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Good morning, everyone, and thank you for waiting. Welcome to the earnings call for our second quarter in 2023 at Açaí Atacadiza. I'd like to highlight, if you need simultaneous translation, we have those two available on our platform. Thus, you must select the interpretation button through the globe icon on the bottom part of your screen and choose your language of preference, Portuguese or English. We'd like to let you know that this earnings call is being recorded and will be provided on the company's IR website at ir.asae.com.br, where you can already find the earnings release. During our presentation, all participants will have their mics off. Soon after, we'll begin the Q&A session. To submit a question, please select the Q&A icon on the bottom part of your screen. Write your name, company and language to enter the queue. As you are announced, a request to open up your mic will appear on your screen. Then you'll open up your mic to be able to submit questions. We'd like to instruct you that all questions should be submitted at once. We also want to highlight the information in this presentation and possible statements that could exist during the video conference related to business perspectives, forecasts, and operational targets and financial targets that I say represent beliefs and assumptions of the company's management, as well as information that's currently available. Future statements are not a guarantee of performance. They involve risks, uncertainties, and assumptions because they relate to future events and thus rely on circumstances that could or not occur. Investors must understand that general economic conditions, market conditions, and other operational factors can affect the future performance at SAE and lead to results that differ materially from those presented in future statements. Now, we'll pass the floor on to Gabriel Hedo, the Investor Relations Director at ASAI. Thank you. Good morning, everyone. Once again, we'll be participating in this earnings call for the second quarter of 23 at SAE. I'm going to present the executives we have present, Belmiro Gomes, our CEO, Denis Sabaghi, our CFO, and our VPs, Lamy dos Anjos and Anderson Castillo with operations. Before we begin the presentation, I'll pass the floor on to Belmiro for his initial remarks.

Obrigado.

Thank you, Gabi. Good morning, everyone. I'd like to thank you all for your presence as you're participating in this earnings call today. And we'll begin by talking about our second quarter. The second quarter, of course, in 23 is a very challenging year. The numbers we're going to be presenting here, first of all, I want to thank our teams and everyone in our stores from different areas that have been working intensely throughout the first quarter to deliver the results that we have at this moment. It's very important for the company, considering the amount of the expansions and new stores that SA has been adding to its base. and even for this year, which should be the second biggest year when it comes to store openings historically in our acai trajectory. So I want to highlight the main points in the second quarter. It's a quarter that is a quarter that has been... Very important when it comes to deflation in some categories where you had a real big peak in prices in the beginning of the pandemic. And then there's this movement towards a drop in prices, especially for commodities, which impacts the sales and the same store sale base. As from the moment when you have this drop in prices, it is natural that our customers that are contractors, which represent about 40% of our sales, will reduce their level of purchases and stock as they see the prices. And a growing movement, just as we also perform some reductions whenever there's a drop in prices. When you have this contrary effect, you see consumers that are so very pressured with the payment of interest, their income levels are still very low. And so this is mainly due to the impact we had in same-store sales. in the second quarter and also the effect created last year with this movement that was done by SAE with the closing of the extra stores. At the end of the first quarter of 22, we had 105 hypermarket stores of the second biggest operator in this format in Brazil, which, of course, benefited most of the market, especially in Sao Paulo and Rio markets where you had the biggest amount of these stores. So, of course, there's a base effect that now we'll notice as we start reopening the extra stores. Besides this, in the second quarter, this is something very important. Due to many factors, we had a growth of 21%. We're adding, without the inflation, even with the deflation in food, we added a total volume of sales that represents almost 3 billion riyals, so a growth in total customer flow of about 25%, and we reached 70 million tickets sold. Within this quarter, they represent about 105, 110 million people going by the SAE stores. And this growth is mainly supported by the expansion and the conversions and transformations since 2009. One thing is if you convert from one format to another and the other is if you transform like from the hypermarket to the cash and carry, you need to have this heavy duty process for transforming the physical structure of the store. when it comes to construction, placing the equipment and really changing the entire concept that the store had so that it can have the necessary stock capacity, meet the needs of customers and also contractors. Sorry, also the small businesses, the B2B customers. So these are stores that are very well located. And as we had already mentioned initially, there was an expectation that there would be quick maturity in these stores and a drop or not very significant impact on results. But this is very visible when we look at the margins delivered in the second quarter, even with a huge amount of almost 35 percent of our sales area. with stores open for less than three years, we can still deliver a gross margin that's about 16%, with a variation of only 0.10% compared to what we delivered last year. Even with the impact of the provisional measure that started to be active in the 1st of May, that also had a marginal effect on our margin effect. So the margins have been very positive. An important highlight in this quarter is mainly in the expense lines, even with this amount of stores, Adding all these services, we