b2w companhia digital

www.pwc.com.br (A free translation of the original in Portuguese)

B2W Parecer 31-12-2019_RQv_FINAL_English

B2W Companhia Digital Parent company and consolidated financial statements at December 31, 2019 and independent auditor's report

(A free translation of the original in Portuguese)

PricewaterhouseCoopers, Rua do Russel 804, 6º e 7º, Edifício Manchete, Rio de Janeiro, RJ, Brasil, 22210-907, T: +55 (21) 3232 6112, www.pwc.com.br

B2W Parecer 31-12-2019_RQv_FINAL_English

Independent auditor's report To the Board of Directors and Stockholders B2W Companhia Digital Opinion

We have audited the accompanying parent company financial statements of B2W Companhia Digital (the "Company"), which comprise the balance sheet as at December 31, 2019 and the statements of income, comprehensive income, changes in equity and cash flows for the year then ended, as well as the accompanying consolidated financial statements of B2W Companhia Digital and its subsidiaries ("Consolidated"), which comprise the consolidated balance sheet as at December 31, 2019 and the consolidated statements of income, comprehensive income, changes in equity and cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of B2W Companhia Digital and of B2W Companhia Digital and its subsidiaries as at December 31, 2019, and the financial performance and the cash flows for the year then ended, as well as the consolidated financial performance and the cash flows for the year then ended, in accordance with accounting practices adopted in Brazil and with the International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). Basis for opinion

We conducted our audit in accordance with Brazilian and International Standards on Auditing. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Parent Company and Consolidated Financial Statements section of our report. We are independent of the Company and its subsidiaries in accordance with the ethical requirements established in the Code of Professional Ethics and Professional Standards issued by the Brazilian Federal Accounting Council, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

http://www.pwc.com.br/

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the parent company and consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Why it is a Key Audit Matter How the matter was addressed in the audit

Assessment of the recoverable amount of the intangible asset (note 16) and of the realization of deferred taxes (note 12)

The Company has material balances of intangible assets with definite and indefinite useful lives, related to expenditures on development of websites and systems for which a provision for impairment may be required whenever events or changes in circumstances indicate that their carrying amount may not be recoverable, as well as goodwill arising on acquisition of investments in prior years tested annually to determine the need or not of a provision for impairment. The assessment of recoverability is based on projections of expected future cash flows of each subsidiary to which the balances relate (cash-generating unit – CGU).

Our audit procedures included, but were not limited to, obtaining an understanding and performing an assessment of the internal control environment with respect to the processes to assess the recoverable amount of the Company’s assets and to calculate and record the tax credits. We assessed the governance related to this process, including the approval of the budgets used in this calculation and reviews of the teams of specialists in financial calculations of the Company. We involved our specialists in financial projections in the assessment of the reasonableness of the main operating and financial assumptions used by management, comparing them with the economic and industry forecasts available. We also tested the logical and arithmetical accuracy of the projections.

The Company has also balances of deferred income tax and social contribution assets related basically to income tax and social contribution losses and temporary differences, which were recognized considering their expected realization based on projections of future taxable income. The projections of cash flow and future taxable income were prepared based on the business plan

With the support of our specialists in tax matters, we tested the calculation bases of the income tax and social contribution tax losses and temporary differences, comparing them with the related tax records. We also analyzed the reasonableness of the term for utilization of the accumulated tax losses over the next years. We performed a sensitivity analysis and recalculated the projections considering scenarios of discount rates and profit margin percentage, and

Matters

Why it is a Key

Audit Matter

How the matter was addressed


approved by the management and consider assumptions related to the results of the activities of each CGU, as well as other assumptions supporting these projections. The use of different assumptions could modify significantly the recoverable amounts determined by the Company. For this reason, we considered this a key audit matter.

read management’s disclosures regarding the financial statements. We also compared the projections with the history of results for the prior years. Our audit procedures evidenced that the judgments and the assumptions used by management in the projection of results are reasonable and consistent with the data and information obtained.

Impacts of the adoption of CPC 06 (R2)/IFRS 16 – Leases (notes 2.2 and 17)

The Company adopted CPC 06 (R2)/IFRS 16 as from January 1, 2019, using the modified retrospective approach, which permits the recognition of the cumulative effect of the initial adoption in the opening balance of the revenue reserve at January 1, 2019, without restatement of the comparative information. As a result, at January 1, 2019 the Company and its subsidiaries recognized material amounts of right-of-use asset related to properties and lease liability. Considering the specificity and the volume of the lease contracts held by the Company and the materiality of the effects of the adoption of the new standard on the Company’s financial statements, we considered this a key audit matter.

Our audit procedures included, but were not limited to, obtaining an understanding and performing an assessment of the internal control environment for identification of lease contracts or contracts that contain leases and of the internal policies adopted by the Company’s management for determination of the lease assets and liabilities. By sampling, we read the terms of the contracts to confirm management’s assessment with respect to the identification of contracts that contain leases. We obtained the calculation spreadsheet of the initial impacts of the adoption of the standard and, based on a sample of contracts, we assessed the assumptions used to measure the leases identified, the practical expedients permitted by the standard, and assessed the discount rate used and tested the logical and arithmetical accuracy of the calculations. We assessed the recording of the right-of-use asset related to properties and the lease liability and read management’s disclosures regarding the financial statements. Our audit procedures evidenced that the judgments and the assumptions used by management to measure the right-of-use asset related to properties and the lease liability are reasonable, the calculations are adequate and the disclosures are consistent with the data and information obtained.


Lawsuit with final and unappealable decision in respect of the exclusion of the ICMS from the calculation base of PIS and COFINS (note 11)

During the year the Company recorded tax credits amounting to R$ 152 million, related to lawsuits for which final and unappealable decisions were issued in 2019, in connection with the right to exclude the ICMS base from the PIS and COFINS calculation base for the periods covered by the lawsuits. This matter was addressed in our audit due to the materiality of the amount involved, the volume of operations that gave rise to the credits, and the existence of significant management’s judgment in determining the estimates related to the measurement and realization of the tax credit, supported by the opinion of the legal counselors.

Our audit procedures included, but were not limited to:

(a) With the support of our tax specialists, we read the decisions and discussed with management and its legal counselors for assessment of the criteria adopted by the Company and its subsidiary for the recognition of the credit. (b) On a test basis, we confirmed the existence and origin of the balances of PIS and COFINS recoverable based on the supporting documentation (c) By sampling, we tested the calculations prepared by the Company to measure the amounts of taxes recoverable and, when applicable, the monetary restatement for the period included in the lawsuit, identifying and reporting adjustments considered immaterial by management. (d) Understanding and assessment of the material internal controls related to the process of review and approval of the asset measurement. (e) Understanding and assessment of the estimate adopted by the Company’s management to determine the segregation into current and long term portions. (f) Based on the sales projections prepared by management, we performed an assessment of the likelihood of realization of such tax credit. (f) Reading of the disclosures presented in the notes to the financial statements.

We consider that the assumptions and criteria used by Management are consistent with the disclosures in the explanatory notes and the information obtained in our work.

Other matters

Statements of Value Added The parent company and consolidated Statements of Value Added for the year ended December 31, 2019, prepared under the responsibility of the Company's management and presented as supplementary information for IFRS purposes, were submitted to audit procedures performed in conjunction with the audit of the Company’s financial statements. For the purposes of forming our opinion, we evaluated whether these statements are reconciled with the financial statements and accounting records, as applicable, and if their form and content are in accordance with the criteria defined in Technical Pronouncement CPC 09 - "Statement of Value Added". In our opinion, these Statements of Value Added have been properly prepared in all material respects, in accordance with the criteria established in the Technical Pronouncement, and are consistent with the parent company and consolidated financial statements taken as a whole.

Audit of the prior year figures

The audit of the financial statements for the year ended December 31, 2018 was conducted under the responsibility of other independent auditors, who issued an unqualified opinion thereon, dated March 15, 2019.

Other information accompanying the parent company and consolidated financial statements and the auditor's report

The Company’s management is responsible for the other information that comprises the Management Report. Our opinion on the parent company and consolidated financial statements does not cover the Management Report, and we do not express any form of audit conclusion thereon. In connection with the audit of the parent company and consolidated financial statements, our responsibility is to read the Management Report and, in doing so, consider whether this report is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement in the Management Report, we are required to report that fact. We have nothing to report in this regard. Responsibilities of management and those charged with governance for the parent company and consolidated financial statements

Management is responsible for the preparation and fair presentation of the parent company and consolidated financial statements in accordance with accounting practices adopted in Brazil and with the International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the parent company and consolidated financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the financial reporting process of the Company and its subsidiaries. Auditor’s responsibilities for the audit of the parent company and consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the parent company and consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Brazilian and International Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with Brazilian and International Standards on Auditing, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the parent company and consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures

that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control of the Company and its subsidiaries.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting

estimates and related disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of the Company to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the parent company and consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the parent company and consolidated financial

statements, including the disclosures, and whether these financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or

business activities within the Group to express an opinion on the parent company and consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Rio de Janeiro, february 14, 2020 PricewaterhouseCoopers Auditores Independentes CRC 2SP000160/O-5 Claudia Eliza Medeiros de Miranda Contadora CRC 1RJ087128/O-0

B2W Companhia Digital

Balance Sheet

In thousands of reais

ASSETS Note 2019 2018 2019 2018

CURRENT

Cash and cash equivalents 7 3,533,847 3,113,727 3,535,807 3,119,948

Marketable securities and other financial assets 8 2,719,116 1,717,267 2,947,491 1,916,761

Accounts receivables 9 751,168 123,337 762,147 155,489

Inventories 10 888,168 841,257 951,382 879,569

Recoverable taxes 11 658,600 457,445 684,136 492,407

Prepaid expenses 22,777 27,283 35,422 37,293

Other current assets 510,295 422,122 515,344 426,628

Total current assets 9,083,971 6,702,438 9,431,729 7,028,095

NON CURRENT

Marketable securities and other financial assets 8 224,775 - 224,775 -

Recoverable taxes 11 1,197,168 1,255,524 1,197,168 1,255,524

Deferred income tax and social contribution 12 1,264,561 1,104,076 1,326,769 1,163,874

Judicial deposits 23 90,350 66,068 90,543 66,084

Account Receivable - Related parties 13 89,729 85,873 - 41,013

Other non current assets 62,875 64,571 69,014 70,872

Investments 14 682,608 589,750 65,693 -

Fixed assets 15 384,131 414,417 407,866 435,499

Intangible assets 16 2,486,896 2,462,235 2,990,855 2,966,256

Rights-of-use assets 17 210,796 - 252,158 -

Total non current assets 6,693,889 6,042,514 6,624,841 5,999,122

TOTAL ASSETS 15,777,860 12,744,952 16,056,570 13,027,217

Parent Company Consolidated

2


Balance Sheet


LIABILITIES AND SHAREHOLDERS' EQUITY Note 2019 2018 2019 2018

CURRENT

Suppliers 18 2,665,242 1,907,327 2,758,582 2,005,607

Borrowings and financing 19 1,300,545 675,672 1,320,955 723,091

Debentures 20 214 246 214 246

Salaries, provisions and social contributions 38,361 36,477 60,303 57,847

Accounts payable - Business combination 21 - - 8,092 1,534

Taxes payable 22 85,224 36,459 106,930 57,741

Income tax and social contribution - - 2,960 17,580

Advances received from clients 136,432 80,263 136,461 80,263

Lease liability 17 62,062 - 79,648 -

Other current liabilities 203,142 160,862 353,398 261,539

Total current liabilities 4,491,222 2,897,306 4,827,543 3,205,448

NON CURRENT LIABILITIES

Borrowings and financing 19 4,866,478 5,900,928 4,912,171 5,920,928

Debentures 20 200,000 200,000 200,000 200,000

Provisions 23 56,055 53,752 148,698 149,854

Accounts payable - Related parties 13 248,805 150,577 20,367 -

Accounts payable - Business combination 21 - - - 7,788

Lease liability 17 177,845 - 209,747 -

Other non current liabilities 3,023 5,274 3,612 6,084

Total non current liabilities 5,552,206 6,310,531 5,494,595 6,284,654

SHAREHOLDERS' EQUITY

Capital 25 8,289,558 5,742,330 8,289,558 5,742,330

Advance for future capital increase 38,513 46,773 38,513 46,773

Capital reserve (2,593,639) (2,251,988) (2,593,639) (2,251,988)

Accumulated losses

5,734,432 3,537,115 5,734,432 3,537,115

Total shareholders' equity 5,734,432 3,537,115 5,734,432 3,537,115

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 15,777,860 12,744,952 16,056,570 13,027,217


3


Statement of Operations


Note 2019 2018 2019 2018

Net revenue 27 6,527,405 6,225,396 6,767,982 6,488,473

Cost of goods and services sold (4,489,713) (4,523,801) (4,756,354) (4,813,573)

Gross profit 2,037,692 1,701,595 2,011,628 1,674,900

Operating income (expenses)

Selling expenses 28 (1,304,795) (1,284,032) (1,120,760) (1,095,587)

General and administrative expenses 28 (628,712) (487,544) (736,902) (557,144)

Other operating income (expenses) 28 (45,701) (64,479) (46,597) (45,007)

OPERATING INCOME BEFORE FINANCIAL RESULT 58,484 (134,460) 107,369 (22,838)

Financial revenue 518,285 425,995 534,428 448,054

Financial expenses (1,072,557) (970,979) (1,100,779) (1,014,388)

FINANCIAL RESULT 29 (554,272) (544,984) (566,351) (566,334)

Equity accounting 27,196 67,310 (3,714) -

Loss before income tax and social contribution (468,592) (612,134) (462,696) (589,172)

Income tax and social contribution

Current 12 - - (17,745) (20,569)

Deferred 12 150,354 214,707 162,203 211,827

Loss of the period (318,238) (397,427) (318,238) (397,914)

Attributable to Company's shareholers (318,238) (397,427) (318,238) (397,427)

Attributable to Non controlling shareholers - - - (487)

Basic net loss per share 30 (0.6794) (0.8738) (0.6794) (0.8738)

Diluted net loss per share 30 (0.6691) (0.8596) (0.6691) (0.8596)


4


Comprehensive Income Statement



2019 2018 2019 2018


Items to be posteriorly reclassified to the result

Accumulated conversion adjustment of foreign investments - 941 - 941

Total comprehensive result (318,238) (396,486) (318,238) (396,973)

Atributed to controlling shareholers (318,238) (396,486) (318,238) (396,486)

Atributed to non controlling shareholers - - - (487)


Statement of Changes in Shareholders’ Equity

Parent Company and Consolidated



Cash Flow Statement


Note 2019 2018 2019 2018

Cash flows from operating activities


Adjustments to net loss:

Depreciation and amortization 15/16/17 499,321 424,370 522,704 435,153

Deferred income tax and social contribution (150,354) (214,707) (162,203) (211,827)

Interest and indexation and exchange variances 514,930 497,117 523,098 502,634

Equity accounting (27,196) (67,310) 3,714 -

Others (45,718) (16,152) (14,470) (36,884)

Adjusted net loss 472,745 225,891 554,605 291,162

Decrease (increase) in operational assets:

Accounts receivable (408,983) 377,346 (422,496) 388,753

Inventories (32,090) 338,625 (56,992) 328,240

Recoverable taxes (142,799) (192,341) (121,815) (207,955)

Prepaid expenses 4,506 (2,823) 1,871 (1,151)

Judicial deposits (24,282) (28,900) (24,459) (28,873)

Other accounts receivable (current and non-current) (86,477) 24,018 (86,858) 22,793

(690,125) 515,925 (710,749) 501,807

Decrease (increase) in operational liabilities:

Suppliers 600,449 212,113 595,509 120,659

Payroll and related charges 1,884 4,060 2,456 5,517

Taxes and contributions (current and non current) 48,765 897 49,189 22,193

Other accounts payable (current and non current) 83,339 63,622 129,244 111,166

Accounts payble affiliate companies 94,371 (243,794) 61,381 (167,909)

828,808 36,898 837,779 91,626

Interes paid on Loans and Debentures (484,958) (462,485) (489,459) (465,980)

Interest paid on leases (18,734) - (23,047) -

Paid Income Tax and Social Contribution - - (11,191) (15,616)

- -

Net cash provided by (used in) operational activities 107,736 316,229 157,938 402,999

Cash flow from investing activities:

Marketable securities (1,224,004) 1,123,739 (1,251,528) 1,070,468

Fixed assets acquisition 15 (24,130) (20,116) (31,928) (26,222)

Intangible assets acquisition 16 (408,161) (322,586) (411,118) (325,588)

Capital increase (27,567) - (27,567) -

Value paid for the acquisition of subsidiaries - - (1,547) (21,371)

Amount received from the sale of subsidiaries - - - 2,034

Net cash used in investment activities (1,683,862) 781,037 (1,723,688) 699,321

Cash flow from financing activities:

Borrowings and financing 19 (b) 2,168,982 2,352,560 2,215,282 2,398,884

Loans and Financing Settlements 19 (b) (2,631,976) (1,813,584) (2,679,936) (1,861,467)

Payments of lease liabilities (56,764) - (69,741) -

Capital increase in cash 2,516,004 10,711 2,516,004 10,711

Net cash provided by financing activities 1,996,246 549,687 1,981,609 548,128

Increase in cash and cash equivalents 420,120 1,646,953 415,859 1,650,448

Opening balance of cash and cash equivalents 7 3,113,727 1,466,774 3,119,948 1,469,500

Closing balance of cash and cash equivalents 7 3,533,847 3,113,727 3,535,807 3,119,948

Increase in cash and cash equivalents 420,120 1,646,953 415,859 1,650,448

Investment and financing activities not involving cash

Payment of invested capital 14 (a) 41,840 - 41,840 -

Initial adoption of IFRS 16 2.2 (23,413) - (23,413) -


7


Statement of Value Added


2019 2018 2019 2018

Revenues

Sales of goods and services 8,025,052 7,674,350 8,357,392 8,044,302

Other revenues/ expenses 6,049 (1) 6,076 405

Reversal (allowance) for doubtful accounts (23,009) (17,371) (42,534) (31,446)

8,008,092 7,656,978 8,320,934 8,013,261

Goods acquired from third parties

Costs of goods and services sold (5,527,035) (5,573,099) (5,882,872) (5,962,570)

Materials, energy, third party services and others (1,247,364) (1,095,000) (953,444) (778,857)

Lost / Recuperation of asset value 1,673 (1,240) 1,673 1,921

(6,772,726) (6,669,339) (6,834,643) (6,739,506)

Gross value added 1,235,366 987,639 1,486,291 1,273,755

Depreciation and amortization (499,321) (424,370) (522,704) (435,153)

Net value added generated 736,045 563,269 963,587 838,602

Value added received in transfer

Equity result 27,196 67,310 (3,714) -

Financial income 518,285 425,995 534,428 448,054

Total value added to distribute 1,281,526 1,056,574 1,494,301 1,286,656

Distribution of value added

Employees

Direct compensation 227,945 194,603 356,891 299,591

Benefits 59,639 57,939 73,731 71,452

Guarantee fund for years of service 19,567 19,214 34,376 31,291

307,151 271,756 464,998 402,334

Taxes and contributions

Federal (145,569) (219,029) (145,259) (197,871)

State 335,295 331,805 346,796 345,750

Municipal 9,206 7,202 20,512 13,848

198,932 119,978 222,049 161,727

Compensation of third party capital

Interest 1,072,557 970,979 1,100,779 1,014,388

Rentals 19,898 90,062 23,487 104,895

Others 1,226 1,226 1,226 1,226

1,093,681 1,062,267 1,125,492 1,120,509

Remuneration of own capital

Loss for the period (318,238) (397,427) (318,238) (397,427)

Participation of non controlling shareholders - - - (487)

(318,238) (397,427) (318,238) (397,914)

Distribution of value added 1,281,526 1,056,574 1,494,301 1,286,656


8

MANAGEMENT REPORT 2019 B2W – Companhia Digital, the largest and most beloved Digital Company in Latin America, in compliance with legal provisions and pursuant to current Brazilian corporate law, presents the Management Report with financial and operating statements for the fiscal year ended December 31st, 2019.

1. ORGANIZATIONAL PROFILE

B2W is a Digital Company, leader in Latin America, whose history is intertwined with the history of e-commerce in Brazil. The company operates on the following fronts: e-commerce (1P) and Marketplace (3P) through the brands Americanas.com, Submarino, Shoptime; consumer credit services Submarino Finance and Digital Finance; payments, credit and financial services through Ame; technology platform; and solutions for logistics, distribution and customer service. With the purpose of CONNECTING PEOPLE, BUSINESS, PRODUCTS AND SERVICES on the same digital platform, B2W constantly invests to be closer to its customers, offering the best shopping experience, attracting the best talents and creating barriers to new entrants.

Americanas is the controlling shareholder of B2W DIGITAL, with participation of 61.42%. The Company is headquartered in Rio de Janeiro and its shares are traded through the BTOW3 code on B3, in the Novo Mercado segment, which has the highest Corporate Governance index in Brazil.

9

VISION

To be closer to our customers, becoming the largest and most beloved Digital Company in Latin America.

VALUES

Have the best people

Be a good “Business Owner”

Seek excellence in operation

To focus on the customer

Delta – Doing more and better every day

Being obsessed with results

Breathing innovation all the time

1.1. THE LARGEST AND MOST BELOVED INTERNET BRANDS

B2W Digital has the most complete portfolio of e-commerce brands, with complementary customer

profiles, and low overlap (86% of our customers buy from just one brand). B2W Digital's multi-brand

operation is a competitive advantage that allows for the: i) attracting of more customers, ii) optimization

of direct traffic and SEO, iii) increasing relevance and presence of brands, and iv) increasing the

assortment available by connecting different brands and Sellers.

10

Americanas.com

The biggest store. The lowest prices.

Americanas.com is the largest Brazilian online store with millions of products available in more than 40 categories. Voted by customers as the number one in service and the internet's most beloved store, Americanas.com offers the shopping experience and variety of customer delivery options. It is a democratic, inclusive brand that is present in the daily lives of Brazilians. The clients can buy through site, app or kiosks located in Americanas stores and receive their products at home or at the more than 1,700 Americanas stores throughout the country.

Submarino

The products you enjoy and the best service on the internet

Submarino is a digital brand, a reference in books, games, technology and entertainment. The goal of the brand is to bring the best experience to customers, through the main subjects that happen on the internet and the biggest launches at all times, always with quality content and curatorship done by those who understand the subject! In addition, our website and app have agile navigation to enhance our shopping experience and the search for new products. Shoptime

Exclusive products and live demonstration Shoptime is the largest home shopping channel in Latin America. A specialist in live broadcasts of product demonstrations, it is on the air 24 hours per day, offering clients good content and entertainment. Shoptime offers unique items and practical solutions for day-to-day use with its own brands: Home & Comfort (bed and bath), Fun Kitchen (portable electric appliances), La Cuisine (houseware) and Life Zone (sports and leisure).

