COMPANHIA BRASILEIRA DE DISTRIBUIÇAO NETHERLANDS HOLDING B.V. FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of November, 2022
Brazilian Distribution Company
(Translation of Registrant's Name Into English)
Av. Brigadeiro Luiz Antonio,
3142 São Paulo, SP 01402-901
Brazil
(Address of Principal Executive Offices)
(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F)
Form 20-F X Form 40-F
(Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule
101 (b) (1)):
Yes ___ No X
(Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule
101 (b) (7)):
Yes ___ No X
(Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.)
Yes ___ No X
| FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE) |
| ITR - Interim Financial Information - September 30, 2022 - COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO |
REPORT ON REVIEW OF INTERIM FINANCIAL INFORMATION
To the Shareholders and Management of
Companhia Brasileira de Distribuição
Introduction
We have reviewed the accompanying individual and consolidated interim financial information of Companhia Brasileira de Distribuição ("Company"), included in the Interim Financial Information Form (ITR), for the quarter ended September 30, 2022, which comprises the balance sheet as of September 30, 2022 and the related statements of profit and loss and comprehensive income for the three and nine-month periods then ended, and changes in equity and cash flows for the nine-month period then ended, including the explanatory notes.
The Board of Directors is responsible for the preparation of the individual and consolidated interim financial information in accordance with technical pronouncement CPC 21 (R1) - Interim Financial Reporting and international standard IAS 34 - Interim Financial Reporting, issued by the International Accounting Standards Board (IASB), as well as for the presentation of such information in accordance with the standards issued by the Brazilian Securities Commission (CVM), applicable to the preparation of Interim Financial Information (ITR). Our responsibility is to express a conclusion on this interim financial information based on our review.
Scope of review
We conducted our review in accordance with Brazilian and international standards on review of interim financial information (NBC TR 2410 and ISRE 2410 - Review of Interim Financial Information Performed by the Independent Auditor of the Entity, respectively). A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with the standards on auditing and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion on the individual and consolidated interim financial information
Based on our review, nothing has come to our attention that causes us to believe that the accompanying individual and consolidated interim financial information included in the ITR referred to above is not prepared, in all material respects, in accordance with technical pronouncement CPC 21 (R1) and international standard IAS 34 applicable to the preparation of Interim Financial Information (ITR) and presented in accordance with the standards issued by the CVM.
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Companhia Brasileira de Distribuição
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Other matters
Statements of value added
The interim financial information includes the individual and consolidated statements of value added (DVA) for the nine-month period ended September 30, 2022, prepared under the responsibility of the Company's Board of Directors, and presented as supplementary information for the purposes of international standard IAS 34. These statements have been subject to review procedures performed in conjunction with the review of the ITR to determine whether they are reconciled with the interim financial information and the accounting records, as applicable, and if their form and content are in accordance with the criteria defined in technical pronouncement CPC 09 - Statement of Value Added. Based on our review, nothing has come to our attention that causes us to believe that these statements of value added were not prepared, in all material respects, in accordance with the criteria set out in CPC 09 and consistently with respect to the individual and consolidated interim financial information taken as a whole.
The accompanying interim financial information has been translated into English for the convenience of readers outside Brazil.
São Paulo, November 3, 2022
| DELOITTE TOUCHE TOHMATSU | Eduardo Franco Tenório |
| Auditores Independentes Ltda. | Engagement Partner |
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Companhia Brasileira de Distribuição
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| Company Information | |
| Capital Composition | 5 |
| Individual Interim Financial Information | |
| Balance Sheet - Assets | 6 |
| Balance Sheet - Liabilities | 7 |
| Statement of Operations | 8 |
| Statement of Comprehensive Income | 9 |
| Statement of Cash Flows | 10 |
| Statement of Changes in Shareholders' Equity | |
| 1/1/2022 to 9/30/2022 | 11 |
| 1/1/2021 to 9/30/2021 | 12 |
| Statement of Value Added | 13 |
| Consolidated Interim Financial Information | |
| Balance Sheet - Assets | 14 |
| Balance Sheet - Liabilities | 15 |
| Statement of Operations | 16 |
| Statement of Comprehensive Income | 17 |
| Statement of Cash Flows | 18 |
| Statement of Changes in Shareholders' Equity | |
| 1/1/2022 to 9/30/2022 | 19 |
| 1/1/2021 to 9/30/2021 | 20 |
| Statement of Value Added | 21 |
| Comments on the Company`s Performance | 22 |
| Notes to the Interim Financial Information | 42 |
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Companhia Brasileira de Distribuição
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Number of Shares (thousand) | Current Quarter 9/30/2022 | |
| Share Capital | ||
| Common | 269,637 | |
| Preferred | 0 | |
| Total | 269,637 | |
| Treasury Shares | ||
| Common | 160 | |
| Preferred | 0 | |
| Total | 160 |
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Companhia Brasileira de Distribuição
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| Individual Interim Financial Information / Balance Sheet - Assets | |||
| R$ (in thousands) | |||
| Code | Description |
Current Quarter 09/30/2022 |
Previous Year 12/31/2021 |
| 1 | Total Assets | 29,850,000 | 33,646,000 |
| 1.01 | Current Assets | 7,371,000 | 9,650,000 |
| 1.01.01 | Cash and Cash Equivalents | 2,382,000 | 4,662,000 |
| 1.01.03 | Accounts Receivable | 539,000 | 428,000 |
| 1.01.03.01 | Trade Receivables | 297,000 | 330,000 |
| 1.01.03.02 | Other Receivables | 242,000 | 98,000 |
| 1.01.04 | Inventories | 1,980,000 | 2,232,000 |
| 1.01.06 | Recoverable Taxes | 1,097,000 | 1,048,000 |
| 1.01.08 | Other Current Assets | 1,373,000 | 1,280,000 |
| 1.01.08.01 | Non-Current Assets for Sale | 34,000 | 1,153,000 |
| 1.01.08.03 | Other | 1,339,000 | 127,000 |
| 1.01.08.03.02 | Dividends Receivable | 0 | 16,000 |
| 1.01.08.03.03 | Credits with Other Related Parties - Short Term | 1,181,000 | 0 |
| 1.01.08.03.04 | Others assets | 158,000 | 111,000 |
| 1.02 | Noncurrent Assets | 22,479,000 | 23,996,000 |
| 1.02.01 | Long-term Assets | 4,801,000 | 4,935,000 |
| 1.02.01.04 | Accounts Receivable | 806,000 | 491,000 |
| 1.02.01.04.01 | Trade Receivables | 0 | 1,000 |
| 1.02.01.04.02 | Other Accounts Receivable | 806,000 | 490,000 |
| 1.02.01.07 | Deferred Taxes | 616,000 | 550,000 |
| 1.02.01.09 | Credits with Related Parties | 501,000 | 692,000 |
| 1.02.01.10 | Other Noncurrent Assets | 2,878,000 | 3,202,000 |
| 1.02.01.10.04 | Recoverable Taxes | 2,052,000 | 2,399,000 |
| 1.02.01.10.05 | Restricted deposits for legal proceedings | 723,000 | 717,000 |
| 1.02.01.10.06 | Financial Instruments - Fair Value Hegde | 0 | 1,000 |
| 1.02.01.10.07 | Other Noncurrent Assets | 103,000 | 85,000 |
| 1.02.02 | Investments | 9,227,000 | 11,059,000 |
| 1.02.02.01 | Investments In Associates | 9,227,000 | 11,059,000 |
| 1.02.02.01.02 | Investments in Subsidiaries | 9,227,000 | 11,059,000 |
| 1.02.03 | Property and Equipment, Net | 6,516,000 | 6,067,000 |
| 1.02.03.01 | Property and Equipment in Use | 3,681,000 | 3,331,000 |
| 1.02.03.02 | Leased Properties Right-of-use | 2,835,000 | 2,736,000 |
| 1.02.04 | Intangible Assets, net | 1,935,000 | 1,935,000 |
| 1.02.04.01 | Intangible Assets | 1,935,000 | 1,935,000 |
| 1.02.04.01.02 | Intangible Assets | 1,548,000 | 1,494,000 |
| 1.02.04.01.03 | Intangible Right-of-use | 387,000 | 441,000 |
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Companhia Brasileira de Distribuição
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Individual Interim Financial Information / Balance Sheet - Liabilities
| R$ (in thousands) | |||
| Code | Description |
Current Quarter 09/30/2022 |
Previous Year 12/31/2021 |
| 2 | Total Liabilities | 29,850,000 | 33,646,000 |
| 2.01 | Current Liabilities | 5,208,000 | 7,541,000 |
| 2.01.01 | Payroll and Related Taxes | 344,000 | 394,000 |
| 2.01.02 | Trade payables, net | 2,132,000 | 3,651,000 |
| 2.01.03 | Taxes and Contributions Payable | 303,000 | 278,000 |
| 2.01.04 | Borrowings and Financing | 1,102,000 | 1,243,000 |
| 2.01.05 | Other Liabilities | 1,327,000 | 1,913,000 |
| 2.01.05.01 | Payables to Related Parties | 418,000 | 388,000 |
| 2.01.05.02 | Other | 909,000 | 1,525,000 |
| 2.01.05.02.01 | Dividends and interest on own capital | 1,000 | 81,000 |
| 2.01.05.02.07 | Pass-through to Third Parties | 0 | 2,000 |
| 2.01.05.02.08 | Financing Related to Acquisition of Assets | 82,000 | 84,000 |
| 2.01.05.02.09 | Deferred Revenue | 28,000 | 44,000 |
| 2.01.05.02.12 | Other Accounts Payable | 300,000 | 768,000 |
| 2.01.05.02.17 | Lease Liability | 498,000 | 546,000 |
| 2.01.07 | Liabilities related to assets held for sale | 0 | 62,000 |
| 2.01.07.01 | Liabilities on Non-current Assets for Sale | 0 | 62,000 |
| 2.02 | Noncurrent Liabilities | 11,103,000 | 12,456,000 |
| 2.02.01 | Borrowings and Financing | 4,909,000 | 6,563,000 |
| 2.02.02 | Other Liabilities | 4,537,000 | 4,513,000 |
| 2.02.02.01 | Liabilities with related parties | 24,000 | 96,000 |
| 2.02.02.01.04 | Debts with Others Related Parties | 24,000 | 96,000 |
| 2.02.02.02 | Others | 4,513,000 | 4,417,000 |
| 2.02.02.02.03 | Taxes payable in installments | 79,000 | 148,000 |
| 2.02.02.02.07 | Other Noncurrent Liabilities | 267,000 | 231,000 |
| 2.02.02.02.08 | Provision for Losses on Investments | 758,000 | 703,000 |
| 2.02.02.02.09 | Lease Liability | 3,409,000 | 3,335,000 |
| 2.02.04 | Provisions | 1,555,000 | 1,315,000 |
| 2.02.06 | Deferred Revenue | 102,000 | 65,000 |
| 2.03 | Shareholders' Equity | 13,539,000 | 13,649,000 |
| 2.03.01 | Share Capital | 5,860,000 | 5,859,000 |
| 2.03.02 | Capital Reserves | 308,000 | 291,000 |
| 2.03.02.04 | Stock Option | 306,000 | 289,000 |
| 2.03.02.07 | Other Capital Reserve | 2,000 | 2,000 |
| 2.03.04 | Earnings Reserve | 7,724,000 | 6,925,000 |
| 2.03.04.01 | Legal Reserve | 705,000 | 705,000 |
| 2.03.04.05 | Retention of Profits Reserve | 231,000 | 233,000 |
| 2.03.04.07 | Tax Incentive Reserve | 2,762,000 | 2,349,000 |
| 2.03.04.10 | Expansion Reserve | 2,414,000 | 2,575,000 |
| 2.03.04.12 | Transactions with shareholders | 1,612,000 | 1,063,000 |
| 2.03.05 | Retained Earnings/ Accumulated Losses | 664,000 | 0 |
| 2.03.08 | Other comprehensive income | -1,017,000 | 574,000 |
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Companhia Brasileira de Distribuição
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Individual Interim Financial Information / Statement of Operations
| R$ (in thousands) |
| Code | Description | Current Quarter | Year to date current period 01/01/2022 to 09/30/2022 | Previous Quarter | Year to date previous period 01/01/2021 to 09/30/2021 |
| 3.01 | Net operating revenue | 4,272,000 | 11,836,000 | 3,613,000 | 10,967,000 |
| 3.02 | Cost of sales | -3,270,000 | -8,797,000 | -2,708,000 | -8,014,000 |
| 3.03 | Gross Profit | 1,002,000 | 3,039,000 | 905,000 | 2,953,000 |
| 3.04 | Operating Income/Expenses | -1,082,000 | -3,097,000 | -942,000 | -2,725,000 |
| 3.04.01 | Selling Expenses | -657,000 | -1,894,000 | -571,000 | -1,625,000 |
| 3.04.02 | General and administrative expenses | -136,000 | -397,000 | -152,000 | -466,000 |
| 3.04.05 | Other Operating Expenses | -288,000 | -775,000 | -248,000 | -706,000 |
| 3.04.05.01 | Depreciation and Amortization | -239,000 | -660,000 | -176,000 | -574,000 |
| 3.04.05.03 | Other operating expenses, net | -49,000 | -115,000 | -72,000 | -132,000 |
| 3.04.06 | Share of Profit of associates | -1,000 | -31,000 | 29,000 | 72,000 |
| 3.05 | Profit from operations before net financial expenses | -80,000 | -58,000 | -37,000 | 228,000 |
| 3.06 | Net Financial expenses | -184,000 | -666,000 | -215,000 | -419,000 |
| 3.07 | Income (loss) before income tax and social contribution | -264,000 | -724,000 | -252,000 | -191,000 |
| 3.08 | Income tax and social contribution | 60,000 | 267,000 | 187,000 | 284,000 |
| 3.08.01 | Current | 6,000 | -211,000 | 18,000 | -20,000 |
| 3.08.02 | Deferred | 54,000 | 478,000 | 169,000 | 304,000 |
| 3.09 | Net Income from continued operations | -204,000 | -457,000 | -65,000 | 93,000 |
| 3.10 | Net Income (loss) from discontinued operations | -92,000 | 1,387,000 | -24,000 | -67,000 |
| 3.10.01 | Net Income (loss) from discontinued operations | -92,000 | 1,387,000 | -24,000 | -67,000 |
| 3.11 | Net Income for the period | -296,000 | 930,000 | -89,000 | 26,000 |
| 3.99 | Earnings per Share | ||||
| 3.99.01 | Basic Earnings per Share | ||||
| 3.99.01.01 | ON | -1.10060 | 3.45330 | -0.33183 | 0.09682 |
| 3.99.02 | Dilutet Earnings per Share | ||||
| 3.99.02.01 | ON | -1.10049 | 3.44909 | -0.33095 | 0.09655 |
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Companhia Brasileira de Distribuição
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Individual Interim Financial Information / Statement of Comprehensive Income
| R$ (in thousands) |
| Code | Description | Current Quarter | Year to date current period 01/01/2022 to 09/30/2022 | Previous Quarter | Year to date previous period 01/01/2021 to 09/30/2021 |
| 4.01 | Net income for the Period | -296,000 | 930,000 | -89,000 | 26,000 |
| 4.02 | Other Comprehensive Income | -662,000 | -1,591,000 | 601,000 | -699,000 |
| 4.02.02 | Foreign Currency Translation | -662,000 | -1,596,000 | 605,000 | -689,000 |
| 4.02.04 | Fair Value of Trade Receivables | 0 | -1,000 | -8,000 | -10,000 |
| 4.02.05 | Cash Flow Hedge | 1,000 | 6,000 | 3,000 | 2,000 |
| 4.02.06 | Income Tax Related to Other Comprehensive Income | -1,000 | 0 | 1,000 | -2,000 |
| 4.03 | Total Comprehensive Income for the Period | -958,000 | -661,000 | 512,000 | -673,000 |
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Companhia Brasileira de Distribuição
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Individual Interim Financial Information / Statement of Cash Flows - Indirect Method
| R$ (in thousands) | |||
| Code | Description |
Year to date current period 01/01/2022 to 09/30/2022 |
Year to date previous period 01/01/2021 to 09/30/2021 |
| 6.01 | Net Cash Operating Activities | -1,470,000 | -400,000 |
| 6.01.01 | Cash Provided by the Operations | 274,000 | 1,339,000 |
| 6.01.01.01 | Net Income for the Period | 930,000 | 26,000 |
| 6.01.01.02 | Deferred Income Tax and Social Contribution (Note 19.3) | -63,000 | -430,000 |
| 6.01.01.03 | Gain (Losses) on Disposal of Property and equipments | -2,686,000 | 79,000 |
| 6.01.01.04 | Depreciation/Amortization | 795,000 | 936,000 |
| 6.01.01.05 | Interest and Inflation Adjustments | 1,102,000 | 826,000 |
| 6.01.01.07 | Share of Profit (Loss) of Subsidiaries and Associates (Note 12.2) | 31,000 | -72,000 |
| 6.01.01.08 | Provision for Risks | 326,000 | 114,000 |
| 6.01.01.10 | Share-based Payment | 17,000 | 20,000 |
| 6.01.01.11 | Allowance for Doubtful Accounts (Note 7.1 and 8.1) | 1,000 | 2,000 |
| 6.01.01.13 | Allowance for obsolescence and damages (Note 9.1) | -46,000 | -11,000 |
| 6.01.01.15 | Deferred Revenue | -12,000 | -24,000 |
| 6.01.01.16 | Loss or gain on lease liabilities (Note 21.2) | -122,000 | -127,000 |
| 6.01.01.18 | Gain in disposal of subsidiaries | 1,000 | 0 |
| 6.01.02 | Changes in Assets and Liabilities | -1,744,000 | -1,739,000 |
| 6.01.02.01 | Accounts Receivable | 47,000 | 12,000 |
| 6.01.02.02 | Inventories | 398,000 | 86,000 |
| 6.01.02.03 | Recoverable Taxes | 332,000 | -169,000 |
| 6.01.02.04 | Other Assets | -463,000 | -87,000 |
| 6.01.02.05 | Related Parties | -373,000 | -132,000 |
| 6.01.02.06 | Restricted Deposits for Legal Proceeding | -16,000 | -93,000 |
| 6.01.02.07 | Trade Payables | -1,599,000 | -1,538,000 |
| 6.01.02.08 | Payroll and Related Taxes | -51,000 | -58,000 |
| 6.01.02.09 | Taxes and Social Contributions Payable | -78,000 | -101,000 |
| 6.01.02.10 | Payments of provision for risk | -197,000 | -78,000 |
| 6.01.02.11 | Deferred Revenue | 33,000 | 34,000 |
| 6.01.02.12 | Other Payables | -430,000 | 160,000 |
| 6.01.02.15 | Received Dividends and Interest on own capital | 653,000 | 225,000 |
| 6.02 | Net Cash of Investing Activities | 2,509,000 | -346,000 |
| 6.02.01 | Capital Increase on Subsidiaries | 0 | -1,000 |
| 6.02.02 | Acquisition of Property and Equipment (Note 14.1) | -663,000 | -444,000 |
| 6.02.03 | Increase in Intangible Assets (Note 15.2) | -118,000 | -100,000 |
| 6.02.04 | Sales of Property and Equipment | 3,278,000 | 199,000 |
| 6.02.10 | Net Cash from Incorporations | 12,000 | 0 |
| 6.03 | Net Cash of Financing Activities | -3,319,000 | -1,123,000 |
| 6.03.01 | Capital Increase | 1,000 | 8,000 |
| 6.03.02 | Proceeds from Borrowings and Financing (Note 16.2) | 0 | 2,883,000 |
| 6.03.03 | Payments of Borrowings and Financing (Note 16.2) | -2,482,000 | -2,633,000 |
| 6.03.04 | Payment of Dividends and Interest on own Capital | -95,000 | -584,000 |
| 6.03.05 | Transactions with Non-controlling Interest | 0 | 8,000 |
| 6.03.07 | Acquisition of companies | -3,000 | -3,000 |
| 6.03.09 | Payment of lease liability | -740,000 | -802,000 |
| 6.05 | Increase (Decrease) in Cash and Cash Equivalents | -2,280,000 | -1,869,000 |
| 6.05.01 | Cash and Cash Equivalents at the Beginning of the Period | 4,662,000 | 4,905,000 |
| 6.05.02 | Cash and Cash Equivalents at the End of the Period | 2,382,000 | 3,036,000 |
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Companhia Brasileira de Distribuição
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Individual Interim Financial Information / Statement of Changes in Shareholders' Equity 01/01/2022 to 09/30/2022
| R$ (in thousands) | |||||||
| Code | Description |
Share Capital |
Capital Reserves, Options Granted and Treasury Shares |
Earnings Reserve | Retained Earnings/ Accumulated Losses | Other comprehensive income |
Shareholders' Equity |
| 5.01 | Opening balance | 5,859,000 | 291,000 | 6,925,000 | 0 | 574,000 | 13,649,000 |
| 5.03 | Adjusted opening balance | 5,859,000 | 291,000 | 6,925,000 | 0 | 574,000 | 13,649,000 |
| 5.04 | Capital Transactions with Shareholders | 1,000 | 17,000 | 553,000 | 0 | 0 | 571,000 |
| 5.04.01 | Capital Increase | 1,000 | 0 | 0 | 0 | 0 | 1,000 |
| 5.04.03 | Share based expenses | 0 | 17,000 | 0 | 0 | 0 | 17,000 |
| 5.04.07 | Interest on own Capital | 0 | 0 | -14,000 | 0 | 0 | -14,000 |
| 5.04.11 | Hyperinflationary economy effect | 0 | 0 | 577,000 | 0 | 0 | 577,000 |
| 5.04.16 | Others | 0 | 0 | -10,000 | 0 | 0 | -10,000 |
| 5.05 | Total Comprehensive Income | 0 | 0 | 0 | 930,000 | -1,591,000 | -661,000 |
| 5.05.01 | Net Income for the Period | 0 | 0 | 0 | 930,000 | 0 | 930,000 |
| 5.05.02 | Other Comprehensive Income | 0 | 0 | 0 | 0 | -1,591,000 | -1,591,000 |
| 5.05.02.04 | Foreign currency translation | 0 | 0 | 0 | 0 | -1,596,000 | -1,596,000 |
| 5.05.02.07 | Fair value of trade receivables | 0 | 0 | 0 | 0 | -1,000 | -1,000 |
| 5.05.02.08 | Cash Flow Hedge | 0 | 0 | 0 | 0 | 6,000 | 6,000 |
| 5.06 | Internal Changes of Shareholders' Equity | 0 | 0 | 246,000 | -266,000 | 0 | -20,000 |
| 5.06.01 | Reserves Constitution | 0 | 0 | 266,000 | -266,000 | 0 | 0 |
| 5.06.05 | Transactions with Shareholders | 0 | 0 | -20,000 | 0 | 0 | -20,000 |
| 5.07 | Closing Balance | 5,860,000 | 308,000 | 7,724,000 | 664,000 | -1,017,000 | 13,539,000 |
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Individual Interim Financial Information / Statement of Changes in Shareholders' Equity 01/01/2021 to 09/30/2021
| R$ (in thousands) | |||||||
| Code | Description |
Share Capital |
Capital Reserves, Options Granted and Treasury Shares |
Earnings Reserve | Retained Earnings/ Accumulated Losses | Other comprehensive Income |
Shareholders' Equity |
| 5.01 | Opening balance | 5,434,000 | 479,000 | 6,090,000 | 0 | 1,692,000 | 13,695,000 |
| 5.03 | Adjusted opening balance | 5,434,000 | 479,000 | 6,090,000 | 0 | 1,692,000 | 13,695,000 |
| 5.04 | Capital Transactions with Shareholders | 424,000 | -194,000 | 7,000 | -4,000 | 0 | 233,000 |
| 5.04.01 | Capital Increase | 208,000 | 0 | -200,000 | 0 | 0 | 8,000 |
| 5.04.03 | Share based expenses | 0 | 20,000 | 0 | 0 | 0 | 20,000 |
| 5.04.05 | Sales of treasury stock | 0 | 2,000 | 6,000 | 0 | 0 | 8,000 |
| 5.04.07 | Interest on own Capital | 0 | 0 | -69,000 | 0 | 0 | -69,000 |
| 5.04.11 | Hyperinflationary economy effect | 0 | 0 | 279,000 | 0 | 0 | 279,000 |
| 5.04.14 | Capital Reduction | 216,000 | -216,000 | 0 | 0 | 0 | 0 |
| 5.04.16 | Others | 0 | 0 | -9,000 | -4,000 | 0 | -13,000 |
| 5.05 | Total Comprehensive Income | 0 | 0 | 0 | 21,000 | -694,000 | -673,000 |
| 5.05.01 | Net Income for the Period | 0 | 0 | 0 | 26,000 | 0 | 26,000 |
| 5.05.02 | Other Comprehensive Income | 0 | 0 | 0 | -5,000 | -694,000 | -699,000 |
| 5.05.02.04 | Foreign currency translation | 0 | 0 | 0 | -5,000 | -684,000 | -689,000 |
| 5.05.02.07 | Fair value of trade receivables | 0 | 0 | 0 | 0 | -10,000 | -10,000 |
| 5.05.02.08 | Cash Flow Hedge | 0 | 0 | 0 | 0 | 2,000 | 2,000 |
| 5.05.02.09 | Income taxes related to other comprehensive income | 0 | 0 | 0 | 0 | -2,000 | -2,000 |
| 5.07 | Closing Balance | 5,858,000 | 285,000 | 6,097,000 | 17,000 | 998,000 | 13,255,000 |
| 12 |
Companhia Brasileira de Distribuição
FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE) | |
Individual Interim Financial Information / Statement of Value Added
| R$ (in thousands) | |||
| Code | Description |
Year to date current period 01/01/2022 to 09/30/2022 |
Year to date previous period 01/01/2021 to 09/30/2021 |
| 7.01 | Revenues | 12,597,000 | 11,802,000 |
| 7.01.01 | Sales of Goods, Products and Services | 12,617,000 | 11,705,000 |
| 7.01.02 | Other Revenues | -19,000 | 99,000 |
| 7.01.04 | Allowance for/Reversal of Doubtful Accounts | -1,000 | -2,000 |
| 7.02 | Products Acquired from Third Parties | -9,896,000 | -9,213,000 |
| 7.02.01 | Costs of Products, Goods and Services Sold | -8,354,000 | -7,743,000 |
| 7.02.02 | Materials, Energy, Outsourced Services and Other | -1,542,000 | -1,470,000 |
| 7.03 | Gross Value Added | 2,701,000 | 2,589,000 |
| 7.04 | Retention | -729,000 | -678,000 |
| 7.04.01 | Depreciation and Amortization | -729,000 | -678,000 |
| 7.05 | Net Value Added Produced | 1,972,000 | 1,911,000 |
| 7.06 | Value Added Received in Transfer | 1,857,000 | 237,000 |
| 7.06.01 | Share of Profit of Subsidiaries and Associates | -31,000 | 72,000 |
| 7.06.02 | Financial Revenue | 501,000 | 232,000 |
| 7.06.03 | Other | 1,387,000 | -67,000 |
| 7.07 | Total Value Added to Distribute | 3,829,000 | 2,148,000 |
| 7.08 | Distribution of Value Added | 3,829,000 | 2,148,000 |
| 7.08.01 | Personnel | 1,403,000 | 1,463,000 |
| 7.08.01.01 | Direct Compensation | 955,000 | 923,000 |
| 7.08.01.02 | Benefits | 238,000 | 219,000 |
| 7.08.01.03 | Government Severance Indemnity Fund for Employees (FGTS) | 85,000 | 98,000 |
| 7.08.01.04 | Other | 125,000 | 223,000 |
| 7.08.02 | Taxes, Fees and Contributions | 300,000 | -21,000 |
| 7.08.02.01 | Federal | -210,000 | -311,000 |
| 7.08.02.02 | State | 421,000 | 194,000 |
| 7.08.02.03 | Municipal | 89,000 | 96,000 |
| 7.08.03 | Value Distributed to Providers of Capital | 1,196,000 | 680,000 |
| 7.08.03.01 | Interest | 1,175,000 | 662,000 |
| 7.08.03.02 | Rentals | 21,000 | 18,000 |
| 7.08.04 | Value Distributed to Shareholders | 930,000 | 26,000 |
| 7.08.04.01 | Interest on shareholders' equity | 14,000 | 69,000 |
| 7.08.04.03 | Retained Earnings/ Accumulated Losses for the Period | 916,000 | -43,000 |
| 13 |
Companhia Brasileira de Distribuição
FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE) | |
Consolidated Interim Financial Information /Balance Sheet - Assets
| R$ (in thousands) | |||
| Code | Description |
Current Quarter 09/30/2022 |
Previous Year 12/31/2021 |
| 1 | Total Assets | 43,391,000 | 49,443,000 |
| 1.01 | Current Assets | 13,845,000 | 17,872,000 |
| 1.01.01 | Cash and Cash Equivalents | 3,860,000 | 8,274,000 |
| 1.01.03 | Accounts Receivable | 1,096,000 | 1,125,000 |
| 1.01.03.01 | Trade Receivables | 696,000 | 831,000 |
| 1.01.03.02 | Other Receivables | 400,000 | 294,000 |
| 1.01.04 | Inventories | 5,539,000 | 5,257,000 |
| 1.01.06 | Recoverable Taxes | 1,817,000 | 1,743,000 |
| 1.01.08 | Other Current Assets | 1,533,000 | 1,473,000 |
