Sendas Distribuidora S.A. - ADR Stock price
Compare with Peer Group
📊 Peer Group
📈 What is it?
The peer group consists of the companies with the most similar business model. They serve as a benchmark for putting a stock into context.
🧮 How is it selected?
Based on similarity of business model, meaning companies from the same industry with comparable products and a similar customer base. That's the only way to compare apples to apples.
🏛️ Why does it matter?
Whether a stock is cheap or expensive is best judged by comparison. A P/E of 18 or an EV/FCF of 20 can look cheap or expensive depending on the yardstick. The peer group gives you the most accurate one: companies with a similar business model that operate under the same conditions.
🎯 What does it mean for investors?
When a metric sits below the peer average, the stock is valued more cheaply relative to its competitors, and above the average more expensively. A discount to the peer group can be an opportunity, but it can also have a reason (for example lower growth). The comparison is a starting point, not a verdict.
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Key metrics
📘 Market Capitalization
📈 What is it?
Market capitalization shows how much a company is currently worth on the stock market.
🧮 How is it calculated?
🏛️ Why is it important?
It helps classify companies by size (Large, Mid, Small Cap) and indicates their market presence and relative stability.
🧮 Calculation
🎯 What does this mean for investors?
- Large-cap companies tend to be more stable, often pay dividends, but may grow more slowly.
- Smaller firms may offer higher growth potential but come with more volatility.
- Market capitalization is a useful indicator of company size — but not a measure of whether a stock is undervalued or overvalued.
📘 Enterprise Value (EV)
📈 What is it?
Enterprise Value represents the total cost to acquire a company — including its debt and excluding its cash reserves.
🧮 How is it calculated?
(= Market Cap + Net Debt)
🏛️ Why is it important?
EV gives a more complete picture of a company's value than market cap alone and is used in key valuation ratios like EV/FCF or EV/Sales.
🧮 Calculation
🎯 What does this mean for investors?
- Enterprise Value shows the true cost of buying a company, including all financial obligations.
- It is more accurate than just looking at market cap, especially when comparing companies with different levels of debt or cash.
- Professional investors prefer EV-based multiples because they better reflect the company’s full financial footprint.
📘 Net Debt
📈 What is it?
Net Debt shows how much debt remains after subtracting a company’s available cash reserves.
🧮 How is it calculated?
🏛️ Why is it important?
It indicates how dependent a company is on borrowed money and how easily it can service its debt in the short term.
🧮 Calculation
🎯 What does this mean for investors?
- Low or negative net debt signals financial strength and flexibility.
- Companies with strong cash positions are better positioned in crises.
- High net debt increases financial risk — especially in environments with rising interest rates or economic downturns.
📘 Cash
📈 What is it?
Cash represents all liquid assets a company can access immediately — including cash, bank deposits, and short-term investments.
🧮 How is it calculated?
🏛️ Why is it important?
It reflects a company’s financial flexibility and resilience — enabling investments, buybacks, or buffer in downturns.
🧮 Calculation
🎯 What does this mean for investors?
- A strong cash position means greater room for maneuver and crisis resistance.
- Cash-rich companies can invest, pay down debt, or repurchase shares.
- But excess idle cash might indicate a lack of growth opportunities.
📘 Shares Outstanding
📈 What is it?
Shares outstanding represent the total number of a company’s shares currently held by investors — excluding treasury stock.
🧮 How is it calculated?
🏛️ Why is it important?
It’s the basis for key metrics like Earnings Per Share (EPS), Market Capitalization, or the Price/Earnings ratio (P/E).
🧮 Calculation
🎯 What does this mean for investors?
- Fewer shares in circulation typically increase earnings per share — making each share more valuable.
- Share buybacks reduce the number of shares and boost per-share metrics.
- Issuing new shares does the opposite — diluting shareholder value and lowering per-share figures.
📘 Price-to-Earnings Ratio (P/E)
📈 What is it?
The P/E ratio shows how many times a company's earnings per share are reflected in its current share price — in other words, how "expensive" the stock appears relative to its profits.
🧮 How is it calculated?
🏛️ Why is it important?
The P/E ratio is one of the most widely used valuation metrics. It helps investors assess whether a stock appears cheap or expensive compared to its earnings power.
🧮 Calculation
📊 P/E (TTM) = Based on earnings from the last 12 months (Trailing Twelve Months):🎯 What does this mean for investors?
- A low P/E may indicate undervaluation — or signal underlying issues.
- A high P/E may reflect strong growth expectations — or an overvalued stock.
📘 Price-to-Sales Ratio (P/S)
📈 What is it?
The P/S ratio shows how much investors are paying for $1 of the company’s revenue – regardless of profitability.
🧮 How is it calculated?
🏛️ Why is it important?
P/S is especially useful for evaluating growth companies or businesses not yet profitable. It reflects how the market values the company’s sales.
🧮 Calculation
Market Cap = $2.71b | Revenue (TTM) = $15.01b
Market Cap = $2.71b | Estimated Revenue = $15.89b
🎯 What does this mean for investors?
- A low P/S may indicate undervaluation — or low profitability.
- A high P/S can reflect strong growth expectations — or excessive optimism.
- Especially helpful when evaluating companies where profits are low, volatile, or negative.
📘 Enterprise Value to Sales (EV/Sales)
📈 What is it?
EV/Sales shows how much investors are paying for $1 of revenue — considering not just equity, but also debt and cash. It’s the capital structure–adjusted version of the P/S ratio.
🧮 How is it calculated?
🏛️ Why is it important?
It’s ideal for comparing companies with different levels of debt. It reflects a company's true cost relative to its revenue.
🧮 Calculation
Enterprise Value = $7.07b | Revenue (TTM) = $15.01b
Enterprise Value = $7.07b | Forward Revenue = $15.89b
🎯 What does this mean for investors?
- EV/Sales allows for capital structure–neutral company comparisons.
- A lower ratio may indicate undervaluation; a higher one may signal strong growth expectations or overvaluation.
- Especially helpful when evaluating high-growth companies with low or negative earnings.
📘 Enterprise Value to Free Cash Flow (EV/FCF)
📈 What is it?
EV/FCF shows how many years it would take for a company to "pay back" its enterprise value using its free cash flow.
🧮 How is it calculated?
🏛️ Why is it important?
It focuses on real cash generation, ignoring accounting noise — ideal for assessing profitability and value based on liquidity, not earnings.
🧮 Calculation
🎯 What does this mean for investors?
- A low EV/FCF may signal undervaluation and strong cash generation.
- A high EV/FCF might reflect weak recent cash flow or aggressive growth expectations.
- Best suited for stable, mature businesses with predictable free cash flows.
📘 Price-to-Book Ratio (P/B)
📈 What is it?
The P/B ratio compares a company’s market value to its book value — showing how much investors are paying for each dollar of net assets.
🧮 How is it calculated?
🏛️ Why is it important?
P/B is commonly used for asset-heavy industries like banks or industrials. It helps assess whether a stock is trading above or below its net asset value.
🧮 Calculation
🎯 What does this mean for investors?
- A P/B below 1 may signal undervaluation — or weak profitability.
- A P/B above 1 implies the market expects future value creation (e.g., brand, IP, growth).
- Best used for companies with tangible assets and strong balance sheets.
📘 Dividend per Share (DPS)
📈 What is it?
Dividend per Share shows how much cash a company pays out to shareholders for each share they own – usually on an annual or quarterly basis.
🧮 How is it calculated?
🏛️ Why is it important?
DPS is the absolute value of the payout per share – crucial for income-focused investors and dividend strategies.
🧮 Calculation
🎯 What does this mean for investors?
- A stable or growing DPS often signals a strong, shareholder-friendly business.
- DPS alone doesn’t tell you how attractive the payout is – the stock price also matters (→ see Dividend Yield).
- Long-term dividend growth is often a hallmark of high-quality companies – like the dividend aristocrats.
📘 Dividend Yield
📈 What is it?
Dividend yield shows how large a company’s dividend is in relation to its current share price.
🧮 How is it calculated?
🏛️ Why is it important?
It allows investors to compare dividend payouts across stocks, regardless of price or payout size.
🧮 Calculation
🎯 What does this mean for investors?
- A stable yield can reflect reliable distributions.
- Comparing 1Y and 5Y yield shows whether dividend growth keeps pace with stock price appreciation.
- A low yield isn’t always negative – it can signal strong past performance or growth focus.
📘 Dividend Growth
📈 What is it?
Dividend growth shows how much a company has increased its dividend per share over time.
🧮 How is it calculated?
5Y: Compound Annual Growth Rate (CAGR)
🏛️ Why is it important?
Consistently rising dividends are often a sign of financial strength and shareholder orientation – especially relevant for long-term investors.
🧮 Calculation
🎯 What does this mean for investors?
- Stable dividend growth is a sign of sustainable earning power.
- High dividend growth can significantly boost your total return:
- If a company pays $1 in dividends and increases it by 15% annually over 5 years, you’ll receive $2 per share in year 5 – twice as much as at the start!
📘 Payout Ratio
📈 What is it?
The payout ratio shows what percentage of a company’s earnings (per share) is distributed to shareholders as dividends.
🧮 How is it calculated?
🏛️ Why is it important?
It helps assess whether the dividend is sustainable – especially in relation to the company’s profitability.
🧮 Calculation
🎯 What does this mean for investors?
- A low payout ratio means the company retains more earnings for reinvestment – typical for growth companies.
- A moderate payout (e.g. 25–50%) indicates a healthy balance between returns and reinvestment.
- High payout ratios may seem attractive but can carry risk if earnings decline.
📘 Consecutive Dividend Increases
📈 What is it?
This metric shows how many consecutive years a company has raised its dividend per share – without any cuts or pauses.
🧮 How is it calculated?
(Special dividends are not considered.)
🏛️ Why is it important?
A long track record of increases reflects financial strength, consistency, and shareholder commitment.
🎯 What does this mean for investors?
- A long dividend increase streak builds confidence – especially in volatile markets.
- Such companies are seen as reliable and income-friendly investments.
- The longer the streak, the stronger the company’s dividend discipline.
📘 Revenue
📈 What is it?
Revenue shows how much a company earns in total from selling its products and services – the gross income before any costs are deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Revenue is one of the key figures to assess a company’s size, market position, and growth potential.
🧮 Calculation
🎯 What does this mean for investors?
- Growing revenue indicates rising demand and can be an early signal of future earnings growth.
- Comparing actual and expected revenue reveals trends in the market environment and analyst sentiment.
- Note: Strong revenue alone isn’t enough – margins and profitability matter just as much.
📘 EBITDA
📈 What is it?
EBITDA stands for “Earnings Before Interest, Taxes, Depreciation, and Amortization.” It reflects a company’s operating profit before the effects of financing, taxes, and accounting depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
EBITDA is widely used to evaluate a company’s operating performance – especially across capital-intensive sectors or international comparisons.
🧮 Calculation
🎯 What does this mean for investors?
- A high or growing EBITDA indicates strong operational profitability – independent of taxes, interest, or accounting methods.
- It’s especially useful for comparing companies across sectors or geographies.
- Important: EBITDA is not a net income figure – it excludes key costs like depreciation and interest.
📘 EBIT
📈 What is it?
EBIT stands for “Earnings Before Interest and Taxes.” It reflects a company’s operating profit after depreciation, but before interest and tax expenses.
🧮 How is it calculated?
🏛️ Why is it important?
EBIT is a core profitability metric that shows how well the company performs in its main business operations – independent of capital structure and tax environment.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT indicates strong profitability from the company’s core business – before financial and tax effects.
- It allows better comparison between companies with different debt levels or tax structures.
- Compared to EBITDA, EBIT already accounts for depreciation and reflects capital intensity more clearly.
📘 Net Income
📈 What is it?
Net income is the company’s total profit – the amount left after all expenses, taxes, interest, and depreciation have been deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Net income is the most comprehensive measure of a company’s profitability – showing how much actual profit remains after all business and financing costs.
🧮 Calculation
🎯 What does this mean for investors?
- Growing net income indicates that the company is managing all of its costs efficiently.
- It directly influences valuation metrics like P/E ratio and the company’s dividend capacity.
- Over time, net income trends reveal how resilient and profitable the business model really is.
📘 Free Cash Flow (FCF)
📈 What is it?
Free Cash Flow shows how much actual cash remains after a company covers its operating expenses and capital expenditures.
🧮 How is it calculated?
🏛️ Why is it important?
FCF reflects a company’s real financial strength – regardless of accounting profits. It shows how much flexibility a company has for dividends, share buybacks, or debt reduction.
🧮 Calculation
🎯 What does this mean for investors?
- High free cash flow means the company generates real, usable cash – independent of reported net income.
- It’s often the most reliable base for sustainable dividends and buybacks.
- Declining FCF can be an early warning sign – even when profits appear stable.
📘 Revenue Growth
📈 What is it?
Revenue growth shows how much a company’s sales have changed compared to the previous year – both on a trailing basis (TTM) and based on forward projections.
🧮 How is it calculated?
Forward = (Expected revenue ÷ Revenue in prior year − 1) × 100
Forward growth is based on analyst estimates for the current fiscal year.
🏛️ Why is it important?
Rising revenue signals growing demand, business expansion, and market share gains – especially important for growth-oriented companies.
🧮 Calculation
🎯 What does this mean for investors?
- Growth is the engine of long-term value creation – especially in tech and growth sectors.
- What matters is not just current growth, but its sustainability.
- Forward projections reflect whether analysts expect continued momentum – or a slowdown.
📘 EBITDA Growth
📈 What is it?
EBITDA growth shows how much a company’s operating profit (before interest, taxes, depreciation, and amortization) has increased or decreased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBITDA ÷ EBITDA from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
Growing EBITDA indicates improving operational profitability – regardless of financing or accounting effects.
🧮 Calculation
🎯 What does this mean for investors?
- Strong EBITDA growth signals operational efficiency and scalability – especially during growth phases.
- EBITDA growth can be an early indicator of margin and earnings expansion – but should be assessed alongside revenue and EBIT.
📘 EBIT Growth
📈 What is it?
EBIT growth shows how much a company’s operating profit (after depreciation, but before interest and taxes) has increased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBIT ÷ EBIT from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
EBIT growth is a direct indicator of a company’s business performance – taking into account capital intensity through depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- Rising EBIT signals improving operating profitability – even after accounting for depreciation.
- It’s especially important for evaluating companies with significant capital expenditures.
- Combined with revenue and EBITDA growth, EBIT growth provides a well-rounded view of operational progress.
📘 Net Income Growth
📈 What is it?
Net income growth shows how much a company’s bottom-line profit has increased or decreased compared to the previous year – both on a trailing basis (TTM) and based on analyst projections.
🧮 How is it calculated?
Forward = (Expected net income ÷ Net income from prior year − 1) × 100
The forward estimate reflects analysts’ expectations for the current fiscal year.
🏛️ Why is it important?
Net income is the ultimate measure of profitability. Growing net income signals stronger efficiency, cost control, and sustainable earnings power.
🧮 Calculation
🎯 What does this mean for investors?
- Stronger net income boosts valuation, dividend potential, and investor confidence.
- If profits stall while revenue grows, it may signal margin pressure.
📘 Free Cash Flow Growth
📈 What is it?
Free cash flow (FCF) growth shows how a company’s available cash – after covering operating expenses and capital expenditures – has changed compared to the previous year.
🧮 How is it calculated?
🏛️ Why is it important?
Free cash flow reflects real financial strength. Growing FCF indicates more flexibility for dividends, share buybacks, and reinvestment.
🧮 Calculation
🎯 What does this mean for investors?
- Declining FCF may point to rising investments, increasing costs, or weaker operating performance.
- Especially for dividend investors, FCF growth is critical – since dividends are paid from actual available cash.
- A negative trend isn't always bad, but it deserves closer attention.
📘 Gross Margin
📈 What is it?
Gross margin shows how much of a company’s revenue remains after deducting the direct costs of goods sold (like materials and production). It represents the company’s “raw profit” before fixed costs, taxes, and interest.
🧮 How is it calculated?
Or simply: Gross Margin = Gross Profit ÷ Revenue × 100
🏛️ Why is it important?
Gross margin indicates how efficiently a company can produce or procure what it sells. It is a key measure of product-level profitability and pricing power.
🧮 Calculation
🎯 What does this mean for investors?
- A high gross margin suggests strong pricing power and efficient production.
- Falling margins may signal rising input costs or competitive pressure.
- Compared to peers, gross margin offers insights into the quality of a business model.
📘 EBITDA Margin
📈 What is it?
The EBITDA margin shows how much of a company’s revenue remains as operating profit before interest, taxes, depreciation, and amortization.It reflects operating efficiency without being distorted by financing or accounting factors.
🧮 How is it calculated?
🏛️ Why is it important?
The EBITDA margin reveals how much operating income a company generates per dollar of revenue – independent of capital structure and tax effects.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBITDA margin reflects strong core profitability – before accounting distortions.
- It allows for effective comparisons across companies and sectors.
- A stable or growing margin signals efficient cost control and business scalability.
📘 EBIT Margin
📈 What is it?
The EBIT margin shows what percentage of revenue remains as operating profit after depreciation but before interest and taxes.
🧮 How is it calculated?
🏛️ Why is it important?
The EBIT margin reflects a company’s core profitability while accounting for capital intensity (e.g. machinery, infrastructure). It’s especially useful for comparing businesses with different levels of depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT margin shows that the company remains efficient even after factoring in depreciation.
- It’s especially relevant for capital-intensive industries.
- Stable or rising EBIT margins over time are a strong indicator of pricing power and business quality.
📘 Net margin
📈 What is it?
Net margin shows how much of a company’s revenue remains as bottom-line profit after deducting all costs, interest, taxes, and depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
Net margin reflects a company’s overall efficiency – across operations, financing, and taxation. It shows how much actual profit is generated from each dollar of revenue.
🧮 Calculation
🎯 What does this mean for investors?
- A high net margin means the company is not only strong operationally but also manages financing and taxes efficiently.
- Peer comparisons reveal business quality and competitiveness.
- Declining margins despite revenue growth can be a red flag for rising costs or inefficiencies.
📘 Free cash flow margin
📈 What is it?
The free cash flow (FCF) margin shows how much of a company’s revenue remains as actual free cash after covering all operating expenses and capital expenditures.
🧮 How is it calculated?
🏛️ Why is it important?
This margin reflects the true liquidity generated by the business – independent of accounting rules or depreciation. It’s especially relevant for dividends, buybacks, and reinvestment decisions.
🧮 Calculation
🎯 What does this mean for investors?
- A high FCF margin means a company consistently generates strong cash flow.
- It’s a positive signal for financial stability and shareholder returns.
- The long-term trend is key – a declining margin may indicate rising investments or weakening operating efficiency.
📘 Equity Ratio
📈 What is it?
The equity ratio indicates what portion of a company’s total assets is financed by shareholders’ equity – in other words, how much it relies on its own capital.
🧮 How is it calculated?
🏛️ Why is it important?
A high equity ratio reflects financial strength and stability, especially during downturns. It’s a key indicator of a company’s solvency and long-term risk profile.
🧮 Calculation
🎯 What does this mean for investors?
- Companies with high equity ratios are generally more resilient and less dependent on external debt.
- Low equity ratios can signal higher risk or aggressive financial strategies.
- Important: Always assess the equity ratio in combination with the return on equity (ROE). This shows not just how stable the company is – but also how efficiently it uses shareholder capital.
📘 Return on Equity (ROE)
📈 What is it?
Return on equity (ROE) shows how efficiently a company uses its shareholders’ equity to generate profit. In other words: how much net income is earned per dollar of equity.
🧮 How is it calculated?
🏛️ Why is it important?
ROE is a core profitability metric. It helps investors understand whether a company delivers attractive returns on the capital provided by its shareholders.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROE indicates that the company is using its capital efficiently and profitably.
