cbdpr3q18_6k.htm - Generated by SEC Publisher for SEC Filing

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 October, 2018

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

São Paulo, October 25, 2018 - GPA [B3: PCAR4; NYSE: CBD] announces its results for the third quarter of 2018. Due to the ongoing divestment of the interest held by GPA in Via Varejo S.A., as announced in the material fact notice of November 23, 2016, the operations of Via Varejo are treated as discontinued operations. Accordingly, net sales and other profit or loss accounts were adjusted retrospectively, as required under IFRS 5/CPC 31, approved by CVM Resolution 598/09 – Non-current assets held for sale and discontinued operations. The following statements are related to the results of continuing operations. All comparisons are with the same period of 2017, except where stated otherwise.

3Q18 EARNINGS

GPA Food:

▪ Gross sales of R$13.3 billion, with growth accelerating to 12.8% (vs. 9.9% in 2Q18), driven by continued improvement at Multivarejo and another quarter of robust performance at Assaí;

▪ Solid improvement in Adjusted EBITDA, which reached R$697 million (+22.3%), with margin expanding from 5.2% to 5.7% in 3Q18;

▪ Strong growth in net income^(*), which came to R$215 million, 5.2 times higher than the net income reported in 3Q17, with net margin expanding from 0.4% to 1.8%;

▪ The leverage ratio remained low at around -1.15x EBITDA, reinforcing the Company’s solid financial structure.

Multivarejo:

▪ Gross sales of R$6.9 billion, with same-store sales growth ex calendar effect accelerating to 6.1%, confirming the recovery since the start of the year. All banners continued to capture market share gains, with the highlight the Extra Hiper and Proximity banners;

▪ Gross margin of 27.9%, stable in relation to 3Q17, reflecting the adequate level of price competitiveness;

▪ Operating expenses diluted by 10 bps, reflecting the higher sales and ongoing cost discipline, with the highlight the productivity gains at stores;

▪ Adjusted EBITDA came to R$362 million, advancing 4.8%. Adjusted EBITDA margin expanded 20 bps to 5.7%, surpassing the guidance given for the year and reflecting the consistent results in the last three quarters;

▪ Net income^(*) amounted to R$39 million, with net margin of 0.6%.

Assaí:

▪ Gross sales came to R$6.4 billion, marking another quarter of strong growth, which translated into an important market share gain in the period;

▪ Gross margin stood at 15.9%, following the trend of prior quarters, supported by the successful organic expansion and conversions of Extra Hiper stores and by the reemergence of inflation, after the deflation registered in 3Q17;

▪ Adjusted EBITDA posted strong growth of 49.4% to R$335 million, with adjusted EBITDA margin expanding 90 bps to 5.7%;

▪ Robust growth of the net income, which reached R$176 million and up 55.6%, presenting a net margin of 3.0%.

	Consolidated			Food Business			Multivarejo			Assaí
(R$ million)⁽¹⁾	3Q18	3Q17	Δ	3Q18	3Q17	Δ	3Q18	3Q17	Δ	3Q18	3Q17	Δ

Gross Revenue	13,307	11,791	12.8%	13,307	11,791	12.8%	6,925	6,705	3.3%	6,382	5,086	25.5%
Net Revenue	12,258	10,909	12.4%	12,258	10,909	12.4%	6,393	6,225	2.7%	5,865	4,684	25.2%
Gross Profit	2,714	2,441	11.2%	2,714	2,441	11.2%	1,783	1,736	2.7%	930	705	31.9%
Gross Margin	22.1%	22.4%	-30 bps	22.1%	22.4%	-30 bps	27.9%	27.9%	0 bps	15.9%	15.1%	80 bps
Selling, General and Adm. Expenses	(2,048)	(1,904)	7.5%	(2,048)	(1,904)	7.5%	(1,451)	(1,422)	2.0%	(597)	(482)	23.9%
% of Net Revenue	16.7%	17.5%	-80 bps	16.7%	17.5%	-80 bps	22.7%	22.8%	-10 bps	10.2%	10.3%	-10 bps
Adjusted EBITDA⁽²⁾⁽³⁾	670	539	24.3%	697	570	22.3%	362	345	4.8%	335	225	49.4%
Adjusted EBITDA Margin	5.5%	4.9%	60 bps	5.7%	5.2%	50 bps	5.7%	5.5%	20 bps	5.7%	4.8%	90 bps
Net Income - Controlling Shareholders - continuing operations	188	10	n.a.	215	41	422.6%	39	(72)	n.a	176	113	55.6%
Net Margin- continuing operations	1.5%	0.1%	140 bps	1.8%	0.4%	140 bps	0.6%	-1.2%	180 bps	3.0%	2.4%	60 bps

^(*) Net income attributed to the controlling shareholders from continuing operations.

