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Annual Report 2016 and Sustainbility
Mensage From Management
In 2016, we continued to pursue a balance
between our commercial variables,
such as sales and profitability. Given the
country's macroeconomic scenario and the
challenges in the international market, we
improved our processes in search of even
greater control of expenses and financial
flows, resulting in a solid performance.
TO OUR CUSTOMERS,
SHAREHOLDERS, ASSOCIATES
AND SUPPLIERS:
01
The parent company's gross revenue
reached R$ 12,0 billion, an increase of
7.6% when compared to 2015. Operating
cash generation (EBITDA) totaled R$
2.1 billion, up 12,0%. In the consolidated
result, gross revenue totaled R$ 21.4
billion and EBITDA growth was 12.2%.
[G4-9]
In the period, we inaugurated 93 new
stores, totaling 1,127 stores in more
than 430 cities throughout the country,
maintaining the usual discipline regarding
the approval of the new points and the
expected financial returns. Over the
course of the year, the Company opened
its first unit in 37 new cities, offering
competitive prices and quality products
to the local population. It also continued
the development of logistics and supply
projects for the stores, diversification of
its own-brands portfolio, renewal of the
apparels assortment and evolution of the
financial products and services offered.
[G4-9]
B2W Digital continued to post significant
evolution in GMV growth, as well as in the
marketplace, which grew 153.4% in the
year. Thus, we remain confident about the
potential of e-commerce in Latin America.
[G4-9]
Also notable was Lojas Americanas'
recognization through important awards
during the year. Today, we have Brazil's
most valuable retail brand, according to
a ranking by Interbrands, BrandZ LATAM
and Isto é Dinheiro, all published in 2016.
In addition, through B2W Digital, we are
electronic commerce leaders in Latin
America, according to Internet Retailer
2016.
We ended the year with a motivated
team, one that is determined to reach
new levels of results. We would also like
to thank our clients, associates, suppliers
and shareholders, who have been part of
these achievements, demonstrating that
we are on the right path, seeking to fulfill
dreams and meet people's consumption
needs, saving time and money and
surpassing their expectations.
We reiterate our confidence in the
country's development and, for 2017, just
as in previous years, we will continue
on our path of learning and overcoming,
which leaves us naturally enthusiastic,
because we will reach new levels of
results, always seeking to better serve the
needs of our clients.
Organizacional ProfileLojas Americanas S.A. is one of the
nation's largest retail chains, offering a
huge variety of top brand name products
and quality services at a fair price to
clients in all states. In its 87th year, the
Company is in step with the pace of
global development and seeks to assure
excellence in serving its clients and
suppliers. [G4-3]
Considered by renowned institutions such
as the Reputation Institute (Reputation
Lojas Americanas S.A.:
Everybody's going
02
Pulse) and Interbrand as the most
reputable and valuable retail company
in the country, the Company generates
business, jobs and income for 21,166
associates. [G4-9]
Founded in the small city that was
Niteroi in 1929, in Rio de Janeiro state,
Lojas Americanas established itself
in the nearby capital, where it set up
its headquarters and, subsequently,
conquered Brazil. At the end of 2016, the
Company had a nationwide presence
through 1,127 stores located in 436
municipalities, corresponding to 980,000
square meters of sales area, in addition to
four distribution centers, located in Minas
Gerais, Pernambuco, Rio de Janeiro and
São Paulo. [G4-5, G4-6, G4-9]
Lojas Americanas sells up to 60,000 items
from approximately 2,000 suppliers of
toys, candies, lingerie, CDs and DVDs,
games, hygiene and beauty, domestic
utilities, among others. The Company has
13 of its own category brands, including
Hygiene and Beauty (Basic+care and
Dental Clear), Apparel (Basic+), Bed,
Table and Bath (Casual Home and Classic
Home), Stationery (School Basics and
Office Basics), Toys (Brink+), Household
Utensiles (Casual Home, Classic Home,
Home Basics and Strong Tools), Christmas
Articles (Christmas Traditions), Cookies
and Chocolates (D'ellice) and Foodstuffs
(Leven). [G4-4, G4-12]
In 2016, it opened 93 stores and
strengthened its commitment to fulfill the
dreams of its clients and maintain the "85
years in 5 - Somos Mais Brasil" (We Are
More Brazil) expansion program, launched
in 2015. The program calls for the opening
of 800 new stores and two distribution
centers in the 2015 and 2019 period.
Shareholding Breakdown
LOJAS AMERICANAS S.A.'s shares
are listed on the Bolsa de Valores,
Mercadorias e Futuros (BM&FBOVESPA)
under ticker symbols LAME3 (common)
and LAME4 (preferred). [G4-7]
1.2. Multiple and Complementary
Structure
Lojas Americanas has a multiple and
complementary sales structure. In
addition to the brick-and-mortar store
network, the Company also operates with
B2W DIGITAL, a leading Latin American
company whose purpose is to connect
people, businesses, products and services
through a digital platform. [G4-8]
Lojas Americanas' expansion followed
the trend of the market where consumer
are seeking more convenience, facilities
and fair prices. To satisfy this customer
profile, Lojas Americanas offers two store
formats: Traditional and Express.
The Traditional format has large stores, an
average sales area of 1,100 square meters,
an assortment of up to 60,000 items and
daily inventory replenishment. There
are more than 45 departments, such
as housewares, toys, games, candies,
perfumery, stationery, electronics,
personal hygiene and apparel, among
others.
The Express model features an
assortment suited to the characteristics
and demands of the locations and
consumer profiles, offering convenience
products in the neighborhoods in which
they live or close to their work. This model
sells up to 15,000 carefully selected items,
the selling space averages 400 square
meters and the "just-in-time" logistics
system is applied.
In addition to the store formats, Lojas
Americanas has +AQUI in more than
300 stores. +AQUI is the business unit
responsible for the marketing financial
products and services (credit cards,
insurance and prepaid cards) within Lojas
Americanas' stores.
The following organization chart *
presents an integrated overview of Lojas
Americanas' stores.
*31/12/2016
1.3. B2W DIGITAL, leader in Latin America
Shareholding Breakdown
B2W is the Latin American leader and its
purpose is to connect people, businesses,
products and services through a digital
platform.
B2W has the largest and most esteemed
internet brands (Americanas.com,
Submarino, Shoptime and SouBarato) and
a rapidly growing Marketplace operation.
The platform built over the past few years
allows B2W also to offer technology,
logistics, distribution, client and consumer
financing services.
In its strategic five-year plan (2016 to
2020), B2W will continue investing in
the digital platform that has been built,
making all of its business fronts profitable,
with the objective of generating value for
its shareholders.
Lojas Americanas is B2W's controlling
shareholder, with a 62.16% ownership
interest. The Company's shares are
traded through the BTOW3 ticker
symbol on the BM&FBOVESPA's Novo
Mercado segment, the highest corporate
governance rating in Brazil.
For more information about B2W Digital
please access www.b2wdigital.com.
1.4. Promoter of Financial Products
and Services
In 2016, +AQUI, which is responsible
for the management and promotion of
financial products and services in Lojas
Americanas' stores, saw rapid growth and
significant evolution as called for in its
strategic plan.
With the goal of "making dreams come
true and meeting the consumption
needs of the people, providing credit,
protecting their assets and exceeding
their expectations with excellent customer
service" +AQUI is present in 318 Lojas
Americanas stores in over 140 cities in
17 states of the country, plus the Federal
District. [G4-9]
The products in the portfolio offered
come with extended warranties, insurance
against theft of mobile devices, technical
assistance for the installation of air-
conditioners, pre-paid credit cards, regular
gift vouchers, topical gift vouchers,
prepaid cards for licensed digital content
and the Company's credit card.
In 2017, as part of the evolution of the
portfolio, in partnership with Central de
Funcionamento (CDF) and Blackhawk
Networks, the company initiated the offer
of TV installation and helpdesk service.
+AQUI offers more convenience for clients
to enjoy the facilities offered by new
technologies to the fullest.
Lojas Americanas Credit Card
+AQUI is responsible for offering the Lojas
Americanas card to the millions of clients
who visit its stores stores daily. In 18
months of operations, the promoter issued
over 800,000 credit cards and registered
recurring transactions in more than 1,000
Lojas Americanas stores and thousands of
other commercial establishments around
the country. In 2016, the purchases made
with the Company card surpassed 30%
of sales mark made through the credit
card in some stores. In addition, sales
through the card within the Company
rose by more than 500% compared to the
previous year..
The increase in productivity and the
improvement of +AQUI's indicators can
be seen by the growth of efficiency in
the provision of products/services by the
promoter evidenced by the rapid growth
in sales of Lojas Americanas stores and
an average ticket higher than otherwise
observed in the Company.
For 2017, Lojas Americanas is excited
about the opportunities that present
themselves with the evolution of +AQUI,
believing that the expansion of the
portfolio of products and financial services
deriving from the retail business will
contribute increasingly more benefits,
comfort and convenience for all clients,
allowing it to reach higher levels of results.
Mission
"Realize dreams and meet the consumption
needs of the people, saving time and
money and exceeding their expectations."
Vision
“To be the best retail company in Brazil."
The best company consists of being:
– By the Clients, to be regarded as the
best shopping option;
– By the Shareholders/Investors, to be
considered as offering the best return in
the segment;
– By the Associates, to be considered
as the best option for professional
development;
– By the Suppliers, to be considered as
the best distribution channel;
– By Society, to be considered to be a
socially and ecologically responsible
company.
Competitive Advantages
– A distinctive business model, able to
combine growth and profitability with
resiliency;
– Strong culture of operational efficiency
and cost control, with a proven
performance track record;
– Multiple and complementary sales
platform, with shops, e-commerce,
Marketplace, kiosks, home shopping and
others, offering a wide assortment and
serving different audiences;
– Leading position in the Brazilian retail
sector with great brand name recognition;
– Broad and diverse product mix;
– Disciplined financial management with a
focus on the high level of profitability and
return on invested capital.
