Contents

Introduction ____________________________________________03

Message from Management__________________________________05

Organizational Profile______________________________________08

The Company_______________________________________09

Diversified portfolio___________________________________12

Clients: Our greatest asset______________________________14

Governance________________________________________19

People Management_______________________________________25

People who make a difference____________________________26

Essential training____________________________________27

Investing in talent____________________________________29

Valuing talent_______________________________________29

Socio-Environmental Management_____________________________32

Green Company_____________________________________33

GHG emissions profile_________________________________36

Opportunities for eco-efficiency__________________________39

Corporate citizenship__________________________________41

Economic Performance____________________________________44

Deepening the customer relationship___________________________45

Financial results_____________________________________45

GRI Content____________________________________________49

About the report_____________________________________50

GRI Index_________________________________________55

Masthead and Corporate Information___________________________68

Introduction

For the second consecutive year, we are pleased to present our sustainability report

in accordance with the standards of the Global Reporting Initiative (GRI). For this

second release, we have adapted to the latest version of these standards: G-4. The GRI

is a non-governmental organization, with head offices in Amsterdam, The Netherlands.

Based on the practical application of the concept of sustainability into corporate

strategies, GRI reporting standards are, globally, among the most widely accepted and

recognized.

Like other large companies around the world, we have voluntarily adopted the GRI

model to depict our economic, social and environmental performance in a more

comprehensive manner. We believe this template strengthens and improves the

distribution of information about our best practices as they relate to the

implementation of sustainability in corporate management.

Accordingly, we identify with the GRI's goals while we also are progressing in terms

of transparency, allowing us to enhance our communication channels, of which this

report is a highlight, and whose objective is to strengthen our dialogue with key

stakeholders and the society at large. This is how we would like to share information

about our progress and challenges.

Message from Management

Corporate guidelines orient our sustainability management

B2W Digital experienced great advances in 2013. We are committed to strengthening

corporate management that is oriented along guidelines for sustainability, as well as

investments in tools, processes and solutions, and the continuous development of our

associates.

In 2013, we completed the first stage of a three-year investment plan (2013, 2014 and

2015), which is addressing four strategic acquisitions: three technology companies that

specialize in systems development – Uniconsult, Ideais and Tarkena – and a delivery

firm that specializes in the fulfillment of e-commerce orders – Click Rodo. In

continuance of our strategy to build closer ties to our customers, we have begun

operations at three new distribution centers (DCs), located in the states of Minas

Gerais, Pernambuco and Rio de Janeiro. The Company currently has seven DCs with

seven others being readied to open before the close of 2015. The new CDs have

generated direct and indirect employment, and are promoting the development of

surrounding regions. We give preference to hiring local labor and, as we believe in the

growth potential of Brazil, we will continue investing in the country.

During 2013, the Company posted strong growth and improved its operations, all the

while keeping its customers as the focus of its attentions. B2W Digital reported

consolidated gross revenues of approximately R$ 7 billion, a 28.5% increase over the

previous year.

We are, therefore, publishing, for the second straight year, our Sustainability Report

based on the model of the Global Reporting Initiative (GRI), an international

organization that has developed the most recognized and widely adopted standard in

use among the world's largest companies. With this report, we have taken a step

forward by adopting G-4, the most updated and advanced version of the GRI.

Another important change in the scope of our social, environmental and economic

management in 2013 – and something about which we are very proud – was our

joining the United Nations Global Compact. This initiative aims to encourage

companies to commit themselves to the best corporate practices relating to respect for

human rights, the environment and business ethics.

In our quest for increased eco-efficiency in our activities, we also celebrated another

significant achievement in 2013, when we opened BIT (B2W Innovation and

Technology), our new building located in Rio de Janeiro's port district. BIT was

completely renovated in accordance with the quality standards of LEED (Leadership in

Energy and Environmental Design). The market has increasingly adopted this

international certification of best environmental practices for buildings – from the

design phase to construction to long-term use.

Everything we do at B2W Digital is directed toward providing our customers with the

best possible shopping experience. In recognition of our efforts, we have received a

number of significant industry awards. It is noteworthy that our associates are

considered a very important asset to our business and we recognize that we have, on

our side, the best people willing to support our vision to be "the largest and favorite

digital company in Latin America." In this regard, we constantly invest in the

development of our associates. Their talents are part and parcel of an organizational

culture characterized by meritocracy and results-oriented performance.

While we are very pleased with how much we have accomplished, we know that we

have much more that we can contribute to the development of people, regions of the

country, and Brazil itself.

MANAGEMENT

Organizational Profile

The Company

With a portfolio consisting of brands and diversified businesses, B2W Digital –

created, in 2006, from the merger of Americanas.com and Submarino – is the

e-commerce leader in Latin America.

Since its inception, it has achieved great strides with its unique multi-channel multi-

brand, multi-business model. The Company operates through the Internet, telephone

sales, catalogues, kiosks and television. [G4-3]

Its shares are traded on the Brazilian Securities, Commodities and Futures Exchange

(BM&FBOVESPA) and is listed, under the BTOW3 ticker, on the Novo Mercado (New

Market) segment, which demands the highest level of corporate governance in Brazil.

Lojas Americanas S..A owns approximately 62.3% of the Company's shares. [G4-7]

B2W Digital owns the Americanas.com, Submarino, Shoptime and SouBarato

brands, as well as the B2W Viagens, Ingresso.com and Submarino Finance subsidiaries.

[G4-4]

National and international presence

Besides the Company's headquarters in the city of Rio de Janeiro, B2W Digital

maintains seven distribution centers, which are located in the states of São Paulo,

Pernambuco, Minas Gerais and Rio de Janeiro. However, its presence goes beyond

Brazil. Ingresso.com operates in Argentina, Mexico and Chile, while B2W Viagens

operates in Argentina. [G5-5, G4-6, G4-8, G4-9]

Mission

To fulfill people’s dreams and satisfy their consumption needs, saving them time and

money, and exceeding their expectations.

Vision

To be the largest and best-loved digital company in Latin America.

Values

To have the best people

To be a good "business owner"

To strive for operational excellence

To be customer-focused

To do more and better every day

To be results-driven

Competitive advantages

Best digital team in Brazil

Technology and Logistics Platform

Low-cost operations

Wide variety of products

Management model

Quality of services

Experienced management with strategic vision

Awards and recognition

We were immensely pleased with the awards we received in 2013. The Company placed

first in four categories of the Reclame Aqui (Complain Here) award in recognition of its

service quality, with Americanas.com winning in the E-Commerce: Large Operations –

Electronics and Ingresso.com winning the Internet: Ticket Sales award. Submarino

won in the Tourism and Leisure: Services category, while Blockbuster Online was the

winner in the Internet: Services category.

B2W also received recognition from two other major awards in 2013. The Internet

Retailer Award, an annual e-commerce award for Latin America, ranked B2W first in

Latin America, while Americanas.com won, for the seventh consecutive year, the

Datafolha Institute's Top of Mind Internet award in the e-commerce category.

Such acknowledgement of from society is a reason to celebrate and be proud of the

efforts of our team. These awards also serve as motivation for us to continue doing

more and making improvements every day.

Learn more about the Company's profile on its website: http://www.b2wdigital.com/institucional/perfil.

Diversified portfolio

The Company has gradually expanded its areas of activity, driven mainly by

expanding access to digital technologies.

Americanas.com

The largest store. The lowest prices.

Since 1999, Americanas.com has been Latin America's largest and most complete

online store. The brand, voted by consumers as being #1 in customer service, offers

more than 500,000 products that can be purchased on its website, via telephone sales,

and through more than 700 kiosks set up inside Lojas Americanas’ brick-and-mortar

stores. Beyond this, the Company's delivery, travel, mobile app and B2B services,

among many others, are contributing to a unique and increasingly complete shopping

experience.

Submarino

The products you enjoy and the best service on the Internet.

Submarino – a pioneer in online shopping and a benchmark for technology and

innovation – offers over 30 categories of products through the Internet, telephone

sales, a mobile app and catalogues, with a strong emphasis on the sale of books, games,

DVDs, electronics, information technology, telephony devices, fashion and online

services. In addition, Submarino has been strengthening its brand through additional

offerings, such as Submarino Viagens, B2B services and the Submarino (credit) Card.

Shoptime

Unique products and live demonstrations.

Shoptime is the top Brazilian home shopping channel (TV sales), which also

operates via the Internet, catalogue and telephone sales. The focus of the brand is on

integration between its various sales channels with the goal of providing customers the

best shopping experience possible. Shoptime's inventory emphasizes products for the

home, which includes four of its own brands: Casa & Conforto, Fun Kitchen, La Cuisine

and Life Zone.

