Companhia Brslra Dst Adr

Good morning and thank you for standing by. Welcome to the conference call to announce the results of the third quarter of 2024 of GPA. Those who need simultaneous interpretation, we have this tool available on the platform. To access the interpretation, click on the interpretation button on the globe icon at the bottom of your Zoom screen and choose your preferred language, Portuguese or English. For those who don't speak... For listening to the video conference in English, there is an option to mute the original audio in Portuguese by clicking on Mute Original Audio. This video conference is being recorded and will be made available at the company's IR website, where the complete materials of the earnings release is available. You can also download the presentation from the chat icon. During the company's presentations, All participants will be in listen-only mode. Then we are going to start the questions and answers session. To ask a question, please click on the Q&A icon at the bottom of your Zoom screen and write your question to join the line. When you are announced, a prompt to activate your microphone will appear on your screen, and then you must activate your microphone to ask questions. Please ask all your questions at once. The information contained in this presentation and any statements that may be made during this conference call regarding GPAs, business prospects, projections, operational and financial goals, are beliefs and assumptions of the company's management, and are based on information currently available. Forward-looking statements are not guarantee of performance. They involve risks, uncertainties and assumptions, because they refer to future events and therefore depend on circumstances that may or may not occur. Investors should understand that general economic conditions, market conditions and other operational factors may affect the future performance of GPA and may lead to results that will be materially different from those expressed in such forward-looking statements. Today, with us, we have GPA CEO Marcelo Pimentel and CFO and IRO Rafael Russovski. Now I'm going to give the floor to Mr. Marcelo Pimentel to start the presentation. Mr. Pimentel, please.

It's all about bread, all about bread I'll be happy It's all about bread, all about bread All about bread Take the fresh fruit Salad always green Know where the food comes from The bread that already knows you Who knows what you like And does everything just to see you happy Has everything, everything of bread for you You happy is all bread, all bread, all bread Pelo planeta Pra ficar tudo bem Tudo pra sua saúde No seu dia a dia Ainda bem que o pão faz tudo E tem mais e mais vantagens Tudo que você sempre quis Tudo de pão que o pão faz É só pra te ver mais feliz Você feliz É tudo de pão Tudo de pão Você Bye. Bye. Bye.

Good morning, everyone. Thank you so much for your interest in attending the conference call to announce the results of the third quarter of 2024. We chose to open this meeting with a video of the new Pão de Açúcar campaign that we launched in September and which highlights the strong bond between Pão and its customers, in addition to rescuing the theme of happiness, which is so typical of the brand. I'll talk a little bit more about this campaign, which is very symbolic and important for us throughout the presentation. Now, starting the presentation, the numbers that we are reporting confirm the consistency and assertiveness of our work and show a constant evolution with every relevant with very relevant highlights and solid operational advances. On slide number four, I start with the highlights of this quarter. We need to celebrate the advance of our adjusted EBITDA margin, which reached the highest level since 2021, 8.9% in the quarter, and which has been evolving for... eight consecutive quarters. The gross margin has reached 27.7, growing 1.1 percentage points compared to the third quarter of 2023, reflecting the acceleration of gains in commercial negotiations and operational improvement in our brands and formats. I also highlight the generation of free operating cash of 366 million in one year, Any improvement in 2016 million compared to the last 12 months ended in the third quarter of 2023, showing the consistent advance in our profitability. We grew in same-store sales by 5.0%, a result higher than in the second quarter last year, which was 3.4%, with an acceleration of the supermarket format. Extra grew 5.8% and Pão de Açúcar grew 4.6%. The proximity format maintains its consistency and advanced 4.6%. In e-commerce, we continue to be leaders in the food industry in the country. with advances both in 1P and 3P channels. We grew 17.2% this quarter, with an amazing penetration in perishables, reaching more than 35% of the baskets sold in digital. In conclusion, I want to highlight the progress in the reduction of pre-IFRS 16 financial leverage, which reached 2.9 times compared to 8.8 times one year ago. Now, moving to the next slide, let's open the highlights with the strategic pillars as I always comment with you. Starting with top line, so total sales have reached 4.8 billion in Q3. If we exclude the direct sales model of allies, we reach a total of 4.6 billion, which represents a growth of 4.5% in this quarter. We had a lower impact of seasonality compared to Q2-24, with an annual growth accelerating month after month, and same-store sales also accelerating compared to the previous quarter. We grew 5% in a period driven by Pão de Açúcar and Extra brands. Extra has been having gain after gain, quarter after quarter, and in this period it reached 5.8% growth in same-store sales, the highest growth in this quarter since 2022, driven by increase in volume, especially imperishable items. I would like to highlight the effectiveness of the review of our mix and category management that we started in the second quarter. We continue to advance this work and we hope to end the end of the year, which also includes a conversion of 60 stores of the brand, 27 of which have already been completed. Throughout this year, we will carry out the review of clustering and pricing and promotions in stores and the strategic review of our assortment. The results so far are quite promising, both in margin and in sales, confirming the potential of the brand in its positioning as a mainstream neighborhood supermarket. In Pão, we had an acceleration in sales as compared to the previous quarter. We reached 4.6 in LFL, also with an increase in volume and average prices. We also highlight the perishables categories. In a proximity format, we grew 4.6 in same-store sales, with a significant contribution from stores that we opened from 2022 onwards. These units have a double-digit sales growth in LFL, which shows assertiveness in the expansion project of this format. As in previous quarters, we grew 1.5 percentage points in market share compared to small supermarkets in Greater São Paulo, thereby confirming our expansion strategy focusing on this market. In the customer pillar, we have maintained a level of excellence with 82 points in NPS with continuous evolution of the quality of service to our customers. It's worth mentioning that this advance was seven points compared to the third quarter 2023 and an impressive 20 points as compared to Q2 2022 when we started this reconnection journey. And we saw improvement in all our brands, which demonstrates our consistency in these processes. The higher level of customer satisfaction is translated by the growth of our share of wallet, especially premium customers. We had an evolution of 5 percentage points in the last 12 months, added to constant growth of the premium and valuable customer base. which is a fundamental part of the business strategy of Pão de Açúcar. Also, to reinforce this connection with Pão de Açúcar customers, we launched a new campaign in September, which you could see at the beginning of our meeting. And it says, if you were happy, this is so good. The campaign highlights the strong bond between Pão in each audience, highlighting the theme of happiness. In an increasingly omni-channel shopping scenario, the campaign emphasizes that our brand is available wherever customers want, offering good value in product services and connection with the customer, adding to inspiring and creating moments with happiness. The campaign significantly raised the brand recall, especially in freshness and quality. Another relevant point was increasing the number of downloads of our app, which more than doubled compared to the previous year. Another important level for customer loyalty Our private label already accounts for 21.7% of total sales of our brands, of all our companies, with emphasis on extra reaching 25.9% penetration. Private label items are present in 8 out of 10 shopping baskets. The value proposition of this business is to offer high-quality products comparable to category leaders at extremely competitive prices. Advancing in the digital pillar we recorded another quarter of strong growth. We reached a 35% share in perishables, an important milestone that contributes to sustaining the profitability strategy of our e-commerce.