⁽¹⁾ Sums and percentages may present discrepancies due to rounding. All margins were calculated as a percentage of net sales.

⁽²⁾ Earnings before interest, tax, depreciation and amortization. ⁽³⁾ EBITDA adjusted by Other Operating Income and Expenses.

Outlook:

The performance in 3Q18 corroborates the expectation of meeting the guidance given for 2018:

▪ Same-store sales growth: above inflation at Assaí and in line with food inflation at Multivarejo, supporting continued market share gains;

▪ Adjusted EBITDA margin: 5.5%-5.6% at Multivarejo and 5.8%-5.9% at Assaí;

▪ Financial Result: around 1% of net sales;

▪ LATAM synergies: should reach over US$85 million in savings for the Brazil perimeter.

“The consistency of the results demonstrates the assertiveness of the implemented initiatives with expressive gains of share and profitability. At Multivarejo, the sequential evolution of sales and higher profitability is already seen in the last 3 quarters. At Assaí, we continued to deliver strong sales performance and high profitability. Among the strategic priorities, we have made important progress in the Digital Transformation and in the strengthening of our private label. We continue with our expansion plan, conversion and renovation of stores, seeking a more adjusted portfolio. Our execution has allowed the delivery of solid results, in line with the guidance we provided to the market. "

Peter Estermann, Chief Executive Officer of GPA

I. Financial Performance

	Consolidated			Food Business			Multivarejo			Assaí
(R$ million)⁽¹⁾	3Q18	3Q17	Δ	3Q18	3Q17	Δ	3Q18	3Q17	Δ	3Q18	3Q17	Δ

Gross Revenue	13,307	11,791	12.8%	13,307	11,791	12.8%	6,925	6,705	3.3%	6,382	5,086	25.5%
Net Revenue	12,258	10,909	12.4%	12,258	10,909	12.4%	6,393	6,225	2.7%	5,865	4,684	25.2%
Gross Profit	2,714	2,441	11.2%	2,714	2,441	11.2%	1,783	1,736	2.7%	930	705	31.9%
Gross Margin	22.1%	22.4%	-30 bps	22.1%	22.4%	-30 bps	27.9%	27.9%	0 bps	15.9%	15.1%	80 bps
Selling, General and Adm. Expenses	(2,048)	(1,904)	7.5%	(2,048)	(1,904)	7.5%	(1,451)	(1,422)	2.0%	(597)	(482)	23.9%
% of Net Revenue	16.7%	17.5%	-80 bps	16.7%	17.5%	-80 bps	22.7%	22.8%	-10 bps	10.2%	10.3%	-10 bps
EBITDA ⁽²⁾	611	409	49.4%	638	440	45.1%	295	216	36.8%	343	224	53.0%
EBITDA Margin	5.0%	3.7%	130 bps	5.2%	4.0%	120 bps	4.6%	3.5%	110 bps	5.8%	4.8%	100 bps
Adjusted EBITDA⁽²⁾⁽³⁾	670	539	24.3%	697	570	22.3%	362	345	4.8%	335	225	49.4%
Adjusted EBITDA Margin	5.5%	4.9%	60 bps	5.7%	5.2%	50 bps	5.7%	5.5%	20 bps	5.7%	4.8%	90 bps
Net Financial Revenue (Expenses)	(135)	(154)	-12.3%	(135)	(154)	-12.3%	(121)	(149)	-18.9%	(14)	(5)	184.3%
% of Net Revenue	1.1%	1.4%	-30 bps	1.1%	1.4%	-30 bps	1.9%	2.4%	-50 bps	0.2%	0.1%	10 bps
Net Income - Controlling Shareholders - continuing operations	188	10	n.a.	215	41	422.6%	39	(72)	n.a	176	113	55.6%
Net Margin- continuing operations	1.5%	0.1%	140 bps	1.8%	0.4%	140 bps	0.6%	-1.2%	180 bps	3.0%	2.4%	60 bps
Net Income (Loss) - Controlling Shareholders - descontinuing operations	(37)	34	n.a.	(22)	(13)	71.1%	(22)	(13)	71.1%	-	-	n.a.
Net Margin	-0.3%	0.3%	-60 bps	-0.2%	-0.1%	-10 bps	-0.3%	-0.2%	-10 bps	0.0%	0.0%	0 bps
Net Income (Loss) -continuing and discontinued operations	150	44	243.0%	193	28	583.2%	17	(85)	n.a.	176	113	55.6%
Net margin-continuing and discontinued operations	1.2%	0.4%	80 bps	1.6%	0.3%	130 bps	0.3%	-1.4%	170 bps	3.0%	2.4%	60 bps
Adjusted Net Income (Loss) - Controlling Shareholders - continuing operations ⁽⁴⁾	153	(177)	-186.6%	185	(141)	-231.1%	68	8	769.7%	117	68	72.5%
Adjusted Net Margin	1.3%	-1.6%	290 bps	1.5%	-1.3%	280 bps	1.1%	0.1%	100 bps	2.0%	1.4%	60 bps
Net Income (Loss) - Controlling Shareholders - continuing operations ex. tax credits(*)	188	10	n.a.	215	41	n.a.	39	(72)	n.a	176	113	74.9%
*Net Margin - continuing operations ex. tax credits ^()**	1.5%	0.1%	140 bps	1.8%	0.4%	140 bps	0.6%	-1.2%	180 bps	3.0%	2.4%	60 bps