SouBarato

SouBarato is B2W Digital's outlet shopping website that offers a wide range of top

brand products at discount prices, which are lower than the market average. The site

sells new and repackaged products, in perfect condition, at discounts of up to 70%.

Launched towards the close of 2011, SouBarato's wide and varied product assortment

stretches across more than 20 categories, and includes smartphones and cell phones,

computers and accessories, TVs and consumer electronics.

B2W Viagens

B2W Viagens operates under the Americanas Viagens, Shoptime Viagens, Milevo,

Submarino Viajes and Submarino Viagens brands, the latter having won in 2013, by

popular vote and for the third time, as the provider of the best customer service and for

being the Best Online Travel Agency in Brazil. B2W Viagens' sites have partnered with

over 750 airlines, 200,000 hotels and 4,000 attractions worldwide.

Ingresso.com

With over 5 million customers, Ingresso.com, Brazil's largest online ticket vendor,

offers the convenience of secure ticket sales via its website, telephone sales and apps for

iPhone, Android and Facebook. In addition to being a leader in the virtual world, the

brand's new software, Arena, launched in 2013 and intended for use within Brazil's

largest ticket outlets and box offices, is the most intelligent strategic management tool

on the market, which is allowing for the further strengthening of the brand's presence.

Submarino Finance

Submarino Finance offers the Submarino Mastercard credit card, which offers

special advantages via the Submarino website, such as discounts, exclusive installment

payment scheduling, differentiated credit limits, and the Leagues (customer loyalty)

Program. Over the course of 2013, we surpassed the 830,000 cards mark and achieved

a 38% sales share via the Submarino website.

Clients: Our greatest asset

We offer a distinctive shopping, delivery and customer service experience to

strengthen our bonds with consumers.

B2W's strategy is to form increasingly closer ties to customers by offering the best

shopping experience, as well as the best delivery and customer services possible:

Best shopping experience: Through our websites, to offer the best products, the best

prices and the best navigation, facilitating the entire purchasing process for our

customers.

Best delivery service: We want to increasingly be closer to where our customers live,

which will allow us to make deliveries faster and more reliably.

Best customer service: We want to delight our customers by being responsive and

efficient in resolving problems that arise.

Investments

We have adopted an investment plan whose main objective is to enable the growth

and improvement of our operations.

Over the course of 2013, 2014 and 2015, the Company will invest over R$ 1 billion in

logistics, technology and innovation, with the opening of at least ten new distribution

centers.

Logistics

B2W Digital has been constantly investing in optimizing its logistics systems and

supply chain.

In keeping with its investment plan, the Company acquired the transportation firm,

Click Rodo Entregas Ltda., which has the best e-commerce delivery operations in

Brazil.

To forge a closer relationship with its customers and provide the best delivery service

possible, in October 2013, B2W Digital opened three new distribution centers (in the

states of São Paulo, Minas Gerais and Pernambuco), which increased the Company's

storage capacity by 60%. These three facilities replaced existing distribution centers,

which were located in the same states, but had less capacity. Currently, B2W operates

seven distribution centers (in the states of São Paulo, Rio de Janeiro, Minas Gerais and

Pernambuco). Also in line with the Company's announced investment plan, at least

seven new distribution centers will be opening before the close of2015. [G4-13]

Beyond this, the Company has established strategic alliances with major carriers

across the country to ensure its ability to fulfill its commitment to offer the best level of

customer service.

Technology

Consistent with the Company's investment plan and its strategy to be a benchmark in

the technology and Internet market, B2W Digital acquired, in 2013, three tech firms

that specialize in the development of e-commerce systems and solutions. As a result,

the Company has doubled the size of its technology/Internet team, which, with over

600 engineers, is currently the largest in Latin America. [G4-13] The following are the

main highlights of the acquired companies:

Uniconsult: Order control optimization (shipping and returns), systems for the

management of multiple distribution centers, and development of specific systems

for marketplace transactions;

Ideais Tecnologia: Development and optimization of online sales platforms,

B2B/BB2C and mobile systems;

Tarkena: Optimization of search systems and algorithms for freight management.

Investments in technology platforms in the areas of operations and logistics,

television, customer service and telesales are aimed at improving operational quality

and efficiency to provide an even better shopping experience for our customers.

Last year, several projects, ranging from improvements in the design of the

technological platform to new functionalities, were implemented.

Recently launched projects include the following highlights:

[B] Seller web services platform: Platform for the creation of online stores and

backoffice/ERP integration systems;

KM de Vantagens online store: B2W Digital is operating the KM de Vantagens

e-commerce platform through its Shoptime brand;

Four own brands: Newme, Meemo, Topdesk and Orb, which are available via the

Americanas.com, Submarino and Shoptime websites;

SouBarato's new website: The new site has a new visual identity, and is more

dynamic and interactive.

New Submarino website: New tools, new layout and more intuitive;

New versions of Americanas.com, Submarino and Shoptime mobile

apps: Versions available for all smartphone operating systems;

Product recommendations in Americanas.com and Shoptime: Products

are recommended based on browsing history and customer purchases;

Facebook sharing button: With a single click, customer can share purchase

information on Facebook;

New "autocomplete" feature for searches conducted on

Americanas.com, Submarino and Shoptime: More relevant results,

returning most-clicked items, best sellers and latest products;

Frequently asked questions and answers (FAQ) system for

Americanas.com: Offers rapid responses to frequently asked customer

questions;

Product evaluation tool: New, easier and faster process;

Shoptime: Shoptime customers can now see, via the website, the latest products

being offered on TV, allowing for greater interaction between the brand's different

sales channels.

Privacy concerns

We recognize that our customers' privacy and the protection of their personal

information is critical in the digital environment. Accordingly, we have invested heavily

in technology and innovation, establishing a specialized, information technology (IT)

team whose duties involve ensuring a safe shopping environment through the use of

the best data protection and information use mechanisms, and strengthening our

technology platforms such that they are constantly addressing market challenges

related to these issues.

Corporate actions taken to resolve problems and issues related to these matters

always take place at management level administrative. This said, in 2013, we did not

record any cases of legal or regulatory non-compliance, or any complaints regarding

breaches of customer privacy or data loss. [PR8]

Direct contact

As our customers are our greatest asset, we invested to build closer ties with them

and offer them services of the highest quality. We believe that to ensure shopping

experiences that exceed expectations, offering the best prices and products, we must

ensure navigational ease on our websites, as well as fast and reliable delivery. In this

manner, we can delight our customers and find a warm place in their hearts.

To ensure that we are building close ties to our clients and guaranteeing customer

satisfaction, in 2013, we made great efforts to further facilitate customer contacts and

enhance various contact channels, through integration and communication

activities. We have improved existing systems dedicated to responding to questions,

suggestions or complaints from consumers, which have been submitted to management

bodies, and posted on social media and websites, such as Reclame Aqui (Complain

Here).

As part of the advancement process, we have created internal groups that specialize

in resolving cases submitted to particular departments of the Company. Additionally,

we have taken a leadership role in pioneering the creation of the B2W Resolve project.

This initiative provides yet another contact channel for the resolution of potential

conflicts, such that customer problems can be resolved more quickly, without the

necessity for these to wind up in the court system.

These initiatives have a positive impact on our relationship with customers. As a

result, their trust and satisfaction with the Company is deepened. This, in turn, makes

us enthusiastic about our initiatives and confident that we are on the right track.

The measures we have already referenced reinforce the Company's commitment to

complying with the pronouncements that appear in the Consumer Protection Code and

the Electronic Commerce Decree (Decree No. 7,962 of March 15, 2013).

We would like to note that, in 2013, no cases of non-compliance with regulations and

voluntary codes concerning marketing communications were recorded. [PR7]

Quality control

To establish a procedure to satisfy certification standards and quality control for our

products and services, in 2014 we will create a direct communication channel with the

Company that will directly address health and safety concerns. To accomplish this, we

will rely on a specific sector, which manages certifications from Brazil's National

Institute of Metrology, Standardization and Industrial Quality (INMETRO), for the

implementation of internal verification systems. The initiative will strengthen the

control of administrative rules, help us to take a proactive stance against potential

problems and serve to overhaul, adapt and otherwise strengthen the specific manner by

which we handle quality control issues.

In 2013, no significant fines were levied nor actions taken against us as regards

noncompliance with laws and regulations related to information disclosure about and

the labeling of products and services. [PR2]

Governance

[G4-34]

Our practices are guided by the rules of the BM&FBOVESPA and its

Novo Marcado (New Market), the segment that focuses on

transparency and sustainable management.

B2W is incorporated under the rules established by the Brazilian Securities,

Commodities and Futures Exchange (BM&FBOVESPA) and its Novo Mercado, the

segment that demands the highest level of corporate governance in Brazil – which

includes an ownership structure composed exclusively of common shares and the

election of independent members to Boards of Directors. B2W's Board of Directors

consists of seven members, four representatives of the controlling shareholder and

three independent members.