- It’s especially meaningful for capital-intensive businesses or firms with high equity bases.
- Important: A very high ROE can also result from high debt levels – always interpret it alongside the equity ratio to assess financial health.
📘 Return on Capital Employed (ROCE)
📈 What is it?
ROCE measures how efficiently a company generates profits from its total capital – including both equity and interest-bearing debt.
🧮 How is it calculated?
It evaluates the return on all capital employed, regardless of how it’s financed.
🏛️ Why is it important?
ROCE is ideal for comparing companies with different financing structures. It shows how well management uses capital to create value for both shareholders and creditors.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROCE means the company uses its capital efficiently – regardless of whether it's funded by debt or equity.
- The higher the ROCE compared to peers, the more value the company creates with its invested capital.
- Especially relevant for capital-intensive sectors like industrials, energy, or infrastructure.
📘 Return on Invested Capital (ROIC)
📈 What is it?
ROIC measures how efficiently a company generates returns from the capital invested in its core operations – regardless of whether the capital comes from equity or debt.
🧮 How is it calculated?
- NOPAT = Net Operating Profit After Taxes
- Invested Capital = Operating assets minus non-interest-bearing liabilities
🏛️ Why is it important?
ROIC is one of the most accurate indicators of capital efficiency. Unlike return on equity, it is not distorted by leverage and shows how much value is created for all capital providers.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROIC shows how effectively a company uses the capital that is truly invested in its core operations.
- Unlike ROCE, ROIC focuses only on the capital that is actively used to run the business – and that requires a return (i.e. interest-bearing).
- Especially useful when comparing companies with large amounts of excess cash or non-interest-bearing liabilities – giving a more realistic picture of capital efficiency.
📘 Leverage Ratio (Debt-to-Equity)
📈 What is it?
The leverage ratio indicates how much a company relies on interest-bearing debt (such as loans and bonds) relative to its shareholders’ equity.
🧮 How is it calculated?
🏛️ Why is it important?
This ratio helps assess a company’s financial structure and risk profile. High leverage can enhance returns – but also increases exposure to interest rate changes and financial stress.
🧮 Calculation
🎯 What does this mean for investors?
- A low leverage ratio signals financial strength and independence.
- A higher ratio can improve returns in good times but increases risk during downturns or rising interest rate periods.
- 👉 Always interpret in the context of industry, capital intensity, and interest rate environment.
📘 Earnings per share (EPS)
📈 What is it?
Earnings per Share (EPS) shows how much profit is attributable to a single share – and is one of the most important metrics for evaluating a company's performance.
🧮 How is it calculated?
The diluted share count reflects potential new shares that could be issued through options, convertible bonds, or other rights.
🏛️ Why is it important?
EPS is the basis for many key valuation metrics like P/E ratio, PEG ratio, or payout ratio. It enables comparisons of profitability across companies, regardless of their size.
🧮 Calculation
🎯 What does this mean for investors?
- EPS captures per-share profitability and is especially useful for comparisons over time or with analyst estimates.
- Rising EPS may signal consistent growth or share buybacks.
- Important: Always use diluted EPS for more realistic valuations – especially in companies with stock-based compensation.
📘 Free cash flow per share (FCF per share)
📈 What is it?
Free Cash Flow per Share shows how much free cash flow a company generates per outstanding share – after investments, but before dividends or debt repayments.
🧮 How is it calculated?
Free cash flow is calculated as operating cash flow minus capital expenditures (CapEx).
🏛️ Why is it important?
FCF per Share reveals how much real cash is available per share – useful for dividends, buybacks, or reducing debt. Unlike net income, free cash flow is harder to manipulate and often seen as a more reliable metric.
🧮 Calculation
🎯 What does this mean for investors?
- High FCF per share signals strong financial flexibility.
- It shows how much capital the company can effectively reinvest or return to shareholders.
- Particularly relevant for dividend payers and capital-efficient businesses.
📘 Short interest
📈 What is it?
Short interest indicates how many shares of a company are currently sold short – that is, borrowed and sold by investors who expect the price to decline.
🧮 How is it calculated?
It reflects the percentage of a company’s shares that are being shorted relative to the total shares available.
🏛️ Why is it important?
Short interest serves as a sentiment indicator: A high value may signal skepticism or bearish expectations – but also increases the potential for a short squeeze if prices rise unexpectedly.
🧮 Calculation
🎯 What does this mean for investors?
- Low short interest usually indicates market confidence in the company.
- High short interest can be a warning sign – or an opportunity if sentiment shifts.
- Especially relevant in volatile markets or ahead of key earnings releases.
📘 Employees
📈 What is it?
The employee count shows how many people a company employs worldwide – offering insights into its size, structure, and business model.
🧮 How is it calculated?
🏛️ Why is it important?
It helps assess operational scale, labor intensity, and cost structure. Combined with revenue and profit, it enables key metrics like revenue per employee or productivity.
🧮 Calculation
🎯 What does this mean for investors?
- A high headcount can signal operational complexity – but also significant growth capacity.
- Revenue per employee is a key indicator of efficiency.
- Especially useful for comparing tech, industrial, or service-heavy companies.
📘 Turnover per employee
📈 What is it?
Revenue per employee indicates how much revenue a company generates on average per employee – a key measure of efficiency and productivity.
🧮 How is it calculated?
The employee count is typically taken from the most recent annual report.
🏛️ Why is it important?
This metric helps compare business models – especially between labor-intensive and technology-driven companies. A high value suggests automation, operational efficiency, or strong value creation per head.
🧮 Calculation
🎯 What does this mean for investors?
- A high revenue per employee indicates a scalable and margin-strong business model.
- A low figure may reflect labor-intensive operations or lower value-add.
- Especially helpful when comparing tech companies to industrial or service sectors.
Sendas Distribuidora S.A. - ADR Stock Analysis
Analyst Opinions
21 Analysts have issued a Sendas Distribuidora S.A. - ADR forecast:
Analyst Opinions
21 Analysts have issued a Sendas Distribuidora S.A. - ADR forecast:
Sendas Distribuidora S.A. - ADR Events
Past Events
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AUG
7
Q2 2026 Earnings Call
about 2 months ago
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APR
28
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Sendas Distribuidora S.A. - ADR — Q2 2026 Earnings Call
1. Management Discussion
Thank you for waiting, and welcome to the earnings call for the second quarter of 2026 Assai Atacadista. [Operator Instructions] We would like to let you know that this earnings call is being recorded at the ir.assai.com.br, where you can already find the earnings release. We also want to highlight that information and possible statements that could be made during the earnings call related to business perspectives, forecasts, operational and financial targets at Assai Atacadista represent the beliefs and assumptions of the company's management as well as information that is currently available. statements are not a guarantee of performance. They involve risks, uncertainties and assumptions as they involve future events and rely on circumstances that could or not occur. Investors should understand that general economic conditions, market conditions and operational factors can affect the future performance of the company, leading to results that differ materially from those listed in such future statements.
Now I want to pass the floor on to Gabrielle Helu, the Investor Relations Director.
Good morning, everyone. Thank you for participating in this earnings call for the second quarter of '26. I'll be presenting the executives present today. We have Belmiro Gomes, our CEO; Rafael Sachete; [indiscernible], VP of Commercial and Logistics; Sandra Vicari, our VP of People and Sustainability; Rafael da Silva, our CFO.
Now I'll pass the floor on to Belmiro for the beginning of our presentation.
Thank you, Gaby. Good morning, everyone. Thank you for participating. Now here we have the numbers on the first slide. numbers in the first quarter still have pressured consumption. So if you had the opportunity to take out the numbers, but execution was very consistent in this quarter, we gained share. We had an important expansion in our flow. We had an all-time high record preserving profitability, and we were able to advance significantly in our deleveraging. So it's not a quarter with demand acceleration. It's about resilience and economic evolution. So even in this economic scenario, Assai gained market share, expanded the customer flows, preserve margins and led to a leverage market of 2.7. So that demonstrates that even with the pressured ticket, customers continue to search for Assai as a destination. And so total base goes up 2.4%, and you can see that there is a challenging environment. However, the company gains within the cash and carry market, a share of 0.3%. So an important point in the quarter that there was an increase in the customer book, and that happens in our same-store base as well as in the total base, which would be the 3.4%. And then you can explain that movement that we've observed, which is the consumer preserving their frequency, but at the same time, adjusting their purchase mix and basket searching for more for cheaper products, right? So the maintenance of the levels of debt, high interest rates. And I think everyone has been watching the Brazilian economy, and you can see this macroeconomic context. So this environment is not a homogeneous environment. We've already highlighted this and seen this heterogeneous movement where we have lower social classes, especially the Class C with more pressure. So when you look at the consumption dynamic, you can see a persistence in the trade down. We had opportunities to demonstrate in our Investor Day that we had 2 cards with the same store, same taxes, costed BRL 830, which was the leading brand and the other card costed BRL 437. So you can see this ramp-up of the migration of the brand at a moment of commercial pressure. And so they use the trade down -- and so we can see that they don't necessarily reflect the actual customer choice, right? So in order to consider this, they've been having to perform trade down decisions to preserve their volume. And so what we can observe in the social levels that are a little lower. And so you can see this frequency that there is an ongoing flow of customers without an increase in the average ticket. So despite all of this, the effort to perform with balancing out the margin makes a bit of pressure in the actual number is 0.4, but after explains we have an effect of the substitution -- the tax substitution with the removal of some products from the SC, which the state of Sao Paolo has performed, which creates this difference between the gross sales and the net sales. But this quality, this margin continue to evolve. This is due to some initiatives we had considering the dynamics as the scenario we've seen also with the market that's not very -- it doesn't have much elasticity.
So we must be careful with the -- there's a bit more caution in the type of purchases. So the expenses have this effect of 0.2%, there's a slight increase, but it's, of course, a lot lower than the actual increase in customer traffic. So when you see the expenses per customer served, it goes 1.6% below inflation, the actual food inflation and the general inflation, because expenses are really connected also to the amount of customer service in customer traffic. So the net income, recurring net income, BRL 241 million, an aversion of 94% compared to the same quarter last year. From an accounting view, BRL 537 million, the company has been very conservative and very transparent providing this kind of disclaimer and showing the operational performance without any tax credit impact so that the market can really keep up with the actual operational evolution of the company.
And then after and so that you will cover this, you have the operational cash generation, reduction of the net income BRL 1.4 billion in the last 12 months, breaching the leverage level of 2.37%. Cash availability is also very significant and an important [indiscernible] and Rafael will explain this a bit more, which is purposely reducing the discounted receivables. Since in this deleveraging process, when you consider the availability, we end up working with this level of anticipation that is greater than what we had to work with in previous quarters next page.
With this, a bit of what I've already mentioned in the previous part, it demonstrates this effect of the tax substitution. When the product is subject to this tax substitution, the net sales is the same as the gross sales, considering the state taxes. And when it leaves the tax substitution then you have -- when you look at the semi normalized effect, you have this effect of 0.26% within gross profit and 0.20% in expenses. So when you look at the comparison, of course, the company, of course, -- you can see this result considering the net sales, which is in the center of the market, but the comparison is always taking place considering expenses upon gross sales. So when we look at this vertical effect, EBITDA, considering higher pressure of expenses, has a slight stable impact, kept in the second quarter, which is an EBITDA of about 5.6%.
So within the environment with challenging consumption, we've been trying to set up this commercial strategy that's more efficient. We have a significant contribution in the margin considering the operational efficiency and maturity of the stores, especially those that came from the extra conversion period, considering the last batch from the SA expansion and a lot of the services added on like [indiscernible] Delhi. But over time, we can really evolve in productivity, the ways we work and privacy. And that has really helped with the composition of our gross margin and maintenance of this margin has been done considering the maintenance of competitive advantage. So when you look at the customer flow [indiscernible] less sales per square meter and especially when you consider the market share. Then the expenses also had a slight impact with the new avenues for growth that we're going to highlight up ahead, but it also reflects the combined scenario of the customer flow increasing and customers still keeping up with trade down. So I'm going to pass this on to Sachete. She highlights the point of the operational leverage. Okay. We can advance to next one.
Good morning, everyone, and thank you, Belmiro, for your presentation. I'm going to talk about our financial results, our net income, our debt level in the company, our financial results here. We have an inverted calculation, so the lower the better. We reduced the impact of its financial expense of 25% compared to the same effect that effects our net income reaching this. And what were the main drivers of this improvement in the financial results.
So first, the maintenance of our EBITDA and our cash [indiscernible] company, our strategy for deleveraging, the lower level of debt. So through this strategy, the gross value drops. And we also start for the first quarter after many growth. We have this average rate of the cost of debt that is dropping, and this dynamic should remain if there's no change in the economic policy as a supporter or benefit for our financial results to the end of the year. Then we had a positive impact with the tax credit updates with the [indiscernible] credit adjustments, right? And so when you look at the net income, it reached BRL 344 million, recurring net income, 92.7% growth. And so our accounting net income is BRL 537 million with nonrecurring effects of tax credits. So the comparable base would be BRL 344 million, supported by our EBITDA and financial results for the company, which had a significant improvement.
Moving on to the next slide. We're talking about this [indiscernible], which is a company strategy for deleveraging, right? So there's an important effort with the entire team to keep up with high-level services, good sales, high margins, efficient management of expenses and capital allocation in our working capital and CapEx with a focus on deleveraging of the company. So the general cash operational generation was about BRL 3.3 billion. We had a CapEx post the impact of the sales leaseback of BRL 600 million with a free cash flow generation of BRL 2.7 billion, and when we get into the interest of the debt and dividends is BRL 2.3 billion, and we have a final cash generation of BRL 1.4 billion. Why is it not BRL 0.4 billion because you have the normalization of the receivables. An important point is within this strategy, we're reducing this receivables anticipation. And over a while, I believe you won't have this effect anymore in the company's results and earnings because for now, we have BRL 1 billion already supported in this normalization.
Then on the right side, you can see our financial leveraging. So our financial leverage, we have a drop of 0.8x the EBITDA, reaching 2.7%. You can see the dropping trend and this trend is that should remain until the end of the year. So the company is very confident that things will continue to drop over the next quarters.
Now about the gross cash position. I just want to reinforce this. But of course, in our release, you have a cash position is very solid, very healthy.
We can move on to the next slide, please. And we closed the quarter with BRL 7 billion between cash availability and also the [indiscernible] that you could anticipate. This is a growth of 20.9% compared to the same period last year and the robust cash position gives us the necessary comfort that we have 2 years of our debt maturities covered by this cash position. We don't need to have any short-term funding, especially in a more stressing scenario. We continue to be comfortable. But of course, the company is supposed to monitor this market and possibly taking on other long-term credit facilities to have safety to really support our strategic plan of deleveraging the SA Group.
Then I'll pass the floor now to Sandra, as he talks about our people and sustainability areas.
Good morning, everyone. Moving on with our commitment to our sustainability, searching for ways to generate more value for the company. We continue to operate in a strategy that is structured by 3 pillars: Efficient operations, developing people and the communities and ethical and transparent management. And this quarter, we've advanced significantly and consistently throughout this ESG agenda. And I want to highlight that we are reusing about 47% waste. Expansion of our initiatives for composting and water efficiency and also the evolution of the fourth consecutive year of the index of the lease of the ISG B3 Index as one of the only retail companies in this Index. So we're also strengthening a more inclusive and diversity [indiscernible].we expanded our representation of black professionals and women occupying leadership positions. And we've also taken on the goal of creating opportunities for immigrants, refuges and elderly professionals. And I also want to highlight over 5% trainees in our -- young trainees, right, so that it was important for the recognition with the Bungue Youth Employability award.
With this, adding on to all of this work, we've also published the annual for 2025 of the Assai Institute initiatives that is responsible for all of our social investments, and that also consolidates our earnings in the first 3 years of work performed by this institute and also reinforcing our commitment to the development of communities where we are present. These were important advances that we've had in sustainability.
And now I'll pass the floor back to Belmiro so we can continue with the presentation.
Thank you, Sandra. And now I think we're going to talk about our different avenues for growth. As you've seen in the numbers, the macro scenario is still pressured and the company is not just waiting for improvements in the macro scenario. So besides this, in this quarter, we were recognized once again as the most valuable brand in the food retail scenario, and maybe we have one of the biggest assets in Brazilian retail, which is this growing traffic of 40 million people visiting our stores every month. This comes from a relationship that is built upon trust and low prices and our avenues for growth are all starting off with this asset, right?
Our focus is to expand our presence in customer routines without losing track of our food core, which is really having low prices. It's not a switch in the model or change in the model, but an evolution of this model. So we're talking about existing customer traffic using this -- taking advantage of these new opportunities. And so we have the possibility of adding into the consumer shopping journey [indiscernible] to increase the share of wallet with initiatives that don't require a lot of CapEx investments, but that can improve also our capital allocation.
And so some initiatives in each of these are different stages of evolution. We've had significant expansion in Welby, which is supplemented vitamins. This Is already in 93 of our 300 stores, we should reach this new category in 300 stores by the end of '26. We're talking about like creatine, pretrain workout vitamins, supplements and whey protein. And we're adapting to these habit changes among our customers.
Then our own private label, we have about 30 products we already launched as private label products and some categories that represent over 10% there in the categories they're in. So this is an important lever for us, especially if we consider margin gains for the future and also keeping up our competitive price levels and offering to consumers the opportunity to have a quality product, a well-known brand and very relevant prices. So we have new products incorporated every week practically, and this is Irma, we should have a gradual expansion to the end of the year. I believe that next year, these products will already have more significance due to the volumes as I had in big markets here in Sao Paolo.
And for digital, we've advanced over 200% increases within the partnerships we have. We have 104 stores with the iFood operation and 16 million users from the [indiscernible] say that also receive these inputs through offerings. The price is helping to increase [indiscernible] for the in and out, we bought 11,000 refrigerators and we sold all of them. This is a project that is still evolving, and we want to take advantage of the customer traffic with products that have opportunity batches and customers can look at this and see the opportunities they have, reinforcing this image of low price. So we're still waiting on the approval of the bank, Central Bank for the second most important phase.
So then the pilot project for us iPay, which has operations in about 30% of these stores has also evolved. 55% are new customers that have adhered to the product. And then we have the electrical fuel stations. And so most of it is in the free market. We have a cost of energy that's about half of the residential fees that consumers pay. So our objective is that we can provide customers with the opportunity to really charge a hybrid electric vehicle at a cheaper rate than they would pay if they were to do this at home. And so we receive about 20 million vehicles monthly coming from customers that supply or fuel up and recharge in our stores.
So as soon as we finish our technical studies on feasibility as most of our stores have left over demand, the expectation is that customers can perform purchases. And this is a project that has been advanced a lot in many countries where we've had growing electrification and also for fuel stations, we have also been assessing this possibility and the chance of maybe integrating all of the systems for this ecosystem for food shopping, drug stores, digital and also in another routine mission to supply these customers and the initiative maybe the most important that I want to highlight was that now we opened first after 30 years [indiscernible] store, we were really quick with this project. It was the first sector. And we launched 4 months after the approval of the new law. Up until then, the food sector could not have a drug store inside the store and have to be in the gallery.
So ask me what changes and say, well, in a gallery actually the customers already performed a purchase, it's really difficult for them to get into a drug store to shop for drugs with products already in this part, right? So the first unit was launched in the Iconic [indiscernible], where they opened the first extra hypermarket. It's an extremely well-located store with over 180,000 people visiting, almost 200,000, and it's completely integrated. And so we already have 2 units and they're operational. And by the end of 2026, we should have these units and in this period, we are expecting that 250 units potentially -- would be the potential for the mid- to long term. So we already have a store. We already pay for electricity, AC, safety and all of this. The CapEx for the implementation should be below BRL 400,000. And so we should have a total investment in these 250 of about BRL 100 million. With its sales potential, that's very relevant.