Sou Barato

The Americanas.com outlet Sou Barato, the outlet of Americanas.com, offers repackaged products (which have been returned by another customer and / or had the original packaging damaged during the distribution process), used products (which are tested, reconfigured and sanitized to make them perfect new). All products sold are guaranteed. There are more than 22 thousand products, divided between 20 departments, with discounts that reach 60%.

1.2. MARKETPLACE (3P)

The B2W Marketplace offers the best value proposition for the Sellers, who can access the brands with the internet's best reputation to deliver highly qualified traffic to leverage their sales. To deliver the best customer shopping experience, Sellers are also supported by a highly experienced and qualified commercial team as well as the entire B2W Digital platform. In just five years, the Marketplace has already reached GMV of R$ 11.6 billion 2019, an increase of 49.7% in relation to the year prior, representing 64.2% of total GMV. Over the past year, 24.9 thousand new sellers have been connected, reaching a base of 46.8 thousand Sellers. Being a relevant part of the Company’s strategy, the Marketplace should drive strong future growth and profitability.

1.2.1 AMERICANAS MUNDO

Cross Border operation that allows customers to buy products from all over the world (including USA and China), creating a new growth front for B2W Marketplace. Launched in March/ 19, the cross border operation continues to expand rapidly and already has more than 13.4 million SKUs, 33x higher than the

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initial 410 thousand itemss. The operation was responsible for the top selling item on Black Friday, in addition to the item that brought more new customers to B2W in 4Q19.

1.3. IF: INNOVATION AND FUTURE

Faced with the context of accelerated transformation of the physical and digital worlds, and in order to capture the opportunities generated by this new business environment, in 2018, IF – Innovation and Future was created, outside Americanas and B2W operations. IF was conceived with the mission of creating disruptive business and leveraging various initiatives of the Companies. IF’s main verticals include: incubating new business, accelerating existing initiatives, investing in startups (venture capital), leading the O2O fronts, and prospecting new opportunities, including M&A operations.

1.3.1 AME

Fintech and mobile business platform, and among the first initiatives of IF, continues to accelerate and deliver impressive metrics. The Ame app reached more than 6.5 million downloads in just over 18 months of operation.

Ame has been gaining strong traction on Americanas and B2W, optimizing the offer of discounts to

customers, generating greater repeat purchases and increased spending.

Americanas continues to develop unique features for the physical world. Thus, in just one year, Ame is

already in all of the 1,700 stores throughout all of Brazil (vs. 1,337 in 3Q19).

On September 18, 2019, an agreement was signed with Linx, allowing for 65,000 establishments using

the Linx Pay system to accept Ame.

On September 23, 2019, the partnership with Mastercard was announced and includes the offer of

Ame's prepaid card, with the digital first concept, mirroring the customers' Ame account. A physical card

is also available if desired. The partnership makes it possible to pay with Ame at all 7.8 million

Mastercard accredited merchants.

On October 9, 2019, the partnership with VTEX was announced, enabling Ame to connect to more than

2,500 e-commerce sites using VTEX systems.

On December 6, 2019, the partnership with Banco do Brasil was announced to offer credit cards through

Ame.

On December 6, 2019, a partnership with the acquirer Stone was also announced to integrate payment

platforms to enable payments via QR code on Stone machines. On December 12, 2019, a similar

partnership with Cielo was announced.

Ame also continues to expand its acceptance network organically through the Ame Plus platform (seller

profile), totaling 63 thousand merchants.

Over the last few months, several features have been released:

Cash in with credit card

Receive and transfer cash to other Ame accounts

Pay merchants off platform (Ame Plus: other physical world merchants)

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Cash out checking account (bank transfers, exclusive for Ame Plus)

Geomarketing (location of merchants with filters for type of establishment)

Bill payments (bank slip)

Cash in checking-account (bank transfer)

Cash in by bank slip

Cash in at Americanas (store POS)

Cash out of Americanas (store POS, in beta version)

Prepaid cellular recharge

Individual credit (in beta version)

Public transportation (recharge pass balance)

Private transportation

E-Gifts

Marketplace of services

Itaú Bike sharing program

Friend Referral Program (Member Get Member)

Tickets and event passes

Bus tickets

Games (in beta version)

Meal voucher

Buying and selling airline miles (in beta version)

Donations

Mini-games

Beer Delivery (in beta version)

Ame Flash: In order to accelerate O2O initiatives, Ame Flash connects independent couriers

(motorcycle, bicycle, and other modes), enabling for the delivery of products to customers within 2 hours,

from the 1,700 physical stores of Americanas and the physical stores of B2W Marketplace Sellers. The

app already has 800 registered couriers serving 300 physical stores in Rio de Janeiro and São Paulo.

Acquisition of Pedala and Courri: In December/19, Ame completed the acquisition of the startups

Pedala and Courri, which specialize in fast and sustainable deliveries via bicycles and scooters. The

acquisitions aim to accelerate the Ame Flash operation, making deliveries in large urban centers through

different modes.

1.4. O2O: ONLINE TO OFFLINE

Using the concept of “Everything. Anytime. Anywhere.” The O2O initiatives of Americanas and B2W have been enhancing customers' shopping experience and growing at a rapid pace (+160% vs. 4Q18). Over the past twelve months, O2O modalities exceeded the R$ 2 billion GMV mark (+153% vs. 2018).

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LASA Seller: In 2019, the available assortment expanded 3x and sales grew 2.5x over the previous year. During Red Friday, Americanas was the biggest Seller on the B2W Marketplace in number of items sold, registering sales on the days of the event greater than the entire year of 2018.

Click and Collect Now: Available in all 1,700 Americanas stores, allowing the customer to purchase the store's inventory online and pick up the product within 1 hour without shipping. The modality continues its rapid development, reaching the mark of more than 100 thousand orders in December.

Ship from Store: Purchase products online from the nearest LASA physical store and receive the order within 2 hours. The option is available in 110 cities and 13 states, totaling 300 stores implemented.

Click and Collect: Buy online and withdraw at the physical store. In 2019, we became the largest network of pick-up points in Brazil, with more than 8,000 connected points (Americanas stores, Sellers stores, and partner points) in more than 5,000 municipalities, offering 99% of the Brazilian population access to the service.

Infinite Shelf: Assisted sales operation at Americanas for products offered on the digital platform (1P and 3P). In 4Q19, the operation had an average ticket approximately 15x higher than in physical stores and 57% growth in sales over 4Q18.

O2O for B2W Marketplace Sellers: Transforming Sellers stores into Flexible Fulfillment Centers. With this, Click and Collect, Click and Collect Now (1 hour), and Ship from Store (2 hour) initiatives can be expanded to physical stores of B2W Marketplace Sellers.

1.5. LET’S: LOGISTICS AND DISTRIBUTION

The shared management platform for the logistics and distribution assets of LASA and B2W, which aims to optimize the operations of the companies through a flexible Fulfillment model. Delivery Time: In 2019, more than 50% of all purchases made on B2W websites (1P and 3P) and handled by LET’S were delivered within 2 days. In 4Q19, despite the high sales volume on Black Friday, 61.3% of deliveries to the states of Rio de Janeiro and São Paulo were made within 2 days (1P and 3P). New DCs: LET’S announced the opening of 3 new Distribution Centers at the end of 4Q19, in the States of Pará, Minas Gerais and Rio Grande do Sul, in order to reduce the distance to the final consumer, increasing the number of cities eligible for deliveries in up to 24 hours. LET’S currently operates 18 DCs in the states of: RJ, SP, MG, PE, PA, SC and RS. B2W Entrega: The platform that operates and controls B2W Marketplace deliveries. Sellers connected to B2W Entrega have 5 types of service: Fulfillment (storage + delivery), Pick Up - Large Operations (product withdrawal from the Seller DC + delivery), Direct Collect - Small and Medium operations (product withdrawal from the Seller DC + delivery), Drop Off Hub (Seller delivers to one of the Direct Hubs + delivery) and Drop Off in Store (Seller delivers to one of the Americanas locations + delivery). B2W Entrega reached more than 44.6 thousand Sellers at the end of 4Q19, representing 95.3% of the total Seller base and participating in more than 75% of orders placed on the Marketplace. B2W Fulfillment: Reached a total of 511 Sellers connected, with their inventory operated by the platform, ensuring shorter lead times and more competitive freight costs. Through B2W Fulfillment, the customer gets the best shopping experience, where the entire logistics process (inventory, transportation and fulfillment) is operated by B2W.

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1.6. BIT SERVICES: PLATFORM OF TECHNOLOGY AND DIGITAL SERVICES BIT Services, as a result of the acquisition of ten “best in class”, offers complete solutions in different technology verticals to support B2W (1P) and Marketplace (3P) e-commerce operations.

1.7. DIGITAL LABS: B2W INNOVATION AND TECHNOLOGY (BIT)

The BIT – B2W Innovation and Technology was developed with the aim of creating an inspiring and collaborative environment focused on the development of new technologies and innovative solutions. In 2013, BIT RJ was inaugurated, formed by B2W Digital's technology and digital services areas. The facility is responsible for the development of our sites, the platform of Mobile and Data Analytics. The office has an open space concept, an area for informal meetings and an arena for various events. Our São Paulo office (BIT SP) was opened in 2014, to accommodate the teams responsible for the Marketplace platform and a portfolio that includes solutions such as BSeller, SkyHub, among others. In 2015, BIT Recife was opened, which is located in Porto Digital, one of the references in technology and innovation in Brazil. In the same year, we opened BIT Boston (US), strategically positioned between MIT and Harvard, universities worldwide known for excellence in research, innovation, technology and business.

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Our BITs were inspired by the largest and best centers of innovation and entrepreneurship in the world and currently have more than 1,500 engineers. We are pioneers in the use of Microservices, Cloud Computing, Kotlin, Clojure, Datomic, Go and React Native. Considering the scale of B2W, when we do not find the right tools in the market, we develop and make available in-house tools, such as Asgard, RestQL and Apache Marvin, our Open Source projects. In recent years, BIT has become a reference in disruptive initiatives, developing innovative projects with Harvard and MIT Universities, which resulted in articles published with the scientific community. The fronts developed were: Marketing Optimization (in partnership with the Stanford University Artificial Intelligence Laboratory, by Professor Andrew Ng, founder of Google Brains and co-founder of Coursera), Last Mile (with Professor Matthias Winkenbach, director of the MIT Megacity Logistics Lab) and Artificial Intelligence (creation of Marvin, an open source artificial intelligence platform currently incubated by the Apache Foundation). To meet the specific demands of B2W's business, our engineers developed projects in the areas of Machine Learning, Scalable Software Architecture and Natural Language Processing in partnership with Universidade Federal de São Carlos (UFSCAR).

2. MESSAGE FROM MANAGEMENT

Since its creation (2006), B2W Digital has continued to invest heavily in the fundamental pillars of its business. From 2007 to 2019, we had three important cycles, which totaled R$ 5.4 billion in investments (CAPEX) in the Digital Platform and development of e-commerce in Brazil, which still has low penetration of total retail, and we understand this to be an extraordinary opportunity. The investments were concentrated in three main pillars: technology, logistics, and people. Over the years we have built unique assets to operate e-commerce / marketplace in Brazil, as well as a first-rate digital team, with technology DNA and that breathes innovation. Our team is the best combination of young people with experience. The thirteen acquisitions of technology and logistics companies, which we carried out between 2013 and 2015, were also responsible for the arrival of many talented people. We are proud of the successful integrations and the high retention rate of these brilliant people, of which we currently have over 1,500 developers building the B2W of the future. Our technology DNA allowed the Digital Platform to be developed based on cloud and micro services, enabling the team to be organized in more than 90 Squads, accelerating Total GMV and launching new growth fronts, with the Marketplace being an excellent business example, created quickly from this technological architecture. The strategic plan (2017-2019) was aimed to accelerate the growth of the Marketplace (3P) and generate cash. The Marketplace went from GMV of R$ 2 billion in 2016 (18% of Total GMV) to R$ 12 billion in 2019 (62% of Total GMV). With the transformation of the business model, the Company also achieved a

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significant evolution in cash flow, which went from a consumption of R$ 1.6 billion in 2016 to a positive cash generation of R$ 190 million in 2019. In the last three years, we connected 42.1 thousand Sellers (from 4.7 thousand in December/ 16 to 46.8 thousand in December/ 19), allowing for the exponential growth in assortment offered to the customer, which totaled 29.5 million items at the end of 2019 (+26.8 MM vs. the 2.7 MM of December/ 16). During this period, we also launched B2W Entrega, a platform that operates and controls the deliveries of the Marketplace, reducing delivery times and freight costs by 50% (on average), and totaling 95% adhesion by Sellers at the end of 2019. In line with this, we have developed several financial products and services, allowing for Sellers to continue investing in their operations, such as receivables discount (B2W Marketplace native solution) and Credit Seller, where we offer loans quickly, safely, simply and 100 % online. With the rapid growth in the number of Sellers and assortment, our platform has transformed itself to offer increasingly complete and scalable solutions, with the objective of supporting Sellers according to their different needs. Currently, these solutions translate into more than 230 million requests per day on our APIs, simplifying Sellers' operation across the main business variables (product, pricing, customer service, inventory, exchanges, refunds, and freight, among others). We understand that our hybrid Digital Platform model (1P, 3P and Digital Solutions) has a superior value proposition for everyone. We want to continue to be the best option for Suppliers and Sellers, delivering robust and qualified traffic and the best solutions for them to continue growing their business with us. For the Customer, we want to deliver the best experience, through a wide assortment and the highest level of service, with maximum convenience. Ensuring the best level of service on the Brazilian internet is a priority and we will continue offering complete solutions for Sellers, fostering entrepreneurship and also enabling for the emergence of new companies and formal businesses in Brazil. The year 2019 meant the end of a very important cycle, and in 2020, we start a new cycle. In the new 3-year strategic plan (2020-2022), we have the dream of more than doubling in size (GMV) and continuing to generate cash. We are even more prepared and motivated to transform the Customer experience, offering: “Everything. Anytime. Anywhere.” which will guide our strategy to retain our current Customers and attract new Customers. The convenience for Customers, addressing different consumption occasions, will dictate our growth rate and be driven by the intensive use of data, algorithms and analytics to drastically improve the experience within the Digital Platform. The focus will be to become even more relevant in the daily lives of Customers. “Everything. Anytime. Anywhere.” translates into continuously increasing the offering of products and services, improving and expanding our availability, and delivering wherever the customer desires. In this sense, we aim to reach the mark of more than 100 MM items, with more than 150 thousand Sellers connected by the end of 2022. LET'S, the shared management platform for Americanas and B2W's logistics and distribution assets, will be responsible for shortening the distance to the Customer, reducing the delivery time to minutes, by expanding the logistics network to a total of 22 DCs by the end of 2022 (vs. 15 DCs in December/ 19), and the acceleration of O2O initiatives (Online to Offline). Ame, the Fintech and the Mobile Business Platform of Americanas and B2W, which simplifies the lives of people and companies, will continue to build customer loyalty and engagement, expanding its acceptance network organically and through strategic partnerships (as we did with Linx , Vtex, Cielo, Stone, Mastercard, and Banco do Brasil, among others). Ame has a roadmap of new features to radically increase the frequency of use, becoming a one-stop-app, essential in the daily lives of Customers. Ame Flash, which connects independent couriers, will also accelerate O2O initiatives, mainly through the “ship from store” delivery method. The acquisition of startups Pedala and Courri, specialists in fast and

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sustainable deliveries (in urban centers) with bicycles and scooters, was a strategic action to move forward in this market. We also identified great opportunities for growth in categories that still have low penetration in the online world. The acquisition of Supermercado Now allows us to enter the Supermarket category with speed, scale and expertise. This type of category, with high frequency of purchases, will further expand our assortment and boost convenience for the Customer. We will continue to advance our sustainability strategy, reinforcing our commitment to the 2030 Agenda and the United Nations (UN) Sustainable Development Goals (SDGs). We are signatories to the UN Women's Empowerment Pacts (WEP’s), the Coalition for Racial and Gender Equity, and the Business Charter for Human Rights and Decent Work. We understand there are still many opportunities to be developed and we are committed to doing more and better every day. We take the opportunity to thank our team for their enthusiasm and dedication. We were certified by Great Place to Work (GPTW), an important recognition of the effort to keep evolving and engaging the team to achieve increasingly challenging goals, always focusing on the customer. We also thank our suppliers for the partnership, the Marketplace Sellers for choosing our platform, the shareholders for their trust and, above all, the customers for their preference.

Marcio Cruz

CEO, B2W Digital

3. STRATEGY AND INVESTMENT

3.1. ECONOMIC SCENARIO

2019 was marked by a gradual improvement in the economic environment, with the recovery of PIB, control of inflation and reduction in the basic interest rate (Selic), which reached the historic low of 4.5% a.a. in December. In addition, inflation measured by the IPCA ended the year at 4.31%, 0.56 p.p. above that recorded in 2018, but remaining within the target. Electronic commerce, according to data from e-Bit / Nielsen, showed a growth of 16.3% in relation to 2018. The market growth is driven by the constant expansion of the internet user base and the growth in the number of e-consumers. Thus, B2W Digital reiterates its confidence and its positive perspectives for the future, both in relation to the development of the country as well as to the opportunity of growth of the Internet, boosting the penetration of e-commerce as a percentage of total retail commerce and other business opportunities. Sources: Brazilian Institute of Geography and Statistics, the Central Bank of Brazil and e-Bit/Nielsen.

3.2 STRATEGY

The core of the Company's strategy is the customer, and ensuring an excellent online shopping experience is the focus of our efforts. To ensure superior experience in the midst of an environment with structural and logistical challenges, it was necessary to invest heavily in the creation of a unique platform, which allows us to meet and exceed the expectations of our clients. Over the last few years, the Company has invested in technology, logistics, distribution, payments and services, creating the premier shopping experience. With the main structural investments made, B2W continues to invest in its Digital Platform, with the greater purpose of connecting people, businesses, products and services. To ensure success in executing this strategy, the Company relies on its innovative culture and the best digital team in Latin America, including more than a thousand internet / technology engineers.

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3.3 INVESTMENTS

As part of its strategy, B2W continues to invest in the digital platform built, with the objective of enabling the growth and improvement of its operations. In 2019, R$ 510.1 million were invested, mainly in technology and innovation, with a focus on the development of the Marketplace and the platforms for sale by mobile devices.

4. RESULTS OVERVIEW

B2W Digital generated R$ 479.3 MM in cash in 4Q19, an evolution of R$ 264.6 MM in relation to the

R$ 214.7 MM registered in 4Q18. In 2019, cash generation totaled R$ 189.9 MM, an evolution of

R$ 428.9 MM in relation to consumption of R$ 239.0 MM registered in 2018. Accordingly, the Company

ended the year with a net cash position of R$ 984.7 MM.

B2W Digital registered record sales on Black Friday. The investments made in the digital platform

in recent years reflected, once again, in the leadership of traffic and sales during the event. On Black

Friday, we were the largest Marketplace platform in Brazil, enabling Sellers to scale their business,

selling the equivalent of 53 days’ worth of sales.

B2W Marketplace set a new record, connecting more than 8.1 thousand new Sellers in 4Q19,

from a base of 38.7 thousand Sellers in September/ 19 to more than 46.8 thousand Sellers in

December/ 19. In this way, we exceeded the initial goal of closing the year with 40 thousand connected

Sellers.

B2W Digital total assortment reached 29.5 million items exiting 4Q19, growing 264% vs. 4Q18,

driven by Marketplace. With this, we exceeded the initial goal of closing the year with 20 MM items.

Americanas Mundo expanded its assortment to over 13.4 million items in 4Q19. Launched in

March/ 19, the operation that allows customers to buy products from Sellers all over the world, was

responsible for the top selling item on Black Friday.

O2O (Online to Offline) surpassed the R$ 2 billion GMV mark in 2019 (+153% vs. 2018). Using the

concept of “Everything. Anytime. Anywhere”, the O2O initiatives of Americanas and B2W have been

improving customers' shopping experience and growing at an accelerated pace. In the last twelve

months, more than 2.8 million people have made their purchases through these initiatives.

B2W Digital announced the acquisition of Supermercado Now, an innovative e-commerce platform

with focus on the online supermarket category. The business model, of which has proven success in

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other countries, has great growth opportunity in Brazil and will allow B2W to expand its presence in the

Supermarket category, opening a new growth front and offering an even more complete assortment for

the more than 16 million active customers of the Company.

LET’S opened 3 new Distribution Centers (DCs) at the end of 4Q19, in the states of Pará, Minas

Gerais, and Rio Grande do Sul, in order to reduce the distance to the final consumer and expanding

the number of cities eligible for deliveries within 24 hours.

B2W Digital was recognized with “Great Place to Work 2020” certification, an important

acknowledgement of the effort to continue evolving and engaging the team to achieve increasingly

challenging goals, always focusing on the customer.

4.2. RESULTS

The financial information serving as the basis for the comments below refer to 4Q19, 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$). Definitions for adjusted financial metrics can be found in Annex III and Annex V. Beginning in January 2019, the Company's income statements reflect the new accounting practices implemented by CPC 06 (R2) / IFRS 16. Therefore, to maintain the comparability of results (4Q19 vs. 4Q18 and 2019 vs. 2018), the income statement for the quarter ended December 31, 2018 (4Q18) is presented in comparable amounts. The reconciliation of the quarterly results and year 2018 is available on the Company's IR website (ri.b2w.digital). In order to maintain comparability between the periods, the result presented in 4Q19 and the year 2019 were adjusted in order to disregard the tax credits arising from a final judgement in the STF regarding the unconstitutionality of the inclusion of ICMS in the PIS / COFINS calculation basis, as per Material Fact published in 12/20/2019. Total GMV: In 4Q19, total GMV was R$ 6,647.5 million, an increase of 30.9% compared to the R$ 5,078.5 million registered in 4Q18. In 2019, GMV reached R$ 18,777.5 million, an increase of 25.1% from R$ 15,005.4 million in 2018.

The Marketplace continues to develop rapidly, increasing 47.2% (vs. 4Q18) and representing 64.2% of Total GMV (vs. 57.1% in 4Q18). Gross Revenue: In 4Q19, gross revenue totaled R$ 2,806.7 million, compared with the R$ 2,469.5 million registered in 4Q18. In 2019, the accumulated gross revenue was R$ 8,357.4 million vs. R$ 8,044.3 million in 2018.