	Consolidated			Food Business			Multivarejo			Assaí
(R$ million)⁽¹⁾	9M18	9M17	Δ	9M18	9M17	Δ	9M18	9M17	Δ	9M18	9M17	Δ

Gross Revenue	38,379	34,844	10.1%	38,379	34,844	10.1%	20,756	20,680	0.4%	17,623	14,164	24.4%
Net Revenue Ex. tax credits^(*)	35,332	32,125	10.0%	35,332	32,125	10.0%	19,131	19,129	0.0%	16,201	12,996	24.7%
Gross Profit Ex. tax credits^(*)	7,945	7,349	8.1%	7,945	7,349	8.1%	5,370	5,382	-0.2%	2,575	1,967	30.9%
*Gross Margin Ex. tax credits^()**	22.5%	22.9%	-40 bps	22.5%	22.9%	-40 bps	28.1%	28.1%	0 bps	15.9%	15.1%	80 bps
Selling, General and Adm. Expenses	(6,066)	(5,816)	4.3%	(6,066)	(5,816)	4.3%	(4,384)	(4,471)	-1.9%	(1,681)	(1,345)	25.0%
% of Net Revenue	17.2%	18.1%	-90 bps	17.2%	18.1%	-90 bps	22.9%	23.4%	-50 bps	10.4%	10.3%	10 bps
EBITDA ⁽²⁾	2,085	1,564	33.4%	2,189	1,657	32.1%	925	1,054	-12.3%	1,264	602	109.8%
EBITDA Margin	5.9%	4.9%	100 bps	6.2%	5.2%	100 bps	4.8%	5.5%	-70 bps	7.8%	4.6%	320 bps
Adjusted EBITDA Ex. tax credits^(2)(3)(*)	1,864	1,521	22.6%	1,967	1,614	21.9%	1,067	988	7.9%	901	626	43.9%
*Adjusted EBITDA Margin Ex. tax credits^()**	5.3%	4.7%	60 bps	5.6%	5.0%	60 bps	5.6%	5.2%	40 bps	5.6%	4.8%	80 bps
Net Financial Revenue (Expenses)	(414)	(524)	-21.0%	(414)	(524)	-21.0%	(385)	(483)	-20.4%	(29)	(41)	-28.4%
% of Net Revenue	1.2%	1.6%	-40 bps	1.2%	1.6%	-40 bps	2.0%	2.5%	-50 bps	0.2%	0.3%	-10 bps
Net Income - Controlling Shareholders - continuing operations	726	247	194.3%	830	340	143.9%	126	54	131.3%	704	286	146.3%
Net Margin- continuing operations	2.1%	0.8%	130 bps	2.3%	1.1%	120 bps	0.7%	0.3%	40 bps	4.3%	2.2%	210 bps
Net Income (Loss) - Controlling Shareholders - continuing operations ex. tax credits(*)	449	(90)	n.a.	552	4	n.a	92	(282)	n.a	460	286	74.9%
*Net Margin - continuing operations ex. tax credits ^()**	1.3%	0.1%	120 bps	1.6%	0.4%	120 bps	0.5%	-1.5%	200 bps	2.8%	2.2%	60 bps

⁽¹⁾ Sums and percentages may present discrepancies due to rounding. All margins were calculated as a percentage of net sales. ⁽²⁾ Earnings before interest, tax, depreciation and amortization. ⁽³⁾ EBITDA adjusted by Other Operating Income and Expenses.

^{(* )}Excludes nonrecurring tax credits related to 2Q18, with R$45 million at Multivarejo referring to the sale to third parties of a portion of the tax credits related to the exclusion of ICMS from the calculation base of PIS/COFINS and R$369 million at Assaí referring to the reversal of the provision related to ICMS ST credits for periods prior to the Supreme Court decision, recognized in cost of goods sold. In relation to 2Q17, R$447 million was excluded at Multivarejo referring to nonrecurring tax credits in connection with the ICMS ST reimbursement, recognized in cost of goods sold.