The processes of going public and joining the Novo Mercado were approved by the

Brazil’s Securities Exchange Commission (CVM) and BM&FBOVESPA, respectively, on

July 25 and 26, 2007.

B2W’s shares are listed on the BM&FBOVESPA and began trading under the BTOW3

(common shares) ticker symbol on August 8, 2007.

On December 31, 2013, the controlling shareholder block of Lojas Americanas was

composed of 62.23% of the Company's shares, excluding treasury shares.

The following is the Company's shareholding breakdown:

Dividend policy

The Company's By-laws, in conformity with the principles of current legislation, sets

the minimum value for dividends at 25% of net profit for any given fiscal year, adjusted

in accordance with the legislation in force. In 2013, B2W did not distribute any

dividends to its shareholders.

Shares

The Company's common shares are part of the Special Tag Along Stock Index

(ITAG), which consists of the stocks of companies that offer the same conditions to

minority shareholders in the event of a change of control. The Company is also part of

other major indices, such as the Consumption Index (ICON), the Special Corporate

Governance Equity Index (IGC) and the Valor Index - 2nd Tier (IVBX-2).

Adherence to the Arbitration Chamber

The Company, its shareholders and directors are obliged to resolve, by arbitration,

any dispute or controversy that may arise between them, related to or arising from, in

particular, the application, validity, effectiveness, interpretation, violation and

purposes of the provisions contained in the bylaws, the provisions of Brazilian Law No.

6.404/76, the rules issued by the National Monetary Council, the Central Bank of Brazil

and the Securities Commission of Brazil and other rules applicable to the operation of

the securities market in general, and those contained in the Listing Rules of the Novo

Mercado, the Novo Mercado Participation Agreement, the Arbitration Rules of the

Market Arbitration Board and, especially, the Assignment and Assumption of Liabilities

Agreement ("Termo de Voto"), which was entered into on December 13, 2006 and is on

file at the Company. Such arbitration shall be conducted before the Market Arbitration

Board, established by the BM&FBOVESPA, in accordance with the regulations of said

board, or the parties may, in accordance with Chapter 12 of those regulations, agree to

have such arbitration carried out before another board or in a different arbitration

center to resolve their disputes.

Accordingly, the Company is subject to the Market Arbitration Chamber, in

conformity with the arbitration clause contained in its By-laws.

Independent auditors

In accordance with CVM Instruction No. 381, B2W Digital affirms that its

independent auditors provide services to the Company in which corporate acquisitions

are reviewed. The independent auditors were contracted for such services on February

20, April 19, July 5, August 12, and September 5, 2013, receiving a total remuneration

of R$ 260,000, which represents approximately 20% of total fees relating to external

audit services. These services have already been executed and do not conflict with those

rules related to the independence of independent auditors.

The Company's policy regarding contracting independent auditors for other audit

services, which are not external in nature, ensures that there is no conflict of interest,

loss of independence or objectivity on the part of such independent auditors.

Board of Directors

Independent Members Luiz Carlos Di Sessa Filippetti

Mauro Muratorio Not

Paulo Antunes Veras

Representatives of the Controlling Shareholder Celso Alves Ferreira Louro

Jorge Felipe Lemann

Miguel Gomes Pereira Sarmiento Gutierrez

Osmair Antonio Luminatti

B2W Digital’s Board of Executive Officers

Anna Christina Ramos Saicali, President and CEO

Carlos Eduardo Rosalba Padilha, Operations Officer

Carlos Henrique de Lucca Fortes Gatto, Operations Officer

Flavio de Almeida Serapião, Operations Officer

Fabio da Silva Abrate, Investor Relations Officer

Jean Pierre Lessa e Santos Ferreira, Operations Officer

José Timotheo Barros, Operations Officer

Márcio Cruz Meirelles, Sales & Marketing Officer

Murilo dos Santos Corrêa, Chief Financial Officer

Thiago Mendes Barreira, Sales & Marketing Officer

IR, transparent information

The relationship with the market (analysts, investors and shareholders) is the focus

of Investor Relations (IR) area activities, for which transparency in the disclosure of

information about the Company's business is considered a priority. To fulfill this

commitment, B2W Digital maintains multiple contact channels, such as a bilingual site

that features up-to-date data, as well as e-mail and telephone.

A public meeting for analysts and shareholders, which is open to other interested

parties, is held annually. In addition, IR professionals attend events and conferences

for investors.

This work also involves the dissemination of an IR events calendar, coordinating the

production and publication of annual and quarterly reports, and other publications, as

required by law. The team is also responsible for disclosing market communications,

such as relevant facts, which are sent, simultaneously, to the CVM, BM&FBOVESPA

and the investing public.

To learn more about IR activities and to acquire related content, more information is

available via the website:

http://www.b2wdigital.com/informacoes-aos-investidores.

Suppliers network [G4-12]

By strengthening control practices in the contracting of suppliers, which are

integrated into our supply chain, we believe that we are in a position to choose the best

business partners. This, in turn, helps us in our business planning and contributes to

the results of our Company's operations. Thus, the adoption of more stringent criteria

for new contracts and those already signed have become guidelines that have been

incorporated into internal codes of conduct and reflect our commitment to United

Nations Global Compact (learn more in the highlights box below). [G4-26]

Among these activities, we note our control of internal flows of prior documentary

analysis and supplier regularity, an internal data bank in which all of this information

is registered, and an auditing procedure that has helped us to create indicators that

assist in the control and evaluation of supply contracts. Among the criteria that we

apply in this process are the degree of criticality of a given supplier to the overall

structure of the Company; analysis of compliance with rules, regulations and

standards; and the elaboration of action plans to resolve issues regarding irregularities.

Another extremely important dimension of our management is its aim to disseminate

principles for the protection and enhancement of human rights, including in contracts,

thereby contributing to the eradication of any forms of forced labor or labor performed

under conditions that are contrary to human dignity in our production chain. To

accomplish this, we have adopted specific provisions, which, in cases of non-

compliance, includes punitive measures, such as fines and immediate disaccreditation.

The Company supports several initiatives of entities, both public and private, which

are engaged in the identification of the potential risks and impacts of human rights

violations that may be associated with its activities. We encourage audits, as well as

internal and external monitoring, to inhibit any practices that are contrary to the

expectations of the many stakeholders related to our business. [HR6 and HR10]

Joining the Global Compact

In 2013, the company took another important step in the process of strengthening its

management, in line with the highest standards of sustainability, when, on November 1,

it signed on to the United Nations Global Compact. This is an initiative that brings

together thousands of companies around the world committed to the best practices of

corporate respect for human rights, particularly in relation to labor issues, as well as

environmental and business ethics. We are pleased to be part of this initiative.

From this framework, we intend to move further along the path we have taken

toward building a Green Company. As part of the commitments made by the Global

Compact, we report annually on our sustainability report, progress in the spread of a

line with the UN principles and values of corporate culture. [G4-15]

People Management

People who make a difference

To achieve the goal of being the most well-loved company in Latin

America, we need people who are committed to this goal.

To have the best people on our side, we constantly invest in the development and

improvement of our team. We have identified, in the market, those professionals with

the essential characteristics necessary to achieving our way of doing business, i.e. an

ability to exceed targets, passion for technology and courage to face challenges. We also

value those who behave like owners of the business and who always put the customer

first.

Profile of our associates

In 2013, B2W's workforce was composed of 10,017 associates, of whom 6,392 were

women and 3,625 men. All of our professionals are full-time employees with indefinite-

term employment contracts. [LA10]

We understand that, to promote equality between men and women and to ensure

that wage policies for recruitment and promotion eliminate all possibilities of

discrimination, the Company's most significant component for the development and

promotion of its people must be meritocracy. Accordingly, our entire team has the same

opportunities and we are very happy to know that, through the individual merits of

each, women are present in all levels of the corporate hierarchy – board of directors,

president and CEO’s office, board of executive officers, and managers, and women

comprise the majority of our rank-and-file employees.

The following table reflects numbers of employees present in given functional levels

of the Company (by gender). [G4-10]

To stimulate the improvement of the welfare of our associates, we prioritize hiring

professionals who are residents of the regions surrounding our facilities. Thus, in 2013

the majority of employees hired by the Company, including senior managers (directors

and managers), came from the respective regions where the Company is

present. [EC6]

In 2013, our associates participated in formal health and safety committees. This is a

significant issue in the context of our Personnel Management policy. [LA5]

Essential training

Enhancing talents and promoting skills, such as leadership,

results orientation and strategic vision, require ongoing training.