Net Revenue: In 4Q19, net revenue totaled R$ 2,220.1 million, compared with R$ 1,978.6 million registered in 4Q18. In 2019, net revenue was R$ 6,661.7 million vs. R$ 6,488.5 million in 2018. Adjusted Gross Profit: In 4Q19, adjusted gross profit totaled R$ 728.4 million, an increase of 15.3% vs. the R$ 631.6 million registered in 4Q18. Adjusted gross margin expanded 0.9 p.p., from 31.9% in 4Q18 to 32.8% in 4Q19. In 2019, adjusted gross profit was R$ 2,142.9 million, an increase of 11.1% vs. the R$ 1,928.9 million in 2018, with a margin expansion of 2.5 p.p, (32.2% vs. 29.7%). Adjusted Selling, General and Administrative (SG&A) Expenses: In 4Q19, adjusted expenses totaled R$ -474.1 million vs. the R$ -422.4 million registered in 4Q18. The SG&A as a percentage of GMV decreased by 1.2 percentage points, from 8.3% in 4Q18 to 7.1% in 4Q19. In 2019, adjusted expenses totaled R$ -1,542.9 million vs. R$ -1,411.9 million registered in 2018. The SG&A as a percentage of GMV decreased by 1.2 percentage points, from 9.4% in 2018 to 8.2% in 2019. Adjusted EBITDA: In 4Q19, Adjusted EBITDA reached R$ 254.3 million, an increase of 21.6% compared with the R$ 209.2 million registered in 4Q18. Adjusted EBITDA margin varied from 10.6% in 4Q18 to 11.5%

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in 4Q19, an increase of 0.9 p.p. In 2019, Adjusted EBITDA was R$ 600.1 million, an increase of 16.1% compared with R$ 517.1 million registered in 2018. Adjusted EBITDA Margin expanded 1.0 p.p., from 8.0% in 2018 to 9.0% in 2019. Net Financial Result: In 4Q19, the net financial result was R$ -137.9 million (vs. R$ -163.6 million in 4Q18). The net financial result went from R$ -587.5 million in 2018 to R$ -603.9 million in 2019. Net Result: In 4Q19, the net result was R$ -22.3 million vs. R$ -69.6 million in 4Q18. In 2019, the net result was R$ -391.6 million (vs. R$ -405.1 million in 2018). Cash Management:

Cash Generation: In 4Q19, cash generation was R$ 479.3 MM, an evolution of R$ 264.6 MM vs.

cash generation of R$ 214.7 MM registered in 4Q18. In 2019, cash generation totaled R$ 189.9 MM,

an increase of R$ 428.9 MM in relation to the consumption of R$ 239.0 MM recorded in 2018.

As a way of capturing all effects, cash generation / consumption is measured by the variation of net debt in relation to the previous quarter, always disregarding possible impact of capital increase operations. In the quarter, to calculate cash generation, the R$ 40.6 MM received in October/ 19 from the capital increase is disregarded (total of R$ 2.5 billion for the year).

Working Capital: -41 days in December/ 19 (improvement of 61 days vs. 4Q18). This result reflects

the 1P assortment curation and assortment review process, the optimization of the merchandise

planning, as well as the increased 3P (Marketplace) share of total sales.

It is important to remember that 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).

CAPEX: B2W uses its cash generation by prioritizing investments that present optimal returns to

shareholders. Accordingly, in 4Q19, CAPEX totaled R$ 136.6 MM, representing 2.1% of Total GMV.

For the year of 2019, CAPEX totaled R$ 510.1 MM, representing 2.7% of Total GMV.

Capital Increase

The Capital Increase of R$ 2.5 Bn had 100% participation by the Company’s shareholders. Americanas

participated with R$ 1,564.5 MM and minority shareholders acceded with the remaining R$ 935.5 MM

(R$ 2,459.4 MM cash in 3Q19 and the remaining R$ 40.6 MM in 4Q19).

On August 19, 2019, a meeting of the Board of Directors was held with the objective of approving the

proposal to increase the company's capital, in the amount of R$ 2,500,000,035.00 (two billion, five

hundred million, and thirty five reais), for private subscription of 64,102,565 new common shares, all

nominative and with no par value, for the issuance price of R$ 39.00 (thirty nine reais) per share.

The Capital Increase will improve our capital structure, while maintaining our commitment for cash

generation, enabling us to continue investing in our powerful digital platform and accelerating the

growth through a differentiated ecosystem, including LET`S (Flexible Fulfillment Platform), Ame (Mobile

Business Platform), and initiatives such as O2O (Online to Offline) and Digital Services, as detailed in

presentation also made available to Messrs. Shareholders on this date as an attachment to the Minutes

of the Board of Directors’ Meeting that approved the Capital Increase (both made available through IPE

Module of Empresas.Net System, at www.cvm.gov.br and at www.b3.com.br, and at the Company’s

Investors Relations website - [email protected]).

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The shareholders had from August 23, 2019 to September 21, 2019 the right to exercise preference in

the subscription of the new shares issued, in proportion of their participation in the capital of the

company at the closing of the trading session on August 22, 2019. The assessment of additional

leftovers occurred between September 30 and October 07, 2019.

INDEBTEDNESS

¹Excludes the R$ 2.500 MM proceeds from the capital raise.

Accounts receivable are mainly composed of credit card receivables, net of the discounted value, which have immediate liquidity and can be considered as cash. In December/18, the Board of Directors approved the structuring of the FIDC (Credit Card Receivables Advance Fund) with shareholders' equity of R$ 1.1 billion. The FIDC is a unique tool in the market, representing an important source of fundraising. The composition of accounts receivable from B2W is shown in the following table:

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4.3. INCOME STATEMENT EXCLUDING THE EFFECTS OF TAX CREDITS AND EFFECTS OF THE CONSOLIDATION OF B2W DIGITAL’S TRANSPORTATION SUBSIDIARIES

Effects of the consolidation of B2W Digital’s transportation subsidiaries.

CONCILIATION OF EFFECTS RELATING TO FISCAL CREDITS

Effects of the consolidation of B2W Digital’s transportation subsidiaries.

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NON-EXCLUDING THE CONSOLIDATION OF B2W DIGITAL’S TRANSPORTATION SUBSIDIARIES

CONCILIATION OF EFFECTS RELATING TO FISCAL CREDITS

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4.4 NOTE REGARDING THE FINANCIAL STATEMENTS

Effects in the consolidation of B2W Digital’s transportation subsidiaries BFF Logistics and Distribution, a subsidiary of B2W Digital, provides merchandise distribution services to the Company, generating an elimination effect in consolidated gross revenue and selling, general and administrative expenses (distribution expenses), according to the present accounting rules. Consolidated gross profit is reduced in proportion to the positive effect observed on selling, general and administrative expenses, but no effect on Adjusted EBITDA and Adjusted EBITDA Margin. Adjusted EBITDA On October 4th, 2012, Brazilian Securities Exchange Commission (CVM) enacted Instruction 527/12, regarding the voluntary disclosure of non-accounting information such as EBITDA. The Instruction aims to standardize the disclosure, in order to improve the understanding of this information and make it comparable among publicly listed companies. In order the maintain consistency and comparability between previous periods, we present the reconciliation of EBITDA. In 4Q19, Adjusted EBITDA was R$ 254.3 million. Including other operating income and expenses, EBITDA, according to CVM Instruction 527/12, would be R$ 247.6 million in 4Q19 (11.2% of NR) vs. R$ 194.9 MM in 4Q18 (9.9% of NR).

4.5 DEFINITIONS Adjusted EBITDA: Operational earnings before interest, taxes, depreciation and amortization and excluding other operational revenues/expenses and equity accounting. Adjusted Gross Profit: Gross profit excluding the effects of the consolidation of B2W Digital’s transportation subsidiaries. Adjusted Selling, General, and Administrative (SG&A): SG&A excluding the effects of the consolidation of B2W Digital’s transportation subsidiaries. GMV (Gross Merchandise Volume): Sales of own merchandise, sales realized on the Marketplace, and other revenues (excluding commissions from Marketplace sales), after returns and including taxes. Marketplace Participation: Marketplace sales as a percentage of total consolidated GMV. Market Share: Total sales on B2W sites, including those made on the Marketplace, divided by total market sales (source: e-Bit). Net Debt (Cash): Calculated as the sum of short-term and long-term indebtedness, less the sum of cash & equivalents and credit card accounts receivables (net of the discounted balance). Working Capital: Calculated as the sum of days of trade accounts receivable (using GMV as a basis) and inventory days, minus vendor days, considering GMV and CMV in the last 12 months.

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5. CORPORATE GOVERNANCE 5.1 TRANSPARENCY AND COMMITMENT TO STAKEHOLDERS

B2W Digital was formed in 2006 under the rules established by the São Paulo Stock Exchange (B3) and the Novo Mercado, which includes a stock ownership structure exclusively comprised of common shares and the election of independent members of the Board of Directors. . Composition of Shareholders B2W's shares are listed on the B3 S.A. and traded under ticker symbol BTOW3. On December 31, 2019, Americanas control block consisted of 61.42% of the Company's shares. Dividend Policy The Company's Bylaws, in conformity with the principles of current legislation, establish the minimum value for dividends at 25% of the net profit for any given fiscal year, adjusted in accordance with legislation in effect. In 2019, B2W did not distribute dividends to its shareholders. Shares The Company's common shares are part of the Special Tag Along Stock Index (ITAG). This indicator consists of shares of companies that offer the same conditions to minority shareholders in the event of change of ownership control. The Company is also part of other important indices, such as Ibovespa, IBrX 50, Icon, IGC, IVBX-2, ISE, MSCI and FTSE Russell. Adherence to the Arbitration Panel B2W chose mediation as a means of resolving conflicts of interest between partners and managers and between them and the Company. If no agreement can be reached, B2W, its shareholders and administrators are required to resolve, through arbitration, any and all disputes or controversies that may arise among them, related to or resulting from, especially, the application, validity, effectiveness, interpretation, violation and effects of the provisions contained in the Bylaws, the provisions of Brazilian Law 6.404/1976, the rules issued by Brazil’s National Monetary Council, the Central Bank of Brazil and the Securities Exchange Commission of Brazil (CVM), and other rules applicable to market securities in general, as well as those in the Novo Mercado Listing Rules, the Novo Mercado Participation Agreement, the Arbitration Rules of the Market Arbitration Panel Rules and, especially, the Voting Agreement and Assumption of Obligations (“Voting Terms”) entered into on December 13, 2006 and filed at the Company’s headquarters. B2W also is linked to the Market Arbitration Panel. Any claim can be heard by this entity, established by B3 in accordance with the regulations of the aforementioned panel, and the parties may, in accordance with Chapter 12 of those regulations, agree on a different arbitration panel or center to resolve their disputes. Idependant Auditors In compliance with CVM Instruction no. 381, the Company informs that its independent auditors KPMG Auditores Independentes and PricewaterhouseCoopers, provided only external audit services in the first half and second half of 2019, respectively. The Company's policy on contracting services, other than external auditing, from independent auditors ensures that there is no conflict of interest and that the contracted services do not compromise the independence of its auditors. Thus, the company seeks that its auditors provide an objective service and issue an impartial opinion on the Company's Financial Statements.

5.2 GOVERNANCE STRUCTURE Board of Directors and Management B2W's Board of Directors consists of seven members and adopts a series of initiatives that go beyond what the Novo Mercado requires, such as the participation of independent members on the Board of Directors in a number that is higher than the minimum required. The evaluation of members is based on the financial and operational targets set the previous year. Each year, the Board meets quarterly or whenever necessary, convened by its Chairman.

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The Executive Management Board is a collective body responsible for exercising the attributions conferred by the law, the Bylaws and the Board of Directors for the performance of the acts necessary to the regular operation of the Company. Independent Members Luiz Carlos Di Sessa Filippetti Mauro Muratorio Not Paulo Antunes Veras Representatives of the Parent Company and members of the Board of Directors Anna Christina Ramos Saicali Celso Alves Ferreira Louro Jorge Felipe Lemann Miguel Gomes Pereira Sarmiento Gutierrez B2W Digital Management Marcio Cruz Meirelles – President/CEO Carlos Eduardo Rosalba Padilha – COO Carlos Henrique de Lucca Fortes Gatto – COO Fábio da Silva Abrate – Chief Financial Officer and Investor Relations Officer Jean Pierre Lessa e Santos Ferreira – COO José Timotheo Barros – COO Marcelo da Silva Nunes – CFO Thiago Mendes Barreira – Commercial Officer Anna Christina da Silva Sotero – Comercial Officer José Mauro Rocha de Barros – COO

5.3 THE ROLE OF THE COMMITTEES Audit Committee It is incumbent upon the Committee, among other functions, to review the management report and the Company's annual and quarterly financial statements, reporting quarterly to the Board of Directors. Comprised of three members, for a term that will coincide with the term of office of the members of the Board of Directors, being allowed re-election. The members of the Audit Committee are appointed by the Board of Directors, exclusively among the Independent Directors. Nominating Committee The Nominating Committee is responsible for nominating candidates to the Board of Directors, whose names will be submitted to the Company's General Meeting for the election of the members of its Board of Directors. Composed of four members of the Board of Directors, of which at least two must always be independent, for a period to coincide with the term of office of members of the Board of Directors, reelection being allowed. Sustainability Committee For 12 years, the Sustainability Committee, known as Companhia Verde, has been committed to defining corporate sustainability guidelines. Currently, our fronts of action and projects are aimed at contributing to the achievement of the 2030 agenda of the Sustainable Development Goals (SDGs) of the United Nations (UN), in which society and companies are committed to developing the SDGs and their goals until the year 2030. Composed of members of the Board of Executive Officers and executives from different areas, in addition to the participation of a member of the Board of Directors throughout the meetings, the Committee brings a multidisciplinary vision to the company and its work aims to foster best management practices based in the balance between the environmental, social and economic pillars.

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In 2019, for the fourth consecutive year, B2W won the portfolio of companies of the Business Sustainability Index (ISE) 2019 B3 S.A. – Brasil, Bolsa, Balcão, and was listed for the second time in the Exame Sustainability Guide. This is the recognition of a joint effort to build a socially just, economically profitable and environmentally responsible company.

5.4 POLICIES AND REGULATIONS

B2W has a set of Policies and Regulations designed with respect to company values and with the aim of further improving its corporate governance structure, providing an environment that aims to ensure compliance with the Company's strategic objectives and mitigate the risks of not realizing them, generating value to all its stakeholders. Seeking to realize its vision, mission and values, in 2017, B2W revised and updated the Code of Ethics of the Company and also the Compliance Policy. The two documents are public and are available on the Companhia Verde site (www.companhiaverde.com.br). At the time of admission, all members receive a copy of the Code of Ethics and Conduct, signing a term of science and agreement. B2W values integrity, transparency, and solidarity, and since 2014, we have promoted the aspects of the Anti-Corruption Law (12.846/13) which addresses the responsibility of harmful conduct against national and foreign public administration. The Company's Code of Conduct, Product Donation Policy and Project Support and Risk Management Policy deal with issues that ensure compliance with the Law. In compliance with CVM Instruction 586 of June 2017, the Company disclosed on October 31, 2018, for the first time, the Report on the Brazilian Code of Corporate Governance, which deals with the governance practices adopted by the Company in relation to 5 spheres: Shareholders, Board of Directors, Board of Executive Officers, Supervisory and Control Bodies and Ethics and Conflict of Interest in accordance with the principles and practices recommended in the aforementioned Report (ICVM 586) 8 Policies and 5 Regulations were formalized and / or revised, thus promoting greater transparency and reducing the asymmetry of information to its stakeholders. Among the Policies / Regulations formalized are the Internal Regulations of the Committees of the Board of Directors, the Remuneration Policy of Directors, the Risk Management Policy, the Internal Regulations of the Board of Directors and the Policy for the Appointment of Directors, among others. All documents are public and are available on B2W's Investor Relations website (ri.b2w.digital). A signatory of the Global Compact of the United Nations (UN) since 2013, B2W has worked to strengthen the sustainability of management processes in the company and across the supply chain. The Global Compact is an initiative that brings together thousands of companies around the world that are committed to the best corporate practices with regard to human rights, especially in relation to labor issues, as well as the environment and business ethics.

To this end, we promote and value the sharing of protection principles and the development of human rights, featuring these terms in our commercial contracts, being committed to the eradication of all forms of forced labor and to combat any and all practices that do not respect the Human Dignity Principle throughout its value chain. All our contracts impose specific punitive clauses including fines and disqualification in the event of irregularities. The Company supports several initiatives by entities, both public and private, which are engaged in the identification of the potential risks and impacts of human rights violations that may be associated with its activities.

6. LATIN AMERICA’S BEST AND BIGGEST DIGITAL TEAM 6.1 TALENTS SET TO GROW

In order to keep up with the accelerated growth of the e-commerce market in Latin America, B2W Digital has been investing to improve attraction, retention and development of talent, as well as in the strengthening of its organizational culture and corporate identity. We understand that, only with clear directions and a well-prepared team will we assure the accomplishment of our strategic plans and the continuity of our business. In 2019, the Company perfected its recruitment, selection, training and competence development programs. In view of the growing increase in the demand for qualified professionals to work in the digital market, B2W has sought to increase the value and capacities of its own team, to boost its results. In view of the assumptions of employment generation and promotion of the local

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development of regions in which it acts, B2W Digital has its strategy of prioritizing the hiring of a local labor force.

6.2 PROFESSIONAL PROFILE

B2W Digital’s professional team has closed the year with a total of 8,697 associates (of these, 1,453 are seasonal), of which 4,325 are women (51.3%) and 4,302 are men (48.7%). To promote equality among men and women, and to guarantee that wage and hiring policies eliminate any possibility of discrimination, the Company holds meritocracy as the only basis for career development. All of our associates comply with the legal working hours for their professional categories, entering the Company on experience contracts of, at most, 90 days. At the end of this period, depending on the proficiency evaluation, the associates have their contracts extended for an undetermined length of time. The Company adopts practices to act in favor of diversity and equality of opportunities. All associates are selected exclusively based on their professional profile, not discriminated by color, gender, political, religious or sexual orientation, which is a clause inscribed in the Company’s Bylaws and practiced at all hierarchical levels.

6.3. RECRUITMENT AND TALENT SELECTION

B2W Digital has developed a bold plan with the intention of identifying the best talents of the market in the functions important to the business, with an entrepreneurial profile and who are aligned to the values and principles of the Company. Through the main doors to the Company – internship, trainee and new talents programs – we recruit young university students and recent graduates, who identify with the “B2W Way”. B2W Internship Program In 2019, we resumed the Internship Program, with the hiring of 70 interns, in Rio de Janeiro and São Paulo.. In addition to participating in various technical, behavioral and immersion training at the Company, they will have the opportunity to learn in practice what they are studying in their courses, experiencing the dynamism of a digital company on a daily basis. B2W Tech Internship Program Launched in 2018, the former “Internship Bit” program focuses on the selection of interns interested in becoming front-end (professionals who develop the interface between system and user) and back-end (professionals who work in programming and in the database). Over a six-month period, interns participate in classes taught by B2W Digital associates, undergo job rotation, develop activities in different areas, and create a project with the help of a tutor (associate). Master's Internship Program Launched in 2019, the partnership project with the UFSCar Computing Department aims to encourage research and knowledge exchange between the academic and corporate environment. This is the first research project that focuses on the evolution of the Apache Marvin platform and includes the participation of teachers and master students from the educational institution.

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Trainee Program We ended the selection process of the Trainee 2020 Program with the approval of 19 candidates. The new trainees will travel through several areas of the Company, following a job rotation model, and then they will be allocated to their areas, where they will develop specific projects. New Talents Program With the purpose of training recent graduates to become future leaders of the Company in an accelerated way, the Company offers the New Talents Program. When they enter B2W, the New Talents are allocated directly in their areas to start their development on the job. They also participate in some training sessions, such as “General Corporate Vision”, in which they swap experiences with managers of different areas, as well as in technical visits to some distribution units. New Talents Program Master Program focused on the recruitment of high potential youths with masters or doctorates from the best universities in the country, who join the company as coordinators. Beginning Together Program – Apprenticeship for Minors B2W Digital runs the "Começando Juntos" (Beginning Together) program that provides youths with their first experience in the job market, designed to help them to develop their skill sets. The program encompasses their professional and interpersonal training of these young people, who have been able to achieve permanent development through live classes and e-learning, in addition to other tools. The company is a proud to be able to contribute to the process for forming citizens and not just training the professional skills of these young people. SOMAR Program – Inclusion of Disabled Persons Being an increasingly inclusive Company is part of our values. To this end, B2W Digital expanded the dissemination of vacancies in institutional channels and in partnerships with municipal secretariats and specialized consultants for these opportunities. In addition, identifying talents and promoting the qualification of persons with disabilities in our business units has been a major challenge considering the accelerated growth of the sector. The Devs Hunt In order to offer the candidate a differentiated experience through a dynamic selection process, B2W Digital launched the program The Dev's Hunt which aims to present the main vacancies of the company and select the best talents performing all the main stages of the selection process in a single day. During the year, 2 editions of the selection process were held in São Paulo.

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Top of mind Universities In recent years, we have strengthened our talent attraction team and made a project to define our EVP – Employee Value Proposition. The project's objective is to reinforce B2W Digital's employing brand in universities, demonstrating all the knowledge, development and career opportunities that the Company can offer. As a result, we repositioned our Company as a brand for this audience and increased the number of events we participate in at Universities by more than 200%. Programming Marathon (Brazilian Computer Society) As a stimulus for the development of entrepreneurial technological projects, we sponsor the Regional - São Paulo and National - Salvador stages of the XXIV SBC Marathon (Brazilian Computer Society) of Programming, where important initiatives were developed through the practice of Hackathon (programming marathon). The competition winners were classified to represent Brazil in the International Collegiate Programming Contest, the main international competition in the area. Programming Marathon (UNICAMP) In 2019, B2W sponsored the Unicamp Programming Marathon. The event, in competition format, aims to select students who will represent the university in official competitions throughout the year. In addition to rewarding the winning teams, we held an opening lecture at the event, sharing with the students the day-to-day life of a developer at B2W. Brazil Conference B2W Digital supported and participated in the fifth edition of the Brazil Conference at Harvard and MIT held by the Brazilian student community in Boston to promote the meeting with leaders from different sectors and with the mission of finding innovative solutions for the future of our country. We also supported HackBrazil, a competition for innovation and technology, which nominated five finalists who played in the final in April, 2019, in Boston. Working days In 4Q19, we held two Working Days with students from Universities of UFF and CEFET, in Rio de Janeiro, and one dedicated to women, in São Paulo. This initiative aims to present B2W's day-to-day and career opportunities. During the event, guests participate in lectures, office tour, and conversations with Company executives. International Mathematical Olympiad We sponsor the participation of the ITA (Technological Institute of Aeronautics) team in the International Mathematical Olympiad that promotes the solution of problems in the areas of algebra, analysis (real and complex) and combinatorial analysis. The ITA team, made up of six students, had five students awarded, winning three silver medals (second prize) and two bronze medals (third prize). Recruitment Trade Shows and Academic Weeks In order to recruit the best talent in the market, B2W Digital participated in the main recruitment fairs and academic weeks at universities across the country. In addition to the space to meet the candidates, the company also carried out various activities such as lectures, workshops at PUC-RJ, EFEJ, UFPE, USP, Unicamp, ITA, Semana da Computação UFSCar and Semana da Engenharia de Produção USP.

6.4. TALENT DEVELOPMENT In line with the main principles, policies and values of the Company, our development programs are structured on three pillars: People, Method and Results. With the objective of searching for the continuous improvement of all our professionals and of contributing to excellence in corporate management of human resources processes, we offer training specific to each profile and challenge embraced by each associate. All associates who identify with the Company's culture, like technology / internet and want to develop to the maximum of their potential, find numerous opportunities in B2W Digital. Proof of this is the significant number of hours of training in 2019: more than 60 thousand hours, between setting, technical and behavioral training, given by consultancies or by the associates themselves. The trainings are promoted at Headquarters, at two innovation and technology centers (BITs: B2W Innovation and Technology) and at distribution centers throughout the country.

