Annual Report 2016 and Sustainbility

Mensage From Management

In 2016, we continued to pursue a balance

between our commercial variables,

such as sales and profitability. Given the

country's macroeconomic scenario and the

challenges in the international market, we

improved our processes in search of even

greater control of expenses and financial

flows, resulting in a solid performance.

TO OUR CUSTOMERS,

SHAREHOLDERS, ASSOCIATES

AND SUPPLIERS:

01

The parent company's gross revenue

reached R$ 12,0 billion, an increase of

7.6% when compared to 2015. Operating

cash generation (EBITDA) totaled R$

2.1 billion, up 12,0%. In the consolidated

result, gross revenue totaled R$ 21.4

billion and EBITDA growth was 12.2%.

[G4-9]

In the period, we inaugurated 93 new

stores, totaling 1,127 stores in more

than 430 cities throughout the country,

maintaining the usual discipline regarding

the approval of the new points and the

expected financial returns. Over the

course of the year, the Company opened

its first unit in 37 new cities, offering

competitive prices and quality products

to the local population. It also continued

the development of logistics and supply

projects for the stores, diversification of

its own-brands portfolio, renewal of the

apparels assortment and evolution of the

financial products and services offered.

[G4-9]

B2W Digital continued to post significant

evolution in GMV growth, as well as in the

marketplace, which grew 153.4% in the

year. Thus, we remain confident about the

potential of e-commerce in Latin America.

[G4-9]

Also notable was Lojas Americanas'

recognization through important awards

during the year. Today, we have Brazil's

most valuable retail brand, according to

a ranking by Interbrands, BrandZ LATAM

and Isto é Dinheiro, all published in 2016.

In addition, through B2W Digital, we are

electronic commerce leaders in Latin

America, according to Internet Retailer

2016.

We ended the year with a motivated

team, one that is determined to reach

new levels of results. We would also like

to thank our clients, associates, suppliers

and shareholders, who have been part of

these achievements, demonstrating that

we are on the right path, seeking to fulfill

dreams and meet people's consumption

needs, saving time and money and

surpassing their expectations.

We reiterate our confidence in the

country's development and, for 2017, just

as in previous years, we will continue

on our path of learning and overcoming,

which leaves us naturally enthusiastic,

because we will reach new levels of

results, always seeking to better serve the

needs of our clients.

Organizacional ProfileLojas Americanas S.A. is one of the

nation's largest retail chains, offering a

huge variety of top brand name products

and quality services at a fair price to

clients in all states. In its 87th year, the

Company is in step with the pace of

global development and seeks to assure

excellence in serving its clients and

suppliers. [G4-3]

Considered by renowned institutions such

as the Reputation Institute (Reputation

Lojas Americanas S.A.:

Everybody's going

02

Pulse) and Interbrand as the most

reputable and valuable retail company

in the country, the Company generates

business, jobs and income for 21,166

associates. [G4-9]

Founded in the small city that was

Niteroi in 1929, in Rio de Janeiro state,

Lojas Americanas established itself

in the nearby capital, where it set up

its headquarters and, subsequently,

conquered Brazil. At the end of 2016, the

Company had a nationwide presence

through 1,127 stores located in 436

municipalities, corresponding to 980,000

square meters of sales area, in addition to

four distribution centers, located in Minas

Gerais, Pernambuco, Rio de Janeiro and

São Paulo. [G4-5, G4-6, G4-9]

Lojas Americanas sells up to 60,000 items

from approximately 2,000 suppliers of

toys, candies, lingerie, CDs and DVDs,

games, hygiene and beauty, domestic

utilities, among others. The Company has

13 of its own category brands, including

Hygiene and Beauty (Basic+care and

Dental Clear), Apparel (Basic+), Bed,

Table and Bath (Casual Home and Classic

Home), Stationery (School Basics and

Office Basics), Toys (Brink+), Household

Utensiles (Casual Home, Classic Home,

Home Basics and Strong Tools), Christmas

Articles (Christmas Traditions), Cookies

and Chocolates (D'ellice) and Foodstuffs

(Leven). [G4-4, G4-12]

In 2016, it opened 93 stores and

strengthened its commitment to fulfill the

dreams of its clients and maintain the "85

years in 5 - Somos Mais Brasil" (We Are

More Brazil) expansion program, launched

in 2015. The program calls for the opening

of 800 new stores and two distribution

centers in the 2015 and 2019 period.

Shareholding Breakdown

LOJAS AMERICANAS S.A.'s shares

are listed on the Bolsa de Valores,

Mercadorias e Futuros (BM&FBOVESPA)

under ticker symbols LAME3 (common)

and LAME4 (preferred). [G4-7]

1.2. Multiple and Complementary

Structure

Lojas Americanas has a multiple and

complementary sales structure. In

addition to the brick-and-mortar store

network, the Company also operates with

B2W DIGITAL, a leading Latin American

company whose purpose is to connect

people, businesses, products and services

through a digital platform. [G4-8]

Lojas Americanas' expansion followed

the trend of the market where consumer

are seeking more convenience, facilities

and fair prices. To satisfy this customer

profile, Lojas Americanas offers two store

formats: Traditional and Express.

The Traditional format has large stores, an

average sales area of 1,100 square meters,

an assortment of up to 60,000 items and

daily inventory replenishment. There

are more than 45 departments, such

as housewares, toys, games, candies,

perfumery, stationery, electronics,

personal hygiene and apparel, among

others.

The Express model features an

assortment suited to the characteristics

and demands of the locations and

consumer profiles, offering convenience

products in the neighborhoods in which

they live or close to their work. This model

sells up to 15,000 carefully selected items,

the selling space averages 400 square

meters and the "just-in-time" logistics

system is applied.

In addition to the store formats, Lojas

Americanas has +AQUI in more than

300 stores. +AQUI is the business unit

responsible for the marketing financial

products and services (credit cards,

insurance and prepaid cards) within Lojas

Americanas' stores.

The following organization chart *

presents an integrated overview of Lojas

Americanas' stores.

*31/12/2016

1.3. B2W DIGITAL, leader in Latin America

Shareholding Breakdown

B2W is the Latin American leader and its

purpose is to connect people, businesses,

products and services through a digital

platform.

B2W has the largest and most esteemed

internet brands (Americanas.com,

Submarino, Shoptime and SouBarato) and

a rapidly growing Marketplace operation.

The platform built over the past few years

allows B2W also to offer technology,

logistics, distribution, client and consumer

financing services.

In its strategic five-year plan (2016 to

2020), B2W will continue investing in

the digital platform that has been built,

making all of its business fronts profitable,

with the objective of generating value for

its shareholders.

Lojas Americanas is B2W's controlling

shareholder, with a 62.16% ownership

interest. The Company's shares are

traded through the BTOW3 ticker

symbol on the BM&FBOVESPA's Novo

Mercado segment, the highest corporate

governance rating in Brazil.

For more information about B2W Digital

please access www.b2wdigital.com.

1.4. Promoter of Financial Products

and Services

In 2016, +AQUI, which is responsible

for the management and promotion of

financial products and services in Lojas

Americanas' stores, saw rapid growth and

significant evolution as called for in its

strategic plan.

With the goal of "making dreams come

true and meeting the consumption

needs of the people, providing credit,

protecting their assets and exceeding

their expectations with excellent customer

service" +AQUI is present in 318 Lojas

Americanas stores in over 140 cities in

17 states of the country, plus the Federal

District. [G4-9]

The products in the portfolio offered

come with extended warranties, insurance

against theft of mobile devices, technical

assistance for the installation of air-

conditioners, pre-paid credit cards, regular

gift vouchers, topical gift vouchers,

prepaid cards for licensed digital content

and the Company's credit card.

In 2017, as part of the evolution of the

portfolio, in partnership with Central de

Funcionamento (CDF) and Blackhawk

Networks, the company initiated the offer

of TV installation and helpdesk service.

+AQUI offers more convenience for clients

to enjoy the facilities offered by new

technologies to the fullest.

Lojas Americanas Credit Card

+AQUI is responsible for offering the Lojas

Americanas card to the millions of clients

who visit its stores stores daily. In 18

months of operations, the promoter issued

over 800,000 credit cards and registered

recurring transactions in more than 1,000

Lojas Americanas stores and thousands of

other commercial establishments around

the country. In 2016, the purchases made

with the Company card surpassed 30%

of sales mark made through the credit

card in some stores. In addition, sales

through the card within the Company

rose by more than 500% compared to the

previous year..

The increase in productivity and the

improvement of +AQUI's indicators can

be seen by the growth of efficiency in

the provision of products/services by the

promoter evidenced by the rapid growth

in sales of Lojas Americanas stores and

an average ticket higher than otherwise

observed in the Company.

For 2017, Lojas Americanas is excited

about the opportunities that present

themselves with the evolution of +AQUI,

believing that the expansion of the

portfolio of products and financial services

deriving from the retail business will

contribute increasingly more benefits,

comfort and convenience for all clients,

allowing it to reach higher levels of results.

Mission

"Realize dreams and meet the consumption

needs of the people, saving time and

money and exceeding their expectations."

Vision

“To be the best retail company in Brazil."

The best company consists of being:

– By the Clients, to be regarded as the

best shopping option;

– By the Shareholders/Investors, to be

considered as offering the best return in

the segment;

– By the Associates, to be considered

as the best option for professional

development;

– By the Suppliers, to be considered as

the best distribution channel;

– By Society, to be considered to be a

socially and ecologically responsible

company.

Competitive Advantages

– A distinctive business model, able to

combine growth and profitability with

resiliency;

– Strong culture of operational efficiency

and cost control, with a proven

performance track record;

– Multiple and complementary sales

platform, with shops, e-commerce,

Marketplace, kiosks, home shopping and

others, offering a wide assortment and

serving different audiences;

– Leading position in the Brazilian retail

sector with great brand name recognition;

– Broad and diverse product mix;

– Disciplined financial management with a

focus on the high level of profitability and

return on invested capital.

