Annual and Sustainability Report 2013 Annual and Sustainability Report 2013
Summary
GPA Message from the Board of Directors Message from the CEO Profile Corporate Structure 2013 Highlights Awards and Recognition
Nexes of Trust Model of Management Corporate Governance Risk Management Competitive Differentials Engagement with Stakeholders
Boldness that Inspires Business Strategy GPA Businesses Multivarejo Assaí Via Varejo Nova Pontocom GPA Malls Economic and Financial Performance Investments Capital Markets Prospects
A Focus on Sustainability Guidelines for Sustainability Commitments Valuing our People Conscientious Consumption and Supply Transformation in the Chain of Value Managing Environmental Impact Engagement with Society
Ot her Tools in the Menu About the Report GRI Table of Contents Ibase Social Balance Sheet Assurance Report Corporate Information
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GPA Message from the Board of Directors In 2013, GPA was able to consolidate its Message from the Board of Directors Message from the CEO strategies and achieve Profile good results in all its Corporate Structure 2013 Highlights business units. Awards and Recognition
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It is with much pride that I present the of the Board of Executive Officers, results GPA achieved in 2013. With and we have a Board of Directors that resilience and discipline, and thanks supports GPA’s strategy and looks to the engagement and commitment after the interests of all stakeholders. of its team, GPA was able to cement In addition, we count on and take its strategies and obtain good results responsibility for more than 150,000 in all its businesses. motivated employees who are dedicated to the Company’s success. The year 2013 was marked by the conclusion of a cycle that began in We will remain firm in following our 1999, with the Casino Group’s first guideline of offering more competitive investment in GPA. We reiterate, prices and keeping the customer once again, our total confidence in at the center of our decisions. We Brazil, with the conviction that this will continue to take actions that is a country of great opportunities. are appreciated and recognized by This certainty translates into plans for consumers, building their loyalty to the future focused on growing GPA, our banners and reinforcing what sets and continuing its history of success us apart from the rest of the market. and our commitment to the country’s development. Thus, with a proactive stance, we will move ahead in our mission of providing GPA is the largest international the best shopping experience for our operation of the Casino Group, customers and of promoting actions which is now one of the largest retail that reflect the values that constitute companies in the world. We are our Group’s strength. committed to continuous pursuit of excellence in offering products and Jean-Charles Naouri services to our customers, supported Chairman of the Board by the skill of our professionals. It is with great satisfaction that I affirm that these results were achieved thanks to the actions of our team of coworkers, who, with determination and professionalism, made it possible for GPA to overcome the challenges.
We know that 2014 will bring new challenges, but our prospects are positive. We have complete confidence in the management ability 2 Annual and Sustainability Report 2013
GPA Aware that the Message from quest for sustainable the CEO management is a long lasting journey, we will Message from the Board of Directors Message from the CEO continue investing in Profile Corporate Structure dialogue and creation 2013 Highlights Awards and Recognition of value for our stakeholders.
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Even in a challenging macroeconomic practical, convenient and attractive for environment, GPA demonstrated our customers. Thus, we identified the ability and agility to adapt opportunities that allow us to act in a its strategy to the directions of coordinated fashion to offer the best the market and recorded robust buying solution, while ensuring the performance, with gains in market alignment of processes, synergistic share in the different businesses. gains, financial discipline and, consequently, lower costs. Buoyed by the communion of values with the Casino Group, and its clear Over the course of the year, business vision, the excellent results the Company also emphasized booked in 2013 reflect the evolution implementing the more competitive of our management practices and pricing strategy in Multivarejo, ongoing corporate governance, which, principally under the Extra banner. besides attesting to the determination As a consequence, we made and expertise of our professionals, is a important strides in the flow of clear demonstration of our commitment customers in stores, and gains to creating value for our stakeholders. in market share. The strategy is undergirded by the pursuit of gains in We have delivered growth with efficiency, which have been achieved positive results in recent years, through rationalizing operating and strengthening GPA as a Group poised corporate expenses. to grow sustainably and structured for the future, which is an important Investment in organic growth was differential in the retail segment. another important driver affording us important sales growth during the In 2013, we strengthened our year. GPA entered new marketplaces, multiformat model, with a diversified principally with the Assaí model; albeit converging portfolio of reinforced its presence in important businesses, and amplified our markets, such as the Northeast, competitive advantages with an with Via Varejo; and expanded the absolute focus on our customers’ proximity format with Minimercado needs. We chose, definitively, doing Extra, in the State of São Paulo. business through multiple channels as a strategic priority. Toward this Among the businesses, Assaí’s end, we developed a series of performance was one of the highlights actions with a focus on integration, of 2013. During the year, we capturing synergies and offering strengthened the new model of store creative solutions to make the and invested in organic expansion by shopping experience increasingly inaugurating 14 stores and entering 3 Annual and Sustainability Report 2013
GPA into five new states, strengthening the With more than 150,000 employees, national footprint of the banner. we are the largest private employer in Message from Brazil’s retail sector. For this reason, As a part of our strategy of generating we will maintain our commitment the CEO greater flow and attractiveness to increasing the satisfaction of our to the stores, while boosting the people, investing in perfecting their Company’s revenue from leasing potentials, so that we always have Message from the Board of Directors commercial space, GPA Malls added people that are prepared, happy and Message from the CEO approximately 45,000 m² of gross engaged with the business and its Profile leasable space, closing the period demands for growth. Corporate Structure with a total of 288,000 m². 2013 Highlights Sustainability continues to be a Awards and Recognition For Via Varejo, the year was marked strategic axis at GPA, all the more by sales growth, consolidation of so, given the size and scope of our the process of professionalizing businesses. Aware that pursuing the business, and taking actions sustainable management is a focused on pursuing efficiency long and abiding journey, we will gains. The company’s profitability continue to invest in dialogue and grew significantly as a function of the in creating value for stakeholders, measures implemented, and greater working increasingly closely with our discipline. At the end of the year, Via customers, without abandoning our Varejo effected its Public Offering environmental and social pursuits, of Shares, an important step toward while remaining aligned with the reinforcing the presence of the leading international principles we have company in the durable household signed on to, such as the United goods segment in the capital markets. Nations’ Global Compact. This Public Offering also strengthened GPA’s financial structure, contributing We are aware of our responsibilities to the reduction of the net debt and our role as a corporate citizen, position at the end of 2013. committed to maintaining balance among the economic, social and At Nova Pontocom, we adopted a environmental aspects of our activities. strategy also focused on pursuing competitiveness and growth, with Ronaldo Iabrudi gains in efficiency, market share CEO and a positive return as of the 2nd quarter. In addition, we launched Extra Marketplace, a new model of sales that brings together, on a single site, offerings from different stores, in various segments, and that has allowed us to increase the assortment of products we offer to our customers considerably.
In 2013 we consolidated our multiformat model, with a diverse and convergent business portfolio, expanding our competitive advantages with absolute focus on the needs of our clients.
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GPA Profile
Message from the Board of Directors Message from the CEO Profile Corporate Structure 2013 Highlights Awards and Recognition
A leader in the retail segment in Business units 2.8 million Brazil, with gross revenue of R$64.4 <2.2, 2.3 and 2.7> square meters billion in 2013, GPA is an enterprise in the Casino Group, one of the largest Multivarejo of sales area global retailers.1 <2.1 and 2.8> Which operates the supermarket, hypermarket, minimarket, fuel stations and Founded in 1948, in São Paulo, drugstore formats with the Pão de Açúcar and it maintains its administrative Extra brands. headquarters in São Paulo and is active in 19 Brazilian states and in Assaí 659 the Federal District. The Company Active in the self-service wholesale segment. closed the year with 170 thousands employees, 1,999 points of sale Via Varejo million with an aggregate of 2.8 million With bricks-and-mortar stores for durable of tickets per the year square meters of sales floor, 659 household goods under the Casas Bahia and million check-outs and a logistics Pontofrio banners. infrastructure formed by 58 distribution centers. <2.4, 2.5, 2.7 and 2.8> Nova Pontocom 170 thousand With e-commerce operations at pontofrio. employees With the strategy of keeping the com, casasbahia.com.br, extra.com.br, customer at the center of its decisions barateiro.com, partiuviagens.com.br and and better serving them in accordance eHub.com.br. with their profiles, at all the various times of purchase, GPA is active GPA Malls through multiple businesses and Responsible for managing the real estate channels, with bricks-and-mortar assets, expansion projects and inaugurating stores and e-commerce operations, new stores. distributed among five business units: Multivarejo, Assaí, Via Varejo, Nova Pontocom, GPA Malls. <2.6> 1 Reference Source: https://www.deloitte.com/assets/Dcom-Brazil/ Local%20Assets/Documents/Estudos%20 e%20pesquisas/Os%20Podersos%20do%20 Varejo%20Global%202013.pdf
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GPA To offer increasing practicality In its day-to-day activities, GPA and comfort to customers, GPA promotes practices and actions that Profile strengthened the one-stop-shopping reflect a business model capable of concept at its stores, adding various leveraging the development of the services like drugstores, fuel stations, communities in which it is located, Message from the Board of Directors restaurants, galleries of stores, considering the human, economic, Message from the CEO etc. In 2013, this positioning was social and environmental aspects. Profile reinforced with the launch of the Corporate Structure Conviva brand, a neighborhood In 2001, it signed the United 2013 Highlights shopping center format where Nations’ Global Compact. In Awards and Recognition customers can combine their daily addition, the Group acts directly shopping, services and food needs. or through associations that represent the supermarket GPA’s shares have been listed sector, such as the Associação since 1995 on the BM&FBovespa, Brasileira de Supermercados at Corporate Governance Level 1, (ABRAS), the Associação Paulista and since 1997 on the New York de Supermercados (APAS), the Stock Exchange (ADR level III). In Federação do Comércio de Bens, 2013, Via Varejo, the company in the Serviços e Turismo do Estado de São Group leading Brazil’s retail segment Paulo (Fecomércio) and the Instituto for durable household goods and para Desenvolvimento do Varejo furniture, completed its Public Offering (IDV). <4.12 and 4.13> of Shares, joining BM&FBovespa’s Corporate Governance Level 2. <2.9>
GPA in Brazil
> Leads in retail food > Leads in durable household goods retailing > Runner up in the self-service market1 > Brazil’s largest private employer in the retail sector2
GPA by the numbers
> Gross revenue of R$64.4 billion in 2013 > 2.8 million m2 of sales floor > 659 million check-outs per year > 170 thousands employees > 1,999 points of sale in 19 states and the Federal District
1 Ranking ABAD NIELSEN 2013 2 Reference Source: http://exame.abril.com. br/negocios/empresas/melhores-e-maiores/ ranking/2013/grupos/ 6 Annual and Sustainability Report 2013
GPA
Profile With its diversified 1 Classes A, B, C and D form part of the Instituto Brasileiro de Geografia e business structure, Estatística – IBGE’s 5-class system based Message from the Board of Directors on multiples of Brazil’s minimum wage, as GPA is able to serve follows: Class A – more than 20 times the Message from the CEO minimum wage; Class B – 10 to 20 times Profile customers at all the minimum wage; Class C – 4 to 10 times Corporate Structure the minimum wage; Class D – 2 to 4 times the minimum wage; and Class E – up to 2013 Highlights income levels, at their 2 times the minimum wage; where the Awards and Recognition minimum wage in 2013 was R$678 for a various buying times. 220-hour month, climbing to R$724 in 2014. Multiformat Structure
% of all sales Business Banner Public1 Stores in 2013
Pão de Açúcar A/B Classes 9.7 168 Supermarkets Extra B/C/D Classes 7.8 213
Hypermarket Extra A/B/C/D Classes 22.4 138 Multivarejo Proximity Minimercado Extra A/B/C/D Classes 0.7 164
Extra Food Drugstores A/B/C/D Classes 157 Pão de Açúcar 2.5 Extra Gas Stations A/B/C/D Classes 85 Pão de Açúcar > Merchants Self-service > Transformers Assaí Assaí 10.6 75 wholesale > Users > Individuals Real Estate GPA Malls Conviva Shoppings A/B/C/D Classes – 2 Businesses
Casas Bahia B/C/D Classes 29.2 602 Specialized Via Varejo Store Pontofrio A/B/C Classes 9.5 397
pontofrio.com.br
extra.com.br
Non- e-commerce casasbahia.com.br A/B/C Classes Foods (B2C) Nova partiuviagens.com.br 7.5 – Pontocom
barateiro.com.br
e-hub B2B companies e-commerce (B2B) Wholesale activities B2B companies
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GPA Corporate Structure
Message from the Board of Directors Message from the CEO Profile Corporate Structure 2013 Highlights Awards and Recognition
Sh areholding Structure 12/31/2013 <2.8> Common Preferred Shareholders % % Total % shares shares Casino Group 99.6 99.9 4.9 3.0 104.5 39.5
Board of Executive and Board of - - 0.1 0.1 0.1 0.1 Directors Shares held - - 0.2 0.1 0.2 0.1 in treasury
Free-Float 0.1 0.1 159.5 96.8 159.6 60.3
Total 99.7 100.0 164.8 100.0 264.5 100.0
The Casino Group is GPA’s main shareholder. With 39.5% of the The Casino Group total capital and 99.9% of the common shares, the French retail chain became the Company’s sole Founded in 1898 in France, the controlling shareholder on July 2, Casino Group is one of the world’s 2012. The transaction marked the leading food sellers, with annual conclusion of a process that began in invoicing of 48.6 billion Euros, more 1999, when the Casino Group took its than 300,000 employees, and 3,500 first equity interest in GPA. stores in operation in several different regions: Latin America (Brazil, Argentina, Colombia and Uruguay), Southeast Asia (Thailand and Vietnam) and the Indian Ocean.
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GPA Corporate Structure With 43.3% of its total capital and 62.3% of the common shares, Message from the Board of Directors Message from the CEO GPA is the controlling shareholder Profile of Via Varejo, the leader of the Corporate Structure 2013 Highlights Brazilian durable household goods Awards and Recognition and furniture market. In addition, it holds 52.1% of the capital of Nova Pontocom, the second leading company in the Brazilian e-commerce segment.
Ownership Structure
Free Float GrupoCasino CasinoGroup 60.3% 39.5%
GPA
Free Float
29.3% 52.1% 43.3% 27.3% FundadoresCB Founders CB Família Klein
Via Varejo AdministradoresManagement 4.0% 43.9% 100.0%
NOVA Pontocom Bartira
As of December 31, 2013
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GPA > GPA lowered operating and > Strengthening of a department of corporate expenses, reinvesting these Risk Management. 2013 gains in the competitiveness of prices. > Implementation of GPA’s new Highlights > The Company closed the year with Corporate Governance model, 128 new stores, including 87 for GPA simplifying the structure to ensure Food (Multivarejo and Assaí) and 41 greater agility and autonomy for the Message from the Board of Directors for Via Varejo. businesses. Message from the CEO Profile > The multi-channel concept was > Revision of the model for Corporate Structure enhanced with the dissemination of compensation and succession 2013 Highlights innovative actions such as the “Store planning for executives. Awards and Recognition Take-Out” and “Electronic Catalog.” > Launch of the first GPA clinic in the > Multivarejo booked gross sales Distribution Center for the Anhanguera growth of 7.5% during the year, with Highway, in São Paulo, with capacity robust gains in market share. to attend to 4,000 employees.
> Pão de Açúcar relaxed the > Revitalization of the corporate parameters for store formats, with brand, from Grupo Pão de Açúcar to smaller points of sale that make it GPA. possible to expand the brand. > Partnership between the Instituto > Minimercado Extra continued to GPA, with the support of the Casino expand organically, with 59 new stores Group Corporate Foundation, and and enhanced logistical and operating FGV to implement a scholarship efficiency. program for promising low-income students. > Exclusive brands made gains under the Pão de Açúcar and Extra banners. > Restructuring of the Corporate 128 Sustainability department and > Assaí inaugurated 14 stores, with creation of sustainability guidelines entry into five new states. for all the businesses based on five new stores commitments. were opened in 2013 > Launch of the Universidade Assaí, with five schools oriented toward training leaders and marketing teams. 7.5% > Via Varejo completed its Public growth in gross Offering of Shares, the second largest sales Multivarejo transaction in the Brazilian stock market in 2013, topping R$2.845 billion.
> Launch of the Via Varejo management 59 new program, with the development of goals Minimercado Extra stores and indicators down to the store level.
> Nova Pontocom launched Extra Marketplace, a new sales model R$ 2.845 bringing together, on a single site, the offerings from different stores, in billion various segments. was the Public Offering > Transformed into a business unit, of Via Varejo GPA Malls launched the Conviva brand, with the inauguration of two neighborhood shopping centers (Rio de Janeiro and Minas Gerais).
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GPA Awards and
Recognition <2.10>
Message from the Board of Directors > The Most Admired Companies > Socio-Environmental Message from the CEO in Brazil Responsibility Award Profile Carta Capital magazine Câmara Municipal de São Paulo Corporate Structure 2013 Highlights A survey of 1,300 executives. The award pays homage to people and Awards and Recognition GPA won in the Supermarkets entities that stand out in the area of category. environmental technology. GPA was honored for its work since >E LID Entrepreneurialism 2001 developing the Pão de Açúcar Award Unilever Recycling Station Program. LIDE – Grupo de Líderes Empresariais > The B2C E-Commerce Excellence Pays homage to the companies and in Quality Award executives that have been innovative E-bit, which surveys behaviors and in their respective areas over the trends in e-commerce in Brazil course of the last year. GPA was awarded in the Sustainable The award recognizes the best Brazilian Entrepreneurship category. online retailers. > The virtual store at extra.com.br > 19th ABEMD Award for Direct received the Diamond trophy, winning Marketing Most Loved Store, by popular vote. Associação Brasileira de Marketing > The Pão de Açúcar Delivery site Direto (Abemd) received the trophy for Delivery Champion, according to the specialists. Brazil’s highest award for Direct Marketing, which awards those > 3rd IBEF Award for entered by agencies and customers Sustainability with gold, silver and bronze trophies. Instituto Brasileiro de Executivos de > Pão de Açúcar’s Fortune Cookie Finanças (Ibef) campaign was awarded in two categories: Campaigns/Programs Developed to orient the actuation (bronze trophy) and the Mail Award. of companies in several areas > In the Digital/Mobile category, involving sustainability: environmental Pão de Açúcar’s Book of Messages responsibility, social justice, economic campaign took the gold trophy. viability, management, conflicts, governance and structure of the > Trustworthy Brands 2013 operation. Seleções magazine and Ibope GPA was certified in the Structure of the Inteligência Operation category.
A survey of 1,500 people showing > Prêmio Marketing Best – the level of trust of readers of Special Edition 25 years Seleções magazine in relation to Editora Referência, brands, institutions and personalities Mediamundomarketing and the Brazilians. Academia Brasileira de Marketing Extra won in the Supermarkets category. The award chose the best cases of marketing over the last 25 years. GPA was among the 35 awarded in this edition.