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“Great Places to Work 2020” Certification As a result of B2W Digital’s commitment to the development of the Company's talent, we received certification in January/ 20. This is an important recognition to the efforts of continuing to evolve and engage the team to achieve increasingly challenging goals, always focusing on the customer. Training Method - Lean Six Sigma and Agile Methodologies B2W has been intensifying the training and education of associates in Lean Six Sigma and Agile Methodologies, as a way to obtain better results through the training and development of its associates. In 2019, almost 400 associates were trained in the “Belts” methodologies (Yellow, Green, Black and Master Black Belt). B2W Fellows – Scholarship Program The Program is intended for associates that have two or more years of work in the Company, and that have been nominated by their immediate superiors, in account of the superior performance in the exercise of their functions. The aim of the program is to promote the academic training of the participants, qualifying them even more and amplifying their chance of career growth. The Company offers the selected associates scholarships to undergraduate and graduate courses. Leadership Development Program In 2019, we continue to apply to PDG.com, the Manager Development Program, and more than 1000 managers participated in the classes that were taught in our units. The program aims to assist career transition leaders by seeking understanding of their role, impact of their actions on the people they lead and, consequently, on the organization. The Program has been applied at all levels of management, contributing to the preparation of the entire Company team. In addition, in 2019, we continued the LBA Program (Leadership and Business Academy) in partnership with HBS (Harvard Business School) to improve our leadership. Talent Radar The program consists of identifying our talents and directing the training and development actions according to the profile of each associate. Since the beginning of the program, more than 500 managers have been mapped per degree of competence and readiness to take on new challenges. B-Talks In 4Q19, we launched B-Talks, a talk show that aims to share knowledge, promote conversations and debates, and present and integrate areas and people. The events have a panel format where associates are interviewed and present projects, moderated by a manager. The event is broadcast live via webcast to all of our units and employees, allowing them to submit questions before and during the meeting. BIT Tech Week and Hackathon Ironbit In order to foster innovation and technology in our environments, in 2019 we launched BIT Tech Week, a week focused on the realization of lectures, talks, mini-courses and at the end, the traditional hackathon IRONbit! Meetups In 4Q19, B2W Digital continued the rounds of meetups (technical community events). The Meetups are informal events for exchanging information and experiences on a specific topic, involving people from certain technology communities and also the Company's internal people, providing a moment of networking between the two worlds. During this period, we received several groups such as NODE.JS, Elastic, Java, GODOT, Nerd Girls, Devops, Phython, and others. Hackathons In 4Q19, we carried out, in partnership with USP-SP and Inter Hack - the Hackathon for students from USP São Paulo, Leste and São Carlos. Qcon – International Software Development Conference: Thinking about the development of our associates, B2W Digital supported the participation of more than 100 associates in the Qcon Conference. The event brings together the latest software development trends and takes place annually in several cities around the world. The lectures are selected for those who work on a daily basis with development, influence and generate innovation in their teams.

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TDC – The Developer’s Conference In July 2019, more than 200 associates from different locations participated in the TDC (The Developer’s Conference). TDC is a software development event in Brazil that connects organizers of meetups and events, speakers, companies and sponsors. Independently, there are more than ten parallel trails per day organized by experts on the subject. This is yet another initiative that B2W has been investing to contribute to the learning of our IT team. BRACIS / STILL B2W sponsored and supported the 2019 edition of Bracis / Still in Salvador. During the event, our associates participated in several actions representing the company. The Tech Labs team presented B2W's first scientific paper presenting to the scientific community a corpus of user reviews that we extracted from our user evaluation base.

6.5 – TALENT DEVELOPMENT Due to the accelerated growth of the Company, B2W Digital registered more than 1,405 promotions of its associates at all levels. Considering the promotions for management positions, 27% were promoted to "Leader", 17% to “Supervisor”, 37% to “Coordinator” and 19% to “Manager”. As criteria in the hiring and promotion of professionals, the Company bets on the potential of people development, regardless of any criteria of ethnicity, age, nationality, or time of entry.

7. SUSTAINABILITY B2W Digital, through its purpose of connecting people, businesses and services, has collaborated for an increasingly inclusive society and shared values with stakeholders. Throughout 2019, it carried out several initiatives that generated positive changes, balancing the three dimensions, environmental, social and economic. Our initiatives are in line with the Universal Principles of the Global Compact and the United Nations (UN) Agenda 2030 Sustainable Development Goals (SDGs).

7.1 SUSTAINABILITY RECOGNITIONS

B2W Digital makes up, for the sixth consecutive year, the B3 Corporate Sustainability Index (ISE) and was recognized, for the second consecutive year, in the Exame Sustainability Guide, being listed among the most sustainable companies in the country. At the Chico Mendes Socioenvironmental Award, the company was recognized with the Green Seal Certification in the “Responsible Socioenvironmental Action” category. Environment In 2019, the Company participated in B3's Carbon Efficient Index (ICO2) and voluntarily answered the questionnaire of the Carbon Disclosure Project (CDP), with the objective of increasing the transparency and management of its emissions. For the ninth consecutive year, it published its inventory of greenhouse gas (GHG) emissions, which, since 2016, has received the Gold seal from the GHG Protocol program. Contributing to the mitigation of their emissions, DCs located in São Paulo, Brasília and Rio de Janeiro expanded the delivery of small goods by means of bicycles, providing greater mobility in large centers and reducing emissions. Inclusion and diversity In line with the UN 2030 agenda, through social projects and support for external initiatives, B2W Digital has sought to work with communities. The projects aim to promote inclusion, education, reduce inequalities and improve the quality of life, contributing to social transformation. B2W Digital is present throughout the country with its digital platform. As a way to develop a project of national relevance with a positive social impact, we are working in the Amazon rainforest, in partnership with the Amazonas Sustainable Foundation promoting the sale of products from Amazonian craft groups to all of Brazil. The project aims to enhance the craftsmanship of the riverside and indigenous communities

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through the sale of their products on the Americanas.com website. All income obtained from the sale goes to the development of the project. Americanas and americanas.com sponsored the “Todo Mundo Vai” running and walking circuit focused on quality of life and well-being and participated, for the second consecutive year, in the Natal Sem Fome campaign, promoted by the NGO Ação Cidadania, which aims to end the country's hunger. Seeking to show the possibilities for the future for cities and the importance of combating global warming and its effects, they also sponsored the exhibition "O Dia Seguinte" held in Rio de Janeiro. For the fourth year, we promoted the socio-cultural project Grafitarte for urban intervention through graffiti with exclusive sponsorship from Submarino. For the fifth consecutive year, we encourage access to literature in communities in Rio de Janeiro and São Paulo through a library bus that is part of the Books in the Squares Project sponsored by Americanas and americanas.com. Americanas and americanas.com, together with the Instituto Rumo Náutico - Projeto Grael - has been promoting, since 2016, the democratization of access to sports practices for young people in socially vulnerable situations, developing socioenvironmental aspects inherent to sport such as respect for the environment, leadership, human relations and citizenship.

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Notes to the individual and consolidated financial statements On December 31, 2019

(In thousands of Reais, unless otherwise stated)

1 Operational context

B2W - Companhia Digital ("B2W" or "Company”), with head offices at Rua Sacadura Cabral, 102, in the City and State of Rio de Janeiro, incorporated through the merger of Americanas.com S.A. - eCommerce (Americanas.com) and Submarino S.A., with shares traded on the Novo Mercado B3 S.A. - Brasil, Bolsa, Balcão under the ticker BTOW3. B2W is controlled by Lojas Americanas SA ("LASA" or "Parent Company"), a publicly traded company with shares traded on B3 S.A. - Brasil, Bolsa, Balcão under the ticker LAME3 - ON and LAME4 - PN.

The Company and its subsidiaries (collectively, "the Group") operate on the following fronts: e-commerce, through its brands, Americanas.com, Submarino, Shoptime and Sou Barato; credit card administration and promotion; technology platform; logistics platform, distribution and customer service platform, Marketplace, and digital payment account through Ame.

B2W offers technology services through BIT Services, which is the result of the construction of a disruptive, robust and innovative technology platform to support the growth of the Company. On the logistics vertical, B2W offers services of storage, distribution and customer services to its partners through its B2W Fulfillment (BFF) platform. Finally, consumer credit services are another important part of B2W Digital’s platforms, through which the Company offers private label credit cards for its four main brands, Americanas.com, Submarino, Shoptime and Sou Barato.

2 Main accounting policies The main accounting policies applied in the preparation of these financial statements are defined below. These policies were consistently applied in the years presented, unless otherwise stated.

2.1 Basis of preparation

The preparation of the financial statements requires the use of certain critical accounting estimates and also the exercise of judgment by the Company's management in the process of applying the Group's accounting policies. Those areas that require a higher level of judgment and are more complex, as well as the areas in which assumptions and estimates are significant for the consolidated financial statements, are disclosed in note 3.

The financial statements were prepared based on historical cost, with the exception of financial assets at fair value through profit or loss and derivative financial instruments, which are measured at fair value and financial liabilities, which are measured at amortized cost.

The issuance of these financial statements was authorized by the board of directors on December 14, 2020.

(a) Declaration of conformity

The individual and consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), the accounting practices adopted in Brazil, Law 6.404 / 76 and pronouncements and interpretations issued by the Accounting Pronouncements Committee - CPC and ratified by the CVM - Brazilian Securities Commission.

(b) Demonstration of Value Added (DVA)

The presentation of the Individual and Consolidated Statement of Added Value (DVA) is required by Brazilian corporate law and the accounting practices adopted in Brazil applicable to publicly-held companies. IFRS does not require the presentation of this statement. As a consequence, by IFRS, this statement is presented as supplementary information, without prejudice to any financial statements.

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2.2 Changes in key accounting policies The following standards were adopted for the first time for the year started on January 1, 2019, and brought material

impacts to the Group:

CPC 06 (R2) / IFRS 16 – Leasing Operations

O CPC 06 (R2) / IFRS 16 – Leasing Operations introduced a unique model of accounting for leases in the balance sheet of lessees. As a result, the Group, as a lessee, recognized the rights of use assets that represent its rights to use the underlying assets and the lease liabilities that represent its obligation to make lease payments (note 17). The lessor's accounting remains similar to previous accounting policies.

The Group adopted the CPC 06 (R2) / IFRS 16, and used the modified retrospective approach, in which the

cumulative effect of the initial adoption is recognized as an adjustment to the opening balance of retained earnings as of January 1, 2019. Therefore, the comparative information presented for 2018 has not been restated - that is, it is presented as previously reported in accordance with CPC 06 / IAS 17 and related interpretations.

The main lines of the financial statements are presented below, with the changes introduced by CPC 06 (R2) / IFRS 16 Leasing, on the base date of their initial adoption: Balance Sheet as of January 1, 2019


Original balances

Adoption

impact

Resetting of opening balance

Original balances

Adoption

impact

Resetting of opening balance

Non-current assets 6,042,514 204,170 6,246,684 5,999,122 256,302 6,255,424

IR/CSLL Deferred 1,104,076 10,132 1,114,208 1,163,874 12,061 1,175,935

Investiments 589,750 (3,745) 586,005 - - -

Right-of-use assets - 197,783 197,783 - 244,241 244,241

Current Liabilities 2,899,926 53,027 2,952,953 3,209,425 65,976 3,275,401

Leases payable- net - 53,027 53,027 - 65,976 65,976

Non-current liabilities 6,310,531 174,556 6,485,087 6,284,654 213,739 6,498,393

Leases payable- net - 174,556 174,556 - 213,739 213,739

Shareholders’ equity 3,537,115 (23,413) 3,513,702 3,537,115 (23,413) 3,513,702

In the initial adoption of IFRS 16 / CPC 06 (R2), the Group used the following practical procedures permitted by the

standard: - use of a single discount rate on a lease portfolio with reasonably similar characteristics; - use of previous assessments on whether inexpensive leases; - accounting for operating leases with a remaining term of less than 12 months on January 1, 2019 as short-term

leases; - exclusion of initial direct costs for measuring the right-of-use asset on the date of initial application; and - use of retrospective analyzes to determine the lease period, when the contract includes options for extending or

terminating the lease.

The Group also chose not to reassess whether a contract is, or contains, a lease on the date of initial adoption. Instead, for contracts signed before the transition date, the Group used its valuation using the IAS 17/CPC 06 (R1) and the IFRIC 4 - " Determination if an Agreement contains a Lease ".

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The standards listed below were also adopted for the first time for the year started on January 1, 2019, but had no material impact on the Group:

(a) IFRIC 23/ ICPC 22 – Uncertainty about Treatment of Income Taxes

This interpretation clarifies how to measure and recognize current and deferred income tax assets and liabilities (IR / CS), in the light of IAS 12 / CPC 32, in cases where there is uncertainty about treatments applied in the calculation of the respective taxes. Management evaluated the main tax treatments adopted by the Group in the open periods subject to question by the tax authorities and concluded that there is no significant impact to be recorded in the financial statements. Critical management estimates are disclosed in Notes 3 and 11, respectively.

With regard to uncertain tax treatments related to income tax and social contribution, management assesses the likelihood of acceptance and decisions of higher courts. If the Company, supported by its legal advisors, understands that such treatments are likely to be accepted by the tax authority, the Company makes disclosure and, if the tax treatment is likely not to be accepted by the tax authority, the Company records the provision.

(b) IAS 12/ CPC 32 – Taxes of profit

The standard clarifies that the tax effects (taxes on income) on dividend distributions related to financial instruments classified in equity, must follow the classification of past transactions or events that generated distributable profits. This requirement is applicable to all income tax effects related to dividends, including distributions whose accounting treatments are similar to dividends, for example: interest on equity.

(c) IAS 23/ CPC 20 – Borrowing costs

The amendment clarifies that if a specific loan remains open after the corresponding qualifying asset is ready for use or sale (as the case may be), it will become part of the general loans for purposes of determining the costs of loans eligible for capitalization in others qualifying assets, for which there are no specific loans.

(d) IFRS 3/ CPC 15 – Business combination

The standard clarifies that the acquisition of control over a business that was previously a joint operation (under IFRS 11) of the acquirer, is a combination of business in stages (step-acquisition). Accordingly, the acquirer must remeasure the interest previously held in the joint operation at fair value, on the acquisition date.

(e) IAS 28/ CPC 19 – Investiment in associate, subsidiary and joint venture

IFRS 9 excludes from its scope equity interests in associates and joint ventures, which are accounted for using the equity method in accordance with IAS 28. The amendment to IAS 28 clarified that the referred scope exclusion in IFRS 9 applies only to investment elements that are accounted for using the equity method. Accordingly, the accounting of long-term financial instruments with an associate or joint venture that, in substance, are part of the net investment in these investees, but for which the equity method does not apply, must follow the requirements of IFRS 9.

2.3 Consolidation

The following accounting policies are applied in the preparation of the consolidated financial statements:

(a) Subsidiaries Subsidiaries are all entities (including structured entities) over which the Group has control. The subsidiaries are fully consolidated from the date on which control is transferred to the Group. Consolidation is interrupted as from the date when the Group ceases to have control. The identifiable assets acquired and the contingent liabilities assumed for the acquisition of subsidiaries in a business combination are initially measured at fair values on the acquisition date. The Group recognizes the non-controlling

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interest in the acquiree, both at fair value and at the proportional portion of the non-controlling interest in the fair value of the acquiree's net assets. The measurement of non-controlling interest is determined on each acquisition made. Acquisition-related costs are recorded in the income statement for the year as incurred. Transactions, balances and unrealized gains on transactions between Group companies are eliminated. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. The accounting policies of subsidiaries are changed, when necessary, to ensure consistency with the policies adopted by the Group. In the parent company's financial statements, the financial information of subsidiaries is recognized using the equity method (note 14).

(b) Loss of control in subsidiaries When the Group ceases to have control, any interest held in the entity is measured at fair value, with the change in book value recognized in the income statement. The amounts previously recognized in other comprehensive income are reclassified to income.

2.4 Presentation of segment information

The activities of the Group are concentrated in the marketing of products and delivery of services by various means of non-presence marketing, especially the Internet. Despite the diversity of products sold and services provided by the Group (e-commerce, consumer finance service platforms; technology platform; logistics, distribution and customer services platform; Marketplace; and the digital payment account), such activities are not controlled and managed by the Management as independent operational segments, as their accompanying results are monitored, tracked, and evaluated in an integrated manner. Thus, Management understands that the Company is organized, basically, as a single business unit. The Group also operates in the area of financial products through the subsidiary Submarino Finance Promotora de Crédito Ltda. and Digital Finance Promotora de Crédito Ltda, which, by not achieving the minimum quantitative and qualitative parameters, is not being presented as a separate operating segment.

2.5 Foreign currency conversion

(a) Functional currency and presentation currency

The financial statements are presented in Reais, which is the Group's functional currency. All balances have been rounded to the nearest thousand, except where otherwise indicated.

(b) Transactions and balances

Foreign currency transactions, that is, all transactions that are not carried out in the functional currency, are translated using the exchange rate on the dates of each transaction. Monetary assets and liabilities in foreign currency are translated into the functional currency at the exchange rate on the closing date. Gains and losses on changes in exchange rates on monetary assets and liabilities are recognized in the income statement. Non-monetary assets and liabilities acquired or contracted in foreign currency, when applicable, are converted based on the exchange rates of the transaction dates or on the fair value valuation dates when it is used. The difference in foreign currency generated when converting the financial statements of the subsidiary whose functional currency is not the real (“R$”) to the real presentation currency (“R$”) is recognized in other comprehensive income and accumulated in equity valuation adjustments in equity.

2.6 Cash, cash equivalents and marketable securities Cash and cash equivalents include cash, bank deposits and other highly liquid short-term bonds and securities, with the intention and possibility of being redeemed in the short term, and with an insignificant risk of change in value.

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2.7 Financial assets and liabilities

2.7.1 Classification The Group classifies, on initial recognition, its financial assets and liabilities as measured: (i) amortized cost ; (ii) fair value through other comprehensive income (VJORA); (iii) fair value through profit or loss (VJR). The classification of financial assets according to CPC 48 / IFRS 9 is generally based on the business model in which a financial asset is managed and on its contractual cash flow characteristics.

2.7.2 Recognition and measurement The Group conducts an assessment of the objective of the business model in which a financial asset is held in the portfolio because it better reflects the way in which the business is managed and the information is provided to management. Financial assets are initially recognized at fair value, plus transaction costs for all financial assets not classified at fair value through profit or loss. Financial assets at VJR are initially recognized at fair value, and transaction costs are charged to the income statement. Financial assets are written off when the rights to receive cash flows have expired or have been transferred; in the latter case, provided that the Group has significantly transferred all the risks and rewards of ownership. If financial assets valued at VJORA, they will be measured at fair value and changes in fair value, except for losses through impairment, interest and exchange differences on debt instruments, will be recognized in VJORA and accumulated in the fair value reserve. Financial assets measured at VJR are subsequently recorded at fair value. Loans and receivables are recorded at amortized cost, using the effective interest rate method. Gains or losses arising from changes in the fair value of financial assets measured at VJR are presented in the income statement under "Financial income or expenses" in the year in which they occur. Exchange variations on monetary securities are recognized in the income statement. Changes in the fair value of monetary and non-monetary securities, classified as VJORA, are recognized in equity. When securities classified as VJORA are sold or suffer impairment, the accumulated adjustments to fair value, recognized in equity, are included in the income statement as "Financial income or expenses". Interest on VJORA securities, calculated using the effective interest rate method, is recognized in the income statement as part of other income. The fair values of publicly quoted investments are based on current purchase prices. If the market for a financial asset (and for securities not listed on a stock exchange) is not active, the Group establishes fair value through valuation techniques. These techniques include the use of recent transactions contracted with third parties, reference to other instruments that are substantially similar, analysis of discounted cash flows and option pricing models that make the greatest possible use of information generated by the market and rely as little as possible on information generated by the administration of the entity itself. For purposes of assessing whether contractual cash flows are only principal and interest payments, ‘principal’ is defined as the fair value of the financial asset upon initial recognition. 'Interest' is defined as a consideration for the time value of money and for the credit risk associated with the principal outstanding over a given period of time and for the other basic risks and costs of borrowing (for example, liquidity risk and administrative costs), as well as a profit margin. The Group considers the contractual terms of the instrument to assess whether the contractual cash flows are only payments of principal and interest. This includes assessing whether the financial asset contains a contractual term that could change the timing or the value of the contractual cash flows so that it would not meet this condition.

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2.7.3 Compensation for financial instruments Financial assets and liabilities are offset and the net amount is shown in the balance sheet when there is a legal right to offset the recognized amounts and there is an intention to settle them on a net basis, or to realize the asset and settle the liability simultaneously. The legal right must not be contingent on future events and must be applicable in the normal course of business and in the event of default, insolvency or bankruptcy of the company or the counterparty.

2.7.4 Impairment of financial assets The Group opted to measure provisions for losses on accounts receivable and other receivables and contractual assets at an amount equal to the expected credit loss for life. When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating expected credit losses, the Company considers reasonable and bearable information that is relevant and available without undue cost or effort. This includes quantitative and qualitative information and analysis, based on the Company's historical experience, credit assessment and considering information “forward looking”. The Company considers a financial asset to be in default when:

(i) unlikely that the creditor will fully pay its credit obligations, without resorting to actions such as collateral (if any); or

(ii) the financial asset has been past due for more than 180 days; or (iii) probability that the debtor will go bankrupt, or undergo another type of financial reorganization.

The expected credit losses are estimates weighted by the probability of credit losses. Credit losses are measured at present value based on the difference between the cash flows due to the Group in accordance with the contract and the cash flows that the Group expects to receive. At each balance sheet date, the Group assesses whether the financial assets are in trouble with recovery. A financial asset has “recovery problems” when one or more events occur that have a detrimental impact on the estimated future cash flows of the financial asset.

2.7.5 Derecognition The Group derecognizes a financial asset when the contractual rights to the asset's cash flows expire, or when the Group transfers the contractual rights of receipt to the contractual cash flows on a financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred or in which the Group neither transfers nor substantially maintains all the risks and benefits of the ownership of the financial asset and also does not retain control over the financial asset. The Group derecognizes a financial liability when its contractual obligation is withdrawn, canceled or expires. The Group also derecognizes a financial liability when the terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.

2.8 Derivative financial instruments - hedge activities

The Group maintains derivative financial instruments as a fair value hedge to hedge its exposures to the risks of changes in foreign currency and interest rates. Derivatives are initially measured at fair value on the date the contract is signed and are subsequently measured at fair value. For more details, see note 4.3.

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2.9 Accounts receivable from customers Accounts receivable from credit card companies are presented net of the adjustment to present value, calculated on the share of sales and the provision for estimated credit loss. Also recorded under this item are sales made through corporate transactions, which are highlighted as "Other accounts receivable" (note 9). Accounts receivable from customers, unless it is an accounts receivable from customers without a significant financing component, are initially recognized at fair value. Accounts receivable from customers without a significant financing component are initially measured at the transaction price less the estimated credit loss provision ("Impairment").