Supply Chain
In 2016, Lojas Americanas implemented
measures designed to make its supply
chain even more efficient. In pursuit
of competitive advantages to support
expansion, the Company makes use of
the best product storage and distribution
practices, always seeking to exceed client
expectations.
Currently, the 1,127 stores are present
in 439 cities in Brazilian states and are
supplied by four distribution centers
located in Minas Gerais, Pernambuco, Rio
de Janeiro and São Paulo.
The implementation of new technologies
and the improvement of processes
includes: the choice of more efficient and
cost-effective transportation and supply
models; the optimization of distribution
center operations and the redesign of the
logistics network, always considering the
appropriate levels of inventory to ensure
the lowest operating cost and better
product allocation in the stores.
The practices adopted in the warehousing
and distribution areas generate new
business opportunities, since they ensure
the supply of the new stores, supporting
the presence of a greater variety of
products at all points of sale, while also
offering speedier and safe restocking,
thus leading to economies of scale due to
the more efficient inventory management.
For 2017, Lojas Americanas will maintain
its investments in the continuous
improvement of logistic processes with a
focus on technology, people and the best
market practices.
THE GREEN COMPANY
A decade ago, Lojas Americanas stores
were guided by a culture of sustainability
to implement their actions, always with
the supervision of a multidisciplinary
in-house committee known as "the
Green Company," which meets weekly
to track and monitor the evolution of
the Company's initiatives. In the "Socio-
environmental Management" chapter we
present the investments and the actions
that oriented the actions in 2016. [G4-34]
Through private social investments
approved by the Sustainability Committee,
on which a member of the Board of
Directors also sits, Lojas Americanas
reinforces its commitment to enhance
environmental practices that are aligned
with economic and social development.
This is a responsible attitude, which
affects the decisions of investors and
clients.
In 2016, Lojas Americanas revised its
Materiality Matrix in order to prioritize
the management of investments and
strengthen its sustainable business model.
THREE CONSECUTIVE YEARS
IN THE ISE PORTFOLIO
Lojas Americanas was again, in 2016,
selected to be part of the portfolio of
companies in the Corporate Sustainability
Index (ISE) of the BM&FBOVESPA,
ensuring its place for the third consecutive
year. The announcement was made on
November 25. The ISE takes corporate
sustainability into account, i.e. the level
of the group's commitment to sustainable
development in the social, economic
and financial, environmental and climate
change areas.
AWARDS AND RECOGNITION
Investments of Lojas Americanas'
stores with regard to quality control of
products and services, audit of suppliers,
operation of distribution centers and the
computerization of internal processes
to better serve the client have been
recognized. The effort of the company
and its associates have led to awards,
which added value to the brand, its
reputation and its commitment to society.
The highlights of awards and recognitions
throughout the year included:
– Época Negócios 360º - Época Store
Businesses — Americanas won 1st place
for retailers for the third consecutive
time. The annual ranking is considered a
national guide to measure all dimensions
relevant to the continued success of
organizations.
– Empresas Mais - Estadão —Lojas
Americanas won in the "Retail" category
and was among the 10 highlights in
Corporate Governance.
– Most Valuable Brands of Brazil - IstoÉ
Dinheiro — In the ranking of the 50
most valuable brands of Brazil, Lojas
Americanas was 1st among retailers and
placed 12th overall.
– Época Reclame Aqui Prize - Lojas
Americanas won in the "retail" category
in 2016. The award recognizes the best
companies for the consumer, based on a
popular vote.
– Brazil Reputation Pulse – For the
second consecutive year, Lojas
Americanas was ranked as the retail
company ith the best reputation, being
1st ranked among retailers and 2° place
among all Brazilian companies.
– BrandZ LATAM — In the ranking of the
most valuable brands of Latin America,
Lojas Americanas was in 1st among
retailers and placed 12th overall.
– Ranking NOVAREJO [Standard Group]
- Lojas Americanas came in 1st in the
Clothing and Department Stores category.
The lists presents the largest Brazilian
retail companies.
– Espaço Brinquedo magazine —
Lojas Americanas won a trophy as a
"benchmark store".
– Marcas Brasileiras Mais Valiosas
[Interbrand] - Ranking of Interbrand, which
presents the most valuable brands in
Brazil. Lojas Americanas featured in 12th
place, being one of the five brands that
saw the highest growth in value in the
year.
– 300 Maiores Empresas do Varejo
Brasileiro - Brazilian Retail and
Consumption Society — Lojas Americanas
came in 1st in the "Department Stores,
Home Items and General Merchandise"
category and in 4th place in the Overall
ranking of the companies evaluated. In
its 15th edition, the survey conducted
by Revista Seleções in partnership with
the Datafolha interviewed about 1,000
readers of the magazine.
– Socioambiental Chico Mendes — For
the third consecutive year we received
the "Green Seal – Chico Mendes Award"
in the "Responsible Socio-Environmental
Management" category.
People03
Lojas Americanas invests in the potential
of its associates, considering them
important assets to drive the business.
Its people and management policy
strengthens the promotion of inclusive
and sustainable economic growth,
employment and decent work for all as
established in one of the UN's Sustainable
Development Goals. Toward this end, the
ambitious expansion plan to open 800
PEOPLE IN FIRST PLACE
new stores by 2019 rests on the strength
of the members of its workforce — who
have a highly qualified, diverse profile,
and are obsessed with results and client-
focused.
Based on meritocracy, the importance we
ascribe to our associates contributes to
ensuring that the Company has unique
professionals who are motivated and
confident that they are inserted in a
working environment where there are real
chances for professional development.
We continue to adopt diversity and equal
opportunity practices. The headcount at
the end of the year was 21,166 associates,
of which 11,604 were women and 9,562
were men, all covered by the Brazilian
Consolidated Labor Code (CLT) and the
Collective Bargaining Convention. The
Company values equality between men
and women and, to ensure that hiring and
application of wage policies eliminate any
possibility of discrimination, meritocracy
was chosen as the sole basis for career
growth. [G4-10, G4-11]
In 2016, 6,826 associates were promoted
and assumed new positions. Of these,
54.81% were women and 99.8% of them
have experienced career growth within
the Company itself, formed through its
development programs. [G4-LA11]
In the following table we present the
numbers per functional level and gender.
[G4-10, G4-LA12, G4-LA13]
Our Principles for People
Lojas Americanas' development programs
are structured on three underpinnings:
People, Method and Results The three
pillars are in accordance with Lojas
Americanas' principles, policies and
values and are aimed at enhancing the
performance of associates, based on
differentiated training of our professionals
and excellence in corporate management.
Talent Recruitment and Selection
People are the main underpinning of the
strategy that drives Lojas Americanas,
which seeks to be the best development
option for professionals and to reside
at the top of the list of companies that
generate jobs coupled with excellence.
During its 87 years of existence, Lojas
Americanas has shaped its strategy and
processes, offering growth opportunities
to associates who perform well and are
aligned with the organizational culture. In
addition to hiring for store and distribution
center operations, the Company relies
on different entry-level gates that are
intended to attract and recruit the best
talent for the company: MBA programs,
Trainee, Trainee Logistics, Inclusion
of People with Disabilities (PCD), New
Talent and Internship. In 87 years, the
management of these processes has
been improved and they have proved to
be successful, as can be seen by the fact
that more than half of our officers entered
the company through one of these
programs.
The selection exclusively takes into
account the skills required for each job
function and each associate's professional
profile. Lojas Americanas does not
condition entry into the Company in any
way by race, gender, political, religious
or sexual orientation, a practice adopted
throughout the hierarchy and transcribed
in its Code of Ethics [G4-56].
MBA Program
Since it was created in 2012, the MBA
Program has recruited talents from the
world's main business schools. The goal
of the program is that its participants
assume a management position and
develop major projects in specific areas of
the Company, with express monitoring by
directors of Lojas Americanas.
Trainee Program
As fast and dynamic as the retail business
itself, the Trainee program offers
intense instruction for young people
who demonstrate a profile of someone
who could assume a managerial role.
Its duration is 12 months. In the first six
months, the trainee becomes familiar with
all the Company's operations, participating
in the routines of the distribution centers
and stores and also attends various
corporate training sessions. In the
subsequent six months, the professional
is assigned to an area of the business and
given on the job training to undertake
a challenging final project deemed
important by the Company. In 2016, out of
more than 31,000 applications, 10 trainees
were selected and hired in January 2017.
New Talents Program
The New Talents Program aims to
quickly educate and train recent
university graduates, fast tracking them
to become future Company leaders,
able to accompany the rapid pace of our
organization's growth. These talents are
immediately assigned in specific business
areas on their first day of work and
during the initial year participate in the
Overview program, consisting of a series
of presentations and training sessions
prepared by the Company's executives
to offer the newcomers a global vision of
the business. At the end of 2016, 33 new
talents were hired for various areas.
Internship Program
The Lojas Americanas Internship Program
seeks to develop university students who
have entrepreneurial profiles. Trainees
are selected for areas related to business
fields in which they have an affinity, and
who are willing to learn and are interested
in building a career within the Company.
The program is nationwide in scope, with
a minimum duration of six months and
a maximum of two years; it requires the
student's dedication of 30 hours a week.
Upon joining the Program, the university
student participants enter a training
module that transmits the vision, mission
and corporate values, as well as the
management tools needed for their
work routines. The new professionals
are given the opportunity to become
acquainted with the day-to-day activities
of the Company's stores, headquarters,
distribution centers and other business
units. In 2016, Lojas Americanas admitted
216 interns, including stores, distribution
centers and headquarter operations.
