Magazine Luiza S.a. · BMFBOVESPA:MGLU3

Magazine Luiza — Q3 2023 Earnings Presentation

33 slides from Magazine Luiza's earnings presentation, Nov 14, 2023

1. Slide 1: Conference Call 3Q23

   Conference Call 3Q23 November 14, 2023

2. Slide 2: Simultaneous translation and access to results materials

   Esta teleconferência possui tradução simultânea. Para acessar, basta clicar no botão Interpretação através do ícone do globo na parte inferior da tela. O Release de Resultados e a Apresentação, versões português e inglês, estão disponíveis para download no site de RI: ri.magazineluiza.com.br A apres

3. Slide 3: Total sales grew 21% per year, reaching R$14.8 billion in 3Q23

   Over the last 4 years, total sales grew an average of 21% per year, reaching R$ 14.8 billion in 3Q23 Total sales growth [Billion R$; %] Online Physical stores 21% p.a. Growth of sales with +81% +12% +2% +5% increased profitability 14.8 14.2 13.8 30.4% Gross Margin 12.4 73% [+2.9 p.p. vs 3Q22] 72% 73%

4. Slide 4: Total Physical Store Sales were R$4.0 billion in 3Q23, growing 2%

   Total Physical Store Sales were R$ 4.0 billion in 3Q23, growing 2% Growth of physical stores sales [Billion R$; %] 3% p.a. 2% 18% -8% 1% 2% Growth of physical stores sales 4.0 [3Q23 vs 3Q22] 4.2 3.8 3.9 3.5 +0,7 p.p. Market share gain [3Q23 vs 3Q22; GFK] 3Q19 3Q20 3Q21 3Q22 3Q23 44

5. Slide 5: E-commerce reached R$10.9 billion in sales in 3Q23

   Over the last 4 years, our e-commerce business grew an average of 35% per year, reaching R$10.9 billion in sales in 3Q23 Growth of e-commerce sales [Billion R$; %] 1P 3P 35% p.a. 6% +148% +22% +3% 6% Growth of e-commerce sales [3Q23 vs 3Q22] 10.9 10.3 10.0 3 p.p. market share gain 6.1 Versus a decre

6. Slide 6: Marketplace reached R$4.4 billion in sales in 3Q23

   Over the last 4 years, our marketplace business grew an average of 51% per year, reaching R$4.4 billion in sales in 3Q23 Growth of marketplace sales [Billion R$; %] 51% 4-year average annual marketplace 51% a.a growth [3Q23 vs 3Q19] +145% 67% +1% +25% 4.4 25% Growth of marketplace sales 3.5 3.5 [3Q2

7. Slide 7: Increased profitability of the marketplace

   In addition to increasing sales, we significantly increased the profitability of our marketplace Growth of the 3P take-rate Growth of the 3P contribution margin [% GMV; 1Q21-3Q23] [% GMV; 1Q21-3Q23] 44% increase in marketplace derived revenues [3Q23 vs 3Q22] 1Q21 2Q21 3Q21 4Q22 1Q22 2Q22 3Q22 4Q22 1Q2

8. Slide 8: Marketplace sales surpassed physical store sales

   Magalu’s marketplace sales once again surpassed physical store sales, and the marketplace has the potential to become our largest sales channel Share of sales per channel [% GMV; 3Q19-3Q23] 30% Share of 3P sales as a percentage of total sales [%; 3Q23] Physical Stores 41% Share of 3P sales as a perc

9. Slide 9: Accelerated hunting of new sellers

   Accelerated hunting of new sellers 283,000 new sellers joined the platform since 3Q20, reaching the mark of 323,000 sellers on the marketplace platform in 3Q23 Growth in the number of sellers Total number of offers 1P + 3P [‘000 sellers; on-boarded] [MM offers] 114 323 81 236 50 120 21 40 3Q20 3Q21

10. Slide 10: Improvements to the seller platform

    IMPROVEMENTS TO THE SELLER PLATFORM Seller App within the SuperApp: Magalu Indica: Seller chat / Customer coupon Sellers can now access information from Exclusive offers generating value for sellers Chat enabling sellers to answer the palm of their hand, through the and customers customers questions

