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Good morning, everyone.

Thank you for waiting. Welcome to Magalu conference call related to our first quarter 2024. For those of you who need simultaneous interpreting, please click on the interpretation button, the globe icon at the bottom of your screen, and choose the language of your preference, Portuguese or English. This event is being recorded and will be available on the company's IR website at ri.com. The link to the presentation in English is also available in the chat. During the presentation, all participants will be in listen-only mode. Then we will begin the Q&A session. In order to ask questions, the Q&A icon can be clicked at the bottom of your screen. Write your name, company, and language of your question. When announced, a prompt to enable your mic will appear on your screen, and then you should enable your mic to continue with your question. Questions received in writing will be answered later by our investor relations team. I'll turn the floor now to Fred Trajano, CEO of Magalu. Fred, you may begin. Good morning, everyone. Thank you for joining us in Magalu's earnings conference call to discuss 1Q24 results. Okay, and I am here with the whole management of the company. And again, all of the officers will be available to answer your questions at the end of the presentation. Well, the first quarter of 2024, I guess the right way to describe it is that it was a historical achievement for the company. The numbers speak for themselves. We had some highlights that were quite significant. in a macroeconomic context, which is still challenging for all retailers in Brazil. In this context, with all of these situations, interest rates still high, increasing taxes, and all of the macroeconomic issues broadly discussed in the news, still the company posted significant growth. of 54%, with a 7.4% margin in Q1, a quarter which is normally with an unfavorable seasonality in retail and also retail in terms of credit. This 7.4% margin means a 2.5 percentage point increase over Q123. At the same time, we increased the EBITDA by 54%. Below the EBITDA line, we had a 39% decrease in financial expenses. There was a declining SILIC interest rate, 13 high, down to 11 in Q1, but still we had a 39% decrease in financial expenses. which enabled us to post a positive result of 30 million bureaus of adjusted net income in Q124. I would like to stress that even in our best years, never in a quarter, in an yearly comparison, never did we have a $600 million delta in EBIT. So for income before tax, we improved $700 million compared to the same quarter last year. Of course, with all of the situations from last year, the macroeconomic situation was worse. It's not ideal, but even with this difficult context, We saw so many companies in difficulties in their operations, and still we managed. With a lot of hard work, discipline, and management, discipline in controlling expenses, in managing margins, and with a lot of effort, we were able to improve by 600 million bureaus our EBIT. So I think that this is a result to be celebrated. Of course, we are relying that the macroeconomic scenario will improve and that we will continue with our hard work. We have a very favorable outlook ahead of us, but we need to stop, acknowledge, and clearly understand what was done and value what was done in terms of the outcome of our work. I think that in addition to the accounting part, I think it is very important to value this quarter. Roberto Bellissimo is going to detail this in a moment, which is this is the cash generation, operating cash generation. This is a big highlight for the quarter, considering 12 months, and in April, in actually March 2024, it was $2.7 billion. double what we had in the period ending in March of 2023. For the first time in a long time in 2021, we were able to end the quarter with basically the same cash as the end of the year. We ended last year with 9.1 billion in our cash in the end. of this quarter with $9 billion in cash. In the same period last year, we had reduced the company's cash by $3 billion. We had a funding of $1.250 billion in this period, but we also paid $900 million in debentures. And so this has an impact on our cash. So for many years now, Q1 didn't present such a positive cash dynamic as the first quarter of 2024, clearly showing that our work undoubtedly gave us good fruits in practically all of the line items of the balance sheet. Speaking about the debt, we paid 3 billion in BRL, 1 billion in BRL in Q1 and the other 2 billion now in April. In the end of last year, we spoke a lot about this There were a lot of concerns and we practically annihilated these concerns with our debt payment. The next debt maturing in the company is only in the end of 2025. So the company has no bank debts any longer for the short term. And I think that This is an indication of the great operating result, evolution, working capital management by the company. So now, with the funding, we have a very favorable outlook to resume investments and to step on the gas of our projects, which I will detail in a moment. From the standpoint of sales, I would like to highlight that we were able to grow. Despite a comparison base of last year, I don't know if you remember, but in the earnings call of Q123, I had mentioned that the company started paying default. And we hadn't passed through the default in Q123. Only about 25% of default passed through. So mainly the 1P operation of Magaloop had a very hard comparison base because we had the price increase and had not passed through the tax increase to our prices. And we had to pass through in one quarter 350 million, and there it was 1.5 billion. And that's what we had to pass through to our prices. We did this pass through along the year, and in Q1 of this year, this was totally passed through, and this meant an evolution of the gross margin of the company in 6.2 percentage points. And also, our services income also increased. Forbiddable speak about this, including a