Young Apprentice
Committed to preparing students for the
labor market, the program is developed
in partnership with the National Service
for Commercial Education (Senac) or
equivalent entities. With a fixed-term
contract, the young apprentices must
be enrolled in and regularly attending
grade school.
Inclusion of People with
Disabilities (PCD)
Lojas Americanas seeks to promote
inclusion and training of persons with
disabilities in its workplaces. Candidates
are selected through partnerships with
municipal bureaus and specialized
consultants, who nominate individuals
for the vacancies in our stores and
distribution centers across the country.
Development and Training
Lojas Americanas' growth and significant
results are due mainly to the distinctive
characteristics of its associates: they
represent human capital that is prepared,
engaged with and who have an excellent
understanding of the business, which
contributes to maintaining the Company's
market leadership in the competitive retail
landscape. Toward this end, in 2016 we
intensified instruction targeted at leaders,
with the aim of disseminating the internal
culture, based on meritocracy, teamwork
and long-term commitment. [G4-LA10]
Americanas Development
Center (CDA)
Created in 2005 within the Corporate
University concept, the Americanas
Development Center (CDA) is
headquartered in Rio de Janeiro and has
18 complexes throughout the country. In
addition to the physical space, the CDA
contains a virtual learning environment
designed to maintain associates
constantly up to date. In 2016, the training
of associates was stepped up at the
various sub-centers, totaling 278,000
training hours (average of 13.1 hours per
associate). [G4-LA9]
The Retail Faculty
The Retail Faculty is designed for
associates with two or more years of
service in the Company who have been
nominated by their immediate superiors,
due to exceptional job performance.
The goal of the program is to promote
the academic training of participants,
further qualifying them and boosting
their chances of career growth. To the
selected members, the Company offers
scholarships for undergraduate and
postgraduate classroom studies.
Digital LAB
In 2016, Lojas Americanas expanded
the role of the Digital LAB, a program
created in 2014 in partnership with
two of the most renowned global
institutions for teaching and research: the
Massachusetts Institute of Technology
(MIT) and the Harvard Business School.
The objective of the Digital LAB is to
cultivate talents and promote the search
for innovative solutions, through good
practices that encourage the construction
of an entrepreneurial environment and
collaboration within the Company.
Benefits
All Lojas Americanas associates receive
a number of benefits, regardless of the
position he or she occupies or their
position in the Company. Among them are
transportation vouchers, life insurance,
health plan, dental care assistance,
food vouchers or meals in cafeterias
and discounts on products in Lojas
Americanas stores and the Americanas.
com, Submarino.com and Shoptime
websites, as well as discounts and
workout academies, language schools
and universities, among others. [G4-LA2]
In addition, the practices set out in the
country's consolidated labor laws (CLT),
such as maternity and paternity leaves,
prior notice upon dismissal and others are
adopted fully for all associates. [G4-LA3,
G4-LA4]
DISK-ALERT
Lojas Americanas offers its professionals
the Disk-Alert hotline, an internal
communications channel that receives
questions, suggestions or criticisms from
associates, whether or not they sit on
internal Company committees. Everything
received through the channel is analyzed
and, depending on the circumstances,
the Ombudsman takes action to correct
the flaws reported by associates, accept
suggestions and clarify doubts. Over the
course of 2016, the Company dealt with
all complaints received by the hotline and
took appropriate steps to resolve them.
[G4-57, G4-58, G4-LA16, G4-HR3]
EXCELLENCE IN PREVENTION
The Company has an Internal Accident
Prevention Commission in all units with
more than 50 associates. For units with
less than 50 associates, one associate
is designated to be responsible for the
subject, meeting the legal obligations.
The Commission is composed of
elected employees and appointed by
the employer, acting in the prevention of
workplace-derived accidents and diseases.
In addition, it forwards solutions regarding
employee health and safety issues, when
such cases are identified. [G4-LA5]
The actions the Company has taken to
improve the working environment have
contributed to reduce and prevent injuries,
accidents and occupational diseases and
absenteeism. To help the associates, the
Company runs educational awareness
and disease prevention campaigns. It
also promotes themed events, such as
"No Tobacco Day," "Pink October" and the
"Everybody’s Going Race," and encourages
the rational use of energy and water along
with awareness of correct waste disposal
techniques, which will be addressed in the
Socio-environmental Management chapter.
Corporate Gorvenance04Values, such as transparency, fairness,
accountability, ethics, clarity in the
rendering of accounts, and better
information flows, are part of Lojas
Americanas’ best governance practices.
These principles orient the business
decisions of the Board of Directors,
the Executive Board, and the internal
committees. [G4-56]
The Company has been listed on the
Brazilian Securities, Commodities and
Futures Exchange (BM&FBOVESPA)
since 1940 and has a shareholder base
composed of common shares (LAME3)
and preferred shares (LAME4). [G4-7]
The Company’s preferred shares are part
of the Bovespa Index (IBOVESPA), the
Brazilian stock market’s most important
indicator of average share prices. In
addition, Lojas Americanas S.A. is also a
part of other important share indices, such
as IBRX-50, ISE, ITAG, ICO2, Icon, IVBX-2,
MLCX, and MSCI-Barra.
BOARD OF DIRECTORS
The Board of Directors consists of
seven members elected at the General
Shareholders Meeting – five of whom
are representatives of the controlling
shareholders and two who are appointed
by the Board of Directors – for a period of
three years with the right to re-election.
The Chair of the Board is chosen from
among the elected members, all of whom
must be shareholders.
The Board, whose powers are conferred
upon it by law and the Company’s
Bylaws, is responsible for electing and
removing Executive Officers, defining their
assignments and replacement criteria;
setting forth the distribution of fixed
remuneration established at the General
Shareholders Meeting for its members
and officers; and making determinations
regarding the issuance of shares,
subscription warrants, and promissory
notes. Formally, the Board of Directors
meets at least four times a year. [G4-34,
G4-42, G4-47]
MEMBERS OF THE BOARD OF
DIRECTORS
Carlos Alberto da Veiga Sicupira –
Chairman of the Board of Directors
Miguel Gomes Pereira Sarmiento
Gutierrez – Full Member/CEO
Cecília Sicupira – Full Member
José María Castellano Rios– Full Member
Love Goel – Full Member
Paulo Alberto Lemann – Full Member
Roberto Moses Thompson Motta – Full
Member
André Street de Aguiar – Alternate
Member
EXECUTIVE BOARD
The Executive Board consists of 11
officers – one of whom is designated
to serve as the CEO – all of whom are
elected by the Board of Directors to a
one-year term of office with the right to
re-election. The Board acts as a collegiate
body in decisions on all matters which,
by the force of law and the Company’s
Bylaws, must be submitted to the Board
of Directors, notably the Annual Report
and the financial statements, the monthly
balance sheets, proposals for capital
stock increases and the distribution of
dividends, and any other discussions
that go beyond the ordinary limits of the
specific functions of each officer. [G4-35]
EXECUTIVE BOARD MEMBERS
Miguel Gomes Pereira Sarmiento
Gutierrez – CEO
Murilo dos Santos Corrêa – Chief
Financial and Investor Relations Officer
Anna Christina Ramos Saicali – Officer
Carlos Eduardo Rosalba Padilha – Officer
Celso Alves Ferreira Louro – Officer
Flávio de Almeida Serapião – Officer
João Guerra Duarte Neto – Officer
José Timotheo de Barros – Officer
Márcio Cruz Meirelles – Officer
Maria Christina Ferreira Nascimento –
Officer
Wellington de Almeida Souza – Officer
THE ROLE OF COMMITTEES
AND AUDITORS
The Board of Directors and the Executive
Board determine the Company’s
guidelines, supported by four internal
committees – Finance, People and
Compensation, Digital, and Sustainability.
[G4-35, G4-45, G4-46]
They function as working groups with
defined objectives to report issues and/or
situations examined by them, and submit
recommendations to the highest body of
governance of Lojas Americanas. Each
committee meets at least once a quarter
or, extraordinarily, whenever convened by
their individual chairs.
FINANCE COMMITTEE
The Finance Committee informs and
advises the Board of Directors about
all decisions involving the Company’s
financial policies, ensuring that it fulfills
its obligations and maintains financial
accountability.
PEOPLE AND REMUNERATION
COMMITTEE
The People and Remuneration Committee
advises the Board on all decisions
involving the Company’s people and
remuneration policies, ensuring (i) that
the members of the Board of Directors,
Executive Board, and all employees have
incentives to achieve exceptional results,
and are compensated appropriately; (ii)
the correct and effective application of the
Company’s culture, which values constant
improvement and meritocracy, and
ensures the alignment of the interests of
employees and shareholders; and (iii) that
the Company can attract, capture, retain,
and develop the best professionals and
leaders, ensuring the succession of its top
executives. [G4-LA12]
DIGITAL COMMITTEE
The Digital Committee advises the Board
of Directors regarding the fulfillment of
its digital oversight responsibilities in the
areas of technology and e-commerce,
TV and mobile applications, as well as
emerging channels.
SUSTAINABILITY COMMITTEE
The Sustainability Committee, formally
established by the Board of Directors in
2010, is multidisciplinary and contributes
to the definition of best management
practices, which are based on the search
for the balance between economic,
environmental, and social concerns, as
well as promoting the engagement of all
employees in regards to sustainability
issues.
Through weekly meetings, the committee
discusses, plans, and implements actions
to promote the Company’s sustainable
development, always based on the needs
of stakeholders.