have about 60 stores open last year, almost 100. When you look at the three-year period, expenses were extremely stable, with a variation of 9 to 9.3. So this is because we've already included in this percentage of expenses the cost of occupation in the stores that are still under maturity, personnel costs, and all of the trends and movements that are coming from this expansion process and maturity in the stores. So the expenses are a big highlight. And this variation diabetes is about 0.4 compared to the previous period, keeping up the delivery consistency and being able to grow sustainably. with our own cash generation and keeping up the levels of results even when submitted to a high growth rate. So Danny will highlight this a bit more in the EBIT and the net income, and we're going to be closing with margins even with the interest costs and the carryover costs and the level of debt and investments the company performed to be able to acquire the POSs And a real estate from the extra stores and also perform the transformations and conversions necessary. We are still able to deliver in this scenario. We believe there's going to be some changes in the interest rates. That will impact our costs and then that'll help us, of course, get back to the more normalized scenario. So we have strong cash generation capacity. We should also highlight this up ahead, which really makes the debt indicator drop compared to the first quarter, which is very close to 2.8 and now reaches 2.6. then moving on to the projects with the extra conversions we have at this moment a opening of 57 conversions we're still missing nine if you can go back to the previous slide we opened you can see a store in maca maca it has a store that was built it's a building that was built in 1988. Sorry, 1880. And we were able, so we had to do some renovation and restructuring. Now the company currently has 20 construction projects underway, which keeps us, allows us to have this estimate of approximately 30 new units this year. with an important participation also coming back through the organic expansion process since our land bank of projects is still being set up and the company really has a set of projects for organic store openings now in 2023 and 2024 and 2025. We can advance into the next slide, please. So the sales multiples and the performance of the extra stores, as I mentioned in the first quarter, we know how people are very anxious for the sales. But these are stores that have even less than eight months of full operation. So it's still a very new project. The first store openings were concentrated in August last year. Next month, we're still going to have like the first stores completing a full year anniversary of operations. And even with the impacts of deflation that we had, which, of course, will impact the same stores and the existing units as well in the new units, the stores already performed 2.5 in the sales multiples. And I think the main point here is that these stores continue to keep up their growth ramp up with an evolution of almost 10% compared to the second quarter, and especially delivering a EBITDA margin, which total EBITDA margin with a degradation of 0.4 in the total base, meaning that the expansion already came in very strongly with an EBITDA that's close to 6%, even with this short period of sales. So another topic we would like to also highlight within this group of stores that came around in the second batch of the hypermarkets, Açaí will start having a gross area. of 220,000 square meters, which represents probably this, it would be like the second biggest shopping in Latin America in total. It's 1,300 shop owners split between these units. And the focus in the company mainly was delivering, first of all, the a part that was from our operation. So this year we're completing this within the investments. We already have about half of these galleries complete. So this should help us when it comes to the revenue. And the revenue from these galleries in the stores are not considered in our lease line. So we received some questions about this. The company looks at the revenue coming from these galleries shops in the stores in our cash and carry stores and this revenue of the galleries come into the gross profit so these 1,300 small stores are going to help these stores with a bigger customer flow when it comes to maturity dilution of the rental costs and occupation costs that we have in the stores such as the property tax water sewer taxes and other fees so it's a really intense project with 220,000 square meters of rental space. And we received some questions even about this. And so it's important to highlight this point. Now I'll pass the phone to Denny and she'll talk about our EBITDA, our cost of debt results. And then after I'll come back a little more up ahead. Thank you so much. All right. Thank you, Bermudu. Good morning, everyone. And now, once again, moving on to slide five, where we're going to talk about EBITDA. We bring important evolution in RIAs quarter over quarter and also important evolution in the second quarter compared to last year and also in the quarter. In the semester, sorry, with 334 million reais and an EBITDA that already reaches 2 billion. So our margins have a little bit of pressure of about 7% compared to 7.4% last year. And this pressure is mainly due to the maturity gap. of the stores. So an important point to highlight here is that we have a store network with over one third of the stores and maturity. So 35% of these stores are in this maturity phase. So when we highlighted to you guys the evolution of the extra margins as an important point to highlight is that if we exclude the effects of the conversions and the margins of the conversions, then the EBITDA margin remains quite stable year over year. So here we have results that demonstrate the resilience of the company and This is a very important point, also reflects the maturity, and then we have a very stable margin year over year. So if we move on to the next slide, and I'm going to talk about our financial results, and here the results of 628 million, it's important to exclude some of the effects with the lease liabilities. So when we look at this parcel here, that's blue, we can see that there's a financial result pre-IFRS of 221 to 420. And this evolution of 200 million year over year is mostly related to the cost of debt and the biggest volume of debts as well. That's a