2.10 Inventory Inventories are stated at average acquisition cost or net realizable value, whichever is less. The average acquisition cost is shown net of the adjustment to present value of suppliers (term purchases) and bonuses agreed with suppliers, when applicable. The net realizable value is the estimated selling price in the normal course of business and the estimated costs necessary to make the sale. Inventories are reduced by the provision for losses, which is periodically analyzed and evaluated for their adequacy.

2.11 Intangible assets

(a) Goodwill The goodwill results from the acquisition of subsidiaries and represents the excess:

(i) the consideration transferred; (ii) the value of the non-controlling interest in the acquiree; and (iii) the fair value on the acquisition date of any previous equity interest in the acquired company in relation to

the fair value of the identifiable net assets acquired. If the total consideration transferred, the non-controlling interest recognized and the previously held interest measured at fair value is less than the fair value of the acquired subsidiary's net assets, in the case of a favorable purchase, the difference is recognized directly in the statement the result. In the consolidated financial statements, goodwill from acquisition and subsidiaries is recorded as "intangible asset".

(b) Trademarks and licenses Trademarks and licenses purchased separately are initially shown at historical cost. Trademarks and licenses acquired in a business combination are recognized at fair value on the acquisition date. Subsequently, brands and licenses, assessed for a defined useful life, are recorded at cost less accumulated amortization. Amortization is calculated using the straight-line method to allocate the cost of trademarks and licenses over their estimated useful life of 15 to 20 years.

(c) Softwares/Website Expenses related to the development of web sites (the Company's main sales channel), such as the development of operational applications and technological infrastructure (purchase and internal development of software and installation of applications on the sites), rights to use software, as well as graphic development, are recorded in intangible assets, as provided for in Technical Pronouncement CPC 04 (IAS 38), being amortized on a straight-line basis over the stipulated term of their use and benefits to be earned (note 16). Software licenses are capitalized based on the costs incurred to purchase the software and websites and make them ready for use. Costs associated with software maintenance are recognized as an expense, as incurred. Development costs that are directly attributable to the design and testing of new software and identifiable and exclusive websites, controlled by the Group, are recognized as intangible assets when the following criteria are met:

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It is technically feasible to complete the software / website so that it is available for use; Management intends to complete the software / website and use or sell it; The software / website can be sold or used; It can be demonstrated that the software / website is likely to generate future economic benefits; Adequate technical, financial and other resources are available to complete the development and to use or sell

the software / website; The expense attributable to the software / website during its development can be safely measured. Directly attributable costs, which are capitalized as part of the software / website product, include employee costs allocated to the development of software / websites and an appropriate portion of applicable indirect expenses. Costs also include borrowing costs incurred during the software / website development period. The amount of charges on capitalized loans is obtained by applying the weighted average rate on loans that were in effect during the year on investments made in obtaining the asset and does not exceed the amount of borrowing costs incurred during the year. Other development expenditures that do not meet these criteria are recognized as an expense as incurred. Development costs previously recognized as an expense are not recognized as an asset in a subsequent year.

2.12 Fixed assets Property, plant and equipment are measured at historical cost, less accumulated depreciation. The historical cost includes the expenses directly attributable to the acquisition of the items and the financing costs related to the acquisition of qualified assets. Subsequent costs are included in the asset's carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with these costs will flow and can be reliably measured. All other repairs and maintenance are recorded against the income for the year, when incurred. Land is not depreciated. Depreciation of other property, plant and equipment is calculated using the straight-line method considering their costs and their residual values during the estimated useful life, as shown in note 15. Residual values and useful lives of assets are reviewed at the end of each year and, if appropriate, adjusted. Gains and losses on disposals are determined by comparing the results with their book value and are recognized in "Other net operating expenses and income" in the income statement.

2.13 Leasing Operations Previously, the Group determined at the inception of the agreement whether it was or contained a lease under ICPC 03 / IFRIC 4 - Complementary Aspects of Leasing Operations. The Group now assesses whether a contract is or contains a lease based on the new lease definition. According to CPC 06 (R2) / IFRS 16, a contract is or contains a lease if it transfers the right to control the use of an identified asset for a period of time in exchange for consideration. The Group recognizes a right of use asset and a lease liability at the date of commencement of the lease. The right of use asset is initially measured at cost and subsequently at cost less any accumulated depreciation and impairment, and adjusted for certain remeasures of the lease liability. The lease liability is initially measured at the present value of the lease payments that were not paid at the commencement date, discounted using the interest rate implied in the lease or, if that rate can not be determined immediately, the Group's incremental loan rate. In the transition, for leases classified as operating leases under CPC 06 (R1) / IAS 17, lease liabilities were measured at the present value of the remaining payments, discounted by the Group's incremental loan rate on January 1, 2019.

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The right of use assets were measured at their book value as if CPC 06 (R2) / IFRS 16 had been applied since the date of commencement, discounted by the lessee's incremental loan rate at the date of initial application.

2.14 Impairment of non-financial assets Assets that have an indefinite useful life, such as goodwill, are not subject to amortization and are tested annually to identify any need for impairment. Assets that are subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized when the carrying amount of the asset exceeds its recoverable amount, which represents the higher of an asset's fair value less its selling costs and its value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (Cash-Generating Units - CGU). Non-financial assets, except for goodwill, which have been adjusted for impairment, are subsequently reviewed for the analysis of a possible reversal of impairment on the balance sheet date. Goodwill adjusted to income for the year by impairment is no longer reversed.

2.15 Accounts payable to suppliers Accounts payable to suppliers are obligations contracted for goods or services acquired in the normal course of business. These obligations can be deducted from receivables when there are commercial agreements signed with suppliers for disclosure or promotion of certain products. They are classified as current liabilities if payment is due in the year of up to one year. Otherwise, these accounts payable are presented as non-current liabilities. They are measured at amortized cost using the effective interest rate method (note 18).

2.16 Present value adjustment

The operations of long-term purchases, primarily from suppliers of goods and services, were adjusted to their present value taking into account the maturities of these transactions. The average rate used of 5.86% per annum (p.a.) at December 31, 2019 (6.48% p.a. at December 31, 2018), funding base for the base dates. The constitution of the present value adjustment of purchases is recorded under "Suppliers" in Note 18 against the “Inventories” account (Note 10) and the counterpart entries are shown under the heading "Financial Expenses", in Note 29, through the maturity date, in the case of suppliers, and for the realization of inventories based on the amounts recorded under the heading "Cost of goods sold and services provided."

The operations of long-term transactions, at the same previously-agreed prices as represented, mainly, through credit card installment sales, were brought to their present value taking into account the payment deadlines of the aforementioned transactions. The average rate used of 6.31% p.a. as of December 31, 2019 (7.00% p.a. on December 31, 2018), was based on receivable discounts on their respective base dates. On the identified adjustments, the tax rates were applied on the respective base of dates. The present value adjustment of installment sales has a counterpart entry under the heading "Accounts receivable from clients" (Note 9) against the “Sales Revenue” account and its realization is recorded under "Financial revenues" in note 29 through the maturity date.

2.17 Loans and financing Loans and financing are recognized at amortized cost, net of costs incurred at. Any difference between the amounts raised (net of transaction costs) and the total amount payable is recognized in the income statement during the period in which the loans are open, using the effective interest rate method. Hedged loans, with swap contracts as instruments for the purpose of protecting against fluctuations in the exchange rate, are recorded at fair value, as shown in note 4.1 (a). Loans are classified as current liabilities, unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.

2.18 Provisions

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Provisions are recognized when: (i) the Group has a present or non-formalized obligation as a result of events that have already occured; (ii) it is propable that an outflow of funds will be necessary to settle the obligation; and (iii) the amount can be reliably estimated. When there are a series of similar obligations, the likelihood of settling them is determined taking into account the class of obligations as a whole. A provision is recognized even if the probability of settlement related to any individual item included in the same class of obligations is small. Provisions are measured at the present value of expenses that must be required to settle the obligation, using a rate before tax effects, which reflects current market assessments of the value of money over time and the specific risks of the obligation. The increase in the obligation due to the passage of time is recognized as a financial expense.

The Group assesses, at least once a year, the sufficiency of its provisions for events likely to occur over the next fiscal year.

2.19 Current and deferred income tax and social contribution

Income and social contribution taxes for the year comprise current and deferred taxes and are recognized in the income statement. The current and deferred income tax and social contribution charge is calculated based on tax laws enacted, or substantially enacted, on the balance sheet date. Management periodically evaluates the positions taken by the Group in calculating income taxes in relation to situations in which the applicable tax regulations give rise to interpretations and establishes provisions, when appropriate, based on the estimated amounts paid to the tax authorities. Current income tax and social contribution are shown net, by taxpayer entity, in liabilities when there are amounts payable, or in assets when the amounts paid in advance exceed the total due on the date of the financial statements. However, deferred tax assets and liabilities are presented separately (note 12 (a)). Deferred income tax and social contribution assets are recognized only to the extent that it is probable that future taxable income will be available and against which temporary differences can be used. Deferred income tax assets and liabilities are shown net in the balance sheet when there is a legal right and the intention to offset them when calculating current taxes, generally related to the same legal entity and the same tax authority.

2.20 Employee benefits

(a) Share-based compensation The Group operates a share-based compensation plan, settled with shares, under which the entity receives the services of employees as consideration for the Group's equity instruments (BTOW3 shares). The fair value of employee services, received in exchange for granting options, is recognized as an expense. The total amount to be recognized as an expense over the duration of the exercise and acquisition of rights over the plan's shares (vesting period) is determined based on the fair value of the instruments granted, calculated on the grant date of the share purchase programs, based on the average quotation of the closings of shares on the stock exchange where they are traded, this total amount being appropriated to the result, with corresponding adjustment in shareholders' equity, by the linear method during the vesting period, considering the expectation of withdrawal.

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On the balance sheet date, the Group reviews the withdrawal estimates on the number of shares that are in vesting period, based on historical data, and recognizes the impact of the revision of the estimates, if any, in the income statement, with an adjustment corresponding in equity. On the date of granting the plan, the amounts received from employees, net of any directly attributable transaction costs, are credited to the share capital (nominal value). Restricted shares or shares, as the case may be, issued at the end of the vesting period are also credited to the share capital, but based on the capitalization of the reserves that were constituted during the vesting period.

(b) Profit sharing When applicable, the Group recognizes a liability and an expense for profit sharing based on a methodology that takes into account the net profit attributable to the Company's shareholders.

(c) Other benefits The Company and its subsidiaries do not grant other post-employment benefits, termination benefits or other long-term benefits to Management and its employees in addition to those provided for in the labor legislation.

2.21 Capital social Common and preferred shares are classified in equity (note 25). Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction from the amount raised, net of taxes. When the Company purchases shares of its own capital (treasury shares), the amount paid, including any additional directly attributable costs (net of income tax), is deducted from shareholders' equity until the shares are canceled or traded. When these shares are subsequently traded, any amount received, net of any additional transaction costs directly attributable and the respective effects of income tax and social contribution, is included in the shareholders' equity attributable to the Company's shareholders.

2.22 Revenue recognition The Group adopted CPC 47 / IFRS 15 as of January 1, 2018. Revenue comprises the fair value of the consideration received or receivable for the sale of products and services in the normal course of the Group's activities. Revenue is shown net of taxes, returns, rebates and discounts, as well as eliminations of sales between Group companies. The Group recognizes revenue when its value can be reliably measured, when it is probable that future economic benefits will flow to the entity and when specific criteria have been met for each of the activities. The Group bases its estimates taking into account the type of customer, the type of transaction and the specifications of each sale.

(a) Sale of goods and services Revenues from sales of goods and services are recognized when the products are delivered and accepted by customers at their facilities. For cases that allow the customer to return the goods, the revenue is recognized to the extent that it is highly likely that a significant reversal in the amount of accumulated revenue will not occur. Sales orders approved by credit card companies, whose products have not yet been invoiced, nor delivered to customers, and sales of gift cards that are in the possession of customers and which will be used in the future are recorded as "Advance received from customers" classified in current liabilities.

(b) Financial income Financial income is recognized on an accrual basis, using the effective interest rate method.

2.23 Distribution of dividends and interest on equity

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When applicable, the distribution of dividends and interest on equity to the Company's shareholders is recognized as a liability in the Group's financial statements at the end of the year, based on the Company's bylaws. Any amount above the mandatory minimum is recorded in equity until the date of approval. The tax benefit of interest on own capital is recognized in the income statement for tax purposes and in shareholders' equity for corporate purposes.

3 Accounting estimates and judgment Accounting estimates and judgment are continually evaluated, and are based on historical experience and various other factors, including expectations of future events, which are believed to be reasonable under the circumstances.

3.1 Critical accounting estimates and assumptions

By definition, the resulting accounting estimates will rarely be equal to the respective actual results. The estimates and assumptions that present a significant risk, with the probability of causing a relevant adjustment in the book values of assets and liabilities for the next year, are contemplated below:

(a) Goodwill impairment Annually, the Group tests for possible impairment losses on goodwill, in accordance with the accounting policy presented in note 2.14. The recoverable amounts of Cash-Generating Units (CGUs) were determined based on calculations of the value in use, made based on estimates. No goodwill impairment losses were recognized in the financial statements for the years ended December 31, 2019 and 2018.

(b) Recovery of deferred income tax and social contribution Significant management judgment is required to determine the amount of deferred tax assets that can be recognized and considers the probable realization period based on projections of future taxable income. The assumptions for the projection of future taxable profits are in line with the Company's business plan approved by management and are presented in Note 12. The expectation for realization of deferred income tax and social contribution assets is shown in note 12 (b).

(c) Fair value of derivatives and other financial instruments The fair value of the financial instruments presented in note 4.3 is based on market prices, quoted on the balance sheet date or, if they do not exist, on other instruments that allow their measurement.

(d) Tax credit resulting from exclusion of ICMS in the PIS and COFINS calculation basis

As mentioned in Note 11, the PIS and COFINS tax credit resulting from the exclusion of ICMS in its calculation base was calculated considering the management's best estimate determined based on the survey of the identified and available documents. The period that involves the right to credit, including dates prior to the validity and mandatory nature of the electronic invoice and digital fiscal bookkeeping (SPED), generates greater complexity in calculating the amounts and, therefore, the amount recognized may still change.

3.2 Critical judgments in the application of the Group's accounting policies

(a) Provision for estimated credit loss

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Justified by Management on expected losses on credits due and overdue, being recorded in an amount considered sufficient to cover the probable losses on the realization of accounts receivable (note 9).

(b) Provision for losses on inventories The provision for losses on inventories is estimated based on the history of losses on the execution of physical inventories at distribution centers, as well as the sale of items below the purchase price and unsold inventoriesThis provision is considered sufficient by Management to cover probable losses on the realization of its inventories (note 10).

(c) Useful life of fixed and intangible assets The depreciation or amortization of property, plant and equipment and intangible assets, based on a report prepared by an independent specialist, considers the best estimate of the use of these assets for the purposes of its operations. Management periodically assesses whether changes in the economic scenario and / or the consumer market may require a revision of these estimates of useful life (notes 15 and 16).

(d) Impairment of non-financial assets Impairment tests are performed considering projections of future results, calculated based on internal and market assumptions, discounted to present value. These projections are calculated considering Management's best estimates, which are revised when changes in the economic scenario or in the consumer market occur.

(e) Contingent assets and liabilities The Group recorded provisions, which involve considerable judgment by Management, for tax, labor and civil risks that, as a result of a past event, it is probable that an outflow of funds involving economic benefits will be necessary to settle the obligation and an estimate reasonable amount can be made of the amount of that obligation. The Company is subject to legal, civil and labor claims covering matters arising from the normal course of its business activities. The assessment of the likelihood of loss includes the assessment of the available evidence, the hierarchy of laws, the available jurisprudence, the most recent court decisions and their relevance in the legal system, as well as the assessment of outside lawyers. Provisions are reviewed and adjusted to take into account changes in circumstances such as the applicable statute of limitations, conclusions of tax inspections or additional exposures identified based on new matters or court decisions. Actual results may differ from estimates. Contingent assets are events that give rise to the possibility of economic benefits for the Company. When practically certain, based on legal opinions that support their realization, they are recognized in the income for the year (note 11).

4 Management of financial risk

4.1 Financial risk factors

In the normal course of business, the Group is exposed to market risks related to the fluctuation of interest rates and exchange variations, as well as credit risk on its installment sales and liquidity risk. Under monitoring carried out by its officers and management, and supervised by the Board of Directors, the Group uses hedge instruments to minimize exposure to these risks. These administrators determine what strategies are to be adopted and Management contracts appropriate hedge instruments for each circumstance and inherent risk.

The Group does not have options, swaptions, repentance swaps, flexible options, derivatives embedded in other products, structured derivative transactions and "exotic derivatives". The Group does not operate derivative financial instruments for speculative purposes, thus reaffirming its commitment to the conservative cash management policy, whether in relation to its financial liabilities or its cash position.

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(a) Market risk

(i) Exchange rate risk

The Group uses traditional swaps to offset exchange losses arising from sharp devaluations of the Real (R$) against these foreign currency deposits.

Traditional swaps (registered in the borrowings and financing account):

The counterparts to these traditional swaps are the financial institutions that provide loans in foreign currency (US dollars and Euro). These CDI-referenced swaps aim to cancel exchange risk, transforming the cost of the debt (Note 19) to local currency and interest rates, varying at 118.9% to 122.6% of the CDI. These contracts, at December 31, 2019, amounted to a reference value of R$ 800,000 for the Parent Company and R$ 800,00 in the Consolidated (R$ 1,090,000 and R$ 1,136,324 on December 31, 2018, respectively). These operations are matched in terms of amount, terms, and interest rates. The Group intends to settle such contracts simultaneously with the respective loans. In this type of operation there are no contractual terms of margin call. The are no contractual clauses for margin calls in this type of transaction.

At December 31, 2019, the position of these derivative financial instruments was as follows:


2019 2018 2019 2018

Hedge object 790,496 1,120,161 790,496 1.168.284

Liability of the swap (% CDI) (816,561) (1,117,541) (816,561) (1,164,307)

Swap accounting balance (26,065) 2,620 (26,065) 3,977


2019 2018 2019 2018

Object of the hedge (debt)

Amortized cost 790,496 1,120,161 790,496 1,168,284

Fair value 802,770 1,088,697 802,770 1,137,412

12,274 (31,464) 12,274 (30,872) Swaps Active position Amortized cost (790,496) (1,120,161) (790,496) (1,168,284) (Dollar/Euro + Pré)

Fair value (804,465) (1,116,867) (804,465) (1,165,942)

(13,969) 3,294 (13,969) 2,342 Passive position (% CDI)

Amortized cost (816,561) (1,117,541) (816,561) (1,164,307)

Fair value (818,256) (1,145,711) (818,256) (1,192,837)

1,695 28,170 1,695 28,530

12,274 (31,464) 12,274 (30,872)

Considering that the Group's exposure to the risk of wide swings in currency exchange rates is mitigated by traditional swap operations, contracted for exchange protection purposes and, therefore, simultaneously with the respective foreign currency borrowings, the change in the rate of the US dollar and Euro compared to the real due to the current market conditions does not produce any significant impacts on the Group's financial information.

(ii) Interest rate risk

The Group uses resources produced by operational activities to manage its operations, as well as to guarantee investments and growth. In order to complement its cash requirements for growth, as well as to support cash investments, when necessary, the Group obtains loans and financing from the main financial institutions in the country, which are substantially (around 89% of total) indexed to the variation of the Interbank Deposit Certificate (CDI). Relevant fluctuations in the CDI (see sensitivity analysis in item (d) below) raise the possibility of inherent risk. Financial investment policies indexed by the CDI partially mitigate this effect.

48

(b) Credit risk

Credit risk is managed at the corporate level. Credit risk stems from cash and cash equivalents, derivative financial instruments, deposits in banks and other financial institutions as well as exposure to client credit. With regard to banks and other financial institutions, the individual risk limits are determined based on internal or external classifications according to the limits set by the Board of Directors. The use of credit limits is regularly monitored. Sales to retail clients are settled in cash or through the main credit cards existing in the market.

The credit risk is minimized by the fact that approximately 84% of the Group's sales are conducted through credit cards administered by the main credit card operators, which have excellent levels of risk classification. The Group maintains a provisions for credit losses estimated by management, that is considered sufficient to cover possible losses on its receivables.

(c) Liquidity risk

Management continuously monitors forecasts for the liquidity requirements of the Group in order to ensure that it has sufficient cash to satisfy its operating needs. This forecast takes into consideration plans for financing the Groups's debt, compliance with clauses, compliance with internal targets for the asset balance quotient and, if applicable, external or legal regulatory requirements - for example, currency restrictions.

The Treasury invests excess cash in interest-bearing bank accounts, term deposits, short-term deposits and securities, choosing instruments with appropriate maturities with sufficient liquidity that offer a sufficient margin as determined by the aforementioned forecasts.

The table below analyzes the non-derivative financial liabilities of the Group and the derivative financial liabilities that are settled on a liquid basis by the Group, through common maturity periods that correspond to the period remaining between the date of the calculation of the net equity balance and the contracted date of maturity. Derivative financial liabilities are included in the analysis if their maturities are essential for an understanding of the cash flows.

Parent Company

Less than one year Between one and two years

Between two and five years

More than five years

At December 30, 2019

Suppliers 2,665,242

Borrowings, financing and debentures 1,322,361 461,152 5,663,804 646,166

Leases liability 78,240 54,487 118,236 40,212


Suppliers 1,907,327 - - -

Borrowings, financing and debentures 694,058 2,484,977 4,545,653 860,431

Consolidated

Less than one year Between one and two years

Between two and five years

More than five years


Suppliers 2,758,582 Borrowings, financing and debentures 1,342,808 460,686 5,717,242 646,166

Leases liability 98,988 71,239 136,698 40,212


Suppliers 2,005,607 - - -

Borrowings, financing and debentures 742,861 2,506,754 4,545,653 860,431

49

(d) Analysis of additional sensitivity

Sensitivity analysis of swap transactions

Swap operations recorded by the Group were contracted, simultaneously with foreign currency loans, including maturities, rates and equivalent amounts, exchanging foreign exchange exposure of the loans for exposure to CDI. The Group's gross debt in USD/EUR was represented as follows:


2019 2018 2019 2018

Foreign currency loans US$ (Note 19 (a))

296,368 635,968 296,368 684,091

€ (Note 19 (a)) 494,128 484,193 494,128 484,193

US$ rate at closing date 4.0307 3.8748 4.0307 3.8748

€ rate at closing date 4.5305 4.4390 4.5305 4.4390

Estimated final US$ rate, released by Bacen 4.0900 3.8000 4.0900 3.8000

Estimated final € rate, released by Bacen 4.6203 4.4825 4.6203 4.4825

Scenarios I and II were estimated to deteriorate from 25% to 50% respectively, above the probable expectation, as shown in the table below:

Parent

Company

Operation Risk Probable scenario Scenario I -

Deterioration of 25%

Scenario II -


Dollar

Exchange rate at December 31, 2019 4.0307 4.0307 4.0307

Estimated exchange rate at December 31, 2020 4.0900 5.1125 6.1350

Foreign currency borrowings (variation US$) 4,360 79,542 154,724

Swaps (Foreign currency assets) (variation US$) (4,360) (79,542) (154,724)

Net effect zero zero zero

Euro



Foreign currency borrowings (variation €) 9,792 135,772 261,752

Swaps (Foreign currency assets) (variation €) (9,792) (135,772) (261,752)

Net effect null null null

Consolidated

Operation Risk Probable scenario Scenario I -


Scenario II -


Dollar



Foreign currency borrowings (variation US$) 4,360 79,542 154,724

Swaps (Foreign currency assets) (variation US$) (4,360) (79,542) (154,724)


Euro

50

CDI rate sensitivity analysis

The Group maintains a large part of its debt, approximately 89%, and its cash and cash equivalents indexed to the CDI variation (considering the exchange of foreign currency denominated debt by CDI variation with traditional swaps). The net debt was represented as follows:


2019 2018 2019 2018

Net debt:

- Cash and cash equivalents 3,533,847 3,113,727 3,535,807 3,119,948 - Marketable securities and other financial assets

2,943,891 1,717,267 3,172,266 1,916,761

- Loans and financing (6,167,023) (6,576,600) (6,233,126) (6,644,019)

- Debentures (200,214) (200,246) (200,214) (200,246)

110,501 (1,945,852) 274,733 (1,807,556)

CDI rate on the closing date 4.40% 6.40% 4.40% 6.40%

Estimated final CDI rate, released by Bacen 4.50% 6.50% 4.50% 6.50%

Additionally, Management conducted sensitivity tests for adverse scenarios, deteriorating the CDI rate by 25% or

50% higher than the probable scenario (judged by Management), as shown in the table below:

4.2 Capital management

The goal of the Group with regard to capital management is to ensure the continuity of its operations, to offer a return to shareholders and benefits to other stakeholders, as well as maintaining the ideal capital structure to minimize associated costs.