| 1.01.08.01 | Non-Current Assets for Sale | 41,000 | 1,187,000 |
| 1.01.08.03 | Other | 1,492,000 | 286,000 |
| 1.01.08.03.01 | Financial Instruments - Derivatives | 58,000 | 19,000 |
| 1.01.08.03.02 | Dividends Receivable | 0 | 16,000 |
| 1.01.08.03.03 | Credits with Related Parties - Short Term | 1,181,000 | 0 |
| 1.01.08.03.04 | Others assets | 253,000 | 251,000 |
| 1.02 | Noncurrent Assets | 29,546,000 | 31,571,000 |
| 1.02.01 | Long-term Assets | 4,823,000 | 4,966,000 |
| 1.02.01.04 | Accounts Receivable | 877,000 | 559,000 |
| 1.02.01.04.01 | Trade Receivables | 0 | 1,000 |
| 1.02.01.04.02 | Other Accounts Receivable | 877,000 | 558,000 |
| 1.02.01.07 | Deferred Taxes | 647,000 | 581,000 |
| 1.02.01.09 | Credits with Related Parties | 343,000 | 517,000 |
| 1.02.01.10 | Other Noncurrent Assets | 2,956,000 | 3,309,000 |
| 1.02.01.10.04 | Recoverable Taxes | 2,064,000 | 2,410,000 |
| 1.02.01.10.05 | Restricted deposits for legal proceedings | 738,000 | 731,000 |
| 1.02.01.10.06 | Financial Instruments - Fair Value Hegde | 3,000 | 6,000 |
| 1.02.01.10.07 | Other Noncurrent Assets | 151,000 | 162,000 |
| 1.02.02 | Investments | 4,100,000 | 4,508,000 |
| 1.02.02.01 | Investments in Associates | 1,239,000 | 1,254,000 |
| 1.02.02.02 | Investment properties | 2,861,000 | 3,254,000 |
| 1.02.03 | Property and Equipment, Net | 15,373,000 | 16,344,000 |
| 1.02.03.01 | Property and Equipment in Use | 10,765,000 | 11,573,000 |
| 1.02.03.02 | Leased Properties Right-of-use | 4,608,000 | 4,771,000 |
| 1.02.04 | Intangible Assets, net | 5,250,000 | 5,753,000 |
| 1.02.04.01 | Intangible Assets | 5,250,000 | 5,753,000 |
| 1.02.04.01.02 | Intangible Assets | 4,863,000 | 5,312,000 |
| 1.02.04.01.03 | Intangible Right-of-use | 387,000 | 441,000 |
| 14 |
Companhia Brasileira de Distribuição
FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE) | |
Consolidated Interim Financial Information / Balance Sheet - Liabilities
| R$ (in thousands) | |||
| Code | Description |
Current Quarter 09/30/2022 |
Previous Year 12/31/2021 |
| 2 | Total Liabilities | 43,391,000 | 49,443,000 |
| 2.01 | Current Liabilities | 12,964,000 | 16,550,000 |
| 2.01.01 | Payroll and Related Taxes | 737,000 | 808,000 |
| 2.01.02 | Trade payables, net | 6,677,000 | 10,078,000 |
| 2.01.03 | Taxes and Contributions Payable | 514,000 | 580,000 |
| 2.01.04 | Borrowings and Financing | 2,239,000 | 1,470,000 |
| 2.01.05 | Other Liabilities | 2,797,000 | 3,552,000 |
| 2.01.05.01 | Payables to Related Parties | 365,000 | 371,000 |
| 2.01.05.02 | Other | 2,432,000 | 3,181,000 |
| 2.01.05.02.01 | Dividends and interest on own capital | 10,000 | 112,000 |
| 2.01.05.02.07 | Pass-through to Third Parties | 55,000 | 15,000 |
| 2.01.05.02.08 | Financing Related to Acquisition of Assets | 184,000 | 182,000 |
| 2.01.05.02.09 | Deferred Revenue | 205,000 | 383,000 |
| 2.01.05.02.11 | Acquisition of companies | 732,000 | 701,000 |
| 2.01.05.02.12 | Other Payables | 431,000 | 893,000 |
| 2.01.05.02.17 | Lease Liability | 815,000 | 895,000 |
| 2.01.07 | Liabilities related to assets held for sale | 0 | 62,000 |
| 2.01.07.01 | Liabilities on Non-current Assets for Sale | 0 | 62,000 |
| 2.02 | Noncurrent Liabilities | 14,517,000 | 16,513,000 |
| 2.02.01 | Borrowings and Financing | 5,619,000 | 7,582,000 |
| 2.02.02 | Other Liabilities | 6,287,000 | 6,489,000 |
| 2.02.02.01 | Liabilities with related parties | 24,000 | 96,000 |
| 2.02.02.01.04 | Debts with Others Related Parties | 24,000 | 96,000 |
| 2.02.02.02 | Others | 6,263,000 | 6,393,000 |
| 2.02.02.02.03 | Taxes payable in installments | 82,000 | 153,000 |
| 2.02.02.02.05 | Financing Related to Acquisition of Assets | 79,000 | 68,000 |
| 2.02.02.02.07 | Other Noncurrent Liabilities | 292,000 | 260,000 |
| 2.02.02.02.08 | Provision for Losses on Investments | 758,000 | 689,000 |
| 2.02.02.02.09 | Lease liability | 5,052,000 | 5,223,000 |
| 2.02.03 | Deferred taxes | 845,000 | 935,000 |
| 2.02.04 | Provisions | 1,663,000 | 1,442,000 |
| 2.02.04.01 | Tax, Social Security, Labor and Civil Provisions | 1,663,000 | 1,442,000 |
| 2.02.06 | Profits and Revenues to be Appropriated | 103,000 | 65,000 |
| 2.03 | Shareholders' Equity | 15,910,000 | 16,380,000 |
| 2.03.01 | Share Capital | 5,860,000 | 5,859,000 |
| 2.03.02 | Capital Reserves | 308,000 | 291,000 |
| 2.03.02.04 | Stock Option | 306,000 | 289,000 |
| 2.03.02.07 | Other Capital Reserve | 2,000 | 2,000 |
| 2.03.04 | Earnings Reserve | 7,724,000 | 6,925,000 |
| 2.03.04.01 | Legal Reserve | 705,000 | 705,000 |
| 2.03.04.05 | Retention of Profits Reserve | 231,000 | 233,000 |
| 2.03.04.07 | Tax Incentive Reserve | 2,762,000 | 2,349,000 |
| 2.03.04.10 | Expansion Reserve | 2,414,000 | 2,575,000 |
| 2.03.04.12 | Transactions with shareholders | 1,612,000 | 1,063,000 |
| 2.03.05 | Retained Earnings/ Accumulated Losses | 664,000 | 0 |
| 2.03.08 | Other comprehensive income | -1,017,000 | 574,000 |
| 2.03.09 | Non-Controlling interests | 2,371,000 | 2,731,000 |
| 15 |
Companhia Brasileira de Distribuição
FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE) | |
Consolidated Interim Financial Information / Statement of Operations
| R$ (in thousands) | ||||||||||||
| Code | Description |
Current quarter 07/01/2022 to 09/30/2022 |
Year to date current period 01/01/2022 to 09/30/2022 | Previous Quarter 07/01/2021 to 09/30/2021 | Year to date previous period 01/01/2021 to 09/30/2021 | |||||||
| 3.01 | Net operating revenue | 10,451,000 | 30,636,000 | 9,594,000 | 28,689,000 | |||||||
| 3.02 | Cost of sales | -7,856,000 | -22,825,000 | -7,183,000 | -21,245,000 | |||||||
| 3.03 | Gross Profit | 2,595,000 | 7,811,000 | 2,411,000 | 7,444,000 | |||||||
| 3.04 | Operating Income/Expenses | -2,462,000 | -7,280,000 | -2,274,000 | -6,806,000 | |||||||
| 3.04.01 | Selling Expenses | -1,518,000 | -4,504,000 | -1,397,000 | -4,155,000 | |||||||
| 3.04.02 | General and administrative expenses | -416,000 | -1,244,000 | -392,000 | -1,244,000 | |||||||
| 3.04.05 | Other Operating Expenses | -476,000 | -1,337,000 | -461,000 | -1,370,000 | |||||||
| 3.04.05.01 | Depreciation and Amortization | -419,000 | -1,217,000 | -367,000 | -1,172,000 | |||||||
| 3.04.05.03 | Other operating expenses, net | -57,000 | -120,000 | -94,000 | -198,000 | |||||||
| 3.04.06 | Share of Profit of associates | -52,000 | -195,000 | -24,000 | -37,000 | |||||||
| 3.05 | Profit from operations before net financial expenses | 133,000 | 531,000 | 137,000 | 638,000 | |||||||
| 3.06 | Net Financial expenses | -312,000 | -987,000 | -275,000 | -620,000 | |||||||
| 3.07 | Income (loss) before income tax and social contribution | -179,000 | -456,000 | -138,000 | 18,000 | |||||||
| 3.08 | Income tax and social contribution | 27,000 | 126,000 | 125,000 | 168,000 | |||||||
| 3.08.01 | Current | -25,000 | -326,000 | -6,000 | -89,000 | |||||||
| 3.08.02 | Deferred | 52,000 | 452,000 | 131,000 | 257,000 | |||||||
| 3.09 | Net Income from continued operations | -152,000 | -330,000 | -13,000 | 186,000 | |||||||
| 3.10 | Net Income (loss) from discontinued operations | -92,000 | 1,387,000 | -24,000 | -67,000 | |||||||
| 3.10.01 | Net Income (loss) from Discontinued Operations | -92,000 | 1,387,000 | -24,000 | -67,000 | |||||||
| 3.11 | Net Income for the period | -244,000 | 1,057,000 | -37,000 | 119,000 | |||||||
| 3.11.01 | Attributable to Controlling Shareholders | -296,000 | 930,000 | -89,000 | 26,000 | |||||||
| 3.11.02 | Attributable to Non-controlling Shareholders | 52,000 | 127,000 | 52,000 | 93,000 | |||||||
| 3.99 | Earnings per Share | |||||||||||
| 3.99.01 | Basic Earnings per Share | |||||||||||
| 3.99.01.01 | ON | -1.10060 | 3.45330 | -0.33183 | 0.09682 | |||||||
| 3.99.02 | Diluted Earnings per Share | |||||||||||
| 3.99.02.01 | ON | -1.10049 | 3.44909 | -0.33095 | 0.09655 | |||||||
| 16 |
Companhia Brasileira de Distribuição
FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE) | |
Consolidated Interim Financial Information / Statement of Comprehensive Income
R$ (in thousands)
| Code | Description | Current Quarter 07/01/2022 to 09/30/202 | Year to date current period 01/01/2022 to 09/30/2022 | Previous Quarter 07/01/2021 to 09/30/2021 | Year to date previous period 01/01/2021 to 09/30/2021 |
| 4.01 | Net income for the Period | -244,000 | 1,057,000 | -37,000 | 119,000 | |
| 4.02 | Other Comprehensive Income | -838,000 | -2,000,000 | 798,000 | -888,000 | |
| 4.02.02 | Foreign Currency Translation | -838,000 | -2,003,000 | 802,000 | -877,000 | |
| 4.02.04 | Fair Value of Trade Receivables | 0 | -1,000 | -8,000 | -10,000 | |
| 4.02.05 | Cash Flow Hedge | 1,000 | 4,000 | 3,000 | 1,000 | |
| 4.02.06 | Income Tax Related to Other Comprehensive Income | -1,000 | 0 | 1,000 | -2,000 | |
| 4.03 | Total Comprehensive Income for the Period | -1,082,000 | -943,000 | 761,000 | -769,000 | |
| 4.03.01 | Attributable to Controlling Shareholders | -958,000 | -661,000 | 512,000 | -673,000 | |
| 4.03.02 | Attributable to Non-Controlling Shareholders | -124,000 | -282,000 | 249,000 | -96,000 | |
| 17 |
Companhia Brasileira de Distribuição
FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE) | |
Consolidated Interim Financial Information / Statement of Cash Flows - Indirect Method
| R$ (in thousands) | |||
| Code | Description |
Year to date current period 01/01/2022 to 09/30/2022 |
Year to date previous period 01/01/2021 to 09/30/2021 |
| 6.01 | Net Cash Operating Activities | -3,220,000 | -1,788,000 |
| 6.01.01 | Cash Provided by the Operations | 1,353,000 | 2,375,000 |
| 6.01.01.01 | Net Income for the Period | 1,057,000 | 119,000 |
| 6.01.01.02 | Deferred Income Tax and Social Contribution (Note 19.3) | -37,000 | -383,000 |
| 6.01.01.03 | Gain (Losses) on Disposal of Property and equipments | -2,637,000 | 116,000 |
| 6.01.01.04 | Depreciation/Amortization | 1,436,000 | 1,621,000 |
| 6.01.01.05 | Interest and Inflation Adjustments | 1,281,000 | 928,000 |
| 6.01.01.07 | Share of Profit (Loss) of Subsidiaries and Associates (Note 12.2) | 195,000 | 37,000 |
| 6.01.01.08 | Provision for Risks | 342,000 | 125,000 |
| 6.01.01.09 | Provision for Write-off and impairment | 0 | 4,000 |
| 6.01.01.10 | Share-based Payment | 17,000 | 20,000 |
| 6.01.01.11 | Allowance for Doubtful Accounts (Note 7.1 and 8.1) | 31,000 | 45,000 |
| 6.01.01.12 | Net gain (loss) by dilution of equity interest | 0 | -1,000 |
| 6.01.01.13 | Allowance for obsolescence and damages (Note 9.1) | -44,000 | -18,000 |
| 6.01.01.15 | Deferred Revenue | -103,000 | -91,000 |
| 6.01.01.16 | Loss or gain on lease liabilities (Note 21.2) | -186,000 | -147,000 |
| 6.01.01.18 | Gain in disposal of subsidiaries | 1,000 | 0 |
| 6.01.02 | Changes in Assets and Liabilities | -4,573,000 | -4,163,000 |
| 6.01.02.01 | Accounts Receivable | 64,000 | 29,000 |
| 6.01.02.02 | Inventories | -661,000 | -189,000 |
| 6.01.02.03 | Recoverable Taxes | 216,000 | -173,000 |
| 6.01.02.04 | Other Assets | -423,000 | -95,000 |
| 6.01.02.05 | Related Parties | -370,000 | -79,000 |
| 6.01.02.06 | Restricted Deposits for Legal Proceeding | -19,000 | -90,000 |
| 6.01.02.07 | Trade Payables | -2,618,000 | -3,494,000 |
| 6.01.02.08 | Payroll and Related Taxes | -26,000 | -31,000 |
| 6.01.02.09 | Taxes and Social Contributions Payable | 132,000 | 79,000 |
| 6.01.02.10 | Payments of provision for risk | -213,000 | -112,000 |
| 6.01.02.11 | Deferred Revenue | -7,000 | 68,000 |
| 6.01.02.12 | Other Payables | -378,000 | 184,000 |
| 6.01.02.13 | Income Tax and Social contribution,paid | -286,000 | -260,000 |
| 6.01.02.15 | Dividends and Interest on Equity received | 16,000 | 0 |
| 6.02 | Net Cash of Investing Activities | 2,121,000 | -801,000 |
| 6.02.02 | Acquisition of Property and Equipment (Note 14.1) | -953,000 | -734,000 |
| 6.02.03 | Increase in Intangible Assets (Note 15.2) | -163,000 | -176,000 |
| 6.02.04 | Sales of Property and Equipment | 3,300,000 | 203,000 |
| 6.02.09 | Acquisition of Investment Propery (Note 13) | -63,000 | -93,000 |
| 6.02.10 | Net Cash from Mergers | 0 | -1,000 |
| 6.03 | Net Cash of Financing Activities | -2,987,000 | -1,407,000 |
| 6.03.01 | Capital Increase | 1,000 | 8,000 |
| 6.03.02 | Proceeds from Borrowings and Financing (Note 16.2) | 1,064,000 | 4,160,000 |
| 6.03.03 | Payments of Borrowings and Financing | -2,772,000 | -3,696,000 |
| 6.03.05 | Payment of Dividends | -187,000 | -737,000 |
| 6.03.06 | Transactions with Non-controlling Interest | 0 | 14,000 |
| 6.03.07 | Acquisition of companies | -3,000 | -3,000 |
| 6.03.08 | Transactions with Non-controlling Interest | -8,000 | -5,000 |
| 6.03.09 | Payment of lease liability | -1,082,000 | -1,148,000 |
| 6.04 | Exchange rate changes in cash and cash equivalents | -328,000 | -189,000 |
| 6.05 | Increase (Decrease) in Cash and Cash Equivalents | -4,414,000 | -4,185,000 |
| 6.05.01 | Cash and Cash Equivalents at the Beginning of the Period | 8,274,000 | 8,711,000 |
| 6.05.02 | Cash and Cash Equivalents at the End of the Period | 3,860,000 | 4,526,000 |
| 18 |
Companhia Brasileira de Distribuição
FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE) | |
Consolidated Interim Financial Information / Statement of Changes in Shareholders' Equity 01/01/2022 to 09/30/2022
| R$ (in thousands) | 1000 | ||||||||
| Code | Description |
Share Capital |
Capital Reserves, Options Granted and Treasury Shares |
Earnings Reserves | Retained Earnings/ Accumulated Losses | Other compre-hensive Income |
Shareholders' Equity |
Non-Controlling Interest |
Consolidated Shareholders' Equity |
| 5.01 | Opening balance | 5,859,000 | 291,000 | 6,925,000 | 0 | 574,000 | 13,649,000 | 2,731,000 | 16,380,000 |
| 5.03 | Adjusted opening balance | 5,859,000 | 291,000 | 6,925,000 | 0 | 574,000 | 13,649,000 | 2,731,000 | 16,380,000 |
| 5.04 | Capital Transactions with Shareholders | 1,000 | 17,000 | 553,000 | 0 | 0 | 571,000 | -83,000 | 488,000 |
| 5.04.01 | Capital Increase | 1,000 | 0 | 0 | 0 | 0 | 1,000 | 0 | 1,000 |
| 5.04.03 | Share based expenses | 0 | 17,000 | 0 | 0 | 0 | 17,000 | 0 | 17,000 |
| 5.04.07 | Interest on own Capital | 0 | 0 | -14,000 | 0 | 0 | -14,000 | 0 | -14,000 |
| 5.04.11 | Hyperinflationary economy effect | 0 | 0 | 577,000 | 0 | 0 | 577,000 | 17,000 | 594,000 |
| 5.04.13 | Disco subsidiary PUT valuation (Note 17.3) | 0 | 0 | 0 | 0 | 0 | 0 | 9,000 | 9,000 |
| 5.04.15 | Dividends declared to non-controlling interests | 0 | 0 | 0 | 0 | 0 | 0 | -102,000 | -102,000 |
| 5.04.16 | Others | 0 | 0 | -10,000 | 0 | 0 | -10,000 | -7,000 | -17,000 |
| 5.05 | Total Comprehensive Income | 0 | 0 | 0 | 930,000 | -1,591,000 | -661,000 | -282,000 | 943,000 |
| 5.05.01 | Net Income for the Period | 0 | 0 | 0 | 930,000 | 0 | 930,000 | 127,000 | 1,057,000 |
| 5.05.02 | Other Comprehensive Income | 0 | 0 | 0 | 0 | -1,591,000 | -1,591,000 | -409,000 | -2,000,000 |
| 5.05.02.04 | Foreign currency translation | 0 | 0 | 0 | 0 | -1,596,000 | -1,596,000 | -407,000 | -2,003,000 |
| 5.05.02.07 | Fair value of trade receivables | 0 | 0 | 0 | 0 | -1,000 | -1,000 | 0 | -1,000 |
| 5.05.02.08 | Cash Flow Hedge | 0 | 0 | 0 | 0 | 6,000 | 6,000 | -2,000 | 4,000 |
| 5.06 | Internal Changes of Shareholders' Equity | 0 | 0 | 246,000 | -266,000 | 0 | -20,000 | 5,000 | -15,000 |
| 5.06.01 | Reserves Constitution | 0 | 0 | 266,000 | -266,000 | 0 | 0 | 0 | 0 |
| 5.06.05 | Transactions with Shareholders | 0 | 0 | -20,000 | 0 | 0 | -20,000 | 5,000 | -15,000 |
| 5.07 | Closing Balance | 5,860,000 | 308,000 | 7,724,000 | 664,000 | -1,017,000 | 13,539,000 | 2,371,000 | 15,910,000 |
| 19 |
Companhia Brasileira de Distribuição
FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE) | |
Consolidated Interim Financial Information / Statement of Changes in Shareholders' Equity 01/01/2021 to 09/30/2021
| R$ (in thousands) | |||||||||
| Code | Description |
Share Capital |
Capital Reserves, Options Granted and Treasury Shares |
Earnings Reserves | Retained Earnings/ Accumulated Losses | Other comprehensive Income |
Shareholders' Equity |
Non-Controlling Interest |
Consolidated Shareholders' Equity |
| 5.01 | Opening balance | 5,434,000 | 479,000 | 6,090,000 | 0 | 1,692,000 | 13,695,000 | 3,112,000 | 16,807,000 |
| 5.03 | Adjusted opening balance | 5,434,000 | 479,000 | 6,090,000 | 0 | 1,692,000 | 13,695,000 | 3,112,000 | 16,807,000 |
| 5.04 | Capital Transactions with Shareholders | 422,000 | -194,000 | 7,000 | -4,000 | 0 | 233,000 | -111,000 | 122,000 |
| 5.04.01 | Capital Increase | 208,000 | 0 | -200,000 | 0 | 0 | 8,000 | 0 | 8,000 |
| 5.04.03 | Share based expenses | 0 | 20,000 | 0 | 0 | 0 | 20,000 | 0 | 20,000 |
| 5.04.05 | Sales of treasury stock | 0 | 2,000 | 6,000 | 0 | 0 | 8,000 | 0 | 8,000 |
| 5.04.07 | Interest on own Capital | 0 | 0 | -69,000 | 0 | 0 | -69,000 | 0 | -69,000 |
| 5.04.11 | Hyperinflationary economy effect | 0 | 0 | 279,000 | 0 | 0 | 279,000 | 14,000 | 293,000 |
| 5.04.14 | Capital Reduction | 216,000 | -216,000 | 0 | 0 | 0 | 0 | 0 | 0 |
| 5.04.15 | Dividends declared to non-controlling interests | 0 | 0 | 0 | 0 | 0 | 0 | -137,000 | -137,000 |
| 5.04.16 | Others | 0 | 0 | -9,000 | -4,000 | 0 | -13,000 | 12,000 | -1,000 |
| 5.05 | Total Comprehensive Income | 0 | 0 | 0 | 21,000 | -694,000 | -673,000 | -96,000 | -769,000 |
| 5.05.01 | Net Income for the Period | 0 | 0 | 0 | 26,000 | 0 | 26,000 | 93,000 | 119,000 |
| 5.05.02 | Other Comprehensive Income | 0 | 0 | 0 | -5,000 | -694,000 | -699,000 | -189,000 | -888,000 |
| 5.05.02.04 | Foreign currency translation | 0 | 0 | 0 | -5,000 | -684,000 | -689,000 | -188,000 | -877,000 |
| 5.05.02.07 | Fair value of trade receivables | 0 | 0 | 0 | 0 | -10,000 | -10,000 | 0 | -10,000 |
| 5.05.02.08 | Cash Flow Hedge | 0 | 0 | 0 | 0 | 2,000 | 2,000 | -1,000 | 1,000 |
| 5.05.02.09 | Income taxes related to other comprehensive income | 0 | 0 | 0 | 0 | -2,000 | -2,000 | 0 | -2,000 |
| 5.07 | Closing Balance | 5,858,000 | 285,000 | 6,097,000 | 17,000 | 998,000 | 13,255,000 | 2,905,000 | 16,160,000 |
| 20 |
Companhia Brasileira de Distribuição
FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE) | |
Consolidated Interim Financial Information / Statement of Value Added
| R$ (in thousands) | |||
| Code | Description |
Year to date current period 01/01/2022 to 09/30/2022 |
Year to date previous period 01/01/2021 to 09/30/2021 |
| 7.01 | Revenues | 33,748,000 | 31,607,000 | |
| 7.01.01 | Sales of Goods, Products and Services | 33,726,000 | 31,518,000 | |
| 7.01.02 | Other Revenues | 29,000 | 100,000 | |
| 7.01.04 | Allowance for/Reversal of Doubtful Accounts | -7,000 | -11,000 | |
| 7.02 | Products Acquired from Third Parties | -25,205,000 | -23,604,000 | |
| 7.02.01 | Costs of Products, Goods and Services Sold | -21,727,000 | -20,314,000 | |
| 7.02.02 | Materials, Energy, Outsourced Services and Other | -3,478,000 | -3,290,000 | |
| 7.03 | Gross Value Added | 8,543,000 | 8,003,000 | |
| 7.04 | Retention | -1,369,000 | -1,363,000 | |
| 7.04.01 | Depreciation and Amortization | -1,369,000 | -1,363,000 | |
| 7.05 | Net Value Added Produced | 7,174,000 | 6,640,000 | |
| 7.06 | Value Added Received in Transfer | 1,797,000 | 221,000 | |
| 7.06.01 | Share of Profit of Subsidiaries and Associates | -195,000 | -37,000 | |
| 7.06.02 | Financial Revenue | 605,000 | 325,000 | |
| 7.06.03 | Other | 1,387,000 | -67,000 | |
| 7.07 | Total Value Added to Distribute | 8,971,000 | 6,861,000 | |
| 7.08 | Distribution of Value Added | 8,971,000 | 6,861,000 | |
| 7.08.01 | Personnel | 3,150,000 | 3,219,000 | |
| 7.08.01.01 | Direct Compensation | 2,506,000 | 2,479,000 | |
| 7.08.01.02 | Benefits | 411,000 | 382,000 | |
| 7.08.01.03 | Government Severance Indemnity Fund for Employees (FGTS) | 89,000 | 106,000 | |
| 7.08.01.04 | Other | 144,000 | 252,000 | |
| 7.08.01.04.01 | Profit (cost) sharing | 144,000 | 252,000 | |
| 7.08.02 | Taxes, Fees and Contributions | 3,135,000 | 2,549,000 | |
| 7.08.02.01 | Federal | 326,000 | 179,000 | |
| 7.08.02.02 | State | 2,590,000 | 2,144,000 | |
| 7.08.02.03 | Municipal | 219,000 | 226,000 | |
| 7.08.03 | Value Distributed to Providers of Capital | 1,629,000 | 974,000 | |
| 7.08.03.01 | Interest | 1,599,000 | 955,000 | |
| 7.08.03.02 | Rentals | 30,000 | 19,000 | |
| 7.08.04 | Value Distributed to Shareholders | 1,057,000 | 119,000 | |
| 7.08.04.01 | Interest on shareholders' equity | 14,000 | 69,000 | |
| 7.08.04.03 | Retained Earnings/ Accumulated Losses for the Period | 916,000 | -43,000 | |
| 7.08.04.04 | Noncontrolling Interest in Retained Earnings | 127,000 | 93,000 | |
| 21 |
Companhia Brasileira de Distribuição
FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE) | |
| 22 |
Consolidated result with robust growth in total sales in the quarter
| · | Consolidated total gross revenue from continuing operations reached R$11.6 billion in 3Q22, up 9.5% versus 3Q21, as a result of sales growth with acceleration of expansion at New GPA Brazil and continued double-digit growth at Grupo Éxito. In 9M22, total gross sales were R$33.7 billion; |
| · | Consolidated Adjusted EBITDA totaled R$660 million in 3Q22 with an Adjusted EBITDA margin of 6.3%. Year-to-date, Consolidated Adjusted EBITDA reached R$2.0 billion; |
| · | Solid financial situation, with leverage of 1.7x at the end of the quarter, 0.4x lower compared to 3Q21. The cash position at the end of the quarter was R$3.9 billion, 1.7x the Company's short-term debt. |
Improved sales growth in same-store sales, beyond the acceleration of expansion in the New GPA Brazil
| · | Gross revenue from sales in the continued perimeter, excluding gas stations, totaled R$ 4.3 billion in 3Q22, a 14.2% growth in total sales and 6.6% in same-store concept versus the same period in 2021, as a result of the continuous work in six strategic pillars focused on "do the basics well" and on store openings in the period. In 3Q22, e-commerce sales totaled R$409 million, an increase of 8.0% versus 3Q21, excluding sales from discontinued hypermarkets. Therefore, the total online sales penetration was 11.1%; |
| · | The pro forma Adjusted EBITDA margin was 6.0%, explained by the impact of higher inflation on gross profit, despite a good control of SG&A with a reduction of 70 bps in % of net revenue. Year-to-date, the pro forma Adjusted EBITDA margin was 7.3%; |
| · | GPA Brazil continues its process of repositioning and redefining its internal processes, focusing on operations and on resuming profitability for the Company's turnaround in 2023. |
Continuous double-digit growth in the international perimeter
| · | Grupo Éxito recorded strong double-digit growth in same-store sales at 20.3% versus 3Q21 (in constant currency), growing in the 3 countries in which it operates, which is due to an increase in-store traffic and the satisfactory performance of innovative formats. Omnichannel sales represented 9.5% of total sales for 3Q22; |
| · | Grupo Éxito reached an Adjusted EBITDA Margin of 7.6% in 3Q22, a decrease of 110 bps compared to 3Q21, impacted by the higher level of inflation in the 3 countries in which it operates and by the higher level of provision at Tuya. |
| 23 |
GPA Consolidated
Resumption of sales growth in Brazil with profitability still evolving and continuity of the good performance of Grupo Éxito
| R$ million, except when indicated | GPA Consolidated(1) | |||||
| 3Q22 | 3Q21 | Δ | 9M22 | 9M21 | Δ | |
| Gross Revenue | 11,561 | 10,560 | 9.5% | 33,727 | 31,518 | 7.0% |
| Net Revenue | 10,453 | 9,595 | 8.9% | 30,637 | 28,689 | 6.8% |
| Gross Profit | 2,596 | 2,412 | 7.6% | 7,812 | 7,445 | 4.9% |
| Gross Margin | 24.8% | 25.1% | -30 bps | 25.5% | 25.9% | -40 bps |
| Selling, General, and Administrative Expenses | (1,936) | (1,789) | 8.2% | (5,748) | (5,400) | 6.4% |
| % of Net Revenue | 18.5% | 18.6% | -10 bps | 18.8% | 18.8% | 0 bps |
| Other Operating Revenue (Expenses) | (56) | (94) | -40.2% | (121) | (198) | -39.0% |
| Adjusted EBITDA(2) | 660 | 677 | -2.5% | 2,021 | 2,198 | -8.1% |
| Adjusted EBITDA Margin(2) | 6.3% | 7.1% | -80 bps | 6.6% | 7.7% | -110 bps |
| Net Income Controlling Shareholders - Continued Operations | (196) | (65) | 203.1% | (457) | 94 | -588.2% |
| Net Margin Controlling Shareholders - Continued Operations | -1.9% | -0.7% | -120 bps | -1.5% | 0.3% | -180 bps |
| Net Income Controlling Shareholders - Discontinued Operations(3) | (92) | (25) | 270.1% | 1,387 | (68) | n.d. |
| Net Income Controlling Shareholders Consolidated | (288) | (89) | 221.7% | 930 | 26 | n.d. |
(1) The consolidated considers profit and loss of the operations of GPA Brazil, the operations of Grupo Éxito (Colombia, Uruguay, and Argentina), other businesses (Stix Fidelidade, Cheftime, and James Delivery), and the result of the equity income of Cdiscount
(2) Operating income before interest, taxes, depreciation and amortization. Adjusted for Other Operating Revenue (Expenses)
(3) Includes the result of hypermarket operations
Message from the CEO
We have ended the third quarter with growth in sales and accelerated expansion of the perimeter of New GPA Brazil and have maintained double-digit growth for Grupo Éxito. The advances in New GPA's results begin to reflect the work we started six months ago, focusing on the Group's pillars and strategic projects, returning to "doing the basics well."