11. Slide 11: New categories represent 86% of items sold in 3P

    New categories already represent 86% of items sold in 3P, as a direct result of building a diversified base of sellers and offers Growth of # of sellers per type of sales New categories as a percentage of Magalu's category [# sellers 3P; 2017-2023] online sales [% 3P Items Sold; 3T23] Traditional Cat

12. Slide 12: Marketing and SuperApp experience drive growth of new product families

    Investments in marketing and user experience in the SuperApp have driven the growth of new product families Growth highlights per product family [YoY GMV; 3Q23 vs 3Q22] Top of the funnel Improvements in Investments in marketing experience navigating the categories 69% Running 63% Vacuum YoY GMV 3P s

13. Slide 13: Increase marketplace conversion by expanding logistics offerings

    Increase marketplace conversion rates by expanding our logistics offerings, raising service levels and shortening delivery times Percentage of marketplace orders delivered by Magalu Entregas in up to 48 hours 80% 41% 3Q22 81% +10p.p. 51% of marketplace offers Today 84% pass through Magalu Entregas 1

14. Slide 14: Multichannel fulfillment with faster delivery and lower costs

    Truly multichannel fulfillment with faster delivery speed and lower costs ~14% +2.400 8 of 3P orders Distribution SELLERS centers +70% 25% 25% of light products Increase in Reduction of conversion rates shipped from the costs Louveira DC 14

15. Slide 15: Physical stores in the multichannel marketplace

    Physical stores play a fundamental role in the multichannel marketplace Today Multichannel Ecosystem 70% of orders that pass through the physical In the past… stores originated online (1P e 3P) 630 Agencies enabled 81K Sellers using the for drop-off stores as a postal agency Traditional physical sto

16. Slide 16: Sponsored search ads tripled

    ‘ The service is now also offered on the Sponsored search ads Netshoes platform, TRIPLED taking the first step towards the expansion vs 3Q22 of Magalu Ads to the wider Magalu Ecosystem

17. Slide 17: Financial services for sellers

    Financial services for sellers R$10 Bi Highlight total TPV no 3Q23 +21% vs 3Q22 7.9 Million PIX transactions vs 4.9 million in 3Q22 +58k Sellers already have our Digital Accounts ● We established a partnership with Mercado Bitcoin, one of the leading crypto exchanges in Latin America, giving users t

18. Slide 18: Magalu Ecosystem companies with profits and sales growth

    Magalu Ecosystem companies have produced excellent results, with profits and sales growth 25% Marketplace growth Focus on operations with migration to a new ERP YoY 1 R$ Bi of sales in 3Q23 R$21 mm LEADER Even with the of Net in the Sports focus on R$30 mm of Net category operations, the Profit 3Q23 P

19. Slide 19: Financial Highlights

    Financial Highlights

20. Slide 20: Conclusion of the investigation of the anonymous complaint

    Conclusion of the investigation of the anonymous complaint An investigation, conducted by the Audit, Risk and Compliance Committee (CARC), Tozzini Freire Advogados and PwC, concluded that the anonymous complaint was unfounded At the end of work, inaccuracies were identified in accounting entries for

21. Slide 21: Measures to improve internal control mechanisms

    Additionally, the board of directors determined that the following measures should be immediately implemented in order to improve internal control mechanisms Adopted Measures: Improvement of Improvement of the governance automated supplier mechanisms that budget management guarantee the Review of ri

22. Slide 22: Recognition of Tax Credits

    Recognition of Tax Credits The Company also informs the market that it recognized, this quarter, extemporaneous PIS/COFINS tax credits on bonuses received from its suppliers Such credits were based on a recent decision by the Superior Court of Justice (STJ) and the opinion of its legal advisors Tota

23. Slide 23: Summary of adjustments and release of tax credits

    Summary of adjustments and release of tax credits The total net adjustment represents 1% of Assets and 3% of current Shareholders' Equity Before (In R$ millions) 2022 2022 1H23 Total Net Adjustments in Recognition of Bonus Revenue¹ (696) (226) 93 (830) Tax Credits on Net Bonuses² 507 - - 507 Impact

24. Slide 24: Financial Highlights - 3Q23

    Financial Highlights - 3Q23 R$14.8 Billion in Total Sales (5% of growth) 30.4% Gross Margin (vs 27.5% of margin in 3Q23) 25% 3P Growth R$487 Million in Adjusted EBITDA (5.7% of margin) * 6% E-commerce Growth -R$143 (-1.7% of margin) Million in Adjusted Net Income* +R$331 (3.9% of margin) Million in

