1Q21 Earnings Release

Barueri, April 26, 2021 - Smiles Fidelidade S.A. (B3: SMLS3), one of the largest frequent-flyer programs in Brazil with over 18 million members, announces its 1Q21 results. The financial and operational information in this report refers to the consolidated income (expenses) of Smiles Fidelidade S.A. and is presented in accordance with IFRS and in Brazilian reais (R$), except when indicated otherwise. The percentage changes may use more decimal places for the calculation than those shown in the document and are compared with the numbers of Smiles Fidelidade S.A.

Smiles Fidelidade S.A.

B3: SMLS3

Novo Mercado

Share Price: R$21.72

Number of Shares: 124,158,953

Market Cap: R$2.5 bi

(close: April 23, 2021)

ri.smiles.com.br

1Q21 Conference Call

April 27, 2021

In Portuguese and English:

(Simultaneous Translation)

11:00 a.m. (Brasília time)

10:00

Phone: +55 (11) 3181-8565 or +1 (412) 717-9627

Password: Smiles

Webcast (Portuguese)

Webcast (English)

SMILES CONTACTS

Hugo Assumpção

Chief Financial Officer and Investor Relations Officer

Diogo Lopes

Finance and Investor

Relations Manager

Message From Management

We started 2021 with a new chapter in Smiles' history: GOL's incorporation. From now on, together, Smiles and Gol will bring the most value from several operational synergies, create new opportunities, even more significant and strategic in the turbulent seas of a market deeply affected by the Covid-19 pandemic.

Unfortunately, after an upward trend, with indicators improving every month, the second wave was a new blow to the segment and made us, once again, adjust the operation to ensure the best possible experience for our customers in a scenario of drastic flight reduction and, therefore, directly affecting our indicators.

In parallel to this, Smiles has shown its strength and recorded about 6% growth in 1Q21 X 1Q20, totaling 18.5 million members. The GOL Smiles co-branded credit card, relaunched last year, also continues bringing great results, with a 9.6% increase in the active customer base compared 1Q 2020.

In operation, while our members are unable to safely fulfill the dream of traveling, we expand the opportunities for them to accumulate or redeem miles in the most convenient way and adapted to the moment. Shopping Smiles, our marketplace, remains with special offers drawn up with our retail partners to offer consumers even more

benefits to redeem or accumulate their miles. In March, gross sales result (GMW), which is our main indicator, was nearly three times higher over March 2020. Over 40% of Smiles customer base has already made at least one purchase on our marketplace.

For those who needed to postpone their plans, we expanded our service channels and implemented, still in the pilot phase, the service via WhatsApp to reschedule flights, offering practicality and convenience to our customers. Another well-accepted feature was Meu Bonus Vip, for Smiles Club's members, which now allows transferring credit card points with up to 50% bonus - without relying on sales and with advantages according to the chosen plan.

We know we still have a long way to go, but we trust that the company's new phase will start another successful journey, with Smiles' preserved competitive advantages, leveraging new businesses and new opportunities,

bringing together the strengths and value of both companies - Smiles and GOL - further intensifying the ecosystem and partnerships. We will be stronger to face our market's competitive challenges, capturing the entire business value.

To all those who, over the past eight years, have believed in Smiles' proposal and ability to make it happen, thank you very much.

Mariana Vargas

Investor Relations Specialist

Highlights

Income Statement - IFRS

2

Balance Sheet

3

Cash Flow Statements

4

Business Model

Smiles started as a single frequent-flyer program but has evolved into its current coalition model, which features several unique characteristics that allow for the accrual and redemption of miles from GOL flights and its international partner airlines, as well as Brazil's leading commercial banks, including co-branded cards issued by Bradesco, Banco do Brasil and Santander, and a vast network of retail partners. The current model works through (i) the accrual of miles by members when they purchase airline tickets with GOL or other partner airlines or products and services from business and financial partners; Smiles miles being acquired through the frequent-flyer of these customers to those businesses, and (ii) award redemptions by members when they exchange their miles for flights on GOL and other partner airlines or products and services offered by commercial and financial partners.

Our primary sources of revenues come from (i) redeemed miles revenues, represented by tickets and awards in our network of airline, commercial and financial partners, (ii) interest income between the date the miles were accrued and the date they were redeemed, and (iii) breakage revenues if issued miles expire without being redeemed.

Glossary

The ratio between the number of redeemed and accrued miles in each period.

Breakage Estimate: Miles expired and not redeemed; it may be expressed as a number of miles, an amount in Reais or a percentage of miles issued, depending on the context.

Free Float: Shares owned by non-controlling shareholders.

Miles: The redemption rights of Smiles Program members sold to commercial partners.

Products or services provided to members by a commercial partner resulting from redeeming the customer's frequent-flyer miles.

Reward Products: Product or service, excluding air tickets, provided to members by a commercial partner from redeeming the customer's frequent-flyer miles.

Smiles Program: A coalition program for several companies, including GOL Linhas Aéreas Inteligentes S.A.

Smiles & Money: A means of redeeming air tickets or products by combining money and miles.

This release may contain forward-looking statements related to business prospects, estimates of operating and financial results, and growth prospects for Smiles. These are merely projections and, as such, are based exclusively on management's expectations for Smiles. Such forward-looking statements substantially depend on external factors and risks presented in Smiles' disclosure documents and are therefore subject to change without notice. Independent auditors did not review the Company's non-financial information. Some of the report's figures may differ from the statements

5

Attachments

  • Original document
  • Permalink

Disclaimer

Smiles Fidelidade SA published this content on 26 April 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 April 2021 23:20:07 UTC.