Supply Chain

In 2016, Lojas Americanas implemented

measures designed to make its supply

chain even more efficient. In pursuit

of competitive advantages to support

expansion, the Company makes use of

the best product storage and distribution

practices, always seeking to exceed client

expectations.

Currently, the 1,127 stores are present

in 439 cities in Brazilian states and are

supplied by four distribution centers

located in Minas Gerais, Pernambuco, Rio

de Janeiro and São Paulo.

The implementation of new technologies

and the improvement of processes

includes: the choice of more efficient and

cost-effective transportation and supply

models; the optimization of distribution

center operations and the redesign of the

logistics network, always considering the

appropriate levels of inventory to ensure

the lowest operating cost and better

product allocation in the stores.

The practices adopted in the warehousing

and distribution areas generate new

business opportunities, since they ensure

the supply of the new stores, supporting

the presence of a greater variety of

products at all points of sale, while also

offering speedier and safe restocking,

thus leading to economies of scale due to

the more efficient inventory management.

For 2017, Lojas Americanas will maintain

its investments in the continuous

improvement of logistic processes with a

focus on technology, people and the best

market practices.

THE GREEN COMPANY

A decade ago, Lojas Americanas stores

were guided by a culture of sustainability

to implement their actions, always with

the supervision of a multidisciplinary

in-house committee known as "the

Green Company," which meets weekly

to track and monitor the evolution of

the Company's initiatives. In the "Socio-

environmental Management" chapter we

present the investments and the actions

that oriented the actions in 2016. [G4-34]

Through private social investments

approved by the Sustainability Committee,

on which a member of the Board of

Directors also sits, Lojas Americanas

reinforces its commitment to enhance

environmental practices that are aligned

with economic and social development.

This is a responsible attitude, which

affects the decisions of investors and

clients.

In 2016, Lojas Americanas revised its

Materiality Matrix in order to prioritize

the management of investments and

strengthen its sustainable business model.

THREE CONSECUTIVE YEARS

IN THE ISE PORTFOLIO

Lojas Americanas was again, in 2016,

selected to be part of the portfolio of

companies in the Corporate Sustainability

Index (ISE) of the BM&FBOVESPA,

ensuring its place for the third consecutive

year. The announcement was made on

November 25. The ISE takes corporate

sustainability into account, i.e. the level

of the group's commitment to sustainable

development in the social, economic

and financial, environmental and climate

change areas.

AWARDS AND RECOGNITION

Investments of Lojas Americanas'

stores with regard to quality control of

products and services, audit of suppliers,

operation of distribution centers and the

computerization of internal processes

to better serve the client have been

recognized. The effort of the company

and its associates have led to awards,

which added value to the brand, its

reputation and its commitment to society.

The highlights of awards and recognitions

throughout the year included:

– Época Negócios 360º - Época Store

Businesses — Americanas won 1st place

for retailers for the third consecutive

time. The annual ranking is considered a

national guide to measure all dimensions

relevant to the continued success of

organizations.

– Empresas Mais - Estadão —Lojas

Americanas won in the "Retail" category

and was among the 10 highlights in

Corporate Governance.

– Most Valuable Brands of Brazil - IstoÉ

Dinheiro — In the ranking of the 50

most valuable brands of Brazil, Lojas

Americanas was 1st among retailers and

placed 12th overall.

– Época Reclame Aqui Prize - Lojas

Americanas won in the "retail" category

in 2016. The award recognizes the best

companies for the consumer, based on a

popular vote.

– Brazil Reputation Pulse – For the

second consecutive year, Lojas

Americanas was ranked as the retail

company ith the best reputation, being

1st ranked among retailers and 2° place

among all Brazilian companies.

– BrandZ LATAM — In the ranking of the

most valuable brands of Latin America,

Lojas Americanas was in 1st among

retailers and placed 12th overall.

– Ranking NOVAREJO [Standard Group]

- Lojas Americanas came in 1st in the

Clothing and Department Stores category.

The lists presents the largest Brazilian

retail companies.

– Espaço Brinquedo magazine —

Lojas Americanas won a trophy as a

"benchmark store".

– Marcas Brasileiras Mais Valiosas

[Interbrand] - Ranking of Interbrand, which

presents the most valuable brands in

Brazil. Lojas Americanas featured in 12th

place, being one of the five brands that

saw the highest growth in value in the

year.

– 300 Maiores Empresas do Varejo

Brasileiro - Brazilian Retail and

Consumption Society — Lojas Americanas

came in 1st in the "Department Stores,

Home Items and General Merchandise"

category and in 4th place in the Overall

ranking of the companies evaluated. In

its 15th edition, the survey conducted

by Revista Seleções in partnership with

the Datafolha interviewed about 1,000

readers of the magazine.

– Socioambiental Chico Mendes — For

the third consecutive year we received

the "Green Seal – Chico Mendes Award"

in the "Responsible Socio-Environmental

Management" category.

People03

Lojas Americanas invests in the potential

of its associates, considering them

important assets to drive the business.

Its people and management policy

strengthens the promotion of inclusive

and sustainable economic growth,

employment and decent work for all as

established in one of the UN's Sustainable

Development Goals. Toward this end, the

ambitious expansion plan to open 800

PEOPLE IN FIRST PLACE

new stores by 2019 rests on the strength

of the members of its workforce — who

have a highly qualified, diverse profile,

and are obsessed with results and client-

focused.

Based on meritocracy, the importance we

ascribe to our associates contributes to

ensuring that the Company has unique

professionals who are motivated and

confident that they are inserted in a

working environment where there are real

chances for professional development.

We continue to adopt diversity and equal

opportunity practices. The headcount at

the end of the year was 21,166 associates,

of which 11,604 were women and 9,562

were men, all covered by the Brazilian

Consolidated Labor Code (CLT) and the

Collective Bargaining Convention. The

Company values equality between men

and women and, to ensure that hiring and

application of wage policies eliminate any

possibility of discrimination, meritocracy

was chosen as the sole basis for career

growth. [G4-10, G4-11]

In 2016, 6,826 associates were promoted

and assumed new positions. Of these,

54.81% were women and 99.8% of them

have experienced career growth within

the Company itself, formed through its

development programs. [G4-LA11]

In the following table we present the

numbers per functional level and gender.

[G4-10, G4-LA12, G4-LA13]

Our Principles for People

Lojas Americanas' development programs

are structured on three underpinnings:

People, Method and Results The three

pillars are in accordance with Lojas

Americanas' principles, policies and

values and are aimed at enhancing the

performance of associates, based on

differentiated training of our professionals

and excellence in corporate management.

Talent Recruitment and Selection

People are the main underpinning of the

strategy that drives Lojas Americanas,

which seeks to be the best development

option for professionals and to reside

at the top of the list of companies that

generate jobs coupled with excellence.

During its 87 years of existence, Lojas

Americanas has shaped its strategy and

processes, offering growth opportunities

to associates who perform well and are

aligned with the organizational culture. In

addition to hiring for store and distribution

center operations, the Company relies

on different entry-level gates that are

intended to attract and recruit the best

talent for the company: MBA programs,

Trainee, Trainee Logistics, Inclusion

of People with Disabilities (PCD), New

Talent and Internship. In 87 years, the

management of these processes has

been improved and they have proved to

be successful, as can be seen by the fact

that more than half of our officers entered

the company through one of these

programs.

The selection exclusively takes into

account the skills required for each job

function and each associate's professional

profile. Lojas Americanas does not

condition entry into the Company in any

way by race, gender, political, religious

or sexual orientation, a practice adopted

throughout the hierarchy and transcribed

in its Code of Ethics [G4-56].

MBA Program

Since it was created in 2012, the MBA

Program has recruited talents from the

world's main business schools. The goal

of the program is that its participants

assume a management position and

develop major projects in specific areas of

the Company, with express monitoring by

directors of Lojas Americanas.

Trainee Program

As fast and dynamic as the retail business

itself, the Trainee program offers

intense instruction for young people

who demonstrate a profile of someone

who could assume a managerial role.

Its duration is 12 months. In the first six

months, the trainee becomes familiar with

all the Company's operations, participating

in the routines of the distribution centers

and stores and also attends various

corporate training sessions. In the

subsequent six months, the professional

is assigned to an area of the business and

given on the job training to undertake

a challenging final project deemed

important by the Company. In 2016, out of

more than 31,000 applications, 10 trainees

were selected and hired in January 2017.

New Talents Program

The New Talents Program aims to

quickly educate and train recent

university graduates, fast tracking them

to become future Company leaders,

able to accompany the rapid pace of our

organization's growth. These talents are

immediately assigned in specific business

areas on their first day of work and

during the initial year participate in the

Overview program, consisting of a series

of presentations and training sessions

prepared by the Company's executives

to offer the newcomers a global vision of

the business. At the end of 2016, 33 new

talents were hired for various areas.

Internship Program

The Lojas Americanas Internship Program

seeks to develop university students who

have entrepreneurial profiles. Trainees

are selected for areas related to business

fields in which they have an affinity, and

who are willing to learn and are interested

in building a career within the Company.

The program is nationwide in scope, with

a minimum duration of six months and

a maximum of two years; it requires the

student's dedication of 30 hours a week.

Upon joining the Program, the university

student participants enter a training

module that transmits the vision, mission

and corporate values, as well as the

management tools needed for their

work routines. The new professionals

are given the opportunity to become

acquainted with the day-to-day activities

of the Company's stores, headquarters,

distribution centers and other business

units. In 2016, Lojas Americanas admitted

216 interns, including stores, distribution

centers and headquarter operations.