And so this drug structure has a full assortment, which includes prescription drugs, GLP-1s, controlled drugs, vitamins and supplements. And this is all going to be integrated, right? So when we opened this first unit. It was not only the first drug store, but also the first online operation where the delivery is done by us. Though within Assai Pharma, customers can also buy through the app and they'll receive the drugs of their house. And so what we've seen in the first days of our operations is that the numbers are above what we expected you can see that for customers to be able. Anyway, since you have to come and shop, the possibility for them to be able to buy the drugs is also an important step. The team really helped us with this. And I think more than just talking about this deployment or more than just us telling you how it was, I would really like to say that we actually have a little video that was made, not by us, but it does demonstrate how this was implemented and [indiscernible]. Today at the capital, we have the first drug store inside a supermarket. Ever since March, this type of retail business [indiscernible]. So the transition is on the subtitles of the video.
Thank you. Now after this video, I think we can get into the Q&A session.
[Operator Instructions] We'll start off with our first question from Danniela Eiger at XP.
2. Question Answer
The first one is about the perspective forward. It's evident that we're in a very challenging moment for consumption in the market, and you guys anticipated this and have many different initiatives to have this. But when you look at the core business, when it comes to food, you have supplements you guys are working on private label. But how are you guys -- how do you guys see the evolution and the mix of categories as well as the trade down you guys mentioned as well as prices considering the food inflation dynamic and this product mix. So if you guys could help us. But of course, you guys have a lot more details and information, right? We would like to know what you guys see as trends in this?
And then the second one is, if possible, if you guys could share a little bit of what you guys consider as economics for the Assai Pharma stores. So when it comes to uplifting the sales, contribution margins and nominal amounts, et cetera, because you really have a better margin in the category. And you also need to understand that you guys may be replacing that with something that was already there. So I think it's going to really depend on performance among categories, but it will be great if we look like it is more like in the midterm. What could this bring us evolution when it comes to growth and profitability?
So thank you, Danni. This is the consumer consumption environment. We see the numbers continue to be pressured. It's really connected to low income. When we look we see the cash and carry channel as a whole. In the channel that's most impacted as what we're seeing is lower income as I was already having this in previous quarters, looking at the inflation received what's the actual index, which is the movement of this fixed basket. But in Brazil, we have a bigger variability. When you get paid down of brands that's really unique, right? Here it's a ramp-up, right? So you have such a big amount of brands that allows customers to perform these adjustments, right? So we see an increase of customer flows in our same-store base and total base. When we looked at the trade down, and it's still about approximately 2%. So customers haven't been following the inflation, right? So that's what is not -- that's not what's coming out from the customer's pocket, right? So while you have this high debt level and most of the income committed to the payment of interest is kind of what happens in our results, and we don't see consumers have space for this.
So what you mentioned is we have these different initiatives that we're not just waiting for the macro environment to get better, but some initiatives that were mentioned intent, for example, the private label should help a lot because as consumers also migrate, they can choose our product and the brand that's going to give us a higher margin. But at this moment, we see consumers that are really pressured. So where have we most felt is low-income consumers, not high income. When we look at the research of Nielsen for modern retail, we see that impacting companies that service high income and obviously, the impact is almost 0. When you look at Class C, D, then you have a more relevant impact, and we feel this directly in this customer that buys us, but also the customers that supply their house with us, right? And the impact, as I mentioned in the beginning, is and what we should see from now on is, well, July we've already closed. Of course, we already had positive same-store sales, 0.50, without any calendar effects. So that demonstrates that we should have a continuity scenario in a same-store kind of adjusting by 1 point up or down, but that's what we've been working at. However, in this scenario of consumption pressure, it should remain for while. So that's why the company has really been betting on new growth possibilities. And that represents about 5%. And so any new initiatives like a U.K. that's it, right? And so especially, we expect higher revenue than [indiscernible]. We look at the 40 million customers, we have an average of 200,000 people going through these stores. So we wanted to bring this because our feeling is that it captures exactly what the customer sentiment is, right? They have to come and shop, they have to come and supply themselves. So if they can solve this in a single journey. We can also interconnect both of these to generate cash back and the success of the , right? So what are the main points we have, positive or negative.
Well, that's operational expenses that are there. So in the same way as the CapEx is way below what we would need for street drugs. When you look at operational expenses, you can kind of perform a similar calculation, right? So you have the cost of personnel [indiscernible] rent, safety, et cetera. And all of this is -- most of the Assai stores have available space to be able to add a drug store without having to implement any major revolutions in the assortment. So within this, we've also been having an ongoing revision of the amount of products you've been working on in some categories. So it's really been possible to accommodate the pharma operation without any major impact. So the CapEx of drug store is like 1/3 of -- than what we would have [indiscernible], et cetera.
So our view is that we have to really work on the legal changes there and because that's -- we have an investment of about BRL 100 million with the sales potential of a store. It's like 1.5 store revenue. But of course, we don't want to break down our expectation of revenue per store. We're showing an ambient study or phase of this project, but we see this as a huge potential.
Now our next question is from Joao Pedro Soares Citi.
The first question here is the cash back. Could you tell us a little bit about the strategy currently because one of the questions we get when we compare with our history and the drugstores in the galleries, I think here, the biggest evolution is that you have mutual interest, right, in both of them working well and this cash back can be crucial to help really lock in [indiscernible] right, cash and carry through the drugstores and everything. So I wanted to hear about the initiatives you have been considering and how you're looking at this [indiscernible] of the drug store cash and carries.
And then the second point is when you look at the sector data and you break down same-store sales in same quarter of next year. We can see that volumes dropped significantly in August and September. So it seems like there's a more favorable base, especially for volumes in the sector when it comes to the third quarter. And I wanted to hear about this and if it makes sense, et cetera.
Well, as you mentioned, if you were to consider the products that were made now, and I want to invite you guys to go and visit the [indiscernible] store and see with your own eyes how [indiscernible] was implemented. It's very different than the products that we had before like drug stores in the gallery. These are outside of the store. We could have done this before, of course, but we were never interested in this, right? Because we think it needs to be really integrated with the customers. When inside the store, they can leave their cart there and go buy given the list of drugs that they need and that can be separate already for them when they come out to check out.
When they -- after they get their perishable goods, if they waited in, they check out, they don't want to stop anywhere. They're going to go straight home, right? So their relationship with the cart is very different before and after paying, right, for their shopping.
So anyway, in a store with about 200,000 customers going by if I generating cash back of about [indiscernible] to spend at the drug store, they're probably going to do so. So they're probably going to visit our store. So in our view, we're going to be providing an actual service to our customers. Just as you saw on the news article made by Global, most of the customers and people that visit food facilities, et cetera, are the people that also need ongoing drugs for chronic conditions. So we're going to have operational costs that can be passed along to the customer partially. In our view, it's -- we were able to open up the first one 4 month after the change. That means the customer is really focused on this initiative, and we believe it should add a lot of value to just say a lot of sales, a lot of margin and no additional extra costs. I show you the CapEx numbers and you can compare that, what you see as CapEx, maybe you can even bring in part of what this would be expenses.
Same stores for August, September last year, there was a drop in volume. That was a period where we really felt a setback in commodity consumption, so especially that drop last year with rice, meats and some carbs and this consumption has still remained at low levels, and that's how we've been very careful to estimate possible recompositions because we knew where it was concentrated. So since it was very much concentrated in carbohydrates at that time. And when we look at the volumes of the other commodities now in the first and second quarter, you can see that there's some price pressure that they don't really state the truth is that there is a reduction in carb consumption and an increase in protein consumption. So a lot of the adjustments in layout and assortment. Was ready to prepare for this movement, which is as I've already seen. So when you see the food service customers, there is always 16 million customers in our app. We can see the recurrence of volume. And so those guys from food service, the guys from pizza stands, restaurants, snack shops, et cetera, they have been keeping this frequency, but they do see a drop in the volume. I hope to have answered.
Our next question comes from Vinicius Strano, UBS.
I wanted to explore a little bit about what you guys see as a customer sensitivity to price in staying, right? And also get a better reading on your view in regards to competitive sitting, right? There was a shift in management from your main competitor. I want to know if you guys have any notice any difference space on pricing and commercial practices is if you guys could talk about the market share per region. We have and also the performance of region between [indiscernible] and the market.
Okay, Vinicius, thank you. And now going back per region in Brazil, I think the movement of their regions is a lot more related to the income classes than the region itself. So if I look at the Northeast Brazil and north of Brazil, there's our performance because it concentrates most of the population of the low income. That's going to be very visible right and also within each of the regions. And so you can see that in the Southeast [indiscernible] when you look at this within Southeast, you'll see the stores at [indiscernible] with a high population have no impact. So when you look at the other part, where you had a proposition that's a little more pressured, and then that's going to the data of the families at to -- we reached a new all-time high level of commitment compromising income rate, so it's not standard. And what we've seen in a real tough way is a consequence of a series of factors. I said I was not going to talk about the bads anymore, but that was a significant impact in June of course, right? So a bunch of factors in the economy. And at this moment, that's led to repercussion, right?
So while we see [indiscernible] consumers is at their limit, right, what they can spend. And when we look at the average ticket accounts and BRL 500. And then within these BRL 500, they're going to have trade downs of products without I don't want to mention brands here, but if you're experiencing the food sector, we've seen a significant movement to this sense, right? So what's the positive side to this was the best possible movement with the scenario we have in to have is private label project, a company our size, the brand as strong as ours because customers are willing to search for quality, but they have a price limit and private label can be selling is very relevant. So we have very positive expectations, right? And [indiscernible] from the customers, they're really willing to perform brand trade downs and winning products, especially so they are at the limit of what they can actually spend.
Then you asked something else about management.
Yes, it was -- but we do and it was about the competitive scenario overall and also specifically about the competitor.
Okay. Well, obviously, as each company has changes -- but as you can see it's the consumer environment, right? So consumers are paying high interest rates and as you can see, the beds and initiatives you've had are really based on keeping customers in-house, gaining new customers and increasing the share of wallet. So we don't see like market elasticity that can allow for major movements, right? And so you -- we've seen certain changes in the commercial policy. But at this moment, what pressures is the most is the markets are.
So our next question comes from Irma Sgarz at Goldman Sachs.
I wanted to take advantage of the last point, and it's a great moment for private labels. And could you talk about the lessons learned so far? I think it's a real ignites in the past, you guys always had a bit more resistance considering the size of the operation in Southeast. Now as you guys launch private label as well, but I wanted to hear how you guys consider additional categories and products and the challenges that you guys may be found over time. And maybe a bit of how you guys consider the brand strategy as well, right? You have the Chef brand, of course, for one part of this private label segment, but you guys also consider segmenting private labels. And with this, would you guys believe that the best path is to separate privately from these brand, we'd like a commercial name or having some kind of umbrella brand.
Well, at the moment, you have a consumer that's really willing to have a brand trade down. The SA brand is the most valuable and the most well-known any research can show you this, of course, there is a risk when you associate all of the products. So we brought a very skillful team with a lot of knowledge and the experience from a quality perspective. [indiscernible] and so the [indiscernible] included so far and maybe the project could even advance quicker if we have -- if we weren't looking this -- we have test labs and a series of initiatives to ensure that what we're going to deliver to customers is really valid, right? So we have like the SI signature, then you have the name blue as long. So there are some processes or so adjusting and getting to lessons learned, but some of the biggest challenges so far because of the volumes, because Brazil doesn't have that many suppliers of private labels [indiscernible].
Our volume within the city of Sao Paolo with 120 stores under activity is really heavy, right? So we've probably get -- we're probably going to do this even once in suppliers that are already the buyers of natural brands and that should also maybe lead to reduction of these investments. So we see this as a major potential, right? So now as we see we have the scenario where we can have this private label scenario that's very relevant. So the objective is not to have an increase in sales, but improving the margins and use this as pressure with our existing suppliers. So when we see customers really adhere to buying a private label. It could be that after we'll also have a pontoon chef. But at this moment, as we have than the need for speed, it will have a lot of products and they're going to continue with the SI brand. [indiscernible], you want to add on to this in any way?
But, I think that was great. And I just want to say, every week, we're launching new products, and I want to highlight our concern with the quality. It's not a first price product, but it's a quality -- product quality that's very similar to leading brands, and this strategy has been growing a lot. The number of items in the store with greater presence and customers' basket, and we'll be able to add a lot more strength to the private label.
Our next question comes from Lucas Esteves at Santander.
We have 2 points you want to discuss. First, the gross margin continues to demonstrate because it's in evolution. And I wanted to know from your view, how much of this comes from the tutors are opened in the last few years? And how much comes from other structural initiatives like the Buttery Delhi bakery. And I know there's also a tax effect, but I would like to know about the operation. And if there's still space for expansion from now on, right? So when I add the topic, and you guys also mentioned SI services to about 40 million customers per month and that's still impacting and the Assai Pay pilot project demonstrates over half of the customers are new. So how far do you consider this financial verticals and monetization potential or opportunity? And is it more of a -- or is it more of a relationship to increase conversion, et cetera?
Well, financial vertical, yes, we're very anxious to get the release for this, right, for financial services. And the Assai product is good but it's really restricted to only a few of our customers. So maybe one of the biggest value levers we have is really the financial aspect that this could really help our sales as you grant credit through a private label. And then at the same time, you can also have new revenue, and we see this as a great chance for someone to look at the installed testing our potential. And so that already operate more time with this product in the market really. Well, fortunately, we're still waiting on the approvals of this project from the FIC agreement we have. But maybe it's one of the products that we can have the most value lease, right? But we didn't expect that this could take so long, but it is a product with high potential. And so -- we then also working on this project so we have a clear idea of the potential market and -- what's the level of penetration that you provide? And as it's more of an internal product, you'll have moments where you're going to be leveraging sales and there's going to be moments for us product to extract even more value from this protocol. So these are kind of -- just as I showed you about the pharma, what we're considering is to create this ecosystem that is richer right up ahead. So I want to talk about the like electrical carding station and all of this within this relationship as has in this customer base. So gross margin, we have part of this -- and so when you look at the increase in margins, we would see some sections like Delhi and ice-cold cuts are very polemic, but now they had a lot of margin to the business. So we're always very cautious about this. And in our products, we've been working on, but especially with the private label, which should add a lot of value to the brands so the customer -- the company is working to have a growing margin even in expensive environment that we already considered as a really an environment that's very challenging, right? So thank you. But we don't have a great, great Friday.
[indiscernible].
We have three questions. I think the first one -- and these three are follow-ups of top is that already approached. The first one is about the dynamic for demand. And so how -- what space do you guys imagine there is for trade down? And how do you imagine they continue these were challenging trends we have in the market. I think that's the first question.
The second one is within these new initiatives, you explained that there is already about 13 new billion SKUs? And what do you expect to reach? When you think about 2026, 2027, what's the ambition? And maybe one last topic is the subventing topic, right? So we just have about BRL 900 million that tax credit with [indiscernible]. And I would like to understand this better, so we can project this line and I want to understand how much you expect to capture throughout the next quarter. If it's going to be linear? Is as we had seen this in the first and second quarters of 2026. So those are my three questions on my side.
And I'm going to leave the last one here to Sachete, so you can talk about subvention and the tax credits. On demand and trade down, we've seen that this is really -- you can see this correlation with the debt level among families. So it's at 82%, and we can reach 120% of the families. We'd expect that as you have a drop in interest rates at this movement, the trade down will probably set back. And so our -- but of course, we also had this expectation for '26 that did not become concrete as debt levels among families became really high and numbers talk about 26% or so the income and end up pressuring peaks a bit. So that's why we have to be careful.
And a lot of the new initiatives the company has been trying to adjust quickly in this scenario and as the macro environment gets better, I believe customers also want to recover. We already had years were pretty good in a lot of the stores came from trade up, right? So maybe this is easier than in other countries, right? So it's a ramp, right? And then you can see how much is possible upwards or downwards. So what we believe is that in this trade down, we should still keep in the third quarter more, but as the debt levels drop and you have this adjustment and expectation for interest rate drops, that families will be able to stop the trade down and that's something that's really going on depend on the macro scenario, right? If not, -- and here a lot were connected to the macro scenario. That's what we've seen on [indiscernible] in our numbers are really reflecting this macroeconomic scenario that can service this within the present population. So the new initiatives? Do you want to talk about this, the new brands and expectations we have and then we can pass this on to Sachete.
Yes. So this year, in 2026, we'll have about 230 SKUs we've been evolving, and we already have a lot more than this in the stores. And we believe that for the scenario in '27, we'll have double the amount of this number in SKUs that already launched and we continue to launch in the next few years, especially in categories where we have more relevant and you can have more penetration or profitability way above in the category.
All right. So on our contingent assets that you are considering to the growth of taxes. The company has a series of taxes that are connected to products. And we're also considering the third phase regime as well. And we have the monthly use and we're going to consume this credit monthly as well. But I want to remind you that this credit is considering quick usage as we consume those into all of the bias regime will happen until the end of the year. then we can send this credit out very quickly as escapement CDS when we can consider the vigation proposed by the government or a different tax model that we're going to have a automatic migration, which becomes the recovery credit considering our revenue levels and margins, we are very confident that we'll have a cycle of 18 months to consume this credit as a whole.
So our next question comes from [indiscernible].
And so just I wanted to ask you to explain, you talked about same-store without a calendar effect I wanted to confirm this point. And we did just trying if you could break this down. I think you talked about the trade down a lot but the composition still between price and volume, that would be great. get a bit of this perception about July in greater depth.
And then the second question, Sachete, is on the topic of the ST credits because part of this has already been paid, anything that about when taxes recoverable, but when do you think you'll be able to recover this, right? Throughout the next quarters that we can already include this as a composition for this cash generation as well. So these are the 2 points.
Yes, we did talk about July. The numbers are correct. I mentioned that we have positive same-store as your 50 and for volume, it's pretty much stable. You have a slight increase, especially when you look at customers coming from foodservice. So July demonstrates its continuity of the second quarter. We can notice stability in the average ticket, of course, not for the first -- we're still in the first month of the quarter, it's a holiday month, right? So it's kind of different. They may not be a good sign of a full quarter, but we do notice that in this scenario with debt, there is a major concentration of purchases in the beginning of the month when you have the credit card turnover, right? So customers are pressured and then even -- the reality between days has been a little different than what we had observed in different years like prior years, but July has the stability in the same-store that's positive.
Great. So I'm going to get this point on tax now and using we have 2 to increase the level of the balance [indiscernible] regime. And in regards to ICMS credits for ST Sao Paolo, just a broader explanation so everyone can have the same basis of understanding. We have a relevant part of our business in City Sao Paolo. There was a tax regime of ST for a very big group of items. And in this model, the products are taxed from their origin and from the credit of ICMS to be generated, we were already considering this as costs when the products came in. Then the state is changing this. And up into October, that is like this curve every month for having a ramp-up of products and that start moving into the normal tax regime. So when products come in was coming, you have an increase in balance and ICMS recoverable. Since this number did not exist before, it generates some impacts in our quarter volume EBITDA recurrence. This number tends to head to practically monthly consumption stock turnover we expect an in about 5 days, products company become stock and then we consider this as a balance recoverable and then we offset this in our balance sheet. So the period for the utilization is really quick.
Our next question comes from Wellington Santana at Bank of America.
We have two here on our side. I want to understand because I think at this point with weaker consumption, consumers being a little more cautious about the trade down and -- how can we consider ourselves [indiscernible] phenomenon and acceleration of price inflation food inflation, how do you also look at this from a B2B perspective and in and out strategies? And if you could also update us on the partnership you guys have with the live company and how that's moving and how you're considering this integration. Just so we could get an update on this point. That would be really good.