significant increase in the sale of insurance. And the increase of the marketplace take rate. The marketplace once again contributed a lot to improve our result, gross margin and EBITDA margin of the company. So a number of fronts. And the default base will cool off along the quarters. We have passed through less default last year in Q1 of 23. And progressively, we passed through the default increase. And as of the second half, we are going to have a much easier comparison base to highlight our one-piece sales. But I would like to highlight the best performance of our brick-and-mortar stores in the last two and a half years. I guess that whenever there's a crisis, the market asks about the future of physical stores. When the crisis is over, the physical stores are shown to be resilient, not just for the whole system as a whole, but as an abundant importance. Thank you. 0.7 percentage point with the gradual macroeconomic improvement like i said it's it's not totally improved but macroeconomically speaking it's better the debt service of individuals fell from 8.3 to 7.3 data from the brazilian central bank so that now the households have more money to buy and after a long period after covid There was a hangover. People bought a lot during COVID, stopped buying after COVID, and now are buying again. So we see an improvement cycle beginning again. Another highlight for physical stores, which is important, is that with the return of default, the difference in Internet prices compared to physical stores reduced, because in the Internet, we would pay... fewer taxes in 1P, not just Megalo. All companies and the physical stores found it harder to compete with the online e-commerce. With the arrival of default, the taxes for online increased, so the price gap between on and offline reduces. Physical stores become more competitive and they were convenient. People like to go to the stores. It's convenient. Now in April, this trend became significantly more marked. April was a spectacular month for brick and mortar stores, showing that this trend that we saw in the Q4 and now confirmed in Q1 is maintained. And we have a physical store position that no other competitor has. We have a huge opportunity for this general, which was once again shown to be resilient. It's very important to note this, and I'd like to congratulate all the operational team and the physical stores of Magalodi. They did brilliant work, and they continue to do even better in Q2. Now I'd like to speak a little about e-commerce. I spoke a little about 1P. 1P was at a slight decrease in the quarter. The total was 1% growth because 3P increased. 1P. not just in the controlling Magalu, but in the controlled companies, Epoca, Kaboom, et cetera, they all had increasing default. All of them had to pass through default along the year. So we had a comparison base of first Q23 with no pass-through of default, which kind of made sales a little harder. But we were able to pass through default. We were able to significantly increase the margins of our 1P operation in all of the channels of the group. in this Q1. And we already see 1B resuming growth starting in April, showing that, indeed, the big point about growth was not competition. It was the default comparison base of last year. We are comfortable and confident that from now on, this 1B trend tends to accelerate. I would also like to highlight the growth of our marketplace. I think that of all channels, the biggest profitability delta that we had was in the marketplace. We increased EBITDA by 2.5% compared to last year. the marketplace increased more than that significantly more it is one of the channels that contributed the most to our improvement in operating profit and contribution margin we want to have a profitable channel and we want to grow only if we have a high profitability If we look at the track record, it grew 39% per annum. It grew 6% this quarter, but it has contributed significantly to our bottom line. In the future, well, now that we finished the best through-off take rates in Q2 of last year, again, the marketplace will find an easier scenario as of the second quarter. And now starting in Q2, the focus of 1P brick-and-mortar stores and 3P continues to be increasing profitability. Well, the COVID pandemic is behind us, and we have a reality for digital companies that was correct, that sales growth has necessarily to be coupled with profit increase. The focus of Magalu this year continues to be increasing the income, and we're going to deliver this. Sales growth, when it comes, will be coupled with profit increase, preferably when profit increase was greater than sales growth. We want to continue to increase our margins. 7.4 for the quarter is an achievement. It is a consensus of the market for the whole year. We delivered in last season, so we want to continue to surprise positively the market, particularly in the operating markets. profit line item. We will grow and all channels, we believe, will grow. The month of April is already pointing in that direction. On the next slide, still on the marketplace, we can see the growth and take rate along the quarters. Q1, 21, 22, 23, now 24. And the cash margin. which is almost like a contribution margin for 3P in the same period, we see significant growth in profitability of our marketplace, contributing a lot to our EBITDA, just like the default was through in 1B, just like the operating leverage of physical stores with the same store sales growth for brick-and-mortar stores. Here I'd like to highlight the number of sellers. We continue to grow the number of sellers. We have 350,000 sellers, more than 138 million offers published on our marketplace. I would like to highlight that this is despite the fact that we have had a lot of sellers and offerings disconnected from the marketplace. We are in the Encanta Magalu year. Delight Magalu. We always have a theme. And the theme this year is to improve our NPS. It is already above the market, but we want to have even more. exemplary levels of NPS for all operations of the group. And we have done significant work with the sellers so that they can operate at the same NPS level of 1B in the stores, which is at around 80. 