AUDIT COMMITTEE
Lojas Americanas also has an Audit
Committee, which is convened as
necessary and consists of three members
– one appointed by the controlling
shareholders, one by the preferred
shareholders, and one by common
shareholders. [G4-41]
INDEPENDENT AUDITORS
In accordance with CVM Instruction
No. 381, the Company discloses that
its independent auditors, KPMG,
provided valuation services related to
the acquisition of companies by the
Company. Contracted on April 13, 2016,
it received total fees of R$ 630,000,
which were related, in their totality, to
external audit services. The Company’s
policy regarding contracting independent
auditors for other audit services, which
are not external in nature, ensures that
there is no conflict of interest, loss of
independence or objectivity on the part of
these independent auditors. [G4-41]
100% TAG-ALONG RIGHTS FOR
ALL SHAREHOLDERS
Since 2006, Lojas Americanas’ Bylaws
require the obligation to grant full Tag
Along Rights (100%) to the Company’s
common and preferred shares. With this,
all Lojas Americanas shareholders are
given equal treatment in the event of a
change of control of the Company and are
guaranteed the right to sell their shares
under the same conditions negotiated by
the controlling shareholders. [G4-41]
DIVIDENDS POLICY
In 2016, distribution of profits of R$ 115.5
million in interest on shareholders’ equity
(before income tax withholding), based
on net income for the fiscal year. In
conformity with the principles of current
legislation, sets the minimum value for
dividends at 25% of the net profit for any
given fiscal year, after the establishment
of a 5% legal reserve. [G4-EC1]
SHARE BUYBACK PROGRAM
Lojas Americanas maintains a share
buyback program for the Company,
either to maintain shares in treasury or for
subsequent cancellation. The program
provides for the repurchase of up to ten
million nominative registered common
shares and ten million nominative
registered preferred shares.
POLICIES AND REGULATIONS
Throughout 2016, Lojas Americanas
maintained its commitment to combating
corruption and promoting ethics in its
relationship with all its stakeholders.
In addition to its Code of Ethics and
Conduct, which was approved by the
Board of Directors and the Executive
Board, the Company has a Policy on
Compliance and Combating Corruption.
Upon hiring, all employees receive a
copy of the Code of Ethics and Conduct,
and sign a cognizance and agreement
statement.
Lojas Americanas values principled,
transparent, and cooperative behavior.
Several policies contribute to the
governance process, including the
Disclosure and Use of Information
Policy. The Company’s policies establish
strict rules and harsh punishments for
offenders, as well as those who engage in
fraudulent acts.
As a signatory to the United Nations
Global Compact since 2013, the Company
has worked to strengthen internal
processes related to sustainability
management, as well those that exist
throughout its supply chain. The Global
Compact is an initiative that brings
together thousands of companies around
the world that are committed to best
corporate practices that respect human
rights, particularly those in relation to
labor issues, as well as the environment
and business ethics.
In this sense, Lojas Americanas promotes
and endorses the promulgation of
principles that protect and value human
rights. In its trade agreements, the
Company highlights these aspects
through the inclusion of specific,
punitive clauses, which impose fines
and immediate disqualification of
violators found to have engaged in
irregular behavior. These measures are
intended to assist in the eradication of
forced labor and to combat any practice
that disregards the principle of human
dignity in the value production chain.
The Company also supports a number of
initiatives in the public and private sectors
that seek to identify the risks and potential
impacts of human rights violations
associated with their activities. [G4-LA14,
G4-LA15, G4-HR1, G4-HR5, G4-HR6, G4-
HR10, G4-HR11, G4-SO3, G4-SO4], G4-
SO4]
Economic Performance05General Considerations
The comparison of the information
presented refers to the results of Lojas
Americanas in 2016 and 2015, except
when otherwise indicated. The financial
information serving as the basis for the
comments below, presented in Brazilian
reais (R$), are in accordance with
international financial reporting standards
(IFRS), with the standards issued by the
Brazilian Securities Commission (CVM), as
well as the Novo Mercado listing rules.
Gross Merchandise Volume
(GMV)
The Gross Merchandise Volume (GMV)
presents consolidated gross sales and
services revenue plus sales made on
the B2W Digital's marketplace platforms,
consequently, in Lojas Americanas'
consolidated results.
In the fourth quarter of 2016 (4Q16),
consolidated GMV reached R$ 8 billion,
an increase of 13.6% compared to the R$
7.1 billion registered in the fourth quarter
of 2015 (4Q15). In 2016, consolidated GMV
reached R$ 23.3 billion, growth of 8.7%
compared to R$ 21.5 billion in 2015. [G4-9]
Gross revenue
In 4Q16, the parent company's gross
revenue was R$ 4 billion, an increase
of 8% over 4Q15. Consolidated, gross
revenue was R$ 7.3 billion, an expansion
of 7.5% in relation to 4Q15. In 2016,
the parent company's gross revenue
was R$ 12 billion, an increase of 7.6%
compared to 2015 and R$ 21.4 billion
in the consolidated result, with a 3.3%
expansion compared to 2015. [G4-9]
The "same stores" gross revenue growth
was 6% in the fourth quarter and 5.6% in
2016.
Due to the effect of the tax changes
that took effect in 2016, the taxes and
deductions line was impacted, influencing
the comparison with 2015. In 2016,
the income tax line increased 16.3% in
the parent company and 18.2% in the
consolidated result when compared to
2015. Such growth makes it impossible
to directly compare the growth of gross/
net revenues and the margins/expenses
of the periods under analysis. Thus, we
assumed nominal EBITDA growth as the
best measure of value creation for the
Company.
Net revenue
In 4Q16, the parent company's net
revenue was R$ 3.5 billion, 8.1% more
than in 4Q15. Consolidated, net revenue
was R$ 6.3 billion, an increase of
7.7% compared to 4Q15. In 2016, the
parent company's net revenue was
R$ 10.4 billion, an increase of 6.4% in
relation to 2015 and R$ 18.1 billion in the
consolidated result, up 1% In relation to
2015. [G4-9]
Gross profit and gross margin
In 4Q16, the parent company's gross
margin was equivalent to 37% of
net revenue (NR), a variation of -1.0
percentage point (p.p.), when compared
to the gross margin of 38% obtained in
4Q15. In the consolidated view, gross
margin in 4Q16 was 30.2% of NR, the
same level as in the previous year.
In 2016, the parent company's gross
margin was equivalent to 35.6% of net
revenue (NR), an increase of 1.3 p.p. when
compared to the gross margin of 34.3%
obtained in 2015. In the consolidated
view, the gross margin was 29.8% of NR,
an increase of 1.2 p.p. when compared to
the previous year.
In 2016, the improvement in the gross
margin was favored by the improvement
in the operational efficiency of the stores
and by the evolution of the several
projects implemented by the Company,
which are still in the maturation phase,
but which already make us very optimistic
about the results achieved so far. In 4Q16,
the gross margin was impacted by Red
Friday, a highly promotional event that
has been consolidated and is already part
of the Company's events calendar.
Selling, general and
administrative expenses
In 4Q16, the parent company's selling,
general and administrative expenses
totaled R$ 470.5 million, 13.3% of NR. In
the consolidated view, the sum was R$
794.3 million, which corresponds to 12.7%
of the NR.
In 2016, the selling, general and
administrative expenses of the parent
company totaled R$ 1,575.5 million,
15.2% of NR. In the consolidated view,
the sum was R$ 2,591.3 million, which
corresponds to 14.3% of NR.
EBITDA and EBITDA margin
In 4Q16, the Adjusted EBITDA of the
parent company reached R$ 833.6
million, an increase of 3.7% over 4Q15,
a change of -1.1 p.p. in the margin, which
reached 23.6% of NR. In the consolidated
result, Adjusted EBITDA reached R$
1,093.7 million, an expansion of 7.7%,
reaching a margin of 17.5% of NR, the
same level of 4Q15.
In 2016, the parent company's Adjusted
EBITDA reached R$ 2,120.4 million, an
increase of 12.0% over 2015. The EBITDA
margin increased by 1.0 p.p. reaching
20.4% of NR. In the consolidated result,
Adjusted EBITDA reached R$ 2,808.3
million, an increase of 12.2%. The EBITDA
margin increased by 1.5 p.p., reaching a
margin of 15.5% of the NR.
EBITDA (CVM 527/12)
In 4Q16, the parent company's Adjusted
EBITDA reached R$ 833.6 million.
According to CVM Instruction 527/12, if
other operating income and expenses,
equity accounting, minority and statutory
interests were excluded, the EBITDA would
be R$ 702.1 million in 4Q16, representing
19.9% of NR.
In the consolidated view, Adjusted EBITDA
totaled R$ 1,093.7 million in 4Q16. According
to CVM Instruction 527/12, if other operating
income and expenses, equity accounting,
minority and statutory interests were
excluded, the EBITDA would be R$ 1,009.4
million in 4Q16, representing 16.1% of the NR.
Net financial income
The parent company's net financial
expenses totaled R$ 338.6 million in
4Q16, up 35.3% from R$ 250.3 million
in 4Q15. In the consolidated view, net
financial expenses were R$ 653.7
million in the same period, a variation of
29.4% in relation to the R$ 505.3 million
recorded in 4Q15. The variation of the
financial result of the parent company is
mainly related to the investment in the
subscription of 69,789,183 shares (R$
697.9 million) for B2W's private capital
increase and the Certificate of Deposit
Interbank (CDI) rate. [G4-9]
Net income
In 4Q16, consolidated net income
reached R$ 255.6 million. In 2016,
consolidated net income was R$ 211.7
million. [G4-9]
The following table shows the main
variations of Adjusted EBITDA, in relation
to net income:
Debt
Short-term and long-term consolidated
loans and debentures of Lojas
Americanas at December 31, 2016
amounted to R$ 11,608.5 million.