Thank you, Wellington. And [indiscernible] effect, well, -- we've been, of course, looking at this and it should be confirmed. But what we've seen is we can imagine the capacity to transfer prices that will happen. And so in this scenario, actually, oneo can influence commodities that sometimes already have a bit of depreciation rate. So we could have a positive effect. In regards to this, of course, we have to be careful on that that consumers have to continue to buy this kind of product, right? But there could be a slightly positive fact, right? So the capacity to transfer and pass on prices is something that we've been able to keep with level of price [indiscernible]. What we can't -- what we haven't been able to do is to have customers buy more volumes. So that's related to, of course, some the macroeconomic conditions in the 35 items at the moment. We have customers in over 1,600 different cities. There's an integration issue when it comes to the tax platform that's taking a little more time, it should advance now. We have numbers, we knew the integration to be a little more complex. These are 2 big companies integrating in a whole variety of items that are quite heavy in Brazil. So we should have bigger numbers in the third or fourth quarter.
Our next question is from Nicolas Larrain at JPMorgan.
I wanted to talk about working capital [indiscernible]. Do you guys see big element changes now. The markets may be a little slower than what you guys would expect if there's a perception on this. So we see the market still pretty pressured. So I just wanted to understand if there's any significant changes in the working capital?
No. The average term for payment -- we're not going to add huge volumes of stock. We have a short demand in the market. So I think here, the word is stability. We could have some one-off effects in the anniversary campaign that's going to take place now in the second semester, but nothing very relevant, right? So changes in financial lines as Sachete mentioned is just the discount on receivables that the company is working on to eliminate any liable of as soon as possible, right?
Our next question comes from [indiscernible].
I have a question on Self-Checkout that grew over 40% year-over-year. Could you guys quantify the productivity gains with this initiative and where you are planning to reach to the next years? And then also comparing with the mature markets or look at players like Walmart, Target, Dollar General, they all invested in this initiative from the years. And then recently, they reduced this, but they started to reduce self-checkouts due to their experiences to customers have concerns with shrinkage could you mention how the company is tastes trade-off between productivity and controlled losses?
Well, yes, we saw these initiatives. We've been monitoring this breakage. And however, in the scarcity, where you have a lot of big volumes in the beginning of the month, cash and carry and retail. When you have the service of your customers that normally just consider like a punishment purchase, right? So I think self-checkout is what allows for this to cut expenses and customer flows that you can see that the amount of expenses per customer below lesion. So here today, we already have this level of maturity. We have new initiatives also for productivity in the operation. And we've already had a lot of customers when it comes to packaging. And so we have other initiatives or productivity. But I think the self-checkout is already a level of maturity and that helped the expenses for customers. service really increased below inflation.
Great. So now we're going to head to our last question for today. It's a question in English from Andrew Ruben at Morgan Stanley.
Most have already been answered, but maybe just one on new stores. I know it can take maybe a couple of years to the new store pipeline. So how are you thinking about the right pace of growth over the next few years? Again, I know you have the capital allocation priorities, but curious your outlook for what the market can bear in terms of new SI stores.
Thank you so much, Andrew, for the question. Obviously, the company is really focused on deleveraging, and we really reduced levels of investments. We had to hold on to a lot of those projects, some of them in the land bank, we're already performing. But of course, focus on leverage as the interest rates were not close to the levels we expected. A few years ago, we had to perform a reduction that was significant. When we look at this after, of course, the company is just a matter of time, right, so you can deleverage. But of course, for the model that's going to be expanded, it's going to be already a different model, right? It's a drug store, the electrical charging station. So we're going to have a more complete model with the amount of stores that can be expanded in the future. So at this moment, I think it's difficult to have any kind of precise assessment. It's going to depend on the deleveraging curve, the assertiveness of the new models and the operational structure and capital structure also in this moment to the company.
With this, we've ended our Q&A session, and we would like to pass the floor to Belmiro for his final remarks.
Thank you, Rodrigo. And I think at the end this initiative, we brought our right beginning. We have a challenging consumer environment. There's a macroeconomic issue that, of course, is not under our control entirely, but the company is really focused with different initiatives to improve our core and working -- our biggest asset is the customer flow monthly. You can see all of our initiatives start off with this. This is not an adaptation because you have a more challenging scenario. A lot of these new initiatives were already expected as we perform the extra acquisition and they really place City Cash & Carry stores among higher income customer base. And so this evolution in the model should continue. Of course, they're very completed that 40 million monthly customers. at a growing pace and our brand strength is going to be an important platform for all of these new initiatives to really generate the necessary results up ahead. So thank you so much, everyone, for your efforts this second quarter. I want to thank all of our team, and I want to thank everyone for participating in this earnings call. Thank you so much.
Earnings call for the second quarter of 2026 at Assai Atacadista has officially ended. The Investor Relations department is available to answer any of every other questions. Thank you so much for participating, and have an excellent day.
Sendas Distribuidora S.A. - ADR — Q2 2026 Earnings Call
Sendas Distribuidora S.A. - ADR — Q1 2026 Earnings Call
1. Management Discussion
[Foreign Language] We'd like to instruct you at all questions.
[Foreign Language]
Leverage of 2.5x growth at the same period of the previous year. And now the main focus is the resilience of this business model, where despite a period with more challenging sales different reasons, [indiscernible], the company was able to discipline in gross margin and expenses was very strong and strong cash generation in the period as well. So we had BRL 2.9 billion operational cash generation and then after that's added on to the debt for the normalization of [indiscernible] regards to CapEx for investments, you had BRL 700 million in investments and this is an important alignment in regards to the company's strategy for delivering and so a lower amount of stores and level of investments and that generated a cash generation that was [indiscernible] the effect of the anticipation of cars in comparable basis, we generate BRL 1.2 billion net cash and that is converted automatically to debt payments.
So when we talk about our net debt, we go from BRL 13.4 billion to BRL 12.2 million that met dropping in that period, we dropped to BRL 1.2 million. And in regards to the leverage on the right side, we have this trend of the drop in the debt and an important mention also on the right side of the chart here of the covenants, the company has covenantal hired. [indiscernible] times have begun and these consider the post IFRS EBITDA. So the converts covenant to the IFRS EBITDA. It is equivalent to 1.28. So that would be current status. So less than half of the risk of covenants reinforcing a level of security and financial comfort that the company has in regards to these debts.
And finally, on our cash. On the next slide, we finished the period with BRL 4.4 billion and that's our available cash. And along with this, we also have the nondiscounting cards, would you add up to total possible cash of BRL 7.5 billion in the end of the first quarter, and the company is really confident about cash generation. And due to this or we also launched a buyback program for debenture, which is event to BRL 20 million in a period of 180 days. When this program intends to reduce their gross debt in the company and take advantage of possible opportunities for arbitration are these fees and rates considering possible secondary multis in the venture and these are financial highlights of the first quarter of 2026.
Now I pass the floor on Belmiro talk about our initiatives to evolve the business.
Well, within a as mentioned initially, of course, regardless of the external market, we've been going through these different cycles. Now we know about the commodity cycles, the high interest rates, low interest rates the company has been searching for ways to be positioned. And we have other opportunities even to talk about this and take advantage of an asset that is most important, which are the 40 million monthly customers so that we can all have these new initiatives focused on low CapEx venture flow and store structure to add on new sales. And so we have 100 stores with the products we consider in and out.
And our objective is to have products that have quick turnover to competitive prices and they can most for a certain period of time, right? So we're seeing like the refrigerating that were placed in the stores and other products that we're going to work like this. We're not going to sell like a big line of refiguring is this just an opportunity either on looking at our flow of customers and that reinforced this perception of loan values and increase the share of volume and other part is titin the legal framework that will allow us to deploy the full drug store in our stores.
And we were able to do this before in our galleries, but the first the layout of the cash and carry to start working on the users outside and we saw some changes in habits that analog drugs, and we've been switching for greater healthy lifestyles. We had other opportunities also for cars, protein and supplements. And in our view, the drug store, looking at the public the existing code and our structure will allow us to also be competitive and to enter in this new sector enable actors to sell to get new sales but also a recovery piece of what we call HPC, which is hygiene and personal care products. And besides being an important net sales later was also I think to the products I already mentioned, like supplements and other complements that we're already advancing with. So our drugstore project with a shift in the legal framework was a demand from the sector for almost 30 years in Brazil, our expectation in the second half of the year, we already have 25 stores with this drug are implemented.
Already included some new products as well that are geared to supplements, vitamins proteins, et cetera, to adjust to consumer habits and of course, supplements and vitamins and everything where I understand there is a big potential to sell more in Brazil, we expect for extra product to advance even more on the next slide, you can advance. Well, private label, we've already started the first product. They're going to be -- we're going to use the SA brand it's going to be geared to the end customer, especially the Chef brand that's geared to our food service public. It's a band as I already worked with before and is already geared to some products that should probably be expanded a bit. an icon with the first level price.
And we've already advanced on the first 25. The other 175 million should be available by the second half or until the end of the year. And the objective is to expand margins. That's a clear objective, considering that we saw industry took on a low-cost and put this in, and we want to get part of this reminders. The objective is expansion of the margin, loyalty of our customers and creating a strong point of our commercial purchased power and expanding the mix of private label digital. This year also went through imported we expanded the amount of stores [indiscernible] iFood. We have over 100 stores and if you want to get into the and we're already looking at the different cash as well for fulfillment.
Especially invoices and logistics and everything so that we can work on this new channel. And we're also waiting on the approval of the split of the peak, which is one of the important value levers in our company and we got a waiver for the pet project for the credit card terminals. But the other initiatives still rely on approval from the Central Bank. We have over 1.3 million active cards, and we think it's an important opportunity for complementary financial services and also exploring a private label item for consumers or also for businesses that may be find challenges to obtain credit. So these new initiatives and that we're assessing such as real stations, ASSAI has so 40 million customers, most 20 million. We also have the be stations and the electric power stations. So our cost of being on the free power market is maybe fast than like a residential cost.
So in big stores with high parking areas as you advance, how we can also reinforce this would be able to sell power to customers even for cheaper than what they would have at their house. with the reinforcing price margins, et cetera. And so that these are initiatives where we keep the leverage levels and lot level CapEx, if you consider we can really consider the value-creating possibilities. And so I wanted to go over this. And Blair is also keeping up with our earnings and we've already announced that Rami will be dedicated to more personal projects, and we'll have Andersons taking on commercial logistics, just estates of working on this period as well.
And I want to thank Feefo all of his efforts, dedication and contributions we had other opportunities to talk about this as well. Without your contributions, we'd never get to where we're at. And I want to wish you to express for your new personal projects, and then we'll pass this on to Santander and open up for Q&A. Good morning, everyone. Thank you, Benito, first of all. I just want to -- I don't mind getting the way you hear on the call, but I want to thank you for these 15 years of partnership at a site and thank our shareholders and the Board and management as a whole, my peers and the financial market as well. But I think I wanted to 2 special things. One to our suppliers, which will was leading the commercial area. We've got a lot of support from our suppliers, and I hope they continue to support these in the company and to the over 90,000 employees that during this period that I was [Audio Gap]
The legislation the inspections and legislation will change. So we cannot estimate too much, even if the rhythm is continued, this should probably increase a lot in terms of what was recurrent, as we mentioned. When we look at competitiveness, if we gained 0.3 in shares. So the evaluation that the company has made is that we have a market scenario with indebtedness of the consumers and deflation of commodities. So we will probably be able to sustain the margin, but worse maybe it could have altered and made a difference in sales. That's a scenario we are working with right now.
The company has been very cautious, but this will not affect the deleveraging. Despite the deleveraging, we will have a scenario of a very tight money in the hands of consumers of low income and those who are at the other end do not notice it. So Brazil has many Brazil at the same time, and the reality today, if we look at the numbers. with the movement of the government of using hall and other things is because we are still highly pressured with the new factors that appear, I think that it's something that will not effect, the higher income.
So we already have higher prices than consumers, investing more in margins to seek more sales and levels of competitiveness, the main share has been maintained in the first quarter in April. We see there is still a higher advance in share despite the fact that the market as a whole has been suffering. So since there are a few companies have opened public companies. But as I said, this is a temporary cycle. The cycles in commodity have always happened. -- high interest rates, low interest rates, and we are implementing new initiatives to sort of until this cycle passes in the converted stores. There's not a lot of difference. And this year, we will stop providing the numbers. But if you look at the first quarter where they were above the forecast, but what's interesting about the stores, especially from extra that many of the new projects even with the layout on the pharmacies and the gas stations.
The more adherent stores are the central stores that we have that are not necessarily coming only from extra even with organic expansion stores which we put closer to the central regions to capture the higher income population. I hope I answered your question. You did answer. But just to draw attention to 1 more point to clarify, looking at the Note 14 about the commercial points. Was there anything in this quarter that was abnormal? This BRL 170 million that was reduced. Is that sustainable? Are you going to continue doing this? Just more color on working capital, if you can? Yes, sustainable it should continue to be done part of the commercial funds we received are recurrent given the negotiations there may be some variations over the quarter, but nothing that is outside of normal with the exception of the fourth quarter where there is higher seasonality.
Next question is from Rodrigo Gastim from BBA. [Operator Instructions]
2. Question Answer
I have 2 questions on my end. The first one, Belmiro is a curiosity on how you internally buffer the budget, how much this cycle of commodities that are more under pressure will last understanding the 12% that you mentioned for the first quarter, how do you see this in your accounts? And in case this lasts for a longer period of time, where there is a deflation of more commodities, what could be done in terms of profitability? Is there any space to tighten operations, how much efficiency can you still gain?
And the second question is about the pricing project and the impact on the gross margins. This is something that you have been talking about for several quarters. if this was already captured and how much is still to come in terms of gross margin because of this project? Those are the 2 questions.
Well, I think both of these questions are related to each other. -- because there have been changes in our model of pricing. So we were at priced in store clusters and given the geography of stores that we have, there have been advances at the rate in which the projects are maturing -- at this moment, there are many components in the margin, there is a margin that has suffered impact at the rate in which there was deflation when the stock is higher and you need to sell things at a new price where there is a drop in margin.
So despite that, what we expect is to continue to deliver the evolution in margin, be it through the system or because the commodity in itself -- and as part of the patient will affect the mix, it's not so marginal, but in this quarter, it's very marginal. But in the predictability, it is very complex because commodities are very difficult to estimate in terms of prices. So at this moment, what we have been looking at with more caution -- we have some strategic stocks being done in April with some projects where we had convictions of purpose, but we are not playing with stock of having more stock than we need more than is necessary in terms of capital, working capital because there are uncertainties in terms of the consumers.
So while this uncertainty exists, for the low-income population, we should continue to be reflecting on this and working slowly. The market has been suffering with this and the international consumption as well. So estimating it is very difficult. We basically will adapt to it. So the company has always been resilient in this sense, so much that I invite anyone who would like to look at our presentation for international investment. Our gross profit has increased in the last 15 years. So even in inflationary cycles or deflationary cycles, we have been able to preserve margins. So in a more objective way.
The consequences for the price of sales. So we are working to have low prices and good commercial negotiations and continue to be competitive and maintain the margins that the company needs. I hope I answered your question. Very clear, Belmiro. And just a quick question that some people asked and maybe it would be interesting to leave this very clear when asked about the inflation of food starting in the second quarter, especially in April, just to make it clear, meter that you already noticed or did not notice in your operations. Have you seen any changes or recovery of pricing it would be important to make this message very clear because that generated some questions. Thank you.
No. In fact, -- this has altered prices in some categories of products that has been visible their products. There are products that are more affected because of the conflict that is link, we should see stronger impacts now in May and June. Since most of the operators in the sector and even us had stock but at the rate in which now there is stock that has suffered inflationary impact we will be correcting the price of sale. Obviously, we need to be careful to not give you a number. But of course, if there's a pressure of price, we will need to pass on the prices that we had perfect.
So it's a dynamic that's still similar to what the first quarter was in April, but there's some optimism in relation to that for May and June. That's the reading you have today. So there's a nominal correction in the same way that we see a deflation of 1% in the commodities. There is a limit of what we can offset as well as an adverse movement, which obviously is not in our hands. This is in the market context because of everything that we mentioned because in terms of the increase of consumption all of this inflation may help correct the top line.
The next question is from Vinicius Strano from UBS. We will open your audio so that you can ask your question. Please go ahead.
Two questions on my end. The first is about the volume of PJ. So if you could comment on what you see in terms of your PJ clients. what your perception is on the financial health of these clients in the scenario of high interest rates. And if you think that in a scenario of recovery of inflation, if we can think about a refi and some movements of anticipation or formation of stock in the profile of clients here at the end of the line?
And my second question is about the effects of the removal of products from the tax regime in Sao Paulo, if you see that this can generate the possibility of monetization that is additional for taxes. Looking at the ICMS angle, if you have 1.6 billion to recover in CMS alone, maybe this can generate some opportunities and thinking about new phases of tax exemptions. What can we think about in terms of impacts in ICM net revenue and margins towards the future?
Thank you, Vinicius. As you well mentioned, Sao Paulo has been removing a series of items in the tax burden, which will be happening over the year and new batches will follow we put to the variation of gross margins because this will affect the ceiling that Sao Paulo has in the correction of ICM V, once you leave the regime where you only had the reinstitution of the tax as a reductor of ICMV for credit and debit. So this will be affecting the net sales in relation to this competitiveness we do not expect any change because -- our numbers were already elevated.
If you think about the substitution or the main sales with the effectively sell products. So that we would need to recover credit, which is extremely complex. It would have to be on for every SKU, but there weighted average. So in our point of view, this will alleviate us in the point of processes because you go into the credit and debit regime, which we operate with low price, the lower the price, the lower the margin no matter how that was already composed before, but the lower price, the less taxes you pay that has a neutral effect from the point of view of competitiveness, in my opinion.
So seriously, what will change is the former negotiation with pricing and negotiating with suppliers, but the products will be going to the normal level. And the volume of PJs, what have we observed these clients, as I mentioned -- even those who accompanied the Nielsen report has a vision that it's a bit distorted. There is a bias in the samples because those who deliver data are the high the large industries for low income is only done afterwards. So the PJ clients are the people that are in the 9% and these clients, we have observed them as highly cautious.
From the point of view of credit, it seems that their financial health has not been dropped in this sense because these clients are very resistant. They never had access to credit, so they are maintained, but they're being very cautious in the origin of the low income that comes and has been impacting cash and carries, accompanying deflation is at the origin of the consumer. So when they feel that their if there's any explosion in any category of product that is not perishable where they see more opportunities of gain clients will be more careful before they invest in stock. That's what we have observed this movement has been happening in the last 2 or 3 years with the PJs being very careful at the moment of absorbing more so part of this explains the margin movement, which we have been doing.
So we do not see clients with elasticity to say that, oh, no, I'm going to drop prices and have huge volumes. No, this has not happened. I hope I answered your question.
The next question is from [indiscernible]. We will continue to the next question [indiscernible] from Bank of America.
Belmiro, I know it's difficult, but what do you think about same-store sales and operational leverage for the year as a whole? You have deflation, but there are also compensations your launch in the Mercado Livre seems a bit delayed. How should we think about the time line to reach 450 SKUs on a national level? And Belmiro also seems that you are very confident in the value proposals. Could you comment on the price differentiations that you are observing?
And to confirm the initial proposal would be B2C, B2B or both?
Bob, I didn't understand the value proposal in relation to what you talked about B2B or B2C, both what is the value proposal in comparison to the electronic competition in the platforms.
Okay. Understood. I think there are 2 factors -- what we are confident on in the value proposal with the partnership with iFood is because of our capillarity in stores and assortment, which we can offer and the price level that we are able to provide so much that today, we are probably the main operators within this platform. and it's an observation of ours that there is still a lot of space to be able to advance for Mercado Livre since we closed the deal at the end of March, we even had announced that the tests would begin in April because there's also a time line of projects for both companies, that is the objective is to accelerate more, but within responsibility, especially on the part of integration.