result of the fundraising we performed in 2022 to be able to handle the expansion project at the company. to support our investments in expansion as well. So, to explain this variation, we can say that 7 million would be coming from these higher costs of debt, And the other 100 and some million are also related to the capitalized interest, which is already at a smaller amount than what it was before, since we already reached 90% of our conversion project for stores. So this kind of explains the variation in our financial results. So moving on to the right side of our slide, we have a lot of stability in our net debt and 7.9%. billion last year and strong cash generation as well which is an important point here in this slide where we end the last 12 months with a cash generation of 5.4 billion and improvement of 2.6 coming from especially from the management of the working capital. So for suppliers and stock, we have significant gains. And this strong generation is really what supported the investments of the company. So when we take a look at the first two lines of 3 billion riyals in these investments, that in the past 12 months represented almost 60 new stores and a sales area that grew significantly. and it's important to highlight that we grew 34% in our sales area and plus 1 billion which are the payments related to the acquisition of the purchase of the commercial real estate. So we supported this high level of investments besides the cost of debt that we bring in here with a total amount of 1.3 billion. So with this we have a net debt and going from 2.7 last year to 2.6. And if you remember, in the first quarter this year, we had a level of 2.8. So this is an important advance in the deleveraging of the company. And now I would like to also make another point here. Great, yeah, go back a bit. Okay, in this last little chart here, We would also like to highlight that we have the indicators and our ratios for depth. On the blue line, you can see how we present this and the release. We know that there are some analysts and investors that look at this indicator of 2.6, adding the payments up to GPA. We would be adding on maybe 0.8 on this indicator. But for the effects of contractual covenants that we have on our debt contracts, the A number for these contracts is the orange line. So we're taking a look at a difference of 1.8 to 2.6, and this 1.8 is what interacts with the three times covenant. So this slide basically and this graph is to present to you all that in regards to covenants, we are very comfortable with the levels that we have achieved at the moment. And when we look at the forecast in the future for deleveraging in a company and our commitments for payments to cash flows, we will have this deleveraging in a very gradual process, but also in 2024 and 2025 at levels that are a lot lower. So we're very comfortable with these numbers up ahead. Now, moving on to the next one, as we bring... Our net income, as we mentioned, the factors we presented during the presentation, so we have our financial results impacting our profits, stores under maturity, as I mentioned, and we'll end the quarter with 156 million. And evolution is very significant compared to the previous quarter because we end with a margin of 1%, and last quarter we had a margin of 0.5%. we have a revolution quarter-over-quarter and in the semester 228 million with a margin of 0.7 so these are the comments the main comments about these two slides now i'll pass the floor back to bow meter to talk about esg advances please okay thank you good danny and of course the company is the second biggest retailer in brazil with 76 uh employees 105 million people going through our stores and so that the equivalent to the Brazilian population comes to our stores in total. So we have an important target audience where stores are part. So this is a topic where there's always things you can improve and work with. But also within this quarter, with the exit of our former controller, our company became 100% fragmented capital. So With this, we become a full corporation and Açaí is recognized as a company that really focuses on ESG. We have 5.5% people with disabilities and we're above the legal quota. And some other important advances we've had, such as the reduction of our emissions in Scope 1 and Scope 2. And another interesting point is the Açaí Academy. to train small businesses and B2B customers. And so we've been able to train people and advanced a lot in these levels of reuse of the waste that reached 44%. We also had a special campaign to gather donations of... blankets and clothes as well for a special campaign for winter. And with the new board, ASAE also has two board members, two women board members in the board. We have a lot of work to do still because we have a total of nine members. Before we only had one woman, now we have Leila and Angiara. We have two now. And we also have important advances also when it comes to diversity, equality and opportunities. We have 43 people that are considered to be black or brown in leadership positions. This is a topic that we're also advancing constantly and in line with the concerns of the society and over 25% women in leadership positions. I also want to highlight that, I'm sorry, it's not on the presentation, but the company was once again signing up to the Great Place to Work, GPTW, as also among one of the 10 best retailers to work at. This is something we're super proud of. This is something where the company started being 60% fragmented, so the new board is really fully independent from the new board members. Five had never even been in contact personally or professionally. with me and so the company really has from a governance perspective some very recognized professionals highly qualified professionals that can support management and provide us comfort when it comes to governance especially for our shareholders so having said that uh we finished the presentation and we'd like to open up for q a thank you so much everyone now we'll begin our q a session We want to remind you that if you do have a question, you must select the Q&A icon on the bottom part of your screen, write your name, company, and language to enter the queue. As your name is announced, a request to open up your mic will appear on your screen. Then you must activate your mic to be able to submit questions. We'd like to ask that you please submit your questions all at once.