The construction of a motivating work environment requires, among other factors,

activities that value talent and continuous improvement. In this regard, we offer

various training programs that contribute to the professional development of our

associates and the dissemination of our culture.

The guiding principles of the Company [G4-56] inspire our personnel development

programs, which, in turn, are built upon the three pillars presented below.

Men Women Men Women

Board of Executive Officers 7 1 9 1

Management 77 54 118 82

Orientation/coordination 132 91 153 111

Technical/supervisory 129 96 294 393

Administration 180 206 209 433

Operations 2,612 5,255 2,814 5,35

Interns 4 0 4 2

Total by gender 3,141 5,703 3,625 6,392

TOTALS

Number of employees at given functional levels

2012 2013

8,844 10,017

People Pillar

Our approach to people, because of the complexity, importance and scope of this

pillar, is subdivided along the lines of culture, leadership practices and relationship to

society.

In Culture, our goal is to spread the Company’s Culture, Values and Principles,

thereby strengthening attitudes and behaviors that are the backdrop to our

Management System and which help us to fulfill our dreams.

In Leadership Practices, we seek to train leaders of the Company so that they can

achieve results with their teams, always with the assurance that "Leadership is

consistently hitting its targets when it has a team that is doing it right."

Relationship with Society means sharing the concepts of the Company's sustainable

development practices with our associates and engaging them therein, such that we

may be increasingly recognized by society as a socially and environmentally responsible

company.

Methods Pillar

Through our Methods, we aim to disseminate and incorporate in the daily lives of our

associates, at all levels, practices and management tools that have been systematized,

such that our way of solving problems, achieving goals, and improving our capacity for

analysis and decision making are based on facts and data.

Results Pillar

The goal of the Results Pillar is to achieve results through performance improvements

in all areas (Sales & Marketing, Operations and Support) by training our associates in

the standards of execution of processes and activities, and in the development of skills

required to achieve results in each function.

Investing in talent

Through courses and training, we have contributed to

continuously raising the level of expertise of our executives.

Our corporate universities are based in Rio de Janeiro and São Paulo. As part of our

activities, we have a dedicated team that internally produces educational content and

seeks academic support from the best universities in Brazil and the world – including

Harvard and Stanford (USA).

In 2013, one of our biggest investments was in training senior management. Here, a

highlight was the participation of a Harvard professor who spent several days at our

Rio de Janeiro headquarters, developing and improving the techniques and strategies

of our Company with our management team.

We have developed specialized training for e-commerce professionals, which

includes classroom modules and also e-learning. The set of training activities has been

dubbed Role Accreditation and is another important training tool being offered by the

Company.

Overall, in 2013, B2W showed a significant increase in the number of training hours

it offered, reaching a total of 160,175 hours, which included improving skills in the

commercial, operations and leadership areas. [LA9]

Moreover, as part of the professional development process, all of the Company's

associates in administrative positions had to undergo a performance evaluation.

[LA11]

Valuing talent

To satisfy the specific needs of e-commerce professionals, we

invest in recruitment and training programs.

Through our distinctive Human Resources Management process, we train our talent

in-house through internship, trainee and new talent initiatives dedicated to more

deeply sensitizing these participants to the issues that are of greatest relevance to our

digital businesses. These programs are considered to be the principal gateways into the

Company – so much so that most of our corporate officers entered the Company by

taking advantage of opportunities like those that we offer, going on to develop

successful careers here.

Internship program

Our program aims to educate and train young college students to become future

leaders. With a maximum duration of two years, it is one of the major gateways into the

Company. Interns undergo training with and attend lectures by our

executives. Educational themes relate to the Company's interest areas and assist in

further familiarizing participants with the Company's business and the digital

marketplace.

From Day One, interns are assigned to their respective areas, learning to handle the

business in these sectors. The goal is to aid their development, such that they can build

successful careers in the Company. The program has been very successful as we can

point to a record of positive accomplishments.

New Digital Talents Program

With its focus on recent college graduates, the program aims to fast-track the

development of professionals capable aiding in the growth of our group companies. An

associate enters the Company already assigned to the area in which he/she will work,

getting to know team in that sector on a day-by-day basis. During the first six months,

the managers of each area of the Company give presentations and site visits are

arranged to operational units, such as distribution, telephone sales and customer

service centers. The program, which was launched in April 2011, features continuous

recruitment that takes place throughout the year.

Trainee Program

B2W Digital's Trainee Program was developed especially for young people, who were

"born connected" and are passionate about new technologies and innovation. During

the yearlong program, participants are engaged in an intense learning initiative divided

into two stages. In the first six months, trainees learn about the entire operation of the

Company and take part in several corporate training programs. In the following

months, individual trainees are assigned to a specific business unit, where on-the-job

training takes place and the trainee has an opportunity to develop a challenging project.

After this period, the associate begins working in this unit.

Program for Persons with Disabilities (PWD)

Promoting social inclusion and the certification of professionals with disabilities in

the workplace is the goal of our People with Disabilities (PWD) Program. B2W values

diversity in the workplace and does not tolerate discrimination in any form.

Professional growth occurs through daily learning about the various activities of the

digital marketplace. We are constantly offering vacancies for this constituency and, in

partnership with municipal departments and specialized consultants, we identify

candidates that we recruit to work in the Company's business units.

Young Apprentice Project

Developed in partnership with Brazil's National Apprentice Training Service

(SENAC) or equivalent bodies in the cities where our business units are located, the

Young Apprentice Project prepares young students for our labor market. The initiative

offers a fixed-term contract and, in return, the student is obligatorily committed to

register at attend elementary school.

Benefits offered

In addition to those benefits that are mandated by law, B2W Digital offers its

associates meal vouchers, health insurance, and discounts on products purchased via

the Americanas.com, Submarino and Shoptime websites. Beyond this, we extend our

care for our professionals in other distinct ways. For example, we maintain

partnerships with the best health spas, as well as with restaurants, language schools

and the most reputable universities. These allow us to offer our associates even further

benefits.

Socio-Environmental

Management

Green Company

We know that achieving economic performance alongside social

development activities and reductions in environmental impacts

constitutes a challenge.

Our efforts to expand and strengthen best management practices for sustainability

have a strong ally in the Green Company project. Since this concept was created in

2007, we have made constant progress in our search for solutions to reduce the

environmental impacts of our activities. [G4-14]

One of the major advances in addressing this significant subject within the Company

came with the creation of our Sustainability Board, which reports to the highest level of

corporate management. Established to support this important policy area, the board

has made contributions that have expanded the reach of our social development and

economic growth activities in the communities where we operate. Our experiences and

notable achievements are highlighted in this chapter. [G4-2]

With the support of the Sustainability Board, which has a team entirely dedicated to

the goals of the Green Company, we carry out our activities by engaging all of our

associates and raising environmental awareness issues through the use of various

educational and management tools.

We recognize the existence of different stakeholders within the industry in which we

operate. Therefore, our goal is to establish connections with each of these. To

accomplish this, we have developed specific relationships and engagement activities for

our various stakeholders.

We believe that stakeholder engagement, beyond being essential to the

implementation of sustainability strategies, must be deeply woven into one of our

ethical values: transparency.

Sustainable communication

One of the positive outcomes of our Green Company strategy is the virtual space we

have established on our Investor Relations website, whose goal is to expand

communication with our stakeholders. This direct and interactive channel is an ideal

place to disseminate information on corporate sustainability guidelines. Through this

space, visitors can access an inventory of our greenhouse gas emissions and our

Environmental Policy. These are initiatives that have yet to be widely adopted by

Brazilian companies, which further demonstrates the innovative, leadership position

the Company is taking.

For questions, suggestions and comments related to topics of interest in this

corporate area, individuals are encouraged to contact the Sustainability division

through its dedicated e-mail address: cia.verde@b2wdigital.com.

A strong area of development for the Green Company is the work being done in the

area of communications. By using various channels of information dissemination,

especially through the use of digital tools, our goal is to mobilize associates, customers

and other stakeholders to become positive players in causes of collective interest. Thus,

the sustainable use of natural resources, consumer awareness and healthy living are key

themes that were present in the campaigns and other information dissemination

activities carried out in 2013. [G4-26]

On World Water Day (March 22), communication activities addressed the fight

against waste. As a way of extending the reach of educational strategies aimed at our

associates, in addition to water taps with timers becoming a permanent feature of our

administrative buildings, communications focused on conscious consumption.

As in previous years, we also encourage associates and guests to participate in Earth

Hour, a worldwide mobilization promoted by the environmental organization, WWF.

By turning off lights for an hour on March 23, people voiced their concerns about global

warming and its potential environmental, social and economic impacts. Tackling

energy waste is an important part of our communication strategy.