3B NPS is still at 65. It was 57 two years ago. We're already at 65. And we want to make strides forward for the NPS of the sellers to be at the same level as 1B, which is an NPS of 80, a number which is absolutely high globally in terms of customer satisfaction. This is one of the focus of the company for this year. More than increasing the number of sellers, we are very much focused on on improving the level of service of our sellers already with a high level of profitability, as I mentioned. To improve this level of service and the profitability, one of the main competitive, sustainable competitive differentials of Magalu, which was always the 1P competitive differential, which was an online multi-channel operation that led us to become leaders in the Brazilian 1P e-commerce industry. We are replicating this competitive edge for 3P, which is the truly multi-channel fulfillment. It is the only true multi-channel fulfillment in the market. What I mean is that 100% of the seller's inventories in our fulfillment operation have the same benefits of our multi-channel approach. The inventories are in the same DCs of our own goods inventories, our 1P. Our DC is more than 20 DCs all over Brazil. A good part of them are available for 3P fulfillment as well. Once the inventory of the sellers lie in the same CD of the 1P, they can benefit from store pickup with free shipping. They benefit from the 1P NPS, which is at around 80, as I mentioned. So as we increase The share of 3P, the fulfillment by Magalu, our NPS will increase. The 3P NPS, which I said, which is below 1P, and also the profitability of 3P because a multi-channel operation bears a much lower cost than a standard logistics operation. We are already at 20%. We launched this service last year. Today, 20% of 3P orders are already on this format, and we'll step on the gas. The highlight goes to the Northeast D.C., which is doing fantastic work. We have very high levels of service there, a high inventory turnover, and the operation is only growing faster. For one year of operation to reach 20% of 3P orders is a fantastic achievement and level of service of 95%. This is the focus of the operation because one of the big differentials of our 3P is to enjoy the same multi-channel performance of 1P, which gives us an array of options and a level of service to consumers way above the average of the market and with a lower cost. In terms of opportunities, while I spoke a lot about CapEx, we are evolving a lot. Our Magalu ads platform increased by 70% the revenue of sellers on the platform. We continue with robust 470 million monthly visits. The trend is that they will increase in the future in all of the companies of the ecosystem. And we have here the conviction that Magalu Ads is going to be one of the big drivers of additional EBITDA for the company looking forward. We have a significant portion of the capex increase of the company to develop Magalu Ads platform. And in the OPEX, to develop the team, to increase the go-to-market team, to make this a reality. And not just sellers, but big brands as well. We're very excited. This is an agenda that has been successful in digital companies around the world. Recently, we were in India visiting many companies there for benchmarking. They had successful ads initiatives there. This happened everywhere in the world. There's no reason why we wouldn't be able to monetize this huge audience of channels. Kaboom, Net Shoes, Epoca, they're all leaders in their categories and in all of our content channels with a significant audience. So, of course, this agenda will be successful and will translate into significant return of investment. Another highlight of the quarter is what we launched in Rio Summit, the first public services of Magalu Cloud. We had a pre-launch of the cloud in December. Now, we have the self-service of Magalu Cloud, object storage Turia, which is for identity and access management, and ID Magalu, a user authentication solution, the single sign-on. These services have already been launched. Many of the services will be launched along the year. We have more than 100 clients already using our cloud services. So, again, here we are very excited about the additional possible contributions to our margins and to our service margins. This was a highlight in the quarter. Magalu Cloud and Magalu Ads. We had a long phase of investment. I would like to highlight some businesses of the group. Magalu Banking, we're going to speak about this. It's a company that was acquired. It was Huffington Tech. It became Magalu Bank. We have a very good result of that. I spoke about logistics. The logistics companies are part of Magalog, the logistics company that provides services to the ecosystem. In terms of channel two, channels that became a highlight were Netshoes, They posted a fantastic performance in the quarter. The marketplace already has a 44% share of marketplace in total sales, 13 million of adjusted net income in Q1, and a significant improvement in working capital. As of April, Netshoes has started accelerating its growth in the high two-digit. We have 7 million active customers. We have a number of good figures in net shares in an operation, which in the past historically was deficient, but recently it's been generating cash, improving results, you name it, very positive figures. The same goes for Kaboom. Kaboom posted another very good quarter, 33% marketplace growth, 31 million in adjusted net income, and the launch of its first physical store. within the Magalu unit on TET. We are running some experiences testing to have some companies of the ecosystem with brick and mortar stores. We are testing them at the unit of TET and in some others. So this is an important way for Kabum to have products in display or to sell products that were returned, whose seal was broken. Well, it's a very successful experience, which I