We have made progress in important actions for consolidating our sustainable growth: completing the work of aligning the ideal assortment, in particular for the Pão banner, which will reflect in an improved perception of product price and availability on the shelves; the increased share of perishables in total sales and the reduced level of total stockouts.
Internationally, Éxito continues to show strong, double-digit growth in same-store sales, and a significant part of the sales are online, maintaining growth in the three countries in which we operate, reflecting the strategy of consistently focusing on innovation and omnichannel.
We have hit the ground running in this fourth quarter, positioned to continue evolving in terms of our strategic plan, our deliveries and improving the experience for our customers.
Marcelo Pimentel
GPA's CEO
Notice/Disclaimer: Statements contained in this release regarding the Company's business outlook, projections of operating/financial profit and loss, the Company's growth potential, and related to market and macroeconomic estimates constitute mere forecasts and were based on the beliefs, intentions, and expectations of the Management regarding the future of the Company. Those estimates are highly dependent on changes in the market, the general economic performance of Brazil, the industry, and international markets and; therefore, are subject to change.
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Sales Performance
GPA BRAZIL
Acceleration of total sales with the conclusion of hypermarket conversions
| GROSS REVENUE | 3Q22/3Q21 | ||
| (R$ million) | Total Sales | % Total Stores | Same-Store Sales(3) |
| Pão de Açúcar | 2,109 | 11.9% | 5.5% |
| Mercado Extra / Compre Bem | 1,449 | 12.5% | 2.0% |
| Proximity | 682 | 25.3% | 21.7% |
| Other businesses(1) | 52 | 31.7% | n.d. |
| New GPA Brazil, excluding Gas Stations | 4,293 | 14.2% | 6.6% |
| Gas Stations | 320 | -22.4% | -21.9% |
| New GPA Brazil | 4,612 | 10.6% | 3.8% |
| Extra Hiper - Discontinued Operation / Stores under Conversion | 44 | -98.3% | n.d. |
| GPA Brazil(2) | 4,657 | -32.5% | 3.8% |
(1) Revenue from the lease of commercial centers
(2) GPA Brazil does not include the results of Stix Fidelidade, Cheftime, and James Delivery
(3) To reflect the calendar effect, 80 bps were reduced in 3Q22
Total sales of New GPA Brazil reached R$4.6 billion in 3Q22 and, excluding gas stations, reached R$4.3 billion, resulting in a growth of 14.2%, driven by the converted hypermarket stores. In same-store sales, growth was 6.6% versus 3Q21. In the Pão de Açúcar banner, our same-store sales reached 5.5% in 3Q22. In the Proximity model, we continued with double-digit growth of 21.7%, explained by the increase in sales in the beverage, bakery, and rotisserie sectors, in addition to the continuous increase in the flow of transit stores and a greater number of stores serving last miles partners. In the mainstream banners, Mercado Extra and Compre Bem, same-store sales grew by 2.0%, impacted by an accurate effect from the incorporation of Compre Bem, which brought logistics and systems challenges. In 3Q22, we still had a negative impact on same-store sales of gas stations due to the conversion of stores to wholesale+retail.
Sales from premium formats corresponded to 50.0% of the total gross sales: *Does not consider the sale of hypermarkets and includes sales of Compre Bem, which started to be considered as of 1Q22. As a result, the numbers for 1Q22 and 2Q22 were retracted. | In e-commerce, our GMV was R$409 million in 3Q22, an increase of 8.0% versus 3Q21, excluding sales from hypermarkets in 3Q21. This growth is explained by a series of improvements, including increased same-day delivery times, a new partnership with iFood for fast delivery in 30 stores, in addition to operational improvements for greater efficiency in order picking. |
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The six strategic pillars of the New GPA Brazil
Based on the company's six strategic pillars, below are the highlights for 3Q22. Top-line: focus on incremental sales To always meet our customers' needs, in the quarter, we concluded the study to define the ideal assortment, especially in the Pão de Açúcar banner. This assortment adjustment will bring about a better structuring of the assortment pyramid, which, consequently, brings better price perception to customers in different formats. In addition to identifying the ideal assortment, we are adjusting our customers' KVI (key value items) to improve our OSA (on-shelf availability) level every day. We have two indicators that already show improvements this quarter: i) the reduction of total stockouts of approximately 20%, and ii) an increase of 160 bps in the share of perishables in total sales. |
Also, in this quarter, we developed the refresh project, which aims to improve the value proposition of perishables, reinterpreting the flow of merchandise and displaying products in the store, bringing higher quality of products on display to the customer and improving profitability by reducing breakage.
NPS: search for continuous evolution in the indicator
In surveys with our customers, we noticed that the main points of attention about NPS are: queues in stores, stockouts, assortments and price mistakes on product labels. We started a complete action plan to improve our NPS, including a stockout reduction plan, multi-skilled training, and implementation of self-checkouts (at the end of 3Q22, we had self-check-outs in 80% of supermarket stores, and in 3Q, we also started the implementation in the proximity format). With these initiatives, we have already seen an evolution of approximately 35% in NPS in 3Q22 versus 4Q21.
Digital: greater availability of delivery times to meet the growing demand of our customers
To sustain our digital growth, we are focused on: i) increasing our assortment, especially in perishables; ii) greater availability of delivery times; and iii) fast delivery. In 3Q22, we implemented fast delivery in our 1P, incorporating James' logistics engine, and today we already have 150 stores serving this model, which took our same-day delivery percentage from 40% to 65% in these stores. Another crucial initiative in our 1P and 3P was the extension of the delivery time to 10 p.m. and the opening of a greater number of stores on Sundays. In our partnerships, we implemented express sales with iFood in 30 proximity stores, with the potential to be implemented in all proximity stores by the end of the year. In October, we started testing operations with BEES and Magazine Luiza to expand our area of operation.
Also, in digital format, we launched the "Stix buy and swap" program, and from September onwards, all customers earn Stix points; just buy and exchange them at the checkout, accelerating the redemption of points and customer loyalty.
Expansion: finalization of the conversions of Extra Hiper stores
In the third quarter, we conducted the conversion of 14 hypermarket stores (10 Pão de Açúcar and 4 Mercado Extra), concluding the conversion plan of 23 stores, 13 of which for the Pão de Açúcar format, 8 for the Mercado Extra, and 2 for the Compre Bem banner.
Pão de Açúcar stores are created with the G7 concept, with a completely revitalized consumer experience and customer flow based on four pillars: Experimental, Exclusive, Social, and Fluid. G7 stores value digital integration into the purchase process, upon the commitment to be increasingly multichannel, offering the customer the choice to buy wherever and however they prefer, whether in stores, on the website, or on the Pão de Açúcar Mais app, which offers exclusive and personalized discounts, which can be used at the time of purchase.
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The new Minuto Pão de Açúcar stores were created to be an extension of our customers' pantry and are notable for the premium shopping experience, which adapts the assortment of the neighborhoods where the units are located.
The Mercado Extra stores, a neighborhood supermarket format, have a concept formed by a differentiated exhibition called Rua do Comércio, in addition to the Mercadão and Feira Estendida, which are open from Tuesday to Thursday, always with fresh products. The stores also have Meat products and Cold Cuts section with reinforced service teams, where the most varied types of meat and cuts are offered to the customer's preferences, in addition to the Bakery, which offers bread and recipes made in-house and ready-to-eat products.
In 3Q22, we opened six new stores under the Minuto Pão de Açúcar banner and one under the Pão de Açúcar banner, totaling 10 new stores in the year. For the fourth quarter, we expect to open approximately 40 stores under the Minuto Pão de Açúcar and the Pão de Açúcar banner.
Regarding the Pão de Açúcar refurbishment, we renovated 24 stores. Of the current store network, we have approximately 45% under the G7 model; given the greater share of perishables in this model, these stores have higher sales and margins than the non-renovated stores (an average of +5 points in sales and approximately +1 point in margin). Until the end of 2022, we will have over 55% of our total stores renovated.
| 27 |
GRUPO ÉXITO
A fifth consecutive quarter of double-digit growth with strong sales performance in all three countries of operation
| GROSS REVENUE | 3Q22/3Q21 | |||
| (R$ million) | Total Sales | % Total Stores | % Total Stores Constant Currency | Same-Store Sales(1) Constant Currency |
| Grupo Éxito | 6,930 | 8.8% | 21.8% | 20.3% |
| Colombia | 4,940 | 2.1% | 16.3% | 14.8% |
| Uruguay | 1,252 | 19.3% | 11.7% | 11.1% |
| Argentina | 737 | 53.1% | 133.7% | 126.8% |
(1) Same-store sales concept performance considering growth at constant exchange rates. To reflect the calendar effect, 20 bps was added in the 3Q22 in Grupo Éxito (10 bps in Colombia, 60 bps in Uruguay, and -50 bps in Argentina)
Grupo Éxito showed a solid sales performance in 3Q22, reaching the fifth consecutive quarter with double-digit growth in same-store sales at constant exchange rates. Gross revenue totaled R$6.9 billion in the quarter, with same-store growth of 20.3% versus 3Q21, and due to the appreciation of the Brazilian real versus the Colombian peso, total store growth was 8.8% YoY.
COLOMBIA
Strong growth above inflation in the quarter, mainly driven by the positive trend in the food category. In same-store sales, growth was 14.8% versus the same period of the previous year. Highlight for the solid performance of the cash & carry business in the quarter. The share of omnichannel sales in the country grew by 70 bps versus 3Q21, reaching 11.9%.
URUGUAY
Significant growth in Fresh Market stores (+17.1% YoY), with a high share of sales (51.5%). Same-store sales grew 11.1% in the quarter.
ARGENTINA
Sales growth above inflation (which was approximately 76% in the quarter) reflects the satisfactory performance of commercial centers, increased in-store traffic, and consolidation of the real estate business in the country.
For further information on the results of Grupo Éxito, please find below the link to the earnings released: https://www.grupoexito.com.co/en/financial-information
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Financial Performance
GPA BRASIL
We have two views for GPA Brazil's result, for a better analysis of our businesses: the accounting view and the pro forma view. In applying IFRS5/CPC 31 "Noncurrent Assets Held for Sale and Discontinued Operations", certain expenses recorded in the Gross Profit, Selling, General and Administrative Expenses cannot be reclassified to net profit of the discontinued operations in accounting since they are only partially related to discontinued operations. Hence, this proration was made for "pro-forma" purposes only and must cease as the expenses reach their new recurring level.
| R$ million, except when indicated | GPA Brazil(1) | |||||
| 3Q22 | 3Q21 | Δ | 9M22 | 9M21 | Δ | |
| Gross Revenue | 4,612 | 4,170 | 10.6% | 13,175 | 12,617 | 4.4% |
| Net Revenue | 4,305 | 3,900 | 10.4% | 12,366 | 11,827 | 4.6% |
| Gross Profit | 1,009 | 960 | 5.1% | 3,138 | 3,119 | 0.6% |
| Gross Margin | 23.4% | 24.6% | -120 bps | 25.4% | 26.4% | -100 bps |
| Selling, General, and Administrative Expenses | (797) | (771) | 3.3% | (2,378) | (2,239) | 6.2% |
| % of Net Revenue | 18.5% | 19.8% | -130 bps | 19.2% | 18.9% | 30 bps |
| Equity Income | 16 | 12 | 36.6% | 34 | 41 | -16.5% |
| Adjusted EBITDA(2) | 255 | 252 | 1.4% | 864 | 1,024 | -15.7% |
| Adjusted EBITDA Margin(2) | 5.9% | 6.5% | -60 bps | 7.0% | 8.7% | -170 bps |
(1) GPA Brazil does not include results from other businesses (Stix Fidelidade, Cheftime, and James Delivery)
(2) Earnings before interest, taxes, depreciation, and amortization. Adjusted for Other Operating Revenue (Expenses)
GPA BRAZIL - PRO-FORMA
| R$ million, except when indicated | GPA Brazil(1) | |||||
| 3Q22 | 3Q21 | Δ | 9M22 | 9M21 | Δ | |
| Gross Revenue | 4,612 | 4,170 | 10.6% | 13,175 | 12,617 | 4.4% |
| Net Revenue | 4,305 | 3,900 | 10.4% | 12,366 | 11,827 | 4.6% |
| Gross Profit | 1,011 | 958 | 5.5% | 3,157 | 3,113 | 1.4% |
| Gross Margin | 23.5% | 24.6% | -110 bps | 25.5% | 26.3% | -80 bps |
| Selling, General, and Administrative Expenses | (797) | (749) | 6.4% | (2,360) | (2,204) | 7.1% |
| % of Net Revenue | 18.5% | 19.2% | -70 bps | 19.1% | 18.6% | 50 bps |
| Equity Income | 16 | 12 | 36.6% | 34 | 41 | -16.5% |
| Adjusted EBITDA(2) | 257 | 274 | -6.4% | 903 | 1,041 | -13.3% |
| Adjusted EBITDA Margin(2) | 6.0% | 7.0% | -100 bps | 7.3% | 8.8% | -150 bps |
(1) GPA Brazil does not include results from other businesses (Stix Fidelidade, Cheftime, and James Delivery)
(2) Earnings before interest, taxes, depreciation, and amortization. Adjusted for Other Operating Revenue (Expenses)
GPA Brazil's Gross Profit totaled R$1.0 billion in the quarter, with a margin of 23.5%, a decline of 110 bps compared to 3Q21, mainly explained by:
| i) | the increase in inflation: resulting in the need to increase promoshare and continuous increase in the costs of in-store transformation of goods, packaging and logistics; and |
| ii) | fees from last mile partners: increased share of last mile partners in our sales, with the negative impact of the fee offset by the positive impact on the dilution of SG&A. |
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Selling, General and Administrative Expenses totaled R$797 million in the quarter, an increase of 6.4% compared to the same period in 2021, below inflation in the period, which resulted in a dilution of 70 bps reaching 18.5% of net revenue. This reduction is concentrated in the line of general and administrative expenses with the restructuring carried out at the headquarters after the hypermarkets transaction, with this we reduced the percentage of general and administrative expenses/net revenue from 4.0% in 3Q21 to 3.2% in 3Q22 and we continue to focus on further diluting this share. In 9M22, selling and administrative expenses totaled R$2.4 billion, reaching 19.1% of net revenue.
Equity Income totaled R$16 million in 3Q22, an increase of 36.6% versus 3Q21, reflecting the increase in revenue from FIC's operations in the period. Year-to-date, equity income was R$34 million.
As a result of the effects mentioned, GPA Brazil's Adjusted EBITDA was R$257 million and Adjusted EBITDA Margin was 6.0%, with a reduction of 100 bps versus 3Q21. GPA Brazil continues its process of repositioning and redefining its internal processes, focusing on operations and on resuming profitability for the Company's turnaround in 2023. |
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GRUPO ÉXITO
| R$ million, except when indicated | Grupo Éxito | |||||
| 3Q22 | 3Q21 | Δ | 9M22 | 9M21 | Δ | |
| Gross Revenue | 6,930 | 6,369 | 8.8% | 20,491 | 18,845 | 8.7% |
| Net Revenue | 6,130 | 5,675 | 8.0% | 18,216 | 16,816 | 8.3% |
| Gross Profit | 1,569 | 1,436 | 9.2% | 4,617 | 4,290 | 7.6% |
| Gross Margin | 25.6% | 25.3% | 30 bps | 25.3% | 25.5% | -20 bps |
| Selling, General, and Administrative Expenses | (1,117) | (986) | 13.3% | (3,305) | (3,047) | 8.5% |
| % of Net Revenue | 18.2% | 17.4% | 80 bps | 18.1% | 18.1% | 0 bps |
| Equity Income | (14) | 17 | -181.1% | (35) | 22 | -257.5% |
| Adjusted EBITDA(1) | 464 | 494 | -6.2% | 1,360 | 1,351 | 0.6% |
| Adjusted EBITDA Margin(1) | 7.6% | 8.7% | -110 bps | 7.5% | 8.0% | -50 bps |
(1) Earnings before interest, taxes, depreciation, and amortization. Adjusted for Other Operating Revenue (Expenses)
Grupo Éxito's Gross Profit in 3Q22 totaled R$1.6 billion (+9.2% YoY) with a margin of 25.6%, growth of 30 bps versus 3Q21, driven by the dilution of net revenue, recovery in the performance of Uruguay and the operation in Argentina, in addition to the greater contribution from the real estate business.
Selling, General and Administrative Expenses totaled R$1.1 billion in 3Q22, representing 18.2% of net revenue, an increase of 80 bps versus the same period in 2021, mainly due to higher inflation levels in the 3 countries in which it operates.
Equity Income totaled a loss of R$14 million in 3Q22, which reflects the result of the 50% interest held in Puntos Colombia and in Tuya finance, with higher level of provision in the quarter (both joint ventures with Bancolombia).
The Adjusted EBITDA in 3Q22 totaled R$464 million, a decrease of 6.2% compared to 3Q21, due to the strong comparison base of 3Q21. The Adjusted EBITDA Margin reduced 110 bps compared to the same period of the previous year, reaching 7.6%, due to the impacts mentioned above. |
| 31 |
OTHER OPERATING REVENUE (EXPENSES)
In the quarter, Other Income and Expenses reached R$56 million, a decrease of -40.2% versus 3Q21. This result is mainly due to stores restructuring and legal contingencies.
FINANCIAL INCOME
| FINANCIAL INCOME | Consolidated | |||||
| (R$ Million) | 3Q22 | 3Q21 | Δ | 9M22 | 9M21 | Δ |
| Financial Revenue | 235 | 43 | 449.2% | 509 | 224 | 127.1% |
| Financial Expenses | (415) | (209) | 98.3% | (1,124) | (506) | 122.1% |
| Cost of Debt | (289) | (157) | 84.1% | (748) | (327) | 128.6% |
| Cost of Receivables Discount | (11) | (1) | n.d. | (35) | (1) | n.d. |
| Other financial expenses | (94) | (52) | 80.5% | (290) | (179) | 62.2% |
| Net exchange variation | (19) | 1 | n.d. | (51) | 1 | n.d. |
| Net Financial Revenue (Expenses) | (180) | (166) | 8.0% | (615) | (282) | 118.1% |
| % of Net Revenue | -1.7% | -1.7% | 0 bps | -2.0% | -1.0% | -100 bps |
| Interest on lease liabilities | (133) | (108) | 22.7% | (372) | (338) | 10.0% |
| Net Financial Revenue (Expenses) - Post IFRS 16 | (313) | (275) | 13.8% | (987) | (620) | 59.2% |
| % of Net Revenue - Post IFRS 16 | -3.0% | -2.9% | -10 bps | -3.2% | -2.2% | -100 bps |
In 3Q22, the Company's net financial result pre-IFRS16 totaled R$180 million, an increase of 8.0% versus the same period of the previous year. This result is mainly explained by:
| · | Financial revenue: a non-recurring effect of some credits in the third quarter of 2022 and monetary restatement related to the assignment of Extra Hiper. |
| · | Financial expenses: the cost of debt due to a higher interest rate scenario, the cost of anticipations of receivables related to the assignment of Extra Hiper, and exchange rate variation in the period. |
| 32 |
NET DEBT
| INDEBTEDNESS | Consolidated | |
| (R$ Million) | 09.30.2022 | 09.30.2021 |
| Short-Term Debt | (2,224) | (2,287) |
| Loans and Financing | (2,139) | (717) |
| Debentures | (85) | (1,570) |
| Long-Term Debt | (5,616) | (7,538) |
| Loans and Financing | (2,984) | (4,039) |
| Debentures | (2,632) | (3,499) |
| Total Gross Debt | (7,840) | (9,825) |
| Cash and Financial investments | 3,860 | 4,526 |
| Net Debt | (3,980) | (5,299) |
| Adjusted EBITDA(1) | 2,259 | 2,447 |
| On balance Credit Card Receivables not discounted | 56 | 95 |
| Net Debt incl. Credit Card Receivables not discounted | (3,924) | (5,204) |
| Net Debt incl. Credit Card Receivables not discounted / | -1.7x | -2.1x |
| Adjusted EBITDA(1) |
(1) Adjusted EBITDA pre-IFRS 16, accrued in the last 12 months
Net debt including the balance of unearned receivables in GPA consolidated reached R$ -3.9 billion, a decrease of R$ -1.2 billion as compared to 3Q21. GPA has a net debt/Adjusted EBITDA ratio of -1.7x, reducing the leverage level by -0.4x.
In the last 12 months, the group generated an operating cash flow of R$1.3 billion in the scope of continuing activities, financing our investment plan. As to the discontinued scope, Extra Hiper stores and Drugstores, presented a positive variation of R$2.4 billion, mainly due to the R$1.7 billion of discount of receivables from the hypermarket transaction, which was partially used by the increase in interest rates. The changes below are in line with the Company's financial deleveraging strategy.
Evolution of the Pro-Forma net debt (R$ million)
| 33 |
INVESTMENTS
| (R$ Million) | Consolidated | |||||
| 3Q22 | 3Q21 | Δ | 9M22 | 9M21 | Δ | |
| New Stores and Land Acquisition | 54 | 19 | 188.0% | 93 | 45 | 105.0% |
| Store Renovations, Conversions and Maintenance | 175 | 72 | 144.8% | 513 | 260 | 97.4% |
| IT, Digital and Logistics | 102 | 106 | -2.9% | 194 | 270 | -28.3% |
| Total Investments GPA Brazil | 331 | 196 | 69.3% | 799 | 576 | 38.9% |
| Total Investments Grupo Éxito | 157 | 124 | 26.3% | 316 | 336 | -6.0% |
| Total Investments Consolidated | 488 | 320 | 52.6% | 1,116 | 912 | 22.3% |
Capex totaled R$488 million in 3Q22, of which R$331 million in Brazil and R$157 million in Grupo Éxito. In Brazil, the focus continues to be on adjusting the portfolio of the Pão de Açúcar banner to our latest G7 model, in addition to converting the remaining hypermarket stores to the group's other banners. In Grupo Éxito, approximately 74% in local currency was allocated to expansion, innovation, omnichannel and digital transformation activities in the period, and the remaining portion to maintenance and support of operational structures, updating of IT and logistics systems.
| 34 |
ESG AT GPA
Agenda with and for society and the environment
With our sustainability strategy and GPA's activity pillars, the following are the highlights for 3Q22:
GPA BRAZIL
1)Promotion of diversity and inclusion: compared to 2021, we increased the percentage of black people on our number of employees by 30 bps, reaching 55% who self-report as black and mixed race and, in leadership positions (management and above), this number reached 40.4%. We are committed to maintaining a level of at least 50% black people on our total number of employees. In 3Q22, we became signatories of the Forum of Generations and the Future of Work, organized by the Mais Diversidade consultancy, which will discuss and provide solutions regarding generational issues in the world of work. In addition, we promoted several discussions in our 6th GPA Diversity Week, which featured several lectures and virtual events - in addition to training - with external guests and which had more than 2,700 participations and NPS of 93;
2)Fight against climate change: we continue to advance our practices and processes to reduce our greenhouse gas emissions (scope 1 and 2), in line with our commitment to reduce 38% by 2030 (base year 2015). We ended 3Q22 with an accumulated reduction of 40% compared to the same period in 2021 due to initiatives to replace refrigerant gases and maintenance of engine rooms, in line with the target established for the year of a reduction of 29.8% (versus 2021);
3)Commitment to Ethics and Transparency: we are part of different market indexes and in 3Q22 we completed our annual climate survey (Fale Na Boa), with the purpose of capturing the perception of our employees about the corporate environment. Using the NPS methodology with quantitative and qualitative questions, we had an overall rating average of 7.9 (an increase of 30 bps versus 2021) and the theme of Diversity and Sustainability was the highlight of the edition with the highest result among the other categories, reaching the score of 8.6 (versus 8.3 in 2021);
4)Transformation in the value chain: in line with our public commitment to reach 100% of sales of our Exclusive Brand eggs from cage-free hens by 2025, we reached, in September, 50% of egg sales that involve animal well-being, advancing the goal established for the year 2022;
5)Social impact and promotion of opportunities:we ended 3Q22 with more than 3.2 million supplemented meals from donations to food banks and partner social organizations, consisting of fruit, vegetables and legumes from our stores not suitable for sale, an increase of 5.5% compared to the same period of 2021. Moreover, in 3Q22, in partnership with the NGO Gerando Falcões, we launched our first social product, the Biscoito de Polvilho Qualitá 200g, with 100% of the proceeds going to the Falcons University project, which invests in the social development of the favelas in which the organization operates. In the first month alone, more than 60,000 units were sold.