In keeping with the main objectives of the Green Company, World Environment

Week (the first week in June) is of great importance to us. During this period, we

expanded our information efforts regarding sustainability through our various

communication channels. Furthermore, in our administrative buildings, we put up new

signs for our selective waste collection program, so as to facilitate the program's

effectiveness and, thereby, contribute to the efficiency of the selective collection

program.

To broaden the range of our educational activities, the campaign also extended to

customers. This was achieved through marketing partnerships that placed banners on

the websites of our brands.

To learn more about the Green Company, please visit the hotsite:

www.b2wdigital.com/institucional/companhia-verde-popup?flash=upload/companhiaverde/00002007.swf

Focus on health

Through an invitation from Brazil's Ministry of Health, we offered support to

activities related to Pink October, an international awareness campaign held in the

month of October to alert and educate society, and especially women, about the

importance of prevention and early diagnosis of breast cancer. Accordingly, as part of

that initiative, we carried out our largest communication campaign of the year to draw

attention to this issue. We invited our associates to dress in pink on October 16, on

which date the color was also prevalent in the decorations used in all administrative

units. Another positive outcome of this initiative was to engage and interact

successfully with our customers through websites, Facebook pages and, by way of a

strong marketing partnership, through the Shoptime television channel.

On World Health Day (April 7), part of our efforts included the distribution of

educational brochures and cereal strips to our associates. As we are deeply concerned

about the health of our employees and other stakeholders with whom we interact, we

also offered tips for improving eating habits, among other messages of encouragement

towards healthier lifestyles.

In 2014, B2W Digital intends to develop or sponsor a significant activity that

encourages participation in sports, as a means of promoting healthy lifestyles among

and the well-being of our associates and the general public.

GHG emissions profile

Maintaining an account of greenhouse gas (GHG) emissions is a critical

component guiding decision-making within the Company.

B2W Digital is a company that understands that the management of greenhouse gas

(GHG) emissions is a fundamental aspect of management. In fact, all members of the

Green Company committee were trained and certified in the Brazilian GHG Protocol

Program tool, an important mechanism for the calculation and control of CO2, which is

based on an international emissions quantification methodology used by companies

and government institutions around the world. Since 2009, the Company has been

internally calculating and managing all of its CO2 emissions, reporting these on its

Investor Relations website.

In 2013, B2W achieved advancements in regards to reducing the use of energy

sources that generate GHG emissions. A large investment was made to replace gas-

powered forklifts with electric ones that are more efficient and generate fewer impacts

on the environment. Thus, the reduction of LPG (liquefied petroleum gas, which is a

mixture of hydrocarbon gases that are used as a fuel in heating applications, such as in

stoves and vehicles) was 99% compared to 2012. Another positive development (shown

in the table below) was the 20% reduction in diesel consumption, as a result of the

decreased use of generators in administrative areas and distribution centers during the

past year. [EN6 and EN27]

Fuel economy [EN3]

Energy Consumption (GJ) 2012 2013

LPG 24969 205

Diesel fuel 4482 6814

Gasoline 275 358

Other fuels 755 145

TOTAL 30481 7522

The data in the table above depicts the direct emissions of the Company, i.e.

emissions from its own sources, such as forklift trucks, fleet vehicles and

generators. These values are part of scope 1 in the next table.

It is significant to note that when we transform the gigajoule (GJ) values above to

tons (t) of CO2 equivalent (tCO2e - a measurement unit used internationally to

calculate emissions), the Company's energy consumption is calculated together with

emissions factors established by the GHG Protocol, which means that the total

reduction that appears in the table above (78%) is lower when converted to GHG

emissions (30%).

In the table below, we show the Company's total GHG emissions for 2013.

GREENHOUSE GAS INVENTORY RESULTS [EN15, EN16 and EN17]

Key

Scope 1: Direct greenhouse gas emissions – According to the GHG Protocol methodology, these are produced from stationary and

mobile sources, which belong to the Company or are controlled by it, such as forklifts used at distribution centers and other

vehicles.

Scope 2: Indirect greenhouse gas emissions – Produced from the consumption of electricity or thermal energy.

Scope 3: All other indirect emissions resulting from the Company's activities, but which are produced by sources not owned or

controlled by the Company, such as business travel and delivery envelopes delivery used for goods purchased via e-commerce.

Scope 2 has undergone a change due to the increase of the emission factor for

electricity generation in Brazil. This factor increases in those years in which electricity

is generated by less renewable sources and is, therefore, dirtier and emits more GHGs.

GHG by source (tCO2e) 2012 2013

Scope 1 728 507

Scope 2 867 1430

E-commerce delivery envelopes 1391 2068

Business trips 482 404

Scope 3 total 1.873 2.472

Indirect Emissions (Scope 3)

Direct Emissions (Scopes 1 and 2)

In 2012, the emission factor for electricity was 0.0653 tCO2/MWh, while in 2013 it had

increased to 0.0960 tCO2/MWh. However, when we analyze power consumption in

kWh, which increased from 13,272,677 kWh in 2012 to 14,892,741 kWh in 2013, it is

possible to note that the increase (12%) was proportionally lower than the Company's

growth (28%). In other words, despite the sizable growth of the Company, the

consumption of kWh has not grown as intensely due to actions taken and investments

made in energy efficiency and raising the consciousness of our associates. [EN16]

Another significant source of emissions from the Company was as a result of business

travel, which is included in Scope 3. In 2013, there was a 16% reduction of this factor,

which is due to the awareness of associates as regards this factor, such that greater

efforts were made to have them travel together on the same flights, among other

actions. Scope 3 also includes plastic envelopes used for deliveries. This factor will be

discussed further in the next section. [EN17]

Logistics

The Company's operations depend on an outsourced truck fleet, which carries out

deliveries of products bought through e-commerce. As such, and as a strategy to reduce

environmental impacts, especially GHG emissions, vehicles will only begin their trips

with full loads, which are also shared with other companies. [EN30]

Management solutions, such as new distribution centers (DCs) – including those that

opened, in 2013, in the cities of Recife, Pernambuco, Rio de Janeiro, and Uberlândia,

Minas Gerais – have been implemented with the goal of improving operations and

optimizing logistics. As we are now physically closer to our customers, we are

contributing to the reduction of GHG emissions and other environmental impacts

related to transportation. [EN30]

However, despite the aforementioned logistics efforts, which sought to consolidate

products to the same address and combat waste of fuel, increasing operations in 2013

resulted in the elevation of the scope 3 emissions by 32%, as reported in the table with

the emissions inventory. This happened because of the growth in the consumption of

plastic envelopes used for deliveries; an item that is included in the calculation of

indirect emissions and heavily monitored, as it has impacts on nature and the

organization's business. [EN17]

Due to the type of business we are engaged in, which is strongly associated with

logistics services, B2W understands that this is a critical issue among the many

challenges associated with climate change that must be addressed. The surge in the

adoption of more stringent legislation, as well as taxes being levied on fuels and

logistics services in general suggests a trend that could increase future operational

costs. In this regard, we will continue the process of improving our management aimed

at adopting best solutions, such as those which we have highlighted in this report.

[EC2]

Opportunities for eco-efficiency

The company views concerns over climate change as an

opportunity to invest in modernization and eco-efficiency

initiatives.

Sustainable buildings

One of the more noteworthy demonstrations of our sustainability management in

2013 was concluded in August, with the opening of the B2W Innovation and

Technology (BIT) facility, B2W's new building, located in Rio de Janeiro, which was

constructed in accordance with Leadership in Energy and Environmental Design

(LEED) quality standards. We opted for this international certification – which attests

to the adoption of best environmental practices for buildings, from the design phase to

construction to long-term use – because we believe that we can achieve progress in our

corporate performance through the implementation of eco-efficient solutions that will

help us achieve better results not only for our business, but for society as a whole.

With LEED certification for BIT, which is one of the few Green Seal-based initiatives

in the city, we are also satisfying the expectations of our stakeholders, who have cited

this international standard in connection with one of the most important issues our

business can address as it tackles matters related to its physical presence.

There are many advantages associated with new constructions bearing the LEED

seal, which go beyond high-level technological standards. In this respect, a notable

feature in facilities use is the absence of dividers that separate associates from one

another. This favors greater interaction between people and facilitates day-to-day

communications.

From an engineering standards standpoint, countless smart solutions were adopted.

For example, 50% of the building's structure is composed of recycled materials and by

restoring its façade, it preserves historic architecture. These options resulted in a great

saving of materials and natural resources.

The energy efficiency of the new building is ensured in several ways – through the

use of T5 fluorescent bulbs (which consume 5% less energy) and a smart air

conditioning system (which allows BIT to avoid being dependent on wasteful cooling

technologies). Another contribution comes through the absence of external lighting,

which, besides eliminating visual pollution, avoids unnecessary power consumption.

