B2W ANNOUNCES GROSS REVENUE GROWTH OF 64%
AND EBITDA GROWTH OF 70% IN 2006
São Paulo, February 15, 2007 – B2W Companhia Global do Varejo, company resultant from the merger between Americanas.com
and Submarino, announces today its consolidated results for 2006. As the merger was approved at the Extraordinary Shareholders
Meeting held on December 13, 2006, for comparison purposes, the comments on the merged companies’ performance were based on
pro-forma, unaudited income statements for 2005 and 2006 (Exhibit I). Such pro-forma information does not replace audited Financial
Statements filed at the Brazilian Stock and Exchange Commission (CVM).
B2W’s portfolio comprises Americanas.com, Shoptime, Submarino, Ingresso.com, Submarino Finance and Submarino Viagens,
offering over 30 product categories throughout its internet channel, catalogues, TV and kiosks.
FINANCIAL HIGHLIGHTS
2006 Consolidated Results
Americanas.com / Shoptime
Financial Highlights (*)
EBITDA (R$ million)
86%
Americanas.com/
Shoptime
R$ MM
2006
2005
Submarino
2006
2005
B2W
2006
2005
61%
142
31
4Q05
50
4Q06
Gross Revenue
77
EBITDA
2005
2006
Submarino
44%
574
2,364
1,439
142
77
65
45
207
122
13.4%
12.8%
10.7%
10.6%
12.4%
11.9%
9 Gross Margin
29.8% of Net Revenues, growth of 150 basis points.
22
45
4Q06
835
9 Gross Revenue
Growth of 64%.
38%
4Q05
865
Highlights of the Period (*)
EBITDA (R$ million)
16
EBITDA Margin
1,528
65
2005
2006
B2W Companhia Global do Varejo
EBITDA (R$ million)
70%
53%
9 EBITDA Margin
12.4% of Net Revenues, growth of 50 basis points.
9 Launch of Submarino’s Card
Over 50,000 cards were issued in 2006.
9 The documents concerning the merger are under analysis of
CVM. Upon the completion of legal procedures, B2W will be
entitled to change its ticker to BTOW3.
9 B2W is subject to the Listing Rules of Novo Mercado, the
highest level of Corporate Governance of the São Paulo
Stock Exchange (Bovespa).
207
122
47
4Q05
72
4Q06
2005
2006
(*) Financial Highlights and Highlights of the Period are based on proforma results.
1
GENERAL CONSIDERATIONS
As the merger was approved at the Extraordinary Shareholders Meeting held on December 13, 2006, for
comparison purposes, the comments on the merged companies’ performance were based on pro-forma,
unaudited income statements for 2005 and 2006 (Attachment I). Such pro-forma information does not
replace audited Financial Statements filed at the Brazilian Stock and Exchange Commission (CVM).
The following discussion is solely based on the consolidated result of the brands Americanas.com,
Shoptime and Submarino, excluding, then, the subsidiaries (Ingresso.com, Submarino Finance and
Submarino Viagens). The Company highlights that gross revenue and EBITDA breakdown by brand shown
in Exhibit II are extraordinary and non-recurring, as well as, the gross revenues and EBITDA of the
subsidiaries.
HIGHLIGHTS OF THE PERIOD
9 Gross Revenue growth of 64%. In 2006, the Company’s gross revenue amounted to R$ 2.4 billion
(US$ 1.1 billion), 64.3% up over 2005.
9 Gross Margin moved up 150 basis points. Gross profit in the period reached R$ 496.5 million
(US$ 228.8 million), leading to a gross margin of 29.8% of net revenues in 2006, versus R$ 289.6 million
(US$ 133.5 million) and gross margin of 28.3%, reported in 2005.
9 EBITDA1 growth of 70%. EBITDA moved up 70.2% over 2005, reaching R$ 207.0 million (US$ 95.4
million). EBITDA margin went up to 12.4%, from 11.9% posted in 2005.
9 Launch of Submarino Credit Card. In mid September, 2006, we launched Submarino’s credit card.
The holders of this card are enrolled in a Reward Program, and additionally, may participate in special
promotions on Submarino’s website. By the end of 2006, over 50,000 cards had been issued.