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GPA Awards and Recognition
Message from the Board of Directors Message from the CEO Profile Corporate Structure 2013 Highlights Awards and Recognition
> Top of Marketing > Top of Mind – Santos ADVB (Sales and Marketing Leaders A Tribuna newspaper in Santos > The Most Important in Retail Association of Brazil) Award Awarded to the 40 most mentioned Editora Padrão – The award recognizes the successful brands in the greater Santos Brazilian Retail Week strategies put together by companies. metropolitan area in coastal São GPA was recognized as one of the Paulo state. The award provides an overview Best Companies in Sustainability. Casas Bahia was awarded in the of the most important facts in 20 Furniture and Appliance Store segments, involving more than 400 > Top of Mind – Folha de S. Paulo category. companies. The Folha de S.Paulo newspaper GPA took 1st place in the category > Top of Mind – São Paulo for The Most Important Super- and A wide-ranging survey of the trends in The Folha de S. Paulo newspaper Hypermarkets. the brands consumers remember most. Extra was awarded in the Hypermarket/ The survey provides an overview of > 2nd Clean-Up Award Supermarket category. the trends in the most recognized Eldorado Radio consumer brands. > Top of Mind – Jornal de Casas Bahia was awarded, for the The initiative pays homage to Brasília 8th consecutive year, in the Furniture people, companies and institutions Jornal de Brasília and Appliance Store category. committed to building a better society and protecting the environment. The survey assesses the brands > The Transparency 2013 Pão de Açúcar and Unilever won in consumers remember most in 120 Trophy the Corporate Citizen category, for product and service segments. ANEFAC, FIPECAFI and Serasa their decade-long work together in Extra was awarded in the Hypermarket/ Experian the Recycling Station Program. Supermarket category. The award appraises the practices > The Best of Agribusiness > Top of Mind – Ribeirão Preto of transparency in companies’ Trophy Melhores & Cia. Group accounting information. Globo Rural magazine GPA was among the 10 awarded Awarded to the brands that garner the in the category for Publicly-Held Selection of the 20 best companies most mentions by those interviewed in Companies – Invoicing above in the agribusiness sector. the study. R$5 billion. GPA was 1st of The 10 Best in the Casas Bahia was awarded in the Wholesale and Retail Sector. Furniture Store category. > 6th C ariri Highlight Trophy Informativo Caririense > 5th tGrea Brands Award > Top of Mind – Santa Catarina Diário do Nordeste A Notícia, of the Grupo RBS and the Homage to the professionals, Instituto MAPA companies and authorities for their The award pays tribute to the brands work in the Cariri region. the inhabitants of Fortaleza (CE) Awarded to the companies and people Assaí was awarded for its important remember most. most mentioned by consumers and work and services offered in the Extra won as the Retailer Most executives in Santa Catarina state. Cariri (CE) region. Remembered by Fortalezans. Casas Bahia was awarded in the Appliance Store category. 12 Annual and Sustainability Report 2013
Nexes of Trust Model of Management
Model of Management Corporate Governance Risk Management Competitive Differentials Engagement with Stakeholders
<4.8> Purpose Values
Humility The determination to build a better life Listening with respect and interest, always moves us, each day, to serve and delight our being disposed to learn more and take into customers, our people and society. consideration different points of view.
Discipline Mission Acting with a focus on achieving objectives, and always delivering as promised.
To guarantee the best buying experience for Determination and engagement all our customers, at each of our stores. Knowing where one wants to get and what must be done, performing all activities with great energy, always seeking to be better, Vision with persistence.
Emotional balance GPA aims to expand its share of the Acting calmly in all situations, with the Brazilian retail market and become the same level of cheer and motivation. most admired company for its profitability, innovation, efficiency, sustainability and contribution to the development of Brazil.
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Nexes of Trust Our People With the objective of aligning the To continue growing as a benchmark expectations of both current and Model of for quality service provision, GPA new employees, GPA developed believes that the success of the its Proposition of Value, which Management business is directly related to the compiles the attributes, benefits and competence, engagement and advantages received by employees as professionalism of its employees. a return on their intellectual capital. Model of Management For this reason, since 2012 it has Corporate Governance stepped up the task of attracting and The “We want you to be happy here” Risk Management identifying the right people for the movement represents the Group’s Competitive Differentials right positions, which is considered proposition of value, maintaining Engagement with Stakeholders to be one of the main requirements the principal objective of attracting, for ensuring the high level of skill and engaging and retaining talent and excellence of the professionals at all putting together the team that forms the Group’s companies. “Our People.”
Integrated Management
To make the guidelines of its Mission and Vision a reality, and maintain the alignment with its Values, GPA relies on an integrated management matrix, which strengthens the characteristics of its multibusiness structure.
Model of Management GPA has adopted an integrated management matrix, formed by a multibusiness structure that ensures the positioning of each business, while maintaining the corporate vision of the processes, with institutional administration in the context of the Group.
Organizational Structure
CEO Nova Communications Varejo Assaí Gpa Malls Via Varejo Corporate Relations Pontocom
Infrastructure and strategic 1. Result development 2. Business/brand value
Corporate 3. Roce finances and services 4. Growth/expansion 5. Customer satisfaction Personnel 6. Employee satisfaction management
1. Result 3. Roce 5. Customer satisfaction 2. Business/brand value 4. Growth/expansion 6. Employee satisfaction
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Nexes of Trust With a structure composed of several businesses and activity in different Model of regions, GPA is an agile organization, which makes decisions and follows Management through. Toward increasing drive and alacrity in this process, it has six performance indicators, which Model of Management are valid for all executives, and Corporate Governance which feed into the Group’s variable Risk Management component of compensation: result/ Competitive Differentials net profit, value of the business/ Engagement with Stakeholders brand (valuation/EVA), return on capital employed (ROCE), growth and expansion, customer satisfaction and employee satisfaction.
Organization Chart
GPA CEO Ronaldo Iabrudi
HR and Finance and Multivarejo GPA Malls Assaí Via Varejo Nova Pontocom Sustainability corporate services Tambasco Alexandre Belmiro Líbano Barroso Quiroga Antônio Salvador Christophe Hidalgo Vasconcellos
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Nexes of Trust The management of the Group is Other building blocks include Model of also supported by a model for high the Group’s processes to satisfy performance, which indicates the skills customers, employees, the society Management required for each of the leadership at large and, as a consequence, positions, contributing to identifying and shareholders, which translate into matching the executives to the posts. the return and growth of the business. Model of Management This process has a feedback loop: Corporate Governance This model is characterized by the to attain the results and shareholder Risk Management appointment of people aligned with satisfaction, new guidelines and goals Competitive Differentials the Company’s values that, with the are established. And all this is done Engagement with Stakeholders adoption of a model of management, in a happy environment, which forms and of an organizational structure, result part of GPA’s DNA. in focused leadership with the right tools: technical knowledge and method.
Model of High Performance
GPA: Pleasure in Serving, Passion for Doing
Monitoring/Control and Troubleshooting
Technical Knowledge S haREHOLders
Cu stOMERS > Model of Management P rOCESSES THE RIGHT L eadeRSHIP PEOPLE > Roles and > Suppliers a win-win Return and responsibilities The right people in relationship S aTISFACTION Ou r PeOPLE Sustainable Who adhere to > Organizational Growth our values the right positions > IT/Logistics Structure > Capital Structure Society
Method
New Guidelines and Goals
Humility, Determination & Engagement, Discipline, Emotional Balance
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Nexes of Trust GPA’s model for corporate governance Members of the Board of Directors is driven by transparency in the and the committees, including the Corporate disclosure of information, a commitment external members, receive fixed monthly to the capital markets, and respect for compensation, unrelated to their actual Governance shareholders and investors. participation in meetings and adjusted annually based on market surveys and Listed on Corporate Governance standards. <4.5> Model of Management Level 1 of the BM&FBovespa Corporate Governance (Bolsa de Valores de São Paulo), Executive compensation is structured Risk Management the Company has adopted the based on programs that monitor the Competitive Differentials International Financial Reporting achievement of the Company’s pre- Engagement with Stakeholders Standards - IFRS issued by the established goals. The evaluation of International Accounting Standards the executives follows a meritocratic Board - IASB, and follows the model, with annual quantitative and rules of the Brazilian Securities qualitative goals, in addition to a Commission (Comissão de Valores behavioral component based on the Mobiliários – CVM). Outside of 360º concept, which consists of a self- Brazil, it is subject to the regulation of evaluation and evaluations by the Chief foreign companies listed in the United Executive Officer, subordinates and States, by its Securities & Exchange colleagues, based on the skills required Commission – SEC and the New York by the Company and the performance Stock Exchange. expected of the position. <4.10>
GPA also follows the guidelines of the The Shareholders’ Meeting is the Sarbanes-Oxley Act (SOX), which tries principal channel of communication to ensure that companies maintain between the Company’s shareholders mechanisms for auditing and reliable and administration. Convoked on controls. In addition, differentiated 15 days’ notice, it is a formal space practices of governance beyond those for resolutions, recommendations or required for companies listed on critiques of the Company. <4.4> Corporate Governance Level 1: The Office of Investor Relations is > 58% of the members of the Board of another channel of communication for Directors are independent. shareholders, who may be in contact > Five committees, the majority of by phone (+55 11 3886-0421) or which are composed by members who email (gpa[email protected]). This office are external to and independent from promotes dialogue with shareholders, the Company, advise the Board of investors and market analysts, by Directors. developing a series of actions, including > Dividends Policy. among others: teleconferences and > Specific committees to discuss publication of releases with quarterly and resolve on compliance with the results; investor day; presentations at policies for Securities Trading and public events in Brazil promoted by the Disclosure and Use of Material Brazilian and international financial Information and the Guarding of institutions; etc. <4.4> Confidentiality. Employees, in turn, have specific Model of Governance channels such as the Call-for-Action GPA is managed by two main (Lig-Ação), a channel for complaints bodies: the Board of Directors and about illicit acts that violate the the Board of Executive Officers, with Code of Moral Conduct, or situations established roles and responsibilities involving fraud. Complaints can be in administering the businesses. In made by phone during business hours this structure, the Board of Directors (Monday through Friday, from 8 a.m. enjoys the support and advice of five to 5:30 p.m.) or by 24-hour voice committees formed by representatives mail, at 0800-55-57-11, or by email of the Board of Directors and by ([email protected]) or letter external members specialized in their (GPA – 0800 – São Paulo – SP – respective areas of activity. <4.1 and 4.4> CEP: 01401-999). 17 Annual and Sustainability Report 2013
Nexes of Trust Board of Directors respective areas, including one A collegial deliberative body CEO, three vice-presidents and Corporate responsible for the overall guidance five executive officers or heads of the businesses, the Board of of business, all elected by the Governance Directors has 12 members, including Board of Directors and having five representatives of the controlling variable compensation pegged shareholder (the Casino Group) to the Company’s results. In Model of Management and seven independent directors. 2013, aggregate compensation Corporate Governance The members have a mandate of of the board of executive Risk Management three years, with re-election being officers was R$43.6 million1. Competitive Differentials permitted. <4.3> Engagement with Stakeholders The officers are responsible for The Board’s main tasks are: electing GPA’s day-to-day administration, in the executive officers, supervising the line with the guidelines relating to conduct of the business, conducting managing the business established the corporate governance process, by the Board of Directors. In January convoking Shareholders’ Meetings, of 2014, the CEO, Enéas Pestana, establishing strategies and monitoring submitted a letter of resignation their execution. The body is also to the Board of Directors, which responsible for approving the appointed one of its directors, financial statements, the annual Ronaldo Iabrudi, to assume the role. budget and investments, and the issuance of new shares pursuant Committees to the existing stock option plan. GPA’s model of governance also prizes administrative efficiency Meetings are held on an ordinary and the professionalization of its basis five times per year, or whenever managers. In this framework, the needed. In line with the best practices committees, whose meetings are held of corporate governance, the with the periodicity established in chairman of the Board does not have each set of internal regulations, have an executive role at the Company. In a fundamental role in the interface 2013, there were 18 meetings, and between the Board of Directors and aggregate director compensation the Board of Executive Officers. totaled R$6.6 million. <4.2> GPA has five sitting committees, Board of Executive Officersa which develop proposals and supply It consists of nine market recommendations in their respective professionals specializing in their areas to the Board of Directors.
The GPA follows the guidelines of the Sarbanes-Oxley Act (SOX) to ensure the maintenance of audit mechanisms and reliable certainty in enterprises.
1 It includes only wages.
18 Annual and Sustainability Report 2013
Nexes of Trust These committees are formed by statements of the Company and the representatives of the Board of entities it controls; evaluating the Corporate Directors and external members, effectiveness and sufficiency of the named based on the following criteria: structure of internal controls and the Governance they may not be members the Board internal and independent auditing of Directors or the Board of Executive processes of the Company and the Officers of the Group or the entities it entities it controls, including in light Model of Management controls; they may not be the spouses of the dispositions of the Sarbanes- Corporate Governance or family through the second degree of Oxley Act. Risk Management members of the Board of Directors or Competitive Differentials the Board of Executive Officers of the Engagement with Stakeholders Group or the entities it controls; they must have knowledge and recognized experience in their respective areas; and they may not occupy positions at companies that compete with the Group and the entities it controls. <4.3 and 4.7>
Audit Committee Formed by three members, of whom two are external and one an independent representative of the Board of Directors, with a mandate of one year, the Audit Committee is responsible for: analyzing management’s report and the financial
Audit Committee
Installed in 2013, it has a supervisory role, to ensure a tighter relationship with the Board of Directors and the adoption of procedures and controls for the effective management of the business.
Sustainability Committee <4.9> implementation and realization of the Active since 2009, it is formed by five annual investment plan; reviewing and members, of whom one is external recommending opportunities related to and others are representatives of the financing transactions to improve the Board of Directors. The main tasks capital structure; and reviewing cash of the Sustainability Committee are flow. Meetings are held at least every to approve GPA’s strategic guidance two months. In 2013, the Finance on sustainability, evaluate sustainable Committee met six times. policies and practices, and promote the initiatives toward sustainability Corporate Governance Committee among the leadership and the Board Created in 2012, it is formed by of Directors, among others. In 2013, five members, all representatives there were seven meetings. of the Board of Directors, including four independent members. Its Finance Committee responsibilities include, among others, Formed by five members, including ensuring the adoption of the best one external member and the others practices of corporate governance representing the Board of Directors. at the Company; and monitoring The committee is responsible for observance of the Brazilian corporate monitoring and supervising the and securities laws, and the securities
19 Annual and Sustainability Report 2013
Nexes of Trust market regulators to which the shareholders. Installed in 2009, it Company is subject. During the year, should be active until its tasks are Corporate there were eight meetings. absorbed by the recently seated Audit Committee, in 2014. Under Governance Human Resources and the Company’s bylaws, the Fiscal Compensation Committee Council is not a permanent body, and Currently consists of three members, its installation and the election of its Model of Management all representatives of the Board of members has occurred annually every Corporate Governance Directors, including two who are year since 2009. Risk Management independent. Among other matters, Competitive Differentials it is responsible for examining Codes and Policies Engagement with Stakeholders candidates for becoming members of GPA’s model of corporate governance the Board of Directors and the Board also consists of a combination of of Executive Officers; reviewing and codes and policies that supply the discussing the compensation of the guidelines and the procedures to be administration and the stock option followed by all employees and other plan; proposing criteria to assess the constituencies, with the objective of performance of managers, as well as ensuring the sustainable practice of establishing the compensation and the Company. These documents are incentive policies; and reviewing the available for reading or downloading Company’s methods of recruitment at www.gpari.com.br. and selection. In 2013, the committee met eight times.
Fiscal Council Formed by three sitting members and three alternates, it is responsible for supervising the acts of the administrators, analyzing the Company’s financial statements, and reporting its observations to
Policy updates
In 2013, the policies for Trading in Securities and the Disclosure and Use of Material Information and Guarding Confidentiality were reviewed and updated, with the inclusion of new control mechanisms.
A set of codes and policies ensure sustainable operations of the Company and all its employees.
20 Annual and Sustainability Report 2013
Nexes of Trust In 2013, the Group advanced in this processes. At Assaí, all employees area by reviewing and updating the hired in 2013 participated in the Intake Corporate Policy for the Disclosure and Use of Program, which includes GPA’s code of Material Information and Guarding ethical conduct. The goal for 2014 is Governance Confidentiality, which establishes rules to raise consciousness through training for the disclosure and confidentiality of and talks on ethics and integrity among material information, and the Policy for 100% of the employees in the Marketing Model of Management Trading in Securities, which establishes department and train the entire Corporate Governance the procedures to be followed in any leadership cadre (managers of stores Risk Management trading of securities issued by the and offices) on concepts and behaviors Competitive Differentials Company or referenced to them, in relation to ethics and integrity in Engagement with Stakeholders to guarantee the adoption of good managing the business.
Nexes of Trust Risk Management
Model of Management Corporate Governance Risk Management Competitive Differentials Engagement with Stakeholders
In 2013, GPA initiated the construction > Standardization of the information of a corporate platform to manage collected. risks. Management of this process > Group discussion of critical risks is under the responsibility of the (with the participation of the Board recently created Department of of Executive Officers and each Risks, operating on the basis of a risk business). methodology and gradual alignment > Preparation of plans of action with the Group’s Strategic Planning. specific to the risks of each business. > Reinforcement of the training of the The risks – financial, operational, professionals involved with the matter. strategic, regulatory, etc. – have > Inclusion of the matter on the been being mapped, analyzed and Group’s agenda, as a permanent prioritized by category, in accordance item on the docket of all the main with the degree of criticality and Committees, as the basis for the impact on costs and operations, internal auditing plan and as an considering too their economic, social integral part of the strategic planning and environmental aspects. process.
The phase for weighing risks is being An effort will then be made to finalized in 2014. These risks will harmonize all the businesses, then be analyzed using a routine of to exploit synergies in certain periodic monitoring for all the mapped procedures and actions. Indicators items, together with their respective will also be developed, using an managers, with a focus on the automated management system. The corporate risk following principal aspects: management platform will help the company to map, monitor and analyze periodically all mapped risks.
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Nexes of Trust Competitive Differentials
Model of Management Corporate Governance Risk Management Competitive Differentials Engagement with Stakeholders
GPA has substantial soft capital, > Strengthened processes in represented by attributes that regularly the Casino brand, with work set the business apart and contribute in partnership and detailed to the baseline reliability needed for management of the portfolio, the Company to grow and expand its inventory, pricing and communication operations. of the gourmet positioning of the brand. As a result, the products Exclusive Brands recorded double-digit sales growth A fundamental element of identity, during the year, with economies of exclusive brands predicate the assurance scale. and exclusivity of GPA and, thus, prove > Launch of the Finlandek brand, to be an important competitive edge, focused on bed, bath and kitchen reinforcing the Company’s image and products, which exceeded the sales increasing the profitability of retail food targets for 2013. sales, in addition to building loyalty > Build-out of the smart choice among customers of the Extra and Pão positioning (chasing the brand de Açúcar chains. leader, with lower prices) for the Qualitá brand, with more than 100 The performance in 2013 reinforced innovations and relaunches, in this positioning: the relative addition to a new communications participation of exclusive brands campaign focused on the cost- increased 200 basis points, to 8% benefit analysis and a new of Multivarejo sales. Among the promotional campaign called “Great factors that contributed to this historic Offers.” performance, the following stand out: > Expanded portfolio of the Club des Sommeliers brand of wines, > Relaunch of the Taeq brand, with with the inclusion of lighter and more innovation in products, aligning affordable products, in addition to presentation with the positioning of items with greater value added, being a healthy brand, relaunching the which contribute to strengthening its brand concept (from “life in balance” to positioning as the biggest brand of “take charge of your life,” as more in line wines of Brazil (by nationality and with consumer tendencies), and new number of labels). packaging. 23 Annual and Sustainability Report 2013
Nexes of Trust Logistical Efficiency arrearages, with better discrimination With capacity to support the Group’s and concession of credit. Competitive growth and handle foreseeable demand throughout the supply chain, This positioning contributed to the Differentials and suit the product mix to each results for the year, which beat the cluster and business, logistics are a performance in 2012, reinforced fundamental part of GPA’s operations. by maintaining the revenues and Model of Management controlling the expenses of the Corporate Governance Over the course of the year, actions operation. Risk Management were taken to capture logistical Competitive Differentials synergies among the businesses, In joint effort with GPA’s Marketing Engagement with Stakeholders such as beginning to share distribution department, FIC developed a series of centers for bricks-and-mortar stores initiatives to offer ever more tangible and e-commerce, ensuring increased benefits that customers notice. Among productivity and reduced operating these, the following stand out: costs, and contributing to financing the level of competitiveness in pricing. Rebuild of the FIC sales force at Pontofrio – the sales force was Highlights included the Minimercado completely overhauled, involving the Extra’s initiatives to strengthen the hiring of 1,200 people from August concept of the advanced logistics unit, through November, representing an which funnels store supply through a increase of 300% in the number of hypermarket acting as a focal point employees. Robust results were for distributing merchandise. This achieved in 2013: 100% coverage strategy afforded more efficiency and of the stores, and an increase in the agility, with lower costs in supplying penetration of FIC cards in Pontofrio the units. sales, from 9% to 13%.