GRUPO ÉXITO
| · | Zero malnutrition: 45,794 children benefited (result up to September 2022) in Éxito Fundation programs related to the fight against chronic child malnutrition in children under 5 years old. The number of beneficiaries increased by approximately 27% compared to 2Q22 and is in line with the year's goal of reaching 60,000 children benefited by the end of 2022; |
| · | Sustainable trade: we achieved 90.7% of suppliers of fruit and vegetables from production in Colombia, in line with our target of 91% by the end of the year. As to textile products, 90% of the clothes are produced in Colombia and with 80% of domestic fabric generating more than 9,600 jobs of which 70% are occupied by women in different regions of the country; |
| · | My planet: store-back recycling volume reached the expected target in the period of 15,543 tons of recyclable materials. And in relation to the volume of recycling stations (consumer), the volume exceeded the target for the period with around 671.8 tons of post-consumer recycled waste by 3Q22, around 27% more than the same period in 2021. |
| 35 |
BREAKDOWN OF STORE CHANGES BY BANNERS
In 3Q22, we completed the process of converting the Extra Hiper stores, totaling 23 converted stores: 13 stores for the Pão de Açúcar format, 8 for Mercado Extra, and 2 for the Compre Bem banner. In the quarter, we opened 6 new stores in the Minuto Pão de Açúcar format and 1 in the Pão de Açúcar format, continuing our expansion plan. At Grupo Éxito, we closed 4 stores for conversion in Colombia and opened another 3 stores converted to the Carulla Fresh Market model, in addition to 4 new stores in the Éxito WOW format (3 stores) and Surtimayorista (1 store). In Argentina, five new Mayorista banner stores were opened.
| 2Q22 | 3Q22 | ||||||
| No. of Stores | Openings | Openings by conversion | Closing | Closing to conversion | No of. Stores | Sales area ('000 sq. m.) | |
| GPA Brazil | 694 | 7 | 14 | -2 | -14 | 699 | 641 |
| Pão de Açúcar | 179 | 1 | 10 | 0 | 0 | 190 | 266 |
| Mercado Extra | 149 | 0 | 4 | 0 | 0 | 153 | 187 |
| Compre Bem | 30 | 0 | 0 | 0 | 0 | 30 | 39 |
| Mini Extra | 141 | 0 | 0 | 0 | 0 | 141 | 35 |
| Minuto Pão de Açúcar | 100 | 6 | 0 | 0 | 0 | 106 | 26 |
| Gas stations | 74 | 0 | 0 | 0 | 0 | 74 | 58 |
| Stores under Conversion / Analysis | 21 | 0 | 0 | -2 | -14 | 5 | 29 |
| Grupo Éxito | 601 | 9 | 3 | -7 | -4 | 602 | 1,033 |
| Colombia | 485 | 4 | 3 | -5 | -4 | 483 | 836 |
| Uruguay | 91 | 0 | 0 | -1 | 0 | 90 | 92 |
| Argentina | 25 | 5 | 0 | -1 | 0 | 29 | 105 |
| Total Group | 1,295 | 16 | 17 | -9 | -18 | 1,301 | 1,673 |
| 36 |
CONSOLIDATED FINANCIAL STATEMENTS
Balance Sheet
| BALANCE SHEET | |||||||
| (R$ Million) | ASSETS | ||||||
| Consolidated | GPA Brazil | Grupo Éxito | |||||
| 09.30.2022 | 09.30.2021 | 09.30.2022 | 09.30.2021 | 09.30.2022 | 09.30.2021 | ||
| Current Assets | 13,844 | 14,256 | 7,504 | 8,408 | 6,270 | 5,735 | |
| Cash and Marketable Securities | 3,860 | 4,526 | 2,446 | 3,068 | 1,381 | 1,375 | |
| Accounts Receivable | 696 | 604 | 312 | 274 | 362 | 325 | |
| Credit Card | 56 | 33 | 56 | 35 | - | - | |
| Sales Vouchers and Trade Account Receivable | 613 | 533 | 202 | 163 | 390 | 363 | |
| Allowance for Doubtful Accounts | (30) | (38) | (1) | - | (30) | (38) | |
| Resulting from Commercial Agreements | 57 | 77 | 55 | 76 | 2 | 1 | |
| Inventories | 5,539 | 6,585 | 1,982 | 3,482 | 3,556 | 3,103 | |
| Recoverable Taxes | 1,817 | 1,676 | 1,129 | 1,094 | 687 | 581 | |
| Noncurrent Assets for Sale | 41 | 206 | 34 | 172 | 6 | 33 | |
| Credits with Related Parties - CP | 1,181 | - | 1,181 | - | - | - | |
| Prepaid Expenses and Other Accounts Receivables | 710 | 659 | 420 | 317 | 277 | 319 | |
| Noncurrent Assets | 29,547 | 34,440 | 13,921 | 16,193 | 15,503 | 18,165 | |
| Long-Term Assets | 4,824 | 4,608 | 4,625 | 4,351 | 185 | 278 | |
| Accounts Receivable | - | 62 | - | 59 | - | 3 | |
| Credit Cards | - | 62 | - | 59 | - | 3 | |
| Recoverable Taxes | 2,064 | 2,588 | 2,064 | 2,588 | - | - | |
| Deferred Income Tax and Social Contribution | 647 | 305 | 633 | 288 | - | - | |
| Amounts Receivable from Related Parties | 344 | 239 | 284 | 185 | 60 | 92 | |
| Judicial Deposits | 738 | 647 | 736 | 646 | 2 | 1 | |
| Prepaid Expenses and Others | 1,031 | 767 | 908 | 585 | 122 | 181 | |
| Investments | 1,239 | 1,304 | 824 | 811 | 415 | 493 | |
| Investment Properties | 2,861 | 3,403 | - | - | 2,861 | 3,403 | |
| Property and Equipment | 15,373 | 19,112 | 6,533 | 8,976 | 8,833 | 10,128 | |
| Intangible Assets | 5,250 | 6,013 | 1,939 | 2,055 | 3,209 | 3,863 | |
| TOTAL ASSETS | 43,391 | 48,696 | 21,425 | 24,601 | 21,773 | 23,900 |
| 37 |
CONSOLIDATED FINANCIAL STATEMENTS
Balance Sheet
| BALANCE SHEET | |||||||
| (R$ Million) | LIABILITIES | ||||||
| Consolidated | GPA Brazil | Grupo Éxito | |||||
| 09.30.2022 | 09.30.2021 | 09.30.2022 | 09.30.2021 | 09.30.2022 | 09.30.2021 | ||
| Current Liabilities | 12,965 | 14,291 | 5,080 | 7,267 | 7,744 | 6,838 | |
| Suppliers | 6,677 | 7,586 | 2,130 | 3,405 | 4,521 | 4,154 | |
| Loans and Financing | 2,154 | 717 | 1,018 | 106 | 1,137 | 611 | |
| Debentures | 85 | 1,570 | 85 | 1,570 | - | - | |
| Lease Liability | 815 | 1,011 | 499 | 657 | 316 | 353 | |
| Payroll and Related Charges | 737 | 853 | 345 | 458 | 378 | 382 | |
| Taxes and Social Contribution Payable | 514 | 457 | 311 | 262 | 201 | 194 | |
| Financing for Purchase of Fixed Assets | 184 | 142 | 82 | 64 | 102 | 78 | |
| Debt with Related Parties | 365 | 248 | 276 | 143 | 57 | 80 | |
| Advertisement | 17 | 40 | 17 | 39 | - | - | |
| Provision for Restructuring | 19 | 21 | 12 | 7 | 6 | 13 | |
| Unearned Revenue | 205 | 311 | 30 | 78 | 121 | 120 | |
| Others | 1,193 | 1,335 | 276 | 479 | 905 | 851 | |
| Long-Term Liabilities | 14,516 | 18,244 | 11,123 | 14,086 | 3,391 | 4,154 | |
| Loans and Financing | 2,987 | 4,048 | 2,276 | 2,929 | 710 | 1,118 | |
| Debentures | 2,632 | 3,499 | 2,632 | 3,499 | - | - | |
| Lease Liability | 5,052 | 6,936 | 3,412 | 5,084 | 1,640 | 1,851 | |
| Financing by purchasing assets | 79 | 100 | - | - | 79 | 100 | |
| Related Parties | 24 | 120 | 24 | 120 | - | - | |
| Deferred Income Tax and Social Contribution | 845 | 951 | 1 | 6 | 841 | 943 | |
| Tax Installments | 82 | 175 | 79 | 169 | 4 | 6 | |
| Provision for Contingencies | 1,664 | 1,456 | 1,570 | 1,351 | 94 | 104 | |
| Unearned Revenue | 102 | 21 | 102 | 21 | - | - | |
| Provision for loss on investment in Associates | 758 | 679 | 758 | 679 | - | - | |
| Others | 291 | 259 | 268 | 227 | 24 | 32 | |
| Shareholders' Equity | 15,910 | 16,162 | 5,221 | 3,247 | 10,638 | 12,908 | |
| Attributed to controlling shareholders | 13,539 | 13,257 | 5,221 | 3,247 | 8,270 | 10,002 | |
| Capital | 5,860 | 5,858 | 5,860 | 5,858 | - | - | |
| Capital Reserves | 308 | 285 | 308 | 285 | - | - | |
| Profit Reserves | 8,388 | 6,115 | 70 | (3,894) | 9,682 | 10,646 | |
| Other Comprehensive Results | (1,016) | 998 | (1,016) | 998 | (1,413) | (644) | |
| Minority Interest | 2,371 | 2,905 | - | - | 2,368 | 2,906 | |
| TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY | 43,391 | 48,696 | 21,425 | 24,601 | 21,773 | 23,900 |
| 38 |
INCOME STATEMENT - 3rd QUARTER OF 2022
| R$ Million | Consolidated(1) | GPA Brazil | Grupo Éxito | ||||||
| 3Q22 | 3Q21 | Δ | 3Q22 | 3Q21 | Δ | 3Q22 | 3Q21 | Δ | |
| Gross Revenue | 11,561 | 10,560 | 9.5% | 4,612 | 4,170 | 10.6% | 6,930 | 6,369 | 8.8% |
| Net Revenue | 10,453 | 9,595 | 8.9% | 4,305 | 3,900 | 10.4% | 6,130 | 5,675 | 8.0% |
| Cost of Goods Sold | (7,804) | (7,105) | 9.8% | (3,270) | (2,889) | 13.2% | (4,536) | (4,212) | 7.7% |
| Depreciation (Logistics) | (52) | (78) | -33.4% | (26) | (51) | -48.6% | (26) | (27) | -4.5% |
| Gross Profit | 2,596 | 2,412 | 7.6% | 1,009 | 960 | 5.1% | 1,569 | 1,436 | 9.2% |
| Selling Expenses | (1,519) | (1,397) | 8.8% | (660) | (616) | 7.2% | (851) | (763) | 11.5% |
| General and Administrative Expenses | (416) | (393) | 6.0% | (136) | (156) | -12.3% | (266) | (223) | 19.4% |
| Selling, General and Adm. Expenses | (1,936) | (1,789) | 8.2% | (797) | (771) | 3.3% | (1,117) | (986) | 13.3% |
| Equity Income(2) | (53) | (24) | 123.2% | 16 | 12 | 36.6% | (14) | 17 | -181.1% |
| Other Operating Revenue (Expenses) | (56) | (94) | -40.2% | (48) | (72) | -33.5% | (7) | (22) | -66.0% |
| Depreciation and Amortization | (419) | (368) | 13.7% | (239) | (183) | 30.9% | (174) | (182) | -4.1% |
| Earnings before interest and Taxes - EBIT | 133 | 137 | -2.7% | (58) | (55) | 7.2% | 256 | 264 | -2.8% |
| Financial Revenue | 260 | 59 | 343.5% | 222 | 38 | 476.3% | 37 | 19 | 93.1% |
| Financial Expenses | (573) | (333) | 71.8% | (408) | (255) | 59.8% | (163) | (76) | 115.0% |
| Net Financial Result | (313) | (275) | 13.8% | (186) | (217) | -14.0% | (126) | (57) | 122.5% |
| Income (Loss) Before Income Tax | (180) | (138) | 30.1% | (245) | (271) | -9.8% | 130 | 207 | -37.0% |
| Income Tax | 36 | 125 | -71.2% | 82 | 187 | -56.4% | (45) | (62) | -27.3% |
| Net Income (Loss) Company - continuing operations | (144) | (13) | 998.9% | (163) | (84) | 93.7% | 85 | 145 | -41.2% |
| Net Result from discontinued operations | (92) | (25) | 270.1% | (92) | (25) | 270.5% | - | - | - |
| Net Income (Loss) - Consolidated Company | (236) | (38) | 521.2% | (255) | (109) | 133.9% | 85 | 145 | -41.2% |
| Net Income (Loss) - Controlling Shareholders - continuing operations(3) | (196) | (65) | 203.1% | (163) | (84) | 93.7% | 34 | 94 | -63.9% |
| Net Income (Loss) - Controlling Shareholders - discontinued operations(3) | (92) | (25) | 270.1% | (92) | (25) | 270.5% | - | - | - |
| Net Income (Loss) - Consolidated Controlling Shareholders(3) | (288) | (89) | 221.7% | (255) | (109) | 133.9% | 34 | 94 | -63.9% |
| Minority Interest - Non-controlling - continuing operations | 52 | 51 | 1.0% | - | - | - | 52 | 52 | -0.2% |
| Minority Interest - Non-controlling - discontinued operations | - | - | - | - | - | - | - | - | - |
| Minority Interest - Non-controlling - Consolidated | 52 | 51 | 1.0% | - | - | - | 52 | 52 | -0.2% |
| Earnings before Interest, Taxes, Depreciation, Amortization - EBITDA | 604 | 583 | 3.6% | 207 | 180 | 15.4% | 456 | 472 | -3.4% |
| Adjusted EBITDA(4) | 660 | 677 | -2.5% | 255 | 252 | 1.4% | 464 | 494 | -6.2% |
| % of Net Revenue | Consolidated(1) | GPA Brazil | Grupo Éxito | |||
| 3Q22 | 3Q21 | 3Q22 | 3Q21 | 3Q22 | 3Q21 | |
| Gross Profit | 24.8% | 25.1% | 23.4% | 24.6% | 25.6% | 25.3% |
| Selling Expenses | -14.5% | -14.6% | -15.3% | -15.8% | -13.9% | -13.5% |
| General and Administrative Expenses | -4.0% | -4.1% | -3.2% | -4.0% | -4.3% | -3.9% |
| Selling, General and Adm. Expenses | -18.5% | -18.6% | -18.5% | -19.8% | -18.2% | -17.4% |
| Equity Income(2) | -0.5% | -0.2% | 0.4% | 0.3% | -0.2% | 0.3% |
| Other Operating Revenue (Expenses) | -0.5% | -1.0% | -1.1% | -1.9% | -0.1% | -0.4% |
| Depreciation and Amortization | -4.0% | -3.8% | -5.6% | -4.7% | -2.8% | -3.2% |
| Earnings before interest and Taxes - EBIT | 1.3% | 1.4% | -1.4% | -1.4% | 4.2% | 4.6% |
| Net Financial Result | -3.0% | -2.9% | -4.3% | -5.6% | -2.1% | -1.0% |
| Income (Loss) Before Income Tax | -1.7% | -1.4% | -5.7% | -7.0% | 2.1% | 3.7% |
| Income Tax | 0.3% | 1.3% | 1.9% | 4.8% | -0.7% | -1.1% |
| Net Income (Loss) Company - continuing operations | -1.4% | -0.1% | -3.8% | -2.2% | 1.4% | 2.6% |
| Net Income (Loss) - Consolidated Company | -2.3% | -0.4% | -5.9% | -2.8% | 1.4% | 2.6% |
| Net Income (Loss) - Controlling Shareholders - continuing operations(3) | -1.9% | -0.7% | -3.8% | -2.2% | 0.6% | 1.6% |
| Net Income (Loss) - Consolidated Controlling Shareholders(3) | -2.8% | -0.9% | -5.9% | -2.8% | 0.6% | 1.6% |
| Minority Interest - Non-controlling - continuing operations | 0.5% | 0.5% | 0.0% | 0.0% | 0.8% | 0.9% |
| Minority Interest - Non-controlling - Consolidated | 0.5% | 0.5% | 0.0% | 0.0% | 0.8% | 0.9% |
| Earnings before Interest, Taxes, Depreciation, Amortization - EBITDA | 5.8% | 6.1% | 4.8% | 4.6% | 7.4% | 8.3% |
| Adjusted EBITDA(4) | 6.3% | 7.1% | 5.9% | 6.5% | 7.6% | 8.7% |
(1) Consolidated considering the result of other supplementary businesses
(2) Equity income includes the result of CDiscount in the Consolidated
(3) Net income after non-controlling shareholders' interest
(4) Adjusted by Other Operating Revenue (Expenses)
| 39 |
CASH FLOW - CONSOLIDATED
| STATEMENT OF CASH FLOW | ||
| (R$ million) | Consolidated | |
| 09/30/2022 | 09/30/2021 | |
| Net Income (loss) for the period | 1,057 | 119 |
| Deferred income tax | (37) | (383) |
| Loss (gain) on disposal of fixed and intangible assets | (2,637) | 116 |
| Depreciation and amortization | 1,436 | 1,621 |
| Interests and exchange variation | 1,281 | 928 |
| Equity Income | 195 | 37 |
| Provision for contingencies | 342 | 125 |
| Provision for write-offs and losses | - | 4 |
| Share-Based Compensation | 17 | 20 |
| Allowance for doubtful accounts | 31 | 45 |
| Net profit (loss) per dilution of shareholding interests | - | (1) |
| Provision for obsolescence/breakage | (44) | (18) |
| Appropriable revenue | (103) | (91) |
| Gain on sale of subsidiary | 1 | - |
| Loss (gain) on write-off of lease liabilities | (186) | (147) |
| Asset (Increase) decreases | ||
| Accounts receivable | 64 | 29 |
| Inventories | (661) | (189) |
| Taxes recoverable | 216 | (173) |
| Dividends received | 16 | - |
| Other Assets | (423) | (95) |
| Related parties | (370) | (79) |
| Restricted deposits for legal proceeding | (19) | (90) |
| Liability (Increase) decrease | ||
| Suppliers | (2,618) | (3,494) |
| Payroll and charges | (26) | (31) |
| Taxes and Social contributions payable | 132 | 79 |
| Other Accounts Payable | (378) | 184 |
| Contingencies | (213) | (112) |
| Deferred revenue | (7) | 68 |
| Taxes and Social contributions paid | (286) | (260) |
| Net cash generated from (used) in operating activities | (3,220) | (1,788) |
| Acquisition of property and equipment | (953) | (734) |
| Increase Intangible assets | (163) | (176) |
| Sales of property and equipment | 3,300 | 203 |
| Acquisition of property for investment | (63) | (93) |
| Net cash from incorporations | - | (1) |
| Net cash flow investment activities | 2,121 | (801) |
| Cash flow from financing activities | ||
| Capital increase | 1 | 8 |
| Funding and refinancing | 1,064 | 4,160 |
| Payments of loans and financing | (2,772) | (3,696) |
| Dividend Payment | (187) | (737) |
| Company acquisition | (3) | (3) |
| Resources obtained from the offering of shares and non-controlling shareholders | - | 14 |
| Transactions with minorities | (8) | (5) |
| Lease liability payments | (1,082) | (1,148) |
| Net cash generated from (used) in financing activities | (2,987) | (1,407) |
| Monetary variation over cash and cash equivalents | (328) | (189) |
| Increase (decrease) in cash and cash equivalents | (4,414) | (4,185) |
| Cash and cash equivalents at the beginning of the year | 8,274 | 8,711 |
| Cash and cash equivalents at the end of the year | 3,860 | 4,526 |
| Change in cash and cash equivalents | (4,414) | (4,185) |
| 40 |
BREAKDOWN OF SALES BY BUSINESS - BRAZIL
| (R$ Million) | Breakdown of Net Sales by Business | |||||
| 3Q22 | 3Q21 | Δ | 9M22 | 9M21 | Δ | |
| Pão de Açúcar | 1,913 | 1,706 | 12.1% | 5,408 | 5,146 | 5.1% |
| Mercado Extra/Compre Bem | 1,345 | 1,197 | 12.4% | 3,851 | 3,652 | 5.4% |
| Proximity(1) | 647 | 516 | 25.4% | 1,784 | 1,521 | 17.3% |
| Gas Stations | 319 | 411 | -22.4% | 1,079 | 1,294 | -16.6% |
| Other Business(2) | 81 | 70 | 14.6% | 243 | 213 | 14.1% |
| New GPA Brazil | 4,305 | 3,900 | 10.4% | 12,365 | 11,826 | 4.6% |
| Extra Hiper | 37 | 2,380 | -98.4% | 864 | 7,395 | -88.3% |
| Drugstores | 0 | 51 | -100.0% | 2 | 149 | -98.6% |
| Other Discontinued Business(3) | 3 | 59 | -94.1% | 98 | 182 | -45.9% |
| GPA Brazil | 4,346 | 6,389 | -32.0% | 13,329 | 19,551 | -31.8% |
(1) Includes sales of Mini Extra, Minuto Pão de Açúcar, and Aliados
(2) Revenue from lease of commercial centers
(3) Revenue from lease of commercial centers of discontinued operations
| 41 |
Companhia Brasileira de Distribuição Notes to the interim financial statements September 30, 2022 (In millions of Brazilian reais, unless otherwise stated) | |
| 1. | Corporate information |
Companhia Brasileira de Distribuição ("Company" or "CBD"), directly or through its subsidiaries ("Group" or "GPA") is engaged in the retail of food, clothing, home appliances, electronics and other products through its chain of supermarkets and specialized stores, especially under the trade names "Pão de Açúcar, "Minuto Pão de Açúcar", "Mercado Extra", "Minimercado Extra", and ''Compre Bem". Regarding the operations of the Extra Hiper brand, see note 1.1. The Group's headquarters are located in the city of São Paulo, State of São Paulo, Brazil.
The Company also operates in other Latin American countries through the subsidiary Almacenes Éxito SA ("Éxito"), a Colombian company operating in this country under the supermarket and hypermarket flags Éxito, Carulla, Super Inter, Surtimax and Surtimayorista, in Argentina under the Libertad brand and in Uruguay under the brands Disco and Devoto. Additionally, Éxito operates shopping centers in Colombia under the Viva brand.
The Company's shares are traded at the Corporate Governance level of the São Paulo Stock Exchange (B3 S.A. - Brazil, Bolsa, Balcão (''B3'')) called Novo Mercado, under the ticker "PCAR3", and on the New York Stock Exchange (ADR level III), under the code "CBD".
The Company is controlled by Wilkes Participações S.A. ("Wilkes"), and its ultimate parent company is Casino Guichard Perrachon ("Casino"), French company listed on Paris Stock Exchange.
| 1.1 | Discontinuation of the business of Extra Hiper stores and sale of assets with Sendas |
As part of the Retail reportable segment, the Company operates different store formats, as highlighted in Note 1, including 103 Extra Hiper stores, which operate in the hypermarket model. In line with the strategy of optimizing its store platform and allocating relevant resources to accelerate the growth of the most profitable banners, Management decided to discontinue the operation of stores with the Extra Hiper banner.
According to material facts published on October 14, 2021 and December 16, 2021, was approved by the Board of Directors of the Company and Sendas Distribuidora S.A. ("Assai" or ''Sendas Distribubidora''), counting only on the vote of the independent directors, the terms and conditions of the definitive agreement for the assignment of exploration rights of 70 commercial rights between the Company and Assaí, located in several states, involving own properties and those leased from third parties.
The transaction is being carried out as follows: (i) transfer of the commercial rights of up to 70 stores to Assaí for the amount of R$3.973 billion and (ii) future sale of 17 properties to a real estate fund Barzel Properties, with guarantee and subsequent lease by Assaí for 25 years, renewable for an additional 15 years, in the amount of R$1.200 billion, according to the agreement entered into on February 25, 2022.
The amounts received by the Company until September 30, 2022 from Assaí totaled R$2.3 billion, being R$1 billion in the fourth quarter of 2021 and R$850 million in the first quarter of 2022 and R$461 million in the second quarter of 2022.
The remaining amounts of the transaction will be received as follows: R$973 million in December 2022, R$1.2 billion in 2023 and R$700 million in January 2024 readjusted by CDI +1.2%. On August 17, 2022, the Company's Board of Directors approved the credit assignment agreements with financial institutions for the definitive assignment of these receivables, in the amount of R$2 billion referring to installments due by Assaí between 2023 and 2024. Based on these contracts, and with the consent of Assaí, the value of R$1.9 billion was assigned definitively and without right of return during the third quarter of 2022, this amount, together with the amounts already received, totals R$ 4.2 billion. The cost of this assignment was R$2.4 million and is allocated to the financial result.
| 42 |
Companhia Brasileira de Distribuição Notes to the interim financial statements September 30, 2022 (In millions of Brazilian reais, unless otherwise stated) | |
Also, in addition to this transaction, of the 33 remaining Extra Hiper stores, the Company decided to convert 25 commercial rights to other more profitable banners (Pão de Açúcar and Mercado Extra) and to close, or sale to third parties, of 8 stores.
Due to the transaction involving the sale of commercial rights and properties to Assaí and the conversion of stores, in the fourth quarter of 2021 the Company began the process of demobilizing and discontinuing operations under the Extra Hiper banner and, until December 31, 2021, the transaction was partially implemented, with the discontinuation of 31 commercial rights and the effective transfer to Assaí of 20 of these commercial rights, of which 6 are owned by the Company.
The operations of the other Extra Hiper stores representing the remaining 50 commercial rights, including 11 owned properties, were discontinued in first quarter of 2022, and another 40 commercial rights were delivered to Assaí in this period. In the second quarter, another commercial right was delivered and in the third quarter, 5 more commercial rights were delivered. The delivery of the remaining 4 commercial rights is scheduled for the fourth quarter of 2022. The assets and liabilities related to these stores (substantially property, plant and equipment, right of use and corresponding liabilities and intangible assets) were classified as assets held for sale.
Management evaluated the transaction in light of IFRS5/CPC31 - "Non-Current Assets Held for Sale and Discontinued Operation" and concluded that the discontinuation of 103 Extra Hiper stores (complete transaction) results in the abandonment of an important line of business in the Retail segment, with subsequent sale of non-operating assets (fixed assets, right of use and commercial rights) to Assaí.
On December 31, 2021, the Company partially abandoned the Extra Hiper stores (21% of gross revenue from the Extra Hiper business line) and concluded that there was no substantial abandonment of the hypermarkets business line, since, according to IFRS5/CPC31, an abandoned operation should be considered discontinued when it is substantially completed, which occurred in the first quarter of 2022, with the abandonment and delivery of 86% of the total stores to Assaí. Therefore, since the first quarter of 2022, the net gain on disposal of assets and the result of the hypermarket business line are being presented as a discontinued operation (Extra Hiper business line), as well as the comparative periods are being restated, in a single line in the income statement, as provided for in IFRS5/CPC31.
In the period ended on September 2022, the Company recorded revenue in the amount of R$3,9 billion, besides to asset write-offs corresponding to the amount of R$1,035 and expenses of R$887 (R$322 related to dismissal of employees, R$81 cancellation of contracts and R$484 other expenses related to the transaction - costs related to transaction, write-off of balances from other accounts related to stores and demobilization), generating the net result of the transaction in the amount of R$2,018 recorded in the result of Discontinued Operations (Note 32).
| 1.2 | Corporate merger of Compre Bem |
In May 2022 there was the total incorporation and consequent extinction of Compre Bem, until then a wholly-owned subsidiary, by the Company. The result of this reorganization had no effect on the Company's consolidated financial statements, as it is a wholly-owned subsidiary of the Company.
| 1.3 | Segregation transaction between the Company and its subsidiary Éxito |
On September 5, 2022, the Company's Board of Directors became aware of the results of preliminary studies for the eventual segregation of GPA and Éxito and, based on the results of these preliminary studies, authorized Management to finish the studies about this transaction, as well evaluate the necessary measures for its respective formalization, including all the measures for the creation of Éxito's BDRs (Brazilian Depositary Receipts) and ADRs (American Depositary Receipts) programs in Brazil and the United States, respectively.
| 43 |
Companhia Brasileira de Distribuição Notes to the interim financial statements September 30, 2022 (In millions of Brazilian reais, unless otherwise stated) | |
The transaction is expected to occur through a share capital reduction of GPA with the objective of distributing approximately 83% of the shares of Éxito currently held by GPA to its shareholders. Thus, after the distribution of shares, GPA would maintain a minority interest of approximately 13% in Éxito.
The effective implementation of the Transaction depends on the completion of these studies, approval by creditors (mainly debenture holders) and obtaining the registration of Éxito with the SEC and CVM, in addition to the final approval of the transaction to be taken by the shareholders of GPA, gathered in an extraordinary general meeting.
| 2. | Basis of preparation |
The individual and consolidated interim financial information was prepared in accordance with IAS 34 - "Interim Financial Reporting", issued by the International Accounting Standards Board ("IASB") and with Technical Pronouncement CPC 21 (R1) - "Interim Financial Reporting" and presented in accordance with the rules approved and issued by the Brazilian Securities and Exchange Commission ("CVM"), applicable to the preparation of the Quarterly Information - ITR.
The individual and consolidated interim financial information have been prepared on the historical cost basis except for certain financial instruments measured at their fair value. All relevant information in the financial statements is being evidenced and corresponds to that used by the Administration in the conduct of the Company.
The individual and consolidated interim financial information is being presented in millions of Brazilian Reais ("R$"), which is the reporting currency of the Company. The functional currency of associates and subsidiaries located abroad is the local currency of each jurisdiction.
The individual and consolidated interim financial information for the period ended on September 30, 2022 were approved by the Board of Directors on November 3, 2022.
The income statement for the year and the statement of added value and the explanatory notes related to the income for the period ended September 30, 2021 are being restated due to the discontinuity of the business of Extra Hiper stores and the sale of assets to Assaí, note 1.1, considering the effects of such transaction in compliance with technical pronouncement CPC 31 / IFRS 5 - Non-current assets held for sale and Discontinued Operation.
The cash flow statements include continued and discontinued operations in line with technical pronouncement CPC31/IFRS 5.
The consolidated interim financial information include the accounting information of all subsidiaries in which the Company exercises control, directly or indirectly. The determination of which subsidiaries are controlled by the Company and the procedures for full consolidation follow the concepts and principles established by CPC 36 (R3)/IFRS 10.
The interim financial information of the subsidiaries are prepared on the same closing date of the Company's years, adopting consistent accounting policies. All balances between Group companies, including income and expenses, unrealized gains and losses and dividends resulting from operations between Group companies are eliminated in full.
Gains or losses resulting from changes in equity interest in subsidiaries, which do not result in loss of control, are recorded directly in equity.
| 44 |
Companhia Brasileira de Distribuição Notes to the interim financial statements September 30, 2022 (In millions of Brazilian reais, unless otherwise stated) | |
In the individual interim financial information, interests are calculated considering the percentage held by Company on its subsidiaries. In the interim financial information, the Company fully consolidates all of its subsidiaries, maintaining the non-controlling interest highlighted in a specific line in shareholders' equity and income statement.
| 3. | Significant accounting policies |
The main accounting policies and practices adopted by the Company in the preparation of individual and consolidated accounting interim information are consistent with those adopted and disclosed in Note 3 and in each of the corresponding explanatory notes to the financial statements for the year ended December 31, 2021 , approved on February 23, 2022 and therefore should be read together.
| 4. | Adoption of new procedures, amendments to and interpretations of existing standards issued by the IASB and CPC and published standards effective from 2021 |
| 4.1. | New and revised standards and interpretations already issued and not yet in force |
The Company did not early adopt the following new and revised IFRSs, already issued and not yet effective:
| Pronouncement | Description | I Applicable to annual periods starting in or after |
| Changes in IAS 1 | Classification of liabilities as current or non-current and materiality concept | 01/01/2023 |
| Changes in IAS 8 | Definition of accounting estimates | 01/01/2023 |
| Changes in CPC 36 (R3) - Consolidated Financial Statements and IAS 28 (CPC 18 (R2)) | Sale or contribution of assets between an investor and your affiliate or Joint Venture | The effective date has not yet been set. by the IASB |
No significant impacts on the Company's individual and consolidated interim financial statements are expected as a result of these changes.