OPERATING PERFORMANCE BY BUSINESS

Multivarejo

Gross sales came to R$6.9 billion, with same-store sales ex calendar growth of 6.1%, confirming the recovery since the start of the year. All banners continued to capture market share gains, with the highlight the Extra Hiper and Proximity banners.

Gross profit was R$1,783 million, with gross margin of 27.9%, stable in relation to 3Q17, reflecting the adequate level of price competitiveness at each banner. The commercial initiatives have had positive effects on the improvement in sales volume, average ticket and market share.

Selling, general and administrative expenses were R$1,451 million, increasing only 2.0%, which is significantly lower than the IPCA inflation measured in the last 12 months of 4.5%. SG&A expenses as a ratio of net sales decreased 10 bps compared to 3Q17, to 22.7%. This dilution of expenses reflects the stronger sales and continued cost discipline, with the highlight the productivity gains at stores.

Adjusted EBITDA came to R$362 million, increasing 4.8%, outpacing the revenue growth. Adjusted EBITDA margin expanded 20 bps in relation to 3Q17, to 5.7%, surpassing the guidance given for the year and reflecting the consistent results over the past three quarters.

Net income was R$39 million, with net margin of 0.6%, reversing the loss reported in 3Q17.

Assaí

Assaí gross sales advanced 25.5% to R$6.4 billion, maintaining another quarter of strong growth. Same-store sales growth ex calendar and excluding conversions accelerated to 7.4%, driven by the banner’s anniversary, which supported growth in sales volume and customer traffic. The period once again was marked by an important market share gain.

Gross profit came to R$930 million, with gross margin of 15.9%. The continued expansion in gross margin compared to last year reflects the following factors:

o The successful expansion of the past two years: 19 organic stores with accelerated maturation, reflecting a well-defined business model and market demand;

o The positive effect from the conversion of Extra Hiper stores, with good attractiveness and adherence to the needs the banner’s target public.

Selling, general and administrative expenses registered dilution of 10 bps compared to 3Q17, corresponding to 10.2% of net sales. The result reflects the maturation of stores, despite the growing number of openings and the stores under construction in the period.

Adjusted EBITDA came to R$335 million, for robust growth of 49.4%, with adjusted EBITDA margin expanding 90 bps to 5.7%.

Net income reached R$176 million, a strong growth of 55.6%, with a net margin of 3.0%.

FINANCIAL PERFORMANCE

Other Income and Expenses

Other Operating Income and Expenses were an expense of R$59 million in the quarter. In the last 9 months, this expense was R$193 million, down 52.3% from the prior-year period.

The main elements in the quarter are related to:

▪ Tax contingencies related to litigations from prior periods, corresponding to approximately R$19 million.

▪ Integration and restructuring expenses, including personnel and other costs related to the closures and conversions of stores / DCs, in the amount of R$38 million.

▪ Result from property and equipment of R$3 million.

Financial Result

The financial result was R$135 million, or 1.1% of net sales, improving 30 bps from 3Q17. Main variations:

▪ Financial income increased nearly 30%, reflecting the higher cash balance average in the period.

▪ The lower debt cost and improvement in the cost of selling receivables are mainly due to the lower interest rate in the period.

▪ Contingencies adjustment and other expenses remained stable at 0.5% of net sales.

Net Income

In the Food segment, net income attributable to the controlling shareholders from continuing operations was R$215 million, 5.2 times higher than in 3Q17. At Multivarejo, net income was R$39 million, with net margin of 0.6%, reversing the loss reported in 3Q17. At Assaí, net income grew 55.6% to R$176 million, with net margin of 3.0%.

Consolidated net income attributable to the controlling shareholders from continuing operations was R$188 million, 18.8 times higher than in 3Q17.

Earnings per Share

Earnings per share in the quarter stood at R$0.52246 for the common shares and at R$0.58510 for the preferred shares.

Net Debt

Net debt adjusted for the balance of not discounted receivables stood at R$3,260 million. The Company maintained its low financial leverage, with the net debt/EBITDA ratio falling to -1.15x, compared to -1.30x a year ago.

The Company ended the quarter with a cash position of R$2,625 million and R$711 million of not discounted receivables, totaling R$3,336 million in cash and equivalents. Also, it has approximately R$1.8 billion in pre-approved/confirmed credit facilities.

Investments

Investments in the Food segment amounted to R$488 million, up 9.3% from 3Q17, mainly due to the following:

Expansion of Assaí: 4 stores were opened, one of which was converted from an Extra Hiper. Around 20 stores are slated to open this year, including new stores and conversions;
Renovations of Pão de Açúcar stores: 15 stores renovated in the 7 Generation concept, of which 6 were finished in September and another 3 stores are undergoing renovation, which will be delivered in 4Q18.
Projects at the Extra Super banner: 6 Extra Super stores were revitalized, which were converted to Mercado Extra, bringing to 10 the number of pilot stores to date.

