Raia Drogasil S.A.

Ladies and gentlemen, thank you for standing by, and welcome to RD Saúde's second quarter of 2026 earnings call. The slide deck can be found at the company's investor relations website at ri.rdsaude.com.br. This conference replay will also be made available at the website. All participants will be on audition-only mode during the company's presentation. After the presentation, we will hold a question and answer session. Before we begin, we would like to inform you that forward-looking statements are being made under the safe harbor of the Securities Litigation Reform Act of 1996. Forward-looking statements are based on the company's management beliefs and assumptions. as well as on information currently available to the company. Forward-looking statements do not guarantee performance. They involve risks, uncertainties, and assumptions as they refer to future events and therefore depend on circumstances that may or may not occur. Investors should understand that overall economic conditions, the industry conditions, and other operating factors may affect the company's future results. and lead to results that differ materially from those expressed in such forward-looking statements. Today with us at the RD Saudis studio are Mr. Renato Raduan, CEO, and Flavio Correa, Head of Investor Relations and Corporate Affairs. I'd like to turn the conference over now to Mr. Raduan. Please go ahead, sir. Hello, good morning, everybody, and welcome to our second quarter earnings call. As always, it is a pleasure to be here with you to delve deeper into our numbers that I'm sure you have taken a look at already. And good morning, Flavio. Hello, good morning, everybody. Good morning, Renato. I'll try to be brief in the beginning of the presentation, try to give you an overview of the figures, and leave some time for Q&A. Before we go into the operational details, I'd like to tell you that we are very happy with the second quarter results. They were very solid, very consistent, both in absolute and relative numbers comparing our company against our previous results and the industry in general. We finished the quarter with 3,287 units. In 12 months' time, We will tell you that we reached 4,000 units next year, but so far the number is 3,687. We opened 76 units and closed three. Our IRR is extremely healthy, and it is contributing to the results. Besides the expansion to 3,687 units, We have 53 million active customers in the last 12 months, almost one-fourth of the Brazilian population, and 119 million tickets in the quarter, with an MPS of 91. Fabio, this number is part of the landscape at this point. It seems like nobody cares about this number anymore, but... Drogasil S.A. And that is also a signal that our plan is working in terms of improving the pharmacy staff and that effort has been recognized by the customers. We closed the quarter with a growth of $12.8 billion, 18.3% growth. And we should remember that last year, the GLP-1 sales put us in a very good position. We already had Monjaro in May last year. So although the sales base was already very high, we were able to grow by 18.3%. And in our mature stores, the growth was 10.9%, almost 11%. Eight percentage points greater than the CMED index. Drogasil S.A. So that's why this result, as I said, is very consistent and solid. And as for digital, we reached almost 4 billion, 55.2% growth, and a penetration of 31%. I was actually doing the math, and of course it is just theoretical exercise. The digital side is so strong because of our brick-and-mortar presence, but... If we were to split the digital from the brick-and-mortar operation, the digital operation would very soon be the first player in the abrafarma industry. and I think that that will happen in the near future. It's a very solid result. And that took us to $1 billion in adjusted EBITDA, 18% growth with a stable margin of 8%. We were able to absorb a lower CMAT inflation adjustment, and we were able to keep an EBITDA margin that is stable. Our adjusted net income, EBT also grew by 33.4%, which is good, but once your profit before taxes grows, what happens is that taxes will grow as well. We had to pay more taxes. Our free cash flow came to $550 million with $1,190,000,000 in total generation. And our financial leverage should be highlighted as well because it is the result of a reduction in our net debt and our increase in our EBITDA. Those two factors led to a reduction of 0.5 in terms of leverage. Now I'd like to... turn it over to Flavio but before that again it is a quarter in which we grew very consistently by almost 2 billion going from 10.8 to 12.8 and 18.3% rather quarter on quarter and year on year actually and again GLP-1 contributed a lot to this growth, but even if we were to exclude GLP-1 and private label, all the categories would have grown at about 13.5%. It is very stable, very healthy. HPC, as you can see here, I told you in the last quarter that it grew by 12.8%, but repellents and sunscreens had not sold so much because it rained a lot. And if we were to exclude that, the growth would have been 14%. And that's exactly what you can see here, this structural growth that I told you about. It's important to remind you of all of that because HPC, It