São Paulo, Brazil, November 10, 2010 – Grupo Pão de Açúcar – (BM&FBOVESPA: PCAR5; NYSE: CBD) announces its results for the 3rd quarter of 2010 (3Q10). The Company’s operating and financial information was prepared in accordance with the accounting practices adopted in Brazil and Brazilian Corporate Law, and is presented in Brazilian Reais, as follows: (i) on a consolidated basis, which includes the full operating and financial results of Sendas Distribuidora and Assaí Atacadista and, as of the third quarter of 2009, Globex Utilidades S.A.; and (ii) on a GPA Food basis, which entirely excludes the operating and financial results of Globex Utilidades S.A., pursuant to current Corporate Law (Law 6404). All comparisons are with the third quarter of 2009 (3Q09), except where stated otherwise. The information about the 3Q09 and 9M09 has not been reviewed by the auditors.

In the third quarter of 2010, Grupo Pão de Açúcar’s gross sales increased by 10.0% over the same period last year to R$6,219.4 million, while net sales climbed by 10.1% to R$5,585.9 million.

In same‐store terms (i.e. stores that have been operational for at least 12 months), gross sales grew by 7.7%, giving real growth of 3.0% when deflated by the IPCA consumer price index. Net sales recorded nominal growth of 7.8%.

Also on a same‐store basis, gross food sales grew by 7.6% in the period, with beverages and personal care & household cleaning products doing particularly well. Non‐food sales climbed by 7.8%, led by the general merchandise and textile category, which recorded higher increases than the non‐food average.

It is worth noting that same‐store non‐food sales would have moved up by 13.1% if fuel sales, which fell by 11.6% year‐on‐year and accounted for 4% of total sales, had been excluded.

The Group’s best‐performing formats were Assaí and Extra Supermercados, which posted gross same‐store sales growth of 19.6% and 24.1% respectively, thanks to a higher customer flow and an increase in the average ticket.

In addition, new strategies to increase the number of products per ticket were implemented in all formats.

In the first nine months of 2010, GPA reported gross sales of R$18,849.6 million and net sales of R$16,943.8 million, 13.7% and 15.1% up, respectively, on the first nine months of 2009.

In same‐store terms, gross sales climbed by 10.4%, giving real growth of 5.2% when deflated by the IPCA, while net sales recorded nominal growth of 11.7%. Sales of food and non‐food products increased by 9.6% and 13.1%, respectively.

In 4Q10, the Company reaffirmed its commitment to its GPA Food gross sales guidance of R$26.0 billion in 2010.

In the third quarter, GPA’s gross profit totaled R$1,443.9 million, 12.1% up year‐on‐year, accompanied by a gross margin of 25.9%, up by 50 bps over 3Q09 and also an improvement over the 24.8% recorded in 2Q10. Excluding Assaí, GPA’s gross margin would have come to 27.5%, 80 bps higher than 3Q09.

The main factors contributing to the year‐on‐year improvement were:

(i) more advantageous negotiations with suppliers;

(ii) improved operational management; and

(iii) implementation of a pricing management tool.

In the first nine months, gross profit amounted to R$4,248.6 million, 13.9% up on the same period last year, accompanied by a gross margin of 25.1%, 20 bps less than the 25.3% recorded in 9M09, also impacted by the change in the ICMS tax substitution regime.

In the third quarter, consolidated gross profit came to R$1,744.2 million, with a margin of 24.6%, 80 bps more than the 23.8% recorded in 3Q09 despite the increased share of electronics/household appliances in the product mix. These items have lower margins than food products.

In the first nine months, gross profit totaled R$5,051.4 million, a 29.8% improvement over the first nine months of 2009, while the gross margin stood at 24.0%.

In the third quarter, total operating expenses (including selling, general and administrative expenses) increased by 10.3% year‐on‐year to R$1,027.5 million, chiefly due to four factors:

(i) higher personnel and social benefit expenses;

(ii) increased expenses with advertising and marketing;

(iii) expenses with technology to support business expansion in the coming years; and

(iv) opening of new stores

Despite these upturns, GPA managed to maintain operating expenses at 18.4% as a percentage of net sales, same level as presented in 3Q09, which demonstrates dilution of other expenses.

In the first nine months, total operating expenses came to R$3,095.3 million, 13.9% more than in 9M09, representing 18.3% of net sales, 20 bps less than the 18.5% recorded in the same period last year.

In the third quarter, operating expenses amounted to R$1,250.8 million, equivalent to 17.6% of net sales, 50 bps less than in 3Q09.

In the first nine months, total operating expenses stood at R$3,752.6 million, equivalent to 17.8% of net sales, 50 bps down year‐on‐year.