And I believe that given our size and our scale to add a series of products, we could -- as we showed in the initial numbers be a very strong competitor within the platform on items that we understand would be adherent. This is a discount that is done with for hands with us in Mercado Livre. And this should probably be strong in the second semester. And with regards to the -- as far as we see a scenario, which for consumption should still continue restricted, obviously, in a deflationary scenario, it could be that the that there is a turnover and that will affect the sales.
But with deflation, we cannot do anything about it in the same way. The inflation would coincidentally be over the main products which are the ones that have more components of credit and also have more weight in the final price of the product and the composition of the packaging, looking at the same stores. We have observed the clients doing trade down. So every time we look at the level of indebtedness of the population, they are holding the market consumption. There are other sectors of retail that are not being affected, but then we have to understand the social classes in Brazil of movement. For higher incomes do not suffer impact even in our stores for higher income do that are directed to lower income.
They are in a market scenario that is very difficult. We hope the scenario improves, and we are working on this at the moment to prepare with new incentives, new proposals of value, new channels and new products to be able to best be prepared.
The next question is from Andrew Ruben from Morgan Stanley.
I'm interested to understand more about the plans for private label. You mentioned the 200 SKUs for the year. Do you have any sense of where you could see that figure reaching over time -- and even over the medium term, your vision for what private label penetration could be within your store sales.
He can hear the translation. He also asked about the 200 SKUs and how we are doing in that sense. Okay. I think I was able to activate it now. Well, we still have the first 25 products as there are a series of negotiations with the industry, we will finish the quarter until the end of the year, we should continue with a evolutionary scale and every quarter brings you the new information. The entrance from the industry is very high. Our own label has always been a challenge in Brazil, but as we had highlighted before, in the polician region of Sao Paulo, we have 60% of penetration in homes.
So there are still opportunities for our own brand. This is being discussed in the Board, but it's a very favorable moment to come in with an aggressive project for private label. We are also looking for products with lower prices. Obviously, there's a lot of and we need a lot more information because of competition issues in the market, but at the rate in which we can and every area will be giving more shedding more light on the subject.
The next question is from [indiscernible] from HSBC. We will activate your audio, so you can ask your question. Please go ahead.
My question is in line with the previous one on the private label -- and when we look at the more mature markets in the United States, for example, like Costco, the giant Costco, they have their own private label that is very strong in terms of vitamins and supplements. It is just like the Equate brand, just to know how the company that brought this release of way and creating if that is going to be offered connected to higher amount of protein consumption and because of the change of the consumer, you also expect to grow in this category with your own brands?
Thank you, [indiscernible]I think in terms of vitamins, when you look at the other protein supplements, no, there is no restriction from the point of view of doing this with own private label. There are medications and private labels, and we can work with the brands that are well-known but the rest would be to work with projects that could be extended. They are in a previous phase because we are creating more space in stores and in my vision, the pharmacy will also be attractive for this the coincidence with Costco is that they have a pharmacy as an important point of attraction and they are able to follow on even in these markets with the volume of sales. And medications within the food sector is huge.
We are still working on this, but the first pharmacies will come out in the second semester, but it will be much faster since it doesn't depend on a license so for us to be able to advance once the changes -- the behavioral changes, especially with the higher classes and the search for more protein products has been quite notorious. We've seen these changes in the market. Assai is the largest seller of protein in Latin America, especially with some projects, which we've had in the last few years for the inclusion of services that are still under maturity. This was made in order to position us more strongly in the position in the category of protein. So this is strongly in our radar.
The next question is from [indiscernible] from Safra. [Operator Instructions]
I would like to ask 3 quick questions. If you could open on gross margins, how much the annual gains come from store maturity and how much comes from pricing projects. Anticipation of credit cards the level dropped a lot in terms of receivables ever in the year-over-year in relation to the last quarter. I would like to know if this is a recurrent volume that we should expect in the future.
And then the last point is in relation to taxes over revenue. There was an increase in this quarter. I would like to understand exactly what the motive of this increase was and if we should consider a higher volume from now into the future.
Well, Tales, I'm going to talk about the margins of the taxes, and then [indiscernible] can talk about the anticipation of credit. So the taxes was a change. When you talked about the item leaves the tax substitution when it is in the SAT. The tax of ICMS is within the ICP. When it comes into the normal thematic the tax is deducted and that's why it comes in as net revenue. So the weight and the increase of taxes over sale is connected to the change of system, the substitution of taxes, especially in the state of Sao Paulo, there are other states also made this change, but it has not been so relevant. In terms of gross margin, we should not probably open.
We've shown positive margins. but they are also negative sides. So for we will probably reach a number which, in our opinion, opens a strategy for the company and opens a lot of strategies to gain share in the company. And then the margin should also become interesting to competition because it wasn't expected. So the natural path of pressure is that you lose the top line and then you lose the margin, but that's not what happened. So our resilience is very strong in the sense within the sector within the food sector, but we cannot open the components of the margins on the taxes.
The more products leave the substitution of tax more will the effect become visible if there are any questions on that, please speak with our international relations team because they will be more than available to give you more information on that and [indiscernible] talk about the anticipation of credit cards. Thank you, Tales for the question.
On the anticipation of credit cards, historically, we've always had this as an alternative to recompose short-term cash to accelerate some kind of cash flow to cover the needs of the company. But historically, these are avenues of cash reductions that are a bit more expensive than a structured sale as a debenture or other path. So given the tax situations. We had a substantial drop or decrease within the period compared over the last 12 months and even in the quarter as a whole, as a strategy -- what we see for the company is no activation in this front, but we should prioritize the lower cost debt they will have balance of the cards increasing.
Just a complement in terms of the debt -- we have a program of rebuying the debt, and this has been improving some taxes or some fees account the Board approved it -- and so we can anticipate credit cards after the purchase of the secondary. It's not necessary to have a volume of cash, and this has been well demonstrated.
The session of questions and answers is finalized now, we will pass the floor to the final considerations of the company.
I would like to thank everyone for the participation in building this material, the Board for the support. We had to bring these scenarios. We would like to be talking more about the consumer market in a better scenario. But is highly resilient. If you look at the delivery of margin independent of the scenarios that we have been going through.
And the company once again is positioning itself planting seats, which when it's connected to indebtedness and the higher possibility of consumption for the low-income population, which are highly pressured at this moment that the company will be well positioned with new initiatives to capture these gains. I would like to thank everyone, and thank you for the participation. I'm sorry if I spoke too long in the beginning, I wasted more time on that, but we just like to make things very clear. We talk about Assai independent of the moment we are in, in our vision, we could say, but all things could be better.
But given the scenario of consumption, I think the entire team in general is highly congratulated. Thank you so much to all.
The video conference on the call of results for the first quarter, Assai has been finalized the Department of Relations our investors is available to answer any further questions. Thank you so much to the participation, and have a great day.
Sendas Distribuidora S.A. - ADR — Q1 2026 Earnings Call
Sendas Distribuidora S.A. - ADR — Shareholder/Analyst Call - Sendas Distribuidora S.A.
1. Management Discussion
Thank you for waiting. Welcome to the webinar on the management's presentation for the General Shareholders' Meeting of Assaí that will be done on the 29th of April 2026. For those of you who need simultaneous translation, I would like to mention that we have this tool available on the platform. In order to do so, please click the interpretation button in the Zoom globe icon on the bottom part of the screen, and choose your language of preference, Portuguese or English.
We'd like to note that this earnings call is being recorded and will be provided on the IR website, address isir.assai.com.br. [Operator Instructions].
Now I'll pass the floor to Gabrielle Helu, the Investor Relations Director at Assaí.
Hello. Good morning, everyone, and thank you for participating in our webinar on the company's proposal. We would like to say that this presentation will be restricted as well as the Q&A to the topics related to the General Shareholders' Meeting and the information on the manual. I'd like to present the Board members that are present, Oscar Bernardes, Leila Loria, Belmiro de Gomes, our CEO; Sandra Vicari, our VP for People and Sustainability; and Tamara Nahuz, our Governance Officer.
Now I'll pass the floor on to Oscar for the beginning of the presentation. Oscar, you're on mute.
Good morning, everyone. Sorry about that. Started off with the mute on. As Gabrielle mentioned, thank you all for participating. And let's move to the first slide.
Great. Now we are still a relatively new company when it comes to being a true corporation, right? You probably remember that in 2023, we had the creation of the first Board with a majority of independent shareholders. I mean, that was a traumatic meeting where we did not get the approval of the management. So the new Board had to work to fix the situation, and we were able to have support for most of our shareholders to approve this package that was a temporary transitory pack in July that same year. And we started off developing a permanent ongoing conversation with shareholders. So we've spoken in person with over 30% of the total base of shareholders.
April 24, we had a meeting where we got the approval of a compensation plan that we call the executive partner program that we consider to be a long-term plan that's extremely important. We spoken with over 44% of the shareholders base, and we got approval, a massive approval, almost 90% of our shareholders approved this. In '25, we had the fourth cycle where we spoke with 57% of our base of shareholders. We also got approval of almost 63%. And now in this cycle, we've already spoke with over 65% of our base of shareholders. And we do not foresee anything very complex for this shareholders' meeting where we focused more on obtaining their opinion and get some questions on strategies for the future and succession plans and in preparation of this general shareholders' meeting in the 29th of April.
All of the interactions were always related to the ISS and Class 1 agencies, but we were completely incapable of convincing these companies and these agencies that we're really doing the right thing in the right way. Although we explained this and provide details, they always have one or another point providing contrary recommendations towards our compensation approval and proposal. And this is a major point of frustration. You must remember, and we're going to get into details about this a little more ahead that we only have 3 statutory directors. So any variation for compensation is a very big variation, especially when you have events that are onetime or one-off events that won't repeat themselves. So we must be very careful as we analyze the variations in the total compensation, right? And that's why we really want to focus on this today to make it very clear that there is no exaggeration in management's compensation. And we also want to emphasize, I want to remind you that the company today is a much greater company than what it was 4 or 5 years ago.
And Belmiro will share this growth a bit. And we've had a series of new businesses and new services and projects going on. So the complexity of the company now is a lot more intense than it was 4 or 5 years, which also led to a series of adjustments and strategic changes that will continue to be ongoing. And with this, we'll have to have an executive profile that is really more comprehensive and complete, which is more difficult to find in the market. So I hope to count on your comprehension. And please submit all of your questions because we really want to get into the general shareholders' meeting without any questions left outstanding, right, about what's being proposed.
So Belmiro, tell us a little bit about the evolution of the company in the last few years.
Oscar, thank you for the introduction. The idea is that I'll share a little bit of the evolution of our growth and the numbers related to compensation and the different research initiatives the company has. We have Sandra Vicari, our People and Compensation Administrator Director. But of course, the complexity in the company became a lot greater. We're one of the biggest companies in Brazil, the biggest customer traffic in physical stores. We received over 40 million people. And most of these or almost all of them, Assaí is referenced in cash & carry in Brazil. And the company is also -- ever since we took over back in 2011, it was a company that was at a deficit with BRL 3 billion in revenue. And now the growth comes from the actual executives and not from the prior shareholders, right?
So I always like to remind you that ever since I took on the role of CEO, I never received [ $0.01 ] of investment from abroad. Everything we did was done with our own cash generation. Of course, our shareholder base management was -- this management was always been capable of transforming the company. So we brought in an analysis that's not from 2011 onwards, but from 2021 onwards, which demonstrates this transformation cycle, where we went from over 60,000 to 92,000 employees. And this period is where you have an increase in the interest rates that results in leverage. But that's also where we have the biggest expansion project in the company and also positioning of cash & carry in Brazil with the acquisition of the Extra hypermarkets, which was not only an expansion of the amount of stores, but also a change in the overall sector in Brazil, which is where you lead a more specialized format that's more in the outskirts of the city and you get into a closer -- a more present model where you're close to all of the different social levels of the classes. So the results we see even in this inflation period in the food sector demonstrates the resilience. We're not only positioned in lower income.
Our resilience also in the margins comes from this broadness of our different diversity of public. So we work from Class A all the way to Class B. And so that services the B2B and there's a major complexity. And we have a series of micro and small entrepreneurs upon the space. The company, it really takes on this unique growth from 212 to 312 stores, and this has been really keeping in line with the growth of the NPLs. When you have an expansion period, your customer experience may drop or the standards may drop from management's perspective or shareholders. We have 40 million customers visiting our stores monthly, right? And so I think it's not about -- that's not the topic of this webinar today, but well this trend for deleveraging and that shows the peak we've had in 2022 with the acquisition of Extra and the closing in 2025. I mean, this year where we really committed to the reduction of our leverage, right? So I think on my side, that's it.
I'm going to go over compensation in detail et cetera because Sandra has actually been in touch with the People Committee, and she's the most skillable person when it comes to assessments and research to get into more details of compensation. And Leila is also working on this webinar and will be available as well for Q&A as well. Thank you much.
Good morning, everyone. As we've already mentioned by Oscar and Belmiro, our objective today is to explain this in a very clear and transparent way and go over all of our compensation proposal that will be submitted to the general shareholders meeting. But before we get into the numbers that we're also going to add on here, I want to reinforce an important point. On this compensation structure, it continues to be completely unmodified from a conceptual perspective. Ever since April 2024, where we had over 44% of our shareholders base favorable. So we were able to keep the same architecture for compensation. And this is based on 3 pillars, which is the fixed compensation where we position our fixed salary of the executives on a medium average in the market, which is our strategy. And we position this based on research done annually.
This year, we've already performed about 3 different research initiatives to assess our positioning at a level compared to the rest of the market and also guarantee our competitiveness avoiding any excesses in compensation. We identified that the fixed salaries of our executives were below [ P50 ]. So that's when we proposed a readjustment in the salary so we could be aligned with the defined strategy. Then we also have a strategy, which is the total target compensation being at 75th, including our variable compensation. Of course, this variable compensation is going to be achieved if all of our targets are reached. And so this company based on goals achieved. Our short-term incentives, as you may see, have a very strong correlation with the financial performance, operational performance, including the metrics for results and also ESG. And we have a ceiling of 150% of our target value if the goals are achieved by 120% and we also have put off of 80% of the EBITDA. And if this is not achieved, there's no payment.
And on the long-term incentive program, we have an extended vesting. And we've also kept our metrics focused on cash generation and returns.
Here, we have our targets just to present here that represent 70% of our long-term incentive plan and the other 30% are restricted shares. Besides this, we have also our executive partner program, which is already approved in our General Shareholders Meeting 2024, which reinforces our long-term alignment between executives and shareholders, and we don't see much of a need to have a new approval because it's already approved to avoid any duplication in decision-making processes. And as you can observe, we have a structure which guarantees the balance between competitiveness, meritocracy and also value creation for the company. This structure was not modified, and I want to reinforce this. It's been kept ever since the approval back in 2024.
And moving on, I want to present to you the movements or the explanation of the movements in 2026, highlighting the one-off effects that are nonrecurring and that were the main focus of -- that caused a bit of confusion in the assessments of the agencies. In the proposal for 2026, we have a total proposal of about BRL 73 million. This number, when we analyze it, must be -- we must consider that in this number, we have BRL 12 million -- sorry, BRL 18.2 million of nonrecurring effects related to 2 specific effects that are involving the transition of the leadership we've had over the year.
First, hiring a new executive where in order to attract an executive to the market that had the conditions to take on the role as a finance VP that was empty for 8 months, we had a hiring bonus payment, and this is a nonrecurring cost. It won't be repeated in the next few years. And we also had the exit of another executive. So there is a cost also for the termination of this contract where you include termination benefits and also the anticipation of vesting provided to this executive that is still available to the company for 3 years. And also, it's an amount that won't be repeated in the next few years. And so when we exclude these effects, we can reach a base of BRL 54.8 million and with this, the increase does not reflect the expansion in compensation or an increase in compensation, but these one-off events that we will have in the next few years.
And so moving on the next slide, we have an external analysis, as I mentioned. And part of these assessments compared the proposal in '26 with what was performed in '25, which generates a major distortion because we have a mix in the maximum value and the amount that was actually paid condition to performance. When we analyze these proposals, from a comparative base and we compare the base in '25 and '26, we observed a reduction of 0.4%. So here, there's no growth or adjustment in compensation. We have stability without the actual growth. And when we compare what was performed in '25 and what was performed in '24, we have an increase in about 0.9%, which was below inflation. And so what we can conclude when we analyze the different proposals and the actuals is that we don't have a relevant growth in compensation, but instead, we have stability.
And so just to make this clear here, as a policy, we always provision the maximum possible, which would be the 150% in the payment curve. And we would love it if we could pay those 150% if performance would justify this. As you've seen, we have not paid this in all the plans we presented. But as a policy, we always provision for the maximum amount, right? And that's why you have this number that hasn't been achieved. And here on the next slide, we have this exact explanation that Oscar explained. And why do we have the major differences, right, between the proposals and the actuals?
Well, the value proposal will always represent the maximum ceiling, right, which and that considers 150% of the target value if you achieve the goals by 120%. So when you look at this from practical terms, historically, the actuals have been below what we've been approving in our general shareholders' meeting. In 2025, we approved [ BRL 19.5 million ], and we only achieved BRL 38.7 million below this, right? So it's a conservative model. And we're only going to be able to pay the 150% or 120% if we have achieved our goals and effective value creation for shareholders. So it's a model that we consider to be very conservative, and this is why we have such a big difference in the last few years between the proposals and the actual since we did not achieve the 150% and so when we look at this from another perspective, and we analyze this historically, as you can see on the next slide, we have a slight composition of our fixed compensation and long-term incentives as well as the instruments we have for shareholding alignment, which is our executive program and our proposal for '26, when we adjust it and we exclude the extraordinary amounts, we keep coherent.
So a growth of only 2.4% compared to what was the actual in '25 and a reduction of 0.4% versus the prior proposal, right? So we don't see in this proposal when we analyze the last 5 years, any kind of change in the profile or compensation mix. What we see is the continuity of this mix keeping up with the same percentages that are very close with just some occasional adjustments in the mix. So when we perform this, I would take on a different perspective from an economic perspective, adjusted according to the IPCA and including extraordinary effects, then we observed a dropping trend of about 18% compared to 2021, as you can see.
So what we reflect when we perform this analysis is that there was not an increase in the compensation or an abusive increase in compensation. Growth at a nominal level was lower than the accumulated inflation, and that demonstrates that the company has been keeping discipline despite being in a relevant expansion cycle, as Belmiro mentioned initially and Oscar mentioned as well. So we had a very important change over the past years, but compensation was kept really in line all these years and keeping up with alignment also with what was approved and all the strategy. And so the executives, as we mentioned initially, perform annual research to assess this compensation and verify our competitiveness.
In the last 3 years, as a result of our research, we had the identification that our executives were below the P50, which is our strategy. We didn't perform any adjustments, but we did now, after all of this growth and expansion cycle, so I think this proposal and all of this really reinforces our commitment to this balance and responsibility in managing executive compensation, right? So our policy remains unmodified and consistent over the years. Our assessment in 2026, as you've seen, is due to nonrepetitive events, right? And this case demonstrates stability and discipline. And you can see it's a model that has strong alignment with shareholders' interest and value creation as well in the company.
And so I think that's it. I think Oscar can also speak about this a little bit as well with our main tool for alignment with our shareholders as well.
And as you've seen, when we get into the partner executive program numbers vary a lot because we must follow the accounting rules. And unfortunately, the value of our shares have been varying a lot. And as this change, the provisions also change. But these are only accounting structures, right because as promised when we have the approval of this plan, the plan will not dilute shareholders' participation in our stake. So we've been buying shares and we have treasury shares as well that support all of our needs to support this program as well as the long-term incentive program. So we see some variations also in the accounting numbers, but they do not affect shareholders if these shares are in treasury, right?