At Nova Pontocom and Via Varejo, New benefits for Extra cards – At the challenge was integration, in Multivarejo, the highlight was the pursuing logistical and operating implementation of new offers through synergies. Toward this end, one Extra cards, sustained by offering distribution center was inaugurated in customers more discounts and benefits. Camaçari (BA), and another was built Marketing actions were undertaken in Contagem (MG), with inauguration to build the visibility of the benefits anticipated for 2014, both being offered, and encourage customer use shared by the two businesses. Nova of the cards (on Extra Wednesdays, Pontocom also consolidated three cardholders get a 12% discount on distribution centers into one in São fruits, legumes and vegetables). In Paulo, with the objective of improving addition, the number of products with a the level of customer service, discount for card purchases increased reducing delivery times and increasing from 50 to 400 during the year. operating efficiency. Remodeling of the Pão de Açúcar FIC card – The remodeling of the Pão For the very characteristics of the de Açúcar card was approved business, with two sizable partners during the year, to transform it into (GPA and Itaú Unibanco) that a more attractive product, with a contribute technology and expertise in series of benefits for customers, with their respective areas of activity (retail implementation slated for the second and financial services), FIC is another half of 2014. important distinguishing feature of the Group, with the capacity to attract Building on this performance, FIC and retain customers, and significant began 2014 with notable distinguishing potential for growth going forward. benefits, and maintains strict control of defaults and costs, with positive In 2013, FIC continued working to expectations for sales growth over enhance efficiency in its product 2013, both in Retail Food and at lines, maintain suitable control of Pontofrio. 24 Annual and Sustainability Report 2013
Nexes of Trust Corporate Reputation <4.16> and external surveys track these In 2013, GPA’s Corporate assets, highlighted by a diagnostic Competitive Communications department was survey conducted by the Reputation formed to build and strengthen Institute, which noted the principal Differentials the reputation of the Group and drivers of GPA’s reputation amongst its its businesses among the various stakeholders: customers, employees, stakeholders. investors, the press and suppliers. The Model of Management grading of the company’s reputation Corporate Governance Managing intangible assets falls within is strong among all the stakeholders Risk Management the scope of this positioning. Internal surveyed, as is shown below: Competitive Differentials Engagement with Stakeholders
c ustOMERS emploes ye suppliers
steem steem steem
e e e
a a a
d d d
y y y
m m m
h h h
t t t
i i i
r r r
a a a
a a a
p p p
t t
t
i i
i
o o
Excellent > 80 o
m m
m 70.3 66.9 72.0
e e e n n n
Strong 70–79
So-so 60–69 t r s t t r s t t r s t Weak 40–59 u u u Poor < 39 the press shareholders sample size steem steem
Customers: 667 e e
Employees: 1.512
a a
d d
y y
Suppliers: 38 m m
h h
t t
i i
r r
Press: 10 a a
a a
p p
t
t
i
strong i
o o strong
m
Shareholders: 10 m
e e n n
Worldwide retail sector: 69.07
Brazilian retail sector: 69.05 t r u s t t r u s t
These indicators materialized as During the year, various actions were a reputational platform, which developed in line with this model, includes actions for internal and highlighted by the: external constituencies, based on the following pillars: > Creation of the GPA purpose: “The determination to build a better life moves > Capable of serving the us, each day, to serve and delight our client in all business units and customers, our people and society. departments > Revitalization of the brand, from > A large group with a multi “Grupo Pão de Açúcar” to “GPA,” business strategy which afforded the evolution of the > Attractive and desired company corporate brand, now capable of to work representing all the Company’s > Differentiated through business models with a single symbol. sustainability practices > Integration and exchange of best > Ethic and transparent in every practices with Casino through internal single relation channels of communication and > Excellent in corporate forums. governance 25 Annual and Sustainability Report 2013
Nexes of Trust Engagement with Stakeholders
Model of Management Corporate Governance Risk Management Competitive Differentials Engagement with Stakeholders
< 4.14, 4.15, 4.16 and 4.17>
Employees
Forms of relationships and Main results and initiatives in contact channels response to these demands > The Call-for-Action (Lig-Ação) > To align employee expectations, the complaints and whistle-blowing “We want you to be happy here” pitch channel (Multivarejo, Assaí, Nova was created, where the primary goal Pontocom and Corporate) is to attract, engage and retain talent. > Executive forum > Attend and listen to all our > Coffee with the president employees, to try to handle all > Intranet complaints with dedication, thinking of VIA VAREJO – CASAS BAHIA our people in a respectful way, so that AND PONTO FRIO all employees are able to perform well > Ombudsman and work in an excellent organizational > Complaints Channel: 0800-774-3000 climate with sustainable results in a > Email: [email protected], practical and simple way, with an eye by letter (São Caetano do Sul, rua João on Our Cause. Pessoa nº 83 / SP - zip code: 09520-010
Corporate Sustainability [email protected] The basis for identifying stakeholders took into consideration the size of the constituency and the relationship with issues relevant to the Company’s sustainability.
26 Annual and Sustainability Report 2013
Nexes of Trust Engagement with Costumers/Consumers Stakeholders Forms of relationships and Main results and initiatives in contact channels response to these demands MULTIVAREJO – PÃO DE AÇÚCAR, > 90% customer satisfaction with Model of Management EXTRA AND ASSAÍ the retail food brands, services and Corporate Governance > Casa do Cliente products. Risk Management > Attend and listen to all our clients Competitive Differentials VIA VAREJO – CASAS BAHIA to deal with any complaints with Engagement with Stakeholders AND PONTO FRIO dedication so that we can realize their 1/Operational dreams, attaining sustainable results intelligence Department: in a practical and simple way, with an > Casas Bahia Customer Service eye on Our Cause. (Phone line: 3003-8889) > 3,639,270 served > Chat Casas Bahia: (Institutional website) > 20,438 served > Pontofrio Customer Service (Phone line: 4002-3388) > 920,290 served > Chat Pontofrio (Institutional website) > 71,842 uses 2/ Ombudsman > Complaints Channel: 0800-774- 3000 > Email: [email protected], by letter (São Caetano do Sul, rua João Pessoa nº 83 / SP - zip code: 09520-010)
Community/Society
Forms of relationships and Main results and initiatives in contact channels response to these demands > EXTERNAL COMMUNICATIONS > Relationships with the press, DEPARTMENT management of the corporate > CORPORATE RELATIONS reputation and brand. DEPARTMENT > Work with entities, NGOs, professional associations, institutes VIA VAREJO – CASAS BAHIA and other associations, in formulating AND PONTO FRIO sectoral accords and suggesting and changing Public Policies. 1/ Institutional and external > Anticipating movements and communication department trends that impact the business and > [email protected] defending the company’s interests 55 11 4225 6323 within the principles of the Group’s 2/ Ombudsman code of ethics and values. > Channel Denunciation: 0800-774- > Attending and listen to a society 3000 to deal with any denunciation with > Email: [email protected], dedication, and sense of responsibility for letter (São Caetano do Sul, rua João in the communities reaching Pessoa nº 83 / SP - zip code: 09520-010) sustainable results in a practical and simple way to respect Our Cause. Corporate Sustainability: [email protected] 27 Annual and Sustainability Report 2013
Nexes of Trust Engagement with Suppliers Stakeholders Forms of relationships and Main results and initiatives in contact channels response to these demands VIA VAREJO – CASAS BAHIA AND > Attend and listen to all our Model of Management PONTO FRIO suppliers, to deal with all complaints Corporate Governance 1/ Ombudsman with dedication, maintaining good Risk Management > Complaints Channel: 0800-774-3000, relationships, seeking sustainable Competitive Differentials > Email: [email protected], results that contribute to the Engagement with Stakeholders by letter (São Caetano do Sul, rua João perpetuation of Via Varejo in a Pessoa nº 83 / SP - zip code: 09520- practical and simple way, with an eye 010) on Our Cause.
Shareholders/Investors
Forms of relationships Main results and initiatives in and contact channels response to these demands Investor Relations Department > Provide the Group’s financial, > GPAPhone: + 55 11 3886-0421 operational and strategic information Fax:+ 55 11 3884-2677 [email protected] to the Financial Markets, seeking to www.gpari.com.br add value to this constituency, and > Via Varejo that allows the assessment of the Phone + 55 11 4225-9516 shares at a fair market value. Fax:+ 55 11 4225-9596 [email protected] www.viavarejo.com.br/ri
90% customer satisfaction rating in Food Retailing 3,639,270 attendances at Consumer Care Center at Casas Bahia 920,290 attendances at Care Service Consumer Ponto Frio
28 Annual and Sustainability Report 2013
Nexes of Trust Engagement with Stakeholders
Model of Management Corporate Governance Risk Management Competitive Differentials Engagement with Stakeholders The knowledge gained in years of relation with the customers is one of the main intangible assets GPA.
Knowledge of the Consumer The knowledge GPA has acquired In an age in which consumption over the years in relation to its patterns have become sophisticated customers, whether through market and the consumer is increasingly surveys or internal studies, is an active, with ease of access to important intangible asset that permits technologies and knowledge, the an outstanding position in the retail levels of demand are higher and, segment, which has traditionally been largely, require multiple responses. marked by a more empirical and less analytic approach.
Customers are the main source of relationships, the generation of value and results, in addition to being half of the equation for the company’s reputation (credibility and image). In line with this positioning, the Group has prepared itself so that the businesses make their decisions centered on the customers, understanding that they are the fundamental asset and real source of its growth.
To reinforce this relationship, GPA tries to interact with excellence over the entire life cycle of each customer, respecting particularities, and generating more value for the different businesses, brands and banners. Toward this end, the Group works at each model by offering the most suitable assortment, service, convenience and price in accordance with the pitch for each business, trying to maximize the preference and satisfaction of each client and the results and reputation of the companies. 29 Annual and Sustainability Report 2013
Boldness that Inspires Strategic Approach
Strategic Approach GPA Businesses Economic and Financial Performance Investments Capital Markets Prospects
To ensure the development of This orientation is established based the business while creating value on an analysis of macroeconomic for shareholders, commercial data and ongoing market studies, partners and employees, which make it possible to assess the GPA’s strategic approach is current environment, identify market focused on four main axes: opportunities, understand the real needs and aspirations of consumers > Growth and, thus, develop more specific and > Operational excellence bolder strategic actions. > Innovation and sustainability > People and management
Strategic
Drivers 2013 <1.2>
> Maximum diligence in investments – priority for legal compliance, maintenance of the assets and expansion. > Focus on efficiency gains and structured cost reduction, as a basis for improving market competitiveness. > Gains in market share at all the businesses, based on improving the competitiveness of pricing and increasing customer flow and loyalty. > Strengthening the multiple channel nature of the businesses and the synergies among them.
30 Annual and Sustainability Report 2013
Boldness that Inspires Competitiveness The multi-channel approach The positive environment at the end of Beyond making good on its strategy Strategic 2012 gave way to more challenges in of gains through competitiveness, 2013. As such, the word of the year GPA in 2013 definitively reinforced Approach was competitiveness, to increase the its multi-channel approach flow of customers in the stores and, as a strategic priority for the thus, win gains in market share. Company’s sustainable growth. Strategic Approach GPA Businesses With initiatives to optimize expenses During the year, it took a series Economic and Financial Performance toward gains in efficiency at all of actions toward integrating the Investments the businesses, the fruits were businesses, pursuing synergies Capital Markets reinvested in the competitiveness of and creative solutions to make Prospects prices, principally at retail food, with consumer’s shopping experiences a structured movement to reduce increasingly practical and convenient. prices throughout the mix (notable, monitorable and, for the first time, in The results attained during the year the other products that make up the reflect the boldness of the strategies mix), generating positive perceptions that were adopted and positioned among consumers. GPA as a pioneer of the multi-channel approach in Brazil, with consistent The investment in organic growth and growing results. also was an important strategic driver during the year, which allowed GPA Another initiative was the formation to enter into new marketplaces, of an executive office oriented principally with Assaí’s self-service toward consolidating the multi- wholesale format, and expand channel concept among the Group’s Minimercado Extra’s proximity format different businesses, strengthening in the city of São Paulo. synergies, profitability and the benefits for customers, with cross- As a result, the Group was able, cutting actions in four areas: notwithstanding the harsher Marketing; Logistics; Information environment, to meet the Technology and Strategic Planning. challenges and attain gains in efficiency, broadening its footprint In addition to making it possible to in various regions of the country capture synergies at each business, and capturing market share in the goal is to pursue Group-wide the different businesses. gains in operating efficiency, which permit funding the implementation of an aggressive growth strategy, based on a series of initiatives:
> Combined procurement with economies of scale. > Shared logistics assets and infrastructure. > Integrated marketing. > Dissemination of innovative actions such as the “Store Take-Out” and “Electronic Catalog,” facilitating Strategic Vision consumer access to the products marketed through the Group’s different formats. To be the largest and best distribution group in Brazil, generating growth, higher asset values and above-average returns for our shareholders, and sustaining results through satisfying our customers, our people and society.
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Boldness that Inspires Strategic Strategic challenges going forward <1.2> Approach Growth P eople and Management > Multivarejo > Increased productivity with Focus on expanding the proximity and customer focus. Strategic Approach self-service wholesale formats. > Development of leaders and the GPA Businesses > Via Varejo succession plan. Economic and Financial Performance Protect and strengthen the footprint in the > Revision of incentives and the variable Investments markets in which it is present and enter into compensation plan, reinforcing meritocracy. Capital Markets states with strong growth potential. > Continued increase in engagement. Prospects > Nova Pontocom > Reduction of turnover. Strengthening the multi-channel platform for growing e-commerce (market place). Innovation and Sustainability > GPA Malls > Multi-channel approach. Robust expansion of gross leasable space, > New formats. with increased recurring revenue from > New equipment and methods for leasing commercial space. building stores. > Increased energy efficiency. Operational Excellence > Automation and intelligence > Multivarejo in the operations. Increased competitiveness of prices, > Transformation of the chain of value. supported by gains in efficiency and > Conscientious consumption and supply. rationalization of operating expenses. > Via Varejo Continuing the efficiencies effort. Implementation of synergies and best practices among the businesses. Increased efficiency in managing working capital.
32 Annual and Sustainability Report 2013
Boldness that Inspires GPA Businesses
Strategic Approach GPA Businesses Economic and Financial Performance Investments Capital Markets Prospects
were opened in 1 This positioning had a positive impact Multivarejo Multivarejo Pão de Açúcar and Extra on all the formats, if especially the Multivarejo is the new brand for the hypermarket, which saw sales growth retail business model for GPA food, that beat inflation. The performance in which operates in the hyper- and non-foods over the course of the year supermarket segments under the was positive, with more visible results Extra banner; in supermarkets and at year-end, complemented by positive food delivery, under the Pão de performance in foods, highlighted by Açúcar banner; the Minimercado perishables (fruits, legumes, vegetables Extra proximity stores; and fuel and seafood), which enjoyed double-digit 27.5 stations and drugstores. growth during the year. In 2013, to gain market share, GPA In line with this strategy, promotional thousand m² adopted a strategy focused on activities were also intensified, with of sales area were added increasing competitiveness by reducing an enhanced presence in the media prices, supported by improving and in the area of influence of the efficiency and reducing expenses, with stores. Thus, the results in terms of the objective of increasing customer competitiveness were accelerated, flows. This positioning had an impact with an increase in the volume of sales principally in the businesses that form (7.5% over 2012); a recovery in the flow part of Multivarejo. of customers in the stores, and gains in market share, where the gain in the Initiated in the 2nd quarter of the year, last period was 100 basis points. this directive had a plan to rationalize expenses, where the principal The number of stores also increased initiatives were: store operating at the same clip, with 70 inaugurations efficiency, back-office optimization in Multivarejo, including 59 new and synergies, and reduced corporate Minimercado Extra stores, in addition expenses. The gains were passed to 5 for Pão de Açúcar, and 6 for Extra along to consumers through lower Super, adding aggregate sales floors of prices. One of the differences of this 27,500 square meters. 1 The Multivarejo brand was launched in strategy is that, for the first time, price 2014 and is therefore a subsequent event competiveness had broader scope. presented in this report. 33 Annual and Sustainability Report 2013
Boldness that Inspires Pão de Açúcar and Osasco), the model also entered Characterized by being a model into new marketplaces (Sorocaba, GPA known for innovation and Guarulhos and Praia Grande), strengthened by its resilience, Pão reinforcing its presence in the State of Businesses de Açúcar in 2013 recorded the best São Paulo. performance among the Multivarejo banners, with uniform growth Together with aggressive growth, Strategic Approach throughout Brazil and an increase of the challenge to the Minimercado GPA Businesses 10.7% in sales in relation to 2012. in 2013 was to guarantee logistical Economic and Financial Performance and operational efficiency – key Investments To increase the penetration of the characteristics in supporting Capital Markets format and thus secure its expansion, the growth of the business and Prospects a process of relaxing the parameters guaranteeing the success of the for store size was initiated during the model. Along these lines, the actions year, exploring more compact units undertaken during the year were that afford the banner profitable and oriented toward investments in: agile expansion. > training the workforce; During the year, the chain opened > information systems; The GPA ended 5 stores, with expansion in new > infrastructure and logistics to marketplaces, and strengthened its undergird the strong expansion seen the year with 85 positioning in cities that are growing. in 2013 and the growth projected gas stations and going forward. Extra 157 drugstores in In addition to the successful strategy Drugstores and Gas Stations of more competitive pricing, which With 157 stores in operation, operation. permitted an increase of 5.5% in the drugstores were restructured in 2013, volume of sales over 2012, the stores culminating in the remodeling of 7 under the Extra banner also achieved stores. The changes were focused robust gains with the intensification of on expanding sales floors, which the synergies and integration with the went from 30/40 square meters to virtual world. stores with 100 m2, and emphasizing skin products and cosmetics, which During the year, pilot services can contribute higher margins to were launched in partnership the business. As a result of this with e-commerce operations, new positioning, all the drugstores such as the “Store Take-Out” and remodeled during the year have “Electronic Catalog,” permitting already enjoyed gains in profitability. hypermarkets to make use of the benefits of the multi- In fuel stations, the Group closed the channel approach, increasing year with 85 units, maintaining the customer flow and enhancing the elements that set this segment apart: supply of in-store services. trustworthy brands, better deals with the distributors, the best prices in the Proximity Stores region, transference of the low-price As one of GPA’s focal points image to the store, and increased for expansion going forward, customer flow. proximity stores, which currently operate under the Minimercado Extra banner, maintained their accelerated pace of inaugurations, opening 59 stores, closing the year with 164 units, representing growth of 87.7% over 2012.
In addition to expanding their actuation in cities where they were already present (such as Campinas, Santos, São Paulo state’s ABC region 34 Annual and Sustainability Report 2013
Boldness that Inspires GPA Businesses
Strategic Approach GPA Businesses Economic and Financial Performance Investments Capital Markets Prospects
IN 2013 GROSS REVENUE OF Assaí For Assaí, 2013 was a year of such, doesn’t yet represent performance sales growth, consolidation of a for a full year. Same-store growth was R$ 6.8 new model of store, and strong 13.5%, sustained principally by increased organic expansion, with the entry customer flows. into five new states in Brazil, which billion reinforces its national footprint Stores and consolidates the current store Assaí’s strategy to expand to new model, which is more suitable for marketplaces seeks to enhance the the profile of priority customers: chain’s presence in Brazil, increasing resellers, transformers, and users. its participation in states where it had 75 stores not been present. One of the strengths Gross revenue for the year was R$6.8 of this strategy is the deployment of a billion, an increase of 34.1% over new model of store, which functions Assaí the year prior. Roughly 63.8% of this as a mini distribution center (thanks to 14 opened in 2013 amount was due to sales at stores increases in sales floors and storage inaugurated during 2013 and that, as areas) and thus does not depend on logistical infrastructure, since deliveries are made directly by the supplier.