The pronouncements in effect as of January 2022, CPC 27 - Property, plant and equipment (Resources Before Intended Use) and CPC 15-R1 (Reference to the Conceptual Framework) were adopted and did not produce significant effects on the Company's individual and consolidated interim financial information.
| 5. | Significant accounting judgments, estimates and assumptions |
The preparation of the individual and consolidated interim financial information of the Company requires Management to make judgments, estimates and assumptions that impact the reported amounts of revenue, expenses, assets and liabilities, and the disclosure of contingent liabilities at the end of the year; however, uncertainty about these assumptions and estimates could result in outcomes that require material adjustments to the carrying amount of the asset or liability impacted in future periods.
The significant assumptions and estimates used in the preparation of the individual and consolidated interim financial information for the period ended September 30, 2022 were the same adopted in the annual financial statements for 2021, disclosed in Note 5.
| 45 |
Companhia Brasileira de Distribuição Notes to the interim financial statements September 30, 2022 (In millions of Brazilian reais, unless otherwise stated) | |
| 6. | Cash and cash equivalents |
The detailed information on cash and cash equivalents was presented in the annual financial statements for 2021, in note 6.
| Parent Company | Consolidated | ||||||
| Rate | 09.30.2022 | 12.31.2021 | 09.30.2022 | 12.31.2021 | |||
| Cash and banks - Brazil | 59 | 90 | 60 | 100 | |||
| Cash and banks - Abroad | (*) | 81 | 84 | 1,412 | 3,481 | ||
| Short-term investments - Brazil | (**) | 2,242 | 4,488 | 2,338 | 4,598 | ||
| Short-term investments - Abroad | (***) | - | - | 50 | 95 | ||
| 2,382 | 4,662 | 3,860 | 8,274 |
(*) As of September 30, 2022. Refers to (i) funds from the Éxito Group, of which R$71 in Argentine pesos, R$441 in Uruguayan pesos and R$819 in Colombian pesos (R$126 in Argentine pesos, R$366 in Uruguayan pesos and R$2,905 in Colombian pesos on December 31, 2021); (ii) resources of the Company abroad, in US dollars in the amount of R$81 (R$ 84 on December 31, 2021).
(**) Financial investments, on September 30, 2022, substantially comprise repurchase operations and CDB, remunerated by the weighted average of 102.81% (93.51% on December 31, 2021) of the CDI (Interbank Deposit Certificate).
(***) Refer to funds invested abroad, on September 30, 2022, in local currency equivalent to R$1 in Uruguay and R$49 in Colombia (R$1 in Uruguay and R$94 in Colombia on December 31, 2021).
| 7. | Trade receivables |
Detailed information on accounts receivable was presented in the annual financial statements for 2021, in Note 7.
| Parent Company | Consolidated | |||||
| 09.30.2022 | 12.31.2021 | 09.30.2022 | 12.31.2021 | |||
| Credit card companies | 45 | 63 | 45 | 65 | ||
| Credit card companies - related parties (note 11.2) | 11 | 14 | 11 | 15 | ||
| Sales vouchers and trade receivables | 168 | 135 | 583 | 655 | ||
| Private label credit card | 18 | 40 | 29 | 53 | ||
| Receivables from related parties (note 11.2) | 1 | 16 | 1 | 13 | ||
| Receivables from suppliers | 55 | 63 | 57 | 66 | ||
| Allowance for doubtful accounts (note 7.1) | (1) | - | (30) | (35) | ||
| 297 | 331 | 696 | 832 | |||
| Current | 297 | 330 | 696 | 831 | ||
| Noncurrent | - | 1 | - | 1 | ||
| 46 |
Companhia Brasileira de Distribuição Notes to the interim financial statements September 30, 2022 (In millions of Brazilian reais, unless otherwise stated) | |
| 7.1. | Allowance for doubtful accounts on trade receivables |
| Parent Company | Consolidated | ||||
| 09.30.2022 | 09.30.2021 | 09.30.2022 | 09.30.2021 | ||
| At the beginning of the period | - | (1) | (35) | (43) | |
| Allowance booked for the period | (1) | - | (31) | (43) | |
| Write-offs of receivables | - | 1 | 29 | 44 | |
| Foreign currency translation adjustment | - | - | 7 | 4 | |
| At the end of the period | (1) | - | (30) | (38) |
Below is the aging list of consolidated gross receivables, by maturity period:
| Overdue receivables - Consolidated | ||||||
| Total | Not yet due | <30 days | 30-60 days | 61-90 days | >90 days | |
| 09.30.2022 | 726 | 593 | 88 | 26 | 16 | 3 |
| 12.31.2021 | 867 | 729 | 110 | 17 | 9 | 2 |
| 8. | Other receivables |
Detailed information on other accounts receivable was presented in the 2021 annual financial statements, in Note 8.
| Parent Company | Consolidated | ||||||
| 09.30.2022 | 12.31.2021 | 09.30.2022 | 12.31.2021 | ||||
| Accounts receivable from insurers | 2 | 5 | 2 | 5 | |||
| Receivable from sale of subsidiaries | 74 | 79 | 74 | 79 | |||
| Lease receivables | 29 | 63 | 112 | 179 | |||
| Accounts receivable - Via (*) | 616 | 298 | 616 | 298 | |||
| Sale of real estate properties | 64 | 54 | 70 | 55 | |||
| Sale of real estate developments | - | - | 95 | 93 | |||
| Other (**) | 276 | 104 | 321 | 158 | |||
| Allowance for doubtful accounts on other receivables (note 8.1) | (13) | (15) | (13) | (15) | |||
| 1,048 | 588 | 1,277 | 852 | ||||
| Current | 242 | 98 | 400 | 294 | |||
| Noncurrent | 806 | 490 | 877 | 558 | |||
(*) Amounts receivable from Via S.A. ("Via"), subsidiary sold in 2019.The amount of R$616 includes the amount of R$509 corresponding to GPA right to receive the refund of the ICMS exclusion benefit from the PIS and COFINS basis of its former subsidiary Globex from Via, after the final and unappealable process, referring to the period from 2003 to 2010, whose part of the amount in the amount of R$278 was recorded in June 2022, after completing the collection of information and documentation related to the credit (see note 20.9). The Company complemented the credits related to the topic in the 3rd quarter of 2022 by R$44.
| 47 |
Companhia Brasileira de Distribuição Notes to the interim financial statements September 30, 2022 (In millions of Brazilian reais, unless otherwise stated) | |
(**) Includes the amount of R$161 receivable from Real Estate Fund Barzel for the sale of 17 properties related to the demobilization of Hypermarkets (Note 1.1). The Company will transfer the amounts received to Assaí, since the Company has already received from it the advance for the sale of the properties.
| 8.1 | Allowance for doubtful accounts on other receivables |
| Parent Company | Consolidated | ||||
| 09.30.2022 | 09.30.2021 | 09.30.2022 | 09.30.2021 | ||
| At the beginning of the Period | (15) | (11) | (15) | (11) | |
| Losses recorded in the period | - | (2) | - | (2) | |
| Write-offs recorded in the period | 2 | - | 2 | - | |
| At the end of the Period | (13) | (13) | (13) | (13) |
| 9. | Inventories |
Detailed information on inventories was presented in the annual financial statements for 2021, in explanatory note Note 9.
| Parent Company | Consolidated | ||||
| 09.30.2022 | 12.31.2021 | 09.30.2022 | 12.31.2021 | ||
| Stores | 1,198 | 1,582 | 1,200 | 1,646 | |
| Distribution centers | 815 | 728 | 815 | 773 | |
| Inventories - Èxito Group | - | - | 3,535 | 2,884 | |
| Real Estate Inventory - Èxito Group | - | - | 38 | 50 | |
| Allowance for losses on inventory obsolescence and damages (note 9.1) | (33) | (78) | (49) | (96) | |
| 1,980 | 2,232 | 5,539 | 5,257 |
| 9.1. | Allowance for losses on inventory obsolescence and damages |
| Parent Company | Consolidated | ||||
| 09.30.2022 | 09.30.2021 | 09.30.2022 | 09.30.2021 | ||
| At the beginning of the Period | (77) | (41) | (96) | (72) | |
| Additions | (73) | (6) | (73) | (6) | |
| Write-offs / reversal | 119 | 17 | 117 | 24 | |
| Foreign currency translation adjustment | - | - | 3 | 2 | |
| Incorporation (Note 1.2) | (2) | - | - | - | |
| At the end of the Period | (33) | (30) | (49) | (52) |
| 48 |
Companhia Brasileira de Distribuição Notes to the interim financial statements September 30, 2022 (In millions of Brazilian reais, unless otherwise stated) | |
| 10. | Recoverable taxes |
Detailed information on recoverable taxes was presented in the annual financial statements for 2021, in note 10.
| Parent Company | Consolidated | ||||
| 09.30.2022 | 12.31.2021 | 09.30.2022 | 12.31.2021 | ||
| State VAT tax credits - ICMS (note 10.1) | 623 | 911 | 623 | 920 | |
| Social Integration Program/ Contribution for Social Security Financing - PIS/COFINS (note 10.2) | 2,184 | 2,022 | 2,220 | 2,062 | |
| Social Security Contribution - INSS (Note 10.3) | 231 | 297 | 234 | 300 | |
| Income tax and social contribution prepayments (*) | 79 | 200 | 486 | 672 | |
| Other | 14 | 16 | 15 | 23 | |
| Other recoverable taxes - Éxito Group IVA | 18 | 1 | 303 | 176 | |
| Total | 3,149 | 3,447 | 3,881 | 4,153 | |
| Current | 1,097 | 1,048 | 1,817 | 1,743 | |
| Noncurrent | 2,052 | 2,399 | 2,064 | 2,410 |
(*) Includes Éxito's amount of R$404 (R$460 on December 31, 2021).
| 10.1. | Schedule of expected realization of ICMS |
| Parent Company | Consolidated | ||
| In | |||
| Up to one year | 404 | 404 | |
| From 1 to 2 years | 110 | 110 | |
| From 2 to 3 years | 30 | 30 | |
| From 3 to 4 years | 30 | 30 | |
| From 4 to 5 years | 11 | 11 | |
| More than 5 years | 38 | 38 | |
| 623 | 623 |
Regarding credits that cannot be immediately offset, the Company's Management, based on a technical recovery study, which was prepared considering the future expectation of growth and consequent offsetting with debts arising from its operations, understands that viable future compensation. The aforementioned studies are prepared and reviewed annually based on information extracted from the strategic planning previously approved by the Company's Board of Directors. For the interim accounting information, the Company's Management has monitoring controls on adherence to the plan established annually, reassessing and including new elements that contribute to the realization of the ICMS balance to be recovered. As of September 30, 2022, no modifications to the previously prepared plans were necessary.
| 49 |
Companhia Brasileira de Distribuição Notes to the interim financial statements September 30, 2022 (In millions of Brazilian reais, unless otherwise stated) | |
| 10.2 | Schedule of expected realization of PIS and COFINS |
The realization of the PIS and COFINS balance is shown below:
| Parent Company | Consolidated | ||
| In | |||
| Up to one year | 524 | 551 | |
| From 1 to 2 years | 514 | 523 | |
| From 2 to 3 years | 517 | 517 | |
| From 3 to 4 years | 509 | 509 | |
| From 4 to 5 years | 120 | 120 | |
| 2,184 | 2,220 |
In June 2022, the 2nd Class of the Higher Justice Court (STJ) recognized the illegality of the early revocation of the tax incentive provided for in Law 11,196/05. The Law reduce to zero the PIS and COFINS rates levied on revenues from the sale of certain technology products. As a result of this judgment, the Company recorded credits in the amount of R$160 in the second quarter of 2022.
On September 6, 2022, the Company obtained a favorable decision in a lawsuit related to the exclusion of ICMS from the PIS and COFINS calculation basis, which is carried out separately from other lawsuits on the same topic whose credits have already been recognized in the financial statements in 2020. Due to the favorable decision, the Company recorded a credit in the amount of R$106 (R$71 of which in the financial result).
10.3 INSS
On August 28, 2020, the Federal Supreme Court (STF), in general repercussion, recognized that the incidence of social security contributions (INSS) on the constitutional third of vacations was constitutional. The Company has been following the development of these issues, and together with its legal advisors, concluded that the elements so far do not impact the expectation of realization. The amount involved in the parent company and consolidated is equivalent to R$149, on September 30, 2022 (R$161, on December 31, 2021).
| 50 |
Companhia Brasileira de Distribuição Notes to the interim financial statements September 30, 2022 (In millions of Brazilian reais, unless otherwise stated) | |
| 11. | Related parties |
| 11.1. | Management compensation |
The expenses related to management compensation (officers appointed pursuant to the Bylaws including members of the Board of Directors and the related support committees), were as follows:
(In thousands of Brazilian reais)
| Base salary | Variable compensation | Stock option plan - Note 23 | Total | ||||||||
| 09.30.2022 | 09.30.2021 | 09.30.2022 | 09.30.2021 | 09.30.2022 | 09.30.2021 | 09.30.2022 | 09.30.2021 | ||||
| Board of directors (*) | 31,492 | 23,491 | - | - | 5,267 | 5,235 | 36,759 | 28,726 | |||
| Executive officers | 22,421 | 16,255 | - | 5,582 | 1,898 | 2,617 | 24,319 | 24,454 | |||
| Fiscal Council | 324 | 324 | - | - | - | - | 324 | 324 | |||
| 54,237 | 40,070 | - | 5,582 | 7,165 | 7,852 | 61,402 | 53,504 |
(*) The compensation of the Board of Directors' advisory committees (Human Resources and Compensation, Audit, Finance, Sustainable Development and Corporate Governance) is included in this line.
| 51 |
Companhia Brasileira de Distribuição Notes to the interim financial statements September 30, 2022 (In millions of Brazilian reais, unless otherwise stated) | |
| 11.2. | Balances and transactions with related parties |
Detailed information on Related Parties was presented in the annual financial statements for 2021, in Note 11.
| Parent company | |||||||||||||||||
| Balances | Transactions | ||||||||||||||||
| Trade receivables | Other assets | Trade payables | Other liabilities | Revenues (expenses) | |||||||||||||
| 09.30.2022 | 12.31.2021 | 09.30.2022 | 12.31.2021 | 09.30.2022 | 12.31.2021 | 09.30.2022 | 12.31.2021 | 09.30.2022 | 06.30.2021 | ||||||||
| Controlling shareholders: | |||||||||||||||||
| Casino | - | - | - | - | 7 | - | - | 1 | (22) | (34) | |||||||
| Euris | - | - | - | - | - | - | 1 | 1 | (2) | (2) | |||||||
| Wilkes | - | - | - | - | - | - | 2 | 2 | (6) | (4) | |||||||
| Subsidiaries: | |||||||||||||||||
| Éxito | - | - | - | - | - | - | - | - | 11 | 11 | |||||||
| Novasoc Comercial | - | - | 48 | 57 | - | - | 1 | 1 | 3 | 1 | |||||||
| SCB Distribuição e Comércio | - | 3 | - | 18 | - | 2 | - | - | 46 | 18 | |||||||
| Stix Fidelidade | - | - | 26 | 21 | 9 | 21 | 12 | 7 | (113) | (105) | |||||||
| Cheftime | - | - | 4 | 44 | - | - | 1 | 1 | 3 | (11) | |||||||
| James Intermediação | - | - | 26 | 36 | - | 1 | 2 | 8 | (5) | (13) | |||||||
| GPA M&P | - | - | - | - | - | - | 10 | 13 | - | - | |||||||
| GPA Logistica | - | - | 113 | 110 | 2 | 84 | 78 | 6 | 2 | ||||||||
| Others | - | - | 1 | 1 | - | - | - | - | - | - | |||||||
| Associates | |||||||||||||||||
| FIC | 11 | 14 | 31 | 34 | 7 | 8 | 3 | - | 16 | 44 | |||||||
| Other related parties | |||||||||||||||||
| Greenyellow do Brazil Energia e Serviços Ltda ("Greenyellow") | - | - | - | - | - | - | 77 | 269 | (72) | (69) | |||||||
| Sendas Distribuidora (*) | 1 | 2 | 1,430 | 370 | 12 | 15 | 249 | 103 | 4,218 | 101 | |||||||
| Casino Group | - | 11 | 2 | - | - | - | - | - | (1) | (5) | |||||||
| Others | - | - | 1 | 1 | - | - | - | - | - | - | |||||||
| Total | 12 | 30 | 1,682 | 692 | 35 | 49 | 442 | 484 | 4,082 | (66) | |||||||
(*) Comprised mainly of R$973, as disclosed in Note 1.1.
| 52 |
Companhia Brasileira de Distribuição Notes to the interim financial statements September 30, 2022 (In millions of Brazilian reais, unless otherwise stated) | |
| Consolidated | |||||||||||||||
| Balances | Transactions | ||||||||||||||
| Trade receivables | Other assets | Trade payables | Other liabilities | Revenues (expenses) | |||||||||||
| 09.30.2022 | 12.31.2021 | 09.30.2022 | 12.31.2021 | 09.30.2022 | 12.31.2021 | 09.30.2022 | 12.31.2021 | 09.30.2022 | 06.30.2021 | ||||||
| Controlling shareholders | |||||||||||||||
| Casino | - | - | - | - | 7 | - | - | 1 | (22) | (34) | |||||
| Euris | - | - | - | - | - | - | 1 | 1 | (2) | (4) | |||||
| Wilkes | - | - | - | - | - | - | 2 | 2 | (6) | (4) | |||||
| Associates | |||||||||||||||
| FIC | 11 | 14 | 31 | 35 | 7 | 8 | 2 | - | 16 | 44 | |||||
| Puntos Colombia | - | - | 17 | 42 | - | - | 34 | 58 | (81) | (81) | |||||
| Tuya | - | - | 41 | 57 | - | - | - | - | 60 | 64 | |||||
| Other related parties | |||||||||||||||
| Greenyellow | 1 | - | - | - | - | - | 84 | 283 | (111) | (104) | |||||
| Sendas Distribuidora (*) | - | 2 | 1,430 | 370 | 12 | 15 | 249 | 103 | 4,218 | 101 | |||||
| Casino Group | - | 12 | 4 | 12 | - | - | 17 | 19 | (18) | (23) | |||||
| Others | - | - | 1 | 1 | - | - | - | - | - | - | |||||
| Total | 12 | 28 | 1,524 | 517 | 26 | 23 | 389 | 467 | 4,054 | (41) |
(*) Comprised mainly of R$973, as disclosed in Note 1.1.
| 53 |
Companhia Brasileira de Distribuição Notes to the interim financial statements September 30, 2022 (In millions of Brazilian reais, unless otherwise stated) | |
| 12. | Investments |
12.1 Composition of investments
| Parent company | Consolidated | ||||
| 09.30.2022 | 12.31.2021 | 09.30.2022 | 12.31.2021 | ||
| Investments | 9,227 | 11,059 | 1,239 | 1,254 | |
| Provision for investment losses | (758) | (703) | (758) | (689) | |
| Investment | 8,469 | 10,356 | 481 | 565 |
The provision for investment losses comprises R$758 related to Cnova N.V as of September 30, 2022 (R$689 on investment in Cnova N.V. and R$14 on investment in Cheftime as of December 31, 2021).
12.2 Investment movement
| Parent company | |||||||
| 09.30.2022 | 09.30.2021 | ||||||
| Éxito | Outros | Total | Éxito | Outros | Total | ||
| At the beginning of the Period | 9,427 | 929 | 10,356 | 10,479 | 490 | 10,969 | |
| Equity | 157 | (188) | (31) | 205 | (133) | 72 | |
| Dividends and interest on equity | (276) | - | (276) | (246) | - | (246) | |
| Share buyback (Note 12.2.1) | (378) | - | (378) | - | - | - | |
| Capital increase | - | 85 | 85 | - | 103 | 103 | |
| Capital increase with fixed assets | - | - | - | - | 13 | 13 | |
| Transfer of participation (*) | - | - | - | (521) | 521 | - | |
| Incorporation (Note 1.2) | - | (261) | (261) | - | - | - | |
| Investment write-off | - | (1) | (1) | - | - | - | |
| Spin-off gas station | - | - | - | - | 5 | 5 | |
| Other transactions | (2) | - | (2) | (3) | - | (3) | |
| Equivalence over other comprehensive income | (1,087) | 64 | (1,023) | (405) | (16) | (421) | |
| In the end of the period | 7,841 | 628 | 8,469 | 9,509 | 983 | 10,492 |
(*) Transfer of 5% interest in the capital of subsidiary Éxito to subsidiary GPA 2.
| Consolidated | ||
| 09.30.2022 | 09.30.2021 | |
| At the beginning of the period | 565 | 659 |
| Equity - continued | (195) | (37) |
| Equivalence over other comprehensive income | 55 | (18) |
| Capital increase | 56 | 21 |
| In the end of the period | 481 | 625 |
| 54 |
Companhia Brasileira de Distribuição Notes to the interim financial statements September 30, 2022 (In millions of Brazilian reais, unless otherwise stated) | |
12.2.1 Share buyback
On March 24, 2022, the proposal to distribute the results of Grupo Éxito in the amount of 487 billion Colombian pesos was approved, of which 237 billion Colombian pesos were paid on March 31, 2022 and the remaining amount of 250 billion of Colombian pesos (equivalent to R$315 as of March 31, 2022) were allocated to the share buyback program of Grupo Éxito. The allocation of 147 billion Colombian pesos (equivalent to R$186 as of March 31, 2022) from the expansion reserve, corresponding to 2020 profit, was also approved for the share buyback program of Grupo Éxito.
On June 1, 2022, the members of the Company's Board of Directors approved the adhesion to the Share Buyback Plan of subsidiary Éxito, for the sale of 3.4% of the shares held by the Company and its subsidiary GPA2 in Éxito, which was concluded on June 22, 2022, with the receipt of R$398 by GPA, being R$378 for the Company and R$20 for GPA2. The Company had its participation changed from 91.57% to 91.52% and GPA2 maintained its 5% share.
| 13. | Investment properties |
The information regarding Investment properties did not undergo significant changes and was disclosed in the annual financial statements for 2021, in Note 13.
Consolidated
| Balance at 12.31.2021 | Additi-ons | Depreciation | Write-off | Foreign Currency Translation adjustment | Transfers (*) | Balance at 09.30.2022 | |
| Land | 759 | - | - | (1) | (140) | (4) | 614 |
| Buildings | 2,455 | 1 | (39) | - | (275) | 10 | 2,152 |
| Construction in progress | 40 | 62 | - | - | (10) | 3 | 95 |
| Total | 3,254 | 63 | (39) | (1) | (425) | 9 | 2,861 |
(*) Transfers from fixed assets
Consolidated
| Balance at 12.31.2020 | Additi-ons | Impairment | Depreciation | Write-off | Foreign Currency Translation adjustment | Transfers | Balance at 09.30.2021 | |
| Land | 762 | 1 | - | - | - | (33) | 73 | 803 |
| Buildings | 2,859 | 88 | (4) | (43) | (2) | (105) | (208) | 2,585 |
| Construction in progress | 18 | 4 | - | - | - | (1) | (6) | 15 |
| Total | 3,639 | 93 | (4) | (43) | (2) | (139) | (141) | 3,403 |
(*) Transfers to fixed assets
| Consolidated | |||||||||||
| Balance at 09.30.2022 | Balance at 12.31.2021 | ||||||||||
| Cost | Accumulated depreciation | Net | Cost | Accumulated depreciation | Net | ||||||
| Land | 614 | - | 614 | 759 | - | 759 | |||||
| Buildings | 2,380 | (228) | 2,152 | 2,607 | (152) | 2,455 | |||||
| Construction in progress | 95 | - | 95 | 40 | - | 40 | |||||
| Total | 3,089 | (228) | 2,861 | 3,406 | (152) | 3,254 |
| 55 |
Companhia Brasileira de Distribuição Notes to the interim financial statements September 30, 2022 (In millions of Brazilian reais, unless otherwise stated) | |
| 14. | Property and equipment |
Detailed information on fixed assets was presented in the annual financial statements for 2021, in note 14.
| Parent Company | |||||||||
| Balance at 12.31.2021 | Additi-ons | Remeasu-rement | Depre-ciation | Write-offs | Transfers (*) | Incorporation (**) | Balance at 09.30.2022 | ||
| Land | 398 | - | - | - | (3) | - | 23 | 418 | |
| Buildings | 430 | 23 | - | (13) | (12) | - | 10 | 438 | |
| Leasehold improvements | 1,230 | 47 | - | (110) | (33) | 132 | 123 | 1,389 | |
| Machinery and equipment | 732 | 110 | - | (102) | (1) | 127 | 53 | 919 | |
| Facilities | 116 | 7 | - | (16) | (7) | 11 | 5 | 116 | |
| Furniture and fixtures | 300 | 43 | - | (34) | (52) | 9 | 21 | 287 | |
| Construction in progress | 101 | 376 | - | - | (10) | (378) | - | 89 | |
| Others | 24 | 7 | - | (7) | (4) | 4 | 1 | 25 | |
| Total | 3,331 | 613 | - | (282) | (122) | (95) | 236 | 3,681 | |
| Lease - right of use: | |||||||||
| Buildings | 2,736 | 182 | 332 | (312) | (103) | - | - | 2,835 | |
| 2,736 | 182 | 332 | (312) | (103) | - | - | 2,835 | ||
| Total | 6,067 | 795 | 332 | (594) | (225) | (95) | 236 | 6,516 | |
(*) R$103 were transferred to intangibles.
(**) See Note 1.2.
| Parent Company | |||||||||||
| Balance at 12.31.2020 | Additions | Remeasu-rement | Depre-ciation | Write-offs | Transfer(*) | Spin-off / Incorpo-ration | Balance at 09.30.2021 | ||||
| Land | 586 | - | - | - | (1) | (28) | - | 557 | |||
| Buildings | 743 | 5 | - | (24) | 15 | (55) | - | 684 | |||
| Leasehold improvements | 1,867 | 44 | - | (161) | (64) | 69 | 1 | 1,756 | |||
| Machinery and equipment | 925 | 60 | - | (125) | 21 | 64 | 1 | 946 | |||
| Facilities | 203 | - | - | (25) | (8) | 7 | - | 177 | |||
| Furniture and fixtures | 359 | 22 | - | (47) | - | 9 | 1 | 344 | |||
| Construction in progress | 108 | 313 | - | - | - | (288) | (11) | 122 | |||
| Others | 28 | 5 | - | (8) | - | 6 | - | 31 | |||
| Total | 4,819 | 449 | - | (390) | (37) | (216) | (8) | 4,617 | |||
| Lease - right of use: | |||||||||||
| Buildings (**) | 4,282 | 43 | 213 | (374) | (75) | 1 | - | 4,090 | |||
| 4,282 | 43 | 213 | (374) | (75) | 1 | - | 4,090 | ||||
| Total | 9,101 | 492 | 213 | (764) | (112) | (215) | (8) | 8,707 | |||
(*) Of this amount, the main effects are R$125 for transfers to held for sale, R$81 for intangibles and R$13 of capital increase with fixed assets (see Note 12.2).