Assaí recorded an EBITDA margin of 3.5% in 3Q10, 10 bps more than in 3Q09 (further details in the section on Assaí).

In the first nine months, EBITDA totaled R$1,153.4 million, growth of 13.8%, with a margin of 6.8%, versus 6.9% in 9M09.

In the third quarter, consolidated EBITDA stood at R$493.5 million, 41.8% up on 3Q09, with a margin of 7.0%, a 130 bps improvement over 3Q09.

In the first nine months, EBITDA amounted to R$1,298.8 million, with a margin of 6.2%.

The Company is reaffirming its beginning‐of‐year guidance of exceeding EBITDA of R$1.8 billion by year‐end.

In the third quarter, the net financial expense came to R$102.1 million, equivalent to 1.8% of net sales, chiefly due to the increase in the net debt from R$597 million in 3Q09 to R$1,788 million in 3Q10 and the period upturn in the SELIC base rate (see page 7 below, “Net Debt”)

The net financial expense of R$102.1 million in 3Q10 was the result of three factors:

(i) interest on the net bank debt totaling R$54.4 million, representing 1.0% of net sales, 30 bps higher than the 2Q10 ratio, fueled by the period increase in net debt and the SELIC base rate.

(ii) Discounted receivables of R$28.2 million, equivalent to 0.5% of net sales, in line with the 2Q10 figure, despite the increase in the SELIC base rate. The average term is of 36 days and an average cost of 109.5% of CDI.

(iii) Other assets and liabilities restated by the CDI rate (i.e. taxes paid in installments and court deposits included in the balance sheet), totaling R$19.5 million, equivalent to 0.3% of net sales.

Net Debt

Net debt increased, as shown in the graph below, mainly due to: (i) expenditure of R$598 million on acquisitions, including R$471 million paid to Globex’s shareholders; (ii) investments of R$98 million in the expansion of Assaí; and (iii) a R$194 million loan with Globex.

 (1) end of period

In the third quarter, GPA’s consolidated net financial expense was R$191.7 million, equivalent to 2.7% of net sales.

It is worth noting the recognition of R$18.0 million in non‐recurring costs from Globex this quarter, due to the change in the criterion for booking the cost of discounted receivables, which are now recognized in the same month as the discount.

Excluding this non‐recurring effect, the net financial expense would have been R$173.7 million, equivalent to 2.4% of net sales.

In the first nine months, the net financial expense came to R$465.2 million, or R$415.2 million excluding the nonrecurring effect of R$ 50.0 million in 9M10.

CONSOLIDATED

Since the third quarter of 2009, FIC (Financeira Itaú CBD) has also been operating Globex's credit cards and, given their respective shareholders’ equities, GPA now retains a 36% interest in FIC, excluding Globex, while Globex retains a 14% stake. GPA’s consolidated interest in FIC remains at 50%.

In the third quarter, FIC, including Globex’s operations, accounted for 15.0% of total sales, closing the period with 7.4 million clients. Default remained under control, thanks to a rigorous credit‐granting policy.

As a result, FIC’s equity income was R$11.7 million, six times more than the same period a year earlier. Of this total, R$9.5 million went to GPA and R$2.3 million to Globex.

This performance was in line with the Group’s strategy of increasing the FIC card’s share of sales, making it the best payment option in the stores and e‐commerce operations, with exclusive benefits and advantages for cardholders.

In the first nine months, equity income, including Globex’s operations, totaled R$36.0 million, of which R$26.4 million went to GPA and R$9.6 million to Globex.

In the third quarter, net income came to R$138.0 million and the net margin stood at 2.5%.

It is worth noting that if we exclude the non‐recurring effects in 3Q10 (REFIS complement in Rio de Janeiro of a negative R$2.2 million and restructuring expenses from the ZBB process totaling a negative R$6.3 million), the adjusted net income totaled R$143.6 million.

In the first nine months, net income totaled R$349.9 million, equivalent to 2.1% of net sales. Excluding nonrecurring items in 9M10, net income would have increased by 4.9% to R$400.0 million.

In the third quarter, Assaí recorded gross sales of R$816.2 million, including the stores in São Paulo, Ceará, Rio de Janeiro, Pernambuco and Tocantins(6), 47.5% up on 3Q09, fueled by the sales of new channels, organic growth, conversion of stores, and the format’s improved operating result. Net sales accompanied the gross sales growth, climbing to R$736.5 million.

Gross profit totaled R$108.5 million, with a margin of 14.7%, 10 bps up on 3Q09.

Total operating expenses came to R$82.9 million, equivalent to 11.3% of net sales, very close to the 3Q09 ratio, but 80 bps down on 2Q10.