Assaí closed 2013 with a total of 75 stores, of which 14 were inaugurated Partnership during the year – totaling 20 with the new store model – and 55 with with the industry the old model, of which 14 were remodeled using a series of initiatives to modernize them. Assaí functions as a supplemental distributor for mid-sized producers, which recognize in the model an important With the new model of store, the banner tool for expanding their presence in various regions of entered into five states (Alagoas, Bahia, the country, and use the chain’s geographic footprint and Mato Grosso, Mato Grosso do Sul, and capillarity of distribution to reinforce the positioning of their Paraná), increasing its capillarity at products and brands. the national level. With approximately 180,000 m2 of buildings, these units 35 Annual and Sustainability Report 2013
Boldness that Inspires GPA Businesses are characterized by having longer better suited to the chain’s target aisles and high ceilings, which facilitate customers, and generated the loading, and increase by up to six times increase in the number of customers. Strategic Approach the capacity to stock merchandise. GPA Businesses Economic and Financial Performance Another marked characteristic of the Investments new model is the store setting, which Capital Markets has covered parking, air conditioning Prospects and natural light. This package of initiatives resulted in stores that are
Target customers
Assaí’s new model of store is oriented toward meeting the demands of four main clienteles. > Individual consumers > Entities: > Transformers (restaurants, pizzerias, diners) > Resellers (neighborhood grocers and supermarkets) > Users (schools, small companies, churches, hospitals)
36 Annual and Sustainability Report 2013
Boldness that Inspires GPA Businesses
Strategic Approach GPA Businesses Economic and Financial Performance Investments Capital Markets Prospects
Via Varejo Federal District, whose economies The year 2013 was a decisive one for accounted for more than 90% of consolidating the management model GDP (IBGE 2010). In 2013, the for Via Varejo, leader of the Brazilian expansion plan saw the inauguration retail sector for durable household of 41 stores, and entry into two new goods and furniture. The company states: Alagoas and Paraíba. efficiently executed a strategic plan anchored in sustainable actions to With more than 60 years of history and capture synergies, gains in efficiency, tradition in the market for electronics operational improvements and and furniture, the retail chain has expansion of the Casas Bahia and roughly 67,500 employees and is a Pontofrio banners. These are strong great creator of jobs. In 2013 alone, brands, with capillarity and a complete 2,500 positions were created for offering of durable household goods new stores and other postings, and and furniture capable of serving all of training programs were undertaken Brazil’s social classes. to develop leadership and enhance engagement, productivity and the Via Varejo’s leadership is confirmed by quality of service. There were its 26.0% market share among retailers 632,000 hours of training for 97,000 specialized in durable household goods, participants over the course of the and 18.7% market share among general year. The projects should expand, retailers (hypermarkets/supermarkets, including to foment the presence of department stores, and e-commerce) women in leadership positions. in November of 2013, according to data from the consultant GFK. Logistics Efficiency gains were obtained The regular and continuing increase through changing processes, in the specialized market share, of seeking out synergies and roughly 220 basis points over the using technology, in each case period from November of 2012 through contemplating increasingly better November of 2013, demonstrates customer service throughout Brazil. the force of the business, with 999 Casas Bahia and Pontofrio stores in 18 Brazilian states and the 37 Annual and Sustainability Report 2013
Boldness that Inspires For logistics in 2013, three The pursuit of synergies also extends distribution centers and depots were to the associated company Nova GPA inaugurated, thus increasing the Pontocom, the second largest company numbers to 14 distribution centers in the Brazilian e-commerce sector, with Businesses with aggregate space of 852,000 a market share of 17% at December square meters, and 9 depots 31, 2012, according to data from E-bit. strategically located to regionalize Actuation in partnership in such areas Strategic Approach deliveries, both to supply stores as logistics and marketing brings GPA Businesses and to deliver to customer homes. greater efficiency to the businesses and Economic and Financial Performance optimizes the growth both of bricks-and- Investments Consumers’ buying experiences mortar stores on streets and in shopping Capital Markets only end when they receive the centers, and e-commerce, reinforcing Prospects product, within the agreed-upon time the multi-channel concept. and in perfect condition. Toward this end, there were simultaneous Shares on the BM&FBovespa investments in technology to ensure On December 16, 2013, Via Varejo lower cost and greater agility to went public with its Public Offering meet the average demand of 1.2 on the BM&FBovespa (VVAR11), million deliveries per month. becoming the 21st company to join the Level 2 corporate governance One of the tools that was adopted segment. The deal topped was to send a text message to the R$2.845 billion, constituting the customer’s cell phone on the eve year’s second largest offering of delivering the merchandise, to in the Brazilian stock market. guarantee the presence a responsible person at the agreed-upon address. Another strategic action was the With this action, there was a 25% acquisition of shareholding control decrease in the number of failed of Móveis Bartira, the exclusive deliveries due to absence, and an provider of furniture for Casas increase in customer satisfaction. Bahia and Pontofrio. With this Technology also was deployed in deal, Bartira became the first the routine for assembling furniture. industry in the GPA business The teams receive tablets to use the portfolio. The idea is to optimize check-list for services, solicit materials production to ensure good results and reschedule timetables, ensuring in marketing residential furniture. better quality for the average of 700,000 assemblies per month. Via Varejo, despite the challenging macroeconomic environment, In order to offer a great variety of consolidated its leadership and products and services at prices that generated sustainable results. All attract the different social classes, Via the actions were effected with Varejo maintains tight relationships dedication, and aligned with the with its suppliers, including banks and company’s cause: to make the financial and other service companies, dreams of customers and employees and the industry. come true, while respecting human and business values. Via Varejo by the numbers
> R$25.0 billion in gross sales > Via Varejo 26.0% market share in the specialized segment > 602 Casa Bahia stores and 397 Pontofrio stores > Footprint in 18 Brazilian states + the Federal District > 14 Distribution Centers and 10 depots > 1.2 million deliveries to customers per month
38 Annual and Sustainability Report 2013
Boldness that Inspires GPA Businesses
Strategic Approach GPA Businesses Economic and Financial Performance Investments Capital Markets Prospects
Nova Pontocom E-commerce in Brazil, which in 2013 topped R$31 billion, according to ABComm (Associação Brasileira de Comércio Eletrônico) continues to grow at accelerated rates, and Nova Pontocom, the umbrella for GPA’s e-commerce operations (www.extra.com.br, www.casasbahia. com.br, www.pontofrio.com.br, www.barateiro.com.br and www. partiuviagens.com.br, in addition to Pontofrio Atacado, Soluções B2B and e-Hub) is one of the companies best prepared to lead this sector.
In 2013, Nova Pontocom again proved its potential, adopting a strategy focused on gains in competitiveness 28.5% and gearing to accelerate its growth. increase in gross revenue In line with GPA’s positioning during compared to 2012 the year, the savings generated by revising processes and reducing expenses were reinvested in the More than competitiveness of prices, which contributed to increased customer flow, an increased conversion rate and 250 gains in market share. retailers registered Attentive to the market functionalities and opportunity, Nova Pontocom in 2013 launched Extra Marketplace, a 400,000 sales model that brings together on a new items registered single site the offerings from different 39 Annual and Sustainability Report 2013
Boldness that Inspires stores, in various segments. The Pontocom was also inaugurated in GPA model, until now unprecedented in Camaçari (BA) in partnership with Via Brazil, entered into operation in the Varejo, reducing logistics costs and Businesses 2nd quarter of 2013 and closed the perfecting the level of service offered year with significant results: more to customers in the region. than 250 vendors and 400,000 new Strategic Approach items registered. In addition, attentive to the strong GPA Businesses growth of smart phones and Economic and Financial Performance Along the same lines, the e-Hub to the growing share of sales Investments business unit was strengthened, through mobile devices in global Capital Markets winning the technology and logistics e-commerce, Nova Pontocom Prospects operations for Nike’s online sales in redesigned its mobile sales structure, Brazil (www.nike.com.br). For the perfecting its consumers’ shopping volume of sales and the importance of experiences through this channel. the brand, the new account became the main business of the unit, which As a result, gross sales increased has other contracts with companies 28.5% over 2012, with improving like Amazon (to market Kindle in performance each quarter – Brazil), Microsoft, HP and Clinique highlighted by the 2nd half of the (cosmetics), among others. year, when growth accelerated and a new sales record was set on Black With its customer’s best shopping Friday – which cemented Nova experience in mind, GPA has Pontocom as the runner up in the parlayed integrating e-commerce Brazilian e-commerce segment. In operations with the physical addition, the company’s results world, promoting initiatives with reached the break-even point in multiple channels and capturing the 4Q13, guaranteeing robust synergies among the businesses. cash generation during the year.
In 2013, pilot services such as the “Store Take-Out” and “Electronic Catalog” were launched, guaranteeing more comfort and consumer access to the products marketed in the different formats. A distribution center for Nova
In 2013, the Nova Pontocom proved once again their potential, adopting a strategy focused on competitiveness gains.
40 Annual and Sustainability Report 2013
Boldness that Inspires GPA Businesses
Strategic Approach GPA Businesses Economic and Financial Performance Investments Capital Markets Prospects
GPA Malls The year 2013 saw a strategic change projects capable of generating more in positioning for GPA Malls, which traffic and higher profitability. attained the status of a business unit of the Group, ceasing to have a The result of this strategic change profile directed only toward executing was the delivery of more than projects, in favor of positioning 40,000 square meters of gross focused on the conception and leasable space during the year, management of commercial spaces. which permitted GPA to close 2013 with 286,000 m2 of gross This movement was consolidated leasable space, an increase of in 2013 with the contracting of a 18.4% in relation to 2012. team of professionals with expertise in different business segments: the real estate market, shopping centers, franchises, etc. In all, six departments were structured to meet the different and new demands arising from the new positioning.
The projects developed during the year were forged with an emphasis on three axes that came to drive GPA Malls:
> cost gains, with a focus on developing efficient solutions and a better financial return; > the pursuit of quality in projects and the assets built, in relation to efficiency, durability, attractiveness to the consumer and innovation; and; > a distinctive look for the real estate market, with the development of
41 Annual and Sustainability Report 2013
Boldness that Inspires The focus on expanding gross GPA leasable space reinforces the multibusiness positioning of the Businesses Group, with activity in a market with profit levels in excess of the national average for retail. During Strategic Approach the year, the work was focused GPA Businesses on identifying spaces among the Economic and Financial Performance current galleries that would facilitate Investments more efficient utilization of the Capital Markets existing asset. New approaches Prospects were also tested, culminating in the development of a new brand and an innovative business model.
Neighborhood shopping centers The main initiative pursued during the This business model allows customers year was the creation of the Conviva to have their daily shopping, services brand, utilized to give name to a and food needs met a single model GPA introduced to Brazil: the location. At both, the highlight is neighborhood shopping center. the establishment of partnerships with large retail players, which Standing for the concepts of unlocks complementarities among conviviality and convenience, the categories with the objective of two establishments with these forming a multiuse complex to meet characteristics were inaugurated: consumer demand, and creating Conviva Américas, in Rio de Janeiro, special attractions and spaces for and Conviva Minas, in Belo Horizonte. interacting with the community.
42 Annual and Sustainability Report 2013
Boldness that Inspires Economic and Financial Performance
Strategic Approach GPA Businesses Economic and Financial Performance Investments Capital Markets Prospects
<2.8>
Revenue Nova Pontocom growth outpaced the In 2013, GPA’s net revenue grew market, with gains in market share. 13.4%, to R$57.73 billion. This This performance was driven by the performance was driven by same- acceleration of growth over the course store sales, which reached 9.0% of the year, especially as of the 3Q13, growth, 300 basis points above IPCA when gains in efficiency in processes, inflation, closing the year with growth strategic investments and advances in in each business. the level of service were cemented.
At Multivarejo, growth accelerated At Via Varejo, there was double- under all the banners, highlighted by digit sales growth and important Minimercado Extra, which continues gains in market share. Highlights to present above-average same-store included the wireless and computer growth, and Assaí, which continued to categories, which continued the trend grow at an elevated pace. of accelerated sales, confirming the continued cycle of technology consumption in the country.
R evenue
R$ – Million 2013 2012 ∆
Gross Revenue 64,405 57,234 12.5%
Net Revenue 57,730 50,924 13.4%
Same-Store Sales Growth 9.0% 6.5% 250 bps
43 Annual and Sustainability Report 2013
Boldness that Inspires Gross Profit Gross profit grew 9.2%, from R$13.757 Economic billion in 2012 to R$15.026 billion in 2013. Gross margin fell 100 basis and Financial points to 26.0% in 2013, due mainly to the investment strategy of reducing Performance prices in Retail Food, supported by the reduction of selling and general and administrative expenses. Strategic Approach GPA Businesses Gross margin was also impacted Economic and Financial Performance by Black Friday promotions at Via Investments Varejo and Nova Pontocom at year- Capital Markets end, in addition to the increased Prospects share of sales for the e-commerce channel, whose business model operates with lower margins than bricks-and-mortar stores.
Gross Profit R$ – Million 2013 2012 ∆ Net Revenue 57,730 50,924 13.4% Gross Profit 15,026 13,757 9.2% Gross Margin 26.0% 27.0% –100 bps Selling Expenses (9,180) (8,360) 9.8% General and Administrative Expenses (1,485) (1,754) –15.3% Equity Income 47 11 337.3% Other Operating Revenue (Expenses) (673) (33) - Total Operating Expenses (11,291) (10,136) 11.4% % Net Sales Expenses 19.6% 19.9% –30 bps Earnings before Interest, Taxes, 3,814 3,703 3.0% Depreciation, Amortization – EBITDA EBITDA Margin 6.6% 7.3% –70 bps
Operating Expenses Financial Result Operating expenses increased 11.4%, The net financial expense in 2013 was from R$10.136 billion in 2012 to R$1.193 billion, the same level as in R$11.291 billion in 2013. The ratio of 2012. The ratio of the net financial selling and general and administrative expense to net revenue decreased expenses to net revenue decreased from 2.3% in 2012 to 2.1% in 2013, from 19.9% in 2012 to 18.5% in due mainly to the improved financial 2013, mainly as a result of reduced result at Via Varejo. corporate expenses and control of selling expenses at Multivarejo, in addition to gains in operating efficiency at Via Varejo.
44 Annual and Sustainability Report 2013
Boldness that Inspires Financial Result Economic R$ – Million 2013 2012 ∆ Financial Revenue 643 593 8.3% and Financial Financial Expenses (1,836) (1,786) 2.8% Performance Net Financial Revenue (1,193) (1,193) 0% % of Net Revenue 2.1% 2.3% –20 bps Charges on Net Bank Debt (224) (238) –5.6% Strategic Approach Cost of Discount of Receivables GPA Businesses (268) (282) –5.1% Economic and Financial Performance of Payment Book Investments Cost of Discount of Receivables (618) (497) 24.3% Capital Markets of Credit Card Prospects Restatement of Other Assets and Liabilities (83) (176) –52.6% Net Financial Revenue (1,193) (1,193) 0%
Indebtedness The ratio of Net Debt/EBITDA, Net debt, including Viavarejo’s including the consumer financing paymentbook operation, totaled R$ payment vouchers, fell to 0.29x at the 1.102 billion at the end of December end of 2013, significantly lower than 2013. The reduced level of debt the figure in 2012. was mainly due to higher cash generation in the period, driven by The Company’s cash reserves at the efforts to improve working capital. end of December of 2013 amounted to approximately R$8.4 billion. In addition, the gross inflow of R$896 million from Via Varejo’s Public Offering also contributed to the lower debt position.
S hort Term Debt R$ – Million 12.31.2013 12.31.2012 Short Term Debt (2,445) (1,712) Loans and Financing (1,200) (1,044) Debentures (1,245) (668) Long Term Debt (4,181) (6,151) Loans and Financing (1,583) (2,409) Debentures (2,599) (3,741) Total Gross Debt (6,626) (7,863) Cash(1) 8,392 7,086 Net Cash (Debt) 1,765 (777) Ebitda(1) 3,814 3,703 Net Debt/Ebitda(1) N/A(2) 0.21x Payment book – short term (2,726) (2,499) PAyment book – long term (141) (130) Net Debt with payment book (1,102) (3,406) Net Debt/Ebitda(1) 0.29x 0.91x
1 Include real estate projects. EBITDA for the last 12 months. 2 Net cash position higher than gross debt. 45 Annual and Sustainability Report 2013
Boldness that Inspires Net Income Cash flow Net income increased 20.7% to At December 31, 2013, GPA’s cash Economic R$1.396 billion in 2013. Net margin position was R$8.367 billion. The grew 10 basis points, from 2.3% in increase of R$1.281 billion in relation and Financial 2012 to 2.4% in 2013. to December 31, 2012 was due mainly to the gross influx of R$896 million in Performance cash from Via Varejo’s Public Offering. The Company did not need to refinance or take on new debt in 2013. Strategic Approach GPA Businesses Economic and Financial Performance Investments Capital Markets Prospects si mplified cash flow GPA Consolidated R$ – Million 2013 2012 Cash Balance at beginning of period 7,086 4,970 Cash Flow from operating activities 4,892 5,299 Ebitda 3,814 3,703 Cost of Discount of Receivables (886) (780) Working Capital 1,355 2,243 Assets and Liabilities Variation 609 133 Cash Flow from Investment Activities (2,027) (1,339) Net Investment (1,752) (1,306) Acquisitions and Others (275) (33) Change on net cash after investments 2,865 3,960 Cash Flow from Financing Activities (1,584) (1,844) Dividends Payments and Others (453) (186) Net Proceeds (1,132) (1,658) Change on net cash 1,281 2,116 Cash Balance at end of period 8,367 7,086
Statement of Value Added
> R$5.8 billion – to pay employees; > R$3.8 billion – to pay taxes and fees;
46 Annual and Sustainability Report 2013
Boldness that Inspires In 2013, GPA invested R$1.850 billion, significant expansion of Minimercado 32.8% more than in 2012 (R$1.393 Extra and Assaí, with 59 and 14 Investments billion) and one of the largest amounts inaugurations, respectively. Under for the Group ever. the other banners, the inaugurations totaled: Strategic Approach The funds were mainly allocated to GPA Businesses opening new stores and acquiring land, 6 – Extra Super Economic and Financial Performance in line with the Company’s strategy of 5 – Pão de Açúcar Investments accelerating organic growth. 36 – Casas Bahia Capital Markets 5 – Pontofrio Prospects During the year, 128 stores were 1 – Gas Station inaugurated, increasing the aggregate 2 – Drugstores sales floors 54%, to 2.8 million square meters. The highlight was the
Investments (in millions of R$) 2009 – 723 2010 – 1,191 2011 – 1,583 2012 – 1,393 2013 – 1,850
Distribution of the Investments in 2013
> New stores and land purchases – 42% > Stores remodeling and conversions – 26% > Infrastructure and others – 32%
I nvestments (in millions of R$)
% increase 2013 2012 (decrease)
New stores and land purchases 785 703 11.8 Store remodeling and conversions 477 433 10.4 Infrastructure and others 628 385 63.3 Financing of fixed assets and Leasing (41) (127) (67.6) Total 1,850 1,393 32.8
47 Annual and Sustainability Report 2013
Boldness that Inspires In 2013, GPA’s share price increased of the Dow Jones Industrial Average, 17.1%, closing the year at R$104.91 which was up 29.6% in 2013. The Capital on the BM&FBovespa. The result trading volume on the New York Stock outpaced the performance of the Exchange (NYSE) was US$6.6 billion Markets Ibovespa, the index of the stocks with (+32.7% over 2012). The average daily the highest trading volumes on the trading volume was US$26.8 million, Bolsa de Valores de São Paulo, which 34.3% higher than the year prior. Strategic Approach fell 15.5% during the year. GPA Businesses The Company’s shares were traded Economic and Financial Performance The trading volume of preferred shares on 100% of the trading days of the Investments in 2013 was R$20.6 billion, an increase BM&FBovespa and the NYSE. At year Capital Markets of 96.1% over 2012, with an average end, GPA’s market capitalization was Prospects daily trading volume of R$83.1 million R$27.7 billion, representing 2.2 times its (+94.5% over 2012). The earnings per shareholders’ equity. share in 2013 was R$3.98.