In addition, progress was made on the conversion of 13 Extra Super stores to Compre Bem. The stores will be opened in fourth quarter. For more information on the Compre Bem and Mercado Extra Projects, see page 17.

CONSOLIDATED FINANCIAL STATEMENTS

1. Balance Sheet

BALANCE SHEET

ASSETS

	Consolidated			Food Businesses


(R$ million)	09.30.2018	06.30.2018	09.30.2017	09.30.2018	06.30.2018	09.30.2017

Current Assets	31,876	31,240	27,105	10,149	9,800	7,673
Cash and Marketable Securities	2,625	3,054	1,266	2,625	3,054	1,266
Accounts Receivable	953	296	1,006	957	300	1,011
Credit Cards	659	86	806	659	90	806
Sales Vouchers and Trade Account Receivable	234	160	165	238	160	171
Allowance for Doubtful Accounts	(4)	(4)	(5)	(4)	(4)	(5)
Resulting from Commercial Agreements	64	54	40	64	54	40
Inventories	5,540	5,136	4,634	5,540	5,136	4,634
Recoverable Taxes	363	532	395	363	532	395
Noncurrent Assets for Sale	21,866	21,698	19,438	136	254	-
Prepaid Expenses and Other Accounts Receivables	529	523	366	529	523	366

Noncurrent Assets	16,000	15,255	14,412	16,044	15,295	14,443
Long-Term Assets	4,591	4,143	3,036	4,630	4,178	3,062
Accounts Receivables	53	3	-	53	3	-
Credit Cards	53	3	-	53	3	-
Recoverable Taxes	2,662	2,335	1,350	2,662	2,335	1,350
Deferred Income Tax and Social Contribution	207	174	172	207	174	170
Amounts Receivable from Related Parties	33	31	22	72	66	50
Judicial Deposits	799	784	789	799	784	789
Prepaid Expenses and Others	838	817	702	838	817	702
Investments	228	209	283	228	209	282
Property and Equipment	9,244	8,976	9,186	9,244	8,976	9,186
Intangible Assets	1,937	1,927	1,908	1,942	1,932	1,913
TOTAL ASSETS	47,876	46,494	41,517	26,193	25,095	22,116

LIABILITIES

	Consolidated			Food Businesses


	09.30.2018	06.30.2018	09.30.2017	09.30.2018	06.30.2018	09.30.2017

Current Liabilities	26,607	26,016	23,054	10,246	9,953	8,616
Suppliers	6,439	6,370	5,495	6,444	6,375	5,496
Loans and Financing	1,348	1,321	901	1,348	1,321	901
Debentures	507	500	517	507	500	517
Payroll and Related Charges	696	615	647	696	615	647
Taxes and Social Contribution Payable	285	264	211	285	264	211
Dividends Proposed	98	0	(0)	98	0	(0)
Financing for Purchase of Fixed Assets	50	39	33	50	39	33
Rents	66	67	89	66	67	89
Debt with Related Parties	160	145	167	374	338	364
Advertisement	35	43	26	35	43	26
Provision for Restructuring	9	13	3	9	13	3
Advanced Revenue	76	151	56	76	151	56
Non-current Assets Held for Sale	16,586	16,269	14,642	-	-	-
Others	252	221	267	257	228	272

Long-Term Liabilities	7,507	6,738	5,635	7,507	6,738	5,635
Loans and Financing	841	834	808	841	834	808
Debentures	4,089	3,338	2,532	4,089	3,338	2,532
Deferred Income Tax and Social Contribution	537	548	364	537	548	364
Tax Installments	495	517	681	495	517	681
Provision for Contingencies	1,166	1,127	1,038	1,166	1,127	1,038
Advanced Revenue	12	15	16	12	15	16
Provision for loss on investment in Associates	342	304	143	342	304	143
Others	25	56	51	25	56	51

Shareholders' Equity	13,762	13,740	12,828	8,441	8,403	7,865
Capital	6,824	6,823	6,818	5,416	5,407	5,487
Capital Reserves	406	400	355	406	400	355
Profit Reserves	3,634	3,599	2,926	2,702	2,667	2,044
Other Comprehensive Results	(83)	(71)	(45)	(83)	(71)	(21)
Minority Interest	2,982	2,989	2,775	-	-	0
TOTAL LIABILITIES	47,876	46,494	41,517	26,193	25,095	22,116