9 Approval of the merger at first call. On December 13, the Extraordinary Shareholders Meeting
approved the merger of the companies Americanas.com and Submarino, having the operation been
submitted to the Brazilian antitrust agencies (the CADE – Administrative Board for Economy Protection,
SDE – Secretariat of Economic Law and SEAE – Secretariat for Economy Monitoring) on time and
under the form required by the Law. The Concentration Act is currently being analyzed by the SEAE and
the SDE and will be subsequently submitted to the CADE’s approval. B2W is following the progress of
the process and collaborating with authorities as required.
9 Documents related to the merger are being analyzed by the CVM and, as soon as the proceedings are
completed, B2W will be authorized to change its ticker to BTOW3. It is important to note that SUBA3’s
shares already reflect B2W’s total capital.
9 A multifunctional group was appointed to compose the integration team, responsible for mapping and
implementing the synergies initially estimated between the companies.
9 Since its inception, B2W has high levels of Corporate Governance, shares traded on the Novo
Mercado and additional rules, including the election of the Board of Directors with five members
appointed by Lojas Americanas and four independent members.
2
COMMENTS ON THE PERFORMANCE
GROSS REVENUE
In the 4Q06, consolidated gross revenue went up by 49.6%, from R$ 521.8 million in 4Q05 to R$ 780.3
million.
Consolidated gross revenue reached R$ 2.4 billion (US$ 1.1 billion) in 2006, 64.3% up year-on-year. It is
worth mentioning that Shoptime’s performance has been booked as of September 2005, when the
Company was acquired.
CAGR = 68.1%
2,364
1,439
805
296
2002
480
2003
2004
2005
2006
Groos Revenues (R$MM)
GROSS PROFIT
Gross profit totaled R$ 496.5 million in 2006 (29.8% of Net Revenue), a 71.5% increase over the R$ 289.6
million (28.3% of Net Revenue) recorded in 2005.
28.3%
29.8%
496.5
289.6
2005
Gross Profit (R$MM)
2006
Gross Margin (%)
OPERATING EXPENSES
Selling, general and administrative expenses amounted to R$ 289.6 million, 17.4% of Net Revenue in 2006,
versus the R$ 167.6 million reported in 2005 (16.4% of Net Revenue). The 100 basis points increase
reflects the inclusion of Shoptime’s expenses, which were consolidated as of September, 2005.
Extraordinary Expenses totaled R$ 18.7 million in 2006, versus R$ 15.5 million recorded in 2005. These
expenses refer to costs related to Submarino’s IPO and secondary offering held in 1Q05 and 2Q06,
respectively.
3
EBITDA
Fourth-quarter EBITDA grew 53.0% year-on-year, reaching R$ R$ 71.7 million. The EBITDA Margin
represented 13.2% of Net Revenue.
In 2006, EBITDA was R$ 207.0 million, 70.2% up on 2005. The EBITDA Margin was 12.4% of Net
Revenue.
Performance indicators in 2006 show B2W’s improvement in operating performance, compared to the
same indicators in the previous year.
EBITDA is based on earnings before the financial result, excluding depreciation, amortization and
extraordinary expenses.
11.9%
12.4%
207.0
121.6
2005
EBITDA (R$MM)
2006
EBITDA Margin (%)
FINANCIAL RESULT
In 2006, net Financial Result reached R$ 72.1 million (4.3% of Net Revenue), versus R$ 45.3 million (4.4%
of Net Revenue) in 2005. This result was heavily impacted by the increase in tax and contribution on
financial transactions, in addition to the effect of Shoptime’s acquisition (booked as of September, 2005).
EQUITY RESULT
The equity result includes, basically, the subsidiaries Ingresso.com, Submarino Viagens and Submarino
Finance. In 2006, equity result reported R$ 6.4 million loss, especially due to the impact of Submarino
Viagens and Submarino Finance operations, which are in the investment phase. The results posted by
these subsidiaries are under our expectations and we reinforce our enthusiasm about their growth outlook.
NON OPERATING (EXPENSE) REVENUES
Non-operating revenue totaled R$ 49.9 million in 2006, and basically reflects the capital gain resulting from
Toulon’s merger, which was financially realized. This amount was duly taxed by the Company, with due tax
effects booked in the Income Tax and Social Contribution account of the 2006 Income Statement.
NET INCOME AND NET EARNINGS PER SHARE
Net Income stood at R$ 142.7 million (8.6% of Net Revenue) in 2006, versus R$ 56.0 million (5.5% of Net
Revenue) in 2005. Net Earnings per share went up 155%, from R$ 0.4944 in 2005 to R$ 1.2595 in 2006.