EBITDA amounted to R$25.6 million, 46.9% up on 3Q09, with a margin of 3.5%, i.e. up by 100 bps, evidence of an improved operating performance despite the new stores under maturation.

In the first nine months (6), Assaí posted gross sales of R$2,237.3 million and net sales of R$2,021.1 million, 49.2% and 49.6% up, respectively, on 9M09.

Gross profit totaled R$288.0 million, with a margin of 14.2%, 10 bps down on the 14.3% margin recorded in 9M09, due to investments in competitive pricing at the beginning of 2010.

Total operating expenses came to R$227.6 million, representing 11.3% of net sales, 90 bps less than the same period last year.

EBITDA stood at R$60.4 million, 143.9% up year‐on‐year, with a margin of 3.0%, a 120 bps improvement.

(6) The Tocantins store was included in the figures for all months in 2010.

In the third quarter, gross sales came to R$ 1,720.1 million, 41.7% up on the same period in 2009, while net sales grew by 49.3% to R$ 1,514.5 million.

Gross profit stood at R$300.3 million, 86.9% up on the same period last year, with a gross margin of 19.8%, a 400 bps improvement. 

Total operating expenses came to R$223.2million, representing 14.7% of net sales, a 190 bps reduction compared to the 3Q09.

EBITDA was a positive R$77.1 million, with a margin of 5.1%, versus a negative R$8.3 million in 3Q09.

The net financial result was a negative R$89.6 million. It is worth noting that, in this quarter, there was a nonrecurring expense of R$18.0 million due to the change in the criterion for booking the cost of discounted receivables. Excluding this effect, the net financial expense would reach R$71.6 million, representing 4.7% of net sales.

Equity income, considering Globex’s 14% interest in FIC, came to R$2.3 million. This performance was in line with the strategy of increasing the FIC card’s share of sales, making it the best payment option in the Group’s stores and e‐commerce operations, with exclusive benefits and advantages for card‐holders.

The net result was a loss of R$18.3 million, a R$25.9 million improvement over the loss recorded in 3Q09.

Globex's investments totaled R$9.4 million, less than the R$15.9 million recorded in 3Q09. The reduction was due to the Company’s decision to concentrate first on capitalizing the existing assets and maximizing the synergies with Casas Bahia.

GPA FOOD

In the third quarter, GPA invested a total of R$293.1 million in 3Q10, versus R$215.7 million in 3Q09.

The main quarterly investments were:

• R$93.7 million in the opening and construction of new stores and the acquisition of strategic sites; 

• R$110.6 million in store renovations and conversions;

• R$88.7 million in infrastructure (technology and logistics) and others.

In the first nine months, the Group invested R$682.5 million, 58.8% more than in 9M09. Investments should reach R$1.3 billion by year‐end.

In this quarter, ten new stores were opened in the quarter: 2 Extra Supermercado stores, 5 Extra Fácil stores and 2 Assaí stores in São Paulo and 1 Extra Hipermercado in Piauí. In addition, 1 CompreBem store was converted into an Assaí store and 12 CompreBem stores were converted into Extra Supermercado format in São Paulo, 6 Sendas stores were converted into Extra Supermercados in Rio de Janeiro, 1 Extra Hipermercado store was converted into the Assaí format in São Paulo, and 2 Sendas stores were converted into Assaí stores in Rio de Janeiro. It is worth noting that the sales area expanded by 1.0% in 3Q10 and 2.5% in 9M10.

By the end of 2010, GPA expects to record sales area growth of 7.0% over 2009, giving a total sales area of 1.5 million sq.m., which includes the opening of 5 more Extra Hipermercado stores and 9 Assaí stores in 4Q10. 

On November 10, 2010, the Board of Directors approved the prepayment of interim dividends of R$0.08 per class A preferred share and R$ 0.0727272 per common share. Dividends in 3Q10 will total R$19.6 million, in accordance with the Company’s Dividend Payment Policy, approved by the Board of Directors’ Meeting of August 3, 2009.

As for the fourth quarter, after the end of the fiscal year and the approval of the corresponding financial statements, the Company will pay shareholders the minimum mandatory dividends, calculated in accordance with Corporate Law, less the amounts prepaid throughout 2010.

Dividends in relation to the third quarter of 2010 will be paid on December 1, 2010. Shareholders registered as such on November 17, 2010 will be entitled to receive the payment. As of November 18, 2010, shares will be traded ex‐dividends until the payment date.

The following information has not been reviewed by the independent auditors. 

Consolidated Income Statement Based on Law 11,638/07 (R$ thousand)