Rational water use is achieved through the installation of water saving devices in the

bathrooms, e.g. aerators on taps, flow restrictors (6 liters/minute) and dual flush valves

on toilets. Additionally, a rainwater capture/treatment system was designed to allow

this water to be used in toilets.

To encourage our associates to commute in a more healthy and sustainable manner

within a city that has had to confront major urban mobility problems, the building

features a 10-slot bicycle rack. To facilitate their use and ensure the welfare of our

teams, changing rooms that feature water saving devices were installed. For example,

the showers have a maximum flow rate of 8 liters/minute.

Segregated collection of waste is another significant contribution and, with the

collaboration and awareness of our associates, we have brought about the proper

disposal of all wastes being generated in the facility.

Thus, the design features of the building, together with the best management

practices of the facility, are ensuring reduced emissions of GHGs in the functioning of

the BIT, where the total investments came to more than R$ 1 million.

Our sustainability management process will move forward in 2014, as we will

another building constructed to the same standards in São Paulo. It is also our

intention to renovate all of our administrative facilities, applying these same guidelines,

in the coming years. [EN27 and EN31]

Corporate citizenship

Promoting educational activities and solidarity mobilizations is

part of our contribution to building a more sustainable society

Education via digital inclusion

Encouraging education and digital inclusion through modern, information

technology tools, installed in a flexible structure, is the main guideline of the Center for

Mobile Digital Inclusion (CID Móvel), which opened, in 2013, in Osasco (one of the

most populous cities in the São Paulo-metro region), where the Company has a

distribution center.

The CID Móvel initiative is supported by two trailers that were totally refurbished

and equipped to carry out educational activities. Computers with Internet access ensure

the conditions necessary to provide professional computer courses, as well as to

facilitate web communications for the local population.

In synergy with our values and aligned with our business profile, this initiative has

received long-term social investments of over R$ 1 million in 2012, to allow it to begin

operations in 2013. In the coming years, we will invest even more in other social

projects, as we believe that we can always contribute to building a more prosperous and

sustainable society. [EC7]

We believe that, by offering training and certification opportunities to the population

of Osasco and adjacent areas for use in the local labor market, CID Móvel is

contributing to the enlargement of B2W's indirect economic impacts. One of the

Company's concerns is with the generation of jobs in the regions where it

operates. Apart from direct employment in its facilities, we prioritize the selection of

local service providers. [EC8]

Moreover, due to the nature of our type of business and taking into account the many

growth opportunities that exist in Brazil for the advancement of e-commerce, we know

that by offering professional training through initiatives like CID Móvel and others, we

will be providing support, of even greater relevance, to the future socio-economic

development of the communities in which we operate.

Contribution to the community

In 2013, the Company actively demonstrated its commitment to corporate

citizenship, engaging in projects that contributed to the fostering of a more cohesive

society, especially those that required urgent attention.

With support from our associates, we mobilized our network of suppliers and carried

out the collection of over 2,000 hampers and 500 Christmas trees that were donated to

the residents of Rio de Janeiro's Complexo do Alemão shantytown. The community was

hard hit by rains that fell in the city in December, which resulted in large material

losses.

The Company's Sustainability team delivered these donations personally to the

president of the neighborhood association. For everyone involved, there was a feeling of

satisfaction in having participated in the campaign, especially at such a significant time

of the year.

Supporting INCA

Following Rio de Janeiro's Biennial Book Fair, Submarino donated more than 1,200

books and 40 puffs to the National Cancer Institute (INCA). These items found their

way to their new home after having been used in the brand's booth during the fair,

which was held in September.

To further support INCA's work, in 2013, the Company also donated a thousand cans

of powdered milk, a staple food for the patients that are treated at this institution.

Cultural support

In 2013, B2W gave its associates and the Rio de Janeiro community a colorful panel,

70 meters high and 30 meters wide, the largest in the city. It is located in the port

district, where our headquarters are located. The cultural incentive came at an

opportune time, as Rio is in the midst of a revitalization process as the city prepares to

host the 2014 FIFA World Cup and the 2016 Olympic Games.

With its vibrant colors and striking images, this work of graffiti art by visual artist,

Tomaz "Toz" Viana, offers something distinctive to the local landscape. Toz created this

work, along with an expert team of graffiti artists.

Using a huge canvas that cannot be missed by passersby and inspired by the language

of urban art increasingly appreciated in the metropolises of Brazil and the world, this

work graces the city with a message of peace and joy.

Campus Party

For the fourth consecutive year, Submarino participated in the seventh edition of the

Campus Party – the world's principal technology, creativity and digital culture event.

As an e-commerce representative and a gold sponsor of this e-commerce event, the

Company offered visitors the opportunity to watch an unprecedented battle of the

robots (Submarino's Ultimate Robot Combat), which was created by engineering and

robotics teams from Brazil's leading universities. Submarino's stand also offered dance

games and the opportunity to test out technology products.

Economic Performance

Deepening the customer relationship

We are investing to offer the best digital experience in Latin

America.

As regards consolidated operations, in 2013, the Company recorded net revenues of

approximately R$ 6 billion, which represents 26.5% growth compared to the previous

year.

Throughout the year, important steps have been taken, which have enabled the

Company to better achieve its goal of forming a closer relationship with its customers

by providing the best shopping experience, and offering the best delivery and customer

services. In 2013, we opened three new distribution centers (DCs), for a current total of

seven DCs, with at least seven others scheduled to open before the close of 2015.

In recognition of the work achieved by the entire company to deliver the best digital

customer experience, in 2013 B2W won major industry awards, including four "Época

(magazine) Reclame Aqui - Best Consumer-Oriented Companies" awards and, for the

seventh consecutive year, the "Top of Mind Internet" award. These achievements

confirm the Company's position as No. 1 in customer service.

Financial Results

Net Revenue

In 2013, consolidated net revenue totaled R$ 6,088.5 million, compared to R$

4,812.4 million in 2012, which represents an increase of 26.5%.

Gross Profit and Gross Margin

In 2013, consolidated gross profit reached R$ 1,507.5 million, an increase of 31.6%

compared to R$ 1,145.5 million in 2012. For the year, the consolidated gross margin,

when calculated as a percentage of net revenue, was 24.8%, an increase of 1 percentage

point compared to the gross margin of 23.8% achieved in 2012.

General and Administrative Sales Expenses

In 2013, consolidated sales expenses, general and administrative, totaled R$ 1,076.4

million, which represents 17.7% of net revenue.

Adjusted EBITDA and Adjusted EBITDA Margin

In 2013, the consolidated adjusted EBITDA reached R$ 431.1 million, an increase of

30.2% from the R$ 331.2 million recorded for the same period last year. In 2013, the

consolidated adjusted EBITDA margin, when calculated as a percentage of net revenue,

was 7.1%, an increase of 0.2 percentage points in relation to the margin achieved in

2012.

Net Financial Result

In 2013, the consolidated net financial expense was R$ 512.9 million, an increase of

22.1% compared to the consolidated net financial expense of R$ 420.2 million recorded

in 2012.

The Company continues to maintain its commitment to a conservative cash

application policy, which is manifested through the use of foreign currency hedging

instruments, to cover any fluctuations in exchange rates, in relation to financial

liabilities against its total cash position. These instruments offset the foreign exchange

risk, transforming the cost of debt for local currency and interest rates (as a percentage

of the CDI, or Interbank Deposit Certificate). In the same vein, it is worth noting that

the Company's cash is invested in Brazil’s top tier financial institutions.

Net Income

In 2013, consolidated net income was R$ -159.6 million, compared to R$ -170.7

million recorded in 2012.

Debt

B2W uses its cash flow to prioritize investments that generate the best returns for

shareholders. Thus, in 2013, consolidated investments in property and intangible assets

(development of websites and systems) totaled R$ 714.1 million. On 12/31/2013, B2W

had available a total cash of R$ 2,660.0 million, an amount greater than the sum of the

Company's loans and short-term debentures, which totaled R$ 506.5 million. On

12/31/2013, the Company's net debt was R$ 920.7 million, which represented 2.1 times

EBITDA for the previous 12 months. To cope with uncertainties and volatility in the

financial market, B2W Digital is oriented toward the preservation of cash and

extending its debt profile. Over the past few months, several measures have been taken

for this purpose, which allows us to consolidate the Company's investment plan for the

long term.

Absence of Foreign Currency Exposure

On 12/31/2013, B2W Digital carried foreign currency debts on its balance sheet.

However, these debts are FULLY PROTECTED against any foreign exchange

fluctuations through derivative transactions (swaps), which replace the exchange risk

for variation in the basic Brazilian interest rate (CDI).