Young Apprentice

Committed to preparing students for the

labor market, the program is developed

in partnership with the National Service

for Commercial Education (Senac) or

equivalent entities. With a fixed-term

contract, the young apprentices must

be enrolled in and regularly attending

grade school.

Inclusion of People with

Disabilities (PCD)

Lojas Americanas seeks to promote

inclusion and training of persons with

disabilities in its workplaces. Candidates

are selected through partnerships with

municipal bureaus and specialized

consultants, who nominate individuals

for the vacancies in our stores and

distribution centers across the country.

Development and Training

Lojas Americanas' growth and significant

results are due mainly to the distinctive

characteristics of its associates: they

represent human capital that is prepared,

engaged with and who have an excellent

understanding of the business, which

contributes to maintaining the Company's

market leadership in the competitive retail

landscape. Toward this end, in 2016 we

intensified instruction targeted at leaders,

with the aim of disseminating the internal

culture, based on meritocracy, teamwork

and long-term commitment. [G4-LA10]

Americanas Development

Center (CDA)

Created in 2005 within the Corporate

University concept, the Americanas

Development Center (CDA) is

headquartered in Rio de Janeiro and has

18 complexes throughout the country. In

addition to the physical space, the CDA

contains a virtual learning environment

designed to maintain associates

constantly up to date. In 2016, the training

of associates was stepped up at the

various sub-centers, totaling 278,000

training hours (average of 13.1 hours per

associate). [G4-LA9]

The Retail Faculty

The Retail Faculty is designed for

associates with two or more years of

service in the Company who have been

nominated by their immediate superiors,

due to exceptional job performance.

The goal of the program is to promote

the academic training of participants,

further qualifying them and boosting

their chances of career growth. To the

selected members, the Company offers

scholarships for undergraduate and

postgraduate classroom studies.

Digital LAB

In 2016, Lojas Americanas expanded

the role of the Digital LAB, a program

created in 2014 in partnership with

two of the most renowned global

institutions for teaching and research: the

Massachusetts Institute of Technology

(MIT) and the Harvard Business School.

The objective of the Digital LAB is to

cultivate talents and promote the search

for innovative solutions, through good

practices that encourage the construction

of an entrepreneurial environment and

collaboration within the Company.

Benefits

All Lojas Americanas associates receive

a number of benefits, regardless of the

position he or she occupies or their

position in the Company. Among them are

transportation vouchers, life insurance,

health plan, dental care assistance,

food vouchers or meals in cafeterias

and discounts on products in Lojas

Americanas stores and the Americanas.

com, Submarino.com and Shoptime

websites, as well as discounts and

workout academies, language schools

and universities, among others. [G4-LA2]

In addition, the practices set out in the

country's consolidated labor laws (CLT),

such as maternity and paternity leaves,

prior notice upon dismissal and others are

adopted fully for all associates. [G4-LA3,

G4-LA4]

DISK-ALERT

Lojas Americanas offers its professionals

the Disk-Alert hotline, an internal

communications channel that receives

questions, suggestions or criticisms from

associates, whether or not they sit on

internal Company committees. Everything

received through the channel is analyzed

and, depending on the circumstances,

the Ombudsman takes action to correct

the flaws reported by associates, accept

suggestions and clarify doubts. Over the

course of 2016, the Company dealt with

all complaints received by the hotline and

took appropriate steps to resolve them.

[G4-57, G4-58, G4-LA16, G4-HR3]

EXCELLENCE IN PREVENTION

The Company has an Internal Accident

Prevention Commission in all units with

more than 50 associates. For units with

less than 50 associates, one associate

is designated to be responsible for the

subject, meeting the legal obligations.

The Commission is composed of

elected employees and appointed by

the employer, acting in the prevention of

workplace-derived accidents and diseases.

In addition, it forwards solutions regarding

employee health and safety issues, when

such cases are identified. [G4-LA5]

The actions the Company has taken to

improve the working environment have

contributed to reduce and prevent injuries,

accidents and occupational diseases and

absenteeism. To help the associates, the

Company runs educational awareness

and disease prevention campaigns. It

also promotes themed events, such as

"No Tobacco Day," "Pink October" and the

"Everybody’s Going Race," and encourages

the rational use of energy and water along

with awareness of correct waste disposal

techniques, which will be addressed in the

Socio-environmental Management chapter.

Corporate Gorvenance04Values, such as transparency, fairness,

accountability, ethics, clarity in the

rendering of accounts, and better

information flows, are part of Lojas

Americanas’ best governance practices.

These principles orient the business

decisions of the Board of Directors,

the Executive Board, and the internal

committees. [G4-56]

The Company has been listed on the

Brazilian Securities, Commodities and

Futures Exchange (BM&FBOVESPA)

since 1940 and has a shareholder base

composed of common shares (LAME3)

and preferred shares (LAME4). [G4-7]

The Company’s preferred shares are part

of the Bovespa Index (IBOVESPA), the

Brazilian stock market’s most important

indicator of average share prices. In

addition, Lojas Americanas S.A. is also a

part of other important share indices, such

as IBRX-50, ISE, ITAG, ICO2, Icon, IVBX-2,

MLCX, and MSCI-Barra.

BOARD OF DIRECTORS

The Board of Directors consists of

seven members elected at the General

Shareholders Meeting – five of whom

are representatives of the controlling

shareholders and two who are appointed

by the Board of Directors – for a period of

three years with the right to re-election.

The Chair of the Board is chosen from

among the elected members, all of whom

must be shareholders.

The Board, whose powers are conferred

upon it by law and the Company’s

Bylaws, is responsible for electing and

removing Executive Officers, defining their

assignments and replacement criteria;

setting forth the distribution of fixed

remuneration established at the General

Shareholders Meeting for its members

and officers; and making determinations

regarding the issuance of shares,

subscription warrants, and promissory

notes. Formally, the Board of Directors

meets at least four times a year. [G4-34,

G4-42, G4-47]

MEMBERS OF THE BOARD OF

DIRECTORS

Carlos Alberto da Veiga Sicupira –

Chairman of the Board of Directors

Miguel Gomes Pereira Sarmiento

Gutierrez – Full Member/CEO

Cecília Sicupira – Full Member

José María Castellano Rios– Full Member

Love Goel – Full Member

Paulo Alberto Lemann – Full Member

Roberto Moses Thompson Motta – Full

Member

André Street de Aguiar – Alternate

Member

EXECUTIVE BOARD

The Executive Board consists of 11

officers – one of whom is designated

to serve as the CEO – all of whom are

elected by the Board of Directors to a

one-year term of office with the right to

re-election. The Board acts as a collegiate

body in decisions on all matters which,

by the force of law and the Company’s

Bylaws, must be submitted to the Board

of Directors, notably the Annual Report

and the financial statements, the monthly

balance sheets, proposals for capital

stock increases and the distribution of

dividends, and any other discussions

that go beyond the ordinary limits of the

specific functions of each officer. [G4-35]

EXECUTIVE BOARD MEMBERS

Miguel Gomes Pereira Sarmiento

Gutierrez – CEO

Murilo dos Santos Corrêa – Chief

Financial and Investor Relations Officer

Anna Christina Ramos Saicali – Officer

Carlos Eduardo Rosalba Padilha – Officer

Celso Alves Ferreira Louro – Officer

Flávio de Almeida Serapião – Officer

João Guerra Duarte Neto – Officer

José Timotheo de Barros – Officer

Márcio Cruz Meirelles – Officer

Maria Christina Ferreira Nascimento –

Officer

Wellington de Almeida Souza – Officer

THE ROLE OF COMMITTEES

AND AUDITORS

The Board of Directors and the Executive

Board determine the Company’s

guidelines, supported by four internal

committees – Finance, People and

Compensation, Digital, and Sustainability.

[G4-35, G4-45, G4-46]

They function as working groups with

defined objectives to report issues and/or

situations examined by them, and submit

recommendations to the highest body of

governance of Lojas Americanas. Each

committee meets at least once a quarter

or, extraordinarily, whenever convened by

their individual chairs.

FINANCE COMMITTEE

The Finance Committee informs and

advises the Board of Directors about

all decisions involving the Company’s

financial policies, ensuring that it fulfills

its obligations and maintains financial

accountability.

PEOPLE AND REMUNERATION

COMMITTEE

The People and Remuneration Committee

advises the Board on all decisions

involving the Company’s people and

remuneration policies, ensuring (i) that

the members of the Board of Directors,

Executive Board, and all employees have

incentives to achieve exceptional results,

and are compensated appropriately; (ii)

the correct and effective application of the

Company’s culture, which values constant

improvement and meritocracy, and

ensures the alignment of the interests of

employees and shareholders; and (iii) that

the Company can attract, capture, retain,

and develop the best professionals and

leaders, ensuring the succession of its top

executives. [G4-LA12]

DIGITAL COMMITTEE

The Digital Committee advises the Board

of Directors regarding the fulfillment of

its digital oversight responsibilities in the

areas of technology and e-commerce,

TV and mobile applications, as well as

emerging channels.

SUSTAINABILITY COMMITTEE

The Sustainability Committee, formally

established by the Board of Directors in

2010, is multidisciplinary and contributes

to the definition of best management

practices, which are based on the search

for the balance between economic,

environmental, and social concerns, as

well as promoting the engagement of all

employees in regards to sustainability

issues.

Through weekly meetings, the committee

discusses, plans, and implements actions

to promote the Company’s sustainable

development, always based on the needs

of stakeholders.