4
KEY METRICS ON SUBSIDIARIES
ONLINE TICKETS SALES
Ingresso.com offers technology and purchase service of tickets to shows, theater plays, soccer games,
parks, events and movies via web. Ingresso.com is currently the largest online seller of movie tickets in
Brazil. Our clients are able to choose their seat in some movie theaters, and some mobile operators deliver
the purchased movie ticket digitally.
Key Metrics
1Q06
2Q06
3Q06
4Q06
206,154
1,155
279
187
350,661
1,478
355
210
275,368
1,272
(90)
220
216,783
1,257
416
220
2006
Ingresso.com
Tickets sold
Gross revenues (R$ 000's)
EBITDA (R$ 000's)
Active customers (000's)
1,048,966
5,162
960
220
ONLINE TRAVEL SALES
Submarino Viagens offers our clients hotel booking, travel packages, airline tickets, cruises and car rental.
Through the new online booking infrastructure, Submarino Viagens’ clients may choose and book hotels all
over Brazil and abroad, buy airline tickets for domestic and international flights and book travel packages
that include transportation, accommodation and tours.
Key Metrics
1Q06
2Q06
3Q06
4Q06
2006
Submarino Travel
Gross bookings (R$ 000's)
EBITDA (R$ 000's)
Active passengers (000's)
7,588
(556)
12
8,805
(145)
14
10,384
(485)
19
11,087
(371)
26
37,863
(1,558)
26
ONLINE FINANCING
Through our partnership with Cetelem, we offer Submarino’s Credit Card and financing in up to 24
interest bearing installments for purchases made on Submarino’s website including an exclusive Reward
Program and special promotions to cardholders. By the end of 2006, after approximately 6 months of
operations, we had issued over 50,000 cards.
Key Metrics
1Q06
2Q06
3Q06
4Q06
2006
Submarino Finance
Gross billings (R$ 000's)
EBITDA (R$ 000's)
Cards issued
-
248
-
1,310
(569)
1,314
6,745
(5,223)
50,630
8,303
(5,792)
51,944
5
CORPORATE GOVERNANCE AND CAPITAL MARKETS
B2W is subject to the Listing Rules of Novo Mercado, the highest level of Corporate Governance of the São
Paulo Stock Exchange – Bovespa. According to these rules, the company’s ownership structure must be
exclusively composed of common shares and the company’s Board of Directors has to include independent
members. B2W’s Board of Directors is composed of nine members, out of whom five are appointed by
Lojas Americanas and four are independent members.
Lojas Americanas and B2W have entered into a Voting and Assumption of Debt Agreement, which rules
corporate governance and stock ownership matters. Lojas Americanas has also entered into a 4-year
standstill agreement limiting, among other things, its ability to acquire additional shares of B2W in excess of
certain specified levels, without prior approval of a majority of independent members of the Board of
Directors. Lojas Americanas is not allowed to sell its B2W’s shares for 2 years, after the conclusion of this
operation.
POTENTIAL SYNERGIES
Management of both companies expects to capture significant synergies as a result of the merger.
Revenues synergies are projected to be captured from offering new products and services to both
Submarino’s and Americanas.com’s existing customer bases. The combination is expected to facilitate the
development and growth of services, such as online travel and tickets sale,
The combined company expects to achieve a net present value of synergies of approximately R$ 800
million. Considering the synergies opportunities, we point out the rationalization o four distribution centers
through a new logistic operation.
GROWTH EXPECTATION IN THE E-COMMERCE SEGMENT
Forrester Research, an international consulting firm specialized in e-commerce studies and projections,
forecasts, for the Brazilian market, an average annual growth of 34%, reaching R$12.8 billion in 2010. For
projections purposes, the Company expects to present, at least, an average annual growth in line with the
market, but it is worthy mentioning that “We Want More”.
CAGR = 34%
5.3
2007E
7.3
2008E
9.8
2090E
12.8
2010E
Merchandise e-Commerce Market (R$B)
6
EXHIBIT I – PRO-FORMA INCOME STATEMENT
For comparison purposes, the comments on the merged companies’ performance were based on pro-forma, unaudited
income statements for 2005 and 2006. The table below excludes the results of the subsidiaries Ingresso.com,
Submarino Finace and Submarino Viagens.