The ADRs (level III) closed the year trading at US$44.67, up 1.6%, in keeping with the positive performance
CBD x DOW JONES
(100 base = 12/31/2007)
CBD Dow Jones 2008 2009 2010 2011 2012 2013
PCAR4 x IBOVESPA
(100 base = 12/31/2007)
Dividends G PA’s Board of Directors approved PCAR4 dividends of R$150.5 million for Ibovespa 2013, representing R$0.535395 per 2008 2009 2010 2011 2012 2013 common share and R$0.588935 per preferred share.
48 Annual and Sustainability Report 2013
Boldness that Inspires Prospects
Strategic Approach GPA Businesses Economic and Financial Performance Investments Capital Markets Prospects
Given a macroeconomic environment The future characterized by increasing of the businesses competition and increasingly demanding and selective consumers, GPA will remain focused on its strategy Multivarejo of operational excellence, gains in Focus on maintaining the strategy efficiency and cost reduction. of competitiveness and on increasing the flow of customers, while maintaining the Its resources will be steered to level of profitability. ensure the aggressive organic growth foreseen by the Company, which will be A ssaí sustained, principally, by expansion of Expansion will continue, seeking to reinforce the Minimercado Extra, Assaí and Casas the national footprint of the banner and Bahia banners. attain EBITDA margin of 5% in 2016.
The strong expansion of proximity V ia Varejo stores will be facilitated by building O ngoing pursuit of efficiency and gains in models that are appropriate for the margin/growth. various consumer profiles, like the development of more compact stores N ova Pontocom under the Pão de Açúcar banner. Pursuit of gains in market share, with balance between sales growth and profitability, The multi-channel approach of the strengthening synergies and the multi- businesses will be reinforced with the channel approach. dissemination of innovative initiatives, facilitating consumer access to GPA Malls the products marketed through the Expansion of gross leasable space, with a Group’s different formats. focus on enhancing the attractiveness of the Group’s stores. The concept will be enabled further by strengthening Nova Pontocom’s e-commerce operations, which are an important strategic axis for solidifying
49 Annual and Sustainability Report 2013
Boldness that Inspires and disseminating synergies among Prospects the different businesses and formats. Synergies with the Casino Group will also be probed and expanded, Strategic Approach with the development of initiatives GPA Businesses linked to operating proximity stores, Economic and Financial Performance a segment in which Casino operates Investments more than 6,500 units in France, and Capital Markets global bargaining, toward offering Prospects better products at the best prices, among other efforts.
The Company will move forward with its policies for socio-environmental responsibility and with a structured program focused on the sustainable management of its operations, focusing increasingly on the question of sustainability, both at the corporate level, in establishing guidelines and policies, and in the context of each business.
Priorities going forward
> Competitiveness supported by gains in efficiency. > Deepening or reaching market leadership in each business segment. > Organic growth, with significant investments in opening stores. > Reinforcing the multi-channel approach. > Growth with discipline of processes and optimization and control of expenses. > Financial discipline with working capital and investment. > Perfecting working methods and plans of action, with the definition of goals and discipline in following through. > Continuing focus on the quality of customer service. > Increased engagement and reduced turnover. > Transformation of the chain of value. > Conscientious consumption and supply. > Valuing our people.
50 Annual and Sustainability Report 2013 a Focus on Sustainability Guidelines for Sustainability
Guidelines for Sustainability Valuing our People Conscientious Consumption and Supply Transformation in the Chain of Value Managing Environmental Impact Engagement with Society
Sustainability pervades GPA’s the companies have a synergistic strategy. The Company controls and relationship with GPA’s sustainability monitors its products and services, guidelines. toward improving them and thus reducing the environmental and To put the aspiration of being an social impacts of its operations, agent for social change through and acts as a multiplier of good sustainability in practice, creating socio-environmental practices, best practices for its businesses, with educational programs in 2013, GPA also redefined that emphasize conscientious its strategy and grounded its consumption and disposal. The socio-environmental principles in objective is to propagate concrete accordance with the specificities actions for sustainable growth among of each of the Group’s business all its stakeholders (employees, units in five transformative vectors: communities, society, customers, shareholders and suppliers). <4.14> > Valuing our people > Conscientious consumption & To perfect its performance in supply matters relating to the environment > Transformation in the chain of value and society, GPA’s sustainability > Managing environmental impact department was restructured > Engagement with society at the end of 2013 (for more information, see Governance for Commitments Sustainability). This process resulted
53 Annual and Sustainability Report 2013 a Focus on Sustainability Valuing our people
Guidelines for Sustainability Valuing our People Conscientious Consumption and Supply Transformation in the Chain of Value Managing Environmental Impact Engagement with Society
In 65 years, GPA An integral part of the strategy for In line with this positioning, the Group sustainability, valuing and developing developed its proposition of value, has consolidated employees is one of GPA’s foci going materialized in the “We want you forward. Complying with health and to be happy here” movement that itself as the largest safety law, promoting the inclusion of seeks to enhance the conditions of distribution company people with special needs, women and happiness in the workplace. youth, and disseminating the concept in South America. of sustainability among all employees are some of the strategic objectives the Company has mapped out.
company a large company
employee pleasure in serving career opportunity
1
competitive made up of compensation people that do customer package
1 We want you to be happy here! 54 Annual and Sustainability Report 2013 a Focus on Sustainability A large company – With 65 years and relationships with customers, of history, GPA is the largest South suppliers and stakeholders. Valuing American distribution company, with the best reputation in the segment. Career opportunity – In a year, our people Leading or on the way to occupying 20% of GPA’s roughly 160,000 the top spot in all the segments in employees evolve in their careers, Guidelines for Sustainability which it is active, the Group is the whether toward higher posts in the Valuing our People benchmark in the adoption of best hierarchy or in positions in different Conscientious Consumption and Supply practices, a company that is solid, departments or businesses. A career Transformation in the Chain of Value ethical, innovative and committed journey that the Group believes is Managing Environmental Impact to the growth of a just, humane and also worth it personally. Engagement with Society healthy society. Much more than just a big company, GPA is respected and admired for GPA is also a partner – it believes excellence in leadership, the quality in people, knows the importance of the products and services at the of its role in their success, the points of sale, the scope and impact of contribution of its employees in each its activity, the agility of management, new conquest. It is a company that and its consistent results. always tries to understand needs and expectations, and seeks to The diversity of the businesses meet them. As one of the largest forms a solid, robust and sustainable employers in South America, it whole. For all these reasons, the can be seen as one of the largest Group plays an important role in providers of opportunities to those Brazil’s economy, always trying to who want to develop. minimize environmental impacts and encouraging conscientious Competitive compensation package – consumption, promoting the well being GPA offers competitive and meritocratic of the entire society and contributing compensation at all its businesses, and to the development of Brazil. benefits packages appropriate to each function, from offering baskets of basic Pleasure in serving – A company goods and health plans with quality where employees are passionate coverage and service, to programs that about what they do. The work is look after the quality of life and well intense and replete with achievement. being of its people. Employees find satisfaction in the good service they provide every Made up of people that do – day to millions of customers. Employees are the main asset at Even with the day-to-day pressure, GPA, which invests in the value GPA believes in and promotes an of human potential. The Group environment that prizes respect, invests in training and developing its ethics and team spirit, spreading professionals, since it believes that internal enjoyment. With the belief its own growth depends on the daily that people dedicate their technical development of each individual. skill, and fulfill themselves professionally. GPA cultivates skills that drive each business and enhance shopping Driven by customer needs, the experiences. Our People are a team Group maintains an environment that of specialists that ensure focused stimulates creativity, the exchange management, facilitating the best of information and the integration of possible results, today and in the professionals with different profiles: future – for each segment of activity a diversity of skills to attend to and for the entire Company. different customers.
Transparent, ethical and responsible partnership forms the GPA way of being and working, and permeates the environment, the corporative universe, 55 Annual and Sustainability Report 2013 a Focus on Sustainability Profile of the employee a Transfer Assistance policy to
Number of employees by type of contract1 2013 < LA1> Men Women Temporary hires 1,741 1,536 Permanent hires 87,834 78,848 Total by gender 89,575 80,384 Total 169,959
Number of employees by type of employment1 2013 < LA1> Men Women Full time 46,589 52,136 Part time 42,986 28,248 Total by gender 89,575 80,384 Total 169,959
1 Were considered direct contract employees. Were not considered athletes, trainees, service providers and third parties.
56 Annual and Sustainability Report 2013 a Focus on Sustainability Number of employees by region1 2013 Valuing
Number of employees by business unit1 GPA had 2013
1 Contemplates only employees under the Consolidated Labor Laws regime. Does not contemplate athletes, interns, service providers and outsourced 80,384 labor. women
To tal number of workers that left the organization 35,842 2013 w as the total number of employees
1 Fires/total employees at period end. 2 Departure rates do not contemplate apprentices.
57 Annual and Sustainability Report 2013 a Focus on Sustainability To tal workers hired 2013
Valuing B y gender
Guidelines for Sustainability Valuing our People Conscientious Consumption and Supply Transformation in the Chain of Value 33,844 35,477 Managing Environmental Impact Engagement with Society Men Women Total 69,321
Hire rates by gender (%)1 2013
1 Hires/total employees at period end.
Number of hires by region Hire rates by region (%)1 2013 2013
1 Hires/total employees at period end.
Number of departures by region1 DEPARTURES RATE BY REGION (%)1,2 2013 2013
1 Departure do not contemplate apprentices. 1 Fires/total employees at period end. 2 Departure rates do not contemplate apprentices. 58 Annual and Sustainability Report 2013 a Focus on Sustainability Cycle of People
At Multivarejo, 96% of the employees eligible for the performance evaluation and development process were evaluated during 2013.
Personnel development trainees are being prepared to
59 Annual and Sustainability Report 2013 a Focus on Sustainability driven management. The new model there were 1,320 hours of training reinforces Via Varejo’s attributes, by for 98 employees. Since inception, it Valuing promoting sustainable results and has developed 266 store managers giving more autonomy to managers. and submanagers, who previously our people As of February of 2014, the manager acted as salespeople, administrative can do the monthly monitoring of consultants and sales training Guidelines for Sustainability indicators and goals. coordinators. Valuing our People Conscientious Consumption and Supply As a first step, 1,201 leaders were The Casas Bahia Sales Training Transformation in the Chain of Value trained and indicators were established Program (Prove) Managing Environmental Impact with points of control. In 2014, all The program imparts the best sales Engagement with Society store managers will be trained. Other practices, so that salespeople can programs also stood out in 2013 at Via improve results and attain goals. Varejo, including: Initiated in 2004, Prove has trained 70% of the employees. In 2013, there The Leaders of the Future were a total of 85,308 attendees in Program 558,942 hours of training. Initiated in 2011, it is intended to train store managers. In 2013 alone,
Hours of training in 2013
60 Annual and Sustainability Report 2013 a Focus on Sustainability Nova Pontocom took 4th place, Valuing in the category for 2,001 to 4,000 our people employees, in the survey on Guidelines for Sustainability engagement conducted in 2013 Valuing our People Conscientious Consumption and Supply by Valor Econômico newspaper Transformation in the Chain of Value Managing Environmental Impact and Aon Hewitt, which identified Engagement with Society best practices for personnel management in the Brazilian market.
Compacts on education
A verage compensation by functional category (R$) 2013
61 Annual and Sustainability Report 2013 a Focus on Sustainability Valuing our people
Guidelines for Sustainability Valuing our People Conscientious Consumption and Supply Transformation in the Chain of Value Managing Environmental Impact Engagement with Society
Bsenefit offered to employees, broken down by significant operating unit1
1 GPA:There is no coverage for disability/impairment nor a stock option plan. 2 Via Varejo: FTE= Full-Time Employees The amounts denoted All FTEs refer to the sum for corporate, distribution center{s} and branches. When they correspond only to one of these, it is so noted at the side. At Via Varejo there is no: coverage for disability/impairment, retirement fund or stock option plan. Pension plan
The defined contribution benefit is sourced to a private pension plan administrator, without GPA involvement in future obligations. In 2013, the annual cost of plan was R$514,329.32. 62 Annual and Sustainability Report 2013 a Focus on Sustainability Collective bargaining one of the objectives of this change
To make this a reality, programs such as Refer a Special Needs Friend and Family, with employee participation, Diversity
Guidelines for Sustainability Valuing our People Conscientious Consumption and Supply Transformation in the Chain of Value Managing Environmental Impact Engagement with Society Other initiatives
GPA foments a series of programs dedicated to promoting diversity and inclusion, such as:
F irst Job Oriented toward youth aged 16 and up searching for their first job. The objective is to prepare them for the labor market, so Ind icators of diversity
Age Group (%)
Via Varejo GPA1
Executive officers 0 87.5 12.5 0 77.8 22.2 General managers 8.9 83.7 7.5 1.3 82.2 16.5 Departmental managers and 13.9 76.1 10 15.3 77.2 7.5 coordinators Technicians/supervisors 12.9 78.5 8.5 23.8 61.1 15 Administrative 31.2 65 3.8 23.5 69.7 6.8 Operational 38.1 55.7 6.3 49.1 43.1 7.8 Sales 30.6 62.1 7.2 35.6 56.9 7.6 Apprentices 99.6 0.4 0 100 0 0
1 The GPA cluster contemplates Nova Pontocom, Multivarejo, Assaí, GPA Malls and Corporate.
Occupational health and safety Occupational health and safety is
65 Annual and Sustainability Report 2013 a Focus on Sustainability Programs for risk education, prevention and control
GPA’s health and safety indicators1
2 3 GPA and Via Injury rate Occupational disease rate Total days lost Rate of absenteeism Varejo Female Male Female Male Female Male Female Male Central-West 1.24 1.18 0.06 0.08 2775 1759 51.16 26.86 Northeast 1.11 1.53 0 0.04 2652 2679 44.70 32.69 Southeast4 1.01 1.71 0.04 0.33 19525 40556 29.53 55.90 North 0 0 0 0 0 0 0 0 South 0.66 1.20 0 0 539 1538 29.45 52.54
1 The consolidated indicator includes Nova Pontocom, Multivarejo, Assaí, GPA Malls, Corporate and Via Varejo. 2 Days lost refers to calendar days following the accident. The basis for calculating this indicator differs from 2012, frustrating comparison. 3 Does not include data for Via Varejo. 4 There were two deaths in the Southeast region.
Focus on Quality of Life
Through its Sports Program, GPA tries to state, the Federal District (DF), Ceará (CE), promote social change and mobilization, and Rio de Janeiro (RJ), in addition to a providing incentives for the quality of life unit at the Group’s headquarters in São and the well-being of employees and their Paulo (the Brigadeiro Complex). In 2013, families. The initiatives are oriented towards there were 7,500 employee beneficiaries holding events on healthy habits, physical who also received professional assistance training and nutritional advice. The program and services such as gymnastics for is divided into three pillars – GPA Club, the workplace (18 GPA Gym units and GPA Gym and GPA Nutrition – which are three administrative departments) and described below: gymnastics for customers (eight Pão de Açúcar stores in São Paulo). GPA Club Maintained since 1993, it offers physical GPA Nutrition activities such as walking, running, biking GPA offers personalized nutritional and dance classes. Approximately 2,000 guidance to employees, with the objective employees participate in São Paulo (SP), of contributing to a healthier lifestyle and Campinas (SP), Brasília (DF), Rio de Janeiro providing nutritional technical support. (RJ), Goiânia (GO), Fortaleza (CE), Recife In all, four nutritionists, including two at (PE), and Belo Horizonte (MG). headquarters, one for the distribution centers in São Paulo and one in Fortaleza GPA Gym (CE), provided more than 3,000 sessions to Since the inauguration of the first unit in employees during the year. 1998, GPA Gym has grown to 19 units at stores and distribution centers in São Paulo 66 Annual and Sustainability Report 2013 a Focus on Sustainability Conscientious Consumption and Supply
Guidelines for Sustainability Valuing our People Conscientious Consumption and Supply Transformation in the Chain of Value Managing Environmental Impact Engagement with Society
Conscientious Consumption and more natural products in exclusive Supply brands; initiatives to track products; One of the pillars of GPA’s sustainability and ensuring effective periodic strategy is to encourage conscientious communications on conscientious consumption and supply. This consumption. positioning translates into complying with all sanitation law, encouraging In 2013, the main actions toward The Akatu conscientious consumption and sustainability were also focused on implementing and disseminating the waste management. The stores Partnership guidelines from the National Policy function as points to dispose of on Solid Wastes (Política Nacional de paper, plastic, aluminum, glass, Resíduos Sólidos -PNRS). cooking oil, batteries, cell phones, Through a partnership with the expired or out-of-use medications Instituto Akatu, an NGO that works At Multivarejo, following the and pre-consumption packaging. to raise consciousness and mobilize establishment of the corporate These programs have demonstrated society on conscientious consumption, sustainability guidelines, three fronts significant growth, showing the effect pointers are publicized from time were opened: healthy, natural of adhering to small sustainable to time for consumers at Extra and and organic products; trackability actions in consumers’ daily lives. But Pão de Açúcar. This shows how it is of products; and education for the challenge remains to engage possible to inject sustainability into sustainability. Based on a diagnosis, consumers further, and thus efforts the communications planning for the the Group set goals for 2014 that toward effective communications and brands, raising consciousness on include increased marketing of organic consumer engagement in existing conscientious consumption on an products; developing healthier and initiatives will be developed in 2014. ongoing basis.
Pão de Açúcar produces Flavors of the Week magazine, which includes tips on sustainable consumption, recycling and how to use water, energy and other resources conscientiously. Extra supplies insights through the sound systems at the stores, pamphlets, and the social networks.
67 Annual and Sustainability Report 2013 a Focus on Sustainability National Policy on Solid Wastes Extra stores and one Pão de Açúcar
69 Annual and Sustainability Report 2013 a Focus on Sustainability E xtra P&G Recycling Stations The program, in effect since 2007 at Conscientious Extra stores, has voluntary stations for recyclable materials like paper, Consumption plastic, metal, glass, cardboard and used cooking oil. In 2012, Procter and Supply & Gamble began to partner with the initiative. Bins at 126 stores collected 3,471 metric tons of materials and Guidelines for Sustainability 164,462.9 liters of used cooking oil Valuing our People in 2013, which were donated to 43 Conscientious Consumption and Supply recycling cooperatives that partner Transformation in the Chain of Value with the project. Managing Environmental Impact Engagement with Society Recycle More,
Pay Less
In May of 2013, Assaí signed a partnership with AES Eletropaulo to create the “Recycle More, Pay Less” program, which consists of trading in recyclable materials for discounts on electricity bills. Materials are collected at the Guaianases store in São Paulo. During the year, 144 consumers registered and donated 3,746.36 kilos of materials to a cooperative. For 2014, the objective is to add another two collection sites at new Assaí stores.
70 Annual and Sustainability Report 2013 a Focus on Sustainability Transforming the chain of value
Guidelines for Sustainability Valuing our People Conscientious Consumption and Supply Transformation in the Chain of Value Managing Environmental Impact Engagement with Society
GPA tries to act as an agent for change in Product quality – Multivarejo the chain of value, developing initiatives Before arriving on supermarket shelves, that generate real value and permit the all products undergo risk evaluations for dissemination of concepts of sustainability ingredients and legal aspects, to comply among its principal stakeholders. with Brazilian regulatory standards (ANVISA and Ministry of Agriculture) and To support this work, the Group has a validate labeling to ensure consumer Quality Assurance department active health, integrity and well-being. in three areas: developing trusted suppliers; quality control; and food For exclusive brands like Taeq and security. Qualitá, and for our import process, this work commences at product The department is also responsible for development. Labeling content follows inspecting the factories of industrial applicable law and the standards that partners. At Distribution Centers govern each type of product, with throughout Brazil, there is a control instructions on use, information on process for deliveries, toward mitigating handling and preservation, explanations risks relating to quality and failures of the outsourcing of certain components to comply with legal and food safety and descriptions of substances that may requirements. This work is based on have socio-environmental impacts and GPA’s internal norms and standards as effects on consumer health and safety. well as applicable law. The Group is also directly responsible Aspects like safety, integrity of the for complying with the standards consumer, sustainability and social applicable to non-food products: responsibility are also monitored in outsourcing of product components non-food products, to ensure customer or services, substances that may satisfaction and brand integrity. All generate an environmental or social imported products are mapped and impact, safe use of the product or submitted to the Quality Assurance service, product disposal, nutritional department’s development and control labeling, additional nutritional process. information, consumer alerts, 71 Annual and Sustainability Report 2013 a Focus on Sustainability information on allergens and product Stages of evaluation registration with the applicable
In Retail, through the ABVTEX Program to Certify Suppliers, all textile suppliers are audited using criteria developed by ABVTEX, obtaining approval to continue to supply GPA. Proof of maintenance of the certification is solicited periodically. Every month, the commercial team monitors the activity of companies in this segment.