AUDIT COMMITTEE

Lojas Americanas also has an Audit

Committee, which is convened as

necessary and consists of three members

– one appointed by the controlling

shareholders, one by the preferred

shareholders, and one by common

shareholders. [G4-41]

INDEPENDENT AUDITORS

In accordance with CVM Instruction

No. 381, the Company discloses that

its independent auditors, KPMG,

provided valuation services related to

the acquisition of companies by the

Company. Contracted on April 13, 2016,

it received total fees of R$ 630,000,

which were related, in their totality, to

external audit services. The Company’s

policy regarding contracting independent

auditors for other audit services, which

are not external in nature, ensures that

there is no conflict of interest, loss of

independence or objectivity on the part of

these independent auditors. [G4-41]

100% TAG-ALONG RIGHTS FOR

ALL SHAREHOLDERS

Since 2006, Lojas Americanas’ Bylaws

require the obligation to grant full Tag

Along Rights (100%) to the Company’s

common and preferred shares. With this,

all Lojas Americanas shareholders are

given equal treatment in the event of a

change of control of the Company and are

guaranteed the right to sell their shares

under the same conditions negotiated by

the controlling shareholders. [G4-41]

DIVIDENDS POLICY

In 2016, distribution of profits of R$ 115.5

million in interest on shareholders’ equity

(before income tax withholding), based

on net income for the fiscal year. In

conformity with the principles of current

legislation, sets the minimum value for

dividends at 25% of the net profit for any

given fiscal year, after the establishment

of a 5% legal reserve. [G4-EC1]

SHARE BUYBACK PROGRAM

Lojas Americanas maintains a share

buyback program for the Company,

either to maintain shares in treasury or for

subsequent cancellation. The program

provides for the repurchase of up to ten

million nominative registered common

shares and ten million nominative

registered preferred shares.

POLICIES AND REGULATIONS

Throughout 2016, Lojas Americanas

maintained its commitment to combating

corruption and promoting ethics in its

relationship with all its stakeholders.

In addition to its Code of Ethics and

Conduct, which was approved by the

Board of Directors and the Executive

Board, the Company has a Policy on

Compliance and Combating Corruption.

Upon hiring, all employees receive a

copy of the Code of Ethics and Conduct,

and sign a cognizance and agreement

statement.

Lojas Americanas values principled,

transparent, and cooperative behavior.

Several policies contribute to the

governance process, including the

Disclosure and Use of Information

Policy. The Company’s policies establish

strict rules and harsh punishments for

offenders, as well as those who engage in

fraudulent acts.

As a signatory to the United Nations

Global Compact since 2013, the Company

has worked to strengthen internal

processes related to sustainability

management, as well those that exist

throughout its supply chain. The Global

Compact is an initiative that brings

together thousands of companies around

the world that are committed to best

corporate practices that respect human

rights, particularly those in relation to

labor issues, as well as the environment

and business ethics.

In this sense, Lojas Americanas promotes

and endorses the promulgation of

principles that protect and value human

rights. In its trade agreements, the

Company highlights these aspects

through the inclusion of specific,

punitive clauses, which impose fines

and immediate disqualification of

violators found to have engaged in

irregular behavior. These measures are

intended to assist in the eradication of

forced labor and to combat any practice

that disregards the principle of human

dignity in the value production chain.

The Company also supports a number of

initiatives in the public and private sectors

that seek to identify the risks and potential

impacts of human rights violations

associated with their activities. [G4-LA14,

G4-LA15, G4-HR1, G4-HR5, G4-HR6, G4-

HR10, G4-HR11, G4-SO3, G4-SO4], G4-

SO4]

Economic Performance05General Considerations

The comparison of the information

presented refers to the results of Lojas

Americanas in 2016 and 2015, except

when otherwise indicated. The financial

information serving as the basis for the

comments below, presented in Brazilian

reais (R$), are in accordance with

international financial reporting standards

(IFRS), with the standards issued by the

Brazilian Securities Commission (CVM), as

well as the Novo Mercado listing rules.

Gross Merchandise Volume

(GMV)

The Gross Merchandise Volume (GMV)

presents consolidated gross sales and

services revenue plus sales made on

the B2W Digital's marketplace platforms,

consequently, in Lojas Americanas'

consolidated results.

In the fourth quarter of 2016 (4Q16),

consolidated GMV reached R$ 8 billion,

an increase of 13.6% compared to the R$

7.1 billion registered in the fourth quarter

of 2015 (4Q15). In 2016, consolidated GMV

reached R$ 23.3 billion, growth of 8.7%

compared to R$ 21.5 billion in 2015. [G4-9]

Gross revenue

In 4Q16, the parent company's gross

revenue was R$ 4 billion, an increase

of 8% over 4Q15. Consolidated, gross

revenue was R$ 7.3 billion, an expansion

of 7.5% in relation to 4Q15. In 2016,

the parent company's gross revenue

was R$ 12 billion, an increase of 7.6%

compared to 2015 and R$ 21.4 billion

in the consolidated result, with a 3.3%

expansion compared to 2015. [G4-9]

The "same stores" gross revenue growth

was 6% in the fourth quarter and 5.6% in

2016.

Due to the effect of the tax changes

that took effect in 2016, the taxes and

deductions line was impacted, influencing

the comparison with 2015. In 2016,

the income tax line increased 16.3% in

the parent company and 18.2% in the

consolidated result when compared to

2015. Such growth makes it impossible

to directly compare the growth of gross/

net revenues and the margins/expenses

of the periods under analysis. Thus, we

assumed nominal EBITDA growth as the

best measure of value creation for the

Company.

Net revenue

In 4Q16, the parent company's net

revenue was R$ 3.5 billion, 8.1% more

than in 4Q15. Consolidated, net revenue

was R$ 6.3 billion, an increase of

7.7% compared to 4Q15. In 2016, the

parent company's net revenue was

R$ 10.4 billion, an increase of 6.4% in

relation to 2015 and R$ 18.1 billion in the

consolidated result, up 1% In relation to

2015. [G4-9]

Gross profit and gross margin

In 4Q16, the parent company's gross

margin was equivalent to 37% of

net revenue (NR), a variation of -1.0

percentage point (p.p.), when compared

to the gross margin of 38% obtained in

4Q15. In the consolidated view, gross

margin in 4Q16 was 30.2% of NR, the

same level as in the previous year.

In 2016, the parent company's gross

margin was equivalent to 35.6% of net

revenue (NR), an increase of 1.3 p.p. when

compared to the gross margin of 34.3%

obtained in 2015. In the consolidated

view, the gross margin was 29.8% of NR,

an increase of 1.2 p.p. when compared to

the previous year.

In 2016, the improvement in the gross

margin was favored by the improvement

in the operational efficiency of the stores

and by the evolution of the several

projects implemented by the Company,

which are still in the maturation phase,

but which already make us very optimistic

about the results achieved so far. In 4Q16,

the gross margin was impacted by Red

Friday, a highly promotional event that

has been consolidated and is already part

of the Company's events calendar.

Selling, general and

administrative expenses

In 4Q16, the parent company's selling,

general and administrative expenses

totaled R$ 470.5 million, 13.3% of NR. In

the consolidated view, the sum was R$

794.3 million, which corresponds to 12.7%

of the NR.

In 2016, the selling, general and

administrative expenses of the parent

company totaled R$ 1,575.5 million,

15.2% of NR. In the consolidated view,

the sum was R$ 2,591.3 million, which

corresponds to 14.3% of NR.

EBITDA and EBITDA margin

In 4Q16, the Adjusted EBITDA of the

parent company reached R$ 833.6

million, an increase of 3.7% over 4Q15,

a change of -1.1 p.p. in the margin, which

reached 23.6% of NR. In the consolidated

result, Adjusted EBITDA reached R$

1,093.7 million, an expansion of 7.7%,

reaching a margin of 17.5% of NR, the

same level of 4Q15.

In 2016, the parent company's Adjusted

EBITDA reached R$ 2,120.4 million, an

increase of 12.0% over 2015. The EBITDA

margin increased by 1.0 p.p. reaching

20.4% of NR. In the consolidated result,

Adjusted EBITDA reached R$ 2,808.3

million, an increase of 12.2%. The EBITDA

margin increased by 1.5 p.p., reaching a

margin of 15.5% of the NR.

EBITDA (CVM 527/12)

In 4Q16, the parent company's Adjusted

EBITDA reached R$ 833.6 million.

According to CVM Instruction 527/12, if

other operating income and expenses,

equity accounting, minority and statutory

interests were excluded, the EBITDA would

be R$ 702.1 million in 4Q16, representing

19.9% of NR.

In the consolidated view, Adjusted EBITDA

totaled R$ 1,093.7 million in 4Q16. According

to CVM Instruction 527/12, if other operating

income and expenses, equity accounting,

minority and statutory interests were

excluded, the EBITDA would be R$ 1,009.4

million in 4Q16, representing 16.1% of the NR.

Net financial income

The parent company's net financial

expenses totaled R$ 338.6 million in

4Q16, up 35.3% from R$ 250.3 million

in 4Q15. In the consolidated view, net

financial expenses were R$ 653.7

million in the same period, a variation of

29.4% in relation to the R$ 505.3 million

recorded in 4Q15. The variation of the

financial result of the parent company is

mainly related to the investment in the

subscription of 69,789,183 shares (R$

697.9 million) for B2W's private capital

increase and the Certificate of Deposit

Interbank (CDI) rate. [G4-9]

Net income

In 4Q16, consolidated net income

reached R$ 255.6 million. In 2016,

consolidated net income was R$ 211.7

million. [G4-9]

The following table shows the main

variations of Adjusted EBITDA, in relation

to net income:

Debt

Short-term and long-term consolidated

loans and debentures of Lojas

Americanas at December 31, 2016

amounted to R$ 11,608.5 million.