builds credibility in everything that we tell you every quarter. So you can see that the growth was very healthy across the board, excluding GLP-1. Now over to the next slide. Once again, you can see the growth of 18.3% overall and almost 11% in mature stores. We should remember, Flavio, that 11% Drogasil S.A. The customers are recognizing your effort, and the gap between ourselves and the competitors is increasing more and more. And also we have an expansion engine that cannot be replicated by anyone, and that will continue to make that gap even larger. Now let me give you some more details about these numbers, but again, this is old news. We gained 170 BIPs in market share across all regions. In São Paulo, 230 BIPs. In the Southeast region as well, 140 BIPs. In the Midwest, 240 BIPs. Not so much in the South. In the south, the expansion pace is a little slower. We're gaining less share there. And the northeast and the north, we can see a 150 bps expansion. Those are all significant growth rates that are not happening just in one or another region, but across the board around the country. And here on this side of the chart, I would like to highlight this. Less than 40% of our pharmacy footprint is where everything started in Sao Paulo. We are a nationwide network. We're not just constrained to Sao Paulo. Most of our business comes from other regions in the country. And that is important because if we are to grow in the next five to ten years, We already have strong brands and the way paved for our growth in the rest of the country. 60% of our pharmacies, of our brands and teams and inventory located all around the country, which will allow us to grow around the country. And the competitors cannot do the same. We have 13% market share in the Northeast, 12% in the South, 14% in the Southeast. Of course, we are not going to reach 35% in those places overnight. But look at what happened in the Midwest, 25% share already. So we have a great possibility of growing all around the country with the assets that we've built over the years, which our competitors cannot do. Another thing that I like to remind you of is that our EBITDA includes 25% of the stores that are not mature yet, that are not at their optimal level of revenue generation. So we need to take that into account as well. If 90% of the stores were mature, our EBITDA would be higher than that. And now I'd like to turn it over to Favio and I'll come back later. Hello, good morning everybody. Well, let me give you some more details about the digital business. It is a huge success, very consolidated. This is an activity that generated 3.9 billion reals in revenue this quarter. with a 52% year-on-year growth. So although it accounts for 30% of our sales, it's still growing with 52% growth year-on-year. That's very positive, not only on quantitative terms, but also qualitative terms as well. We have our proprietary channel, the app, consolidating 80% of our digital sales. And that also comes from our operating strength with 96% of the deliveries being performed in less than 60 minutes, less than one hour. That is an undisputed strength for us. If you put that together with an 81 NPS and with the access that our customers have to our website and app with 1.1 billion visits that takes us to this incredible success and solid numbers now when it comes to gross profit we came to 28.9% in a percentage of our gross revenue and it consolidates our operating resilience here we have sales gains and lower losses, and they almost offset the negative points because we had a higher share of GLP-1 in our sales this quarter. The CMAT rate was 30 to 40 bps lower than last year, so it pushed our results a little lower, but we have our operating strength, which almost... was able to offset the lower points coming from last year. Now let's take a look at the expenses. Our selling expenses came to 18.6%. We have been talking about that for a few quarters now, right, Renato? We have been talking about how we have been working with our result. The top line can grow by 18% because of the strength of our brand and operations. And in the recent quarters, we decided to propose a different employee value proposition to our staff, and that took our expenses to a higher level, but it can deliver the results that we expect to deliver to the customers. So we are making investments here. It's not really about expenses. And this amount, Drogasil S.A.

lease costs.

Now let's take a look at the G&A expenses. This is a big strength that we have. We changed the structure last year, and we have already captured the effects. We did so in the second quarter last year. We were able to cut off almost 40 bips. in G&A expenses in 2025. And now in 2026, we are also capturing another 30 bps due to our solidity in our management of expenses and the company as a whole, but also because of the dilution coming from the growth in our sales. So this result makes us very happy about the performance this quarter. And Drogasil S.A. Things have been very challenging for retail as a whole, and the second quarter, when we look around to other retail segments, things have been very tough, but our bottom line is growing by 18%, which is just another way of showing how solid we are.