(**) See Note 20.10.
| 56 |
Companhia Brasileira de Distribuição Notes to the interim financial statements September 30, 2022 (In millions of Brazilian reais, unless otherwise stated) | |
| Parent Company | |||||||||||
| Balance at 09.30.2022 | Balance at 12.31.2021 | ||||||||||
| Cost | Accumulated depreciation | Net | Cost | Accumulated depreciation | Net | ||||||
| Land | 418 | - | 418 | 398 | - | 398 | |||||
| Buildings | 811 | (373) | 438 | 788 | (358) | 430 | |||||
| Leasehold improvements | 2,928 | (1,539) | 1,389 | 2,691 | (1,461) | 1,230 | |||||
| Machinery and equipment | 2,327 | (1,408) | 919 | 2,205 | (1,473) | 732 | |||||
| Facilities | 376 | (260) | 116 | 359 | (243) | 116 | |||||
| Furniture and fixtures | 805 | (518) | 287 | 873 | (573) | 300 | |||||
| Construction in progress | 89 | - | 89 | 101 | - | 101 | |||||
| Others | 113 | (88) | 25 | 127 | (103) | 24 | |||||
| Total | 7,867 | (4,186) | 3,681 | 7,542 | (4,211) | 3,331 | |||||
| Lease - right of use: | |||||||||||
| Buildings | 5,521 | (2,686) | 2,835 | 6,020 | (3,284) | 2,736 | |||||
| Equipment | 37 | (37) | - | 37 | (37) | - | |||||
| 5,558 | (2,723) | 2,835 | 6,057 | (3,321) | 2,736 | ||||||
| Total | 13,425 | (6,909) | 6,516 | 13,599 | (7,532) | 6,067 |
| 57 |
Companhia Brasileira de Distribuição Notes to the interim financial statements September 30, 2022 (In millions of Brazilian reais, unless otherwise stated) | |
Consolidated
| Balance at 12.31.2021 | Additions | Remeasure-ment | Depreciation | Write-offs | Transfers (*) | Foreign Currency translation adjustment | Balance at 09.30.2022 | |
| Land | 3,125 | 9 | - | - | (3) | (13) | (263) | 2,855 |
| Buildings | 4,008 | 46 | - | (92) | (13) | (9) | (436) | 3,504 |
| Leasehold improvements | 1,809 | 98 | - | (150) | (35) | 132 | (27) | 1,827 |
| Machinery and equipment | 1,616 | 234 | - | (221) | (8) | 115 | (108) | 1,628 |
| Facilities | 197 | 8 | - | (25) | (8) | 12 | 3 | 187 |
| Furniture and fixtures | 614 | 111 | - | (91) | (55) | 5 | (37) | 547 |
| Construction in progress | 171 | 430 | - | - | (10) | (405) | (2) | 184 |
| Other | 33 | 8 | - | (9) | (3) | 4 | - | 33 |
| Total | 11,573 | 944 | - | (588) | (135) | (159) | (870) | 10,765 |
| Lease - right of use: | ||||||||
| Buildings | 4,728 | 334 | 486 | (560) | (165) | - | (244) | 4,579 |
| Equipment | 38 | 1 | (1) | (7) | - | - | (6) | 25 |
| Land | 5 | - | - | (1) | - | - | - | 4 |
| 4,771 | 335 | 485 | (568) | (165) | - | (250) | 4,608 | |
| Total | 16,344 | 1,279 | 485 | (1,156) | (300) | (159) | (1,120) | 15,373 |
(*) Of this amount, the main effects are R$103 transferred to intangibles and R$33 for real estate inventory - Éxito Group.
| 58 |
Companhia Brasileira de Distribuição Notes to the interim financial statements September 30, 2022 (In millions of Brazilian reais, unless otherwise stated) | |
| Consolidated | |||||||||
| Balance at 12.31.2020 | Additions | Remeasure-ment | Depreciation | Write-offs | Incorporation | Transfers (*) | Foreign Currency translation adjustment | Balance at 09.30.2021 | |
| Land | 3,540 | 2 | - | - | (1) | 1 | (100) | (96) | 3,346 |
| Buildings | 4,414 | 39 | - | (118) | 13 | - | 132 | (136) | 4,344 |
| Leasehold improvements | 2,412 | 45 | - | (204) | (70) | 4 | 132 | (7) | 2,312 |
| Machinery and equipment | 1,769 | 227 | - | (257) | 13 | 1 | 99 | (43) | 1,809 |
| Facilities | 283 | 1 | - | (34) | (8) | - | 13 | 3 | 258 |
| Furniture and fixtures | 706 | 25 | - | (111) | (4) | - | 34 | (16) | 634 |
| Construction in progress | 213 | 527 | - | - | (1) | (9) | (458) | (2) | 270 |
| Other | 34 | 10 | - | (10) | - | - | 9 | - | 43 |
| Total | 13,371 | 876 | - | (734) | (58) | (3) | (139) | (297) | 13,016 |
| Lease - right of use: | |||||||||
| Buildings | 6,465 | 84 | 348 | (636) | (95) | - | 1 | (113) | 6,054 |
| Equipment | 49 | 2 | (2) | (10) | 1 | - | - | (3) | 37 |
| Land | 3 | 1 | - | - | - | - | - | - | 4 |
| 6,517 | 87 | 346 | (646) | (94) | - | 1 | (116) | 6,095 | |
| Total | 19,888 | 963 | 346 | (1,380) | (152) | (3) | (138) | (413) | 19,911 |
(*) Of this amount, the main effects are R$125 for held for sale, R$93 for intangibles and R$(141) for investment properties.
| 59 |
Companhia Brasileira de Distribuição Notes to the interim financial statements September 30, 2022 (In millions of Brazilian reais, unless otherwise stated) | |
| Consolidated | |||||||||||
| Balance at 09.30.2022 | Balance at 12.31.2021 | ||||||||||
| Cost | Accumulated depreciation | Net | Cost | Accumulated depreciation | Net | ||||||
| Restated | |||||||||||
| Land | 2,855 | - | 2,855 | 3,125 | - | 3,125 | |||||
| Buildings | 4,341 | (837) | 3,504 | 4,751 | (743) | 4,008 | |||||
| Leasehold improvements | 3,771 | (1,944) | 1,827 | 3,749 | (1,940) | 1,809 | |||||
| Machinery and equipment | 4,091 | (2,463) | 1,628 | 4,201 | (2,585) | 1,616 | |||||
| Facilities | 569 | (382) | 187 | 554 | (357) | 197 | |||||
| Furniture and fixtures | 1,666 | (1,119) | 547 | 1,810 | (1,196) | 614 | |||||
| Construction in progress | 184 | - | 184 | 171 | - | 171 | |||||
| Other | 149 | (116) | 33 | 163 | (130) | 33 | |||||
| 17,626 | (6,861) | 10,765 | 18,524 | (6,951) | 11,573 | ||||||
| Lease - right of use: | |||||||||||
| Buildings | 8,144 | (3,565) | 4,579 | 8,774 | (4,046) | 4,728 | |||||
| Equipment | 89 | (64) | 25 | 101 | (63) | 38 | |||||
| Land | 9 | (5) | 4 | 9 | (4) | 5 | |||||
| 8,242 | (3,634) | 4,608 | 8,884 | (4,113) | 4,771 | ||||||
| Total | 25,868 | (10,495) | 15,373 | 27,408 | (11,064) | 16,344 |
14.1Additions to property and equipment for cash flow presentation purposes:
| Parent Company | Consolidated | ||||
| 09.30.2022 | 09.30.2021 | 09.30.2022 | 09.30.2021 | ||
| Additions | 795 | 492 | 1,279 | 963 | |
| Lease | (182) | (43) | (335) | (87) | |
| Capitalized borrowing costs | (25) | (6) | (25) | (6) | |
| Property and equipment financing - Additions | (523) | (356) | (940) | (757) | |
| Property and equipment financing - Payments | 598 | 357 | 974 | 621 | |
| Total | 663 | 444 | 953 | 734 |
| 14.2 | Other information |
At September 30, 2022, the Company and its subsidiaries recorded in the cost of sales the amount of R$69 in the parent company (R$ 104 at September 30, 2021) and R$152 in consolidated (R$191 at September 30, 2021) related to the depreciation of trucks, machinery, buildings and facilities related to the distribution centers.
| 14.3 | Fixed Asset Impairment Test |
The balances of fixed assets were subject to impairment tests on December 31, 2021, according to the method described in Note 14 Property, plant and equipment to the financial statements as of December 31, 2021.
The Company monitored the plan used to assess the impairment test on December 31, 2021 and there were no significant deviations that could denote indications of loss or need for a new assessment on September 30, 2022.
| 60 |
Companhia Brasileira de Distribuição Notes to the interim financial statements September 30, 2022 (In millions of Brazilian reais, unless otherwise stated) | |
| 15. | Intangible assets |
Detailed information on intangible assets was presented in the annual financial statements for 2021, in Note 15.
| Parent Company | |||||||
| Balance at 12.31.2021 | Additions | Amortization | Write-off | Transfers | Incorporation (*) | Balance at 09.30.2022 | |
| Goodwill | 502 | - | - | - | - | - | 502 |
| Commercial rights | 47 | - | (3) | - | 3 | - | 47 |
| Software and implementation | 945 | 119 | (157) | (13) | 103 | 2 | 999 |
| 1,494 | 119 | (160) | (13) | 106 | 2 | 1,548 | |
| Lease-right of use: | |||||||
| Right of use Paes Mendonça | 414 | - | (38) | - | (3) | - | 373 |
| Software | 27 | - | (3) | (10) | - | - | 14 |
| 441 | - | (41) | (10) | (3) | - | 387 | |
| Total | 1,935 | 119 | (201) | (23) | 103 | 2 | 1,935 |
(*) See Note 1.2.
| Parent Company | |||||||
| Balance at 12.31.2020 | Additions | Amortizations | Write-off | Transfers | Balance at 09.30.2021 | ||
| Goodwill | 502 | - | - | - | - | 502 | |
| Commercial rights | 47 | - | - | - | - | 47 | |
| Software and implementation | 888 | 100 | (128) | - | 82 | 942 | |
| 1,437 | 100 | (128) | - | 82 | 1,491 | ||
| Lease-right of use: | |||||||
| Right of use Paes Mendonça | 567 | - | (37) | - | - | 530 | |
| Software | 36 | - | (7) | - | (1) | 28 | |
| 603 | - | (44) | - | (1) | 558 | ||
| Total | 2,040 | 100 | (172) | - | 81 | 2,049 | |
| Parent Company | |||||||||||
| Balance at 09.30.2022 | Balance at 12.31.2021 | ||||||||||
| Cost |
Accumulated amortization | Net | Cost |
Accumulated amortization | Net | ||||||
| Goodwill | 502 | - | 502 | 502 | 502 | ||||||
| Commercial rights (note 15.2) | 47 | - | 47 | 47 | - | 47 | |||||
| Software and implementation | 1,952 | (953) | 999 | 1,743 | (798) | 945 | |||||
| 2,501 | (953) | 1,548 | 2,292 | (798) | 1,494 | ||||||
| Lease-right of use: | |||||||||||
| Right of use Paes Mendonça (*) | 546 | (173) | 373 | 546 | (132) | 414 | |||||
| Software | 119 | (105) | 14 | 169 | (142) | 27 | |||||
| 665 | (278) | 387 | 715 | (274) | 441 | ||||||
| Total | 3,166 | (1.231) | 1,935 | 3,007 | (1,072) | 1,935 |
(*) Related to leases and operations agreements of some stores. The Company has the contractual right to operate these stores until 2048.
| 61 |
Companhia Brasileira de Distribuição Notes to the interim financial statements September 30, 2022 (In millions of Brazilian reais, unless otherwise stated) | |
| Consolidated | |||||||
| Balance at 12.31.2021 | Additions | Amortization | Write-off | Foreign currency translation adjustment | Transfers | Balance at 09.30.2022 | |
| Goodwill | 729 | - | - | - | (27) | - | 702 |
| Tradename | 3,385 | - | - | - | (459) | - | 2,926 |
| Comercial rights | 51 | - | (3) | - | (1) | 3 | 50 |
| Contractual rights | 3 | - | (1) | - | 1 | - | 3 |
| Software | 1,144 | 164 | (197) | (13) | (19) | 103 | 1,182 |
| 5,312 | 164 | (201) | (13) | (505) | 106 | 4,863 | |
| Lease-right of use: | |||||||
| Right of use Paes Mendonça | 413 | - | (37) | - | (1) | (3) | 372 |
| Software | 28 | - | (3) | (10) | - | - | 15 |
| 441 | - | (40) | (10) | (1) | (3) | 387 | |
| Total | 5,753 | 164 | (241) | (23) | (506) | 103 | 5,250 |
| Consolidated | |||||||
Balance at 31.12.2020 | Additions | Amortization | Foreign currency translation adjustment | Transfe | Balance 09.30.2021 | ||
| Goodwill | 750 | - | - | (14) | - | 736 | |
| Tradename | 3,731 | - | - | (201) | - | 3,530 | |
| Commercial rights | 47 | - | - | - | - | 47 | |
| Contractual rights | 3 | - | - | - | - | 3 | |
| Software | 1,030 | 176 | (154) | (7) | 93 | 1,138 | |
| 5,561 | 176 | (154) | (222) | 93 | 5,454 | ||
| Lease-right of use: | |||||||
| Right of use Paes Mendonça | 567 | - | (37) | - | - | 530 | |
| Software | 36 | - | (7) | - | - | 29 | |
| 603 | - | (44) | - | - | 559 | ||
| Total | 6,164 | 176 | (198) | (222) | 93 | 6,013 |
| 62 |
Companhia Brasileira de Distribuição Notes to the interim financial statements September 30, 2022 (In millions of Brazilian reais, unless otherwise stated) | |
| Consolidated | |||||||||||
| Balance at 09.30.2022 | Balance at 12.31.2021 | ||||||||||
| Cost |
Accumulated amortization | Net | Cost |
Accumulated amortization | Net | ||||||
| Goodwill | 702 | - | 702 | 729 | - | 729 | |||||
| Tradename | 2,926 | - | 2,926 | 3,385 | - | 3,385 | |||||
| Commercial rights (note 15.2) | 50 | - | 50 | 54 | (3) | 51 | |||||
| Contractual rights | 7 | (4) | 3 | 6 | (3) | 3 | |||||
| Software | 2,359 | (1,177) | 1,182 | 2,165 | (1,021) | 1,144 | |||||
| 6,044 | (1,181) | 4,863 | 6,339 | (1,027) | 5,312 | ||||||
| Lease-right of use: | |||||||||||
| Right of use Paes Mendonça (*) | 545 | (173) | 372 | 543 | (130) | 413 | |||||
| Software | 120 | (105) | 15 | 170 | (142) | 28 | |||||
| 665 | (278) | 387 | 713 | (272) | 441 | ||||||
| Total intangibles | 6,709 | (1,459) | 5,250 | 7,052 | (1,299) | 5,753 |
(*) Linked to lease and operating contracts for certain stores. The Company has the contractual right to operate these stores until 2048.
| 15.1 | Impairment test of intangibles of indefinite useful life, including goodwill |
Goodwill and intangible assets were tested for impairment on December 31, 2021, according to the method described in Note 14, Property, plant and equipment to the financial statements as of December 31, 2021.
The Company monitored the plan used to assess the impairment test on December 31, 2021 and there were no significant deviations that could denote indications of loss or need for a new assessment on September 30, 2022.
| 15.2 | Additions to intangible assets for cash flow presentation purposes: |
| Parent Company | Consolidated | ||||
| 09.30.2022 | 09.30.2021 | 09.30.2022 | 09.30.2021 | ||
| Additions | 119 | 100 | 164 | 176 | |
| Lease | (1) | - | (1) | - | |
| Total | 118 | 100 | 163 | 176 |
| 63 |
Companhia Brasileira de Distribuição Notes to the interim financial statements September 30, 2022 (In millions of Brazilian reais, unless otherwise stated) | |
| 16. | Borrowings and financing |
| 16.1. | Debt breakdown |
| Parent Company | Consolidated | ||||||||
| Weighted average rate | 09.30.2022 | 12.31.2021 | 09.30.2022 | 12.31.2021 | |||||
| Debentures and promissory note | |||||||||
| Debentures Certificate of agribusiness receivables and promissory notes (note 16.4) | CDI + 1.71% per year | 2,717 | 4,613 | 2,717 | 4,613 | ||||
| 2,717 | 4,613 | 2,717 | 4,613 | ||||||
| Borrowings and financing | |||||||||
| Local currency | |||||||||
| Working capital | CDI+1.88% per year | 2,814 | 2,738 | 2,814 | 2,737 | ||||
| Working capital | TR + 9.80% per year | 10 | 11 | 10 | 11 | ||||
| Swap contracts (note 16.7) | CDI-0.12% per year | - | (1) | - | (1) | ||||
| Unamortized borrowing costs | (8) | (11) | (8) | (11) | |||||
| 2,816 | 2,737 | 2,816 | 2,736 | ||||||
| Foreign currency (note 16.5) | |||||||||
| Working capital | USD + 2.12% per year | 416 | 448 | 416 | 448 | ||||
| Working capital | IBR 1M + 1.45% | - | - | 238 | 276 | ||||
| Working capital | IBR 3M + 1.6% | - | - | 1,553 | 959 | ||||
| Credit letter | - | - | 56 | 12 | |||||
| Swap contracts (note 16.7) | CDI + 1.70% per year | 62 | 7 | 62 | 7 | ||||
| Swap contracts (note 16.7) | IBR 3M + 1.6% | - | - | (18) | - | ||||
| 478 | 455 | 2,307 | 1,702 | ||||||
| Total | 6,011 | 7,805 | 7,840 | 9,051 | |||||
| Current assets | - | - | 15 | - | |||||
| Noncurrent assets | - | 1 | 3 | 1 | |||||
| Current liabilities | 1,102 | 1,243 | 2,239 | 1,470 | |||||
| Noncurrent liabilities | 4,909 | 6,563 | 5,619 | 7,582 |
| 64 |
Companhia Brasileira de Distribuição Notes to the interim financial statements September 30, 2022 (In millions of Brazilian reais, unless otherwise stated) | |
| 16.2. | Changes in borrowings |
| Parent Company | Consolidated | ||
| At December 31, 2021 | 7,805 | 9,051 | |
| Additions | - | 1,064 | |
| Accrued interest | 636 | 728 | |
| Accrued swap | 53 | 46 | |
| Mark-to-market | 2 | (2) | |
| Monetary and exchange rate changes | (14) | (14) | |
| Borrowing cost | 11 | 11 | |
| Interest paid | (393) | (462) | |
| Payments | (2,069) | (2,320) | |
| Swap paid | (20) | (28) | |
| Foreign currency translation adjustment | - | (234) | |
| At September 30, 2022 | 6,011 | 7,840 | |
| Parent Company | Consolidated | ||
| At December 31, 2020 | 7,568 | 9,140 | |
| Additions | 2,883 | 4,160 | |
| Accrued interest | 260 | 317 | |
| Accrued swap | (6) | (6) | |
| Mark-to-market | 1 | 14 | |
| Monetary and exchange rate changes | 13 | 13 | |
| Borrowing cost | 10 | 10 | |
| Interest paid | (280) | (340) | |
| Payments | (2,351) | (3,365) | |
| Swap paid | (2) | (16) | |
| Foreign currency translation adjustment | - | (102) | |
| At September 30, 2021 | 8,096 | 9,825 |
| 16.3. | Maturity schedule of noncurrent borrowings and financing |
| Year | Parent Company | Consolidated | |
| From 1 to 2 years | 1,495 | 1,892 | |
| From 2 to 3 years | 1,675 | 1,835 | |
| From 3 to 4 years | 1,229 | 1,303 | |
| From 4 to 5 years | 261 | 305 | |
| After 5 years | 261 | 293 | |
| Subtotal | 4,921 | 5,628 | |
| Unamortized borrowing costs | (12) | (12) | |
| Total | 4,909 | 5,616 |
| 65 |
Companhia Brasileira de Distribuição Notes to the interim financial statements September 30, 2022 (In millions of Brazilian reais, unless otherwise stated) | |
| 16.4. | Debentures and Promissory Note. |
| Date | Parent Company | Consolidated | |||||||||
| Type | Issue Amount | Outstanding debentures (units) | Issue | Maturity | Financial charges | Unit price (in reais) | 09.30.2022 | 12.31.2021 | 09.30.2022 | 12.31.2021 | |
| 17th Issue of Debentures - CDB | No preference | 2,000 | - | 01/06/20 | 01/06/23 | CDI + 1.45% per year | - | - | 2,075 | - | 2,075 |
| 18th Issue of Promissory Notes - CBD (1nd serie) (*) | No preference | 980 | 980,000 | 05/14/21 | 05/10/26 | CDI + 1.70% per year | 1,058 | 1,037 | 994 | 1,037 | 994 |
| 18th Issue of Promissory Notes - CBD (2nd serie) (*) | No preference | 520 | 520,000 | 05/14/21 | 05/10/28 | CDI + 1.95% per year | 1,059 | 552 | 527 | 552 | 527 |
| 5th Issue of Promissory Notes - CBD (1nd serie) | No preference | 500 | 500 | 07/30/21 | 07/30/25 | CDI + 1.55% per year | 1,138,866 | 569 | 517 | 569 | 517 |
| 5th Issue of Promissory Notes - CBD (2nd serie) | No preference | 500 | 500 | 07/30/21 | 07/30/26 | CDI + 1.65% per year | 1,140,179 | 570 | 517 | 570 | 517 |
| Borrowing cost | (11) | (17) | (11) | (17) | |||||||
| 2,717 | 4,613 | 2,717 | 4,613 | ||||||||
| Current liabilities | 85 | 1,089 | 85 | 1,089 | |||||||
| Noncurrent liabilities | 2,632 | 3,524 | 2,632 | 3,524 |
(*) Each series of the 18th issue matures in two installments, with the 1st series maturing on 05/10/25 and 05/10/26 and the 2nd series on 05/10/27 and 05/10/28.
The 17th issue of debentures was settled in advance on September 16, 2022 with part of the proceeds from the sale of stores (note 1.1), as authorized in the respective indenture.
| 66 |
Companhia Brasileira de Distribuição Notes to the interim financial statements September 30, 2022 (In millions of Brazilian reais, unless otherwise stated) | |
| 16.5. | Borrowings in foreign currencies |
On September 30, 2022 GPA had loans in foreign currencies to strengthen its working capital, maintain its cash strategy, lengthening its debt profile and make investments.
| 16.6. | Guarantees |
The Company has signed promissory notes for some loan contracts.
| 16.7. | Swap contracts |
The Company use swap transactions for 100% of its borrowings denominated in US dollars and fixed interest rates, exchanging these obligations for Real linked to CDI (floating) interest rates. These contracts include a total amount of the debt with the objective to protect the interest and principal and are signed, generally, with the same due dates and in the same economic group. The weighted average annual rate in September 2022 was 10.93% (3.01% as of September 30, 2021).
| 16.8. | Financial covenants |
In connection with the debentures and promissory notes and for a portion of borrowings denominated in foreign currencies and working capital, the Company is required to maintain certain debt financial covenants. These ratios are quarterly calculated based on consolidated financial statements of the Company prepared in accordance with accounting practices adopted in Brazil, as follows: (i) net debt (debt minus cash and cash equivalents and trade accounts receivable) should not exceed the amount of equity and (ii) consolidated net debt/EBITDA ratio should be lower than or equal to 3.25. At September 30, 2022, GPA complied with these ratios.
| 67 |
Companhia Brasileira de Distribuição Notes to the interim financial statements September 30, 2022 (In millions of Brazilian reais, unless otherwise stated) | |
| 17. | Financial instruments |
Detailed information on financial instruments was presented in the annual financial statements for 2021, in Note 18.
The main financial instruments and their carrying amounts in the interim financial information, by category, are as follows:
| Parent Company | Consolidated | ||||
| Carrying amount | Carrying amount | ||||
| 09.30.2022 | 12.31.2021 | 09.30.2022 | 12.31.2021 | ||
| Financial assets: | |||||
| Amortized cost | |||||
| Cash and cash equivalents | 2,382 | 4,662 | 3,860 | 8,274 | |
| Related parties - assets | 1,682 | 692 | 1,524 | 517 | |
| Trade receivables and other receivables | 1,271 | 822 | 1,899 | 1,589 | |
| Others assets | - | - | - | 9 | |
| Fair value through profit or loss | |||||
| Financial instruments - Fair value hedge | - | 1 | 18 | 1 | |
| Financial instruments about lease - Fair value hedge | - | - | - | 9 | |
| Suppliers financial instruments - Fair value hedge | - | - | 43 | 15 | |
| Others assets | - | - | - | 2 | |
| Fair value through other comprehensive income | |||||
| Trade receibles credit card companies and sales vouchers | 74 | 97 | 74 | 95 | |
| Others assets | - | - | - | 28 | |
| Financial liabilities: | |||||
| Other financial liabilities - amortized cost | |||||
| Related parties - liabilities | (442) | (484) | (389) | (467) | |
| Trade payables | (2,132) | (3,651) | (6,677) | (10,078) | |
| Financing for purchase of assets | (82) | (84) | (263) | (250) | |
| Debentures and promissory notes | (2,717) | (4,613) | (2,717) | (4,613) | |
| Borrowings and financing | (2,806) | (2,727) | (4,653) | (3,973) | |
| Lease | (3,907) | (3,881) | (5,867) | (6,118) | |
| Fair value through profit or loss | |||||
| Borrowings and financing (Hedge accounting underlyng) | (426) | (459) | (426) | (459) | |
| Financial instruments - Fair Value Hedge - liabilities side | (62) | (7) | (62) | (7) | |
| Suppliers financial instruments - Fair value hedge - liabilities side | - | - | - | (1) | |
| Disco Group put option (*) | - | - | (732) | (701) |
(*) See note 17.3.
The fair value of other financial instruments detailed in table above approximates the carrying amount based on the existing terms and conditions. The financial instruments measured at amortized cost, the related fair values of which differ from the carrying amounts, are disclosed in note 17.3.
| 68 |
Companhia Brasileira de Distribuição Notes to the interim financial statements September 30, 2022 (In millions of Brazilian reais, unless otherwise stated) | |
| 17.1 | Considerations on risk factors that may affect the business of the Group |
| (i) | Capital risk management |
The main objective of the Company's capital management is to ensure if the Company sustains its credit rating and a well-defined equity ratio, in order to support businesses and maximize shareholder value. The Company manages the capital structure and makes adjustments taking into account changes in the economic conditions.
There were no changes to the objectives, policies or processes during the semester ended September 30, 2022.
The Group capital structure is as follows:
| Parent company | Consolidated | |||||
| 09.30.2022 | 12.31.2021 | 09.30.2022 | 12.31.2021 | |||
| Cash and cash equivalents | 2,382 | 4,662 | 3,860 | 8,274 | ||
| Financial instruments - Fair value hedge | (62) | (6) | (1) | 17 | ||
| Borrowings and financing | (5,949) | (7,799) | (7,796) | (9,045) | ||
| Other liabilities with related parties (*) | (65) | (145) | (65) | (145) | ||
| Net financial debt | (3,694) | (3,288) | (4,002) | (899) | ||
| Shareholders' equity | (13,539) | (13,649) | (15,910) | (16,380) | ||
| Net debt to equity ratio | 27% | 24% | 25% | 5% |
(*) Represents amount payable to Greenyellow related to the equipments purchase.
| (ii) | Liquidity risk management |
The Company manages liquidity risk through the daily analysis of cash flows and control of maturities of financial assets and liabilities.
The table below summarizes the aging profile of the Company's financial liabilities as of September 30, 2022.
| a) | Parent company |
| Up to 1 Year | 1 - 5 years | More than 5 years | Total | |
| Borrowings and financing | 1,483 | 6,401 | 295 | 8,179 |
| Lease liabilities | 891 | 2,882 | 2,917 | 6,690 |
| Trade payables | 2,132 | - | - | 2,132 |
| Total | 4,506 | 9,283 | 3,212 | 17,001 |
| b) | Consolidated |
| Up to 1 Year | 1 - 5 years | More than 5 years | Total | |
| Borrowings and financing | 2,593 | 7,255 | 365 | 10,213 |
| Lease liabilities | 1,268 | 4,016 | 3,821 | 9,105 |
| Trade payables | 6,677 | - | - | 6,677 |
| Total | 10,538 | 11,271 | 4,186 | 25,995 |
| 69 |
Companhia Brasileira de Distribuição Notes to the interim financial statements September 30, 2022 (In millions of Brazilian reais, unless otherwise stated) | |
| (iii) | Derivative financial instruments |
| Consolidated | |||||
| Notional value | Fair value | ||||
| 09.30.2022 | 12.31.2021 | 09.30.2022 | 12.31.2021 | ||
| Fair value hedge | |||||
| Hedge object (debt) | 469 | 469 | 426 | 459 | |
| Long position (buy) | |||||
| Prefixed rate | TR + 9.80% per year | 22 | 22 | 10 | 11 |
| US$ + fixed | USD + 2.12 % per year | 447 | 447 | 416 | 448 |
| 469 | 469 | 426 | 459 | ||
| Short position (sell) | |||||
| CDI + 1.67% per year | (469) | (469) | (488) | (465) | |
| Hedge position - asset | - | - | - | 1 | |
| Hedge position - liability | - | - | (62) | (7) | |
| Net hedge position | - | - | (62) | (6) |
Gains and losses on these contracts during the period ended September 30, 2022 are recorded as financial expenses, net and the balance payable at fair value is R$62 (receivable from R$6 as of December 31, 2021), the asset is recorded in line item "Derivative financial instrument - fair value hedge" and the liability in "Borrowings and financing".
| 17.2 | Sensitivity analysis of financial instruments |
According to the Management's assessment, the most probable scenario is what the market has been estimating through market curves (currency and interest rates) of B3.
Therefore, in the probable scenario (I), there is no impact on the fair value of financial instruments. For scenarios (II) and (III), for the sensitivity analysis effect, Management considers an increase of 10% and a decrease of 10%, respectively, on risk variables, up to one year of the financial instruments.
For the probable scenario, weighted exchange rate was R$5.66 on the due date, and the weighted interest rate weighted was 13.53% per year.
In case of derivative financial instruments (aiming at hedging the financial debt), changes in scenarios are accompanied by respective hedges, indicating effects are not significant.
The Company disclosed the net exposure of the derivatives financial instruments, corresponding to financial instruments and certain financial instruments in the sensitivity analysis table below, to each of the scenarios mentioned.
| 70 |
Companhia Brasileira de Distribuição Notes to the interim financial statements September 30, 2022 (In millions of Brazilian reais, unless otherwise stated) | |
| (i) | Other financial instruments |
| Market projection | ||||||||||
| Transactions | Risk (CDI variation) | Balance at 09.30.2022 | Scenario I | Scenario II | Scenario III | |||||
| Fair value hedge (fixed rate) | CDI - 0.12% per year | (10) | (1) | (1) | (1) | |||||
| Fair value hedge (exchange rate) | CDI + 1.70% per year | (478) | (67) | (72) | (61) | |||||
| Debentures and promissories notes | CDI + 1.71% per year | (2,728) | (400) | (434) | (365) | |||||
| Bank loans | CDI + 1.88% per year | (2,814) | (307) | (333) | (280) | |||||
| Total borrowings and financing exposure | (6,030) | (775) | (840) | (707) | ||||||
| Cash and cash equivalents (*) | 102.81% of CDI | 2,338 | 325 | 358 | 293 | |||||
| Receivable - Assaí (**) | CDI + 1.20% per year | 1,184 | 51 | 55 | 46 | |||||
| Net exposure | (2,508) | (399) | (427) | (368) |
(*) Weighted average
(**) Receivable from the sale of 66 Commercial Rights (See Note 1.1)
The Éxito Group's sensitivity test considers the economic environment in which the company operates. In scenario I, the observable rates are used. In scenario II it is considered on increase of 10% and in scenario III it is a decrease of 10%.
Scenario I: Reference Bank Index in Colombia (IBR) available on the closing date of 10.165%.