Subtracting the cash position in the
amount of R$ 6,410.1 million (cash
+ financial investments + accounts
receivable from credit and debit cards)
Adjusted EBITDA - Operating income before interest, taxes, depreciation and amortization, other operating
income/expenses, equity pick-up, minority and statutory interests.
**BWU financial investments [ NE 12 (i)] – Adjusted EBITDA - Operating income before interest, taxes, depreciation
and amortization, other operating income/expenses, equity pick-up, minority and statutory interests.
of total loans, we have a net debt of R$
5,198.4 million.
In the consolidated view, the net debt
was 1.9x the accumulated EBITDA of the
last 12 months. The average maturity
was 804 days on December 31, 2016 (26
months).
At the parent company, net debt was 1.6x
EBITDA accrued in the last 12 months.
The average maturity of the debt was
820 days as of December 31, 2016 (27
months).
As defined in the notice to shareholders
dated May 31, 2016 and disclosed
by B2W Digital in June 2016, Lojas
Americanas exercised its preemptive
rights in the subscription of shares related
to the capital increase in the company
in proportion to its participation, totaling
45,766,785 subscribed shares or R$ 457.7
million. In addition, in the third quarter,
in July 2016, the Company subscribed
all other unsubscribed shares not
subscribed by other shareholders.
After all the steps with relation to the
capital increase were taken, Lojas
Americanas subscribed 69,789,183
shares, totaling an investment of R$ 697.9
million. Lojas Americanas' shareholding
in B2W Digital reached 62.28% in
September 2016.
To address uncertainties and volatility in
the financial market, Lojas Americanas
aims to preserve cash and extend the
debt profile. Over the last few years,
several measures have been taken
with this objective, which allows us to
consolidate the company's long-term
growth plan.
"Accounts receivable" consists mainly
of the discounted value of net credit
card receivables, which are highly liquid
and can be considered as cash. The
breakdown of "accounts receivable" in
Lojas Americanas' view is shown in the
table below: [G4-9]
Absence of exposure to
exchange variations
The Company continues to reaffirm its
commitment to a conservative cash
application policy, manifested by the
use of hedge instruments denominated
in foreign currency and by derivative
operations (swaps). The financial liabilities
and the Company's total cash position
are fully hedged against any exchange
rate fluctuations through these financial
instruments, which offset exchange rate
risk by transforming the cost of debt into
local currency and interest rates (as a
percentage of the CDI*). In the same sense,
it is worth remembering that the Company's
cash is invested with the largest financial
institutions in Brazil.
* CDI - Interbank deposit certificate: average
interest rate of funding on the interbank
market.
Sales per means
of payment
The sales per means of payment of the
parent company in 2016 and 2015 can be
seen in the table below:
Net working capital of the parent
company
As of December 31, 2016, the Parent
Company's net working capital was 28 days.
Inventory: over 2016, the Company
identified opportunities for strategic
purchases that impacted the inventory line
item at the end of the quarters. The success
of 4Q16's events stabilized the item on
December 31, 2016, ending the year at a
level close to the previous year.
Suppliers: the acceleration of payments
to suppliers and strategic shopping
opportunities impacted the average
maturities in the supplier line item.
Gross accounts receivable: the company
constantly monitors credit card installments
and sales volumes, seeking a greater
balance of offered payment/installment
conditions.
Consolidated statement of
income
Adjusted EBITDA - Operating income
before interest, taxes, depreciation and
amortization, other operating income/
expenses, equity pick-up, minority and
statutory interests.
Parent company's income
statement
Adjusted EBITDA - Operating income
before interest, taxes, depreciation and
amortization, other operating income/
expenses, equity pick-up, minority and
statutory interests.
Effects of the consolidation of
B2W Digital's transportation
subsidiaries
Click-Rodo and Direct, B2W Digital
subsidiaries, provide merchandise
distribution services to the Company,
generating an elimination effect on the
consolidated gross revenue and general
and administrative expenses (distribution
expenses), pursuant to current accounting
standards. Consolidated gross profit is
reduced in proportion to the increase
observed in general and administrative
sales expenses, but with no impact on
Adjusted EBITDA and the Adjusted EBITDA
Margin.
The table below sets forth the consolidated
net income of Lojas Americanas, without
these effects in the B2W Digital's result and,
consequently, in the consolidated results of
Lojas Americanas:
Socio-Enviromental Management
06
To be more profitable, socially
responsible, and ecologically conscious,
the Company created the Green
Company Committee in 2007. In 2010,
the committee evolved to the point
where it was formalized in the minutes
of the Board of Directors. In 2012,
the Sustainability Board was created,
Sustainability Committee -
Green Company
reporting directly to the Office of the
President, with a team dedicated
entirely to the Company’s sustainable
development. By 2015, a member of
the Company’s Board of Directors
was designated to serve on the Green
Company Committee and whose role
includes advising the executive board to
consider economic, environmental, and
social impacts in its decision making. [G4-
34]
Additionally, since 2012, Lojas Americanas
has had an Executive Board that reports
directly to the Office of the President, with
a team entirely dedicated to sustainability.
During 2016, the Company maintained
its commitment to develop an action plan
for making investments in socio-cultural
and environmental projects, implementing
them, and then communicating them to
all its stakeholders. Clients, shareholders,
suppliers, government, associates,
non-governmental organizations,
and communities are continuously
encouraged to participate in the
improvement of our socio-environmental
practices. [G4-24]
In 2016, for the third consecutive year,
the Company was included in the
BM&FBOVESPA Corporate Sustainability
Index (ISE) portfolio. This helped to
strengthen, for shareholders and
investors, Lojas Americanas’ commitment
to social and environmental development
that is coupled with good economic
performance. In addition, the Company
received, for the third consecutive year,
the “Green Seal - Chico Mendes Award”
in the “Responsible Socio-Environmental
Management” category. [G4-15]
Sustainability Guidelines
As regards sustainable practices, the
Company focuses all of its communications
activities on two fronts – mobilization
and prevention – and we believe that
investments in sustainability only work when
an institution’s initiatives and efforts are
accessible to society. [G4-14]
Lojas Americanas understands its social role
and its responsibility to launch an expansion
plan, which, in the 2015-2019 cycle, will
open 800 new stores throughout Brazil.
The Company has had an increasingly
positive impact on several communities,
with a special emphasis on the economic
development of those localities in which
new stores have been situated. In this
context, the Company’s rapid growth
has required continuous improvement
of management processes, increasingly
robust governance, and the mobilization of
associates, suppliers, and partners to build a
sustainable business model.
To ensure transparency, a website was
created in 2015 to disseminate information
on Sustainability initiatives. Those who
would like to learn more can access the
site at www.companhiaverde.com.br or
by sending an e-mail to the Company’s
Sustainability division at cia.verde@lasa.
com.br. [G4-31]
Social project investments
In 2016, Lojas Americanas continued to
sponsor a variety of cultural and social
projects, which emphasized sports,
vocational education, and the dissemination
of Brazilian culture, always with respect for
regional diversity. These initiatives took
place across the national territory, with
an eye towards the promotion of local
development. [G4-SO11]
Books in the Squares
In 2016, “Books in Squares,” also known as
the Bookmobile Project, continued to be a
big hit. In partnership with B2W Digital, Lojas
Americanas renewed its sponsorship of
this mobile library initiative. During FY 2016,
fourteen communities and approximately
20,000 people benefited from the project,
which offered a diverse collection of
children’s, young adult, and adult titles.
Grael Project
Americanas.com, in partnership with Lojas
Americanas, sponsored the Grael Project
in 2016. The sponsorship strengthens the
support of sport and healthy lifestyles by
encouraging another project focused on
inclusion, education and democratization
through the practice of sports.
Over the past 18 years, the Grael Project
has helped approximately 16,000 young
people. Created by the brothers and sailing
champions Lars and Torben Grael, the
institution offers free sailing, swimming and
Hawaiian canoeing classes. In addition,
woodworking, fiberglass, electronics,
carpentry, mechanics and upholstering
workshops are offered. In 2016, some 400
youths participated in free sailing courses
and nautical sector training workshops.
Socio-Environmental Investment
Exchange
ALojas Americanas decided to contribute
part of its total social investments to
the BM&FBOVESPA Institute’s Socio-
Environmental Investment Exchange
(BVSA). Over the course of 2016, the
Company achieved the goal of supporting
10 social projects focused on educational
policy, professional training, and income
generation, which were carried out in
Lojas Americanas’ areas of influence in the
states of Rio de Janeiro, Bahia, Ceará, Mato
Grosso do Sul, and Pará. In total, almost
2,000 individuals benefited from these
initiatives.
Galpão Aplauso
Sponsored by Lojas Americanas, the
Galpão Aplauso (Applause Workshop)
project offered vocational courses in
logistics to young people, aged 17-29, who
are residents of low-income neighborhoods
in the Baixada Fluminense and Zona
Oeste regions of Rio de Janeiro. The goal
of the project, which greatly improves the
employability of young people, is to train
these professionals to perform the following
functions – operations assistant, forklift
operator, logistic oversight, and quality
assurance support.
Upon enrolling in the Galpão Aplauso
course, students undergo intense
professional training – theoretical and
practical – and are offered the opportunity
to experience working in a mini distribution
center, specially designed for this program
by Lojas Americanas personnel. The project,
which was launched in January 2015,
has already trained 290 students and, in
February 2017, welcomed a new group of
30 young people to the initiative.
Dupla Escola (Double School) Project
The Integral Education Program – Dupla
Escola – developed in partnership with the
Department of Education of the state of
Rio de Janeiro (SEEDUC) and the National
Commercial Apprenticeship Service
(SENAC) – is another of the Company’s
social investment initiatives. Throughout
2015 and 2016, planning took place towards
the execution of the project, which included
activities such as curriculum development,
establishing an activities agenda, drafting
public notices, and teacher selection, as
well as student enrollment. In total, there
will be 420 high school students who will
receive professional technical training in
logistics and will study, full-time, between
2016 and 2018.