In 2013, the Group fulfilled the goals of 100% of suppliers outside the state of São Paulo having ABVTEX certification and 100% maintenance of the certification after two years. For 2014, the objective is to continue to monitor the audits of the textile sector 72 Annual and Sustainability Report 2013 a Focus on Sustainability and its respective recertification, and pesticide residues when the products monitor ABVTEX’s plan to certify arrive at the Group’s distribution Transforming other categories that are not currently centers. Whenever necessary, work covered by the program, such as to develop a supplier is undertaken the chain of value accessories and shoes. with the help of a technical team that handles the interface between Guidelines for Sustainability Quality from the Source clients, retailers and producers. Valuing our People Considered one of GPA’s most Conscientious Consumption and Supply important programs for monitoring Participation in Quality from the Transformation in the Chain of Value product quality, Quality from the Source is voluntary; by the end of Managing Environmental Impact Source covers the chain of suppliers 2013, 626 suppliers participated. Engagement with Society of fruits, legumes, vegetables and Social and environmental criteria eggs. The main objectives of this will also be assessed, to encourage initiative are to develop suppliers’ suppliers to continue to improve their chains of production, train them production processes and promote to comply with applicable law, actions that are reflected in the quality improve the system of production of life of the workers. and orient consumers, providing a higher level of trustworthiness at the time of purchase.
Quality from the Source monitors good agricultural practices, strictly controls the use of pesticides in all product processes, and checks the physical and visual condition of the products. This work is done by companies certified by the Instituto Nacional de Metrologia, Normalização e Qualidade Industrial (INMETRO). In addition, the program is aligned with the Programa de Analises de Resíduos de Agrotóxicos (PARA), of the Agência de Vigilância Sanitária (ANVISA), which constantly measures pesticide levels in foods.
Suppliers can follow the results through an online platform. At the site, it is possible to access information such as the audit score, the grade on the inspection at arrival and results of the analysis of
Recognition
Thanks to the effort to track and control of toxic residues in the products, the Quality from the Source Program is recognized by ANVISA as a model for quality in retail. In addition, its procurement of fruits, legumes and vegetables has been approved by ISO 9001, one of the most important certifications in the world for managing quality.
73 Annual and Sustainability Report 2013 a Focus on Sustainability Quality from the Source for beef Caras do Brasil (Faces of Brazil) The Quality from the Source Program
Being a group with multiple brands, customer satisfaction can also be measured through an analysis of the organizational image and reputation. In 2013, effective feedback loops were structured such that customers are surveyed for satisfaction on all the services provided.
There were no complaints through any channel about violations of privacy or loss of customer data, nor leaks of data, thefts or losses of customer data on Casa do Cliente’s database.
76 Annual and Sustainability Report 2013 a Focus on Sustainability Managing environmental impact
Guidelines for Sustainability Valuing our People Conscientious Consumption and Supply Transformation in the Chain of Value Managing Environmental Impact Engagement with Society
GP A’s sustainability strategy is guided action also reduces the number of by eco-efficiency in construction and kilometers travelled and, consequently, in the management of the day-to-day lowers CO2 emissions. In 2013, operations. Environmental impacts 54 suppliers participated in the are monitored, to create initiatives to initiative, totaling 44,475 trips to mitigate them and make the activities collect products from the suppliers, more sustainable. an increase of 25% over 2012. For 2014, the goal is to decrease the At Extra and Pão de Açúcar stores, number of kilometers traveled by
efforts are focused on reducing more than 1,800, to reduce CO2 greenhouse gas emissions, energy emissions by 1.4 metric tons.
Reduction of CO2 emissions and kilometers travelled in the Backhaul project
CO2 emissions (t) 701 719 1,247
77 Annual and Sustainability Report 2013 a Focus on Sustainability Managing environmental impact
Guidelines for Sustainability Valuing our People Conscientious Consumption and Supply Transformation in the Chain of Value Managing Environmental Impact Engagement with Society
Initiatives to mitigate environmental impacts in 2013
Energy
Multivarejo Via Varejo Assaí > Deployment at 65 stores of more > Automation of lighting and > Utilization of enclosed refrigerated efficient lighting systems – including replacement of two floors of lighting displays that evaporate residual three with LED. with LED lighting, with a reduction of condensation, eliminating the need for > Dedicated automation for the food 16% in the load used. drains, avoiding water discharge to cooler in the Extra Penha store, > Retrofitting lighting on six the sewage system, generating better obtaining a reduction of 14%. floors of the administrative use of the equipment and reducing > Replacing the electric air headquarters, changing the type of energy consumption. conditioning system with a natural gas fluorescent bulb (from HO to T5), > Skylights and glass facades, to one in the Extra Aeroporto and Extra reducing energy use by 17%. increase natural lighting in the store Morumbi stores. during the day, decreasing light bulb > Adding 19 stores to the process of use and, consequently, reducing the purchasing renewable energy, now consumption of electricity. totaling 112 stores. The volume of renewable energy contracted in 2013 was 4.9 average MW, totaling 48 average MW.
Water use
Multivarejo Via Varejo Assaí > Capturing water from condensation – > Utilization of rainwater storage in the air conditioning and rainwater containers to slow the volume for use in toilets (at the Extra that flows into the sewers, Ribeirão Preto store) reduced and avoiding flooding. water consumption at this store by approximately 19%.
78 Annual and Sustainability Report 2013 a Focus on Sustainability Managing environmental impact
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Emissions
Multivarejo Via Varejo Assaí > Steps forward in the Backhaul – > Utilization of cold water air program, which since 2006 has sought conditioning systems, contributing to to decrease CO2 emissions and reduced greenhouse gas emissions. guarantee more efficiency to logistics, reduced emissions by 781 metric tons and distance travelled by 1,009 kilometers.
Wastes
Multivarejo Via Varejo Assaí > Management of the generation of > Waste recycling program at > Runoff treatment plant, decreasing organic, paper and plastic trash at headquarters, 200 branches in the volume of sewage discharged to operations. The number of stores São Paulo and six distribution the public systems. with integrated waste management centers. In 2013, roughly 11,000 multiplied, from 38 in 2012 to 79 in metric tons of packaging for 2013 – 25 for Pão de Açúcar; 20 for office materials and durable Extra Hiper and Super; and 34 for household goods was recycled. Minimercado Extra.
Noise
Multivarejo Via Varejo Assaí – – > Utilization of silent generators, diminishing the noise in the equipment area of the store, without bothering the neighbors.
79 Annual and Sustainability Report 2013 a Focus on Sustainability Green stores Intergovernmental Panel on Climate Change (IPCC- 2006 and IPCC 2000, Managing With the commitment to enable the for the generation of electricity, other expansion of Multivarejo by using innovative combustion processes, transport of environmental solutions, GPA Malls parlays building stores materials and products and wastes), with exceptional design features, like low the Department for Environment, impact operating costs, quicker project approval, Food and Rural Affairs (DEFRA), for more comfortable ambient temperatures air travel, and the World Resource Guidelines for Sustainability and higher market value. Currently, there Institute (WRI/WBCSD GHG Protocol Valuing our People are green stores in seven locations, including Initiative), for electricity purchases. Conscientious Consumption and Supply three that are certified by Leadership in Energy Transformation in the Chain of Value and Environmental Design, which recognizes For other combustion processes, Managing Environmental Impact buildings using eco-efficient materials and emissions from the fleet of utility Engagement with Society technologies and sustainable construction vehicles was included. In 2013, methods. Among the things that make green Via Varejo automobiles also began stores stand out are: to be contemplated, increasing the coverage of the accounting. For > Waste management starting the transport of materials, the large with construction decrease in emissions was mainly > Paints and adhesives with low emissions due to the migration to outsourced of volatile organic compounds transport. In relation to the emissions
> Low CO2 emissions from gas leaks, the increase was > Utilization of certified wood only proportional to the growth of the > Bike rack stores, which utilize refrigerants, > Carts made from PET bottles and also to replacing gases that > 20% recycled material destroy the ozone layer with > Use of regional materials harmless gases. With the Group’s > Native vegetation in green spaces expansion, energy consumption > Reutilization of rainwater for irrigation increased 7%. In addition, the use and cleaning garages of thermoelectric power plants > Automated lighting (which burn fossil fuel) was higher > Efficient air conditioning use in 2013 than in 2012, increasing the > Refrigeration free of CFC and HCFC Group’s emissions by 18%.
Int ven ory of emissions 2013 Scope 1 (Kyoto Protocol) 73,497 Scope 1 (Montreal Protocol) 341,572 Scope 2 (Kyoto Protocol) 141,211 Scope 3 (Kyoto Protocol) 164,363 Total 720,644
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1 De ir ct emissions greenhouse gasses by source (in metric tons of CO2 equivalents)
2 Indirect emissions (in metric tons of CO2 equivalents)
1 Includes GPA, GPA distribution centers, Extra Hiper, Extra Super, Minimercado Extra, Pão de Açúcar, GPA fuel stations, GPA drugstores, Assaí, Assaí distribution centers, NovaPontoCom distribution centers, Nova Pontocom, Via Varejo, Via Varejo distribution centers, Casas Bahia and Pontofrio. 2 Does not include emissions caused by travel.
1 Indirect emissions of greenhouse gasses by source (in metric tons of CO2 equivalents)
81 Annual and Sustainability Report 2013 a Focus on Sustainability 2011
Managing Ozone Metric Consumption Type of gas Depletion tons eq of (metric tons) environmental Potential CFC11 impact R-22 180.14 0.055 9.91 Guidelines for Sustainability Valuing our People 2012
R-12 0.27 1 0.27 R-141 B 0.22 0.033 0.01 R-22 200.27 0.11 22.03 R-124 0.04 0.02 0.001
The GPA seeks solutions to 2013
1 ODP source: www.epa.gov/ozone/snap/subsgwps.html Includes GPA, GPA distribution centers, Extra Hiper, Extra Super, Minimercado Extra, Pão de Açúcar, GPA fuel stations, GPA drugstores, Assaí, Assaí distribution centers, NovaPontoCom distribution centers, Nova Pontocom, Via Varejo, Via Varejo distribution centers, Casas Bahia and Pontofrio. 2 R-22 gas is the one most utilized by the Group. Nonetheless, we have seen as of 2013 a drop in its use due to replacements with other types of gas that do not destroy the ozone layer, including for example HFCs.
Energy Consumption and dedicated automation for food
82 Annual and Sustainability Report 2013 a Focus on Sustainability Managing environmental De ir ct non-renewable energy (GJ)1 impact 2012 2013 Natural gas 57,942.00 83,709.69 Guidelines for Sustainability Liquefied Petroleum Gas Valuing our People 289,721.00 267,992.232 Conscientious Consumption and Supply (LPG) Transformation in the Chain of Value Diesel 95,040.00 505,070.40 Managing Environmental Impact Total non-renewable energy 442,703 856,772.32 Engagement with Society 1 The information reported does not include direct energy in relation to our own fleet. 2 The significant increase in energy consumption was due to the commencement of Via Varejo’s use of LPG in 2013.
Eei l ctr city, heating and refrigeration from non-renewable sources that is bought and consumed (GJ) 2012 2013 Electricity 2,845,044.00 2,759,601.02 Total non-renewable energy purchased (GJ) 2,845,044.00 2,759,601.02
Eei l ctr city, heating and refrigeration from renewable sources that is bought and consumed (GJ) Renewable sources (mixed source) 454,636.00 796,578.04 Hydroelectric 124,603.00 764,180.79 Biomass 609,862.00 575,244.84 Total renewable energy purchased (GJ) 1,189,101.00 2,136,003.66 Total energy purchased (GJ) 4,034,145.00 4,895,604.68
Green Yellow In the end, Green Yellow will In 2013, GPA introduced an energy present intelligent solutions to GPA efficiency program developed by a that should pay for themselves, company in the Casino Group, Green given the energy savings. The Yellow. Created in 2008, Green Company expects to reduce store Yellow is active in hypermarkets in consumption 25%, i.e. at the same France and Colombia, with solar panel levels seen in France and Colombia. and energy efficiency projects. The goal for 2014 is to take the project to 30 stores in the Group. Testing began at the end of 2013 at three Extra hypermarkets in Green Yellow’s initial focus is the the Mooca, Freguesia do Ó, and energy efficiency program, but the Ricardo Jafet neighborhoods in São possibility of installing solar panels on Paulo. The objective is to evaluate the roofs and parking lots of Group consumption at the stores and their stores is being studied. potential to reduce and identify suppliers and partners that can add to the development of the project.
83 Annual and Sustainability Report 2013 a Focus on Sustainability Integrated waste management organics, wood and other refuse. The One of GPA’s preoccupations is recyclable materials are sent to be Managing minimizing environmental impacts recycled, the organic wastes to produce at its operations. Accordingly, the animal feed and compost, and the wood environmental Company has worked in partnership is transformed into furniture. Only other with other companies to deploy refuse is sent to licensed landfills. impact initiatives in line with the National Policy on Solid Wastes. At retail, the In 2012, one of Brazil’s largest Guidelines for Sustainability objective is to send the least amount environmental services companies Valuing our People of waste possible to landfills, and also became a partner, with the Conscientious Consumption and Supply diminish impact. mission of developing a project that Transformation in the Chain of Value facilitates Company compliance Managing Environmental Impact The first action was taken in 2008, in with the requirements of the PNRS. Engagement with Society partnership with a national supplier, with The company is active at seven a pilot in the first Pão de Açúcar green distribution centers, 301 retail store, in Indaiatuba (SP). Currently, stores, 2 idle asset and equipment the initiative serves 25 Pão de Açúcar management units and 37 drugstores. stores and 56 Extra stores. The process consists of segregating four types of materials: recyclables (paper, plastic),
Non-hazardous waste (t)1
1 Numbers include Retail Food, Via Varejo, Assaí and Nova Pontocom. 2 The values of recycling and landfill were not insured. 3 In 2013, GPA transported 38 metric tons of hazardous waste (batteries, light bulbs and medicines).
84 Annual and Sustainability Report 2013 a Focus on Sustainability Water
Water consumption Volumn (m³) 2013 Surface 284 Ground 156,921 Rain collection 1,091 Other sources (recycled) 30,216 Public utility/supply company 4,118,221 Total 4,306,733
Water Disposal
Packaging
85 Annual and Sustainability Report 2013 a Focus on Sustainability The process involves purchasing pulp- based materials from cooperatives Managing registered with the Group and transforming them through recycling. environmental The packaging is delivered to the manufacturers, which deliver to GPA impact stores.
Guidelines for Sustainability Since program inception, more than Valuing our People 1,000 metric tons of recyclable pulp- Conscientious Consumption and Supply based materials have been transformed Transformation in the Chain of Value into raw materials for packaging. In Managing Environmental Impact 2013, the initiative was expanded to all Engagement with Society exclusive brand products, and laminated carton packaging known as “Long-Life Packaging” was added to the pulp-based packaging in the program. The first products packaged with paperboard from the recycled long-life packaging arrived on the shelves in November, with Taeq Teas and the Qualitá Kids Jelly.
M aterial collected by the cooperatives and sent to the program Year 2010 2011 2012 2013 Metric tons 400 450 307 710
Impacts on biodiversity In other cases, it forms agreements
After installing the stores, the Group considers environmental impacts in its decisions in connection with creating and maintaining the structure needed to make ongoing improvements and implement and revise the established goals and objectives. In addition, it seeks to continue to improve and prevent through Environmental Management Programs, and keep teams ready to conduct environmental analyses for projects.
86 Annual and Sustainability Report 2013 a Focus on Sustainability Engagement with the society
Guidelines for Sustainability Valuing our People Conscientious Consumption and Supply Transformation in the Chain of Value Managing Environmental Impact Engagement with Society
Through a variety of partnerships, materials that are collected at the GPA seeks to collaborate toward events and donated to cooperatives socio-environmental and economic (500 kilos in 2013 alone). improvement of the communities in which it does business, and to promote For 2014, the objective is to increase health through sports. the number of participants in the Pão de Açúcar kids runs in Rio de Janeiro, One example of this is at Pão the Federal District and Fortaleza by de Açúcar, which held four relay 10%, and to increase the number of marathons and four children’s runs, bike rides by 10%, while expanding to and invested in 79 professional other regions, such as Campinas and athletes. In 2013, the Pão de Açúcar Ribeirão Preto, in São Paulo state. Relay Marathon involved 7,000 participants in Brasília, 11,000 in Rio In addition, to back its positioning, de Janeiro, 12,000 in Fortaleza and GPA is the principal sponsor of the 36,000 in São Paulo. The Pão de Instituto GPA, which manages the Açúcar Kids Runs involved 5,000 Company’s private social investments. children in São Paulo, 1,200 in Fortaleza, 1,200 in Brasília and 1,200 Instituto GPA was created in 1998 to in Rio de Janeiro. promote the development of youth and children, through educational, social and Extra promotes monthly bike rides that cultural activities – one of the Group’s involved a total of 4,000 people in 2013. commitments. Its initiatives are oriented The Núcleo de Alto Rendimento (NAR) toward fomenting and developing evaluates athletes and had 390 new people’s potential, providing better athletes and 817 consultations last year. conditions for health, housing, education, training and professional specialization. Both the bike rides and the relay Instituto GPA believes that economic marathons are eco-friendly, stimulating growth translates into improvements in the use of pollution-free transport, everyone’s living conditions. neutralizing carbon emissions through segregated collection and recycling 87 Annual and Sustainability Report 2013 a Focus on Sustainability In this transformative process, education is the principal tool for Engagement building concrete civic actions and fighting for a more just society. with the society Educational programs that stimulate employability and entrepreneurialism Guidelines for Sustainability are offered free of charge. It is Valuing our People focused on Osasco and Santos in Conscientious Consumption and Supply São Paulo state, Rio de Janeiro Transformation in the Chain of Value and São Gonçalo in the state of Managing Environmental Impact Rio de Janeiro, and Brasília. Engagement with Society Inst ituto GPA’s two fronTS are:
Education High school education integrated with professional technical training courses. Initiatives of the M oobilizati n for the Group’s Instituto GPA social actions With actions to encourage voluntarism > The Instituto GPA Music & and social campaigns. Orchestra Program > Advanced Nucleus in Food Technology (NATA) > Program for retail training (cashiers and stockers) In 2013, GPA invested > Call center computing course > Online English course > Panis Et Lactis’ Technological Convention R$ > Day of solidarity > Campaigns to collect books, toys, clothes and coats 7,297,568 > Volunteerism in the Instituto GPA > The Prosper Program
88 Annual and Sustainability Report 2013 a Focus on Sustainability Engagement Mission with the society To promote employability and entrepreneurialism through educational social Guidelines for Sustainability actions oriented towards the communities Valuing our People surrounding GPA’s units. Conscientious Consumption and Supply Transformation in the Chain of Value Managing Environmental Impact Vision Engagement with Society
To be recognized as an agent for change, to improve human development in the communities where GPA is active.