Scenario II: 1.0165% increase in IBR.
Scenario III: 1.0165% decrease in IBR.
| Maket projection | ||||||||
| Transactions | Balance 09.30.2022 | Scenario I | Scenario II | Scenario III | ||||
| Bank loans and swap | (1,786) | 1 | (167) | (3) |
| 71 |
Companhia Brasileira de Distribuição Notes to the interim financial statements September 30, 2022 (In millions of Brazilian reais, unless otherwise stated) | |
| 17.3 | Fair value measurements |
The Company discloses the fair value of financial instruments measured at fair value and of financial instruments measured at amortized cost, the fair value of which differ from the carrying amount, in accordance with CPC 46 ("IFRS13"), which refer to the requirements of measurement and disclosure.
The fair values of cash and cash equivalents, trade receivables and trade payables are equivalent to their carrying amounts.
The table below presents the fair value hierarchy of financial assets and liabilities measured at fair value and of financial instruments measured at amortized cost, the fair value of which is disclosed in the interim financial information:
| Consolidated | |||
| Carrying amount | Fair value | ||
| 09.30.2022 | 09.30.2022 | Level | |
| Financial assets and liabilities | |||
| Trade receibles with credit card companies and sales vouchers | 74 | 74 | 2 |
| Swaps of annual rate between currencies | (62) | (62) | 2 |
| Swaps of annual rate | 18 | 18 | 2 |
| Forward between Currencies | 43 | 43 | 2 |
| Borrowings and financing (FVPL) | (426) | (426) | 2 |
| Borrowings and financing and debentures (amortized cost) | (7,370) | (7,268) | 2 |
| Disco Group put option (*) | (732) | (732) | 3 |
| Total | (8,455) | (8,353) |
(*) Non-controlling shareholders of Group Disco del Uruguay S.A. Éxito Group's subsidiary have a exercisable put option based on a formula that uses data such as net income, EBITDA - earnings before interest, taxes, depreciation and amortization and net debt, in addition to fixed amounts determined in the contract and the exchange variation applicable for conversion to the functional currency. This put option was presented under "Acquisition of minority interest" in current liabilities.
There were no changes between the fair value measurements levels in the period ended September 30, 2022.
Cross-currency and interest rate swaps and borrowings and financing are classified in level 2 since the fair value of such financial instruments was determined based on readily observable market inputs, such as expected interest rate and current and future foreign exchange rate.
| 72 |
Companhia Brasileira de Distribuição Notes to the interim financial statements September 30, 2022 (In millions of Brazilian reais, unless otherwise stated) | |
| 17.4 | Consolidated position of derivative transactions |
The Company and its subsidiaries have derivative contracts with the following financial institutions: Itaú BBA, Conficolombiana, BBVA, Davivenda, Bancolombia, Santander and Banco Popular..
The consolidated position of outstanding derivative financial instruments are presented in the table below:
| Consolidated | ||||
| Risk | Reference value | Due date | 09.30.2022 | 12.31.2021 |
| Debt | ||||
| USD - BRL | US$ 50 | 2023 | (38) | (7) |
| USD - BRL | US$ 30 | 2024 | (24) | - |
| Interest rate - BRL | R$ 21 | 2026 | - | 1 |
| Derivatives - Fair value hedge - Brazil | (62) | (6) | ||
Debt Interest rate - COP | COP 102,708 | 2022 | - | 1 |
| Interest rate - COP | COP 172,729 | 2024 | 5 | - |
| Interest rate - COP | COP 200,000 | 2023 | 13 | 7 |
| 18 | 8 | |||
| Trade payables | ||||
| USD - COP | USD 105 | 2022 | - | 15 |
| USD - COP | USD 64 | 2022 | 33 | - |
| USD - COP | USD 54 | 2023 | 10 | - |
| 43 | 15 | |||
| Derivatives - Éxito Group | 61 | 23 |
The hedge effects at fair value for the better result of the period ending on September 30, 2022 will result in a loss of R$10 (gain of R$74 on September 30, 2021).
| 73 |
Companhia Brasileira de Distribuição Notes to the interim financial statements September 30, 2022 (In millions of Brazilian reais, unless otherwise stated) | |
| 18. | Taxes and contributions payable and taxes payable in installments |
Detailed information on taxes and social contributions payable and taxes in installments was presented in the annual financial statements for 2021, in note 19.
| 18.1. | Taxes and contributions payable and taxes payable in installments are as follows: |
| Parent Company | Consolidated | |||||
| 09.30.2022 | 12.31.2021 | 09.30.2022 | 12.31.2021 | |||
| Taxes payable in installments - Law 11,941/09(ii) | 125 | 171 | 129 | 177 | ||
| Taxes payable in installments - PERT (i) | 111 | 115 | 111 | 115 | ||
| ICMS | 104 | 78 | 106 | 82 | ||
| PIS and COFINS | 3 | 5 | 9 | 9 | ||
| Provision for income tax and social contribution | 18 | - | 19 | 17 | ||
| Withholding Income Taxo n third parties | 2 | 4 | 3 | 4 | ||
| INSS | 5 | 6 | 5 | 6 | ||
| Other | 14 | 47 | 13 | 47 | ||
| Taxes payable - Éxito Group | - | - | 201 | 276 | ||
| 382 | 426 | 596 | 733 | |||
| Current | 303 | 278 | 514 | 580 | ||
| Noncurrent | 79 | 148 | 82 | 153 | ||
| 18.2 | Maturity schedule of taxes payable in installments in noncurrent liabilities: |
| Consolidated | |
| From 1 to 2 years | 22 |
| From 2 to 3 years | 33 |
| From 3 to 4 years | 12 |
| From 4 to 5 years | 15 |
| 82 |
| 74 |
Companhia Brasileira de Distribuição Notes to the interim financial statements September 30, 2022 (In millions of Brazilian reais, unless otherwise stated) | |
| 19. | Income tax and social contribution |
Detailed information on income tax and social contribution was presented in the annual financial statements for 2021, in note 20.
19.1Income tax and social contribution effective rate reconciliation
| Parent Company | Consolidated | ||||
| 09.30.2022 | 09.30.2021 | 09.30.2022 | 09.30.2021 | ||
| Restated | Restated | ||||
| Income (loss) before income tax and social contribution (continued operations) | (724) | (191) | (456) | 18 | |
| Credit (expenses) of IR and CSLL (*) | 181 | 48 | 74 | (22) | |
| Tax penalties | (10) | (9) | (12) | (11) | |
| Share of profit of associates | (8) | 18 | (52) | (8) | |
| Interest on own capital | 24 | 114 | 24 | 114 | |
| Tax benefits | 11 | - | 37 | 12 | |
| Tax credits | 20 | 117 | 14 | 117 | |
| Subsidy for investments (**) | 89 | - | 89 | - | |
| Tax on results earned abroad (***) | (49) | - | (50) | - | |
| Other permanent differences | 9 | (4) | 2 | (34) | |
| Effective income tax and social contribution expensive | 267 | 284 | 126 | 168 | |
| Income tax and social contribution expense for the period: | |||||
| Current | (211) | (20) | (326) | (89) | |
| Deferred | 478 | 304 | 452 | 257 | |
| Credit income tax and social contribution expense | 267 | 284 | 126 | 168 | |
| Effective rate | 36.88% | 148.69% | 27.63 | -933.33% |
(*) The nominal rate is 34% for subsidiaries based in Brazil, 35% (31% - 2021) for those based in Colombia, 25% for those based in Uruguay and 30% for those based in Argentina. The Company does not pay social contribution based on a lawsuit that was final and favorable in the past, therefore the rate is 25%.
(**) Certain Company operations benefit from state tax incentives which, pursuant to article 30 of Law No. 12,973/14 and Complementary Law No. 160/17, are characterized as investment subsidies.
(***) Amounts related to taxes calculated on subsidiaries abroad, related to entities in Exito.
| 75 |
Companhia Brasileira de Distribuição Notes to the interim financial statements September 30, 2022 (In millions of Brazilian reais, unless otherwise stated) | |
| 19.2 | Breakdown of deferred income tax and social contribution |
| Parent Company | |||||||
| 09.30.2022 | 12.31.2021 | ||||||
| Asset | Liability | Net | Asset | Liability | Net | ||
| Tax losses | 849 | - | 849 | 751 | - | 751 | |
| Provision for contingencies | 410 | - | 410 | 355 | - | 355 | |
| Goodwill tax amortization | - | (280) | (280) | - | (280) | (280) | |
| Mark-to-market adjustment | - | (4) | (4) | - | (7) | (7) | |
Fixed, intangible and investment properties | - | (230) | (230) | - | (215) | (215) | |
| Unrealized gains with tax credits | - | (291) | (291) | - | (341) | (341) | |
| Net leasing of the right of use | 203 | - | 203 | 211 | - | 211 | |
| Other | 3 | (44) | (41) | 76 | - | 76 | |
| Deferred income tax and social contribution assets (liabilities) | 1,465 | (849) | 616 | 1,393 | (843) | 550 | |
| Compensation | (849) | 849 | - | (843) | 843 | - | |
| Deferred income tax and social contribution assets (liabilities), net | 616 | - | 616 | 550 | - | 550 |
| Consolidated | |||||||
| 09.30.2022 | 12.31.2021 | ||||||
| Asset | Liability | Net | Asset | Liability | Net | ||
| Tax losses and negative basis of social contribution | 1,188 | - | 1,188 | 1,145 | - | 1,145 | |
| Provision for contingencies | 446 | - | 446 | 397 | - | 397 | |
| Goodwill tax amortization | - | (450) | (450) | - | (481) | (481) | |
| Mark-to-market adjustment | - | (4) | (4) | - | (7) | (7) | |
| Fixed intangible and investment properties | - | (1,509) | (1,509) | - | (1,710) | (1,710) | |
| Unrealized gains with tax credits | - | (211) | (211) | - | (239) | (239) | |
| Net leasing of the right of use | 270 | - | 270 | 285 | - | 285 | |
| Cash flow hedge | - | (21) | (21) | - | (7) | (7) | |
| Other | 6 | - | 6 | 96 | - | 96 | |
| Presumed profit on equity of Éxito | 87 | - | 87 | 167 | - | 167 | |
| Deferred income tax and social contribution assets (liabilities) | 1,997 | (2,195) | (198) | 2,090 | (2,444) | (354) | |
| Compensation | (1,350) | 1,350 | - | (1,509) | 1,509 | - | |
| Deferred income tax and social contribution assets (liabilities), net | 647 | (845) | (198) | 581 | (935) | (354) |
The Company estimates to recover these deferred tax assets as follows:
| Parent Company | Consolidated | |
| Up to one year | 132 | 172 |
| From 1 to 2 years | 125 | 200 |
| From 2 to 3 years | 124 | 162 |
| From 3 to 4 years | 125 | 237 |
| From 4 to 5 years | 121 | 328 |
| Above 5 years | 838 | 898 |
| 1,465 | 1,997 |
| 76 |
Companhia Brasileira de Distribuição Notes to the interim financial statements September 30, 2022 (In millions of Brazilian reais, unless otherwise stated) | |
| 19.3 | Movement in deferred income tax and social contribution |
| Parent Company | Consolidated | ||||
| 09.30.2022 | 09.30.2021 | 09.30.2022 | 09.30.2021 | ||
| Restated | Restated | ||||
| Opening balance | 550 | (213) | (354) | (1,034) | |
| Credit (expense) for the period - Continued operations | 478 | 304 | 452 | 257 | |
| Credit (expense) for the period - Discontinued operations | (415) | 126 | (415) | 126 | |
| Foreigh currency translation adjustment | - | 120 | 7 | ||
| Others | 3 | 3 | (1) | (2) | |
| At the end of the period | 616 | 220 | (198) | (646) |
| 20. | Provision for contingencies |
The detailed information on the provision for lawsuits was presented in the annual financial statements for 2021, in Note 21.
The provision for risks is estimated by the Company's management, supported by its legal counsel. The provision was recognized in an amount considered sufficient to cover probable losses.
| 20.1 | Parent Company |
| Tax | Social security and labor | Civil and Regulatory | Total | |
| Balance at December 31, 2021 | 779 | 336 | 200 | 1,315 |
| Additions | 133 | 272 | 55 | 460 |
| Payments | (3) | (126) | (68) | (197) |
| Reversals | (39) | (83) | (12) | (134) |
| Monetary adjustment | 41 | 35 | 30 | 106 |
| Incorporation (Note 1.2) | 1 | 4 | - | 5 |
| Balance at September 30, 2022 | 912 | 438 | 205 | 1,555 |
| Tax | Social security and labor | Civil and Regulatory | Total | |
| Balance at December 31, 2020 | 849 | 280 | 104 | 1,233 |
| Additions | 48 | 133 | 115 | 296 |
| Payments | (11) | (53) | (14) | (78) |
| Reversals | (89) | (56) | (37) | (182) |
| Monetary adjustment | 15 | 27 | 23 | 65 |
| Balance at September 30, 2021 | 812 | 331 | 191 | 1,334 |
| 77 |
Companhia Brasileira de Distribuição Notes to the interim financial statements September 30, 2022 (In millions of Brazilian reais, unless otherwise stated) | |
| 20.2 | Consolidated |
| Tax | Social security and labor | Civil and Regulatory | Total | |
| Balance at December 31, 2021 | 845 | 361 | 236 | 1,442 |
| Additions | 137 | 278 | 66 | 481 |
| Payments | (3) | (128) | (82) | (213) |
| Reversals | (39) | (85) | (15) | (139) |
| Monetary adjustment | 41 | 36 | 30 | 107 |
| Foreign currency translation adjustment | (9) | (2) | (4) | (15) |
| Balance at September 30, 2022 | 972 | 460 | 231 | 1,663 |
| Tax | Social security and labor | Civil and Regulatory | Total | |
| Balance at December 31, 2020 | 937 | 303 | 145 | 1,385 |
| Additions | 50 | 148 | 131 | 329 |
| Payments | (11) | (64) | (37) | (112) |
| Reversals | (106) | (59) | (39) | (204) |
| Monetary adjustment | 15 | 28 | 22 | 65 |
| Foreign currency translation adjustment | (5) | (1) | (2) | (8) |
| Balance at September 30, 2021 | 880 | 355 | 220 | 1,455 |
| 20.3 | Tax |
As per prevailing legislation, tax claims are subject to monetary indexation, which refers to an adjustment to the provision for tax risks according to the indexation rates used by each tax jurisdiction. In all cases, both the interest charges and fines, when applicable, were computed and fully provisioned with respect to unpaid amounts.
The main provisioned tax claims are as follows:
ICMS
There are assessments by the tax authorities of the State of São Paulo in relation to the reimbursement of tax substitution without due fulfillment of the accessory obligations brought by Ordinance CAT nº17. Considering the proceedings that took place in 2022, the Company maintains a provision of R$320 (R$292 as of December 31, 2021), which represents management's best estimate of the probable effect of loss, related to the evidentiary aspect of the process.
| 78 |
Companhia Brasileira de Distribuição Notes to the interim financial statements September 30, 2022 (In millions of Brazilian reais, unless otherwise stated) | |
Supplementary Law 110/2001
The Company claims in court the eligibility to not pay the contributions provided for by Supplementary Law 110/01, referring to the FGTS (Government Severance Indemnity Fund for Employees) costs. The accrued amount as of September 30, 2022 is R$50 (R$51 in December 31, 2021).
Other tax matters
Other tax claims remained, which, according to the analysis of its legal advisors, were provisioned by the Company. These refer to: (i) challenge on the non-application of the Accident Prevention Factor - FAP; (ii) undue credit; (iii) no social charges on benefits granted to its employees, due to an unfavorable decision in the Court; (iv) IPI requirement on resale of imported products; (v) discussions related to IPTU; (vi) non-approved compensation; (vii) other minor issues. The amount accrued for these matters as of September 30, 2022 is R$543 (R$437 as of December 31, 2021).
Sendas compensation liability
The Company is responsible for Sendas Distribuidora's legal proceedings prior to Assai's activity. As of September 30, 2022 in the total amount of R$25, with tax proceedings being R$3, Labor R$13 and Civil R$9 (R$96, being R$69 for tax proceedings, R$14 for labor and R$13 for civil proceedings on December 31, 2021).
Éxito Group
The subsidiary Éxito and its subsidiaries discuss tax issues related to value added tax, property tax and industry and commerce taxes in the amount of R$59 on September 30, 2022 (R$65 as of December 31, 2021).
| 20.4 | Labor and social security taxes |
The Company and its subsidiaries are parties to various labor lawsuits mainly due to termination of employees in the ordinary course of business. At September 30, 2022, the Company recorded a provision of R$460 (R$361 as of December 31, 2021). Management, with the assistance of its legal counsel, assessed these claims and recorded a provision for losses when reasonably estimable, based on past experiences in relation to the amounts claimed.
| 79 |
Companhia Brasileira de Distribuição Notes to the interim financial statements September 30, 2022 (In millions of Brazilian reais, unless otherwise stated) | |
| 20.5 | Civil and others |
The Company and its subsidiaries are parties to civil lawsuits at several court levels (indemnities and collections, among others) and at different courts. The Company's management records provisions in amounts considered sufficient to cover unfavorable court decisions, when its legal internal and external counsel considers the loss as probable.
Among these lawsuits, we point out the following:
| · | The Company and its subsidiaries are parties to various lawsuits requesting the renewal of rental agreements and the review of the current rent paid. The Company recognizes a provision for the difference between the amount originally paid by the stores and the amounts claimed by the adverse party (owner of the property) in the lawsuit, when internal and external legal counsel consider that it is probable that the rent amount will be changed by the Company. As of September 30, 2022, the amount accrued for these lawsuits is R$70 (R$100 as of December 31, 2021), for which there are no escrow deposits. |
| · | The Company and its subsidiaries answer to legal claims related to penalties applied by regulatory agencies, from the federal, state and municipal administrations, among which includes Consumer Protection Agencies (Procon), National Institute of Metrology, Standardization and Industrial Quality (INMETRO) and Municipalities and some lawsuits involving contract terminations with suppliers. Company supported by its legal counsel, assessed these claims, and recorded a provision according to probable cash expending and estimative of loss. On September 30, 2022 the amount of this provision is R$77 (R$56 on December 31, 2021). |
·The subsidiary Éxito and its subsidiaries respond to certain lawsuits related to civil liability cases, lawsuits for rental conditions and other matters in the amount of R$20 on September 30, 2022 (R$30 on December 31, 2021).
·In relation to the provisioned amounts remaining for other civil jurisdiction matters on September 30, 2022, it is R$64 (R$50 on December 31, 2021).
Total civil lawsuits and others as of September 30, 2022 amount to R$231 (R$236 as of December 31, 2021).
| 20.6 | Possible contingent liabilities |
The Company has other litigations which have been analyzed by the legal counsel and considered as possible loss and, therefore, have not been accrued. The possible litigations updated balance without indemnization from shareholders is of R$12,387 as September 30, 2022 (R$12,123 in December 31, 2021), and are mainly related to:
| · | INSS (Social Security Contribution) - GPA was assessed for non-levy of payroll charges on benefits granted to its employees, among other matters, for which possible loss amounts to R$606, as September 30, 2022 (R$576 as of December 31, 2021). The lawsuits are under administrative and court discussions. On August 28, 2020, the Supreme Court, in general repercussion, recognized the incidence of social security contributions on the constitutional third of vacations as constitutional. The Company has been following the development of this issue, and together with its legal advisors, concluded that the elements so far do not require a provision to be registered. |
| 80 |
Companhia Brasileira de Distribuição Notes to the interim financial statements September 30, 2022 (In millions of Brazilian reais, unless otherwise stated) | |
| · | IRPJ, withholding income tax - IRRF, CSLL, tax on financial transactions - IOF, withholding income tax on net income - GPA has several assessment notices regarding offsetting proceedings, rules on the deductibility of provisions, payment divergences and overpayments; fine for failure to comply with accessory obligations, among other less significant taxes. The amount involved is R$787 as of September 30, 2022 (R$750 as of December 31, 2021). |
| · | COFINS, PIS and IPI - The Company has been questioned about compensations not approved; fine for noncompliance with accessory obligation, disallowance of COFINS and PIS credits, IPI requirement on resale of imported products, among other matters. These proceedings are awaiting judgment at the administrative and judicial levels. The amount involved in these assessments is R$4,522 as of September 30, 2022 (R$4,662 as of December 31, 2021). |
| · | ICMS - GPA received tax assessment notices by the State tax authorities regarding: (i) utilization of electric energy credits; (ii) purchases from suppliers considered not qualified in the State Finance Department registry; (iii) levied on its own operation of merchandise purchase (own ICMS) - article 271 of ICMS by-law; (iv) resulting from sale of extended warranty, and (v) among other matters. The total amount of these assessments is R$5,963 as of September 30, 2022 (R$5,660 as of December 31, 2021), which await a final decision at the administrative and court levels. |
| · | Municipal service tax - ISS, Municipal Real Estate Tax ("IPTU"), rates, and others - these refer to assessments on withholdings of third parties, IPTU payment divergences, fines for failure to comply with accessory obligations, ISS and sundry taxes, in the amount of R$152 as September 30, 2022 (R$142 as of December 31, 2021), which await decision at the administrative and court levels. |
| · | Other litigations - these refer to administrative proceedings and lawsuits in which the Company claims the renewal of rental agreements and setting of rents according to market values and actions in the civil court, special civil court, Consumer Protection Agency - PROCON (in many States), Institute of Weights and Measure - IPEM, National Institute of Metrology, Standardization and Industrial Quality - INMETRO and National Health Surveillance Agency - ANVISA, among others, amounting to R$346 as September 30, 2022 (R$327 as of December 31, 2021). |
| · | The subsidiary Éxito and its subsidiaries have an amount of R$11 of lawsuits with probability of possible losses on September 30, 2022 (R$6 as of December 31, 2021). |
The Company has litigations related to challenges by tax authorities on the income tax payment, for which, based on management and legal assessment, the Company has the right of indemnization from its former and current shareholders, related to years from 2007 to 2013, under allegation that had improper deduction of goodwill amortizations. These assessments amount R$1,538 in September 30, 2022 (R$1,467 in December 31, 2021).
The Company is responsible for the legal processes of GLOBEX prior to the association with Casas Bahia. As of September 30, 2022, the amount involved in tax proceedings is R$413 (R$474 as of December 31, 2021).
The Company is responsible for the legal processes of Sendas prior to Assai activity. As of September 30, 2022, the amount involved was R$1,329, of which R$1,287 are tax and R$42 civil and others (R$1,270, being tax R$ 1,234, civil and others R$36 as of December 31, 2021).
The Company engages external attorneys to represent it in the tax assessments, whose fees are contingent upon a percentage to be applied to the amount of success in the final outcome of these lawsuits. This percentage may vary according to qualitative and quantitative factors of each claim, and as of September 30, 2022 the estimated amount, in case of success in all lawsuits, is approximately R$143 (R$157 as of December 31, 2021).
| 81 |
Companhia Brasileira de Distribuição Notes to the interim financial statements September 30, 2022 (In millions of Brazilian reais, unless otherwise stated) | |
| 20.7 | Restricted deposits for legal proceedings |
The Company is challenging the payment of certain taxes, contributions and labor-related obligations and has made judicial deposits in the corresponding amounts, as well as escrow deposits related to the provision for legal proceedings.
| Parent Company | Consolidated | ||||
| 09.30.2022 | 12.31.2021 | 09.30.2022 | 12.31.2021 | ||
| Tax | 208 | 205 | 209 | 206 | |
| Labor | 487 | 491 | 495 | 498 | |
| Civil and other | 28 | 21 | 34 | 27 | |
| Total | 723 | 717 | 738 | 731 |
| 20.8 | Guarantees |
| Lawsuits | Property and equipment | Letter of Guarantee | Total | |||||
| 09.30.2022 | 12.31.2021 | 09.30.2022 | 12.31.2021 | 09.30.2022 | 12.31.2021 | |||
| Tax | 572 | 723 | 9,892 | 9,924 | 10,464 | 10,647 | ||
| Labor | - | - | 970 | 1,153 | 970 | 1,153 | ||
| Civil and other | 9 | 9 | 401 | 495 | 410 | 504 | ||
| Total | 581 | 732 | 11,263 | 11,572 | 11,844 | 12,304 |
Consolidated |
The cost of letter of guarantees is approximately 0.41% per year of the amount of the lawsuits and is recorded as expense.
| 20.9 | Deduction of ICMS from the calculation basis for PIS and COFINS |
The Company and its subsidiaries have filed lawsuits claiming the right to exclude the ICMS amount from the calculation bases of these two contributions.
On March 15, 2017, based on general repercussions, the STF determined that ICMS should be excluded from the bases of these federal contributions, in line with the thesis claimed by the Company. The Attorney General's Office of the National Treasury (PGFN), in turn, appealed against this decision, with the aim of modulating its effects and clarifying which ICMS value should, after all, be object of suppression from the PIS and COFINS bases.
In 2019, some of the Company's subsidiaries obtained a favorable decision in their own proceedings, resulting in the recording of tax credits in the amount of R$382, of which R$198 in the financial result.
On October 29, 2020, the Company obtained a favorable decision in its individual action regarding this tax matter, resulting in the recording of a tax credit in the amount of R$1,609 (R$613 in the financial result), in the period ended on 31 December 2020, net of provisions for installments that were eventually considered unrealizable.
On May 13, 2021, the STF considered the appeals presented by PGFN in relation to that decision taken on March 15, 2017 and expressed an understanding in line with that of the Company and its legal advisors.
| 82 |
Companhia Brasileira de Distribuição Notes to the interim financial statements September 30, 2022 (In millions of Brazilian reais, unless otherwise stated) | |
During calendar year 2021, the Company reassessed the tax credit, reversing part of the provisions previously constituted in the amount of R$280 (R$109 of which in the financial result).
The calculations prepared by the Company are based on the understanding of its legal advisors and the estimated realization of the asset is, at most, 7 (seven) years.
Still on the subject, Via obtained a favorable decision in May 2020, which includes the amount for which GPA is entitled to be reimbursed, under the terms of the association agreement signed between GPA and the Klein family in the transaction that gave rise to the Via. The periods to which GPA is entitled to reimbursement refer to the subsidiary Globex (which was incorporated in the formation of Via) for the years 2003 to 2010. CBD recognized R$231 of a credit with Via in 2020 and R$278 in the second quarter of 2022, based on the documentation analyzed and validated to date. The related gain was recognized in net income from discontinued operations.
| 20.10 | Arbitration Península |
On September 12, 2017, the Company received a notice from the Brazil-Canada Chamber of Commerce regarding a request for arbitration ("Proceeding") filed by Banco Ourinvest S.A., a financial institution, in its capacity as fund manager and acting in the exclusively interest of the quotaholders of Fundo de Investimento Imobiliário Península ("Península" and the "Procedimento").
The Proceeding aims to discuss the calculation of the rental fees and other operational matters related to the 60 (sixty) stores owned by Peninsula, which are under several lease agreements and contracts entered into between the Company and Peninsula during 2005 (the "Agreements"). The Agreements assure to CBD the rent of the stores for a period of twenty (20) years, which may be extended for an additional 20-year term, at CBD's discretion.
As communicated to the market, on July 7, 2021, the parties reached an agreement to amicably resolve past disputes and terminate the Proceedings. The agreement improved the Agreements, maintaining the long term lease term of 20 years, renewable for another 20 years at CBD's discretion, but introduced new rules that are more adapted to the current market, which allow for the optimization of the use of properties and bring potential for gain for both Parties with the best use of real estate spaces. As a result of this agreement, the Company recorded in the result in the second quarter of 2021 the amount of R$17 in other operating expenses, in addition to the remeasurement related to contractual changes in accordance with IFRS 16 / CPC 06(R2).
| 20.11 | Via |
The Company ceased to exercise corporate control over Via in June 2019. In the 2nd quarter of 2021, Via took certain measures and fully replaced the guarantees that had been provided to third parties by GPA in favor of that company, with no further obligations remaining of GPA on this matter. The Operating Agreement previously signed expired in October 2021 and is therefore terminated. Via still uses the Extra brand for the sale of products sold by it under the Extra Brand Usage License Agreement, which allows Via to carry out e-commerce activities through the Extra.com domain. With the termination of the Operating Agreement, GPA can also promote electronic commerce in electronics on any platforms.
GPA, together with Sendas, Via and Itaú Unibanco are partners in Financeira Itaú CBD S.A. Crédito, Financiamento e Investimento ("FIC").
CBD is the holder of a claim against Via arising from a final and unappealable tax action, the amounts of which were calculated by a specialized company hired by the parties involved, as well as being responsible, on the other hand, for any supervenience liabilities incurred up to a certain date. , if final and unappealable, on behalf of the former Globex. The Company recorded these excessive liabilities to the extent that management considered them to be probable losses due to the progress of the lawsuit and/or gathered documentation to support such a loss.
| 83 |
Companhia Brasileira de Distribuição Notes to the interim financial statements September 30, 2022 (In millions of Brazilian reais, unless otherwise stated) | |
| 21. | Leases |
| 21.1 | Lease obligations |
Detailed information on leasing obligations was presented in the 2021 annual financial statements, in note 22.1.