So this executive shareholder program, I don't even like calling it this compensation program, right? We're a corporation and among us is a recent increase in experiment in Brazil. You probably count on one hand, which actual corporations we have in Brazil. And Board members are just transitional. We have no idea if we will be Board members next year. It depends on your desire, right, to elect us or not -- or choose us or not. So we must provide some long-term continuity to company that does not have a reference shareholder or that does not have a controlling shareholder. So that's where we've developed this program and under a lot of conversations with shareholders.
And I'd say it's really a long-term commitment, right? So it's a program that's been -- besides the 7 years, you have a 3 years lockup, right? So it's really long-term programs. And just to refresh your memory here, this program will only start compensating executives in 7 years, if they actually deliver over 20% increase annually corrected by the inflation considering the profits per share, right?
So this is a very ambitious target, and we still believe we'll be delivering this. We're not -- despite last year's not being maybe brilliant like this, we continue to believe that this is a possible objective. So please carefully look at this program and believe it or not, ISS complains that we don't provide visibility, but it's absurd, right? It's more than explained in the document, but they want us to include on the same spreadsheet that should be approved every year, right? But that's impossible, right? So it was already approved by a massive amount of shareholders and our executives. This will be a contractual commitment of the company, and it's not feasible to change this every year, right? So that's why the Board is still really comfortable with this program that was created, and we hope we'll have stability in the long term, considering a company with such control, right? And so I think that's what we have to present at this point in time. And please do feel free to ask us. We're here to answer any of your questions.
Now we'll start the Q&A session. [Operator Instructions] I think we do not have any questions at this point. So we can wrap up.
Let's just wait maybe 1 more minute. and make sure no one pops in. I know we explained things well, but did we explain things that well? Come on, guys, any questions?
So feel free, of course, to call Gabi or Rafael after this conversation, right, to ask us anything and or even to me or Leila, we're all available, right, to clarify any other points you may have later on.
Well, if we still have no questions, then let's wrap up. But thank you all so much for your participation. And as I mentioned, if you have any other questions, please do hop in. This is Assaí's policy in our current Board, which is total transparency towards shareholders and ongoing contact. This is how we manage a company, which belongs to you, right, at the end of the day. So thank you all very much.
So the webinar on the management's proposal for the General Shareholders' Meeting is officially ended. The Investor Relations department will be available to clarify any other questions. Thank you all participants, and have a great day.
Sendas Distribuidora S.A. - ADR — Q4 2025 Earnings Call
1. Management Discussion
Good morning, everyone, and thank you for waiting. Welcome to the earnings call for the fourth quarter of 2025 at Assai Atacadista. I want to highlight that if you need simultaneous translation, we have this tool available on our platform.
[Operator Instructions] We'd like to let you know that this earnings call is being recorded and will be provided on the company's IR website, ir.assai.com.br, where you can already find the earnings release.
[Operator Instructions] We would also like to let you know that all the information in this presentation and possible statements that could be made during the earnings call about future business perspectives, projections and operational targets, and financial goals at Assai represent beliefs and assumptions of the company's management as well as information that is currently available. Future statements do not represent -- do not guarantee performance. They involve risks, uncertainties and assumptions as they relate to future events and thus rely on circumstances that could or not occur. Investors must understand that overall economic conditions, market conditions, and other operational factors can affect the future performance of Assai and lead to results that differ materially from those listed in such future statements.
We would now like to pass the floor on to Gabrielle Helu, the Investor Relations Director.
Hi, everyone. Good morning, ladies and gentlemen. Thank you for participating in our earnings call for the fourth quarter and the year of '25.
Now we're going to be presenting the executives that are present here. We have Belmiro de Gomes, our CEO; Aymar Giglio, our CFO; Anderson Castilho, our Operations Director; Wlamir dos Anjos and Sandra Vicari, our Human Resources and Sustainability Director.
Now I'll pass the floor to Belmiro to begin the presentation.
All right. Hi, Gaby, and thank you, everyone. First of all, we want to say sorry, we had to make an adjustment for our agenda. We originally had scheduled it for tomorrow, but we -- considering that we have Carnival and a lot of people traveling, we decided to anticipate this, right, instead of having it on Friday prior to Carnival.
So about the fourth quarter and 2025. We are going through a quarter with some effects that we had already mentioned and that the market is most likely aware of from a consumption and debt level.
So first, I want to highlight the aspects of the fourth quarter. And as we talk about 2025 and reinforce this, just how the company is really focused on reducing leverage due to the volumes of the interest rates we have. And we can reach levels that we had actually presented as guidance to the market that we're considering an interest rate that was a lot higher than what we're subject to reaching, 2.55x leverage and a total volume of sales of BRL 84.7 billion in the year, the growth of the same-store sales of 2.6% and the opening of 10 new stores, which would wrap up 2025 with 312 stores under operation.
We were able to look at the commercial execution and store maturity and the new pricing systems we've been implementing. Despite some tailwinds that I'm going to explain up ahead, we had some important evolution in our margin of 0.3 percentage points in 2025.
Our expenses were a bit pressured. We have a lot of new projects going on in the company, and we're going to highlight this up ahead. We are entering into a new cycle of changes in cash & carry, and we have a lot of new projects up ahead and some initiatives that are going to be unleashing value and also growing customer loyalty and sales volumes.
With this, the company's EBITDA also had an evolution of 0.2% and a margin of 5.8%, with a volume of the net income of BRL 847 million in the pre-IFRS view and BRL 645 million in the post-IFRS view. You've probably already seen this in the release that the impact with impairment considering the split with the FIC.
About the environment in the fourth quarter, what we've seen. We had a very significant trend of deflation that took place simultaneously in different commodities. So ever since we -- life is life, we've seen commodities go up and down, and that's normal. But normally, what happens is you have deflation in a certain category, and this is quite common. But then in another category, you normally have some kind of inflation. But what we've seen in the fourth quarter is that there was deflation that was persisting in multiple categories that have a big share among low-income customers and also in the overall food basket, right? Because they're low added value products and normally, farmers and producers don't deliver door-to-door, which is different than, like, health and perfume and cleaning supplies.
Commodities are a big channel that supply cash & carry, right? So as commodities drop a bit, you'll see that rice had a drop of almost 37% compared to the prior system; milk, 16% drop; sugar, 11% drop; beans, 10%. So wheat as well with almost 5% drop in prices within this normal variation. And of course, this, as this category has a high share, will reflect in the volume of sales.
So in the fourth quarter, we brought a breakdown of what the volume would be, right, in tonnes, and we also increased sales in kilos compared to last year. But of course, with the category that's so important in this deflation, the nominal volume considering this the same-store sales is below IPCA, right, once we're quite exposed within this commodity.
Another factor we've been highlighting also that we also have data in the release, which is what we've been demonstrating here with the K effect, let's say, with inflation, right? So now I was going to complain about the interest rate. No, but regardless of this, when we look at the mix of the basic food baskets the population buys, we've seen an expansion at a level we've never seen before, which is when you look at the formats that service high income, they continue to gain volume. They continue to gain sales value because there's a switch for more expensive products, right?
So in the fourth quarter, what we've seen the formats geared towards high income and a growth of 4%. When you look at the same formats that are normally supplying themselves with us, which is where you have this persistence of trade downs, these formats dropped to about 9%. And so of course, maybe high income was going more than low income. Yes, but that variation of 4% to 9% is on one side positive, but also negative, right, yes, compared with the previous year, right? So this is what we call the K effect.
So with interest, a part of this becomes consumption and then part of the population, of course, loses this effect and then it becomes formats it, right? Because most of the volume of interest obtained was also headed to consumption. So we have BRL 7 trillion in fixed income in Brazil according to the data that ANBIMA has been receiving.
On the other hand, we have low income with BRL 4 trillion of debt paying really high interest rates. So this, of course, influences the pack of who is more subject to low income. And EBITDA in the fourth quarter was stable compared to the previous year. There's a negative variation, considering the volume of deflation with a margin of 6.3%.
So we can advance to the next slide. So this is where Aymar will be able to highlight this considering the efforts in leverage from a debt perspective and how things have been evolving. Aymar, it's you.
Hi, there. Good morning, everyone, and thank you for your presence. With this context that Belmiro's mentioned, the company was able to, in 2025, reduce its net debt. The net debt was reduced by BRL 1.2 billion. And this was all in a year where according to our judgment was a very positive year when it comes to operational cash generation, a major EBITDA conversion of BRL 3.7 billion. And this cash generation was enough to pay for the CapEx. It was enough to pay for the services of the debt and the dividends, and still had a final cash generation of almost BRL 600 million.
So this, combined with a reduction in the anticipation of receivables, explains this variation of BRL 1.2 billion -- sorry, BRL 1.2 billion in the net debt of the company, which led to this leverage here on the right side of the chart and of 2.56x, right?
So we reached the guidance that was provided back then for this leverage mix of about 2.60x, we had the 2.56x here. And for 2026, the idea is that this financial discipline and effort in the reduction of leverage can really not only remain, but be intensified in the sense that multiple actions and initiatives can positively impact this reduction, such as a CapEx that we estimated at BRL 700 million. We've been keeping, although we have already provided a new expectation for the new stores, 5 new stores, but obviously, these BRL 700 million at this moment remain because the 5 new stores compared to the 10 previous stores were BTS -- build-to-suit.
So the equipment for the stores, which would be an investment in the BRL 700 million, we've been keeping here considering all of the new projects that we've been working on and prioritizing for 2026. So we keep the value of BRL 700 million, but we also have the possibility of reviewing the portfolio and monetizing assets.
So when a company reaches the size we've reached in the amount of 312 stores, we can and should begin to have this ongoing task of reviewing the portfolio, seeing what we can leverage in this portfolio, and maybe some monetization as well through SLB, that could happen throughout 2026.
So from a debt leverage perspective, I think this was pretty much the information we had that we wanted to share with you. Next, well, Belmiro.
Now here, at this point, Aymar shared and we should look at the portfolio as well, and the company is super focused on reducing leverage. And this focus doesn't make the company stop growing, right? Of course, we all know that cash & carry went through a very strong expansion cycle and became the company with the most valuable brand in food retail and the biggest customer flow as well. And so we've mentioned these initiatives to increase the share of wallet and different projects the company's been working on with a focus on this investment, right?
So here we can show you one point that was actually a bit of a polemic, which was the butchery and the cold cuts or deli area, right, which represents 5% of the total sale at Assai. But that's 5% of a company that's making almost BRL 90 billion. So 5% divided by this amount made Assai really become the biggest protein seller in South America. So this was a challenging project, and there was actually a certain level of CapEx with a higher cost. But in our view, it was also a way to adapt to this change, which is a trend of switching carbs or reducing carb volumes and increasing the general consumption of protein.
So these 2 projects help position the company within this point. As Wlamir mentioned, we saw BRL 1 billion per year, and this is a category, right? The drop in the rice prices, but other categories as well that are growing within this moment. So I want to show you this, quickly here, just to mention how each of these avenues for growth are behaving, right? And what's the biggest point we base on our activities on? Well, the 40 million people that go to our stores monthly. And in the fourth quarter, this was completely stable.
So moving on to the first point. You've probably seen that we announced a partnership yesterday with Mercado Livre. We're going to be starting with Assai in the marketplace through a fulfillment model. We had a challenge in the food sector as a whole to have our own efforts in the sense, but there are some operations that are a lot more efficient because they have other categories and other products that dilute their costs. And so this is an important partnership.
We will be the first cash & carry in Mercado Livre for about 400 SKUs that should be worked on. Of course, these are nonperishable products. And since we're one of the biggest operators in the food format, we have the conditions, prices that are differentiated. I believe this is an important partnership because we'll have a new pillar in the digital channel. And for Mercado Livre, they'll also having more competitive prices. So we should evolve into other initiatives with the supply and the use of consumption of our stores and with Mercado Livre performing adjustments, and Mercado Livre has best and biggest logistical structure as well.
So another channel that's also going to be accelerated is our partnerships with the last mile, and that's highlighting the partnership with iFood that goes from 56 stores. We should have 100 stores within the platform by the end of the first quarter. And on average, the mature stores add about 3% of additional sales. We have also brought [ Wlamir ] in together with Julio leading this project. We still see big potential because the Assai brand is very strong and the customers are searching for this.
So some optimizations in the store as well as the expansion of the Meu Assai app with 60 million registrations and customers on the app have unique prices and frequency that's almost 61% greater, and they spend 40% more in the stores.
We can move on to the next page, please. The other initiative, which here is a means to replicate, let's say, as you've seen in previous opportunities, Assai became one of the biggest tire sellers in Brazil. And if you look at this flow of 40 million people, of course, we've been trying to expand the share of wallet. So the In & Out project basically is to replicate what Costco does very well.
So we have one product with an unbeatable price and this product is not going to get into the regular assortment. But it's going to be there today, if the guy comes back a month later, it probably won't be there. We brought in 2 examples. One is a Philco refrigerator that's on sale today. If you go to the [ Anhanguera stores ], it's only 3,599. It's a side-by-side, 486 liters. We're going to be exclusive. It's a smart refrigerator. It's a lot cheaper than what you'll find on the Internet or any other channel, just to provide characteristic for this opportunity sale.
So in 60 days in 20 stores, we sold more than 1,000 units of these motorcycles. And then you have a bunch of other items that are going to get in -- like televisions for World Cup -- and all of this we're going to be replicating into the Brazilian reality and what we see abroad.
So why am I mentioning this? Well, because remember, the butchery project and some other projects, where since we put in services, a lot of people looked at it and said, "Oh, it's going to be a hypermarket." Well, what's the reference operation? Well, it's probably the Costco American operation that sells a refrigerator, the motorcycles, jewelry, Rolex. No one calls it a hypermarket, right? But the fact that we're putting in durable goods as opportunity items really demonstrate that this is an evolution because we have a potential for sale.
We already have a fixed cost in most stores, and the increment of this other product line should help in this customer flow to help set the positioning of the company when it comes to low prices. And in our view, there's a lot of potential for sales, and we should see results that are quite interesting. And we'll bring this with a break down quarter-over-quarter, and we can advance into the next slide.
Another important initiative that's been gaining traction is Sergio Leite together with Rene, we brought from the market with a lot of expertise and within the private label operation, and we're just going to start having the Chef brand, which was already exclusive besides Econobom, and we're going to start using the Assai brand in a bunch of different categories of products.
We hope to have about 200 SKUs with good penetration until the end of '26. These are very important items. The Assai brand will start now in the first quarter. And the objective of this project is to, first of all, if we've seen that most of our customers are searching for low prices, of course, they're trading down, but they want to continue to have quality, right? So it's a product that's similar to the leading brand, and we want to have a category with a level of margin that's higher.
Always -- there is always this challenge in private label. You needed to have a really big volume and density, which is what we currently have in some markets. Within the Sao Paulo metropolitan region, we have about 60% penetration in most municipalities. And we expect that with the entrance of the private label products, we should also start having our own commercial conditions with big industries because they're going to start having one more competitor within the POS. So it's a super important project that's keeping up with a pretty fast pace.
Now the other project, just to give you an overview, is a product that most people already know about, which is dividing 2 initiatives, right? One initiative we're already going to be starting now in the first quarter, which is space created specifically for supplements like creatine, whey protein, protein bars and all of this. This is the first plan we're implementing in 93 stores. And also, we've seen this acceleration in a shift in habits and maybe the GLP-1 analogs, and that probably helped lever this movement. And of course, now we have to anticipate this movement and adjust, right?
So this is an important project that we've been calling the Health World. And while we do this, we're advancing this pilot also with the drug stores. We have 25 stores that are going to be deployed and under operation until July 2026. And this is a pilot, right, because the systems part is really different than what we operate today. We have a team that's very dedicated to this and yes, Sergio also brought in someone that's a specialist in this area. And so in the first phase, the stores are going to be implemented, coexisting within the store area.
We're still discussing the approval to have access within the same stores. So they're going to be at the entrance, coexisting with the stores, faced with specific entrance according to the current legislation. But as we advance with this discussion -- since we got approval at the Senate and it should be approved at the House of Representatives -- then we're going to modify the layout, so customers from inside the store can also access it. So it's an important category as well.
Just as the In & Out, you have the fixed costs, IP, property tax and all of this already included, right? So most of our contracts are fixed rates, right? So if the IPCA goes up, our sales and inflation is 0.9%. And so you add more sales and that increases the share of wallet as well.
We can advance into the next slide. Now I want to go back because I think there is no one that's more specialized here in this than us to explain the FIC transaction, right? And share this. We've already had multiple opportunities. But this FIC topic, I'm going to -- since it's a topic that's a little more difficult, and we highlighted this in the release, well, you can contact our IR department. And we have someone also in the tax area to explain. We'll get into these topics, and you can concentrate any questions you may have about this directly in the IR department.
Well, this is just like a background to explain why we have this transaction with FIC and also to get into our next initiative here with the development of our financial services, right? So we've already talked about this over time.
We had this FIC that started off with GPA and Itau back in 2004. And over time, it gained complexity because they added Casas Bahia then after with the split between Assai and GPA, Assai also became a partner at FIC, right?
So in the last 5 years, let's say, we had 3 retailers. Sorry, he's on mute. Sorry about that. So we had these 3 retailers and each of them had a different business model, a different moment. And even the Itau partner or shareholder was not very excited with this design and this partnership that had lost its essence that used to be more dynamic over time.
So we had already been talking about this for a while, all of the partners agreed. And then we announced a split from the FIC, that should be approved. And so we hope this happens before, right, by the Central Bank. But this split from FIC represents the exit from GPA and Casas Bahia, and Assai and Itau would continue with this FIC for another 2 years.
We actually value our Passai card a lot and this partnership. And so when you start the approvals, we begin to have the permission of exploring a series of other products that in the current partnership was not really the focus or the interest justified by partners. But through the approval of the Central Bank, within this period, we can explore immediately.
Then I'm getting into the next slide. But I just want to say that this phase with the FIC finishes in 2028, right? So we'll be able to have a new card that can substitute the Passai card, that continues extremely valid and it's operating in the same characteristics, the same value creation for the company and for customers.
Value creation, that is, especially the value proposal by FIC, where customers can buy one unit for the wholesale price, the Passai customers paying with the Passai card and equity method that we're going to continue to apply together with Assai -- sorry, together with Itau. And this new stake and this new design representing 40%.
So from the approvals, we can demonstrate the new products we plan to explore quickly. And the first one is the private label card. The private label card is here to add on to the existence of our co-branded Passai card because it will be able to penetrate customers that have lower purchase power and also in B2B, right? So B2B customers that quite frequently are confused with B2C customers that own a very small business sometimes, have a huge -- have a greater chances of using this private label card, right?
So we've seen the experiences of our regional competitors and all of them have a private label that's really -- and they've been really successful. And that shows adhesion from this closed loop model for this type of customer as well.
So we have a very big expectation to generate earnings and results with this product in the first years. And once again, this is a product that's complementary to what we already have at the FIC. And that's also a product that generates a lot of value, but it's to a smaller amount of B2C customers. Maybe 20% of them can actually access or use this card.
So the private label will be an important -- we take on an important role. And this card, depending on the partnership or contract we develop through the split here will be -- it could be operating by the end of the year, of course, subject to the approvals of the Central Bank.
Then the other processes and products we're considering here, we also have positive expectations about -- because we have 44 million customers circulating our stores every month. And the companies operating that already sell and have partnerships in these other products have always been really interested in starting this channel and working on this with us. So through this approval, we can work on partnerships with these companies in these different sectors. And the expectation is that we'll have a very significant volume of financial revenue generation.
All of these with assistance, consortiums, insurance are all revenues coming from origination. We don't want to have companies that are like an insurance company or a consortium. We just want to originate or provide these services to our customers through a partner.