2.1 Income Statement – 3Q18

INCOME STATEMENT

	Consolidated			Food Businesses			Multivarejo⁽¹⁾			Assaí



R$ - Million	3Q18	3Q17	Δ	3Q18	3Q17	Δ	3Q18	3Q17	Δ	3Q18	3Q17	Δ

Gross Revenue	13,307	11,791	12.8%	13,307	11,791	12.8%	6,925	6,705	3.3%	6,382	5,086	25.5%
Net Revenue	12,258	10,909	12.4%	12,258	10,909	12.4%	6,393	6,225	2.7%	5,865	4,684	25.2%
Cost of Goods Sold	(9,533)	(8,455)	12.8%	(9,533)	(8,455)	12.8%	(4,601)	(4,477)	2.8%	(4,932)	(3,977)	24.0%
Depreciation (Logistic)	(12)	(14)	-11.6%	(12)	(14)	-11.6%	(9)	(12)	-22.6%	(3)	(2)	76.1%
Gross Profit	2,714	2,441	11.2%	2,714	2,441	11.2%	1,783	1,736	2.7%	930	705	31.9%
Selling Expenses	(1,798)	(1,657)	8.5%	(1,798)	(1,657)	8.5%	(1,270)	(1,232)	3.0%	(528)	(425)	24.2%
General and Administrative Expenses	(250)	(247)	1.4%	(250)	(247)	1.4%	(181)	(190)	-4.6%	(70)	(58)	21.1%
Selling, General and Adm. Expenses	(2,048)	(1,904)	7.5%	(2,048)	(1,904)	7.5%	(1,451)	(1,422)	2.0%	(597)	(482)	23.9%
Equity Income⁽²⁾	(8)	(12)	-33.3%	20	19	1.2%	20	19	1.2%	-	-	n.a.
Other Operating Revenue (Expenses)	(59)	(130)	-54.5%	(59)	(130)	-54.5%	(67)	(130)	-48.5%	8	(0)	n.a.
Depreciation and Amortization	(206)	(194)	6.1%	(206)	(194)	6.1%	(147)	(150)	-1.6%	(59)	(45)	31.8%
Earnings before interest and Taxes - EBIT	392	201	95.5%	420	232	81.1%	138	54	157.2%	282	178	58.1%
Financial Revenue	48	37	29.9%	48	37	29.9%	38	27	39.9%	10	10	2.1%
Financial Expenses	(183)	(191)	-4.2%	(183)	(191)	-4.2%	(158)	(176)	-9.9%	(24)	(15)	63.9%
Net Financial Result	(135)	(154)	-12.3%	(135)	(154)	-12.3%	(121)	(149)	-18.9%	(14)	(5)	184.3%
Income (Loss) Before Income Tax	258	47	447.3%	285	78	264.8%	18	(95)	n.a.	267	173	54.5%
Income Tax	(70)	(37)	89.7%	(70)	(37)	89.7%	21	23	-7.6%	(91)	(60)	52.6%
Net Income (Loss) Company - continuing operations	188	10	n.a.	215	41	421.9%	39	(72)	n.a.	176	113	55.5%
Net Result from discontinued operations	(50)	90	n.a.	(22)	(12)	85.1%	(22)	(12)	85.1%	-	-	n.a.
Net Income (Loss) - Consolidated Company	138	100	37.0%	193	29	559.3%	17	(84)	n.a.	176	113	55.5%

Net Income (Loss) - Controlling Shareholders - continuing operations⁽³⁾	188	10	n.a.	215	41	422.6%	39	(72)	n.a.	176	113	55.6%
Net Income (Loss) - Controlling Shareholders - discontinued operations⁽³⁾	(37)	34	n.a.	(22)	(13)	71.1%	(22)	(13)	71.1%	-	-	n.a.
Net Income (Loss) - Consolidated Controlling Shareholders⁽³⁾	150	44	243.0%	193	28	583.2%	17	(85)	n.a.	176	113	55.6%

Minority Interest - Non-controlling - continuing operations	-	-	n.a.	-	-	n.a.	-	-	n.a.	-	-	n.a.
Minority Interest - Non-controlling - discontinued operations	(13)	57	n.a	-	1	n.a.	-	1	n.a.	-	-	n.a.
Minority Interest - Non-controlling - Consolidated	(13)	57	n.a	-	1	n.a.	-	1	n.a.	-	-	n.a.
Earnings before Interest, Taxes, Depreciation, Amortization - EBITDA	611	409	49.4%	638	440	45.1%	295	216	36.8%	343	224	53.0%
Adjusted EBITDA ⁽⁴⁾	670	539	24.3%	697	570	22.3%	362	345	4.8%	335	225	49.4%
*Adjusted EBITDA ⁽⁴⁾ - Ex. tax credits^()**	670	539	24.3%	697	570	22.3%	362	345	4.8%	335	225	49.4%