Leasing contracts totaled R$5,867 as of September 30, 2022 (R$6,118 as of December 31, 2021), according to the following table:
| Parent Company | Consolidated | ||||||
| 09.30.2022 | 12.31.2021 | 09.30.2022 | 12.31.2021 | ||||
| Financial lease liability - minimum lease payments: | |||||||
| Up to 1 year | 498 | 546 | 815 | 895 | |||
| 1 - 5 years | 1,749 | 1,730 | 2,663 | 2,807 | |||
| Over 5 years | 1,660 | 1,605 | 2,389 | 2,416 | |||
| Present value of finance lease agreements | 3,907 | 3,881 | 5,867 | 6,118 | |||
| Future financing charges | 2,783 | 2,638 | 3,238 | 2,983 | |||
| Gross amount of finance lease agreements | 6,690 | 6,519 | 9,105 | 9,101 | |||
| PIS and COFINS embedded in the present value of the lease agreements | 238 | 231 | 357 | 372 | |||
| PIS and COFINS embedded in the gross amount of the lease agreements | 407 | 396 | 554 | 553 | |||
The interest expense on lease liability is presented in note 27. The incremental interest rate of the Company and its subsidiaries was 9.42% in the period ended September 30, 2022 (9.55% as of September 30, 2021).
If the Company had adopted the calculation methodology projecting the inflation embedded in the nominal incremental rate and bringing it to present value by the nominal incremental rate, the average percentage of inflation to be projected per year would have been approximately 7.77% (6.98% in December 31, 2021). The average term of the contracts considered is 9.4 years (9.76 years in December 31, 2021). For international subsidiaries, the average nominal incremental rate is 6.05% with 3.0% of built-in inflation. The average term of the contracts considered is 9.1 years.
| 84 |
Companhia Brasileira de Distribuição Notes to the interim financial statements September 30, 2022 (In millions of Brazilian reais, unless otherwise stated) | |
| 21.2 | Movement of leasing obligation |
| Parent Company | Consolidated | ||
| At December 31, 2021 | 3,881 | 6,118 | |
| Additions | 183 | 336 | |
| Remeasurement | 332 | 485 | |
| Accrued interest | 311 | 401 | |
| Payments | (740) | (1,082) | |
| Anticipated lease contract termination | (122) | (186) | |
| Foreing currency translation adjustment | - | (263) | |
| Liabilities on Non-Current Assets for Sale | 62 | 58 | |
| At September 30, 2022 | 3,907 | 5,867 | |
| Current | 498 | 815 | |
| Noncurrent | 3,409 | 5,052 | |
| Parent Company | Consolidated | ||
| At December 31, 2020 | 5,958 | 8,374 | |
| Additions | 43 | 87 | |
| Remeasurement | 213 | 346 | |
| Accrued interest | 451 | 556 | |
| Payments | (802) | (1,148) | |
| Anticipated lease contract termination | (127) | (147) | |
| Spin-off | (2) | - | |
| Foreign currency translation adjustment | - | (121) | |
| At September 30, 2021 | 5,734 | 7,947 | |
| Current | 656 | 1,011 | |
| Noncurrent | 5,078 | 6,936 | |
| 21.3 | Lease expense on variable rents, low value assets and short-term agreements |
| Parent Company | Consolidated | ||||
| 09.30.2022 | 09.30.2021 | 09.30.2022 | 09.30.2021 | ||
| Expenses (income) for the period: | |||||
| Variable (0.1% to 4.5% of sales) | 21 | 18 | 30 | 19 | |
| Sublease rentals (*) | (101) | (171) | (102) | (172) |
(*) Refers to lease agreements receivable from commercial shopping malls.
| 85 |
Companhia Brasileira de Distribuição Notes to the interim financial statements September 30, 2022 (In millions of Brazilian reais, unless otherwise stated) | |
22. Deferred revenue
The Company received amounts from business partners on exclusivity in the intermediation of additional or extended warranty services, and the amounts referring to the rental of the display of products from suppliers, are recognized in the income for the year by proving the provision of service in the sale of these guarantees to business partners.
The detailed information on deferred revenue was presented in the annual financial statements for 2021, in note 23.
| Parent Company | Consolidated | ||||
| 09.30.2022 | 12.31.2021 | 09.30.2022 | 12.31.2021 | ||
Commitment to future sale of real estate | 26 | 27 | 26 | 30 | |
| Additional or extended warranties | - | 11 | - | 11 | |
| Services rendering agreement - Partnerships | 53 | 11 | 53 | 11 | |
| Revenue from credit card operators and banks | - | - | 74 | 106 | |
| Gift Card | 49 | 56 | 123 | 182 | |
| Others | 2 | 4 | 32 | 108 | |
| 130 | 109 | 308 | 448 | ||
| Current | 28 | 44 | 205 | 383 | |
| Noncurrent | 102 | 65 | 103 | 65 | |
| 23. | Shareholders' equity |
| 23.1 | Capital stock |
The subscribed and paid-in share capital, as of September 30, 2022, is represented by 269,637 (269,376 as of December 31, 2021) thousands of registered shares with no par value. As of September 30, 2022, the capital stock is R$5,860 (R$5,859 as of December 31, 2021).
The Company is authorized to increase the capital stock up to the limit of 400,000 (in thousands of shares), regardless of statutory amendment, upon resolution of the Board of Directors, which will establish the issuance conditions.
At a meeting of the Board of Directors held on February 23, 2022, March 28, 2022, April 29, 2022 and July 27, 2022 capital increases in the amount of R$1 (R$9 on December 31, 2021) were approved through the issuance of 261 thousand common shares (1,024 thousand shares on December 31, 2021).
| 86 |
Companhia Brasileira de Distribuição Notes to the interim financial statements September 30, 2022 (In millions of Brazilian reais, unless otherwise stated) | |
| 23.2 | Stock option plan for common shares current |
| 09.30.2022 | |||||||
| Number of options (in thousands) | |||||||
| Series granted | Grant date | 1st date of exercise | Exercise price at the grant date | Granted | Exercised | Cancelled | Outstan-ding |
| Series B6 | 05/31/2019 | 05/31/2022 | 0.01 | 462 | (352) | (75) | 35 |
| Series C6 | 05/31/2019 | 05/31/2022 | 17.39 | 359 | (154) | (96) | 109 |
| Series B7 | 01/31/2021 | 05/31/2023 | 0.01 | 673 | (137) | (105) | 431 |
| Series C7 | 01/31/2021 | 05/31/2023 | 12.60 | 497 | (134) | (119) | 244 |
| Series B8 | 05/31/2022 | 05/31/2025 | 0.01 | 1,617 | - | - | 1,617 |
| Series C8 | 05/31/2022 | 05/31/2025 | 17.28 | 1,328 | - | - | 1,328 |
| 4,936 | (777) | (395) | 3,764 |
The movement in the number of options granted, the weighted average of the exercise price and the weighted average of the remaining term are presented in the table below:
| Shares in thousands | Weighted average of exercise price | Weighted average of remaining contractual term | |
| Total to be exercised at December 31, 2021 | 1,412 | 5.71 | 1.06 |
| At June 30, 2022 | |||
| Granted during the period | 2,945 | 7.80 | |
| Cancelled during the period | (274) | 7.84 | |
| Exercised during the period | (319) | 2.91 | |
| Outstanding at the end of the period | 3,764 | 7.42 | 2.21 |
| Total to be exercised at September 30, 2022 | 3,764 | 7.42 | 2.21 |
The amounts recorded in the Parent Company and Consolidated statement of operations, for the period ended in September 30, 2022 were R$15 (R$32 as of September 30, 2021).
23.3 Other comprehensive income
Foreign exchange variation of investment abroad
Cumulative effect of exchange rate gains and losses on the translation of assets, liabilities and results from (i) euros to Reais, corresponding to CBD's investment in the subsidiary Cnova NV generating a gain of R$122 and (ii) Colombian pesos to Reais, corresponding to an investment in the Éxito subsidiary generating a loss of R$1,718. The effect on the parent company was R$1,596 (R$1,116 on December 31, 2021).
| 87 |
Companhia Brasileira de Distribuição Notes to the interim financial statements September 30, 2022 (In millions of Brazilian reais, unless otherwise stated) | |
| 24. | Revenue from the sale of goods and / or services |
Detailed information on revenue from the sale of goods and/or services was presented in the 2021 annual financial statements, in note 25.
| Parent Company | Consolidated | ||||
| 09.30.2022 | 09.30.2021 | 09.30.2022 | 09.30.2021 | ||
| Restated | Restated | ||||
| Gross sales: | |||||
| Goods | 12,605 | 11,667 | 32,808 | 30,534 | |
| Services rendered | 125 | 124 | 1,132 | 1,165 | |
| Sales returns and cancellations | (113) | (86) | (214) | (181) | |
| 12,617 | 11,705 | 33,726 | 31,518 | ||
| Taxes on sales | (781) | (738) | (3,090) | (2,829) | |
| Net operating revenues | 11,836 | 10,967 | 30,636 | 28,689 |
| 25. | Expenses by nature |
Detailed information on expenses by nature was presented in the 2021 annual financial statements, in note 26.
| Parent Company | Consolidated | ||||
| 09.30.2022 | 09.30.2021 | 09.30.2022 | 09.30.2021 | ||
| Restated | Restated | ||||
| Cost of inventories | (8,101) | (7,328) | (21,465) | (19,893) | |
| Personnel expenses | (1,556) | (1,388) | (3,339) | (3,181) | |
| Outsourced services | (232) | (291) | (573) | (607) | |
| Overhead expenses | (531) | (436) | (1,472) | (1,305) | |
| Commercial expenses | (400) | (342) | (903) | (840) | |
| Other expenses | (268) | (320) | (821) | (818) | |
| (11,088) | (10,105) | (28,573) | (26,644) | ||
| Cost of sales | |||||
| Selling expenses | (8,797) | (8,014) | (22,825) | (21,245) | |
| General and administrative expenses | (1,894) | (1,625) | (4,504) | (4,155) | |
| (397) | (466) | (1,244) | (1,244) | ||
| (11,088) | (10,105) | (28,573) | (26,644) |
| 88 |
Companhia Brasileira de Distribuição Notes to the interim financial statements September 30, 2022 (In millions of Brazilian reais, unless otherwise stated) | |
| 26. | Other operating expenses, net |
The detailed information on other operating expenses, net were presented in the annual financial
statements for 2021, in note 27.
| Parent Company | Consolidated | ||||
| 09.30.2022 | 09.30.2021 | 09.30.2022 | 09.30.2021 | ||
| Restated | Restated | ||||
| Tax installments and other tax risks | (16) | 62 | (25) | 43 | |
| Restructuring expenses | (129) | (216) | (140) | (242) | |
| Result with fixed assets | 31 | 11 | 46 | (10) | |
| Others | (1) | 11 | (1) | 11 | |
| Total | (115) | (132) | (120) | (198) |
27. Financial income (expenses), net
Detailed information on the net financial result was presented in the 2021 annual financial statements, in note 28.
| Parent Company | Consolidated | ||||
| 09.30.2022 | 09.30.2021 | 09.30.2022 | 09.30.2021 | ||
| Restated | Restated | ||||
| Finance expenses: | |||||
| Cost of debt | (649) | (266) | (748) | (327) | |
| Cost of the discounting of receivables | (33) | - | (35) | (1) | |
| Monetary restatement loss | (114) | (76) | (369) | (196) | |
| Interest on lease liabilities | (284) | (234) | (372) | (338) | |
| Other finance expenses | (51) | (65) | (43) | (78) | |
| Total financial expenses | (1,131) | (641) | (1,567) | (940) | |
| Financial income: | |||||
| Income from short term instruments | 83 | 41 | 111 | 84 | |
| Monetary restatement gain | 381 | 176 | 465 | 228 | |
| Other financial income | 1 | 5 | 4 | 8 | |
| Total financial income | 465 | 222 | 580 | 320 | |
| Total | (666) | (419) | (987) | (620) |
The hedge effects are recorded as cost of debt and disclosed in Note 17.
| 89 |
Companhia Brasileira de Distribuição Notes to the interim financial statements September 30, 2022 (In millions of Brazilian reais, unless otherwise stated) | |
| 28. | Earnings per share |
The earnings per share information was presented in the 2021 annual financial statements, in note 29.
The table below presents the determination of net income available to holders of common shares and the weighted average number of common shares outstanding used to calculate basic and diluted earnings per share in each reporting period:
| 09.30.2022 | 09.30.2021 | ||
| Restated | |||
| Basic numerator | |||
| Net income (loss) allocated to common shareholders - continued operations | (457) | 93 | |
| Net income (loss) allocated to common shareholders - discontinued operations | 1,387 | (67) | |
| Net income allocated to common shareholders | 930 | 26 | |
| Basic denominator (millions of shares) | |||
| Weighted average of shares | 269 | 269 | |
| Basic earnings (loss) per shares (R$) - continued operations | (1.69695) | 0.34633 | |
| Basic earnings (loss) per shares (R$) - discontinued operations | 5.15025 | (0.24950) | |
| Basic earnings per shares (R$) - total | 3.45330 | 0.09682 | |
| Diluted numerator | |||
| Net income (loss) allocated to common shareholders - continued operations | (457) | 93 | |
| Net income (loss) allocated to common shareholders - discontinued operations | 1,387 | (67) | |
| Net income allocated to common shareholders | 930 | 26 | |
| Diluted denominator | |||
| Weighted average of shares (in millions) | 269 | 269 | |
| Stock option | - | - | |
| Diluted weighted average of shares (millions) | 269 | 269 | |
| Diluted earnings per millions of shares (R$) - continued operations | (1.69695) | 0.34606 | |
| Diluted earnings (loss) per shares (R$) - discontinued operations | 5.14604 | (0.24950) | |
| Diluted earnings per shares (R$) - total | 3.44909 | 0.09655 | |
| 90 |
Companhia Brasileira de Distribuição Notes to the interim financial statements September 30, 2022 (In millions of Brazilian reais, unless otherwise stated) | |
| 29. | Segment information |
Management considers the following segments:
| · | Food retail - includes the banners "Pão de Açúcar", "Extra Supermercado", "Mercado Extra", "Minimercado Extra", "Minuto Pão de Açúcar", "Comprebem", "Posto Extra and "GPA Malls". |
| · | Éxito Group - includes the company Éxito (Colômbia) and its subsidiaries Libertad (Argentina) and Disco (Uruguay). Éxito also operates the brands Surtimax, Super Inter, and Carulla. |
The other businesses comprise the results of James, Cheftime, Stix and Cnova N.V.. These segments are kept in this explanatory note for purposes of reconciliation with the consolidated interim financial information.
The eliminations of the result and balance sheet are presented within the segment itself.
Taxes on income earned abroad paid in Brazil are considered in Grupo Éxito.
The information on the Company's segments as of September 30, 2022 is included in the following table:
| 91 |
Companhia Brasileira de Distribuição Notes to the interim financial statements September 30, 2022 (In millions of Brazilian reais, unless otherwise stated) | |
| Description | Retail | Exito Group | Others businesses | Total | ||||||||
| 09.30.2022 | 09.30.2021 | 09.30.2022 | 09.30.2021 | 09.30.2022 | 09.30.2021 | 09.30.2022 | 09.30.2021 | |||||
| Restated | Restated | |||||||||||
| Net operating revenue | 12,366 | 11,827 | 18,216 | 16,816 | 54 | 46 | 30,636 | 28,689 | ||||
| Gross profit | 3,138 | 3,118 | 4,617 | 4,290 | 56 | 36 | 7,811 | 7,444 | ||||
| Depreciation and amortization | (671) | (593) | (531) | (570) | (15) | (9) | (1,217) | (1,172) | ||||
| Share of profit of subsidiaries and associates | 34 | 41 | (35) | 22 | (194) | (100) | (195) | (37) | ||||
| Operating income | 5 | 188 | 745 | 638 | (220) | (188) | 531 | 638 | ||||
| Net financial expenses | (675) | (426) | (309) | (192) | (3) | (2) | (987) | (620) | ||||
| Profit(loss) before income tax and social contribution | (669) | (238) | 436 | 446 | (223) | (190) | (456) | 18 | ||||
| Income tax and social contribution | 306 | 289 | (178) | (131) | (2) | 10 | 126 | 168 | ||||
| Net income (loss) for continued operations | (363) | 51 | 258 | 315 | (225) | (180) | (330) | 186 | ||||
| Net income (loss) for discontinued operations | 1,387 | (67) | - | - | - | - | 1,387 | (67) | ||||
| Net income (loss) of period end | 1,024 | (16) | 258 | 315 | (225) | (180) | 1,057 | 119 | ||||
| 09.30.2022 | 12.31.2021 | 09.30.2022 | 12.31.2021 | 09.30.2022 | 12.31.2021 | 09.30.2022 | 12.31.2021 | |||||
| Current assets | 7,504 | 9,898 | 6,270 | 7,871 | 71 | 103 | 13,845 | 17,872 | ||||
| Noncurrent assets | 13,920 | 13,796 | 15,503 | 17,694 | 123 | 81 | 29,546 | 31,571 | ||||
| Current liabilities | 5,080 | 7,528 | 7,744 | 8,853 | 140 | 169 | 12,964 | 16,550 | ||||
| Noncurrent liabilities | 11,123 | 12,470 | 3,391 | 4,040 | 3 | 3 | 14,517 | 16,513 | ||||
| Shareholders' equity | 5,221 | 3,696 | 10,638 | 12,672 | 51 | 12 | 15,910 | 16,380 |
| 92 |
Companhia Brasileira de Distribuição Notes to the interim financial statements September 30, 2022 (In millions of Brazilian reais, unless otherwise stated) | |
The Company and its subsidiaries operate primarily as a retailer of food, clothing, home appliances and other products. Total revenues by geographic region is showed below:
| 09.30.2022 | 09.30.2021 | ||
| Restated | |||
| Brazil | |||
| Retail | 12,366 | 11,827 | |
| Others businesses | 54 | 46 | |
| 12,420 | 11,873 | ||
| Exito Group | |||
| Colombia | 13,619 | 12,932 | |
| Uruguay | 3,068 | 2,766 | |
| Argentina | 1,529 | 1,118 | |
| 18,216 | 16,816 | ||
| Total net operating revenue | 30,636 | 28,689 |
| 30. | Non cash transactions |
The Company had transactions that was not represent disbursement of cash and therefore was not presented at the statement of cash flow, as presented below:
·Purchase of fixed assets not paid yet as note 14.1;
·Purchase of intangible assets not paid yet as per note 15.2;
·Capital increase with fixed assets: note 12.2;
| · | Merger of subsidiary described in note 1.2. |
| 31. | Non current assets held for sale |
Information of non-current assets held for sale and discontinued operations and operations was presented in the 2021 annual financial statements, in note 32 and 33.
| Parent Company's | Consolidated | |||||||||||
| 09.30.2022 | 12.31.2021 | 09.30.2022 | 12.31.2021 | |||||||||
| Real state/land - Parent company | 34 | 36 | 34 | 36 | ||||||||
| Extra Hyper Stores (Note 1.1) (*) | - | 1.117 | - | 1.117 | ||||||||
| Real estate developments - Éxito | - | - | 7 | 34 | ||||||||
| Assets held for sale | 34 | 1.153 | 41 | 1.187 | ||||||||
| Extra Hiper Stores / Lease liability (Note 1.1) | - | 62 | - | 62 | ||||||||
| Liabilities held for sale | - | 62 | - | 62 | ||||||||
(*) As of December 31, 2021, R$967 refers to Fixed Assets and R$150 to Right of Use - Paes Mendonça.
| 93 |
Companhia Brasileira de Distribuição Notes to the interim financial statements September 30, 2022 (In millions of Brazilian reais, unless otherwise stated) | |
| 32. | Discontinued operations |
Information on discontinued operations was presented in the 2021 annual financial statements, in note 33.
On December 31, 2021, the Company began the process of demobilizing and discontinuing operations under the Extra Hiper banner, and the net result is presented as a discontinued operation. Below is the summary income statement:
| Income statement | 09.30.2022 | 09.30.2021 | |
| Net operating revenue | 963 | 7,726 | |
| Gross profit | 138 | 1,780 | |
| Net income (loss) before income tax and social contribution (*) | 1,714 | (191) | |
| Income tax and social contribution | (415) | 126 | |
| Net income (loss) for the period | 1,299 | (65) | |
| Other results from discontinued operations (**) | 88 | (2) | |
| Net income (loss) from discontinued operations | 1,387 | (67) |
(*) The amount of R$1,714 includes the amount of R$2,018 of the gain on the sale of Extra Hiper stores (46 commercial rights and 11 properties) net of other costs related to the decommissioning of stores (see note 1.1).
(**) The amount of R$88 includes the amount of R$278 corresponding to the right of GPA to receive from Via the reimbursement of the benefit of excluding ICMS from the PIS and COFINS base of its former subsidiary Globex (see note 20. 9), net of tax and labor contingencies for which GPA is responsible.
| 94 |
Companhia Brasileira de Distribuição Notes to the interim financial statements September 30, 2022 (In millions of Brazilian reais, unless otherwise stated) | |
Other information deemed as relevant by the Company
| Shareholder position - 09/30/2022 | |||||||
| SHAREHOLDERS 'POSITION OF THE COMPANY'S CONTROLLERS, UP TO THE LEVEL OF INDIVIDUAL | |||||||
| COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO (Publicly held company) | Shareholding at 09/30/2022 (In units) Total | ||||||
| Shareholder | Common Shares | Preferred Shares | Total | ||||
| Number | % | Number | % | Number | % | ||
| Wilkes Participações S/A | 94,019,178 | 34.87% | 0 | 0.00% | 94,019,178 | 34.87% | |
| Jean-Charles Naouri* | 1 | 0.00% | 0 | 0.00% | 1 | 0.00% | |
| Geant International BV* | 10,275,742 | 3.81% | 0 | 0.00% | 10,275,742 | 3.81% | |
| Segisor* | 5,600,050 | 2.08% | 0 | 0.00% | 5,600,050 | 2.08% | |
| Casino Guichard Perrachon* | 2 | 0.00% | 0 | 0.00% | 2 | 0.00% | |
| Helicco Participações Ltda. | 581,600 | 0.22% | 0 | 0.00% | 581,600 | 0.22% | |
| BTG Pactual | 16,615,645 | 6.16% | 0 | 0.00% | 16,615,645 | 6.16% | |
| Board of Executive Officers | 938,716 | 0.35% | 0 | 0.00% | 938,716 | 0.35% | |
| Board of Directors | 3,763 | 0.00% | 0 | 0.00% | 3,763 | 0.00% | |
| Fiscal Council | 0 | 0.00% | 0 | 0.00% | 0 | 0.00% | |
| Treasury Shares | 160,342 | 0.06% | 0 | 0.00% | 160,342 | 0.06% | |
| Others | 141,442,124 | 52.46% | 0 | 0.00% | 141,442,124 | 52.46% | |
| Total | 269,637,163 | 100.00% | 0 | 0.00% | 269,637,163 | 100.00% | |
(*) Non-resident company. | |||||||
DISTRIBUTION OF THE SOCIAL CAPITAL OF THE LEGAL ENTITY (SHAREHOLDER OF THE COMPANY), UP TO THE LEVEL OF THE INDIVIDUAL | |||||||
| WILKES PARTICIPAÇÕES S.A | Shareholding (In units) | ||||||
| Shareholder/Quotaholder | Common Shares | Preferred Shares | Total | ||||
| Number | % | Number | Number | % | Number | ||
| Casino Guichard Perrachon* | 2 | 0.00% | 0 | 0.00% | 2 | 0.00% | |
| Segisor* | 223,698,566 | 100.00% | 0 | 0.00% | 223,698,566 | 100.00% | |
| Treasury Shares | 0 | 0.00% | 0 | 0.00% | 0 | 0.00% | |
| TOTAL | 223,698,568 | 100.00% | 0 | 0.00% | 223,698,568 | 100.00% | |
| (*) Non-resident company. | |||||||
DISTRIBUTION OF THE SOCIAL CAPITAL OF THE LEGAL ENTITY (SHAREHOLDER OF THE COMPANY), UP TO THE LEVEL OF THE INDIVIDUAL | |||||||
| SEGISOR | Shareholding (In units) | ||||||
| Quotaholder | Number | % | Preferred Shares | % | Number | % | |
| Casino Guichard Perrachon* | 1,774,479,286 | 100.00% | 0 | 0.00% | 1,774,479,286 | 100.00% | |
| TOTAL | 1,774,479,286 | 100.00% | 0 | 0.00% | 1,774,479,286 | 100.00% | |
| 95 |
Companhia Brasileira de Distribuição Notes to the interim financial statements September 30, 2022 (In millions of Brazilian reais, unless otherwise stated) | |
Other information deemed as relevant by the Company | |||||||||
| DISTRIBUTION OF THE SOCIAL CAPITAL OF THE LEGAL ENTITY (SHAREHOLDER OF THE COMPANY), UP TO THE LEVEL OF THE INDIVIDUAL | |||||||||
| ONPER INVESTIMENTOS 2015 S.L. | Shareholding (In units) | ||||||||
| Shareholder | Common Shares | % | Preferred Shares | % | Number | % | |||
| ALMANACENES ÉXITO S.A.* | 3,000 | 100.00% | 0 | 0.00% | 3,000 | 100.00% | |||
| TOTAL | 3,000 | 100.00% | 0 | 0.00% | 3,000 | 100.00% | |||
| DISTRIBUTION OF THE SOCIAL CAPITAL OF THE LEGAL ENTITY (SHAREHOLDER OF THE COMPANY), UP TO THE LEVEL OF THE INDIVIDUAL | |||||||||
| ALMANACENES ÉXITO S.A. | Shareholding (In units) | ||||||||
| Shareholder * | Common Shares | % | % Voting Shares | Number | % | ||||
| Companhia Brasileira de Distribuição | 395,940,638 | 88.33% | 91.52% | 395,940,638 | 88.33% | ||||
| GPA 2 Empreendimentos e Participações Ltda. | 21,619,305 | 4.82% | 5.00% | 21,619,305 | 4.82% | ||||
| Minority | 15,061,510 | 3.36% | 3.48% | 15,061,510 | 3.36% | ||||
| Treasury | 15,618,698 | 3.48% | 0.00% | 15,618,698 | 3.48% | ||||
| TOTAL | 448,240,151 | 100.00% | 432,621,453 | 448,240,151 | 100.00% | ||||
| CONSOLIDATED SHAREHOLDING OF CONTROLLING PARTIES AND MANAGEMENT AND OUTSTANDINGSHARES | Shareholding at 09/30/2022 (In units) Total | ||||||||
| Shareholder | Common Shares | Preferred Shares | |||||||
| Number | % | Number | Number | % | Number | ||||
| Controlling parties | 110,476,573 | 40.97% | 0 | 0.00% | 110,476,573 | 40.97% | |||
| Management | |||||||||
| Board of Directors | 938,716 | 0.35% | 0 | 0.00% | 938,716 | 0.35% | |||
| Board of Executive Officers | 3,763 | 0.00% | 0 | 0.00% | 3,763 | 0.00% | |||
| Fiscal Council | - | 0.00% | 0 | 0.00% | - | 0.00% | |||
| Treasury Shares | 160,342 | 0.06% | 0 | 0.00% | 160,342 | 0.06% | |||
| Other Shareholdersas | 158,057,769 | 58.62% | 0 | 0.00% | 158,057,769 | 58.62% | |||
| Total | 269,637,163 | 100.00% | 0 | 0.00% | 269,637,163 | 100.00% | |||
| Outstanding Shares | 159,000,248 | 58.97% | 0 | 0.00% | 159,000,248 | 58.97% | |||
| CONSOLIDATED SHAREHOLDING OF CONTROLLING PARTIES AND MANAGEMENT AND OUTSTANDINGSHARES | Shareholding at 09/30/2021 (In units) Total | ||||||||
| Shareholder | Common Shares | Preferred Shares | |||||||
| Number | % | Number | Number | % | Number | ||||
| Controlling parties | 110,476,573 | 41.02% | 0 | 0.00% | 110,476,573 | 41.02% | |||
| Management | |||||||||
| Board of Directors | 855,286 | 0.32% | 0 | 0.00% | 855,286 | 0.32% | |||
| Board of Executive Officers | 157,120 | 0.06% | 0 | 0.00% | 157,120 | 0.06% | |||
| Treasury Shares | 160,342 | 0.06% | 0 | 0.00% | 160,342 | 0.06% | |||
| Other Shareholdersas | 157,654,151 | 58.54% | 0 | 0.00% | 157,654,151 | 58.54% | |||
| Total | 269,303,472 | 100.00% | 0 | 0.00% | 269,303,472 | 100.00% | |||
| Outstanding Shares | 158,666,557 | 58.92% | 0 | 0.00% | 158,666,557 | 58.92% | |||
| 96 |
SIGNATURES
Pursuant to the requirement of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO | |||
| Date: November 3, 2022 | By: /s/ Marcelo Pimentel | ||
| Name: | Marcelo Pimentel | ||
| Title: | Chief Executive Officer | ||
| By: /s/ Guillaume Marie Didier Gras | |||
| Name: | Guillaume Marie Didier Gras | ||
| Title: | Investor Relations Officer |
FORWARD-LOOKING STATEMENTS
This press release may contain forward-looking statements. These statements are statements that are not historical facts, and are based on management's current view and estimates offuture economic circumstances, industry conditions, company performance and financial results. The words "anticipates", "believes", "estimates", "expects", "plans" and similar expressions, as they relate to the company, are intended to identify forward-looking statements. Statements regarding the declaration or payment of dividends, the implementation of principal operating and financing strategies and capital expenditure plans, the direction of future operations and the factors or trends affecting financial condition, liquidity or results of operations are examples of forward-looking statements. Such statements reflect the current views of management and are subject to a number of risks and uncertainties. There is no guarantee that the expected events, trends or results will actually occur. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations.
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CBD - Companhia Brasileira de Distribuição published this content on 04 November 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 November 2022 11:21:05 UTC.