So we understand that there is a very restrained demand for these products that are massified, although there is a context of reduced income, et cetera, but these products have their place, let's say. And so we're really placing a lot of expectation on this and some other digital solutions as well for B2B customers. And all of these products are connected and included into our app. And our idea is that our customers through the Meu Assai app can have these other products as well embedded in the app, and the initiatives for acquirers through the Assai Pay terminal, credit card terminal.
This pilot project is already going to be applied to some stores, so we can quickly conquer about 1,000 customers using this machine. And from this moment, where the first phase of these 1,000 customers are at a state or level of operation that we consider to be ideal, we'll roll this out into the other stores in 2026.
So the idea here is -- we're working on this through a partnership -- the funding, the discounts and processing is all going to be under the responsibility of this partner company. And as a final result of this initiative, we really want to have a relationship with the B2B customers and be able to have initiatives that can make the B2B customers have exclusive advantages here in the store, not only generic, but also very much connected to their segment, right? So the transformers will have specific advantages and so on.
So this is our plan for 2026, when it comes to financial services as we create this new ecosystem within the company based on the approvals, of course, of the Central Bank.
Thank you, Aymar. Let's go back one slide, please. One point here. A lot changed in this market. And so I think this FIC had adherence, as we have 42% of the sales to B2B and the other 58% are for individuals in all social levels.
At the end, Assai was adherent to about 20% of our public, right? So we're talking about 8 million people, let's say, and that actually generated a revenue and will continue to generate revenue of over BRL 150 million net per year, and that considers the equivalence of these value propositions. And then now you have the opportunity for the other 80%, right?
So this is a market that changed a lot with the growth of the digital banks, and they don't need that much the retail operation that much to access this. But when it comes to cash & carry, we believe that this is where we have the biggest opportunities, right, with individuals. And also in the owners of these commerces that have -- that prefer to do some credit operations within the actual business, right? So these 2 products have a bigger potential than the revenue we currently have, and we'll be working on this to have something by the end of this year already when it comes to private label.
So before we get into the next slide, you probably saw the communication about the arrival of the new CFO, Rafael Sachete. He's going to join the team in the second half of March. He had here a period to close his activities in the other company he was in. So in a few days, we'll have a new CFO that will be able to support us. And I think it's a role that will really help us when it comes to capital discipline. It will be an important reinforcement for the team.
I want to take advantage also for this moment to thank Aymar. Of course, he continues working as an interim second Director, and he will be involved in this a lot when it comes to financial services. But I just wanted to publicly thank Aymar for his effort, his work in these different initiatives and for taking all these dual roles, let's say, balancing out both dishes at the same time. So on behalf of Assai and all shareholders, I want to thank you.
Thank you, Belmiro. It was a very important period, and you can count on me as well for the next projects and development.
Aymar can't leave before we pay off all of our debt. So that's it.
Anyways, next slide, we talked about different initiatives, and we've been spending a little more time than what we expected. But from a perspective here on reinforcement, we're a low cost business, right? So we have some different initiatives and the SG&A of Assai is stable ever since 2011. So we continue to evolve with low costs. And when you look at new categories, we're searching for ways to reduce expenses.
Of course, the incremental margin is equal or the same and also -- and there are other projects, some other processes as well as we are getting into an expansion cycle. And we should readjust this within our group. We have different projects even in the operation, which is the remote supervisor or inspector. And so we have someone servicing the checkout person remotely. So that reduces the time to 22 seconds.
We have another pilot as well that we're processing receipts. So instead of having 1 person per store with technology, you can have the receipt of the invoices and receipt. We're also changing our safety systems. And we're also reducing the amount of people that we have even with a better level of coverage. And we've also been working on pricing improvements.
We've been considering the artificial intelligence and the biggest gains were in the marketing areas, where we can create in just 2 minutes a video that's directed to that store with a personality price and to consider this in social media and a lot of productivity.
We'll have a new people management system as well that will simplify this ecosystem when it comes to training, selection of talent and within the system that's under deployment at this moment. So there are different initiatives as we search for ways to reduce operational costs and expenses, since we're still in this deflation period in commodities.
Also last but not least, we have also kept our initiatives from an ESG perspective. Of course, the company once again received a series of awards and recognition to the benefit of the time. We're also highlighting this in the release with -- when it comes to brand positioning, respect for consumers and work consistency and other initiatives, right, where Assai is really a reference, right, including black people leadership, some strong efforts also with our employees that are immigrants and refugees, as well as some other initiatives we have been working on.
So thank you, everyone. And now I'm going to quickly go up to Q&A now, okay, due to the benefit of our time limitations.
[Operator Instructions] Moving on to our first question from Danniela Eiger at XP.
2. Question Answer
We have some here on my side, but I'll focus on two, so we have time for others. But the first one is from a market dynamic. You've been very vocal on all of the challenges with purchase power, even deflation. What calls our attention when we look at what we had already known about in the previous quarter with the same-store of 5% in October and with the same-store of 1%, but at the same time, you bring in this variable volume. If you could help us a little bit on equating this and how we can think about this up ahead, if you're also bringing this initiative with supplements, which I think is a super interesting movement, as we've seen consumer changes in habits as well. But just to get a view on what your impression is throughout the year, right, with these components of volume, price, et cetera.
That would be interesting to get a view on. But about your comment on portfolio reviewing, what can we think could be a sale of a certain group of stores in a specific region? Are you talking about closing certain stores? What store profile is this, right? Are these stores that maybe have a more outdated model than what you're searching for today? Would it be worse profitability? Just anything you can share with us would be great. And congratulations on the results.
Thank you, Danni. Well, we brought in data about the volume in the fourth quarter. But as you can see, the basket of cash & carry is very different. We have this mismatch between high income and low income, right? And we already see this performance difference, but it's not as high as what we've seen at this moment, right? So you still have an important trade down movement. And when you look at what we broke down in the release, the format -- it's not like they're selling less in kilos, they're just selling a cheaper product. So that's why we call it this K effect, right? Because you see the opposite actually.
Brazil is a world of inequality. And sometimes we forget about this, right? So especially in cash & carry, where it's present in many different social levels, which is different than retail, where you normally have like a niche focused on a specific group, right, like Sam's Club. Normally, you have customers with a similar profile. In our case, we have a lot of different movements taking place at the same time. One we've highlighted is this loss in purchase power due to the level of debt and unfortunately, you have the bets that are still kind of stealing away a lot of resources. And we're seeing how this really impacts especially the Northeast of Brazil. So customers are buying or trading down still on brands. And there's this movement that's almost the opposite, right? So that's why we brought in this volume.
Of course, if you have deflation, that's really high with a lot of commodities at the same time, you'll have this variation. Just as when you have inflation in commodities were benefited as well. So that considers the flow in volume in the fourth quarter that's been growing, right? But now what we've seen is an acceleration in consumer behavior trends and also with carbs and protein.
So with this, the company has been really well positioned, and we have this movement throughout 2026 migration that's been more accelerated between consumption of beef and protein. And so also how to adjust these changes. So normally, these changes can be quicker even than people imagine, right?
When it comes to our portfolio revision, we normally consider an inflationary cycle of over 313 stores, right? So we're looking at each region, and there could be that when we closely look into the study, there are some stores that maybe are at a deficit, that we could decide to close down or sell to another business format or even in regions where we grow a lot, you could possibly even have an internal overlap, right? So we're going to try to optimize this, and we're not discarding the revision of our current portfolio with adjustments in our store network and stores that are maybe not performing as planned. I hope to have answered.
Our next question is from Rodrigo Gastim at Itau BBA.
Two questions here. First, Belmiro, I would like to keep discussing this topic on the sales dynamic. 2026 is an election year, and that's where you normally have better consumption, a lot of fiscal incentives, et cetera. And of course, we're talking about a category that is not discretionary, but that had a lot of trade down in the last few years, as you mentioned, right? So when I look at the profile, especially, we can see this in different regions, right? So when you consider this and all of these challenges, in the last quarters, but where you have a lot more cash in the economy in regions where you operate and considering the profile of income you have, how do you equate this variable in your budget or your perspectives for sales in the year? And also if you've ever seen something in the first 45 days of 2026, let's say? That's the first question.
The second one, I know you asked us not to talk about details on the tax credit. I don't want to get into details here, but when you consider the relevance of the topic, I just think it's important to ask you one thing, which is, do you see this as something recurrent? Do you consider this to be a recurring event? And did you recognize this over time? Or do you really think that this is something that in your perception, you would be able to continue to capture considering a lower cost throughout the next quarters. So I think I just wanted to focus on this part of the question, right, which I think is very relevant.
Well, as -- there's 2 factors, right? The 2 things that are certain, debt and taxes, right? But taxes in Brazil are very complex. So this could also be answered by the tax team a little better. But in practical terms, we considered this as a contingency asset, and that's probably going to become result as we are able to monetize it. So today, what we have is an estimated value of BRL 1.5 billion in this topic, we continue to assess the next few years. But at a coincidence, we'll have a change in 2027 for the new tax reform. And what we can see at this moment is, yes, it will be at least until '26. And then we will look into '27, because from then on, you have a new tax that would stop existing, right? So you would lose the recurrence considering the basis generating these different items in category. But the results are not related to this. That's related to the capacity to transform it into cash.
Since it's an uncertain asset, the accounting rules make us only take -- consider the results when we are certain that this became cash. So as it becomes cash, you transform that into results. And then it's still a topic that later on, we can look into because we'll have the tax team actually working closer on this to provide more explanation on this. But the expectation is that this will be monetized within 2 years. Looking at the curve, of course, is there's no legal changes in this period, right?
About income, of course, we've seen that it's a World Cup year. There's -- it's an election year. We should have some government programs and even exemption of income tax, et cetera. But we haven't seen this effect yet. But what we have to be careful about is we have 2 phenomenons. One is the level of families that are really carrying on heavy debt levels. So interest rates were kept too high for too long. And when we see there's still a part of the population that has real high debt. And so a lot of people had 0 payments because there are even some credit granting programs. And so there's a service of debt that has to be paid. And you're concerned when that's going to be transformed, but it is a positive expectation here.
When you eliminate this variation in the commodities, you see rice is not going to keep at that level, right? There's rice like 5 kilos and it costs BRL 12. That's not going to be there for too long, right? When you consider they would pay 53 sacks with a production cost of BRL 75. So there's going to have to be an adjustment into the prices because commodities are perishable goods. If they drop because of different market factors, you're going to reflect that into sales, but that doesn't mean it's going to be a new price basis, right?
So if rice for BRL 12, goes minimally back, you'll have an important sales add-on, right? So this is also applicable to rice, beans, sugar. And this is a movement that is adjusted per area, right? So the reduction in the area will probably be very significant in the next year due to the prices that producers received per sack, right? I hope that answered your question.
Our next question comes from Joseph Giordano at JPMorgan. It seems Joseph off the list.
We'll move on to our next question that comes from Joao Soares at Citi.
I wanted to understand 2 points about keeping up the guidance for the CapEx with a lower amount of stores, right? What's the amount of build-to-suit? And is there going to be breakdown on this, if there's going to be more maintenance CapEx? If you could show us a bit more on these 2 points.
Since you guys have been able to do the sales leasebacks and you guys have been delivering the guidance also on tax credit monetization, et cetera, it seems that the balance sheet would allow you to keep up a consistent expansion pace, right? So I want to understand, because there's a more strategic aspect with markets that are maybe a little more challenging to open up new stores. And I wanted to understand if there's something else besides this environment, right, of the balance sheet that could have led to maybe this revision, right?
Well, just we have 2 or 3 years where we had an estimate. And even if you look at the focus report, the guidance actually of 2.6 when we made that, if I'm not mistaken, the expectation was that we would be landing at around 12.5% and it's up 15%. So there are other components that until we're able to reduce our leverage more, we have to be careful about with expansion, which are investments that are higher.
So what we did was postpone some projects that were really important. So we're going to be opening up some projects that are all in the state of Sao Paulo, where the brand is stronger, the ramp-up of the stores quicker and higher. And as we also review the portfolio revision, but also consider the changes in the new business that were added to the current model.
So well, we should have 25 drugstores July, but if maybe we even have 100 till the end of the year. So we can gain speed and scale, right? So why is the CapEx still capped? Well, we have a bit of a carryover as well. The CapEx last year was smaller. We have the maintenance of the investments. And there's also an initiative for the new products -- projects, right? So we could even review this. But at this moment, we can't. So that's why we kept this number of BRL 700 million, because we understand that there are going to be some factors that are going to reduce this.
Most of these stores, we already -- we're working on with third-party capital. So not necessarily reducing the amount of stores will be reduced proportionately in CapEx, right? But at this moment, we still have already BRL 700 million in CapEx. And so there's a strong investment in technology, even in the areas for picking with iFood's operation and also Rappi as well as some other initiatives of the stores as well.
So that's why we didn't want to mess this number yet. We prefer that the market can work with this number, which is more certain at this point in time. I hope I've answered, Joao.
Yes, you did. So I just have 2 follow-ups here. In regards to what we should consider as the average CapEx for these stores, and if it's worth keeping these 10 openings from '27 onwards?
We're not going to be disclosing this information yet until we have a better view on this, because we are already have 3 projects that are being done with BTS, and 2 with our own capital. It could be that this is going to change a bit. So we're also looking at this and the ramp-up curve and the legal licensing processes, and we could still maybe switch the projects a bit.
So now in the beginning of March, we should have a better view on this. And so from the network we have, we still don't have complete certainty of which 5 stores they'll be.
Moving on here. Now our question from Joseph Giordano at JPMorgan.
I know it's a year where we've seen the company work a lot on G&A, and I wanted to separate this question a bit here into 3 parts, right? First, looking at the selling line, where are we now? Which would -- versus what would be the ideal number for the headcount of the store? I think that's the first point.
Second point, I understand the company also works on corporate efficiency work. That was very relevant in January. So if you could also share what could be possible gains coming from this line.
Finally, I wanted to explore the disparities between the profitability of legacy stores for 2022, we had maybe a significant margin drop of 30, 40 bps as well as those that are maturing. So maybe we can consider a more difficult year where expansion was a little tighter. And if we should also consider revisiting this store network.
Well, thank you, Joseph. Let me see if I understood your question, right? There is a performance difference again, right? So our older stores have a greater stake in commodity, right? So if that drops, it's going to be more affected than the store network at Extra or the more central stores that have a different product mix, right? So maybe this difference is not that obvious.
We brought in a little more detail in the Investor Day, but it was huge, right, between high-income stores such [ Goiania ] Goias all the way to Teotonio Vilela, right? So it's a whole another universe. What you saw in one is liquid soap, then powdered soap and successively. So the mix is affected differently, right? So there's a drop of 37% in the rice, 10% in beans, right? So for big sales reps, this won't be affected, right? But of course, you still have -- why do we have to be careful about some points, right?
Well, because rice is not going to keep this price forever, right? It's going to go up again. And anyways, whether due to a reduction in the planted areas, et cetera, we don't know how this is going to keep on, but we'll have some more. So when you look at these important movements, considering the reduction in expansion and some products that were finished, we also had some changes within the administrative front. We had a reduction in our employee base, and these are all readjustment movements.
Also in the store, stores with the checkout, self-checkouts and other points as well, where we also readjusted, looking at the headcount per store. So we had over 92,000 employees. Now we have a lot less employees. But of course, we're also hiring some people for picking, but our expectation is that while the company is really well positioned and focused on these different initiatives for innovation, but we also see the numbers, in Brazil, things happen after Carnival, right? So January is a month where people have a lot of expenses to pay, with back-to-school and other taxes. And so you start having better consumption normally at the end of February and March, when things kind of get back on track in Brazil.
Our next question is from Irma at Goldman Sachs.
About the partnership with Mercado Livre, I would like to understand 2 points, right? If you could discuss how we should think about profitability with these sales made through the platform? And also, how we should consider if these are going to be incremental sales or potentially there would be a migration from store sales to online. And so how you're going to perform this analysis, considering how you're going to identify who's going to perform the sales, et cetera.
So the second question is about the strategy, the two brands, Chef and I wanted to understand your mindset, right? We have 2 different -- and if could be more diversified considering if there's some other SKU doesn't work. So I wanted to understand how you're looking at these 2 strategies. I hope that's clear this question here on private label. So those are the 2 points.
Thank you, Irma. We should also use the Econobom brand for first price products, right? Of course, the product is starting now and it's going to go through a lot of adjustments. Brazil still has, when you compare with other countries around the world, 2 historical conditions, right, in Brazil, logistics and taxes. So you have an expectation also for the tax reform with greater standardization.
We have a lot of regional brands with specific regimes and the logistics issue, which is super difficult, especially with low added value products where you have to transform things and transport things to Sao Paulo. And so in our view, for the product to be successful, you have to have a level of density and low logistical costs. And today, we have a big volume, right? You have products sometimes -- it's not that they're going to be focused only on Sao Paulo and Rio de Janeiro, right, where we have more than 150 stores in a very small or low perimeter and the volume, the Assai in some categories, we had 35%, 40% of everything that the category sells in both states, right?
So that's why we finally -- I believe we finally reached the right moment to reach this private label product strategy. Of course, the Assai brand is a brand that's loved by consumers. But at the same point, you can't get it wrong with this kind of brand, right? So if I can contaminate other products. So we separated the Chef brand, and it's going to gain a lot more strength in some categories within the food service public and also Econobom that should also have some of the first price products.
The main focus is going to be to launch the Assai brand products. So we plan to have an improvement in the margins and also an increasing competition, right? And so about the partnership with MELI, we believe that it's an incremental sale, right? So customers buy through the platform, and we see customers have a purchase occasion that's very different and for different categories.
So when you look at the food sector, a lot of people talk about how it's sometimes like a single group, but these are actually unique categories, when you consider products you choose like tomatoes or perishable goods, and also soap products where you know exactly what products you're getting, right?
So what we negotiated with Mercado Livre is really that will be the first cash & carry. We also want to keep our low price level without compromising margins, right? So we've seen -- the objective is to have an additional channel with incremental sales for Assai. I hope I answered that.
So our next question comes from Lucas Esteves at Santander.
We noticed that there's a relevant factor in cash generation, which is the increase of revenue related to commercial contracts suppliers for allocation of media space, exposure of products and other commercial conditions. And I wanted to know if you consider this to be a structural change and how we should look at this recurrence up ahead.
Well, I'm going to pass this on to Wlamir. We had a very unique negotiation that was made and that ended up leading to this impression, let's say, right? So Wlamir, if you could discuss this.
Thanks for the question, Lucas. The effect is just accounting, right? We were negotiating contracts for the backlight and suppliers and the allocation also annually. And this year, we made the decision, considering the scenario and difficulty we had in the market to work on this, right? Instead of having an annual contract, we created a biannual contract, right? And to the detriment of this, we increased balance sheet revenue, but for cash effect, this was 0, right?
So this is going to be considered during 24 months as we receive these amounts. So this is an accounting effect. What we modified, however, was instead of selling this contract that's annual, we started having a biannual contract. And so there's no change or perspective. And we should probably keep this up in 2027 when we renew this, we should probably keep up as biannual.
Of course, we're going to understand this step up ahead and see if it really makes sense for us and for the suppliers. The suppliers understood this as a positive point as well this negotiation with some compensations and agreements we had with suppliers. So it's just like an accounting balance sheet effect, right? There's no actual cash effect.
Okay. Just a correction point. I saw that Joseph Giordano wrote the tax credits that were billion there. The credits are not in the results. The tax credits are not in the results. They're just a contingency asset. So it's only going to become a result, as it is monetized. So considering that we identified the accounting procedures of registering this as a contingent asset, which is just notifying the market, but it's not included in the results, Joseph.
Moving on. Our next question comes from Gustavo Fratini.
Two questions on our side. First, how do we consider the gross margin from now on, right? You showed significant gains during 2025, but some of the main levers are maybe a little lower, which is store maturity and expansion of the services. And we also have all of the discussions with the ICMS-ST that also hindered this delta between the net revenue and the gross revenue and that also impacted the margins?