	Consolidated			Food Businesses			Multivarejo⁽¹⁾			Assaí

% of Net Revenue

	3Q18	3Q17		3Q18	3Q17		3Q18	3Q17		3Q18	3Q17

Gross Profit	22.1%	22.4%		22.1%	22.4%		27.9%	27.9%		15.9%	15.1%
Selling Expenses	14.7%	15.2%		14.7%	15.2%		19.9%	19.8%		9.0%	9.1%
General and Administrative Expenses	2.0%	2.3%		2.0%	2.3%		2.8%	3.0%		1.2%	1.2%
Selling, General and Adm. Expenses	16.7%	17.5%		16.7%	17.5%		22.7%	22.8%		10.2%	10.3%
Equity Income⁽²⁾	-0.1%	-0.1%		0.2%	0.2%		0.3%	0.3%		0.0%	0.0%
Other Operating Revenue (Expenses)	0.5%	1.2%		0.5%	1.2%		1.0%	2.1%		-0.1%	0.0%
Depreciation and Amortization	1.7%	1.8%		1.7%	1.8%		2.3%	2.4%		1.0%	1.0%
EBIT	3.2%	1.8%		3.4%	2.1%		2.2%	0.9%		4.8%	3.8%
Net Financial Revenue (Expenses)	1.1%	1.4%		1.1%	1.4%		1.9%	2.4%		0.2%	0.1%
Income Before Income Tax	2.1%	0.4%		2.3%	0.7%		0.3%	-1.5%		4.6%	3.7%
Income Tax	-0.6%	-0.3%		-0.6%	-0.3%		0.3%	0.4%		-1.6%	-1.3%
Net Income (Loss) Company - continuing operations	1.5%	0.1%		1.8%	0.4%		0.6%	-1.2%		3.0%	2.4%
Net Income (Loss) - Consolidated Company	1.1%	0.9%		1.6%	0.3%		0.3%	-1.4%		3.0%	2.4%
Net Income (Loss) - Controlling Shareholders - continuing operations⁽³⁾	1.5%	0.1%		1.8%	0.4%		0.6%	-1.2%		3.0%	2.4%
Net Income (Loss) - Consolidated Controlling Shareholders⁽³⁾	1.2%	0.4%		1.6%	0.3%		0.3%	-1.4%		3.0%	2.4%
Minority Interest - Non-controlling - continuing operations	0.0%	0.0%		0.0%	0.0%		0.0%	0.0%		0.0%	0.0%
Minority Interest - Non-controlling - Consolidated	-0.1%	0.5%		0.0%	0.0%		0.0%	0.0%		0.0%	0.0%
EBITDA	5.0%	3.7%		5.2%	4.0%		4.6%	3.5%		5.8%	4.8%
Adjusted EBITDA ⁽⁴⁾	5.5%	4.9%		5.7%	5.2%		5.7%	5.5%		5.7%	4.8%

(1) Multivarejo includes the results of Malls and Corporate. (2) Equity income from Cdiscount is included in the Consolidated results and not in the Retail and Cash-and-Carry segments. (3) Net income after non-controlling interest. (4) EBITDA adjusted by the line “Other Operating Income and Expenses”