am sure will be another successful initiative looking forward. Lastly, as I said, we are in the Incanta Magalu year. Magalu delights. And we had, like I said, two years very much directed to improving results and excessive and almost exclusive focus on improving the margin, increasing efficiency, driving down costs, improving pricing. And we felt that this year... After being successful in this agenda, we were successful in regaining profitability by Magalu. We thought that we should focus our eyes and ears to improve the level of service. To give an idea, corporate NPS at the company increased from 66 to 73, an average of 8 for 1P, physical stores, an average of 65 for 3P. We're improving on all channels, and we want to get the NPS close to 80, which is the one BN store level. But we have a significant improvement with just a few months of Encanta Magalu. In this process, there are a number of initiatives, not a silver bullet. We're talking about level of service, delivering fast services, improving returns, exchanges in all of the digital channels of the company, in all channels of the group, improving searches, have best offers, to make it easier for customers to find the best offering, faster delivery, more payment options at checkout, access management. We want to make it easier for customers to change their passwords, filters and recommendations, and again, A great focus on improving our after-sales, which is not easy to make after-sales delightful. A number of initiatives across the company, all leaders of the company are obsessed about this. There is no better competitive edge than having a level of service way above the average of the market. We already have that in 1P channel and stores. We want to take it to a whole new level across the channels, and we want to bring the 3P level of service to the same level. Fulfillment as well. The multi-channel 3P fulfillment will help us accelerate the process. And all improvement initiatives, several of development, user experience, other improvements in other fronts, business processes, and a focus that is important to – and the focus is moving in that direction. I'll turn the floor to Roberto to detail our financials, and then I'll be back for the Q&A. Thank you.

Good morning, everyone. Thank you for joining us today in our earnings release call for the first quarter of 2024. I will briefly go through the financial highlights. Fred has already said that we had $16 billion in total sales. We grew 3%, we grew online, offline, and then the next highlight is gross margin of almost 30%. We are growing significantly when compared to the previous year. Total EBITDA of 681 million, EBITDA margin of 7.4%, 30 million in adjusted net income, And it's worth noting that this quarter alone, we did not have any non-recurring events or expenses that were non-recurring. Accounting net income was very similar to the adjusted net income. And then we ended. with $9 billion in total cash in the quarter. In this next slide, again, we show the evolution of the EBITDA margin in the past quarters. I would like to highlight the main leverages. growth in our service revenue. Service revenue was up by over 10%, and this certainly contributed, again, to put us in a different level in terms of gross margin in the company. Both marketplace services also grew in a very speedy fashion. insurance and credit services in physical stores as well as through digital channels. So the insurance share has increased on the digital platform as well. Then we had the increase of gross merchandise margin. We had liquidación fantástica, just as we did Black Friday last year, more rational, much more, you know, customer-centric. We had a fulfillment expansion. We had market share gain in the physical stores with operating leverage. And Luisa, credit profitability in the second consecutive quarter also posted growth. you know, profits. Next slide shows the significant adjusted EBITDA margin evolution from 4.9 to 7.4. This is very much related to an increase in gross margin that was up by 2.6 points and mainly merchandise gross margin that was up by 2.6% this quarter. And it's also important to highlight that sales expenses, or SG&A, were almost flat in the quarter. There was only an increase of 2%. And even with increases in the marketplace segment, you know that that, you know, takes expenses up, but this is compensated through the gross margin. But it's important to say that last year, in the same quarter, we had non-recurring expenses of around 120 million BRLs. and we simply eliminated these non-recurring expenses. So we had an operating efficiency in terms of operating expenses. So the numbers were much better this quarter vis-a-vis last year. Next slide, we show the evolution of working capital. When we look at the last 12 months, there was an impressive evolution of $2.1 billion from March 2020 to March 24, and this is the result of a great evolution in inventory turnover and procurement in the past quarters, and as I was saying, in the last... call, we improved turnover, we reduced purchases, our working capital at the end of last year was much healthier. And this was also reflected early this year, because when we compare March to December, there is also some seasonality. But this quarter, the working capital balance was down by $700 million. This is totally related to the supply accounts that was down by $800 million due to seasonality. And because of that, this may come back in the coming quarters. But now, when we look at last year, the variation was much greater. And this year, the variation was quite smaller. And this... called for the need of prepayment and a much better cash flow and and i will show you that further on it's also important to to note that in addition to the turnover and the procurement timeline we reduce our inventory balance over by approximately 200 million brls and we also reduce the balance of taxes to be recovered in approximately 200 million brls this quarter and this contributed to the cash generation of the company as a