The Group monitors the levels of its indebtedness through the Net debt/EBITDA ratio, which in its understanding



Foreign currency borrowings (variation €) 9,792 135,772 261,752

Swaps (Foreign currency assets) (variation €) (9,792) (135,772) (261,752)


Parent Company

Operation Probable scenario Scenario I –


Scenario II -


CDI effective annual interest rate December 31, 2019- % 4.40% 4.40% 4.40%

Net cash 110,501 110,501 110,501

CDI estimated annual interest rate in 2020- % 4.50% 5.63% 6.75%

Annual effect on net debt

Reduction - - -

Increase 111 1,354 2,597

Consolidated

Operation Probable scenario Scenario I –

Deterioration Scenario II –

Deterioration

of 25% of 50%

CDI effective annual interest rate December 31, 2019- % 4.40% 4.40% 4.40%

Net debt 274,733 274,733 274,733

CDI estimated annual interest rate in 2020- % 4.50% 5.63% 6.75%

Annual effect on net debt

Reduction - - -

Increase 275 3,365 6,456

51

represents the most appropriate manner to present the debt metric, because it reflects consolidated net financial obligations requiring immediate cash for payments, considering its operating cash generation.

4.3 Fair value estimate

It is assumed that the book value of the balances of client accounts receivable and suppliers accounts payable, minus impairment in the case of accounts receivable, are close to their fair value. The fair value of financial liabilities, for disclosure purposes, is estimated using discounted contractual future cash flows at existing market interest rates, which are available to the Group through similar financial instruments. The Group uses a market approach to estimate the fair value of its financial instruments.

The Group applies CPC 46/IFRS 13 to the financial instruments measured in the balance sheet at fair value, which requires disclosure of the fair value measurements by level in the following hierarchy:

(Level 1) Quoted (unadjusted) prices in asset markets for identical assets and liabilities to which an entity may have access at the measurement date.

(Level 2) Insertions different from the price quotes negotiated in active market included in Level 1 that are observed for assets or liabilities, whether directly (that is, as prices) or indirectly (that is, price derivatives).

(Level 3) Insertions for assets or liabilities that are not based on data adopted by the market (that is, non-observable insertions).

The following table presents the Group's assets and liabilities measured by fair value as of December 31, 2019.

Consolidated

Level 1 Level 2 Level 3 Total

Assets

Investment Fund – FIDC - 224,775 - 224,775

Bank Deposit Certificates - CDB - 5,217,596 - 5,217,596

Other marketable securities - 1,250,523 - 1,250,523

Total assets - 6,692,894 - 6,692,894

Liabilities

Borrowings and financing (Foreign currency) - 802,770 - 802,770

Derivatives used for hedge -swap - 13,791 - 13,791

Total liabilities - 816,561 - 816,561

The following table presents the Group's assets and liabilities measured by fair value at December 31, 2018. Consolidated

Level 1 Level 2 Level 3 Total

Assets

Investment Fund in Credit Rights - FIDC - 12,044 12,044

Bank Deposit Certificates - CDB - 4,581,947 - 4,581,947

Other marketable securities - 433,849 - 433,849

Total assets - 5,027,840 - 5,027,840

Liabilities

Borrowings and financing (Foreign currency) - 1,137,412 - 1,137,412

52

Derivatives used for hedge – swap - 26,895 - 26,895

Total liabilities - 1,164,307 - 1,164,307

There are no relevant financial assets and liabilities subject to the netting agreement.

5 Financial instruments by category

Consolidated

Amortized Cost Fair Value Through Results

Total


Assets, according to the balance sheet

Marketable securities

- 6,692,894 6,692,894

Accounts receivable from customers and other accounts receivable, excluding prepayments

1,277,491 - 1,277,491

Cash and cash equivalents

15,179 - 15,179

1,292,670 6,692,894 7,985,564

Fair Value Through Results

Amortized Cost Total


Liabilities, according to the balance sheet

Borrowing

National currency - 5,416,565 5,416,565

Foreign currency 802,770 - 802,770

Derivatives financial instruments - swap 13,791 - 13,791

Suppliers and other liabilities, excluding legal obligations - 3,569,907 3,569,907

Debentures - 200,214 200,214

816,561

9,186,686

10,003,247

Consolidado

Amortized Cost Fair Value Through Results

Total


Assets, according to the balance sheet

Marketable securities

- 5,027,840 5,027,840 Accounts receivable from customers and other accounts receivable

582,117 - 582,117

Cash and cash equivalents

8,869 - 8,869

590,986

5,027,840

5,618,826

53

Fair Value Through Results

Amortized Cost Total


Liabilities, according to the balance sheet

Borrowing

National currency - 5,479,712 5,479,712 Foreign currency 1,137,412 - 1,137,412 Derivatives financial instruments - swap 26,895 - 26,895

Suppliers and other liabilities, excluding legal obligations - 2,348,943 2,348,943

Debentures - 200,246 200,246

1,164,307

8,028,901

9,193,208

6 Credit quality of financial assets The Company's financial assets are composed mainly of the balance of cash and cash equivalents, marketable securities and accounts receivable from credit cards. The Company's cash is invested in the largest financial institutions in Brazil (all first-tier institutions) and the receivables of the Company and its subsidiaries are essentially with the main credit card operators, which have low levels of credit risk, as assessed by major rating agencies.

The Group's exposure to interest rate uses and sensitivity analysis for financial assets and liabilities are disclosed in note 4.1. There are no material restrictions on the ability to recover or use the assets mentioned above.

7 Cash and cash equivalents

Parent Company

Controladora

Consolidated

Consolidado 2019 2018 2019 2018

Funds in cash and banks 13,219 2,648 15,179 8,869

Certificates of bank deposits – CDBs (i) 3,504,490 3,067,695 3,504,490 3,067,695

Leasing Letters (ii) 16,138 43,384 16,138 43,384

3,533,847 3,113,727 3,535,807 3,119,948

(i) Remunerated at a rate of up to 105.5 % of the CDI as of December 31, 2019 (up tp 106.25% of the CDI as of December 31,

2018). The CDB's are classified as cash equivalents have immediate liquidity without risk of change in value in case of early

redemption.

(ii) Remunerated at a rate of up to 103.0% of the CDI on December 31, 2019 (up to 101.0% of the parent CDI and consolidated on

December 31, 2018). LAM’s are classified as cash equivalents and have immediate liquidity without risk of change in value in

case of early redemption.

8 Marketable Securities and other Financial Assets


2019 2018 2019 2018

Certificates of Bank Deposits- CDB’s (i) 1,501,924 1,314,759 1,713,107 1,514,253

Leasing Letters (ii) 145,247 390,464 148,047 390,464

Financial bills (iii) 1,071,945 - 1,086,337 -

Junior levels (Fênix-FIDC (a)) 31,324 - 31,324 -

Senior levels (Fenícia-FIDC (b)) 192,951 12,044 192,951 12,044

54

Mezzanine levels (Faísca-FIDC (c)) 500 - 500 -

2,943,891 1,717,267 3,172,266 1,916,761

Current portion 2,719,116 1,717,267 2,947,491 1,916,761

Noncurrent portion 224,775 - 224,775 -

(i) Bank Deposit Certificates, wholly from top-tier financial institutions, bear interest at a rate of up to 105.5% of the CDI at December

31, 2019 (up to 106.25% of the CDI at December 31, 2018). There is no intention to sell these securities in a period longer than 1

year, which is why they are classified in current assets.

(ii) Letters of Lease, wholly from first-tier financial institutions, bear interest of up to 103.0% of the parent CDI and consolidated as of

December 31, 2019 (up to 101.0% of the parent CDI and December 31, 2018). There is no intention to sell these securities in a period

longer than 1 year, which is why they are classified in current assets.

(iii) The Financial bills, wholly from first-tier financial institutions, bear interest at a rate of up to 107.5% of the CDI as of December 31,

2019. There is no intention to dispose of these securities over a period of more than one year. by which they are classified in current

assets.

(a) Investment Fund - Fênix FIDC do Varejo II

In October 2018, the Company's management approved the structuring of the Fênix Investment Fund in Retail Credit Rights II ("Fênix FIDC do Varejo II "), with a duration of 20 (twenty) years, whose objective defined in regulation is the acquisition of credit rights held by the Company, among others, originating through credit cards used in the purchase and sale of products and services, whose electronic transactions are captured and processed by the systems of accrediting merchants. The " Fênix FIDC do Varejo II" initiated operations in February 2019, issued 1,100,000 shares with a unitary face value of R$ 1 (one thousand reais), of which 1,017,500 senior shares with target yield are corresponding to 106.50% of the DI variation and 30,000 subordinated shares to be subscribed by the Company and 52,500 subscribed by the Parent Company Lojas Americanas, totaling the senior shares and subordinated to a stockholders' equity of R$ 1,100,000 of the " Fênix FIDC do Varejo II ".

The total amount of the senior shares corresponding to the principal invested will be amortized / redeemed on a single date, on the business day corresponding to the end of the period of 5 (five) years from the date of issue. The value of the senior shares corresponding to the profitability plus the senior shares after their issue date will be amortized every six months, every six (6) months from the date of issue. The structure of the Fênix FIDC do Varejo II, as well as the remuneration of the shares is represented as follows:

Shares Quantity % 12/31/2019

Benchmark - DI

Senior 1,017,500 92.3% 1,039,107

106.5%

Subordinate 85,810 7.7% 86,142

-

100.0% 1,125,249

Balance Sheet on December 31, 2019:

2019 Assets Cash and cash equivalents 4 Marketable securities 299,967 Accounts receivable Lojas Americanas 364,181 B2W 448,982 Others 12,226

55

Total assets 1,125,361

Liabilities Accounts Payable (Current) 111 Financing (Non Current) 1,039,107 Shareholders equity 86,142 Total liabilities & shareholders' equity 1,125,359

Income statement for the year ended:

2019

Financial income 3,298

Financial expenses (2,956)

Income for the period 342

(b) Fenícia Fundo De Investimento em Direitos Creditórios

The Company holds 197,762 shares of the Fenícia Fund, whose purpose is to raise funds for the application mainly of Credit Rights, in accordance with the investment policy, compositionand diversification of the Fund’s portfolio. It is constituted in the form of a closed condominium, so that its shares will only be redeemed according to the redemption dates defined in the respective supplements or by virtue of liquidation of the Fund. The Fund will have a term of indefinite duration, and may be settled by resolution of the General Meeting in accordance with the Regulations of the fund.

(c) Faísca Fundo De Investimento em Direitos Creditórios Não Padronizado The Company holds 1,000 shares of the Faísca Fund, which aims to provide Shareholders with the appreciation of their Quotas, through the application of the Fund's resources mainly in the acquisition of Credit Rights from third parties, and the others in Financial Assets. It is constituted in the form of a closed condominium, so that its Quotas will only be redeemed at the end of the term, in accordance with the provisions of the regulation or due to its liquidation. The Fund will have an indefinite duration and may be liquidated by resolution of the General Meeting in accordance with the Fund's Regulations.

(d) Changes in financial assets at fair value or through profit or loss

Bank Deposit Certificates, wholly from top-tier financial institutions, are remunerated at a rate of up to 105.5% of the CDI on December 31, 2019 (up to 106.25% of the CDI on December 31, 2018). There is no intention to sell these securities over a period of more than 1 year, which is why they are classified in current assets. Parent Company Consolidated

At January 1, 2018 2,841,006 2,987,229

Additions 12,772,459 13,348,360

Disposals (12,250,622) (12,773,252)

Transfer to cash and cash equivalents (1,645,576) (1,645,576)

At December 31, 2018 1,717,267 1,916,761

Additions 11,857,667 12,495,874

Disposals (10,221,494) (10,830,820)

56

Transfer to cash and cash equivalents (409,549) (409,549)

At December 31, 2019 2,943,891 3,172,266

9 Accounts receivable


2019 2018 2019 2018

Credit cards (i) 261,017 102,303 261,017 102,303

Investment fund - FIDC (Note 8(a)) 448,982 - 448,982 -

Other accounts receivable (ii) 64,609 38,815 111,324 100,132

774,608 141,118 821,323 202,435

Present value adjustments (note 2.7) (iii) (8,179) (1,942) (8,179) (1,942)

Provision for doubtful accounts (15,261) (15,839) (50,997) (45,004)

751,168 123,337 762,147 155,489

(i) The operations with credit cards can be paid in installments, generally, of up to twelve months. The Group's credit risks are minimized

as the portfolio receivables are monitored by the credit card management companies.

(ii) Other accounts receivable mainly represent sales to companies through corporate transactions.

(iii) Present value adjustment was calculated on accounts receivable, net of FIDC anticipations.

The aging list of accounts receivable from customers is composed as follows:


2019 2018 2019 2018

Falling due 749,025 127,170 783,149 169,163

Overdue: Up tp 30 days 8,324 6,526 10,593 8,225 31 to 60 days 5,795 268 6,422 1,693 61 to 90 days 3,418 103 3,746 781 91 to 120 days 1,163 140 1,687 696 121 to 180 days 804 81 1,786 496 > 180 days 6,079 6,830 13,940 21,381

774,608 141,118 821,323 202,435

The amount of the provision for estimated credit loss is based on the Management's analysis of expected losses on the credits to mature and expire.

The changes in the provision for estimated credit losses are shown below:


Balance at January 1, 2018 (15,231) (34,335)

Additions/ Reversals (608) (10,669)

Balance at December 31, 2018 (15,839) (45,004)

Additions/ Reversals 578 (5,993)

Balance at December 31, 2019 (15,261) (50,997)

10 Inventories


2019 2018 2019 2018

Goods for resale 888,396 839,579 950,451 877,891 Present value adjustments (note 2.16) (2,836) (1,638) (2,836) (1,638)

Supplies and packaging 2,608 3,316 3,767 3,316

888,168 841,257 951,382 879,569

57

The balances above are presented the net values of provision for losses due to inventories, obsolescence and low turnover. The changes in the provision for losses are shown below:

Parent Company and Consolidated

Balance at January 1, 2018 (80,565)

Additions/ Reversals 9,221

Balance at December 31, 2018 (71,344)

Additions/ Reversals 5,495 Balance at December 31, 2019 (65,849)

11 Recoverable taxes


2019 2018 2019 2018

Taxes on Goods and Services (ICMS) 201,266 174,735 209,949 182,653

Withholding Income Tax (IRRF) 48,459 58,423 52,991 62,038

Contribution to Social Security Financing (COFINS)

1,205,555 1,213,604 1,209,072 1,216,716

Corporate Income Tax (IRPJ) and Social Contribution on Net Income (CSLL)

239,996 257,713 247,509 277,184

Others 8,592 8,494 9,883 9,340

1,703,868 1,712,969 1,729,404 1,747,931

Net effects of ICMS tax credits on the basis of Pis and Cofins

151,900 - 151,900 -

1,855,768 1,712,969 1,881,304 1,747,931

Current portion 658,600 457,445 684,136 492,407

Non-current portion 1,197,168 1,255,524 1,197,168 1,255,524

Considering the taxation rules currently in effect, the following expectation of the main recoverable taxes is as follows:

- Social Integration Program tax (PIS) and Contribution for the financing of social security (COFINS): The Company expects to recover R$ 396,875 in 2020 and R$ 960,580 in up to 3 years (2021 to 2023) through debits calculation and compensation with other federal taxes. - IRPJ and CSLL: The Company expects to recover R$ 288,455,546 in up to 4 years (2020 to 2023), through a request for restitution and / or compensation with other federal taxes. - Tax on goods and services (ICMS): The Company expects to recover the ICMS credit with its own operations in the

Parent Company

Yr PIS and COFINS IR and CSLL ICMS

2020 396,875 149,818 31,612 23,539 95,407

111,907

2021 496,155 23,539 23,539 95,407

89,359

2022 432,269 48,930 -

2023 32,156 66,168 -

1,357,455 288,455 201,266

58

amount of R$ 111,907 in 2020 and R$ 89,359 in 2021. The Company constantly evaluates the recovery of its tax credits and maintains the net balance of the recovery expectation in the balance sheet.

Res judicata – Exclusion of ICMS on the basis of calculation of PIS and Cofins

In the 4th Quarter of 2019, the Company and its parent company Lojas Americanas were successful in a lawsuit that questioned the constitutionality of including the Tax on the Circulation of Goods and Services (ICMS) in the PIS and COFINS calculation basis. With the final and unappealable decision, the Company recognized the right to recover the amount of taxes calculated in the period object of the claims, duly corrected.

In view of the current position of the tax authorities on the criterion for measuring tax credits, which will be confirmed by the Federal Supreme Court through the judgment of the Motion for Clarification filed by the Federal Union in Extraordinary Appeal No. 574,706, the Company, supported by opinion of its legal advisors, chose to record tax credits based on the criteria currently recognized by tax authorities (COSIT Solution No. 13/18 and IN No. 1911/19), that is, tax credits were measured based on the amount of the ICMS actually paid.

The period that involves the right to credit, including dates that precede the mandatory electronic invoice and digital fiscal bookkeeping (SPED), creates greater complexity in calculating the amounts. Thus, the registered amount of R$ 152 million, consists of management's best estimate, determined based on the survey of available information and, therefore, may undergo changes. It is emphasized that the referred credit, to be used through compensation, must be subject to validation via administrative procedure before the Superintendence of the Federal Revenue of Brazil.

The segregation between current and non-current takes into account the expectation of using these credits to settle taxes administered by SRF.

For more details see the Notes 11, 12, 27, 28 and 29.

12 Income tax and social contribution

(a) Deferred income tax and social contribution

Assets


2019 2018 2019 2018

Tax losses 749,096 654,894 773,140 676,370

Negative bases for social contribution 269,674 235,761 278,333 243,497

Temporary differences Contingencies 19,157 18,375 19,157 18,375 Unsettled swaps 14,471 13,755 17,417 28,695 Present value adjustments receivables and payables 40,843 45,764 40,843 45,764 Provisions for losses on inventories, provision for doubtful accounts and other provisions 196,894 150,348 216,165 161,756 Lease operations 9,898 - 12,661 - Other 19,816 20,296 27,741 27,935

1,319,849 1,139,193 1,385,457 1,202,392

Liabilities Parent Company Consolidated 2019 2018 2019 2018

Capitalization of interest 15,192 32,153 15,192 32,153 ICMS in the PIS/ COFINS calculation base 37,789 - 37,789 - Others 2,307 2,964 5,707 6,365

59

55,288 35,117 58,688 38,518

Net balance 1,264,561 1,104,076 1,326,769 1,163,874

(b) Expected realization of deferred tax and social contribution


2022 17,249 18,098

2023 81,662 85,676

2024 155,291 162,931

2025 264,373 277,379

2026 371,299 389,565

2027 374,687 393,120

1,264,561 1,326,769

The realization of deferred taxes was determined based on the business plan approved by the Company's management and is reviewed at least every year.

The projections are made through operating cash flows started from the year 2020, in nominal terms, considering the inflation of the economy due to changes in market financial indexes using the maximum period of 10 years.

The Company's Management confirms its confidence in its Business Plan, which has made the operational structure of its business development platforms more robust, and will continue to monitor internal and external indicators as a way ratifying its estimates.

(c) Reconciliation between nominal and effective tax rates

The reconciliation between the income tax and social contribution, computed by the nominal and effective rates is demonstrated below:


2019 2018 2019 2018

Losses for the year before income tax and social contribution (468,592) (612,134) (462,696) (589,172)

Nominal rate - % 34% 34% 34% 34%

159,321 208,126 157,317 200,318

Effect of (additions) or deductions on accounting profit

Participation in controlled and jointy controlled companies 9,247 22,885 - -

Other permanent deductions (additions), net (18,214) (16,304) (12,859) (9,060)

Income tax and social contribution at effective rate 150,354 214,707 144,458 191,258

Current - - (17,745) (20,569)

Deferred 150,354 214,707 162,203 211,827

Income tax and social contribution 150,354 214,707 144,458 191,258

Effective rate 32% 35% 31% 32%

60

13 Related party transactions Receivable (payable) Revenue (Expenses)

2019 2018 2019 2018

Operations with Parent Company

Lojas Americanas S.A. (i) (20,367) 41,013 149,149 98,918

- Rental of headquarters, DC’s, and others (6,227) (3,148)

(19,541) (20,211)

- Resale Goods - sale 26,128 19,786

657 565

- Resale Goods - Purchase (3,255) (2,988)

(413) (1,931) - Platform of Digital Services and O2O operations (133,974) (2,724) (18,459) (26,759)

- Operations Lojas Americanas x QSM 36,558 16,297

80,751 95,930

- Operations Lojas Americanas x Direct 35,213 7,968

64,863 31,675

- Operation Lojas Americanas x BIT 25,190 5,822

41,291 19,649

Operations with subsidiaries (ii) 61,546 32,798 (79) (61)

B2W Rental 39,462 39,455

- -

Submarino Finance 156 1,935

- -

Click Rodo - 7

- (1)

BIT Services (formerly Ideais) 43,320 33,402

- -

Direct 887 766

(62) (60)

QSM (28,955) (50,412)

(17) -

Other accounts receivable 6,837 7,806

- -

Other accounts payable (161) (161)

- -

Other operations with affiliates

(103,294)

(108,428)

Transportation of merchanside

Direct (103,248) (100,770)

Systems development

BIT Services (formerly Ideais) (46) (7,658)

Non-Current Assets 89,729 85,873

Non-Current Liabilities (248,805) (150,577)

Debentures (iii)

(200,214)

(200,246)

(15,098)

(16,119)

BWU (200,214) (200,246)

(15,098) (16,119)

61

(i) Refer to operations of purchase and sale of merchandise, reimbursement of expenses and provision of transport and technology services. (ii) Refers mainly to reimbursement of expenses and advances for future capital increase. (iii) On December 7, 2010, the Board of Directors approved the first private issue of the Company’s simple debentures, not convertible into shares, subordinated, in a single series, totaling R$ 200,000. The issue was not subject to

registration with CVM, since the debentures were a private placement without any effort to sell to investors, fully subscribed by BWU Comércio Entretenimento S.A. a wholly owned subsidiary of Lojas Americanas S.A. The requirements and characteristics of emissions are listed in Note 20.