The Instituto GPA Music & > 25 youth from the Instituto GPA Orchestra Program
89 Annual and Sustainability Report 2013 a Focus on Sustainability Day of Solidarity
90 Annual and Sustainability Report 2013 a Focus on Sustainability The Prosper Program
Actions in partnership with the Instituto GPA
P artnership against waste entities and monitoring them to avoid GPA stores donate foods that are not in poor distribution or wastage. ideal condition for display, but good for consumption, to partner institutions. AACD Telethon In 2013, the Group signed a partnership In 2013, GPA donated R$755,000 to the with Mesa Brasil, a SESC initiative against Associação de Assistência à Criança hunger and waste, at 12 stores under Deficiente (AACD) for children with the Extra banner (4 Hipermercados, 4 special needs, representing 1% of the Supermercados and 4 Minimercados). income from sales of the panettones it The socio-educational action has a makes and markets in Pão de Açúcar and strategic system for transporting foods, Extra stores, in addition to sales of Assaí establishing a connection between bags and the money from cash collection the companies that donate and the coffers placed at Extra checkout counters. institutions that receive. The organ also holds classes and presentations on hygiene, Por Exemplo M agazine conservation, and meal preparation In 2013, R$449,027.11 from sales of Por for the beneficiary institutions. Exemplo magazine, which is marketed exclusively at Extra Hiper stores, Extra F ood collections Supermercados and drugstores, was At 18 Extra Hipermercado stores, donated to the NGOs Amigos do Bem, volunteers from the NGO Amigos Casa do Zezinho, AACD, Movimento Todos do Bem collect non-perishable foods from Pela Educação and Parceiros da Educação. consumers at certain times of the year and deliver them to families in Casa de David the semiarid zone in the Brazilian The ‘Goody bag: give a gift that does good Northeast. The initiative collected the whole year’ campaign collected kits 619 metric tons of food in 2013. consisting of sheets, bath towels, t-shirts, underwear and socks, products that are In November of 2013, Cia. das Obras in high demand at the institution called undertook the National Food Collection Casa de David. In all, 123 goody bags were at 39 Extra stores, with the objective of collected and Extra donated 500 goody meeting the needs of nutritional programs bags and R$4,920 (corresponding to the 123 established by the beneficiary institutions donations) to the institution to purchase and contributing to a balanced diet, while foods and hygiene goods. avoiding waste. The foods collected were donated to local food banks responsible for distributing these foods to registered 91 Annual and Sustainability Report 2013 a Focus on Sustainability Engagement Others initiatives
Actions of the Via Varejo So cial Action with the SESC Foundation
Small Recycling Tries to promote environmental education through recycling materials gathered by the community. Activities include encouraging recycling, workshops on environmental education and gymkhanas to collect materials. In 2013, 2,727 children, youth and adults participated in the initiative.
92 Annual and Sustainability Report 2013
A Focus on Sustainability Friends of the Planet Engagement F riends of the Planet at School an incentive program for reading, health, with the society environmental education and culture in Brazilian schools. Since inception in Guidelines for Sustainability 2009, 1.3 million people at 256 schools Valuing our People in 19 municipalities have benefitted Conscientious Consumption and Supply from projects in the areas of health, Transformation in the Chain of Value arts, education, communication and Managing Environmental Impact the environment. Highlights include Engagement with Society the 134% increase in the number of books checked out by students, teachers and other visitors to the libraries at the 12 public schools involved, and an improvement of 7.3% in the grades of the students at these institutions.
F riends of the Planet - Digital Inclusion A mobile van offers free classes on computing and professional training. Since 2009, it has been present in seven cities and has had more than 6,300 enrollments.
Pi r ncipal initiatives and social investments of the Instituto GPA in 2013
Project and activity Actual or expected impacts In 2013, there were 590 students in the Music & Orchestra Program. M usic & Orchestra Program The goal for 2014 is to field two new classes. Courses for Cashiers, Stockers In 2013, there were 670 students, of which 49 were employed with the Group. and Perishable Goods Assistants For 2014, the goal is to serve 1,300 students. 134 students trained in 2013. The goal for 2014 is to have four cycles of classes Call Center Computing Course year round, benefiting 300 students. O nline English Course 126 students benefitted
A dvanced Nucleus in Food Technology (NATA) 332 students benefitted
P anis Et Lactis Seminar 875 people participated > Collection of 545,921 books, 489,450 coats and 647,870 toys. Campaigns to Collect Books, Coats and Toys >Total institutions benefitting: 981 A total of 300 metric tons of foods collected: 200 metric tons collected at stores Day of Solidarity and 100 metric tons donated by the Instituto GPA. Nºs of Volunteers > Easter in Solidarity: 309 V oluntarism > Charity Tree: 1,147 > Santa’s Workshop: 47 > Day of Solidarity: 3,270
93 Annual and Sustainability Report 2013
A Focus on Sustainability Engagement with the society
Guidelines for Sustainability Valuing our People Conscientious Consumption and Supply Transformation in the Chain of Value Managing Environmental Impact Engagement with Society
Pi r ncipal initiatives and social investments of the Instituto GPA in 2013
Partnership Against Waste Donation of 2,094 metric tons of food.
Food collections (in metric tons): F ood collections > Amigos do Bem: 619 > Cia. das Obras: 19
> Assaí Bags – R$ 422,089.18 > GPA brand panettone – R$ 210,416.66 AACD Telethon > Coffers – R$ 34,540.34 > Por exemplo magazine – R$ 86,660.80 > Instituto GPA top off – R$ 1,293.02
Extra donated 500 kits and R$4,920 in purchases. Goody Bags - Casa de David People benefitted: 330
Pi r ncipal initiatives and social investments of the Instituto GPA in 2013
Project and activity Actual or expected impacts
D onation to build and maintain the surrounding Return to Assaí customers road system – Maceió/AL D onation of 2,300 seedlings, planting of 7,700 seedlings on surrounding land, in the parking lot, Improvements for society and the environment along the pavement and road signage around Assaí – Maringá/PR R oofing a mortuary chapel, building access to the road, remodeling a nearby school and donating 778 Improvements for society and the environment, benefits for Assaí customers seedlings – Londrina/PR Surrounding road system and for the local Hospital Return to Assaí customers and access to the Hospital for society das Clinicas – Suzano/SP
94 Annual and Sustainability Report 2013
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<3.1, 3.2, 3.3, 3.4, 3.5, 3.6, 3.7, 3.8, 3.9, 3.10, 3.11 and 3.13>
For the sixth consecutive year, coordinated the effort with the GPA is publishing its Annual and Corporate Sustainability Department, Sustainability Report based on the which crunched all the data, and indicators of the Global Reporting which can be contacted through its Initiative (GRI), a model utilized email ([email protected]) by companies around the world regarding any questions about this to report on economic, social and document. Changes to previously environmental performance. The GRI disclosed data are indicated throughout guidelines are cross-referenced to the document. This year, the scope the Global Compact Principles and to of the report was broader, since the ISO 26000 guidelines on social information from all of the Company’s responsibility. GPA annual report and business units was considered. sustainability level reached B + of GRI application. The consolidated operating and financial data include in full the The topics addressed in the document results of Assaí Atacadista and Via are directed toward the Company’s Varejo S.A. The financial information stakeholders: analysts and investors, complies with the International customers, suppliers, employees Financial Reporting Standards and representatives of sectoral and – IFRS, as established in CVM socio-environmental institutions. Instructions 457/07 and 485/10, To put together the content, 30 and was audited by Deloitte Touche interviews with the professionals Tohmatsu Auditores Independentes. responsible for the companies and business units that form the Group, The socio-environmental information and the management departments includes data from Pão de Açúcar, for personnel, risk management, Extra, Assaí, Nova Pontocom and Via corporate relations, corporate Varejo (Pontofrio and Casas Bahia). governance, investor relations, KPMG audited the non-financial corporate sustainability, operations, information, based on the requirements strategic planning, and marketing, of the NBC TO 3000 and ISAE among others, were conducted. 3000 standards, both for assurance engagements that are not audits or The information refers to the Group’s reviews of historical financial data. performance during 2013, and was gathered and integrated with the support of the offices of the CEO, the vice-presidencies, executive officers and employees of the main areas. The Offices of Investor Relations and Corporate Communications 95 Annual and Sustainability Report 2013
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Profile Information Strategy and analysis ISO 26000 Global Compact Indicator Description Reported Page Chapter Principle 1.1 Message from the president Complete 3 6.2 Description of key impacts, risks and 1.2 Complete 30 6.2 opportunities O rganizational profile ISO 26000 Global Compact Indicator Description Reported Page Chapter Principle 2.1 Name of the organization Complete 5 2.2 Primary brands, products and/or services Complete 5 2.3 Operational structure of the organization Complete 5 6.2 2.4 Location of the organization’s headquarters Complete 5 Countries where the organization operates 2.5 Complete 5 and in which its main operations are located Complete Publicly-held 2.6 Nature of ownership and legal form corporation 5 (sociedade anônima). 2.7 Markets served Complete 5 2.8 Size of the organization Complete 5, 8, 43 Significant changes during the reporting 2.9 Complete 6 period 2.10 Awards received in the reporting period Complete 11 R eport parameters ISO 26000 Global Compact Indicator Description Reported Page Chapter Principle 3.1 Reporting period for the information provided Complete 95 3.2 Date of the most recent previous report Complete 95 3.3 Reporting cycle Complete 95 Contact point for questions regarding the 3.4 Complete 95 report or its contents 3.5 Process for defining report content Complete 95
96 Annual and Sustainability Report 2013
3.6 Boundaries for the report Complete 95 Statement on any specific limitations on the 3.7 Complete 95 scope or boundaries of the report 3.8 Basis for reporting Complete 95 Data measurement techniques and the bases 3.9 Complete 95 of calculations Restatements of information provided in 3.10 Complete 95 earlier reports Significant changes in the report’s scope, 3.11 Complete 95 boundaries or methods of measurement Table identifying the location of the Standard 3.12 Complete 95 Disclosures in the report Current policy and practice on seeking 3.13 Complete 95 7.5.3 external assurance for the report Governance, commitments and engagement ISO 26000 Global Compact Indicator Description Reported Page Chapter Principle Governance structure of the organization, 4.1 including committees of the highest organ of Complete 17 6.2 1 to 10 governance Chairmanship of the highest organ of 4.2 Complete 18 6.2 1 to 10 governance Independent or non-executive members of 4.3 Complete 18, 19 6.2 1 to 10 the highest governing body Mechanisms for shareholders and employees 4.4 Complete 17 6.2 1 to 10 to make recommendations Linkage between compensation and 4.5 organizational performance (including social Complete 17 6.2 1 to 10 and environmental) not 4.6 Processes for avoiding conflicts of interest Complete 6.2 1 to 10 available Qualifications of the members of the highest 4.7 Complete 19 6.2 1 to 10 governance body Internally developed statements of mission 4.8 or values, codes of conduct and material Partial 13, 21 6.2 1 to 10 principles Responsibilities for implementing economic, 4.9 Complete 19 6.2 1 to 10 environmental and social policies Processes for evaluating the highest Complete 17 6.2 1 to 10 4.10 governance body’s own performance Explanation of whether and how the Confidential organization applies the precautionary - 6.2 7 information 4.11 principle Externally developed charters, principles or Complete 6, 51 6.2 4.12 other initiatives Membership in associations and/or national/ Complete 6, 51 6.2 4.13 international organizations
97 Annual and Sustainability Report 2013
List of stakeholder groups engaged by the Complete 26, 51 6.2 4.14 organization Basis for identifying and selecting Complete 26 6.2 4.15 stakeholders with whom to engage 4.16 Approaches to stakeholder engagement Partial 25, 26 6.2 Key topics and concerns that have been Complete 26 6.2 4.17 raised through of stakeholder engagement
M anagement Approach
Indicator Reported Page ISO 26000 Chapter Global Compact Principle
Economic performance 6.2, 6.8 1, 4, 6 and 7
Economic performance Partial 46, 62
Market presence Complete 56, 61, 74, 75
Indirect economic impacts Partial 74, 87, 93
Environmental Performance 7, 8 and 9
Materials Partial 85
Energy Complete 78, 82
Water Complete 82, 85
Biodiversity Partial 86
Emissions, effluents and wastes Complete 80, 81, 85
Products and services Partial 78
Transport Complete 77
Social Performance – labor 1, 3 and 6 practices and decent work
Employment Complete 56, 57, 58, 62
Relations between labor and Complete 63 management
Occupational health and safety Complete 65, 66
Training and education Complete 59, 60, 61
Diversity and equal opportunity Complete 61, 64, 65
Equality of compensation for men and Complete 61 women
98 Annual and Sustainability Report 2013
Social performance – human rights 6.2, 6.3 1, 2, 3, 4, 5 and 6
Procurement practices Complete 21, 72, 74
Non-discrimination Complete 63
Freedom of association Complete 75
Child labor Complete 72, 74
Forced/slave labor Complete 72, 74
Security practices Complete 75
Social performance - society 6.2, 6.6, 6.8 10
66, 70, 87, 89, Community Complete 90, 91, 92
Corruption Complete 21
Public policy Complete 51, 52, 68
Information Anti-competitive behavior Complete not available
Compliance Complete 51, 68
Social performance – responsibility 1 and 8 for the product
Consumer health and safety Complete 72
Labeling of products and services Complete 71, 76
Communications and Marketing Complete 76
Customer privacy Complete 76
Performance Indicators
ISO 26000 Global Compact Global Compact Indicator Reported Page Chapter Principle Principle E conomic performance
6.8, Direct economic value generated and 6.8.3, EC1 Partial 46 distributed 6.8.7, 6.8.9
EC3 Coverage of the organization’s pension plan Complete 62
99 Annual and Sustainability Report 2013
M arket presence
Variation of the proportion of the lowest 6.3.7, EC5 wage compared to the local minimum wage, Complete 61 6.4.4, 1 by gender, at important operating units 6.8 6.6.6, Policies, practices and proportion of 6.8, EC6 Complete 74, 75 spending on local suppliers 6.8.5, 6.8.7 6.8, EC7 Local hiring Complete 56 6.8.5, 6 6.8.7 I ndirect economic impacts
6.3.9, 6.8, 6.8.3, Impact of infrastructure investments 6.8.4, EC8 Partial 87, 93 provided for public benefit 6.8.5, 6.8.6, 6.8.7, 6.8.9 6.3.9, 6.6.6, 6.6.7, 6.7.8, Description of significant indirect economic EC9 Complete 74 6.8, impacts 6.8.5, 6.8.6, 6.8.7, 6.8.9 EN VIRonmental PERFORMANCE
Materials
EN2 Percentage of recycled input materials Complete 85 6.5, 6.5.4 8, 9
E nergy
Direct energy consumption by primary EN3 Complete 82 6.5, 6.5.4 8 source of energy Indirect energy consumption by primary EN4 Complete 82 6.5, 6.5.4 8 source Energy saved due to improvements in EN5 Partial 78, 82 6.5, 6.5.4 8 and 9 conservation and efficiency Initiatives to reduce indirect energy EN7 Partial 78 6.5, 6.5.4 8 and 9 consumption, and reductions achieved Water
EN8 Total water draw by source Complete 85 6.5, 6.5.4 8
Water sources significantly affected by EN9 Complete 85 6.5, 6.5.4 8 water draw Percentage and total volume of water EN10 Complete 85 6.5, 6.5.4 8 and 9 recycled and reused 100 Annual and Sustainability Report 2013
Biodiversity
EN11 Location and size land owned Complete 86 6.5, 6.5.6 8
Significant impacts of activities, products EN12 Partial 86 6.5, 6.5.6 8 and services on biodiversity Strategies for managing impacts on EN14 Complete 86 6.5, 6.5.6 biodiversity E missions, effluents and wastes
Tl direct and indirect greenhouse gas EN16 Complete 81 6.5, 6.5.5 8 emissions Other releotavant indirect greenhouse gas EN17 Complete 81 6.5, 6.5.5 8 emissions Initiatives to reduce greenhouse gas EN18 Complete 80 6.5, 6.5.5 7, 8 and 9 emissions, and reductions achieved
EN19 Emissions of ozone-depleting substances Complete 82 6.5, 6.5.5 7, 8 and 9
Total water discharge, by quality and EN21 Complete 85 6.5, 6.5.3 8 destination Total weight of waste by type EN22 Complete 84 6.5, 6.5.3 8 and disposal method Total number and volume of In 2013, there EN23 Complete 6.5, 6.5.3 8 significant spills were no spills. Weight of transported, imported, exported, or treated waste deemed hazardous EN24 under the terms of the Basel Convention Complete 84 6.5, 6.5.3 8 Annex I, II, III, and VIII, and percentage of transported waste shipped internationally There are Identity, size, protected status, and no bodies of biodiversity value of water bodies and water affected EN25 related habitats significantly affected by Complete 6.5, 6.5.3 8 by significant the reporting organization’s discharges of discharges of water and runoff water and runoff. Products and services
6.5, Initiatives to mitigate environmental 6.5.4, EN26 Complete 78 7, 8 and 9 impacts 6.6.6, 6.7.5 Transport
6.5, Environmental impacts of transporting EN29 Complete 77 6.5.4, 8 products and members of the workforce 6.6.6 SOCIAL PERFORMANCE– LABOR PRACTICES AND DECENT WORK
Employment
Total workforce by type of employment, LA1 labor contract and region, broken down by Complete 56 6.4, 6.4.3 gender Total number and rate of employee LA2 Complete 56, 57, 58 6.4, 6.4.3 6 turnover by age group, gender and region 101 Annual and Sustainability Report 2013
Benefits provided to full-time employees LA3 that are not provided to temporary or part- Complete 62 6.4, 6.4.3, 6.4.4 time employees, by significant operations R elations between labor and management
6.3.10, 6.4, Percentage of employees covered by LA4 Complete 63 6.4.3, 1 and 3 collective bargaining 6.4.4, 6.4.5 6.4, Description of notifications (periods and 6.4.3, LA5 Complete 63 1 procedures) 6.4.4, 6.4.5 O ccupational health and safety
Percentage of employees represented in LA6 Complete 65 6.4, 6.4.6 1 formal health and safety committees Rates of injury, occupational diseases, LA7 days lost, absenteeism and work-related Complete 66 6.4, 6.4.6 1 fatalities, by region 6.4, 6.4.6, 6.8, Education, prevention and risk-control LA8 Complete 66 6.8.3, 1 programs 6.8.4, 6.8.8 Health and safety topics covered in formal LA9 Complete 65 6.4, 6.4.6 1 agreements with unions T raining and education
Average hours of training per year, per LA10 employee, by gender and employee Complete 59, 60, 61 6.4, 6.4.7 category 6.4, Programs for skills management and LA11 Complete 59, 61 6.4.7, continued education 6.8.5 Percentage of employees receiving LA12 regular performance and career Complete 59 6.4, 6.4.7 development reviews, by gender D iversity and equal opportunity
Composition of corporate governance 6.3.7, bodies and breakdown of employees per 6.3.10, LA13 category according to gender, age group, Complete 64, 65 1 and 6 6.4, minority group membership, or other 6.4.3 indicators of diversity Ratio of base salary and compensation of 6.3.7, 6.3.10, women in relation to men, by employee LA14 Complete 61 6.4, 6.4.3, 1 and 6 category and significant operating 6.4.4 locations
102 Annual and Sustainability Report 2013
SOCIAL PERFORMANCE– HUMAN RIGHTS
Procurement process
Percentage and total number of significant investment agreements and contracts that HR1 Complete 72 6.3, 6.3.3 1, 2, 3, 4, 5 and 6 include human rights clauses or that have undergone human rights screenings Percentage of significant suppliers, contractors and business partners that HR2 Complete 72, 74 6.3, 6.3.3 1, 2, 3, 4, 5 and 6 have undergone screening on human rights, and actions taken Hours of employee training on policies and procedures concerning human rights, HR3 Complete 21 6.3 1, 2, 3, 4, 5 and 6 including the percentage of employees trained N on-discrimination
6.3, 6.3.6, Total number of incidents of discrimination HR4 Partial 63 6.3.7, 6.3.10, 1, 2 and 6 and corrective actions taken 6.4.3 F reedom of association
Significant operations and suppliers identified in which the right to exercise 6.3, 6.3.3, the freedom of association and 6.3.4, 6.3.5, HR5 Complete 75 1, 2 and 3 collective bargaining may be violated 6.3.8, 6.3.10, or at significant risk, and actions 6.4.3, 6.4.5 taken to support these rights C hild labor
Significant operations and suppliers 6.3, 6.3.3, identified as having significant risk 6.3.4, 6.3.5, HR6 for incidents of child labor, and Completo 72, 74 1, 2 and 5 6.3.7, 6.3.10, the measures taken to contribute 6.6.6 to a elimination of child labor F orced/slave labor
Significant operations and suppliers identified as having significant risk for 6.3, 6.3.3, incidents of forced or compulsory labor, 6.3.4, 6.3.5, HR7 Complete 72, 74 1, 2 and 4 and the measures that contribute to 6.3.7, 6.3.10, the elimination of all forms of forced or 6.6.6 compulsory labor Security practices
Percentage of security personnel trained 6.3, 6.3.5, HR8 Complete 75 1 and 2 in human rights 6.4.3, 6.6.6
103 Annual and Sustainability Report 2013
SOCIAL PERFORMANCE– SOCIETY
Community
Percentage of operations with actions 66, 70, 87, 89, 6.3.9, 6.8, SO1 to engage the local community, impact Partial 90, 91, 92 6.8.3, 6.8.9 assessments and development programs C orruption
Units analyzed for risks relating to SO2 Complete 21 6.6, 6.6.3 10 corruption Percentage of employees trained in anti- SO3 Complete 21 6.6, 6.6.3 10 corruption policies and procedures Public policies
6.6, 6.6.4, SO5 Public policy positions Partial 51, 68 1 to 10 6.8.3 Policies on financial contributions to 6.6, 6.6.4, SO6 Complete 52 10 political parties, politicians and institutions 6.8.3 The company has no judicial actions for Total number of legal actions for anti- anti-competitive 6.6, 6.6.5, SO7 competitive behavior, anti-trust, and Complete behavior, 6.6.7 10 monopoly practices and their outcomes anti-trust or monopolistic practices.