Subtracting the cash position in the

amount of R$ 6,410.1 million (cash

+ financial investments + accounts

receivable from credit and debit cards)

Adjusted EBITDA - Operating income before interest, taxes, depreciation and amortization, other operating

income/expenses, equity pick-up, minority and statutory interests.

**BWU financial investments [ NE 12 (i)] – Adjusted EBITDA - Operating income before interest, taxes, depreciation

and amortization, other operating income/expenses, equity pick-up, minority and statutory interests.

of total loans, we have a net debt of R$

5,198.4 million.

In the consolidated view, the net debt

was 1.9x the accumulated EBITDA of the

last 12 months. The average maturity

was 804 days on December 31, 2016 (26

months).

At the parent company, net debt was 1.6x

EBITDA accrued in the last 12 months.

The average maturity of the debt was

820 days as of December 31, 2016 (27

months).

As defined in the notice to shareholders

dated May 31, 2016 and disclosed

by B2W Digital in June 2016, Lojas

Americanas exercised its preemptive

rights in the subscription of shares related

to the capital increase in the company

in proportion to its participation, totaling

45,766,785 subscribed shares or R$ 457.7

million. In addition, in the third quarter,

in July 2016, the Company subscribed

all other unsubscribed shares not

subscribed by other shareholders.

After all the steps with relation to the

capital increase were taken, Lojas

Americanas subscribed 69,789,183

shares, totaling an investment of R$ 697.9

million. Lojas Americanas' shareholding

in B2W Digital reached 62.28% in

September 2016.

To address uncertainties and volatility in

the financial market, Lojas Americanas

aims to preserve cash and extend the

debt profile. Over the last few years,

several measures have been taken

with this objective, which allows us to

consolidate the company's long-term

growth plan.

"Accounts receivable" consists mainly

of the discounted value of net credit

card receivables, which are highly liquid

and can be considered as cash. The

breakdown of "accounts receivable" in

Lojas Americanas' view is shown in the

table below: [G4-9]

Absence of exposure to

exchange variations

The Company continues to reaffirm its

commitment to a conservative cash

application policy, manifested by the

use of hedge instruments denominated

in foreign currency and by derivative

operations (swaps). The financial liabilities

and the Company's total cash position

are fully hedged against any exchange

rate fluctuations through these financial

instruments, which offset exchange rate

risk by transforming the cost of debt into

local currency and interest rates (as a

percentage of the CDI*). In the same sense,

it is worth remembering that the Company's

cash is invested with the largest financial

institutions in Brazil.

* CDI - Interbank deposit certificate: average

interest rate of funding on the interbank

market.

Sales per means

of payment

The sales per means of payment of the

parent company in 2016 and 2015 can be

seen in the table below:

Net working capital of the parent

company

As of December 31, 2016, the Parent

Company's net working capital was 28 days.

Inventory: over 2016, the Company

identified opportunities for strategic

purchases that impacted the inventory line

item at the end of the quarters. The success

of 4Q16's events stabilized the item on

December 31, 2016, ending the year at a

level close to the previous year.

Suppliers: the acceleration of payments

to suppliers and strategic shopping

opportunities impacted the average

maturities in the supplier line item.

Gross accounts receivable: the company

constantly monitors credit card installments

and sales volumes, seeking a greater

balance of offered payment/installment

conditions.

Consolidated statement of

income

Adjusted EBITDA - Operating income

before interest, taxes, depreciation and

amortization, other operating income/

expenses, equity pick-up, minority and

statutory interests.

Parent company's income

statement

Adjusted EBITDA - Operating income

before interest, taxes, depreciation and

amortization, other operating income/

expenses, equity pick-up, minority and

statutory interests.

Effects of the consolidation of

B2W Digital's transportation

subsidiaries

Click-Rodo and Direct, B2W Digital

subsidiaries, provide merchandise

distribution services to the Company,

generating an elimination effect on the

consolidated gross revenue and general

and administrative expenses (distribution

expenses), pursuant to current accounting

standards. Consolidated gross profit is

reduced in proportion to the increase

observed in general and administrative

sales expenses, but with no impact on

Adjusted EBITDA and the Adjusted EBITDA

Margin.

The table below sets forth the consolidated

net income of Lojas Americanas, without

these effects in the B2W Digital's result and,

consequently, in the consolidated results of

Lojas Americanas:

Socio-Enviromental Management

06

To be more profitable, socially

responsible, and ecologically conscious,

the Company created the Green

Company Committee in 2007. In 2010,

the committee evolved to the point

where it was formalized in the minutes

of the Board of Directors. In 2012,

the Sustainability Board was created,

Sustainability Committee -

Green Company

reporting directly to the Office of the

President, with a team dedicated

entirely to the Company’s sustainable

development. By 2015, a member of

the Company’s Board of Directors

was designated to serve on the Green

Company Committee and whose role

includes advising the executive board to

consider economic, environmental, and

social impacts in its decision making. [G4-

34]

Additionally, since 2012, Lojas Americanas

has had an Executive Board that reports

directly to the Office of the President, with

a team entirely dedicated to sustainability.

During 2016, the Company maintained

its commitment to develop an action plan

for making investments in socio-cultural

and environmental projects, implementing

them, and then communicating them to

all its stakeholders. Clients, shareholders,

suppliers, government, associates,

non-governmental organizations,

and communities are continuously

encouraged to participate in the

improvement of our socio-environmental

practices. [G4-24]

In 2016, for the third consecutive year,

the Company was included in the

BM&FBOVESPA Corporate Sustainability

Index (ISE) portfolio. This helped to

strengthen, for shareholders and

investors, Lojas Americanas’ commitment

to social and environmental development

that is coupled with good economic

performance. In addition, the Company

received, for the third consecutive year,

the “Green Seal - Chico Mendes Award”

in the “Responsible Socio-Environmental

Management” category. [G4-15]

Sustainability Guidelines

As regards sustainable practices, the

Company focuses all of its communications

activities on two fronts – mobilization

and prevention – and we believe that

investments in sustainability only work when

an institution’s initiatives and efforts are

accessible to society. [G4-14]

Lojas Americanas understands its social role

and its responsibility to launch an expansion

plan, which, in the 2015-2019 cycle, will

open 800 new stores throughout Brazil.

The Company has had an increasingly

positive impact on several communities,

with a special emphasis on the economic

development of those localities in which

new stores have been situated. In this

context, the Company’s rapid growth

has required continuous improvement

of management processes, increasingly

robust governance, and the mobilization of

associates, suppliers, and partners to build a

sustainable business model.

To ensure transparency, a website was

created in 2015 to disseminate information

on Sustainability initiatives. Those who

would like to learn more can access the

site at www.companhiaverde.com.br or

by sending an e-mail to the Company’s

Sustainability division at cia.verde@lasa.

com.br. [G4-31]

Social project investments

In 2016, Lojas Americanas continued to

sponsor a variety of cultural and social

projects, which emphasized sports,

vocational education, and the dissemination

of Brazilian culture, always with respect for

regional diversity. These initiatives took

place across the national territory, with

an eye towards the promotion of local

development. [G4-SO11]

Books in the Squares

In 2016, “Books in Squares,” also known as

the Bookmobile Project, continued to be a

big hit. In partnership with B2W Digital, Lojas

Americanas renewed its sponsorship of

this mobile library initiative. During FY 2016,

fourteen communities and approximately

20,000 people benefited from the project,

which offered a diverse collection of

children’s, young adult, and adult titles.

Grael Project

Americanas.com, in partnership with Lojas

Americanas, sponsored the Grael Project

in 2016. The sponsorship strengthens the

support of sport and healthy lifestyles by

encouraging another project focused on

inclusion, education and democratization

through the practice of sports.

Over the past 18 years, the Grael Project

has helped approximately 16,000 young

people. Created by the brothers and sailing

champions Lars and Torben Grael, the

institution offers free sailing, swimming and

Hawaiian canoeing classes. In addition,

woodworking, fiberglass, electronics,

carpentry, mechanics and upholstering

workshops are offered. In 2016, some 400

youths participated in free sailing courses

and nautical sector training workshops.

Socio-Environmental Investment

Exchange

ALojas Americanas decided to contribute

part of its total social investments to

the BM&FBOVESPA Institute’s Socio-

Environmental Investment Exchange

(BVSA). Over the course of 2016, the

Company achieved the goal of supporting

10 social projects focused on educational

policy, professional training, and income

generation, which were carried out in

Lojas Americanas’ areas of influence in the

states of Rio de Janeiro, Bahia, Ceará, Mato

Grosso do Sul, and Pará. In total, almost

2,000 individuals benefited from these

initiatives.

Galpão Aplauso

Sponsored by Lojas Americanas, the

Galpão Aplauso (Applause Workshop)

project offered vocational courses in

logistics to young people, aged 17-29, who

are residents of low-income neighborhoods

in the Baixada Fluminense and Zona

Oeste regions of Rio de Janeiro. The goal

of the project, which greatly improves the

employability of young people, is to train

these professionals to perform the following

functions – operations assistant, forklift

operator, logistic oversight, and quality

assurance support.

Upon enrolling in the Galpão Aplauso

course, students undergo intense

professional training – theoretical and

practical – and are offered the opportunity

to experience working in a mini distribution

center, specially designed for this program

by Lojas Americanas personnel. The project,

which was launched in January 2015,

has already trained 290 students and, in

February 2017, welcomed a new group of

30 young people to the initiative.

Dupla Escola (Double School) Project

The Integral Education Program – Dupla

Escola – developed in partnership with the

Department of Education of the state of

Rio de Janeiro (SEEDUC) and the National

Commercial Apprenticeship Service

(SENAC) – is another of the Company’s

social investment initiatives. Throughout

2015 and 2016, planning took place towards

the execution of the project, which included

activities such as curriculum development,

establishing an activities agenda, drafting

public notices, and teacher selection, as

well as student enrollment. In total, there

will be 420 high school students who will

receive professional technical training in

logistics and will study, full-time, between

2016 and 2018.