Corporate Citizenship
Through its values and its corporate
identity, Lojas Americanas has promoted
an awareness among all its associates for
activities aimed at promoting health and
well-being, respect, and environmental
protection, as well as the conscious use
of natural resources. In this regard, the
Company created a prevention initiatives
calendar, promoting health and well-being
activities to mitigate environmental impacts,
as a means of mobilizing associates,
customers, and suppliers throughout the
year.
Todo mundo vai Run/Walk
For the third consecutive year, Lojas
Americanas promoted the Todo mundo
vai (All In) run/walk to inspire customers,
associates, and society in general to be
physically active, as a means of contributing
to their own well-being and quality of life.
The 4K and 8K courses attracted 5,000
people to the city of Rio de Janeiro’s Aterro
do Flamengo (Flamengo Park). The event
was also held for the second time in Belo
Horizonte, Minas Gerais; attracting 2,500
people to Lagoa da Pampulha (Pampulha
Lagoon). Along the two stretches of
the course, over 1,000 individuals took
advantage of the opportunity to obtain
physical evaluations and massages. [G4-
SO1] Launched in May 2014, this activity’s
affordable participation prices were made
possible through Brazil’s Sports Incentive
Law. All participants received exclusive
kits that contained an official event t-shirt,
a sports drink, sunscreen, and other
products.
"King and Queen of the Sea"
Sponsored by Lojas Americanas and
Americanas.com, the cities of Salvador
and Rio de Janeiro hosted the biggest
beach sports festival in the country,
featuring sand races, sprints, classic
and challenge (swimming in the sea),
beach biathlon (swimming in the sea
and running in the sand) and a stand-up
paddle race. The event brought together
some 10,000 participants in the stages
in Bahia and Rio de Janeiro, and with the
latter city's competitions taking place on
the Recreio and Copacabana beaches.
"Happily Married"
Lojas Americanas and Americanas.
com brought to Rio de Janeiro state the
“Bem Casados” (Happily Married) feature
film starring actors Camila Morgado
and Alexandre Borges. The movie was
screened at the Arena Carioca Jovelina
Pérola Negra in the Rio de Janeiro
neighborhood of Pavuna in Madureira
Park, and the Crystal Palace plaza in the
municipality of Petrópolis. More than
2,500 people attended the showings,
with the right to popcorn and soft drinks
to accompany the film.
“São Sebastião do Rio de Janeiro”
About 1,000 public school students watched
the "São Sebastião do Rio de Janeiro"
documentary film sponsored by Lojas
Americanas e Americanas.com. The film is
part of a social and educational action and
recounts the history of the city. The students
were from 18 schools in school 15 districts
of Rio de Janeiro. Eight free sessions were
organized in the Ita˙ Cinema Space and the
students helped themselves to popcorn and
soft drinks.
“5x Chico”
The documentary "“5x Chico - O Velho
e Sua Gente” (5x Chico - The Old Man
and His People) sponsored by LASA and
B2W was screened for the populations
of the cities where the filming had taken
place. Approximately of 3,000 people in
PiaÁabuÁu (AL), Piranhas (AL), Bom Jesus
da Lapa (BA), Barra (BA), Pirapora (MG)
and†Janu·ria (MG) watched the movie and
got popcorn and soft drinks.
Toy Donations
During the Christmas period, Lojas
Americanas organized a large, toys
collection campaign. A Christmas tree
was set up at the Company headquarters,
which featured 240 letters to Santa Claus
from more than 240 needy children from
Rio de Janeiro. With the support of our
associates and in partnership with B2W
Digital, more than 240 toys were donated
to Rio de Janeiro NGO, Sonhar Acordado
(Daydreaming). This initiative helped make
the dreams of several hundred children
become reality. [G4-SO1].
Easter Egg Donations
Easter is an important time for retailers.
Therefore, throughout the month of April,
it’s celebrated in a special way. For the
second consecutive year, Lojas Americanas
has spearheaded a campaign to donate
chocolate eggs and bonbons to needy
communities in the cities of Rio de Janeiro
and São Paulo. Executed in partnership with
B2W Digital, a total of 2,100 chocolate eggs
and over 5,000 chocolates were donated.
Christmas Hamper Donations
In December, Lojas Americanas donated
approximately 11,000 Christmas hampers
to ten different NGOs working in socially
vulnerable communities in Rio de Janeiro
and São Paulo. The donations were made
possible through commitments obtained
from suppliers who assisted the Company
during the collection period of this initiative.
This successful, annual activity, which has
been in place for the past three years,
benefits thousands of families
World Environment Day
On June 5, when World Environment Day
was celebrated, the Company issued
environmental education messages to
stimulate positive attitudes among its
associates and its customers. Through
advertising leaflets distributed in stores
and the use of internal communications
channels, all were invited to reflect on the
need to save water and energy.
World Health Day
On April 7, a campaign focused on
associates, which emphasized the beneficial
aspects of engaging in sports activities
and preventive health care. Additionally,
all business units were fumigated as a
means of combating dengue, zika, and
chikungunya-bearing mosquitoes.
Pink October
For the fourth consecutive year, Lojas
Americanas has engaged its customers
and associates in the prevention of breast
cancer. Throughout the month of October,
the Company used point-of-sale monitors
and promotional flyers to highlight this
awareness campaign, which reached
millions of people across Brazil.
EXCELLENCE IN CUSTOMER
SERVICE
To improve its customer service processes
and ensure the full satisfaction of
consumers, in 2016, Lojas Americanas
launched the Jornada do Consumidor
(Consumer’s Day) Project. The Company
has implemented the SAC Easy (Easy
Customer Service) system, which is a
large database that facilitates providing
customers with the assistance they
need. This, in turn, has contributed to an
improvement in customer satisfaction
across the nation.
The Company closed 2016 with 100% of
complaints attended to and 97.2% resolved.
Consumers nationwide registered their
concerns on independently-maintained
and government operated consumer
affairs websites – Reclamão, Consumidor.
gov, ReclameAQUI, and the many state
and municipal websites of the Consumer
Protection and Defense Agencies
(PROCONs). As a result of this high level
of performance, since October 2012,
ReclameAQUI has given Lojas Americanas
its RA 1000 Seal certification, which
acknowledges companies that deliver
excellent customer service.
Part of this acknowledgement of the
Company’s Consumer Relations (SAC)
team is based on observations of
consumer opinions and behaviors on
social networks. Accordingly, our SAC is
constantly monitoring consumer complaints
and suggestions posted to Facebook,
Twitter, Instagram, and YouTube. In 2016,
on Facebook alone, there were two
million interactions. Throughout Brazil,
Lojas Americanas has maintained a close
relationship with representatives of the
various consumer protection agencies
established in the municipalities where its
stores are located, and has attended to
consumer complaints within 48 hours.
Improvements have also been made to
lawsuit avoidance control instruments, such
as the use of the Preliminary Information
Letter (CIP), which is available through the
National Consumer Defense Information
System (SINDEC). We would highlight the
significance of our Post-Sales department,
which solved approximately 45,000 cases
of raised by customers at stores in 2016.
And through the ReclameAQUI portal,
between 2015 and 2016, 100% of all
complaints were responded to and 95%
were resolved within 1 day and 17 hours.
In addition to these initiatives, Lojas
Americanas has developed a platform that
consolidates all requests and complaints
from our customers. This project allowed
us to learn more about our customers and
to act in an objective manner on the issues
reported to us. In 2016, the Company
reported no cases of data breaches or
violations of consumer privacy. [G4-SO11,
G4-PR8].
Red Friday
It’s one of the most important dates on the
calendar for all retailers. And, in 2016 – an
otherwise challenging year for the Brazilian
economy – Lojas Americanas’ Red Friday
surpassed expectations. A duty shift was
drawn from our Customer Service team
and deployed so that customers could be
served for an uninterrupted, 24-hour period,
which ran from midnight on November
25 to midnight, November 26. During the
entire four-day sale period, 10 stores kept
their doors open 24 hours in cities such as
Salvador, São Paulo, Rio de Janeiro, Belo
Horizonte, Santos, and Petrópolis.
Post-Sales Service
Launched in 2015, our post-sales service
division allows us to mediate relationships
between consumers and manufacturers
in an effort to settle disputes in cases that
are not covered by Brazil’s Consumer
Protection Code (CDC).
WORKPLACE HEALTH AND
SAFETY COMES FIRST
Lojas Americanas’ commitment to
procedures that regulate and maintain
workplace health and safety, without
sacrificing strict compliance with the legal
rules and principles related to the same, is
one of the Company’s values. To achieve
this, the Company guarantees the use
of Personal Protective Equipment (PPE)
required for specific tasks, in particular
in its four distribution centers, which are
monitored by supervisors.
Each year, 42 associates are elected to the
Internal Committee for Accident Prevention
(CIPA), which meets on a monthly basis.
All representatives receive NR-05 training
and take the Fire Fighting and Prevention
Course (NR-23), both of which being
required by the Brazilian Ministry of Labor
and Employment (MTE). Following the
training, the group takes actions to prevent
workplace accidents at our headquarters
and throughout our network of stores and
distribution centers.
Environmental Responsibility
Sustainability consists in the generation
of economic value that also creates value
for society and preserves environmental
resources. The Company’s sustainability
policy makes it possible to conduct
business via best socio-environmental
practices. In this way, it seeks to understand
the demands and expectations of
stakeholders, always prioritizing an ethical
and transparent dialogue with them.
