchase BTOW3) (3.4) 0.0 (3.4) -
Total goodwill Amortization (Parent Company) (12.0) (5.5) (6.5) 118.2%
(+) Equity Accounting B2W 17.3 12.7 4.6 36.2%(+) Equity Accounting FAI (18.9) (11.4) (7.5) 65.8%(+) Equity Accounting other subsidiaries (14.5) (21.3) 6.8 -31.9%
(+) Non Operating Income (1.0) 16.9 (17.9) -105.9%
(+) Income and social contribution taxes (3.6) (0.7) (2.9) 414.3%
(=) NET INCOME (LOSS) (9.0) 19.4 (28.4) -146.4%
Lojas Americanas (Parent Company)
Consolidated Net Income without FAI and B2W effects
9
NET INCOME
R$MM 1H08 1H07 Var. ($) Var. (%)
NET INCOME (9.0) 19.4 (28.4) -146.4%
(-) FAI Equity Accounting (18.9) (11.4)(-) Capital gain (Pandora) 0.0 18.8(-) B2W Equity Accounting 17.3 12.7(-) Amortization of goodwill Lojas (Parent Company) (12.0) (5.5)(-) Amortization of goodwill B2W (12.8) (8.6)
(=) Net Income excluding the effects of FAI / non-recurring gains / B2W / amortization of goodwill
17.4 13.4 4.0 29.9%
Expansion and Investment Programs
Creating value for our Shareholders
Share buy-back
Dividend payment
Dividends Payment and Share Buy-back Program (R$ million)
Total Total
2001-2007:2001-2007:
R$ 728 MMR$ 728 MM
33% EBITDA33% EBITDA
10
Evolution of Sales Area x Number of storesPosition at June 30, 2008
447
411
343303
248263
235 127
stores 164 stores
418 stores
111 stores
98 stores
370 stores
207 stores
1H02 1H03 1H04 1H05 1H06 1H07 1H08
Sa
les
Are
a (
tho
us
and
m²)
Nu
mb
er o
f S
tore
s
100.0 110.0
60.014.6
88.8 90.0 89.2
57.934.2
11.1
28.5
0.4
18.135.3
2001 2002 2003 2004 2005 2006 2007/08
Over the last six years:- doubled the sales area and more than quadrupled the number of stores- CAGR of 32%in Gross Revenues and CAGR of 38% of Consolidated EBITDA- Payment of dividends and buy back program totaling R$728MM- Acquisition of Shoptime, creation of B2W, merger of Americanas.com and Submarino, and acquisition of BLOCKBUSTER network- Creation of FAI(Financeira Americanas Itaú), generating capital gains of R$200MM.
Statements relating to the prospects of the business, estimates for operating and financial results, and those related to growth prospects of Lojas Americanas, eventually expressed in this release, are merely projections and, as such, are based exclusively on the expectations of Lojas Americanas’ management concerning the future of the business and its continued access to capital to fund the Company’s business plan. Such statements depend, substantially, on changes in market conditions, government regulations, competitive pressures, the performance of the Brazilian economy and the industry, among other factors and are, therefore, subject to change without prior notice.
Investor Relations [email protected].: + 55 (21) 2206-6708Fax: + 55 (21) 2206-6898
IR Website: http://ir.lasa.com.br