Corporate Citizenship

Through its values and its corporate

identity, Lojas Americanas has promoted

an awareness among all its associates for

activities aimed at promoting health and

well-being, respect, and environmental

protection, as well as the conscious use

of natural resources. In this regard, the

Company created a prevention initiatives

calendar, promoting health and well-being

activities to mitigate environmental impacts,

as a means of mobilizing associates,

customers, and suppliers throughout the

year.

Todo mundo vai Run/Walk

For the third consecutive year, Lojas

Americanas promoted the Todo mundo

vai (All In) run/walk to inspire customers,

associates, and society in general to be

physically active, as a means of contributing

to their own well-being and quality of life.

The 4K and 8K courses attracted 5,000

people to the city of Rio de Janeiro’s Aterro

do Flamengo (Flamengo Park). The event

was also held for the second time in Belo

Horizonte, Minas Gerais; attracting 2,500

people to Lagoa da Pampulha (Pampulha

Lagoon). Along the two stretches of

the course, over 1,000 individuals took

advantage of the opportunity to obtain

physical evaluations and massages. [G4-

SO1] Launched in May 2014, this activity’s

affordable participation prices were made

possible through Brazil’s Sports Incentive

Law. All participants received exclusive

kits that contained an official event t-shirt,

a sports drink, sunscreen, and other

products.

"King and Queen of the Sea"

Sponsored by Lojas Americanas and

Americanas.com, the cities of Salvador

and Rio de Janeiro hosted the biggest

beach sports festival in the country,

featuring sand races, sprints, classic

and challenge (swimming in the sea),

beach biathlon (swimming in the sea

and running in the sand) and a stand-up

paddle race. The event brought together

some 10,000 participants in the stages

in Bahia and Rio de Janeiro, and with the

latter city's competitions taking place on

the Recreio and Copacabana beaches.

"Happily Married"

Lojas Americanas and Americanas.

com brought to Rio de Janeiro state the

“Bem Casados” (Happily Married) feature

film starring actors Camila Morgado

and Alexandre Borges. The movie was

screened at the Arena Carioca Jovelina

Pérola Negra in the Rio de Janeiro

neighborhood of Pavuna in Madureira

Park, and the Crystal Palace plaza in the

municipality of Petrópolis. More than

2,500 people attended the showings,

with the right to popcorn and soft drinks

to accompany the film.

“São Sebastião do Rio de Janeiro”

About 1,000 public school students watched

the "São Sebastião do Rio de Janeiro"

documentary film sponsored by Lojas

Americanas e Americanas.com. The film is

part of a social and educational action and

recounts the history of the city. The students

were from 18 schools in school 15 districts

of Rio de Janeiro. Eight free sessions were

organized in the Ita˙ Cinema Space and the

students helped themselves to popcorn and

soft drinks.

“5x Chico”

The documentary "“5x Chico - O Velho

e Sua Gente” (5x Chico - The Old Man

and His People) sponsored by LASA and

B2W was screened for the populations

of the cities where the filming had taken

place. Approximately of 3,000 people in

PiaÁabuÁu (AL), Piranhas (AL), Bom Jesus

da Lapa (BA), Barra (BA), Pirapora (MG)

and†Janu·ria (MG) watched the movie and

got popcorn and soft drinks.

Toy Donations

During the Christmas period, Lojas

Americanas organized a large, toys

collection campaign. A Christmas tree

was set up at the Company headquarters,

which featured 240 letters to Santa Claus

from more than 240 needy children from

Rio de Janeiro. With the support of our

associates and in partnership with B2W

Digital, more than 240 toys were donated

to Rio de Janeiro NGO, Sonhar Acordado

(Daydreaming). This initiative helped make

the dreams of several hundred children

become reality. [G4-SO1].

Easter Egg Donations

Easter is an important time for retailers.

Therefore, throughout the month of April,

it’s celebrated in a special way. For the

second consecutive year, Lojas Americanas

has spearheaded a campaign to donate

chocolate eggs and bonbons to needy

communities in the cities of Rio de Janeiro

and São Paulo. Executed in partnership with

B2W Digital, a total of 2,100 chocolate eggs

and over 5,000 chocolates were donated.

Christmas Hamper Donations

In December, Lojas Americanas donated

approximately 11,000 Christmas hampers

to ten different NGOs working in socially

vulnerable communities in Rio de Janeiro

and São Paulo. The donations were made

possible through commitments obtained

from suppliers who assisted the Company

during the collection period of this initiative.

This successful, annual activity, which has

been in place for the past three years,

benefits thousands of families

World Environment Day

On June 5, when World Environment Day

was celebrated, the Company issued

environmental education messages to

stimulate positive attitudes among its

associates and its customers. Through

advertising leaflets distributed in stores

and the use of internal communications

channels, all were invited to reflect on the

need to save water and energy.

World Health Day

On April 7, a campaign focused on

associates, which emphasized the beneficial

aspects of engaging in sports activities

and preventive health care. Additionally,

all business units were fumigated as a

means of combating dengue, zika, and

chikungunya-bearing mosquitoes.

Pink October

For the fourth consecutive year, Lojas

Americanas has engaged its customers

and associates in the prevention of breast

cancer. Throughout the month of October,

the Company used point-of-sale monitors

and promotional flyers to highlight this

awareness campaign, which reached

millions of people across Brazil.

EXCELLENCE IN CUSTOMER

SERVICE

To improve its customer service processes

and ensure the full satisfaction of

consumers, in 2016, Lojas Americanas

launched the Jornada do Consumidor

(Consumer’s Day) Project. The Company

has implemented the SAC Easy (Easy

Customer Service) system, which is a

large database that facilitates providing

customers with the assistance they

need. This, in turn, has contributed to an

improvement in customer satisfaction

across the nation.

The Company closed 2016 with 100% of

complaints attended to and 97.2% resolved.

Consumers nationwide registered their

concerns on independently-maintained

and government operated consumer

affairs websites – Reclamão, Consumidor.

gov, ReclameAQUI, and the many state

and municipal websites of the Consumer

Protection and Defense Agencies

(PROCONs). As a result of this high level

of performance, since October 2012,

ReclameAQUI has given Lojas Americanas

its RA 1000 Seal certification, which

acknowledges companies that deliver

excellent customer service.

Part of this acknowledgement of the

Company’s Consumer Relations (SAC)

team is based on observations of

consumer opinions and behaviors on

social networks. Accordingly, our SAC is

constantly monitoring consumer complaints

and suggestions posted to Facebook,

Twitter, Instagram, and YouTube. In 2016,

on Facebook alone, there were two

million interactions. Throughout Brazil,

Lojas Americanas has maintained a close

relationship with representatives of the

various consumer protection agencies

established in the municipalities where its

stores are located, and has attended to

consumer complaints within 48 hours.

Improvements have also been made to

lawsuit avoidance control instruments, such

as the use of the Preliminary Information

Letter (CIP), which is available through the

National Consumer Defense Information

System (SINDEC). We would highlight the

significance of our Post-Sales department,

which solved approximately 45,000 cases

of raised by customers at stores in 2016.

And through the ReclameAQUI portal,

between 2015 and 2016, 100% of all

complaints were responded to and 95%

were resolved within 1 day and 17 hours.

In addition to these initiatives, Lojas

Americanas has developed a platform that

consolidates all requests and complaints

from our customers. This project allowed

us to learn more about our customers and

to act in an objective manner on the issues

reported to us. In 2016, the Company

reported no cases of data breaches or

violations of consumer privacy. [G4-SO11,

G4-PR8].

Red Friday

It’s one of the most important dates on the

calendar for all retailers. And, in 2016 – an

otherwise challenging year for the Brazilian

economy – Lojas Americanas’ Red Friday

surpassed expectations. A duty shift was

drawn from our Customer Service team

and deployed so that customers could be

served for an uninterrupted, 24-hour period,

which ran from midnight on November

25 to midnight, November 26. During the

entire four-day sale period, 10 stores kept

their doors open 24 hours in cities such as

Salvador, São Paulo, Rio de Janeiro, Belo

Horizonte, Santos, and Petrópolis.

Post-Sales Service

Launched in 2015, our post-sales service

division allows us to mediate relationships

between consumers and manufacturers

in an effort to settle disputes in cases that

are not covered by Brazil’s Consumer

Protection Code (CDC).

WORKPLACE HEALTH AND

SAFETY COMES FIRST

Lojas Americanas’ commitment to

procedures that regulate and maintain

workplace health and safety, without

sacrificing strict compliance with the legal

rules and principles related to the same, is

one of the Company’s values. To achieve

this, the Company guarantees the use

of Personal Protective Equipment (PPE)

required for specific tasks, in particular

in its four distribution centers, which are

monitored by supervisors.

Each year, 42 associates are elected to the

Internal Committee for Accident Prevention

(CIPA), which meets on a monthly basis.

All representatives receive NR-05 training

and take the Fire Fighting and Prevention

Course (NR-23), both of which being

required by the Brazilian Ministry of Labor

and Employment (MTE). Following the

training, the group takes actions to prevent

workplace accidents at our headquarters

and throughout our network of stores and

distribution centers.

Environmental Responsibility

Sustainability consists in the generation

of economic value that also creates value

for society and preserves environmental

resources. The Company’s sustainability

policy makes it possible to conduct

business via best socio-environmental

practices. In this way, it seeks to understand

the demands and expectations of

stakeholders, always prioritizing an ethical

and transparent dialogue with them.