As a way of reaffirming its commitment to
socio-environmental issues, since 2013,
Lojas Americanas has been a signatory
to the United Nations Global Compact, an
initiative that unites thousands of companies
around the world that are committed to the
adoption of corporate practices that respect
human rights, especially as regards issues
related to labor practices, the environment,
and business ethics. In 2016, there were no
significant fines or non-monetary sanctions
levied against Lojas Americanas in relation
to environmental management. [G4-15, G4-
EN29]
SUSTAINABLE ARCHITECTURE
With the aim of becoming increasingly
sustainable, Lojas Americanas continued
its work from planning that began in 2013,
when the Company opened its first “green”
store in Rio de Janeiro. Since then, Lojas
American as has been working to gradually
renovate and refit its stores with the aim of
achieving greater efficiencies in energy and
water consumption, giving preference to the
use of low environmental impact materials
and technologies, and reducing operating
costs through the use of low environmental
impact materials and technologies.
In 2016, Lojas Americanas continued to
promote care for the environment and
the responsible consumption of natural
resources, concept to which it committed
itself when the Company announced
the launch of its Conscious Consumer
campaign in 2015. Lojas Americanas has
progressively replaced the water faucets
in its stores with aerator and flow restrictor
models, which deliver only 6 liters of water
per minute, versus 12 liters registered by
the old models. In its restrooms, the gradual
shift towards dual-flush toilets has reduced
consumption to 3 or 6 liters per flush,
depending upon the type of flush required.
By comparison, the older, single-option
models consumed 18 liters per flush.
All 93 stores that opened in 2016 were
designed along the “green store” concept.
These establishments used water-based
paints and have air conditioning systems
that use R410a refrigerant gas (which do
not emit polluting gases), low-consumption
power generators, LED bulbs, dual-flush
toilets, and auto-shut water faucets with flow
regulators. Almost 90% of the materials that
are used for visual communications in the
stores are recyclable.
The Company has encouraged its
associates to make a conscious effort to
collaborate within an environment that
prioritizes the economy of resources in all
business units. Initiatives that demonstrate
the Company’s commitment to protecting
the environment, which also help to reduce
its operating costs include selective waste
collection on all floors of its facilities, area
signage made from reforested MDF boards,
the replacement of common cleaning
products with non-polluting items, and the
installation of automatic shut-off sensors.
GHG EMISSIONS INVENTORY
Mindful of the effects of greenhouse gas
(GHG) emissions on the environment,
particularly its influence on global climate
change, since 2009, Lojas Americanas has
been part of the Brazilian GHG Protocol
Program, which is a tool from an adaptation
of an international methodology that helps
large companies to better understand,
quantify and manage their GHG emissions.
All the members of the Green Company
committee were trained in the use of the
GHG Protocol tool.
Lojas Americanas’ GHG calculation and
reporting for 2016 is intended to illustrate
the Company’s activities in its ongoing effort
to reduce emissions of polluting gases and
mitigate their impact on nature without
sacrificing business liquidity. [G4-EN15]
The result of this work is the Annual
GHG Emissions Inventory. In 2016, Lojas
Americanas and its subsidiary, B2W Digital,
worked together to minimize the rise of
GHG emissions in relation to the Company’s
organic growth. Analyzed, consolidated net
revenue data shows the Company grew
by 1% in relation to 2015, while its direct
emissions (Scope 1) decreased by 26%, a
relative decrease of 27%.Of particular note,
Scope 2 (which mainly reflects indirect
emissions from electric energy acquisition)
decreased by 26%, due to a significant
effort by the Company to manage its energy
use, such that it can consistently maintain
this level of consumption. [G4-EN16]
Regarding indirect emissions (scope 3),
continuous process improvements and fleet
logistics optimizations contributed to a 31%
reduction in indirect emissions. In addition,
the e-commerce operation stopped using
plastic materials in its packaging, which
allowed for a 100% reduction in GHG
emissions from this source type. [G4-EN17]
Even with a nationwide business that is
present in all Brazilian states and with 93
new stores throughout the country, we
have been able to reduce GHG emissions
from air travel by 38%. To accomplish
this, we make sure, whenever possible,
that associates are booked on the same
flights and we also have a preference for
videoconferencing.
– Plastic envelopes (tCO2e)
– Business travel (tCO2e)
– Outsourced fleet (tCO2e)
The major advance in the Company’s
GHG emissions management came in its
contracting of external verification as a
means of validating its 2016 CO2 emissions
inventory data. Thus, we believe that we are
taking another step towards the sustainable
development of Lojas Americanas and data
transparency.
Strategy and Investment07In 2016, Lojas Americanas reached R$
21,400.6 million in consolidated net
revenue, representing 3.3% growth over
the previous year. Of this total, R$ 11,975.1
million relates to the performance of the
parent company (brick-and-mortar stores),
which sold 7.6% more than in 2015.
Growth in same stores gross revenue
6.0% in the fourth quarter and 5.6% in
2016.
The Lojas Americanas’ store chain
has grown approximately 173% in the
past decade. At the close of 2016, the
Company had 1,127 stores distributed
across 436 cities in all Brazilian states. In
addition to the bricks-and-mortar store
chain, the Company has four distribution
centers located in Rio de Janeiro, RJ, São
Paulo, SP, Recife, PE, and Uberlândia, MG.
[G4-9]
The following chart shows the Company’s
expansion over the past ten years:
Store chain expansion
In 2016, Lojas Americanas opened 93 new
stores, reaching 1,127 stores in 436 cities
distributed across all Brazilian states and the
Federal District. The Company is committed
to satisfying the consumption needs of its
customers, exceeding their expectations,
fulfilling their dreams, and helping them to
save time and money.
The following table details the profiles of
stores opened in 2016:
Lojas Americanas has reaffirmed its
commitment to keep up the pace of growth
in its business forecast in the “85 Years in
5 – Somos Mais Brasil” expansion plan,
maintaining the Company’s usual discipline
in the approval of new locations, which
is based on economic feasibility studies
that consider several macroeconomic and
operational assumptions, which include
population growth, per capita income,
evolution of the local economy, logistics
capacity, rent, and anticipated returns.
The new expansion plan foresees the
opening of two new distribution centers
and 800 new stores in Brazil between
2015 and 2019. So far in 2017, the
Company has opened five new stores
and has another 80 contracted or in an
advanced state of negotiation.
To achieve these results, Lojas
Americanas will rely on the abilities
of its employees, their experience in
negotiation and identification of new
points-of-sale, enhancements in its
logistics system, as well as its strong
talent recruitment, training, and retention
program. [G4-2]
Investments
In 2016, Lojas Americanas’ parent
company invested a total of R$ 560.9
million, with an emphasis on expansion,
remodeling of the store network, and
upgrades in technology.
Big Data
Over the past 15 years, Lojas Americanas
has invested in information technology,
storage capacity and real-time data
processing. Collected data addresses
different dimensions of the business,
such as information about customers and
their habits, the supply chain, and the
operational functions of the stores. This has
made it possible for the Company to build
a valuable asset designed to support our
decision-making processes.
Big Data and Analytics initiatives support
the challenge of handling large volumes
of data with real-time intelligence.
Through the development and analysis of
algorithms, the Company has constructed a
data processing platform, which is used for
decision-making in various business areas.
For 2016, the Company notes five major
areas of achievement:
Understanding client behavior: From
advertising through to post-sales,
Client Relationship Management (CRM)
initiatives in brick-and-mortar stores have
already resulted in a large database
that allows the Company to continually
improve its ability to identify, customize,
and interact with its customers. Target
marketing and a strong social media
presence are some of the client-focused
activities that increase our engagement
with them and boosts sales for the
Company.
Mobility: As the Company has a
nationwide presence, the use of mobile
technologies to support its operations has
become indispensable. Thus, the stores’
teams rely on enterprise applications
that generate higher productivity and
establish operational standardization.
Internet of Things: This concept allows
for data capture initiatives in which
sensors monitor the technological park
of the Company’s stores, generating
increases in availability, operational
efficiencies, and productivity.
Commercial optimization: This concept
allows for data capture initiatives in which
sensors monitor the technological park
of the Company’s stores, generating
increases in availability, operational
efficiencies, and productivity.
Human resource management: Lojas
Americanas has developed statistical
and analytical models in partnership
with professors from the world’s leading
business schools, to evaluate talent and
improve the management the Company’s
stores.
All of these initiatives are geared toward
continuously improving client satisfaction
and their shopping experience.
Supply Chain [G4-12]
In 2016, Lojas Americanas carried out
initiatives to make its supply chain
even more efficient. In the search for
competitive advantages that support
expansion, the Company adopts best
practices for product storage and
distribution, always with the objective of
exceeding customer expectations.
Currently, the Company has 1,130 stores
in operation in 439 cities across all
Brazilian states, which are supplied by
four distribution centers, located in the
states of Minas Gerais, Pernambuco, Rio
de Janeiro, and São Paulo.
The implementation of new technologies
and the improvement of processes
includes the choice of more efficient and
economical transportation and supply
models, optimization of distribution center
operations, and the redesign of the
logistics network – always considering
the adequacy of inventories to guarantee
the lowest operational cost and the best
allocation of products in the stores.
The practices adopted in the areas of
storage and distribution generate new
business opportunities, as they assure
the supply of the new stores, support the
presence of a greater variety of products
in all points of sale, allow greater agility
and safety in refueling, and generating
economies of scale due to more efficient
inventory management.
In 2017, Lojas Americanas will continue
to invest in the continuous improvement
of logistics processes, with a focus on
technology, people, and best market
practices.
Private label
Lojas Americanas has 13 private labels
that offer approximately 8,000 quality
products in diverse categories, which are
offered at fair prices.