whole. Now, when we look at financial expenses, the trend is quite positive. Maybe this is the first quarter where our financial expenses are lower when compared to the fourth quarter of the year before. And this is... quite an achievement because that represents almost six to seven hundred million left in financial expenses and this is positive for our results mostly influenced by improvements in working capital also impacted by reductions in cdi and improvement in our overall capital structure in this next slide we show the cash flow for the quarter it's it was the best Cash flow for a first quarter in our history, its balance, even though there was a variation in working capital, that was totally offset by our results. And at the same time, we maintained a total cash position that was quite solid. Capital increase contributed to the debt payment in January. Next slide, we show evolution in the last 12 months. Here you have the fast flow of all of our operations. We have $2.7 billion. This is a record number for the period. And this is very much related, once again, to the increase in EBITDA, variation of working capital, and reduction of expenses with prepayment. That is all part of that same calculation. In this next slide, we show the history of our quarterly payments. transactions, operating cash flow, which is much better than the first quarter of previous years. And in terms of the last 12 months, this is only comparable to the flow of 2020-2021 in the midst of the pandemic. So very positive flow and very strong for this current period. Moving to the next slide, here we show our net cash position. We increased our net cash position this quarter, going from 1.7 billion to 2.4, meaning that we generated almost 2 billion of cash flow in the last 12 months. Also, there was an increase in net cash. We paid debt, and at the same time, our cash position was kept at a high level. Our debt is now all long-term. Now we have the highlights of Magalu Bank, 25 billion in TPV, also growing 6% year-on-year, 8.6 million of fixed transactions with our proprietary technology. and in underacquiring almost $50 million in the first quarter, and some other new things on the seller side. The number of seller accounts continues to grow, reaching almost 100,000 digital seller accounts. The volume of transactions is getting close to 1 billion, and now sellers can activate the digital accounts using the portal alone. And they can also use the services of the digital account straight from the portal, and they can also apply for loans that are secured. Secured loans. This is something else, and this will certainly help the product to grow even more. Finally, talking about Louisa Kragi here, the highlight is the reduction in the level of delinquency. There has been a significant reduction. NPL over 90 days is dropping by 10%. It was 10%, and now it's 9.4%. And there is also a decrease vis-à-vis December because seasonally this is not the best period for delinquency. But once again, we managed to make things different. The coverage ratio increased at the beginning. We had lower provisions, lower cost of funding. We succeeded in operating efficiencies. We were able to reduce operating efficiencies. And once again, we posted net income of around $13 million at Louisa Khaji, reverting a negative result that was negative by $35 million. It is also worth mentioning that this month we agreed with our partner, Itaú, a new capital increase of about $1 billion, $500 million for every partner. Now Luiz Acrede is posting profits, and we see – good prospects for the coming quarters as well. So this capital increase will help LuisaCred to be more capitalized and to prepare it for the new growth cycle. With that, I conclude the financial highlights and I turn the floor back to Fred for his final remarks. Thank you. Thank you, Beto. I think that we could not conclude this presentation without talking about this immense strategy that has hit the state of Rio Grande do Sul. We've been in that state for 20 years. We have more than 2,000 employees working in that area. We have a deep love for the state and the people from that state. We are very solidary, not only that, but we are adopting concrete actions to support the state and its population in this dire moment. First of all, with our team, we have, out of the 2,000 employees, 160 of them had to leave their homes or they were heavily impacted, so we have a people, our people management team helping all of them. Magalu takes good care of its team. But beyond the team for the general population of the state, we are also donating mattresses for the shelters, NGOs, you know, city halls are receiving a lot of mattresses. This is just the beginning of this this effort, and as things evolve, we are constantly looking at requests from local organizations in terms of the operation. Six of our stores are closed. I mean, all of the others are operating again. The average daily sales remain the same. I mean, in terms of physical stores, nothing changed, and in terms of e-commerce, I mean, there was an impact, so e-commerce was mostly impacted. But I think things will get normal very soon. Still talking about our support to the local population, our partner, Tadif, decided to expand and include flooding coverage for all insurances sold in terms of extended guarantee. We have also an insurance for residence assistance. And in the past, we didn't have that coverage. But now... we are including these new coverages in the two products that we sell. And this is for Rio Grande do Sul alone. This is just an exception. We suspended collection and also credit card payments during this period. So we are absolutely solidary to the people of Rio Grande do Sul, and we are working diligently to help things go back to normal as soon as possible. And with that, I now turn the floor over to the analysts for their questions. And once again, as I often say, all of our executives and officers will be available to answer your questions. And then I will be moderating the Q&A. Thank you.