As a way of reaffirming its commitment to

socio-environmental issues, since 2013,

Lojas Americanas has been a signatory

to the United Nations Global Compact, an

initiative that unites thousands of companies

around the world that are committed to the

adoption of corporate practices that respect

human rights, especially as regards issues

related to labor practices, the environment,

and business ethics. In 2016, there were no

significant fines or non-monetary sanctions

levied against Lojas Americanas in relation

to environmental management. [G4-15, G4-

EN29]

SUSTAINABLE ARCHITECTURE

With the aim of becoming increasingly

sustainable, Lojas Americanas continued

its work from planning that began in 2013,

when the Company opened its first “green”

store in Rio de Janeiro. Since then, Lojas

American as has been working to gradually

renovate and refit its stores with the aim of

achieving greater efficiencies in energy and

water consumption, giving preference to the

use of low environmental impact materials

and technologies, and reducing operating

costs through the use of low environmental

impact materials and technologies.

In 2016, Lojas Americanas continued to

promote care for the environment and

the responsible consumption of natural

resources, concept to which it committed

itself when the Company announced

the launch of its Conscious Consumer

campaign in 2015. Lojas Americanas has

progressively replaced the water faucets

in its stores with aerator and flow restrictor

models, which deliver only 6 liters of water

per minute, versus 12 liters registered by

the old models. In its restrooms, the gradual

shift towards dual-flush toilets has reduced

consumption to 3 or 6 liters per flush,

depending upon the type of flush required.

By comparison, the older, single-option

models consumed 18 liters per flush.

All 93 stores that opened in 2016 were

designed along the “green store” concept.

These establishments used water-based

paints and have air conditioning systems

that use R410a refrigerant gas (which do

not emit polluting gases), low-consumption

power generators, LED bulbs, dual-flush

toilets, and auto-shut water faucets with flow

regulators. Almost 90% of the materials that

are used for visual communications in the

stores are recyclable.

The Company has encouraged its

associates to make a conscious effort to

collaborate within an environment that

prioritizes the economy of resources in all

business units. Initiatives that demonstrate

the Company’s commitment to protecting

the environment, which also help to reduce

its operating costs include selective waste

collection on all floors of its facilities, area

signage made from reforested MDF boards,

the replacement of common cleaning

products with non-polluting items, and the

installation of automatic shut-off sensors.

GHG EMISSIONS INVENTORY

Mindful of the effects of greenhouse gas

(GHG) emissions on the environment,

particularly its influence on global climate

change, since 2009, Lojas Americanas has

been part of the Brazilian GHG Protocol

Program, which is a tool from an adaptation

of an international methodology that helps

large companies to better understand,

quantify and manage their GHG emissions.

All the members of the Green Company

committee were trained in the use of the

GHG Protocol tool.

Lojas Americanas’ GHG calculation and

reporting for 2016 is intended to illustrate

the Company’s activities in its ongoing effort

to reduce emissions of polluting gases and

mitigate their impact on nature without

sacrificing business liquidity. [G4-EN15]

The result of this work is the Annual

GHG Emissions Inventory. In 2016, Lojas

Americanas and its subsidiary, B2W Digital,

worked together to minimize the rise of

GHG emissions in relation to the Company’s

organic growth. Analyzed, consolidated net

revenue data shows the Company grew

by 1% in relation to 2015, while its direct

emissions (Scope 1) decreased by 26%, a

relative decrease of 27%.Of particular note,

Scope 2 (which mainly reflects indirect

emissions from electric energy acquisition)

decreased by 26%, due to a significant

effort by the Company to manage its energy

use, such that it can consistently maintain

this level of consumption. [G4-EN16]

Regarding indirect emissions (scope 3),

continuous process improvements and fleet

logistics optimizations contributed to a 31%

reduction in indirect emissions. In addition,

the e-commerce operation stopped using

plastic materials in its packaging, which

allowed for a 100% reduction in GHG

emissions from this source type. [G4-EN17]

Even with a nationwide business that is

present in all Brazilian states and with 93

new stores throughout the country, we

have been able to reduce GHG emissions

from air travel by 38%. To accomplish

this, we make sure, whenever possible,

that associates are booked on the same

flights and we also have a preference for

videoconferencing.

– Plastic envelopes (tCO2e)

– Business travel (tCO2e)

– Outsourced fleet (tCO2e)

The major advance in the Company’s

GHG emissions management came in its

contracting of external verification as a

means of validating its 2016 CO2 emissions

inventory data. Thus, we believe that we are

taking another step towards the sustainable

development of Lojas Americanas and data

transparency.

Strategy and Investment07In 2016, Lojas Americanas reached R$

21,400.6 million in consolidated net

revenue, representing 3.3% growth over

the previous year. Of this total, R$ 11,975.1

million relates to the performance of the

parent company (brick-and-mortar stores),

which sold 7.6% more than in 2015.

Growth in same stores gross revenue

6.0% in the fourth quarter and 5.6% in

2016.

The Lojas Americanas’ store chain

has grown approximately 173% in the

past decade. At the close of 2016, the

Company had 1,127 stores distributed

across 436 cities in all Brazilian states. In

addition to the bricks-and-mortar store

chain, the Company has four distribution

centers located in Rio de Janeiro, RJ, São

Paulo, SP, Recife, PE, and Uberlândia, MG.

[G4-9]

The following chart shows the Company’s

expansion over the past ten years:

Store chain expansion

In 2016, Lojas Americanas opened 93 new

stores, reaching 1,127 stores in 436 cities

distributed across all Brazilian states and the

Federal District. The Company is committed

to satisfying the consumption needs of its

customers, exceeding their expectations,

fulfilling their dreams, and helping them to

save time and money.

The following table details the profiles of

stores opened in 2016:

Lojas Americanas has reaffirmed its

commitment to keep up the pace of growth

in its business forecast in the “85 Years in

5 – Somos Mais Brasil” expansion plan,

maintaining the Company’s usual discipline

in the approval of new locations, which

is based on economic feasibility studies

that consider several macroeconomic and

operational assumptions, which include

population growth, per capita income,

evolution of the local economy, logistics

capacity, rent, and anticipated returns.

The new expansion plan foresees the

opening of two new distribution centers

and 800 new stores in Brazil between

2015 and 2019. So far in 2017, the

Company has opened five new stores

and has another 80 contracted or in an

advanced state of negotiation.

To achieve these results, Lojas

Americanas will rely on the abilities

of its employees, their experience in

negotiation and identification of new

points-of-sale, enhancements in its

logistics system, as well as its strong

talent recruitment, training, and retention

program. [G4-2]

Investments

In 2016, Lojas Americanas’ parent

company invested a total of R$ 560.9

million, with an emphasis on expansion,

remodeling of the store network, and

upgrades in technology.

Big Data

Over the past 15 years, Lojas Americanas

has invested in information technology,

storage capacity and real-time data

processing. Collected data addresses

different dimensions of the business,

such as information about customers and

their habits, the supply chain, and the

operational functions of the stores. This has

made it possible for the Company to build

a valuable asset designed to support our

decision-making processes.

Big Data and Analytics initiatives support

the challenge of handling large volumes

of data with real-time intelligence.

Through the development and analysis of

algorithms, the Company has constructed a

data processing platform, which is used for

decision-making in various business areas.

For 2016, the Company notes five major

areas of achievement:

Understanding client behavior: From

advertising through to post-sales,

Client Relationship Management (CRM)

initiatives in brick-and-mortar stores have

already resulted in a large database

that allows the Company to continually

improve its ability to identify, customize,

and interact with its customers. Target

marketing and a strong social media

presence are some of the client-focused

activities that increase our engagement

with them and boosts sales for the

Company.

Mobility: As the Company has a

nationwide presence, the use of mobile

technologies to support its operations has

become indispensable. Thus, the stores’

teams rely on enterprise applications

that generate higher productivity and

establish operational standardization.

Internet of Things: This concept allows

for data capture initiatives in which

sensors monitor the technological park

of the Company’s stores, generating

increases in availability, operational

efficiencies, and productivity.

Commercial optimization: This concept

allows for data capture initiatives in which

sensors monitor the technological park

of the Company’s stores, generating

increases in availability, operational

efficiencies, and productivity.

Human resource management: Lojas

Americanas has developed statistical

and analytical models in partnership

with professors from the world’s leading

business schools, to evaluate talent and

improve the management the Company’s

stores.

All of these initiatives are geared toward

continuously improving client satisfaction

and their shopping experience.

Supply Chain [G4-12]

In 2016, Lojas Americanas carried out

initiatives to make its supply chain

even more efficient. In the search for

competitive advantages that support

expansion, the Company adopts best

practices for product storage and

distribution, always with the objective of

exceeding customer expectations.

Currently, the Company has 1,130 stores

in operation in 439 cities across all

Brazilian states, which are supplied by

four distribution centers, located in the

states of Minas Gerais, Pernambuco, Rio

de Janeiro, and São Paulo.

The implementation of new technologies

and the improvement of processes

includes the choice of more efficient and

economical transportation and supply

models, optimization of distribution center

operations, and the redesign of the

logistics network – always considering

the adequacy of inventories to guarantee

the lowest operational cost and the best

allocation of products in the stores.

The practices adopted in the areas of

storage and distribution generate new

business opportunities, as they assure

the supply of the new stores, support the

presence of a greater variety of products

in all points of sale, allow greater agility

and safety in refueling, and generating

economies of scale due to more efficient

inventory management.

In 2017, Lojas Americanas will continue

to invest in the continuous improvement

of logistics processes, with a focus on

technology, people, and best market

practices.

Private label

Lojas Americanas has 13 private labels

that offer approximately 8,000 quality

products in diverse categories, which are

offered at fair prices.