Capital Increase

On January 24, 2014, the Board of Directors meeting was held to approve the

signing of the Share Subscription Agreement signed with Tiger Global Brazil, LLC and

Tiger Global Long Opportunities Brazil, LLC (Tiger Global Long Opportunities Brazil,

LLC together with Tiger Global Brazil, LLC, the "Investor") and the Controller of the

Company, Lojas Americanas S.A., for a private capital stock increase to be approved at

an Extraordinary Shareholders Meeting of the Company, in the amount of R$ 2.38

billion, through the private placement of 95,200,000 registered, non-par value

common shares, at an issue price of R$ 25.00 per share. The capital stock increase is

aimed at improving the Company's capital structure and the resources obtained

through its realization will be allocated to the amortization of the Company's debt. The

capital increase will allow the Company to continue investing in the pillars of its

business, accelerating its growth and consolidate its leadership position in the market,

which aims to better serve its customers.

Net Working Capital

On December 31, 2013, consolidated net working capital was 25 days, representing

an improvement of 49 days compared with 74 days recorded on December 31, 2012.

B2W Digital, confirming its commitment to maximize shareholder value, continues

to work to manage working capital variables. Thus, opportunities to improve internal

processes and supplier relationships have been implemented, and we are certain that

better levels can be achieved.

GRI Content

About the report

B2W Digital's second sustainability report meets the guidelines of the Global

Reporting Initiative (GRI), version G4, and reflects the Company's fundamental level of

commitment to corporate management practices related to issues that are most

relevant to the business.

The information in this reporting cycle, including 26 environmental, social and

economic indicators on which we are reporting, refer to the main activities of all

business units of the Company, including its headquarters and distribution centers,

developed between January 1 and December 31, 2013 [G4-17, G4-28]. The 2012

sustainability report [G4-29] was our previous report, based on the GRI, application

level B, version G3, so we consider this report to be an important part of the advances

we have adopted, as this second edition is based upon the latest version of the GRI.

To satisfy the requirements of the G4 version of the GRI, in 2013, we completed the

materiality process, which is detailed in the following topic. Thus, our report for this

second cycle is based on those issues that are considered priorities for our

management, according to the perceptions of internal and external stakeholders who

participated in engagement promoting activities (with customers, suppliers, partners,

and experts on sustainability and retail sales issues). The issues mentioned by these

stakeholders are addressed in every chapter. To systematize the information we have

reported, we relied on the involvement of professionals from all corporate sectors.

We reiterate that via this annual report [G4-30] we are demonstrating our

commitment to strengthening all channels of communication with our stakeholders.

To contact the company and obtain more details on the contents of this publication,

please send an e-mail to cia.verde@lasa.com.br. [G4-31]

Application Level

To meet the requirements of the GRI, version G4 essential, we have responded to the

general contents of G4-1 to G4-34, and G4-56, specified in the GRI Index and marked

in brackets in the corresponding texts. Similarly, in relation to specific contents, for

each material aspect we have correlated our indicators, which are also detailed the GRI

table.

Materiality as a guideline

In 2013, we took an important step in the engagement of our key stakeholders, as we

concluded the materiality process that was started in 2012. The Principle of Materiality

is one of the most important guidelines disseminated by the GRI and another

international organization, AccountAbility – both of which are international

benchmarks in sustainability. This tool, which focuses attention of key stakeholders,

has helped companies to identify those issues that are most relevant to their businesses.

It is for this reason that we decided to adopt it to guide our second sustainability report,

which is based on the GRI model, version G4. [G4-18]

In 2013, we had an opportunity to explore this issue with our stakeholders. Our first

consultation in this area was with retail and sustainability experts in 2012, which we

addressed in our first sustainability report that was published in accordance with GRI

model, version G3. And the results of those first conversations have recently undergone

a re-reading. Accordingly, as we proceed with dialogue strategies that have already

been initiated, we believe that we will evolve towards a better understanding of the

perceptions of our internal and external audiences on priority issues that relate to our

e-commerce activities.

To more deeply sensitize the Company as regards societal perceptions about our

sustainability activities and to best define strategic themes for our business, we hired a

specialized consulting firm that conducted an online consultation and received over

2,900 responses from customers, suppliers, associates and members of the G30. Eight

in-depth interviews were also conducted with four of the Company’s executives, as well

as four sustainability experts who came from, respectively, the Akatu Institute, the São

Paulo Supermarket Association (APAS) and Getúlio Vargas Foundation’s Center for

Retail Excellence (GVCEV). [G4-24, G4-25, G4-26]

In addition to conducting interviews and consultations to arrive at the results and

recommendations presented, the consultancy analyzed internal documents of the

Company, as well as national and international sectoral studies conducted by

recognized organizations, such as AccountAbility, APAS, the Dom Cabral Foundation

and the AKATU Institute. The GRI-G4 guidelines, coupled with a range of international

standards from AccountAbility (AA 1000), which focused on stakeholder engagement,

were also crucial tools in the process.

In the following list, we present the ten most important issues for our business, from

the perspective of respondents from internal and external constituencies. The results of

the identification and the prioritization of strategic issues were, in turn, analyzed and

compared to generate a materiality matrix, which is also illustrated in this chapter.

[G4-19, G4-27]

STRATEGIC ISSUES [G4-20, G4-21]

Material theme

Extent of impacts *

(within the business)

Extent of impacts*

(in the value

chain)

GRI-related aspects

Chapter addressed

Monitoring supplier practices

- Suppliers across Brazil and near the corporate HQ and distribution centers

• Compulsory labor • Human rights evaluation of suppliers

Governance

Supplier engagement and development

Reduction of environmental impacts and the efficient use of resources

Associates and top management

Communities nearby the corporate HQ and distribution centers

Suppliers in general

Customers

• Economic performance • Energy • Emissions • Effluent and waste • Products and services • Transportation • General

l

GHG emissions profile

Eco-efficiency opportunities

Disposal of products and packaging

Sustainable buildings

After-sales servisse

Associates and top management

Suppliers in general

Customers

• Customers’ health and safety

• Labeling of products and services

• Sales & marketing communications

• Customer privacy

Proximity to the customer

Quality in customer relationships (customer service, warranty services, and consumer rights)

Consumer education

Working conditions and employee development

Associates and top management

- • Employment • Workplace health and safety • Training and education

Human resources management

Investor returns and financial health of the business

Associates and top management

Investors

Suppliers in general

Customers

Economic performance

Economic performance

Materiality Matrix

We recognize that the issues referenced here are challenging, not only for us but also

for other companies in both traditional and digital retail operations. However, as has

been demonstrated in this sustainability report, we have achieved significant progress

in finding solutions to issues that have been flagged as priorities, including those that

correlate with the GRI indicator themes, about which we have offered

responses. However, the challenges are ongoing and we know, to evolve further, we

need to prepare ourselves to face them with creativity and dynamism, which are

notable features of doing business the B2W Digital way.

In this respect, our approach will be to continuously improve our management

mechanisms and tools, with the aim of adding value to the Company’s operations and

mitigating negative impacts of products, services and operations, as well as expanding

social assistance, to which we are also committed. To meet the needs of society, we rely

on the support of our associates and, particularly, through the activities of the Green

Company. This initiative has driven us towards excellence in applying the concept of

sustainability in corporate practices and strengthening communication processes with

stakeholders.

We must also remain alert to the perceptions of our stakeholders and to other

opportunities for dialogue. In the next report, we intend to have still more answers to

strategic issues referenced in the query segments. To achieve this, we reiterate that we

are committed to continuously improving our communication channels with society

and identifying the principal trends in the dissemination of the sustainability-related

information as it pertains to retailing. We shall also remain focused on identifying

and/or creating innovative tools and management solutions for use in the Company

over the short- and medium-term. Accordingly, we aim to minimize potential risks,

strengthen relationships and increasingly please our customers and other stakeholders.

“Our whole strategy is defined such that we are a company with a focus on

social responsibility, environmental initiatives and concern for people.”

(Executive interviewee)

GRI Index [G4-32]

Description External

verification Page/Response

G4-1 President’s message - Management Message

G4-2

Description of key

impacts, risks and

opportunities

Socio-Environmental

Management/Green

Company

G4-3 Name of

organization

Organizational Profile/The

Company

G4-4

Primary brands,

products and/or

services

Organizational Profile/The

Company

Description External

verification Page/Response

G4-5

Location of

organization’s

headquarters

Organizational Profile/The

Company

G4-6

Countries where the

organization’s

principal operations

are located or those

that are specifically

relevant to the

sustainability topics

covered in the report

Organizational Profile/The

Company

G4-7 Nature of ownership

and legal form

Organizational Profile/The

Company

G4-8

Markets in which the

organization

operates

Organizational Profile/The

Company

G4-9 Scale of the

organization

Organizational Profile/The

Company

G4-10 Profile of employees

Human Resource

Management/Profile of our

associates

G4-11

Percentage of total

employees covered

by collective

bargaining

agreements

Our associates will

continue to be covered by

collective bargaining

agreements.