In 2016, the Company developed a
diversified line of branded products: 1)
D’elicce, which offers a special line of
panettones, cakes, and chocolate gift
items, and 2) Leven, which has introduced
a variety of nut-based products that have
helped to triple the brand’s available
assortment.
During the year, Brink+ grew to become
one of the leading toy brands offered at
Lojas Americanas, now rivaling traditional
brands in the toy and entertainment
market. In 2016 alone, approximately 90
new items were introduced.
The start of 2017 has already produced
success for School Basics and Office
Basics, which have introduced many new
features, such as a line of school supplies
and an everyday office products line that
include notebooks, backpacks, pencil
sets and pens.
Apparel
In 2016, Lojas Americanas continued
to restructure its apparel department.
Through its Basic+ private label brand,
the Company has introduced more than
50 collections of women’s, men’s, and
children’s clothing, ensuing a weekly flow
of new items for clients.
With the aim of delivering a complete
solution to the customer, in November, the
Company debuted its first line of lingerie,
through the brand extension, Basic+
Lingerie. At the same time, the Company
introduced a sports clothing line, branded
as Basic+ Fitness. These lines promise to
be among the most sold in their categories,
delivering a “comfort-fun” concept that
features basic and comfortable items,
which are also fun and colorful.
To make this project possible, in addition
to strengthening its partnerships with
strategic national suppliers, the Company
also strengthened its import arm. With
these and many other initiatives, Lojas
Americanas remains focused on the goal
of offering customers attractive, quality,
and cost-beneficial products.
In addition, the Company provides
exclusive advantages to customers
in the clothing category, with special
payment conditions and progressive
discounts offered when using the Lojas
Americanas card.
Awards and recognition
Lojas Americanas constantly invests in
initiatives that improve its management
processes, such as improvements in
client service, quality control of products
and services, supplier audits, distribution
center operations, and computerization
of all internal processes. As a result of
this effort, in 2016, the Company received
recognition and several awards, which
reinforced the brand’s value, reputation,
and customer commitment.
Highlights included:
Época Reclame Aqui Award
n 2016, Lojas Americanas won in the
“Retail Chain” category. The award, which
is based on popular votes, recognizes the
most consumer-oriented companies in
the marketplace;
Época 360° - Época Negócios
For the third consecutive time, Lojas
Americanas took first place in the retail
category. This yearbook is considered the
national guide in the measurement of all
relevant dimensions that pertain to the
continued success of organizations;
BRASIL REPUTATION PULSE
For the second consecutive year, Lojas
Americanas was ranked as the most
reputable retail company, placing first in
the retain ranking and second among all
Brazilian companies;
Powerful Global Retailers 2017 - Deloitte
Lojas Americanas is the only Brazilian
retailer to rank among the 250 largest
retailers in the world;
Most Valuable Brazilian Brands -
Interbrand
In the Interbrand ranking, Lojas
Americanas came in 12th, being the most
valuable Brazilian retail brand. It stood out
among five national brands that grew the
most in value during the year, reaching
R$ 1.12 billion;
Most Valuable Brazilian Brands - IstoÉ
Dinheiro
In ranking the 50 most valuable brands in
Brazil, Lojas Americanas was top among
retailers and 12th overall;
EMPRESAS MAIS – ESTADÃO
Lojas Americanas won in the “Retail”
category and was among ten highlighted
for Corporate Governance;
300 Largest Brazilian Retail Companies
- Brazilian Retail and Consumer Society
Lojas Americanas ranked first in the
“Department, Household Products, and
General Merchandise Stores” category
and fourth in the overall ranking of
evaluated companies.
Economic outlook
At the beginning of 2016, the principle
macroeconomic variables presented
results below expectations. According to
a Focus* report, Brazil’s Gross Domestic
Product (GDP), should show a variation
of -3.5%. As a result, for the first time,
the country registered two consecutive
years of decline in the level of economic
activity. Given these challenges, retail
sales fell by 6.2% in 2016, the worst result
of the historical series, which began in
2003, released by the Brazilian Institute
of Geography and Statistics (IBGE). [G4-2]
Even with the challenges presented
throughout the year, inflation measured
by the National Consumer Price Index
(IPCA) registered a cumulative rate of
6.29%, the lowest annual rate since
2013, falling within the target set by the
government.
Despite the challenging environment, the
Company believes that the combination
of its broad product mix, the low
concentration of sales in the various
categories offered within the stores, the
potential for expansion, as well as its
multiple and complementary model all
generate opportunities to gain market
share. During 2016, Lojas Americanas
reported 3.3% growth in consolidated
gross revenue, a 5.6% increase in gross
revenue in the “same stores” concept,
and a 12.2% increase in Adjusted EBITDA,
reaching 15.5% of Adjusted EBITDA
margin consolidated for the period.
The results achieved demonstrate the
resilience of the Company’s business
model.
For 2017, Lojas Americanas remains
optimistic that the Brazilian retail
market will present significant growth
opportunities. It reaffirms its confidence
in the Brazil’s economic development
and underscores the strength of the
Company’s unique business model,
through its broad national presence and
multi-channel customer service.
* Focus Report of 2/3/2017
** Sources: Brazilian Institute of Geography and
Statistics (IBGE) and the Central Bank of Brazil
GRI Content08For the third consecutive year, Lojas
Americanas is publishing its Annual
and Sustainability Report as a single
document, encompassing information
about the Company's financial
performance as well as its sustainability
report for the period between January 1
and December 31, 2016. [G4-17, G4-28].
The Company's published report is in
keeping with the G4 guidelines of the
Global Reporting Initiative (GRI), which is
focused on material themes, identified by
the materiality matrix prepared in 2016,
making the reporting more relevant and
reliable.
The preparation of the report reinforces
the fact that Lojas Americanas is
committed to the management of its
governance and transparency in the
communication of strategic information
to its stakeholders, disclosing corporate
sustainability initiatives to the benefit of
the Company's socio-environmental and
economic development. Lojas Americanas
believes that a profitable business,
aligned with initiatives from a sustainable
growth model, creates even greater value
for shareholders and future investors. [G4-
29; G4-30]
The expansion plan for the 2015-2019
cycle was continued in 2016 and we
commemorated many achievements:
for example, being part of the
BM&FBOVESPA's Corporate Sustainability
Index (ISE) portfolio in 2017 — for the third
year in a row. The Company permanently
motivates all of its associates towards
improving the management indicators,
carefully observing their economic, social
and environmental impacts.
To report the sustainability results,
encompassing all its social and
environmental operations, Lojas
Americanas adopted the GRI G4 Essential
option version. The application of
each indicator carefully observed the
information gathered from the various
corporate areas, with extensive research
and the collection of data from the
quarterly earnings reports to the market,
internal and external communication and
information available on the B2W Digital
and Green Company investor relations
website. [G4-18, G4-32]
The Company is available to anyone
interested in seeking clarification and/
or who would like to make suggestions
regarding this document. The contact
may be by email at [email protected].
br or through the Investor Relations
Department (21) 2206-6708. [G4-31]
Application Level
To meet the GRI, G4 Essential
requirements, we responded to the
general G4-1 to G4-34, and G4-56,
content, specified in the GRI Index and
marked in brackets in the corresponding
texts. In relation to specific content, for
each material aspect we have correlated
responses to our indicators, also detailed
in the GRI table. [G4-32]
Materiality as a guideline
The Materiality Principle is one of the
most important guidelines disseminated
by the GRI and AccountAbility
organizations, considered international
corporate sustainability benchmarks.
This tool has helped to identify the most
important issues for the Company's
businesses from the point of view of its
main stakeholders, and therefore in 2016
we updated our Materiality Matrix, which
had been prepared for the report's first
year, to guide this edition. [G4-18]
Our Materiality Matrix was the result
of a careful survey of a number of
stakeholders. To progress the survey
of the perceptions of society about our
activities on behalf of sustainability and
to define the strategic themes for our
business, an on-line consultation was
conducted with clients, suppliers and
associates. In-depth interviews were
conducted with Company executives
and experts on the topic of sustainability
from the Akatu Institute, the São Paulo
Association of Supermarkets (Apas), and
the Getúlio Vargas Foundation’s Center
for Retail Excellence. [G4-21; G4-24; G4-
25; G4-26].
Also analyzed were internal Company
documents as well as annual reports,
ethical and good conduct codes and
sectorial national and international
studies prepared by recognized
organizations, such as AccountAbility,
Apas, the Dom Cabral and the Akatu
Institute. [G4-20] The GRI-G4 guidelines,
combined with international standards
of AccountAbility (AA1000) focused on
stakeholder engagement, were also key
elements in the process.
The following list presents the ten most
important topics for our business, from
the perspective of the stakeholders who
were consulted. These themes, together
with the issues the Company believes to
be of strategic importance, were analyzed
and compared to generate the materiality
matrix, also shown below in this chapter.
[G4-19; G4-20, G4-21, G4-27]
Three themes that appeared in 2016 had
been mentioned in the previous edition.
"Quality in client relationship" appeared at
the top in the interviews conducted with
executives and experts, underscoring
that this should be the main guidance
for the company. "Associates Working
Conditions, Health and Safety" and
"Employee Training and Development"
also were repeated, as was "Selection
and Contracting," with the latter item an
important indicator of the weight of this
issue for traditional retailers.
On the other hand, to appear on new
themes such as "Diversity and Promotion
of Equal Rights of Associates"; "Culture
of Ethical Behavior and Combat of
Corruption" and "Product Quality Safety
and Control" called attention to aspects
such as respect of human rights and
social diversity. Another observation is
with regard to the strengthening of the
importance of overall product quality and
the relevance of risk and compliance
management for the organization.
Three other topics in 2016's Matrix were
"Careful Handling of Client Information";
"Compliance with Laws and Regulations";
and "Ethical Relations with Suppliers.