In 2016, the Company developed a

diversified line of branded products: 1)

D’elicce, which offers a special line of

panettones, cakes, and chocolate gift

items, and 2) Leven, which has introduced

a variety of nut-based products that have

helped to triple the brand’s available

assortment.

During the year, Brink+ grew to become

one of the leading toy brands offered at

Lojas Americanas, now rivaling traditional

brands in the toy and entertainment

market. In 2016 alone, approximately 90

new items were introduced.

The start of 2017 has already produced

success for School Basics and Office

Basics, which have introduced many new

features, such as a line of school supplies

and an everyday office products line that

include notebooks, backpacks, pencil

sets and pens.

Apparel

In 2016, Lojas Americanas continued

to restructure its apparel department.

Through its Basic+ private label brand,

the Company has introduced more than

50 collections of women’s, men’s, and

children’s clothing, ensuing a weekly flow

of new items for clients.

With the aim of delivering a complete

solution to the customer, in November, the

Company debuted its first line of lingerie,

through the brand extension, Basic+

Lingerie. At the same time, the Company

introduced a sports clothing line, branded

as Basic+ Fitness. These lines promise to

be among the most sold in their categories,

delivering a “comfort-fun” concept that

features basic and comfortable items,

which are also fun and colorful.

To make this project possible, in addition

to strengthening its partnerships with

strategic national suppliers, the Company

also strengthened its import arm. With

these and many other initiatives, Lojas

Americanas remains focused on the goal

of offering customers attractive, quality,

and cost-beneficial products.

In addition, the Company provides

exclusive advantages to customers

in the clothing category, with special

payment conditions and progressive

discounts offered when using the Lojas

Americanas card.

Awards and recognition

Lojas Americanas constantly invests in

initiatives that improve its management

processes, such as improvements in

client service, quality control of products

and services, supplier audits, distribution

center operations, and computerization

of all internal processes. As a result of

this effort, in 2016, the Company received

recognition and several awards, which

reinforced the brand’s value, reputation,

and customer commitment.

Highlights included:

Época Reclame Aqui Award

n 2016, Lojas Americanas won in the

“Retail Chain” category. The award, which

is based on popular votes, recognizes the

most consumer-oriented companies in

the marketplace;

Época 360° - Época Negócios

For the third consecutive time, Lojas

Americanas took first place in the retail

category. This yearbook is considered the

national guide in the measurement of all

relevant dimensions that pertain to the

continued success of organizations;

BRASIL REPUTATION PULSE

For the second consecutive year, Lojas

Americanas was ranked as the most

reputable retail company, placing first in

the retain ranking and second among all

Brazilian companies;

Powerful Global Retailers 2017 - Deloitte

Lojas Americanas is the only Brazilian

retailer to rank among the 250 largest

retailers in the world;

Most Valuable Brazilian Brands -

Interbrand

In the Interbrand ranking, Lojas

Americanas came in 12th, being the most

valuable Brazilian retail brand. It stood out

among five national brands that grew the

most in value during the year, reaching

R$ 1.12 billion;

Most Valuable Brazilian Brands - IstoÉ

Dinheiro

In ranking the 50 most valuable brands in

Brazil, Lojas Americanas was top among

retailers and 12th overall;

EMPRESAS MAIS – ESTADÃO

Lojas Americanas won in the “Retail”

category and was among ten highlighted

for Corporate Governance;

300 Largest Brazilian Retail Companies

- Brazilian Retail and Consumer Society

Lojas Americanas ranked first in the

“Department, Household Products, and

General Merchandise Stores” category

and fourth in the overall ranking of

evaluated companies.

Economic outlook

At the beginning of 2016, the principle

macroeconomic variables presented

results below expectations. According to

a Focus* report, Brazil’s Gross Domestic

Product (GDP), should show a variation

of -3.5%. As a result, for the first time,

the country registered two consecutive

years of decline in the level of economic

activity. Given these challenges, retail

sales fell by 6.2% in 2016, the worst result

of the historical series, which began in

2003, released by the Brazilian Institute

of Geography and Statistics (IBGE). [G4-2]

Even with the challenges presented

throughout the year, inflation measured

by the National Consumer Price Index

(IPCA) registered a cumulative rate of

6.29%, the lowest annual rate since

2013, falling within the target set by the

government.

Despite the challenging environment, the

Company believes that the combination

of its broad product mix, the low

concentration of sales in the various

categories offered within the stores, the

potential for expansion, as well as its

multiple and complementary model all

generate opportunities to gain market

share. During 2016, Lojas Americanas

reported 3.3% growth in consolidated

gross revenue, a 5.6% increase in gross

revenue in the “same stores” concept,

and a 12.2% increase in Adjusted EBITDA,

reaching 15.5% of Adjusted EBITDA

margin consolidated for the period.

The results achieved demonstrate the

resilience of the Company’s business

model.

For 2017, Lojas Americanas remains

optimistic that the Brazilian retail

market will present significant growth

opportunities. It reaffirms its confidence

in the Brazil’s economic development

and underscores the strength of the

Company’s unique business model,

through its broad national presence and

multi-channel customer service.

* Focus Report of 2/3/2017

** Sources: Brazilian Institute of Geography and

Statistics (IBGE) and the Central Bank of Brazil

GRI Content08For the third consecutive year, Lojas

Americanas is publishing its Annual

and Sustainability Report as a single

document, encompassing information

about the Company's financial

performance as well as its sustainability

report for the period between January 1

and December 31, 2016. [G4-17, G4-28].

The Company's published report is in

keeping with the G4 guidelines of the

Global Reporting Initiative (GRI), which is

focused on material themes, identified by

the materiality matrix prepared in 2016,

making the reporting more relevant and

reliable.

The preparation of the report reinforces

the fact that Lojas Americanas is

committed to the management of its

governance and transparency in the

communication of strategic information

to its stakeholders, disclosing corporate

sustainability initiatives to the benefit of

the Company's socio-environmental and

economic development. Lojas Americanas

believes that a profitable business,

aligned with initiatives from a sustainable

growth model, creates even greater value

for shareholders and future investors. [G4-

29; G4-30]

The expansion plan for the 2015-2019

cycle was continued in 2016 and we

commemorated many achievements:

for example, being part of the

BM&FBOVESPA's Corporate Sustainability

Index (ISE) portfolio in 2017 — for the third

year in a row. The Company permanently

motivates all of its associates towards

improving the management indicators,

carefully observing their economic, social

and environmental impacts.

To report the sustainability results,

encompassing all its social and

environmental operations, Lojas

Americanas adopted the GRI G4 Essential

option version. The application of

each indicator carefully observed the

information gathered from the various

corporate areas, with extensive research

and the collection of data from the

quarterly earnings reports to the market,

internal and external communication and

information available on the B2W Digital

and Green Company investor relations

website. [G4-18, G4-32]

The Company is available to anyone

interested in seeking clarification and/

or who would like to make suggestions

regarding this document. The contact

may be by email at cia.verde@lasa.com.

br or through the Investor Relations

Department (21) 2206-6708. [G4-31]

Application Level

To meet the GRI, G4 Essential

requirements, we responded to the

general G4-1 to G4-34, and G4-56,

content, specified in the GRI Index and

marked in brackets in the corresponding

texts. In relation to specific content, for

each material aspect we have correlated

responses to our indicators, also detailed

in the GRI table. [G4-32]

Materiality as a guideline

The Materiality Principle is one of the

most important guidelines disseminated

by the GRI and AccountAbility

organizations, considered international

corporate sustainability benchmarks.

This tool has helped to identify the most

important issues for the Company's

businesses from the point of view of its

main stakeholders, and therefore in 2016

we updated our Materiality Matrix, which

had been prepared for the report's first

year, to guide this edition. [G4-18]

Our Materiality Matrix was the result

of a careful survey of a number of

stakeholders. To progress the survey

of the perceptions of society about our

activities on behalf of sustainability and

to define the strategic themes for our

business, an on-line consultation was

conducted with clients, suppliers and

associates. In-depth interviews were

conducted with Company executives

and experts on the topic of sustainability

from the Akatu Institute, the São Paulo

Association of Supermarkets (Apas), and

the Getúlio Vargas Foundation’s Center

for Retail Excellence. [G4-21; G4-24; G4-

25; G4-26].

Also analyzed were internal Company

documents as well as annual reports,

ethical and good conduct codes and

sectorial national and international

studies prepared by recognized

organizations, such as AccountAbility,

Apas, the Dom Cabral and the Akatu

Institute. [G4-20] The GRI-G4 guidelines,

combined with international standards

of AccountAbility (AA1000) focused on

stakeholder engagement, were also key

elements in the process.

The following list presents the ten most

important topics for our business, from

the perspective of the stakeholders who

were consulted. These themes, together

with the issues the Company believes to

be of strategic importance, were analyzed

and compared to generate the materiality

matrix, also shown below in this chapter.

[G4-19; G4-20, G4-21, G4-27]

Three themes that appeared in 2016 had

been mentioned in the previous edition.

"Quality in client relationship" appeared at

the top in the interviews conducted with

executives and experts, underscoring

that this should be the main guidance

for the company. "Associates Working

Conditions, Health and Safety" and

"Employee Training and Development"

also were repeated, as was "Selection

and Contracting," with the latter item an

important indicator of the weight of this

issue for traditional retailers.

On the other hand, to appear on new

themes such as "Diversity and Promotion

of Equal Rights of Associates"; "Culture

of Ethical Behavior and Combat of

Corruption" and "Product Quality Safety

and Control" called attention to aspects

such as respect of human rights and

social diversity. Another observation is

with regard to the strengthening of the

importance of overall product quality and

the relevance of risk and compliance

management for the organization.

Three other topics in 2016's Matrix were

"Careful Handling of Client Information";

"Compliance with Laws and Regulations";

and "Ethical Relations with Suppliers.