Description External

verification Page/Response

G4-12

Description of the

organization’s

supply chain

Customers: Our greatest

asset/Suppliers network

G4-13

Significant changes

regarding the

organization’s size,

structure, ownership,

or its supply chain

Customers: Our greatest

asset

G4-14

Description of

whether and how the

precautionary

approach or

principle is

addressed by the

organization

Socio-Environmental

Management/Green

Company

G4-15

Externally

developed charters,

principles, or other

initiatives to which

the organization

subscribes or which

it endorses

In 2013, our Company

signed on to the UN

Global Compact,

committing ourselves to

strengthen corporate

practices in respect of

human rights, the

environment and business

ethics.

G4-16

Participation in

national or

international

associations and

organizations

In 2013, the Company

became a member of the

Institute for Retail

Development (IDV), with

the aim of participating in

the discussion of topics of

interest to the industry, as

well as keeping abreast of

best practices as they are

disseminated by the

institution.

Description External

verification Page/Response

G4-17

Entities included in

the consolidated

financial statements

and entities not

covered by the

report

GRI Content/About the

report

G4-18

Explain the process

for defining the

report content

GRI Content/About the

report

Materiality

G4-19 List of all material

aspects GRI content/Materiality

G4-20

Aspect Boundary,

within the

organization, for

each material aspect

GRI content/Materiality

G4-21

Aspect Boundary,

outside the

organization, for

each material aspect

GRI content/Materiality

G4-22

Restatements of

information

provided in earlier

reports

There was no restatement

of information contained in

the 2012 report.

Description External

verification Page/Response

G4-23

Significant changes

from previous

reporting periods in

the Scope and

Aspect Boundaries

The materiality process

was completed in 2013, so

there are no changes in

scope and boundaries in

relation to previous

reports.

G4-24

List of stakeholder

groups engaged by

the organization

About the

report/Materiality

G4-25

Basis for

identification and

selection of

stakeholders with

whom to engage

GRI Content/About the

report/Materiality

G4-26

Organization’s

approach to

stakeholder

engagement

Socio-Environmental

Management/Sustainable

Communications About

the report/Materiality

G4-27

For each group of

stakeholders, key

topics and concerns

that have been raised

through stakeholder

engagement

GRI Content/About the

report/Materiality

G4-28 Reporting period GRI Content/About the

report

G4-29 Date of most recent

previous report

GRI Content/About the

report

Description External

verification Page/Response

G4-30 Reporting cycle GRI Content/About the

report

G4-31

Contact for

questions regarding

the report or its

contents

GRI Content/About the

report

G4-32

‘In accordance’

option chosen by the

organization and the

location of the GRI

Content Index

GRI Content/About the

report

G4-33

Organization’s

policy and current

practice with regard

to seeking external

assurance for the

report

This second cycle of GRI

model-based reporting

does not have external

verification.

G4-34

Governance

structure of the

organization

Governance

G4-56

Organization’s

values, principles,

standards and norms

of behavior

Human Resource

Management/Essential

training

G4-DMA Form of

management

GHG emissions

profile/Logistics

G4-EC2

Financial

implications and

other risks and

opportunities arising

from climate change

GHG emissions

profile/Logistics

Description External

verification Page/Response

G4-DMA Form of

management

Human Resource

Management/Profile of our

associates

G4-EC6 Local hiring

Human Resource

Management/Profile of our

associates

G4-DMA Form of

management

Socio-Environmental

Management/Corporate

citizenship

G4-EC7

Impact of

infrastructure

investments

provided for public

benefit

Socio-Environmental

Management/Corporate

citizenship

G4-EC8

Description of

significant indirect

economic impacts

Socio-Environmental

Management/Corporate

citizenship

G4-DMA Form of

management

Socio-Environmental

Management/GHG

emissions profile

G4-EN3

Power consumption

within the

organization

Socio-Environmental

Management/GHG

emissions profile

G4-EN6 Reduction of energy

consumption

Socio-Environmental

Management/GHG

emissions profile

G4-DMA Form of

management -

Description External

verification Page/Response

G4-EN12

Significant impact of

activities, products

and services on

biodiversity

The Company’s

distribution centers and

administrative buildings

are not protected within

and/or adjacent to high

biodiversity areas. Thus,

the business does not have

any significant impact on

biodiversity.

G4-DMA Form of

management

Socio-Environmental

Management/GHG

emissions profile

G4-EN15 Direct emissions of

greenhouse gases

Socio-Environmental

Management/GHG

emissions profile

G4-EN16

Indirect emissions of

greenhouse gases

from power

purchases

Socio-Environmental

Management/GHG

emissions profile

G4-EN17

Other indirect

emissions of

greenhouse gases

GHG emissions profile

Description External

verification Page/Response

G4-EN21

Emissions of NOx,

SOx and other

significant

atmospheric

emissions

The Company’s operations

do not generate

atmospheric emissions

(persistent organic

pollutants, volatile organic

compounds, fugitive

emissions, hazardous air

pollutants, particulate

matter, etc.) in significant

quantities.

G4-DMA Form of

management

Socio-Environmental

Management

G4-EN26

Protected water

bodies and related

habitats, and

biodiversity value

All water used by the

organization is discharged

into the sewage treatment

network, with no

discharges that

significantly affect water

bodies and related habitats.

G4-DMA Form of

management

Socio-Environmental

Management/Opportunities

for eco-efficiency

G4-EN27

Initiatives to

mitigate

environmental

impacts

Socio-Environmental

Management/Opportunities

for eco-efficiency

Description External

verification Page/Response

G4-DMA Form of

management

Socio-Environmental

Management

G4-EN29

Value of significant

fines and total

number of sanctions

for non-compliance

with laws or

regulations

In 2013 there were no

significant fines or

penalties levied (i.e. those

over R$ 10,000) for

environmental non-

compliance.

G4-DMA Form of

management

GHG emissions

profile/Logistics

G4-EN30

Significant

environmental

impacts of

transporting

products and

members of the

workforce

GHG emissions

profile/Logistics

G4-DMA Form of

management

Socio-Environmental

Management/Opportunities

for eco-efficiency

G4-EN31

Total investments

and expenditures on

environmental

protection

Socio-Environmental

Management/Opportunities

for eco-efficiency

G4-DMA Form of

management

Human Resource

Management/Profile of our

associates

Description External

verification Page/Response

G4-LA2

Comparison of

employee benefits,

full-time vs.

temporary

All of our associates work

as full-time, indefinite-

term employees, therefore,

there has been no change

in the benefits the

Company offers.

G4-DMA Form of

management

Human Resource

Management/Profile of our

associates

G4-LA5

Percentage of total

workforce

represented in

formal health and

safety committees

Human Resource

Management/Profile of our

associates

G4-DMA Form of

management

Human Resource

Management/Investing in

talent

G4-LA9 Average hours of

training per year

Human Resource

Management/Investing in

talent

G4-LA11

Percentage of

employees receiving

performance reviews

Human Resource

Management/Investing in

talent

Description External

verification Page/Response

G4-DMA Form of

management

Customers: Our greatest

asset/Suppliers network

G4-HR6

Operations and

suppliers identified

as having significant

risk of forced or

compulsory labor,

and measures taken

Customers: Our greatest

asset/Suppliers network

G4-DMA Form of

management

Customers: Our greatest

asset/Suppliers network

G4-HR10

Percentage of new

suppliers that were

screened using

human rights criteria

Customers: Our greatest

asset/Suppliers network

G4-DMA Form of

management

Customers: Our greatest

asset/Quality control

G4-PR2

Non-compliance

related to the

impacts of products

and services

Customers: Our greatest

asset/Quality control

G4-DMA Form of

management

Customers: Our greatest

asset/Direct contact

Description External

verification Page/Response

G4-PR7

Incidents of non-

compliance

concerning

communications

about products and

services

Customers: Our greatest

asset/Direct contact

G4-PR8

Total number of

substantiated

complaints regarding

breaches of customer

privacy and losses of

customer data

Customers: Our greatest

asset/Privacy concerns

Masthead

COORDINATION

Institutional Relations Department

Sustainability Department

Investor Relations Department

GRI CONSULTING, WRITING AND EDITING

Report Sustentabilidade

PROOFREADING

Assertiva Produções Editoriais

GRAPHIC DESIGN AND LAYOUT

B2W Digital

PHOTOGRAPHY

Image Database

CORPORATE INFORMATION

B2W Digital – Head Offices

Address: Rua Sacadura Cabral, 102, Saúde, Rio de Janeiro, RJ. CEP: 20081-902