SOCIAL PERFORMANCE– RESPONSIBILITY FOR THE PRODUCT
Customer health and safety
Health and safety impact assessment 6.3.9, 6.6.6, PR1 during the life cycle of products and Complete 72 6.7, 6.7.4, 1 services 6.7.5 6.3.9, 6.6.6, Non-compliance relating to health and PR2 Complete 72 6.7, 6.7.4, 1 safety impacts of products and services 6.7.5 L abeling for products and services
6.7, 6.7.3, Type of product and service information PR3 Complete 71 6.7.4, 6.7.5, 8 required by labeling procedures 6.7.6, 6.7.9 6.7, 6.7.4, Practices related to customer satisfaction, PR5 Complete 76 6.7.5, 6.7.6, including study results 6.7.8, 6.7.9 C ommunications and marketing
Programs for adherence to laws, 6.7, 6.7.3, PR6 Complete 76 standards and voluntary codes 6.7.6, 6.7.9 Substantiated complaints regarding PR8 Complete 76 6.7, 6.7.7 1 breaches of customer privacy
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A nnual Social Balance Sheet / 2013 (Unaudited supplemental information)
1 – Denominators 2013 Amount (in thousands of reais) 2012 Amount (in thousands of reais)
Net Revenue (NR) 57,730,262 50,924,461 Operating Result (OR) 1,052,495 1,051,181 Gross Payroll (GP) 5,242,985 5,184,147 Amount Amount (in (in 2 – Internal Social Indicators % of GP % of NR % of GP % of NR thousands thousands of reais) of reais) Food 295,276 6% 1% 329,130 6% 1% Mandatory social charges 1,072,662 20% 2% 1,159,316 22% 2% Private pension 3,770 0% 0% 3,964 0% 0% Health 244,695 5% 0% 216,787 4% 0% Occupational safety and health 17,973 0% 0% 21,332 0% 0% Education 8,948 0% 0% 2,946 0% 0% Culture 0 0% 0% 0 0% 0% Training and professional development 24,955 0% 0% 30,998 1% 0% Daycare or daycare stipend 809 0% 0% 726 0% 0% Profit sharing 165,419 3% 0% 157,377 3% 0% Others 191,592 4% 0% 203,107 4% 0% Total – Internal social indicators 2,026,100 39% 4% 2,125,683 41% 4% Amount Amount (in (in 3 – External Social Indicators % of OR % of NR % of OR % of NR thousands thousands of reais) of reais) Education 8,683 1% 0% 7,416 1% 0% Culture 2,992 0% 0% 3,115 0% 0% Health and sanitation 0 0% 0% 0 0% 0% Sports 8,814 1% 0% 7,978 1% 0% Combating hunger and food insecurity 6,048 1% 0% 6,103 1% 0% Others 9,080 1% 0% 3,033 0% 0% Total contributions to society 35,616 3% 0% 27,645 3% 0% Taxes (excluding social charges) (1) 4,494,188 427% 8% 3,665,882 349% 7% Total – External social indicators 4,529,804 430% 7% 3,693,527 351% 7% 105 Annual and Sustainability Report 2013
Amount Amount (in (in 4 - Environmental Indicators % of OR % of NR % of OR % of NR thousands thousands of reais) of reais) Investments related to the company’s 0 0% 0% 0 0% 0% production/ operations Investments in external programs and/or 12,686 1% 0% 11,150 1% 0% projects Total investments in the environment 12,686 1% 0% 11,150 1% 0% With respect to establishing “annual ( ) had no targets ( ) had no targets targets” to minimize wastes, overall ( ) achieved 51-75% (X) achieved 51-75% consumption in production/operations and (X) achieved 0-50% ( ) achieved 0-50% using natural resources more efficiently, ( ) achieved 75-100% ( ) achieved 75-100% the company 5 – Indicators on the Staff {N.B. – many of the 2013 numbers in this 2013 2012 section don’t match those in the tables in the document} Number of employees at period end* 160,660 158,509 Number of new employees during the 71,830 60,279 period Number of outsourced employees 1,064 930
Number of interns 154 195
Number of employees over 45 years old 22,523 18,585 Number of women working at the 78,211 72,213 company % of leadership positions occupied by 37.46% 30.10% women Number of blacks working at the 67,525 61,588 company % of leadership positions occupied by 32.99% 32.50% blacks Number of disabled people or people 2,445 2,363 with special needs 6 – Significant information with respect to the exercise of corporate 2013 Goals for 2014 citizenship Ratio between the highest and the lowest 200 times 200 times compensation at the company Total number of accidents at work 1195 1076
106 Annual and Sustainability Report 2013
The social and environmental ( ) executive (X) executive ( ) all employees ( ) executive (X) executive ( ) all employees projects developed by the company officers officers and officers officers and were established by: department department heads heads
(X) executive ( ) all employees (X) all + (X) executive ( ) all employees (X) all + The safety and health standards officers and Commission officers and Commission for the work environment were department for In-house department for In-house established by: heads Prevention of heads Prevention of Accidents Accidents With respect to the right to form ( ) did not (X) follows the ( ) encouraged ( ) did not get (X) follows the ( ) encouraged unions, the right of collective get involved IPO standards and followed the involved IPO standards and followed the bargaining and internal labor ILO ILO representation, the company:
( ) executive ( ) executive (X) all ( ) executive ( ) executive (X) all Private pensions are available to: officers officers and employees officers officers and employees department department heads heads
( ) executive ( ) executive (X) all ( ) executive ( ) executive (X) all Profit-sharing is available to: officers officers and employees officers officers and employees department department heads heads In selecting suppliers, the same ( ) were not ( ) were (x) were required ( ) were not ( ) were (x) were required standards of ethics and social considered suggested considered suggested and environmental responsibility adopted by the company: With respect to employee ( ) did not get ( ) supported (X ) organized ( ) did not get ( ) supported (X) organized participation in voluntary work involved and encouraged involved and encouraged programs, the company:
at the at Procon in court 59,231 at the company at Procon -3% in court there is Total number of consumer company 70,215 there is no no established complaints and criticisms: 70,053 established goal goal
% of complaints and criticisms at the at Procon 99% in court 100% at the company at Procon -99% in court there is addressed or resolved: company 98% no established 98% goal Total value added to distribute In 2013: 14,362,784 In 2012: 12,931,898 (in thousands of R$):
26.6% 40.7% Employees 23.3% 46.4% Employees Distribution of the Value Added Government Government (Statement of Value Added): 4.2% 22.8% Third 5.7% Retained 1.5% 27.0% Third 4.9% Retained Shareholders Parties Shareholders Parties
7 – Other information
“GPA does not use child or slave labor, is not involved in prostitution or sexual exploitation of children or adolescents, and is not involved in corruption.”
Our company values and respects diversity inside and outside the organization.
Contact for clarification on the information declared: Laura Pires - E-mail: [email protected]
*Under the Ibase methodology, the total number of employees does not contemplate those on leave.
107 Annual and Sustainability Report 2013
KPMG Risk Advisory Services Ltda. Central Tel 55 (11) 2183-3000 R. Dr. Renato Paes de Barros, 33 Fax Nacional 55 (11) 2183-3001 04530-904 - São Paulo, SP - Brasil Internacional 55 (11) 2183-3034 Caixa Postal 2467 Internet www.kpmg.com.br 01060-970 - São Paulo, SP - Brasil
Limited assurance report issued by independent auditors
To The Chief Executive Officer, Directors and Other Stakeholders of Companhia Brasileira de Distribuição São Paulo - SP
Introduction We have been engaged by Companhia Brasileira de Distribuição (”Company”) to apply limited assurance procedures on the sustainability information disclosed in Grupo Pão de Açúcar’s 2013 Annual and Sustainability Report, related to the year ended December 31st, 2013.
Responsibilities of Companhia Brasileira de Distribuição Management The management of Companhia Brasileira de Distribuição is responsible for preparing and adequately presenting the sustainability information in the 2013 Annual and Sustainability Report in accordance with the Global Reporting Initiative (GRI) Sustainability Reporting Guidelines (GRI-G3) and by the internal controls determined necessary to ensure this information is free from material misstatement, resulting from fraud or error.
Independent auditors’ responsibility Our responsibility is to express a conclusion about the information in the 2013 Annual and Sustainability Report based on a limited assurance engagement conducted in accordance with Technical Communication (TC) 07/2012, which was prepared upon NBC TO 3000 (Assurance Engagements Other Than Audits and Reviews), both issued by the Brazilian Federal Accounting Council - CFC and equivalent to international standard ISAE 3000, issued by the International Federation of Accountants and applicable to Non-Financial Historical Information. These standards require compliance with ethical requirements, including independence ones and also that the engagement is conducted to provide limited assurance that the information in the Grupo Pão de Açúcar’s 2013 Annual and Sustainability Report, taken as a whole, is free from material misstatement.
A limited assurance engagement conducted in accordance with NBC TO 3000 (ISAE 3000) consists mainly in questions and interviews with the management of Companhia Brasileira de Distribuição and other professionals of the Company involved in the preparation of the information disclosed in the 2013 Annual and Sustainability Report and applying analytical procedures to obtain evidence that allows us to reach a limited assurance conclusion about the sustainability information taken as a whole. A limited assurance engagement also requires additional procedures when the independent auditor acknowledges issues which lead them to believe that the information disclosed in the 2013 Annual and Sustainability Report taken as a whole could present material misstatement.
The selected procedures were based on our understanding of the issues related to the compilation, materiality and presentation of the information disclosed in the 2013 Annual and Sustainability Report, on other engagement circumstances and also on our considerations
108 1 KPMG Risk Advisory Services Ltda., uma sociedade simples brasileira, KPMG Risk Advisory Services Ltda., a Brazilian limited liability de responsabilidade limitada, e firma-membro da rede KPMG de firmas- company and a member firm of the KPMG network of independent membro independentes e afiliadas à KPMG International Cooperative member firms affiliated with KPMG International Cooperative (“KPMG (“KPMG International”), uma entidade suíça. International”), a Swiss entity. Annual and Sustainability Report 2013
regarding areas and processess associated with material sustainability information disclosed where relevant misstatement could exist. The procedures consisted of:
(a)! planning, considering the material aspects and topics of Companhia Brasileira de Distribuição activities, the relevance of the information disclosed, the amount of quantitative and qualitative information and the operational systems and internal controls that served as a basis for preparation of the information in the Grupo Pão de Açúcar’s 2013 Annual and Sustainability Report;
(b)! understanding of the calculation methodology and procedures for the compilation of indicators through interviews with management responsible for data preparation;
(c)! understanding of the reporting processes and management approaches of material aspects and performance indicators;
(d)! application of analytical procedures on data and interviews on the qualitative information and their correlation with indicators disclosed in the 2013 Annual and Sustainability Report;
(e)! analysis of evidence supporting the quantitative and qualitative information disclosed in the 2013 Annual and Sustainability Report;
(f)! analysis of processes for the preparation of the 22013 Annual and Sustainability Report and its structure and content, based on the Principles for Defining Report Content and Quality of the Global Reporting Initiative - GRI (GRI-G3);
(g)! visits to Grupo Pão de Açúcar’s offices for application of the procedures (b), (c), (d), (e) and (f);
(h)! comparison of financial indicators with the financial statements and/or accounting records.
We believe that the information, evidence and results we have obtained are sufficient and appropriate to provide a basis for our limited assurance conclusion.
Scope and limitations The procedures applied in a limited assurance engagement are substantially less extensive than those applied in a reasonable assurance engagement. Therefore, we cannot ensure we are aware of all the issues that would have been identified in a reasonable assurance engagement, which aims to issue an opinion. If we had conducted a reasonable assurance engagement, we may have identified other issues and possible misstatements within the information presented in the 2013 Annual and Sustainability Report.
Nonfinancial data is subject to more inherent limitations than financial data, due to the nature and diversity of the methods used to determine, calculate or estimate this data. Qualitative interpretations of the data's materiality and accuracy are subject to individual presumptions and judgments. Additionally we did not examine data regarding prior periods, assess the adequacy of policies, practices and sustainability performance, nor future projections.
2 109 Annual and Sustainability Report 2013
Conclusion Based on the procedures carried out, described in this report, we have not identified any relevant information that leads us to believe that the information in Grupo Pão de Açúcar’s 2013 Annual and Sustainability Report is not fairly stated in all material respects in accordance with the Global Reporting Initiative (GRI) Sustainability Reporting Guidelines (GRI-G3) and with its source records and files.
São Paulo, May 23rd, 2014
KPMG Risk Advisory Services Ltda. CRC 2SP023233/O-4
Eduardo V. Cipullo Contador CRC 1SP135597/O-6
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3 Annual and Sustainability Report 2013
Other Tools Corporate Information
About the Report Board of Directors GRI Table of Contents Chairman Ibase Social Balance Sheet Jean-Charles Naouri Assurance Report Corporate Information Vice-Chairman Arnaud Daniel Charles Walter Joachim Strasser
Directors Antoine Marie Remi Lazars Giscard D’Estaing Eleazar de Carvalho Filho Fábio Schvartsman Guilherme Affonso Ferreira Luiz Augusto de Castro Neves Maria Helena dos Santos Fernandes Santana Pedro Henrique Chermont de Miranda Roberto Oliveira de Lima Ronaldo Iabrudi Ulisses Kameyama
Board of Executive Officers Chief Executive Officer Ronaldo Iabrudi
Vice-President for Retail Business José Roberto Coimbra Tambasco
Vice-President for Strategic Development Líbano Miranda Barroso
Vice-President for Finance Christophe Jose Hidalgo
GPA Wholesale Businesses Officer and President of the Assaí Chain Belmiro Gomes
Real Estate Businesses Officer Alexandre Gonçalves de Vasconcellos
Vice-President for Personnel Management and Sustainability Antonio Salvador
Fiscal Council President Fernando Maida Dall’Acqua
Councilors Mario Probst Raimundo Lourenço Maria Christians
111 Annual and Sustainability Report 2013
Other Tools Committees <4.1> Audit Committee Corporate Eleazar de Carvalho Filho Nelson Carvalho Information Pedro Oliva Marcilio de Sousa
About the Report Finance Committee GRI Table of Contents Antonie Marie Remi Lazars Giscard d´Estaing Ibase Social Balance Sheet Arnaud Daniel Charles Walter Joachim Strasser Assurance Report Eleazar de Carvalho Filho Corporate Information Fábio Barbosa Pedro Henrique Chermont de Miranda
Human Resources and Compensation Committee Arnaud Daniel Charles Walter Joachim Strasser Guilherme Affonso Ferreira Roberto Oliveira de Lima
Sustainable Development Committee Guilherme Affonso Ferreira Helio Mattar Luiz Augusto de Castro Neves Roberto Oliveira de Lima Ulisses Kameyama
Corporate Governance Committee Arnaud Daniel Charles Walter Joachim Strasser Guilherme Affonso Ferreira Luiz Augusto de Castro Neves Maria Helena dos Santos Fernandes Santana Roberto Oliveira de Lima
Address Av. Brigadeiro Luís Antônio, 3.235 Jardim Paulista – CEP: 01402-901 São Paulo – SP – Brasil Tel.: 55 11 3886-0533 e-mail: [email protected]
The publications on quarterly results, quarterly sales performance, annual reports, the formulário de referência and Form 20-F may be requested from the Office of Investor Relations or accessed at GPA’s IR website (www.gpari.com.br).
Investor Relations Consulting MZ Consult
Ticker Symbols BM&FBovespa: PCAR4 Nyse (ADR Nível III): CBD
Independent Auditors Deloitte Touche Tohmatsu Auditores Independentes
Depositary Banks Banco Itaú S.A. The Bank of New York Mellon
112 Annual and Sustainability Report 2013
Other Tools Contacts <3.4> Additional information and clarification on this Report or Corporate any part of its contents may be requested through the Information following channels of communication: Operating and Financial Data About the Report Site: www.gpari.com.br GRI Table of Contents e-mail: [email protected] Ibase Social Balance Sheet Tel.: 5511 3886-0421 Assurance Report Corporate Information Information on Sustainability Site: www.gpabr.com/sustentabilidade e-mail: [email protected] Tel.: 55 11 3886-3684
Communications and Press Site: www.gpabr.com e-mail: [email protected] Tel.: 55 11 3886-0533
Credits
General coordination Office of Corporate Communications Office of Investor Relations Corporate Sustainability Management
E ditorial supervision, redaction and final editing Gatopardo Comunicação – Silvia Martinelli
T echnical supervision of the GRI indicators and text Report Sustentabilidade
Team Luana Bessa (project management and relationship), Paula Andregheto (publishing), Graciana Feitosa (writing), Guilherme Falcão (graphic design), Flavia Ocaranza (typesetting)
Photos Marcelo Min
R eview Assertiva Produções Editoriais
F ont family Cronos MM, Robert Slimbach, 2001 Arial, Robin Nicholas e Patricia Saunders, 1982
113 Relatório Anual e de Sustentabilidade 2013
Outras Ferramentas Contatos <3.4> Mais informações e esclarecimentos sobre este Relatório Informações ou qualquer parte de seu conteúdo podem ser solicitadas Corporativas aos seguintes canais de comunicação: Dados Operacionais e Financeiros Sobre o Relatório Site: www.gpari.com.br Índice Remissivo GRI e-mail: [email protected] Balanço Social Ibase Tel.: 5511 3886-0421 Carta de Asseguração Informações Corporativas Informações sobre Sustentabilidade Site: www.gpabr.com/sustentabilidade e-mail: [email protected] Tel.: 55 11 3886-3684
Comunicação e Imprensa Site: www.gpabr.com e-mail: [email protected] Tel.: 55 11 3886-0533
Créditos
C oordenação geral Diretoria de Comunicação Corporativa Diretoria de Relações com Investidores Gerência de Sustentabilidade Corporativa
S upervisão editorial, redação e edição final Gatopardo Comunicação – Silvia Martinelli
S upervisão técnica dos indicadores GRI, redação, edição, projeto gráfico e editoração Report Sustentabilidade
Equipe Luana Bessa (gestão de projetos e relacionamento), Paula Andregheto (editoração), Graciana Feitosa (redação), Guilherme Falcão (projeto gráfico), Flavia Ocaranza (diagramação)
F otos Marcelo Min
Revisão Assertiva Produções Editoriais
F amília tipográfica Cronos MM, Robert Slimbach, 2001 Arial, Robin Nicholas e Patricia Saunders, 1982
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