25. Slide 25: Adjusted EBITDA Margin Growth

    Adjusted EBITDA Margin Growth 2.9 p.p. increase in gross margin, with 1.0 p.p. in merchandise margin (completing the pass-through of DIFAL), and 1.9 p.p. in service margins In Oct/23, we succeeded in increasing the EBITDA margin, reaching a level between 6% and 7%* 1.9% 1.0% 0.2% 0.1% 2.5% 0.4% 0.2%

26. Slide 26: Improvement in working capital and lower financial expense

    Improvement of R$634 million in Working Capital in the last 12 months Financial expense R$100 million lower compared to 3Q22 Adjusted net financial expense (R$ Million) Adjusted working capital (R$ Billion) CDI 13.5% 13.8% 13.8% 13.8% 13.3% 3.7 Avarage 7.0% 2.3 2.3 6.3% 5.1% 6.2% 5.3% 1.6 1.4 632 556

27. Slide 27: Total cash stable at R$8.1 billion

    Total Cash stable at R$8.1 billion Operating Cash Generation of R$327 million during 3Q23 Cash Flow 3Q23 (R$ billion) Receivables Cash 0.3 8.1 8.1 (0.1) (0.3) 4.8 5.7 An additional R$160 million in cash from the conclusion of the sale of Luizaseg (Nov/23) 3.3 2.5 Adjusted Final Cash Operating Cash F

28. Slide 28: Net Cash position of R$0.7 billion

    We ended 3Q23 with a Net Cash position of R$0.7 billion Total Cash position ~3 times short-term debt Cash and Debt Receivables Cash Low cost: CDI + 1,25% p.a. 8.1 8.1 0.7 Net Cash 4.8 5.7 7.4 Gross Debt 2.8 2.4 2.0 3.3 2.5 0.2 Adjusted Final Cash Maintenance Adjusted Final Cash Gross Debt 2023 2024

29. Slide 29: Luizacred credit card TPV growth

    Luizacred 6% growth in credit card TPV, reaching R$14.3 billion The credit portfolio is now R$19.5 billion TPV [R$ billion] +5.7% 14.3 13.5 6.8 million +6.4% 11.6 12.3 credit cards +1.5% 1.9 2.0 3Q22 3Q23 Luiza Card Outside Magalu 29 Luiza Card Inside Magalu

30. Slide 30: Luizacred improving default indicators

    Luizacred Improving short and long-term default indicators Percent of the Portfolio Overdue (%) Net Income [R$ Million] 10.9% 10.5% 9.2% 3Q22 2Q23 3Q23 3.5% 3.4% 3.3% (15) Sep-22 Jun-23 Sep-23 (30) 148% 138% 140% (66) NPL 15-90 NPL > 90 Coverage (%) Profit/Loss under IFRS 30

31. Slide 31: Default rates: CDC and Luizacred

    Default rates: CDC and Luizacred Normalization of the overdue loan portfolio with the lowest short-term default rate indicators in the past few years Default rate CDC Default rate Luizacred [% Over30 MOB3] [% Over30 MOB3] The 3Q23 cohorts have the lowest default rates of any cohort in the past few y

32. Slide 32: Magalu ecosystem

    mMagaLu _ ecosystem goo CONSORCIO m, i mMagaLu VIP 205 a anes mMagau Pra — sg hub Stoa fHEa Pagamentos smartHint). @uuss/Les tuizacreD =e Chee ditss Luizasec oO Sf Magau 5 5 x Canaltech ~% eee “ £ Fs]Fsone % SJ Fsone NETSHOES KaEuM!.. STE bee) [00K log ZATTINI aiqrome GFLA GE Sak estante Scaroccsiei

33. Slide 33: Investor Relations

    INVESTOR RELATIONS RI@MAGAZINELUIZA.COM.BR MAGAZINELUIZA.COM.BR/RI As afirmações contidas neste documento relacionadas a perspectivas sobre os negócios, projeções sobre resultados operacionais e financeiros e aquelas relacionadas a perspectivas de crescimento do Magazine Luiza são meramente projeções

Magazine Luiza — Q3 2023 Earnings Presentation on 6ix