B2W S/A
Pro Forma Income Statement
Consolidated
Americanas.com/Shoptime/Submarino
In thousand of Reais
2006
Gross sales
2005
2,363,611
Taxes, returns and rebates
Net sales
(697,014)
1,666,597
Cost of goods sold
(1,170,098)
Gross profit
1,439,009
(417,274)
1,021,735
(732,172)
496,499
289,563
29.8%
28.3%
Operational expenses
(325,263)
(195,188)
Selling
(289,565)
(167,642)
Extraordinary expenses
(18,740)
(15,457)
Depreciation and amortization
(16,982)
(11,736)
Gross margin (% n.s.)
Other operational revenues (expenses)
Operating profit before net financial results
24
(352)
171,237
94,375
10.3%
9.2%
(72,054)
(45,272)
Operating profit before equity result in subsidiaries
99,182
49,103
Equity result in subsidiaries
(6,410)
Non-operating expenses, net
49,851
Operational margin (% n.s.)
Net financial result
Deferred Income tax and social contribution
40
(7,947)
106
14,826
Net income for the period
142,729
56,022
EBITDA
206,958
121,569
12.4%
11.9%
EBITDA margin (% n.s.)
7
EXHIBIT II – PRO-FORMA GROSS REVENUE AND EBITDA
The Company highlights that Gross Revenues and EBITDA breakdown by brands, presented in the table
below, is extraordinary and non-recurring.
Americanas.com / Shoptime
R$ MM
Submarino
4Q06
4Q05
2006
2005
4Q06
4Q05
2006
2005
Gross Revenue
501
331
2
865
279
191
835
574
EBITDA
50
31
142
77
22
16
65
45
14.5%
13.3%
13.4%
12.8%
11.1%
11.7%
10.7%
10.6%
EBITDA Margin
CHARTS – PRO-FORMA GROSS REVENUE AND EBITDA
GROSS REVENUE (R$MM)
76.7%
51.4%
45.5%
46.1%
1.529
501
865
574
Americanas.com/Shoptime
279
191
Submarino
2005
331
835
Americanas.com/Shoptime
Submarino
4Q05
2006
4Q06
EBITDA(R$MM) AND EBITDA MARGIN (% NET REVENUE)
13.4%
12.8%
10.7%
142
10.6%
14.5%
13.3%
77
45
Americanas.com/Shoptime
2005
65
31
Submarino
2006
50
Americanas.com/Shoptime
4Q05
11.1%
11.7%
16
22
Submarino
4Q06
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CONFERENCE CALL ON 2006 RESULTS
Conference Call simultaneously translated into English followed by a bilingual Q&A session will be
held on:
Friday, February 16, 2007
Portuguese
9:00 a.m. US EST (12h00 Brasília)
Connecting Number: +55 (11) 2101-4848
Code: B2W
English
9:00 a.m. US EST (12h00 Brasília)
Connecting Number: +1 (973) 582-2839
Code: B2W or 8454091
Investor Relations
Phone: +55 (11) 2189-1759
ri@submarino.com.br
Investor Relations Website:
www.submarino.com.br/ri
1
EBITDA - Earnings before Interest, Tax, Depreciation and Amortization, and excluding extraordinary expenses, is presented as
additional information because we believe that it is an important indicator of our operating performance, besides being useful to
compare our performance with other companies of the e-retail sector. However, no figure should be considered alone as a substitute
to net income calculated in accordance with US GAAP or Brazilian Corporate Legislation (BR GAAP) or yet as a measure of the
Company’s profitability. In addition, our calculations may not be comparable to other similar methods adopted by other companies
2006 Average US Dollar: R$ 2.17
We make forward-looking statements that are subject to risks and uncertainties. These statements are based on the beliefs and
assumptions of our management, and on information currently available to us. Forward-looking statements include statements
regarding our intent, belief or current expectations or that of our directors or executive officers.
Forward-looking statements also include information concerning our possible or assumed future results of operations, as well as
statements preceded by, followed by, or that include the words ''believes,'' ''may,'' ''will,'' ''continues,'' ''expects,'' ''anticipates,'' ''intends,''
''plans,'' ''estimates'' or similar expressions.
Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions because they relate
to future events and therefore depend on circumstances that may or may not occur. Our future results and shareholder values may
differ materially from those expressed in or suggested by these forward-looking statements. Many of the factors that will determine
these results and values are beyond B2W ability to control or predict.
9