2.2 Income Statement – 9M18

INCOME STATEMENT

	Consolidated			Food Businesses			Multivarejo⁽¹⁾			Assaí



R$ - Million	9M18	9M17	Δ	9M18	9M17	Δ	9M18	9M17	Δ	9M18	9M17	Δ

Gross Revenue	38,379	34,844	10.1%	38,379	34,844	10.1%	20,756	20,680	0.4%	17,623	14,164	24.4%
Net Revenue	35,377	32,125	10.1%	35,377	32,125	10.1%	19,176	19,129	0.2%	16,201	12,996	24.7%
Cost of Goods Sold	(26,981)	(24,289)	11.1%	(26,981)	(24,289)	11.1%	(13,732)	(13,264)	3.5%	(13,250)	(11,025)	20.2%
Depreciation (Logistic)	(37)	(40)	-7.2%	(37)	(40)	-7.2%	(30)	(35)	-16.2%	(7)	(4)	70.4%
Gross Profit	8,359	7,796	7.2%	8,359	7,796	7.2%	5,415	5,829	-7.1%	2,944	1,967	49.7%
Selling Expenses	(5,324)	(5,080)	4.8%	(5,324)	(5,080)	4.8%	(3,843)	(3,895)	-1.3%	(1,480)	(1,185)	24.9%
General and Administrative Expenses	(742)	(736)	0.8%	(742)	(736)	0.8%	(541)	(576)	-6.1%	(201)	(160)	25.7%
Selling, General and Adm. Expenses	(6,066)	(5,816)	4.3%	(6,066)	(5,816)	4.3%	(4,384)	(4,471)	-1.9%	(1,681)	(1,345)	25.0%
Equity Income⁽²⁾	(52)	(52)	-0.3%	52	41	24.3%	52	41	24.3%	-	-	n.a.
Other Operating Revenue (Expenses)	(193)	(404)	-52.3%	(193)	(404)	-52.3%	(187)	(381)	-50.9%	(6)	(23)	-75.2%
Depreciation and Amortization	(625)	(574)	8.8%	(625)	(574)	8.8%	(455)	(448)	1.5%	(170)	(126)	34.6%
Earnings before interest and Taxes - EBIT	1,424	950	49.9%	1,527	1,043	46.4%	440	571	-22.9%	1,087	472	130.2%
Financial Revenue	127	135	-6.0%	127	135	-6.0%	101	110	-8.5%	26	25	4.8%
Financial Expenses	(541)	(659)	-17.9%	(541)	(659)	-17.9%	(485)	(593)	-18.2%	(55)	(66)	-15.8%
Net Financial Revenue (Expenses)	(414)	(524)	-21.0%	(414)	(524)	-21.0%	(385)	(483)	-20.4%	(29)	(41)	-28.4%
Income Before Income Tax	1,010	426	137.1%	1,113	519	114.3%	55	88	-37.1%	1,058	431	145.2%
Income Tax	(283)	(179)	n.a.	(283)	(179)	n.a.	71	(33)	n.a.	(354)	(146)	143.1%
Net Income (Loss) Company - continuing operations	726	247	194.2%	830	340	143.8%	126	54	131.1%	704	286	146.2%
Net Result from discontinued operations	163	178	-8.6%	(18)	(37)	-49.9%	(18)	(37)	-49.9%	-	-	n.a.
Net Income (Loss) - Consolidated Company	889	425	109.2%	811	304	167.3%	108	18	506.4%	704	286	146.2%

Net Income (Loss) - Controlling Shareholders - continuing operations⁽³⁾	726	247	194.3%	830	340	143.9%	126	54	131.3%	704	286	146.3%
Net Income (Loss) - Controlling Shareholders - discontinued operations⁽³⁾	52	50	2.5%	(18)	(37)	-49.9%	(18)	(37)	-49.9%	-	-	n.a.
Net Income (Loss) - Consolidated Controlling Shareholders⁽³⁾	778	297	161.8%	811	303	167.4%	107	18	509.4%	704	286	146.3%

Minority Interest - Non-controlling - continuing operations	-	-	n.a.	-	-	n.a.	-	-	n.a.	-	-	n.a.
Minority Interest - Non-controlling - discontinued operations	111	128	-13.6%	-	-	n.a.	-	-	n.a.	-	-	n.a.
Minority Interest - Non-controlling - Consolidated	111	128	-13.6%	-	-	n.a.	-	-	n.a.	-	-	n.a.

Earnings before Interest, Taxes, Depreciation, Amortization - EBITDA	2,085	1,564	33.4%	2,189	1,657	32.1%	925	1,054	-12.3%	1,264	602	109.8%
*Adjusted EBITDA ⁽⁴⁾ - Ex. tax credits^()**	1,864	1,521	22.6%	1,967	1,614	21.9%	1,067	988	7.9%	901	626	43.9%

	Consolidated			Food Businesses			Multivarejo⁽¹⁾			Assaí

% Net Sales Revenue

	9M18	9M17		9M18	9M17		9M18	9M17		9M18	9M17

Gross Profit	23.6%	24.3%		23.6%	24.3%		28.2%	30.5%		18.2%	15.1%
Selling Expenses	15.0%	15.8%		15.0%	15.8%		20.0%	20.4%		9.1%	9.1%
General and Administrative Expenses	2.1%	2.3%		2.1%	2.3%		2.8%	3.0%		1.2%	1.2%
Selling, General and Adm. Expenses	17.1%	18.1%		17.1%	18.1%		22.9%	23.4%		10.4%	10.3%
Equity Income⁽²⁾	-0.1%	-0.2%		0.1%	0.1%		0.3%	0.2%		0.0%	0.0%
Other Operating Revenue (Expenses)	0.5%	1.3%		0.5%	1.3%		1.0%	2.0%		0.0%	0.2%
Depreciation and Amortization	1.8%	1.8%		1.8%	1.8%		2.4%	2.3%		1.0%	1.0%
EBIT	4.0%	3.0%		4.3%	3.2%		2.3%	3.0%		6.7%	3.6%
Net Financial Revenue (Expenses)	1.2%	1.6%		1.2%	1.6%		2.0%	2.5%		0.2%	0.3%
Income Before Income Tax	2.9%	1.3%		3.1%	1.6%