14 Investments – Parent Company

(a) Change in parent company’s investments

BFF Finance

ST Importações

B2W Chile QSM

BIT Services (i)

Digital Finance

Rental

B2W Argentina

Mesa- express

B2W México

Ame Digital Total

Balance on January 1, 2018 160,257 79,801 61,900 (208) 21,870 220,938 989 (23,121) 238 3 31 - 522,698

Equity in income of subsidiaries 21,342 7,301 14,561 - 6,706 8,812 9,584 (107) - - - - 68,199

Conversion adjustment - - - - - - - - - - - - -

Capital increase - - - - - - - - - - - - -

Added value write-off - - - - - (889) - - - - - - (889)

Sale of investment (197) - - 208 - - - - (238) - (31) - (258)

Balance on December 31, 2018 181,402 87,102 76,461 - 28,576 228,861 10,573 (23,228) - 3 - - 589,750

Equity in income of subsidiaries 1,565 10,337 12,263 - 1,675 3,402 2,618 (61) - - - (3,714) 28,085

Conversion adjustment - - - - - - - - - - - - -

Capital increase - - - - - - - - - - - 27,567 27,567

Added value write-off - - - - - (889) - - - - - - (889)

Constitution with tangible and intangible assets - - - - - - - - - - - 41,840 41,840

Initial adoption IFRS 16 (1,483) - (78) - (1,108) (1,076) - - - - - (3,745)

Balance on December 31, 2019 181,484 97,439 88,646 - 29,143 230,298 13,191 (23,289) - 3 - 65,693 682,608

(i) Includes goodwill for future profitability in the acquisition of the subsidiary in the amount of R$ 43,794.

62

(b) Information on investments in subsidiaries and investees

2019

% Share

Capital

Shareholders equity

Net Income (Net Loss)

Direct Subsidiaries BFF Logística e Distribuição Ltda. 100.00 163,198 181,480 1,565

ST Importações Ltda. 100.00 4,050 88,646 12,263

Mesaexpress 99.99 275 - -

Submarino Finance Promotora de Crédito 100.00 12,005 97,439 10,337

QSM 100.00 5,000 29,713 1,675

BIT Services Tecnologia and Inovação Ltda 100.00 170,013 192,207 2,513

Digital Finance 100.00 500 13,191 2,618

Rental 99.96 2 (23,298) (61)

Indirect Subsidiaries Click Rodo 100.00 44,928 12,205 (142)

Direct 100.00 237,755 80,506 (604)

Investees

Ame Digital 43.08 161,114 152,491 (8,622)

2018

% Share Capital

Shareholders

equity Net Income

(Net Loss)

Direct Subsidiaries

BFF Logística e Distribuição Ltda. 100.00

163,198 181,398 21,342

ST Importações Ltda. 100.00

4,050 76,461 14,561

Mesa Express 100.00

275 - -

Submarino Finance Promotora de Crédito 100.00

100,00

12,005 87,102 7,301

QSM 100.00

5,000 29,528 6,706

BIT Services 100.00

170,013 191,746 7,923

Digital Finance 100.00

500 10,573 9,584

Rental 99.96 2 (23,238) (107)

Indirect Subsidiaries

Click Rodo 100.00

44,928 12,346 (1,131)

Direct 100.00

237,755 82,593 2,232

(c) Other information of investees

AME Digital Brasil Ltda. “AME”, the mobile business platform, jointly developed by the Company and its parent company Lojas Americanas SA, is primarily intended to provide services with advanced technologies involving payment structures in physical and digital sales, including through partnerships with other retail companies, with advantages for end consumers. It was incorporated on July 31, 2019, with share capital of R$ 97,124, represented by 97,124,100, shares with par value of R$ 1.00 each, of which 41,840,043 subscribed by B2W and 55,284,057 subscribed by the parent company Lojas Americanas SA. With this, B2W holds 43.08% of the share capital and, consequently, the parent company Lojas Americanas S.A. 56.92%. These percentages were set based on intangible assets and fixed assets related to the Ame Project. In December 2019, the Company and its parent company Lojas Americanas, the sole shareholders of AME, provided funds, proportional to their participation, for a future capital increase in the total amount of R$ 63,989. Consequently, the company made the amount of R $ 27,567 available and the parent company Lojas Americanas R $ 36,423.

63

15 Fixed assets

movement for the period:

Parent Company

Land Installations, furniture and

fixtures

Computer machines and equipment

Improvements in

third-party properties

Construction in progress

Others Total

Balance at January 1, 2018 5,704 55,947 339,532 48,856 - 1 450,040

Acquisitions - 1,024 15,076 - 4,016 - 20,116 Write-offs - (24) (52) - - - (76) Transfers - 55 - 3,961 (4,016) - - Depreciation - (6,998) (41,777) (6,888) - - (55,663)

Balance at December 31, 2018 5,704 50,004 312,779 45,929 - 1 414,417

Acquisitions - 1,918 17,617 132 4,418 45 24,130

Write-offs - (29) (28) - - - (57) Transfers - 55 - 3,961 (4,016) - - Depreciation - (5,677) (41,661) (7,021) - - (54,359)

Balance at December 31, 2019 5,704 46,271 288,707 43,001 402 46 384,131

Balance at December 31, 2018:

Total cost 5,754 114,959 559,394 30,654 70,864 88 781,713 Write-offs (50) (844) (3,592) (10,247) (4,952) (1) (19,686) Transfers - (990) 2,048 64,800 (65,912) 54 - Accumulated depreciation - (63,121) (245,071) (39,278) - (140) (347,610) Residual value 5,704 50,004 312,779 45,929 - 1 414,417


Total cost 5,754 116,877 577,011 30,786 75,282 133 805,843 Write-offs (50) (873) (3,620) (10,247) (4,952) (1) (19,743) Transfers - (935) 2,048 68,761 (69,928) 54 - Accumulated depreciation - (68,798) (286,732) (46,299) - (140) (401,969)

Residual value 5,704 46,271 288,707 43,001 402 46 384,131

Average annual depreciation rate - 10.08% 11.17% 10% - Undefined

64

Consolidated

Land Installations, furniture and

fixtures

Computer machines and

equipment

Improvements in third-party properties

Goods for lease

Construction in progress

Vehicles Others Total

Balance at January 1, 2018 5,704 62,116 349,776 41,034 31 11,080 103 - 469,844

Acquisitions - 1,286 18,922 562 - 4,063 - 1,389 26,222 Write-offs - (24) (80) (18) - (117) - 399 160 Write-offs in sale of controlled companies - (97) (219) (63) - (11) - - (390) Transfers - 117 245 4,874 - (4,016) - (1,224) (4) Depreciation - (7,792) (45,259) (7,129) (30) - - (123) (60,333)

Balance at December 31, 2018 5,704 55,606 323,385 39,260 1 10,999 103 441 435,499

Acquisitions - 2,359 21,710 1,008 - 6,209 642 - 31,928 Write-offs - (29) (55) - - - - - (84) Transfers - - 107 1,684 - (1,791) - - - Depreciation - (6,454) (45,413) (7,514) (1) - (95) - (59,477)

Balance at December 31, 2019 5,704 51,482 299,734 34,438 - 15,417 650 441 407,866


Total cost 5,754 128,206 585,396 23,829 27,397 91,801 7,183 2,520 872,086 Write-offs (50) (1,461) (4,581) (15,214) (2,321) (6,296) (57) 398 (29,582) Write-offs in sale of controlled companies - (97) (219) (63) - (11) - - (390) Transfers - (3,132) 3,846 73,798 2,306 (74,495) - (2,321) 2 Accumulated depreciation - (67,910) (261,057) (43,090) (27,381) - (7,023) (156) (406,617)

Residual value 5,704 55,606 323,385 39,260 1 10,999 103 441 435,499


Total cost 5,754 130,565 607,106 24,837 27,397 98,010 7,825 2,520 904,014 Write-offs (50) (1,490) (4,636) (15,214) (2,321) (6,296) (57) 398 (29,666) Write-offs in sale of controlled companies - (97) (219) (63) - (11) - - (390) Transfers - (3,132) 3,953 75,482 2,306 (76,286) - (2,321) 2 Accumulated depreciation - (74,364) (306,470) (50,604) (27,382) - (7,118) (156) (466,094)

Residual value 5,704 51,482 299,734 34,438 - 15,417 650 441 407,866

Average annual depreciation rate - 10.08% 11.17% 10% 33% - 20% Undefined

65

In accordance with Technical Pronouncement CPC 01 (IAS 36), items of property, plant and equipment and intangible assets, which show signs that their recorded costs are higher than their recovery values, are reviewed annually to determine the need for a provision to reduce the balance book value at its realization value. Management did not identify changes in circumstances or signs of technological obsolescence, nor evidence that its assets used in its operations are not recoverable in view of its operational and financial performance and concluded that, as of December 31, 2019, there was no need to record any provision for loss on property, plant and equipment and intangible assets.

66

16 Intangible assets

Parent Company

Goodwill on investment acquisitions

Right to use software

Right to use mining

Web sites and systems

development

BLOCKBUSTER Online brand license

Other Total

Balance at January 1, 2018 81,439 78,255 10,230 2,305,239 4,073 955 2,480,191

Additions - 32,738 - 289,848 - - 322,586 Write-offs - - - - - - - Capitalization of interest (i) - - - 28,165 28,165 Amortization - (33,668) (1,320) (329,646) (4,073) - (368,707)

Balance at December 31, 2018 81,439 77,325 8,910 2,293,606 - 955 2,462,235

Additions - 29,892 - 378,269 - - 408,161

Software intended for the payment of capital from Ame Digital

- - - (40,167) - - (40,167)

Capitalization of interest (i) - - - 39,527 - - 39,527 Write-offs - - - - - - - Amortization - (52,940) (1,320) (328,600) - - (382,860)

Balance at December 31, 2019 81,439 54,277 7,590 2,342,635 - 955 2,486,896


Total cost 135,305 210,798 16,500 3,582,976 21,060 955 3,967,594 Accumulated amortization (53,866) (133,473) (7,590) (1,289,370) (21,060) - (1,505,359) Residual value 81,439 77,325 8,910 2,293,606 - 955 2,462,235


Total cost 135,305 240,690 16,500 3,960,605 21,060 955 4,375,115 Accumulated amortization (53,866) (186,413) (8,910) (1,617,970) (21,060) - (1,888,219)

Residual value 81,439 54,277 7,590 2,342,635 - 955 2,486,896

Average annual amortization rate Undefined 20% 8% 8.60% 5.26% Undefined

67

(i) The weighted average CDI rate on loans taken out by the Company in the year ended December 2019 was 124.00% and in December 2018,

120.00%.

(a) Goodwill on acquisition of investments

The Company annually evaluates impairment, with the latest assessment conducted upon the closing of the year ended December 31, 2019. This goodwill calculated from investments and mergers stemming from the expectation of future profitability, based on the projections of future period earnings for 10 years, using a pre-tax discount rate of 9.4% to discount future estimated cash flows, plus more or less of the assets and liabilities in a business combination.

The business model adopted by the Company corresponds to a vertical structure, as a result, the consolidated balances represent, in a more adequate way, the only cash generating unit (CGU), see Note 2.4, which is considered for the impairment test, therefore, there is no impact on the possible negative results of the investees.

Consolidated

Goodwill on investment acquisitions

Right to use

software

Right to use

mining

Web sites and systems

development

BLOCKBUSTER Online brand

license Others Total

Balance at January 1,2018 554,541 102,909 10,230 2,305,945 4,073 9,463 2,987,161

Additions - 32,802 - 289,848 - 2,938 325,588

Write-offs - - - - - (36) (36)

Capitalization of interest (i) - - - 28,165 - - 28,165 Write-offs in the sale of

controlled companies 195 - - - - - 195

Transfers - 4 - - - - 4

Amortization - (34,998) (1,320) (329,903) (4,073) (3,638) (373,932)

Added value – BIT Services (889) - - - - - (889)

Balance at December 31, 2018 553,847 100,717 8,910 2,294,055 - 8,727 2,966,256

Additions - 30,677 - 379,826 - 615 411,118 Write-offs - - - (40,167) - - (40,167) Capitalization of interest (i) - - - 39,527 - - 39,527 Write-offs in the sale of

controlled companies - - - - - - -

Transfers - - - - - - - Amortization - (54,086) (1,320) (329,437) - (147) (384,990) Added value – BIT Services (889) - - - - - (889)

Balance at December 31, 2019 552,958 77,308 7,590 2,343,804 - 9,195 2,990,855


Total cost 614,963 322,254 16,500 3,646,649 21,060 15,162 4,636,588 Write-offs in the sale of

controlled companies (2,356) (38,695) - (48,952) - (1,016) (91,019)

Transfers - (2) - - - - (2) Accumulated amortization (58,760) (182,840) (7,590) (1,303,642) (21,060) (5,419) (1,579,311) Residual value 553,847 100,717 8,910 2,294,055 - 8,727 2,966,256


Total cost 614,074 352,931 16,500 4,025,835 21,060 15,777 5,046,177 Write-offs in the sale of

controlled companies (2,356) (38,695) - (48,952) - (1,016) (91,019)

Transfers - (2) - - - - (2) Accumulated amortization (58,760) (236,926) (8,910) (1,633,079) (21,060) (5,566) (1,964,301)

Residual value 552,958 77,308 7,590 2,343,804 - 9,195 2,990,855

Average annual depreciation rates

Undefined 20% 8% 8.60% 5.26% Undefined

68

The goodwill balances determined on acquisition of equity interests are supported by technical appraisals based on expected future profitability. The company monitored the assumptions used and did not identify loss indicators nor the necessity of a new evaluation on December 31, 2019.

As of December 31, 2019 and December 31, 2018, the goodwill determined on the acquisition of investments was represented as follows:


2019 2018 2019 2018

Cost Accumulated Amortization

Net Net Cost Accumulated Amortization

Net Net

Goodwill in investment acquisition

TV Sky Shop 135,305 (53,866) 81,439 81,439 135,305 (53,866) 81,439 81,439 BIT Services - - - - 263,992 (6,943) 257,049 257,938 Mesaexpress - - - - 310 (307) 3 3 Click Rodo - - - - 19,426 - 19,426 19,426 Direct - - - - 195,038 - 195,038 195,038 BFF Logística - - - - 3 - 3 3

135,305 (53,866) 81,439 81,439 614,074 (61,116) 552,958 553,847

(b) Development of websites and systems

Represents expenses with e-commerce platform (development of technological infrastructure, content, applications and graphic layout of sites), expenses with ERP system implementation and development of own systems, being amortized in a linear way considering the stipulated period of use and benefits earned.

Following its path of innovation, B2W has proceeded to invest in new features, designed mainly to improve the purchase experience, increase the conversion rate and strengthen the positioning of its brands, as well as implementing new operating functions for the Company. Below are highlighted the following recently introduced projects:

New Shoptime: Site with new layout and more optimized for desktop and mobile;

Store in store pet love: largest online pet shop in Brazil;

Insurance and service portal: air conditioning installation, theft and robbery insurance for mobile devices, PET health plan, Extended Warranty;

Media Center Shoptime: TV experience on the web, live and last seen on TV;

Insurance Platform - Shoptime: Recommendation of insurance during the purchase flow on the website and pilot with sale of theft insurance and mobile theft (breakage, loss or theft of mobile);

Shoptime TV on the app: TV programming on the pocket;

Submarino.com - improvement in the home of the books department, organization in the navigation, prominence of the authors, literary lists and official stores;

“Best seller" for readers - Automatic page with customized showcase to highlight the best selling books in the last 15 days in Brazil and the site of Submarino.com.

Favorite Cross Devices – In addition to the App, you can also favor products on the Submarino website. Being an important feature in customer engagement, whose goal is to offer one more option for the user to assemble their wishlist;

To allow greater visibility of the offers of an item, the product page was adapted on the Submarino website to present the 3 best offers in order to facilitate the choice and purchase of our customers;

On the Submarino.com website, a pre-sale filter was developed that made it possible to have an automatic product page in this condition. In addition, we now allow strategic sellers to register products as presales.

The visual identity of the header on Submarino's website has been changed according to brand repositioning. We have updated the institutional color, bringing the user a more modern look and focused on the target audience, and replacing the old logo with the current brand signature. Usability and user experience improvements were also implemented;

Banner Card – In Shoptime pages, this component enables the automated layout of a banner by inserting content through the company's internal platform (Spacey). The goal is reduced image loading, visual standardization and consistency in Shoptime communication.

69

Highlighting the most relevant lines of the baby department, Amercianas.com, with new page, bet on the best mobile experience and presentation of more content. More practical and intuitive navigation.

New Sou Barato app - Coupons, promotions, and various products for the price the customer can afford. We launched the APP with different features, such as favorites, highlights, recommendations, among others.

Site of Americanas.com with a new product page whose objective is to facilitate customer decision making;

New order summary for all the websites of our brands, Americanas.com, Submarino, Shoptime and Sou Barato. We improve the arrangement of values in a manner consistent with the order in which discounts are applied, thus facilitating better understanding of the customer;

Vertical Pocket Furniture – new Shoptime furniture home format;

New format to highlight used Submarino products, aiming at better communication with the user;

Automatic registration of books on the Submarino website from the integration with Metabooks, a platform specialized in the sector's metadata;

Reformulation of the Subamrino Wow Offer page;

Implementation of the latest orders on Submarino's home mobile.

The Company used the same assumptions in item (a) above for the impairment test of intangible assets and identified no need for provision for recoverability of assets.

(c) Right of use mining

The Company reacquired from LASA the amount of R$ 16,500 related to the use of mining in telecommunication means (internet, teleshopping, among others), resulting from the finalization of the partnership between LASA and Itaú Unibanco Holding SA and recorded the said amount as an intangible asset.

17 Lease Assets and Liabilities

As of December 31, 2019, the Group has contracts classified as leases for their commercial, logistics and administrative units. Effective January 1, 2019, in compliance with IFRS 16 / CPC 06 (R2), the Group has adopted the modified retrospective approach and began to recognize the rent value established in long-term lease agreements, as Assets and Liabilities. The rent corresponding to short-term contracts continues to be recognized, by competence, as occupancy expense.

The measurement of the cost of the right-of-use assets corresponds to the net value of the leases, calculated on the rent estimated in the contracts, discounted to present value by the projected rates and terms provided in these leases. The average rate of 7.49% p.a. for the parent company and 7.65% a.a. for the consolidated. The monthly depreciation of the right-of-use assets is calculated, linearly, for the period of validity provided in the agreement, regardless of the renewal clause in accordance with the Group's internal policies.

Below we present the assets to the right-of-use assets and the corresponding obligations:

(a) Right-of-use assets – Leasing Companies


December 31, 2019 January 1,

2019 December 31, 2019 January 1,

2019

Accumulated Accumulated

Cost Depreciation Net Net Cost Depreciation Net Net

Right of use assets 272,898 (62,102) 210,796 197,783 329,500 (77,342) 252,158 244,241

Net balances at year-end 272,898

(62,102)

210,796

197,783

329,500

(77,342)

252,158

244,241

70

Movement of the right–of-use assets of the leases during th year:


December 31, 2019

December 31, 2019

Net balance recorded at of beginning of the year

197,783 244,241

Additions 75,115 85,259 Depreciation (62,102) (77,342)

Net balance at the end of year 210,796 252,158

(b) Leases payable


December 31, 2019

January 1, 2019

December 31, 2019

January 1, 2019

Leases payable 291,175 281,058 347,137 342,308 Interest on leasing (51,268) (53,475) (57,742) (62,593)

239,907 227,583 289,395 279,715

Current portion 62,062 53,027 79,648 65,976 Noncurrent portion 177,845 174,556 209,747 213,739

Movement of the leases in the year:


2019 2019

Net balances recorded at beginning of the year 227,583 279,715

Additions by new contracts 69,088 79,421

Payments (75,498) (92,788)

Appropriate interest 18,734 23,047

Net balance at the end of the period 239,907 289,395

The table below shows the potential right of PIS / COFINS to be recovered embedded in the lease consideration,

according to the periods foreseen for payment. Undiscounted balances and balances discounted to present value:

Parent

Company Consolidated

Nominal Adjusted to

Present Value

Nominal Adjusted to

Present Value

Lease consideration 291,175 239,907 347,137 289,395 PIS/COFINS potential (9.25%) 26,934 22,191 32,110 26,769

(c) “Misleading” caused by the full application of CPC 06 (R2)

The Group, in full compliance with CPC 06 (R2), in measuring and remeasuring its lease liabilities and the right to use, proceeded to use the discounted cash flow technique without considering future projected inflation in the flows to be discounted, according to the prohibition imposed by CPC 06 (R2). Such a prohibition generates distortions in the information to be provided, given the current reality of interest rates in the Brazilian economic environment. Thus, to safeguard the reliable representation of information, and to meet the guidance of CVM's technical areas in order to preserve investors in the Brazilian market, the average comparative rates are presented:

71


Lease Liabilities 2019 2019

Actual Flow x Nominal Rate 239,907 289,395

Actual Flow x Actual Rate 264,729 317,349 24,822 27,954

Right of use 2019 2019

Actual Flow x Nominal Rate 210,796 252,158

Actual Flow x Actual Rate 240,823 286,557 30,027 34,399

Financial expense 2019 2019

Actual Flow x Nominal Rate (18,734) (23,047)

Actual Flow x Actual Rate (11,028) (13,443) 7,706 9,604

Depreciation expense 2019 2019

Actual Flow x Nominal Rate (62,102) (77,342)

Actual Flow x Actual Rate (68,634) (85,404) (6,532) (8,062)

(c.1) Actual Rate vs. Nominal Rate Comparison


Actual Flow x Nominal Rate (i) 7.49% 7.65%

Actual Flow x Actual Rate (i) 2.91% 3.13%

-4.58% -4.52%

(i) Average discount rate used in 2019.

(d) Commitments assumed – Lease agreements

The Group maintains a Private Instrument of Rental Agreement for Commercial Property and Other Covenants for all their properties, with short and long term maturities, whose rent is updated annually based mainly on the IGP-M and IPC-A.

According to CPC 06 (R2) / IFRS 16, lease liabilities were recorded as lease liabilities under contracts with a validity of more than 12 months. The rent corresponding to short-term contracts continues to be recognized, by competence, as occupancy expense.

In the year ended December 31, 2019, the Group incurred R$ 16,976 for short-term and other real estate lease expenses, and future commitments related to these agreements total R$ 5,392.

18 Suppliers Parent Company Consolidated

2019 2018 2019 2018

Merchandise Suppliers of Goods and Other

2,985,104 2,238,736 3,078,444 2,337,016

Commercial agreements (304,121) (318,573) (304,121) (318,573)

Adjustment to present value (Note 2.7) (15,741) (12,836) (15,741) (12,836)

2,665,242 1,907,327 2,758,582 2,005,607

Trade agreements are receivable, defined in partnership agreements signed with suppliers. In financial operations, when provided for in a commercial agreement, settlements are made upon the payment of invoices to suppliers at the net amount.

72

19 Borrowings and financing

(a) Composition

Parent Company

Consolidated

Object Anuual Chargers Final Maturity 2019 2018 2019 2018

In National currency

Working capital 114.0% CDI to 135.5% CDI 12.20.2027 4,340,300 4,342,019 4,407,439 4,362,672

BNDES (i) TJLP to TJLP + 2.9% p.a 09.15.2022 8,816 200,288 8,816 200,288

BNDES (i) TLP to TLP +2.5% p.a. 06.15.2026 459,194 457,510 459,194 457,510

BNDES (i) SELIC +2.5% p.a. to 2.9% p.a 06.15.2026 48,333 350,675 48,333 350,675

BNDES (i) PSI 6.0% p.a. 09.15.2021 358 9,463 358 9,463

FINEP (iv) 4.0% p.a. 12.15.2020 56,732 113,423 56,732 113,423

FINEP (iv) TJLP + 3.0% p.a. 05.15.2024 57,033 65,388 57,003 65,388

Shares FIDC (v) 106.5% of CDI 02.14.2024 448,982 - 448,982 -

In foreign currency (iii)

Working capital (ii) US$ + 5.879% p.a. 08.27.2021 314,579

653,977

314,579

702,692

Swap operations (ii) 118.9% CDI 08.27.2021 (8,949) (49,453) (8,949) (51,402)

Working capital (ii) € + 2.1% to 2.3% a.a.

01.18.2023 488,191 434,720 488,191 434,720

Swap operations (ii) 121.95% CDI to 122.6% CDI 01.18.2023 22,740 78,297 22,740 78,297

Cost funding (IOF and others) (69,256) (79,707) (70,292) (79,707)

6,167,023 6,576,600 6,233,126 6,644,019

Current portion 1,300,545 675,672 1,320,955 723,091

Non-current portion 4,866,478 5,900,928 4,912,171 5,920,928

(i) BNDES financing related to the FINEM program (investments in information technology, implementing a distribution center, acquisition of machinery and equipment and investments in social projects), PEC (Working Capital), BNDES Automatic and "Connected Citizens - Computers for Everyone" programs.

(ii) Foreign currency operations are protected against changes in exchange rates by the use of financial instruments known as swaps (Note 4). (iii) Funding consistent with Resolution 4,131 of the Brazilian Central Bank (BACEN).

(iv) Financing of FINEP with the objective of investing in projects of research and development of technological innovations. (v) Represents the balance of the shares issued by the Fênix-FIDC (Nota 8 (a)).

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(b) Movement


At December 31, 2018 6,576,600 6,644,019

Funding 2,168,982 2,215,282

Principal amortization (2,631,976) (2,679,936)

Interest amortization (484,958) (489,459)

Financial charges 538,375 543,220

At December 31, 2019 6,167,023 6,233,126

(c) Borrowing and long-term financing by maturity date


2019 2018 2019 2018

2020 - 2,227,203 - 2,247,203

2021 419,680 1,197,132 419,680 1,197,132

2022 266,960 1,394,040 266,960 1,394,040

2023 578,361 588,563 624,054 588,563

2024 3,232,918 380,709 3,232,918 380,709

2025 89,127 75,521 89,127 75,521

2026 64,624 37,760 64,624 37,760

2027 214,808 - 214,808 -

4,866,478 5,900,928 4,912,171 5,920,928

The Company is subject to certain debt restriction clauses (Debt Covenants and Cross Default) included in some loan and financing agreements. These clauses include, among others, the maintenance of certain financial ratios, calculated based on the consolidated financial statements disclosed by its parent company. As of December 31, 2019 and December 31, 2018, all indexes were met.

(d) Guarantees

Borrowings and financing in the Parent Company and in the Consolidated are guaranteed by letters of credit of R$ 630,436 on December 31, 2019 (R$ 1,196,747 on December 31, 2018).

(e) Available credit lines

As of December 31, 2019, the Group had credit lines with several institutions in order to use them at the times necessary to drive the Company's organic growth..

20 Debentures (a) Composition (Parent Company and Consolidated)

Value Annual

Maturity Type of Bonds at issue Financial

Issue Date (i) issue outstanding date Chanrges 2019 2018

1st private issue 12.22.2010 12.22.2022 Private 200,000 1,000 125.0% CDI 200,214 200,246

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(b) Movement

(c) Information about issues of debentures

Below are the descriptions of the issued debentures which remain in effect as of December 31, 2019.

Nature 1st Private issue

Date of issue 12.22.2010

Date of maturity 12.22.2022

Amount issued 200

Unitary value R$ 1,000

Annual financial charges 125.0% CDI

Convertibility simple, non convertible to shares

Type and form nominative and book-entry

Amortization of principal value At date of payment

Payment of compensatory interest December 22 of each year (2011 to 2022)

Guarantees N/A

Renogiation Allowed, if agrren between issuer and debenture holder

21 Accounts payable – Combination of Businesses

In order to expand its business and in accordance with the strategic plan, the Company acquired companies with operations related to digital services. Between 2013 and 2015, 19 companies were acquired, operating in the areas of systems development, e-commerce operations and services, customer and product intelligence consulting, and two of the leading e-commerce specialized carriers in Brazil. As of December 31, 2019, the balance payable related to acquisitions of these companies is R$ 8,092 (consolidated).

22 Taxes and contributions Parent Company Consolidated

2019 2018 2019 2018 Taxes on goods and services (ICMS) 69,293 29,203 76,634 36,661 Witholding Income Tax (IRRF) 993 585 1,140 703 Service tax (ISS) 5,501 2,977 6,668 3,706 Social integration program (PIS) and Contribution for the social security fund (COFINS) 8,081 2,645 15,951 12,515 Tax on industrialized products (IPI) - - 1,033 971 Others 1,356 1,049 5,504 3,185

85,224 36,459 106,930 57,741

1st Private issue

At January 1, 2018 200,265

Interest amortization (16,138)

Financial charges 16,119

At December 31, 2018 200,426

Interest amortization (15,130)

Financial charges 15,098

At December 31, 2019 200,214

Consolidated

Current Non-current

2019 2018 2019 2018

BIT Services 8,092 490 - 7,788 Others - 1,044 - -

8,092 1,534 - 7,788

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23 Provision for lawsuits and contingencies

The Company and its subsidiaries are parties to lawsuits and administrative proceedings before courts and government agencies involving tax, labor, civil and other matters. Management has a system for monitoring its judicial and administrative actions conducted by the internal legal department and external lawyers.

Management, based on information from its legal advisors, analysis of pending lawsuits and, regarding labor claims, based on previous experiences regarding the amounts claimed, set up a provision, in an amount deemed sufficient, to cover potential losses on the lawsuits ongoing. Certain lawsuits are secured by letters of guarantee. The judicial deposits made in the year, parent company and consolidated, basically result from resources in tax lawsuits pending at the federal level.

(a) Judicial deposits

When legally required, judicial deposits are made, which total:

Parent Company

Consolidated

2019 2018 2019 2018

Judicial deposits 90,350 66,068 90,543 66,084

Movement:

Parent company Consolidated

At January 1, 2018 37,168 37,211

Additions 34,349 34,686

Reversals (5,449) (5,813)

At December 31, 2018 66,068 66,084

Additions 38,115 38,561

Reversals (13,833) (14,102)

At December 31, 2019 90,350 90,543

(b) Registered provision


2019 2018 2019 2018

Tax 3,515 2,410 32,355 37,114

Labor 16,169 7,710 72,639 61,775

Civil 36,371 43,632 43,704 50,965

56,055 53,752 148,698 149,854

Tax

Refer mainly to tax assessment notices issued for collection of supposed ICMS debt.

Labor

The Group are also parties to lawsuits involving labor. None of these lawsuits refers to individually significant amounts, and the lawsuits mainly involve claims for overtime, among others.

Cívil

The Company is a party, together with its subsidiaries, in lawsuits arising from the normal course of its operations and its subsidiaries, primarily related to consumers, accounting, on December 31, 2019, for the amount shown as

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contingent liability related to these issues. None of these lawsuits refers to individually significant amounts.

Changes in the provision for contingencies:

Parent Company

Tax Labor Civil Total

Balance at January 1, 2018 3,212 1,697 57,738 62,647

Additions 535 6,013 6,365 12,913

Reversals (1,337) - (20,471) (21,808)

Balance at December 31, 2018 2,410 7,710 43,632 53,752

Additions 1,105 15,063 681 16,849

Reversals (6,604) (7,942) (14,546)


Consolidated

Tax Labor Civil Total

Balance at January 1, 2018 41,585 82,451 65,225 189,261

Additions 535 9,682 6,365 16,582

Reversals (5,006) (30,358) (20,625) (55,989)


Additions 1,105 16,565 833 18,503

Reversals (5,864) (5,701) (8,094) (19,659)


(c) Contingent liabilities not provided

On December 31, 2019, the Group had administrative and legal demands of a fiscal, civil and labor nature, classified as “possible loss” by the legal advisors, and, for this reason, no provision was made. The approximate amount of the lawsuits is R$ 824,225 (R$ 597,122 on December 31, 2018) in the parent company and R$ 1,148,198 (R$ 818,177 on December 31, 2018) in consolidated. Among the main lawsuits related to tax assessment notices classified as "possible losses", we highlight: i) the recovery of IPRJ and CSLL debts due to alleged improper use of tax loss carry forwards and social contribution, since the limit of 30% for realization of compensation was not observed, provided of approximately R$ 80,307; and (ii) the notice of infraction due to the attribution of responsibility for the payment of a penalty, in the approximate value of R$ 526,160.

24 Anticipated revenue

On October 18, 2013, B2W signed an Extended Warranty Insurance Commercial Agreement Agreement with the insurance company CARDIF do Brasil Seguros e Garantias SA, with the intervention of TRR Securitas Corretora de Seguros Ltda., And Panamericano Administração e Corretagem de Seguros e de Previdência Privada LTDA., In order to explore the Extended Warranty offer, of purchases made by customers through the Company's sales channels.

As a result of this agreement, B2W received R $ 35,000 as anticipated revenue, which is being appropriated to the result through the achievement of goals.

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The amounts received and not yet appropriated are recorded, in liabilities, under the captions “Other current liabilities” and “Other non-current liabilities”.

Advance received 35,000

Appropriated in 2013 to 2016 (24,627)

Appropriated in 2017 (1,616)



To be appropriated 5,221

Current portion 2,489

Non-current portion 2,732

25 Shareholders’ equity

(a) Capital

On December 31, 2019, the share capital is represented by 523,229,262 common, registered shares with no par value (457,280,804 shares as of December 31, 2018). The shareholding composition of the Company's capital as of December 31, 2019 and December 31, 2018 is as follows:

2019 2018

Lojas Americanas S.A 321,376,659

281,261,673

Macquarie Group Limited 27,699,048 25,332,805 Management 7,168,400 8,251,609 Other shareholders ("free floating") 166,985,155 142,434,717

523,229,262 457,280,804

Lojas Americanas S.A. 61.42% 61.51% Não controladores 38.58% 38.49%

(b) Changes in capital

Number of shares, with no par value. Common Balance

(

nominal (thousands of reais)

On December 31, 2018 457,280,804

5,742,330

Private subscription 64,102,565

2,500,000

Subscription from Stock Option Plan 1,845,893

47,228

On December 30, 2019 523,229,262 8,289,558

(d) Legal reserve

The legal reserve is constituted annually as a destination of 5% of the net income for the year and cannot exceed 20% of the share capital. The purpose of the legal reserve is to ensure the integrity of the share capital and can

78

only be used to offset losses and increase capital.

26 Share-based payment

The Company makes its share subscription plans available to its managers and employees, these being the Company's Stock Option Plan “Option Plan”, approved at the Shareholders' Meeting held on August 31, 2011 and the Share Option Plan Incentive with Restricted Shares “Restricted Stock Plan”, approved at the Shareholders' Meeting held on April 30, 2018.

The main objectives of the programs are to stimulate the expansion, success and social objectives of the Company and the interests of its shareholders, in addition to maintaining the services of high-level executives and employees, offering as an additional advantage becoming shareholders of Company.

The maximum limit for granting options under the Stock Option Plan is shared with the limit of the Restricted Shares Plan. Accordingly, the Restricted Shares Plan and the Option Plan will be limited, jointly, to 5% of the total shares of the Company's share capital existing on the date of their grant, considering, in this total, the effect of the dilution resulting from the exercise of all options granted and not yet exercised under the Option Plan, as well as restricted shares that have not yet been effectively transferred to the Beneficiaries.

(i) Stock Option Plan (2014 – 2016):

The programs currently in force provide for options consisting of two lots subject to certain conditions, among them, that the Beneficiary must allocate a certain percentage of the bonus attributed to him by the Company, for the exercise, partially or in full, of the Options that make up Lot A and Lot B. The Options in Lot A and the Options in Lot B entitle to the acquisition of a certain number of shares, as follows:

Lot A: Each Option in Lot A entitles the acquisition of a ordinary share issued by the Company.

Lot B: Each Option in Lot B entitles you to acquire up to four ordinary shares issued by the Company.

Once the Options are exercised, whether from Lot A or Lot B, and on the exercise date, the Company will make available to the Beneficiary a Share for each Option in Lot A and one Share for each Option in Lot B. The remaining four Shares that make up each Option of Lot B will be delivered after a grace period of 60 months from the date of the respective Program.

The general rule of the Stock Option Plan is that the exercise price must be established by the Board of Directors or by the Committee, using the average closing prices of the shares traded at B3, in a certain period prior to the date of granting the option.

The Board of Directors or the Committee, as the case may be, may determine, when the Program is launched, that the Beneficiaries be granted a discount of up to 20% in the fixing of the exercise price. Specifically in relation to the programs currently in force, the exercise price of each option in Lot A and Lot B corresponds to the average price of the shares issued by the Company in the last 22 sessions of B3.

In addition, the Beneficiaries of the Plan, as holders of the Company's shares, are entitled to receive dividends and interest on equity from the moment the options are exercised.

Program 2016 2015 2015 2015 2014

Administration Committee meeting date - Program Approval

03/10/2016

06/11/2015

06/11/2015 03/10/2015 03/11/2014

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Number of ON Shares Granted

2,845,194 476,807 177,474 1,357,147 1,285,208

Beginning of vesting period Apr/16 Jul/15 Jul/15 Apr/15 Sep/14

End of vesting period Mar/21 Jun/20 Jun/20 Mar/20 Jul/19

Subscription value of the share on the grant date

8.46

11.87

17.37 18.41 20.49

Exercise value of the share - average price as established in each program

9.40

25.82

25.82 20.46 22.77

Number of shares estimated by the Company to be issued and held after the vesting period

3,094,961

432,226

160,880 1,456,245 1,371,281

Grants date 08/09/2016 07/01/2015 06/11/2015 06/05/2015 09/01/2014

Vesting period 60 months 60 months 60 months 60 months 60 months

(ii) Stock Option Plan and Restricted Stock Plan (2018 – 2019):

The program approved in 2018 provides that the Beneficiary may choose to exercise the Options allocating part of its Bonus. Each Option exercised will be entitled to the acquisition of 1 (one) ordinary share issued by the Company (“Share”).

Additionally, for the years 2018 and 2019, the Board of Directors may grant Restricted Shares within the scope of the Restricted Shares Plan approved by the 2018 General Meeting, and may condition the eligibility and/or effective participation of the respective Beneficiary in this Restricted Shares Plan for the effective exercise of options granted under such plans or programs. The Restricted Shares will be delivered after a grace period ending in 5 (five) years from the date of the Program.

Plan 2019 2018

Administration Committee meeting date - Program Approval

05/31/2019 03/07/2018

Number of ON Shares Granted 474,612 444,065

Beginning of vesting period Aug/19 Oct/18

End of vesting period Aug/24 Sep/23

Subscription value of the share on the grant date 33.72 22.70

Market value of the share on the grant date 44.05 31.13

Grant date 08/09/2019 03/07/2018

Vesting period 60 months 60 months

Executive compensation costs arising from the plans for the year ended December 31, 2019 was R$ 22,760 recorded in other operating expenses (R$ 16,896 on December 31, 2018) and offsetting entry recorded in capital reserves. The remuneration costs of the programs to be recognized (from 2019 to 2023) by the plans' vesting period, based on the assumptions used totaled approximately R$ 33,717.

27 Sales and Services Revenue


2019 2018 2019 2018

Gross sales revenue 7,312,925 7,341,200 7,458,928 7,497,129

Gross services revenue 1,603,432 904,429 1,814,619 1,147,190

Returns and unconditional discounts (891,305) (571,279) (916,155) (600,017)

(-) Sales/services tax (1,603,960) (1,448,954) (1,695,723) (1,555,829)

6,421,092 6,225,396 6,661,669 6,488,473 Net effects of taxes on ICMS tax credits on the basis of Pis and Cofins 106,313 - 106,313 -

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Net Revenue 6,527,405 6,225,396 6,767,982 6,488,473

28 Expenses by nature

The Group chose to present its statement of operations for the period ended on December 31, 2019 and 2018 by function, and presents the breakdown by nature below:

Parent Company

Consolidated

2019 2018 2019 2018

Selling

Staff (267,269) (257,698) (286,266) (285,692) Occupation (iii) (21,264) (90,553) (27,042) (101,472) Supplies (21,342) (16,249) (24,653) (19,229) Fees and commissions (255,676) (211,658) (255,718) (211,658) Distribution (278,876) (285,015) (37,113) (28,515) Others (i) (460,368) (422,859) (489,968) (449,021)

Total Selling Expenses (1,304,795) (1,284,032) (1,120,760) (1,095,587)

General and administrative

Staff (58,824) (25,569) (94,443) (48,707) Occupation (2,707) (2,527) (6,362) (10,998) Management fees (9,224) (11,235) (9,224) (11,235) Depreciation and amortization (iv) (499,321) (424,370) (519,745) (432,484) Others (ii) (25,963) (23,843) (74,455) (53,720)

Total General and Administrative expenses (596,039) (487,544) (704,229) (557,144)

Net effects pf expenses related to ICMS tax credits on the basis of Pis and Cofins

(32,673) - (32,673) -

Total Sales and General and Administrative Expenses

(1,933,507) (1,771,576) (1,857,662) (1,652,731)

Other operating income and (expenses) (45,701) (64,479) (46,597) (45,007)

(i) Mainly refers to on and off-line media and outsourced client services. (ii) Mainly refers to attorney's fees, advisory services and court ordered payments. (iii) Up to December 31, 2018, rental expense corresponding to real estate leasing contracts was recognized, on an accrual basis, as occupancy

expense. See notes 2.2 and 17 (c). (iv) Based on CPC 06 (R2) / IFRS 16, as from January 1, 2019, the Company recognized the asset's right to use its real estate leases and consequently

the depreciation expenses, in the amount of R$ 62,102 in the Parent Company and R$ 77,342 in the consolidated. See notes 2.2 and 17.

29 Financial result


2019 2018 2019 2018

Interest and monetary variation on securities 284,369 203,623 296,746 211,144

Financial discounts obtained - 29,271 3,323 43,907

Adjustment to present value of account receivable 196,125 175,324 196,125 175,324

Other finance income 285 17,777 728 17,679

Total financial income 480,779 425,995 496,922 448,054

Interest and monetary variation of financing and prepayment of receivables (848,619) (831,870) (854,863) (839,242)

Adjustment to present value of suppliers (157,466) (118,367) (157,466) (118,367)

Other financial expenses (47,738) (20,742) (65,403) (56,779)

Total financial expense (1,053,823) (970,979) (1,077,732) (1,014,388)

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Rental (18,734) - (23,047) -

Subtotal (591,778) (544,984) (603,857) (556,334)

Net effects of monetary restatement of ICMS tax credits on the basis of Pis and Cofins

37,506 - 37,506 -

Financial result (554,272) (544,984) (566,351) (566,334)

30 Losses per share

The calculation of the basic loss per share was based on the net loss attributed to the holders of common shares and the weighted average number of common shares outstanding. The calculation of the diluted loss per share was based on the net loss attributed to the holders of common shares and the weighted average number of common shares outstanding after the adjustments for all potential dilutive common shares. Parent Company

2019 2018

Numerator Loss for the year (318,238) (397,427)

Denominator (in thousands of shares) basic Weighted average number of common shares in circulation 468,427 454,819

Basic earnings (losses) per share (0.6794) (0.8738)

Denominator (in thousands of shares) diluted Weighted average number of common shares in circulation 475,605 462,319

Losses per share (0.66 91) (0.8596)

31 Insurance coverage - unaudited

The Group maintains insurance policies taken out with some of the main insurers in the country, which were defined by expert guidance and take into consideration the nature and the amount of risk involved.

As of December 31, 2019, the Group had insurance coverage in the form of civil liability, property insurance and inventory, as shown below:

Insured amount

Risk covered Prent Company Consolidated

General Civil Liability and D&O (i) 90,000 11,927,034

Materials damage 1,571,205 1,758,536

Losses and damages 198,117 228,186

Civil Liability in International Transport - US$ 200,000

(i) In addition, the coverage of the vehicle fleet is insured for the amount of 100% of the table of the Fundação Instituto de Pesquisa

Económicos (“FIPE”);

32 Employee and management remuneration In accordance with the Brazilian Corporation Law and the Company's Bylaws, it is the responsibility of the shareholders, at the General Meeting, to set the global amount of the annual compensation of the managers. The Board of Directors is responsible for distributing the funds among the administrators. At the Annual Shareholders' Meeting held on April 30, 2018, the global monthly compensation limit for the Directors (Board of Directors and Executive Board) of the Company was set. In the year ended December 31, 2019, and 2018, the total remuneration (salaries, bonuses and payment based on shares) for the Company's board members, directors and principal executives was R$ 35,525 and R$ 30,461

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respectively (R$ 35,525 and R$ 30,461 consolidated), with compensation falling within the limits approved in the corresponding Shareholders' Meetings. The Group does not grant post-employment benefits, termination benefits or other long-term benefits to Management and its employees (except for the share plan described in note 26).

33 Subsequent Events On January 13, 2020, the Company acquired the totality of the capital stock of SuperNow Portal e Serviços de Internet Ltda. (“Supermercado Now”). It is an innovative e-commerce platform focused on the Supermarket category in Brazil. The transaction amount did not constitute a relevant investment for the Company. The acquisition is in line with B2W's strategy of expanding its presence in the Supermarket category, opening a new growth front and offering an even more complete assortment for the Company's customers.

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