The second is about the G&A expenses. So as selling is very well controlled. G&A has been increasing a lot due to the new projects that are going to lead to a lot of positive results. But how should we look at this from now on? Maybe like a phaseout of the expenses now that projects are more developed?
Well, obviously, you have one part of this, which is the deflation. So when you have a deflation, you dilute this, but the expenses keep on as the same, right? And so this not necessarily will affect the store results, right? So there is a phenomenon, which is temporary. As these commodities recover pricing some way or the other. They're always -- you have to be careful, right, because sometimes it looks like everything is here forever. No, it's not going to be BRL 12 a package, right?
You're going to go back to the price even because of the reduction of the planted area, and also because of the balancing out of the supply and demand law, right? So even if you suffer a bit of this during the period, if it's because of this as an identified and reversible reason, you don't want to make the wrong decisions, especially for store operation.
There was an increase considering the new projects. Of course, first you plant and then you reap, right? So there's no way out. And we are investing in people, training, skills until these projects can once again generate the impact. So when it comes to the expansion of margins, I disagree.
Private label is a project. We're not here just to make the story look cute, right, and fill out a big portfolio of products with the Assai brand. We want to increase margins. This is one of our objectives.
So there's also been an advance in our negotiation systems and advances also in pricing that allow us to have margin gains as well. So even with these new projects, the sales when they're accretive, they also help with the margins at the end. So once again, we still see a sea of opportunities and especially when it comes to financial revenue.
Well, our next question comes from Tales Granello at Safra.
My first question is coming at the store network. I want to know how many stores are being reassessed in the company. If you can break this down, and if there are stores that are at a deficit or not, and if there's a specific market that's been more difficult, where these stores should be reassessed.
Then you have this 5x2 works shifts and some companies in the sector are already testing this model of having 2 days off and 5 days of work. And looking at the reduction of the employees in the beginning of the year, how will this interact with this new scale as it is today? Or if you maybe have to increase in the future the amount of employees.
Thank you, Tales. Well, first, the 5x2 scale, well, we've obviously kept up with this, and we've seen some pilot projects. But most of them are in retailers, right, not any cash & carry or wholesalers. So I think it's going to be a very strong political demand this year. And I'm not going to say whether I think this is right or wrong, but I want to say that if this is applicable to everyone in cash & carry, we have a labor expense that's lower than retail.
So normally, 50%, let's say. And that impacts everyone, but it's going to be basically null at the end of the day and offset. And we have a lower impact in cash & carry, right? So if it's a change that's approved, we'll adapt to it. And maybe we'll have a little less pressure, right? Because there are days we have a purchase cycle that's very different. But of course, if it did come in, we would have to increase this to be able to manage this modification and the shift scheme.
In the store network, we already provided some initial signs. We ended the results this year, we're reallocating this per store. So it could be that there's some closings of the margins with negative contributions. But obviously, we're going to be reassessing the store network, and we should bring in more data about this in the first quarter.
Keeping on here, we'll head to our last question. It's a question in English from Andrew Ruben at Morgan Stanley.
Maybe could we get an update on how you see the B2B business? First, just a general view on the health of the B2B customer set overall?
Then second, as some food categories go into deflation, any relevant behavior changes you're seeing from B2B customers, if that's having an impact on results, would be curious to understand it.
Thank you, Andrew. Very interesting question, because the behavior of this B2B customer is different than B2C. So you can imagine businesses that are seeing price and price dropping month after month, right? They reduced the volume of purchase because they're afraid of losing cash upon their stock levels, right? So maybe they're not going to be able to resell.
So decision-making for who's going to resell is very different than who's going to be consuming, right? So when you have an increase in inflation, normally, you'll increase volume. But when you also have a deflation, then you also have a drop in volume in this public, because they're afraid of setting up -- accumulating stock, because they've been keeping up with the price.
In the B2B basic items, they normally keep up pretty well. But it's a customer that's been impacted by the lack of cash and low income. So they've been working with a stock cycle that's pretty short. There's a demand for credit. And when there's a price drop, then they get into what they consider cautious mode. And so actually, there is some other points where the market was not expecting we would increase margins, even in the sales scenario, right? Because there are some categories where there's no point in dropping prices because customers are not necessarily going to increase their purchases, right? Because they're afraid of their stock cycle, right? And I hope I answered your question, Andrew.
The Q&A session is officially ended. And now we'll pass the floor back to the company for their final remarks.
I think I want to thank the team, Anderson, Wlamir, Sandra, Aymar, and Gaby. And 2026 is a year where we have really good expectations, right? We expect that we'll have a drop in our interest rates. And we consider we have 40 million people visiting us every month in our stores.
So maybe we have a vision that is very significant in the food sector, right? And so this has really been highlighting the effect, and we see low-income customers suffering a lot, right? So there's a big expectation. But generally, Assai has been keeping up with this transformation, and there are years with challenges. So -- but of course, the company's moving along with new projects and initiatives to be able to lever and continue to deliver customer satisfaction and shareholder satisfaction.
So I want to thank the team for the year of 2025, and we're getting into 2026. I want to mention also support from our Board as well when it comes to positioning changes, and that's going to help us have a company that's very different than what we currently have. So thank you, everyone, very much.
The earnings call for the fourth quarter of 2025 at Assai is officially ended. The Investor Relations department is available to clarify any other comments or questions. Thank you so much for participating, and have an excellent day.
[Statements in English on this transcript were spoken by an interpreter present on the live call.]
Sendas Distribuidora S.A. - ADR — Q4 2025 Earnings Call
Sendas Distribuidora S.A. - ADR — Q3 2025 Earnings Call
1. Management Discussion
[Operator Instructions]
We would also like to know that this earnings call is being recorded. And it's going to be provided on the company's website, ri.assai.com.br, where you can already signed the earnings release. [Operator Instructions] And as you announced a request to activate your -- and so then you should activate yout mic, to submit questions. And we'd like to like to know that all questions should be submitted at once. Information contained in this presentation and possible statements that could be made during the earnings call. Related to business perspectives, projections and operational targets and financial targets of Assaí represent assumptions and beliefs of the company.
Draws information that's currently available. And so future statements are not a guarantee of performance and they involve risks, uncertainties and assumptions as they relate to future events and rely on circumstances that could or not occur. Investors must comprehend that economic conditions generally and market conditions and other factors can also affect the future performance, at Assaí, and lead to results that differ materially from those deciding future statements.
Now we're going to pass on the word to Gabrielle Helu the Investor Relations Director.
Good morning, everyone. Thank you for participating in our earnings call for the third quarter. I'm going to present our executive team today with us today, Belmiro de Gomes is our CEO. Aymar Giglio is our CFO; and Anderson Castilho, the Operations VP, [indiscernible] is logistics, SPP and some Sandra Vicari is our people and to sustain a new manager.
I'm going to pass to Belmiro for his initial comments and presentation.
And so thank you, Gabrielle. Thank you, directors for keeping up with us. Good morning, everyone. We're going to talk about our numbers in the third quarter. This is a very challenging quarter. And on the first page here, the presentation -- and from a very positive perspective of the company's firm and its trajectory for deleveraging even in this very restricted environment. We're going to talk about the step ahead. But ever since the beginning, the company has been going through deleveraging and reaching a level of debt is the lowest when it comes to debt-to-EBITDA ratio, what we've been registering since 2021. And the company has been very strong with this in line with an important margin advance and especially in the third quarter due to major rigid control in the levels of expense and in this and so -- and during 2025, we had a result when it comes to expenses. In the third quarter. We brought in, as you can see, the reliefs in the presentation the vision of sales in the quarter.
Well, that because October was better now. This is a fair vision because it brings in the effects of our campaign. And last year, we brought in this strong campaign, which was the anniversary of 50 years, as I say. And this year, it was in the third quarter. And this year, we were able to perform the displacement into the month of October, which is our anniversary month, and that was positive because -- that was very -- and we also bring in this relief separating both universes. And so we're exposed to all of the social [indiscernible] AB to cost E and we're exposed to B2B as well, which is small businesses that supply with us. And so that represents about 40%, 45% of the sales. And in some Cash & Carry's, it's almost 50%, that is 20%. What we saw in this quarter -- maybe one of the biggest differences in performance between sectors and same stores, which meet high from sectors that also serve is low income. So what we saw is in our own customer flow, we have this complete stability in regards to last year. with a minimum variation.
And so trade down [indiscernible] equivalent to what was going on in the first quarter and second quarter without the operation. And so we look at the consumer as a whole, but then we separate this consumer for social level, what we see is we have cross AMB gain volume and CDE with a retraction in volumes. And in this quarter, Brazil reached the highest level of interest in the last year and in our vision. And so that led to a level of debt for families about [ BRL 80 million ] CPS and about [ BRL 8 million ] and that reached an all-time high, and that reached an interest rate of 15% of the higher so favorable on a channel, the supply low income. And these channels also supply with us. So when we look at the B2B public, it normally has a bigger retraction in volumes, the last Nielsen research FP3 in performance when it comes to volumes. That's very important between different retail formats, service cost which AB that had an increase of where actually the volumes of retail formats that are normally the many markets, Merck grocery stores and independent players. Really quite strongly at the cash equivalence we had a setback in volume of third quarter, [ 8.3% ] had its back up 12% in third quarter, and that's also because of methanol, which should impact a bit more in Q3 and and food service had a drop of about 6%. So basically, we're at a level if I talk about high interest item, just going to be one more person. But in practical terms, what's the understanding we have, while we have 7% of the position was high with fixed income and BRL 8 trillion applied to fixed income.
So we have 83% with the service -- with the debt risk really compromised at about BRL 0.5 trillion. So the actual interest rate causes a transfer of income, and you can see clearly that the sectors or formats in the business with AB track gaining a lot of volume and CDEs losing capacity -- and so you have the scenario where you have a job for employment and lower income. So you have this increase in income reaching city population, but a purchase power that's at all times lower and lower. That demonstrates our B2C public that much of an impact, but in B2B, there's a significant impact. So when we look at any number, even Cash & Carry overall, we'll register per pharmacy used -- and that's the level of performance that we make, right? So that -- We can in -- and so that considers the better performance of food servicing and low income. So -- we noticed that this increase in the credit comes from -- mainly because of the dynapalator possibility. And so in some cases, that was even higher and what we can see is higher exposure to risk with a lot of consumers and employees also with this payment. So despite this followed the company's position, we saw that there's no elasticity and that's where we reflect a lot of this volume and we once is visible with EBITDA, it was up [ 0.2% ], and that demonstrates the level of resilience. So if you consider same-store at the levels there are you could expect this and this level of the drop in volumes is not insufficient to impact the objective.
So net income is being impacted by this debt service as the third quarter is the quarter that reflects in totality, it's a leak rate at 15%. And this percentage of interest, almost 450 bps in regard to the third quarter of 2024. And of course, with this, it's still high. But despite the company's leverage, of course, if interest is slower, we would deleverage quicker, but following this journey, as we had disclosed, and we saw that the numbers of retail in the third quarter generated a lot of concerns we wanted to provide this vision that the company really has been keeping up with the deleveraging pace. You can advance the next page, please. So gross profit has an improvement due to store maturity, especially when it comes to services, they really contributed a lot in improving the gross profit. And when it reduces the purchase mix in B2B with lower margins, you also generated a positive effect in the gross margin Expenses are the biggest point on the -- and so we consider the self-checkout and that really helped us when it comes to productivity with a high [indiscernible] labor, so expenses, if we take a look at the volume of sales, this elevation goes up more than sales are below inflation and the highlight here in our view is the EBITDA a goes from a 5.5% to 5.7% in the post-IFRS view, we reached 7.6% EBITDA margin.
And so that's what I wanted to say. I'll pass this on to Aymar into the next slide, you can talk about debt in cash the 4 years.
Good morning, everyone. I'm going to add on to the explanation and what Belmiro mentioning, we have some into such as cash generation and leverage and I think that this page shows how Assaí is really resistant even in a way a more difficult period. So even with this evolution in the third quarter. Now what we would like it to be. We were still able to reduce the net sales year-over-year by BRL 500 million. This is not significant. It's also starting off from an operational cash addition BRL 4.2 billion. This is reasonably greater than the second quarter and if you pay a CapEx of BRL 1.1 billion of month, it's going to have a free cash generation of BRL 13.1 billion. And you gave the interest of the debt [ 2.2 ],and you improve the final cash position by BRL 900 million. When we talk about the BRL 500 million a reduction of the net debt. It's because we're renting varies in the receivables and then we reached the BRL 500 million, but before the receivables, the variation is BRL 900 million. almost BRL 1 billion in generation in 12 months but asset services. Then when we see another view on this issue. We can undersea actual gross debt was also reduced by BRL 500 million. So we added all of the interest during 12 months. So we create all of the debt service, and it's still on sola growth, it was lower by BRL 500 million. So it wasn't because of a cash increase because it was very similar to what it was in the previous year, but the gross debt also dropped -- and I think this is another indicator that it's important, not only the network dropping, but also the grade on the next chart. I would show you our maturities chart here, and then I'll talk about the gross debt as well, a bit more.
On the right side, you can see it's very clear that the leverage continues on a trend that is very strong. If we imagine the level of interest rate in the last 2 quarters really changed from a year-over-year comparison. And so in the third quarter, the actual CDI was almost 4% greater than the effective CDI of the same quarter last year. And even so you have the deleveraging trajectory that continues to reduce half an EBITDA as -- and this -- we keep up the guidance, it's about 260 for the next quarter. If we head to the next slide, we have observations on par results. And these always caused a negative impact, but very significant in the net income due to the debt size. But -- it's still a financial result at roof 22% quarter-over-quarter compared to station of 40%. And so of course, see if you have the sales impact at 3.2% against 2.6% a year ago, it could really in a very worsen scenario. If we hadn't per progress in the debt situation and cash management, then that could be grading if it was just following the interest variation year-over-year. And so in the net income, we had BRL 195 million in the quarter against BRL 198 million, and that reflected the weight of the financial results and EBITDA credit and income tax this year. making the net income be proportionally greater.
Then if you had an income tax cost similar to the previous year. But even so, Considering all of these differences, the net income was cap at about BRL 20 million in this quarter that are considered to mediate. So a net margin of 1.1%. So we believe that even at a moment where -- the scenario is very complicated. The company's been deleveraging continues with strong cash generation and the company continues to present net income even after paying BRL 600 million. quarter. And in this way, we understand these results to be very consistent. And so on the next slide, you have something else that in every track up, which is the maturity flow in terms of the debt, right? So you can see our generation of cash year-over-year, we do and new cash in 2025. We have normal maturities IN 2025. We had a 3 prepayment down the third quarter that help to extend our payments. Our future maturities, and we have a flow in 2026 and 2027 that allows us to see or at least to infer with a big level of security for 2026, almost 100% of this actually that we will not need new cash for refinancing.
And in '29 and '28, the volumes are concentrated but you can remember that our capacity for payment when it comes to cash generation is going to grow over the next year, and we have 2 years in '26 to continue working on debt extension transaction. So we and to BRL 6.2 billion and BRL 5.2 billion in bennani we don't need new cash during [indiscernible] , we'll continue to perform repayment transactions to reduce this concentration of these maturing and ate into 30 and 31. So even with the new were funding [indiscernible] engine that's not going to be significant. And so I think that's what I wanted to say about the electric capacity of the company, which I believe is something that even in a scenario that is maybe more complex, it provides us with a little more comfort and tranquility.
Okay. Thank you,. Next slide, please. we're going to have Sandra from his our VP People and Management and she's -- he's going to talk about our initiatives with sustainability in line with the topic that's very important more have [indiscernible] going on.
Good morning, ladies and gentlemen. I've been talking about our sustainability strategy a bit. And we've been advancing in this strategy -- and when we consider this pillar, where our work is to fly emissions and climate change. Canadians, we launched a new public goal to reach up until 2035, the reduction of our of the use of landfills we would like to reach the goal of being 0 line. So -- and so we also have been investing with reuse of waste, we are increasing comp posting processes and also in the practice projects. We've been involving 96% of our stores already in the program. And which gives us positive numbers when it comes to our efficient pillars when we consider climate change, we talk about as it go and transparent management, we have significant recognition on integration and ESG. We were the first retail -- food retail company in banking -- so we're firmly working in the sense when it comes to ethical responsible basis in the company. And in people development, we've in advance in our diversity and inclusion work with numbers that are very positive leadership of black people and leadership physicians, women in leadership positions.
And Today, we have a significant remotes that are against FPGs over 1,000 actually. And we continue to be working on fighting with hunger and this program related to food safety. And so we've also had some strong work involving our in volunteering both programs during this year, especially with the focus on our regionals. And in October, we like this. You also had award of the academies is also supporting entrepreneurs and we are at addition of award was over 2,100 entrepreneur doing support financially in training -- and we also had the national phase now in September now in Sao Paulo, sorry. And we also had the special awards for special categories, technology, innovation system ability -- and in the 8 additions we've already had, we add up over 9,000 awarded entrepreneur.
So Santos network supporting entrepreneurship. And in all of these advances, we've been able to have operations that are more sustainable and investments, strengthening our governance and we've been advancing with development communities where that are part of our story. So now I'll pass this on to Belmiro and then we're going to highlight this recognition as well. [indiscernible] as what's most conscious as well as I say, with one of the most valuable as well as use of other words, President companies enemy consumers for the fourth consecutive year and top of mind. And so sets of other recognitions as well and acknowledgments that the company has had in this period. We can move on to the next slide. But as we talk about the future, as I assume the biggest and most present company in food retail, when you look at the Cash & Carry operation, to be the most valuable brand.
Our cash flow -- our customer flow is stable with 4 million people visiting our stores monthly. And the company now reached 60% penetration among homes in Sao Paulo. So that gives us space considering the strength of the brand volume and customer sales and a series of projects up ahead. So we've spoken about the [indiscernible] what we're going to be discussing as well cumenvironment and that's most challenging in the company has a series of avenues for growth, right? When it comes to health and we've been believing that as major potential when it comes to medication, vitamin supplements and HPC, which is there's no health in Cosmetics. And so the company's games project antidotes process with part of the population be more willing to having products with better prices and we have a very relevant project with citalabel, especially in regions where we have more density of stores due to this brand train.
So we also have the financial services front. We have a pilot on the street when it comes to the B2B public as well that we're testing the terminals. And soon we should have some news as well. as we have is one of the main value levers. And one important point is also in the digital canals, especially with our partnerships for last mile. That's considering iFood and we've had [indiscernible] customers and less and logistics that's better when provided by last mile providers than if we were to do it itself. There's also an expectation as we've seen how performance among social levels has been with the income tax exemption, it should be some more relief the CDE public of spending most of their income paying off at a veteran.
And now I'll pass the floor back to Gabrielle, and we can get back into Q&A.
Now we're going to begin our Q&A session. [Operator Instructions] Our first question comes from Danniela Eiger at XP. Danniela enable your audio, you may proceed.
2. Question Answer
I have some on my side -- the first one is a follow-up of the last comment you had when we understand more. Out the financial services than [indiscernible] to talk about the terminals. And I want to understand what does that represent protecontext in Assai it's something that you do on your own -- if you could give us more information, I think that would be great. And so my second point is maybe a little bit more on this context here. And where you have a little more space to do something. And I think you guys have been doing exit work in gross margins and expense controls, but we want to understand a little bit more about what could be done in the core business, right? So when it comes to expenses, so the base to keep up with sense there you've been quite lean for a while, right? So I want to understand if something you can still imagine trying very controlled or we're going to see some acceleration and then on the side of the store, I know you're presenting new categories. So what else would you be able to do I don't know is financial services, if we could maybe do something when it comes to site to but B, considering income challenges because I would be interested to get a little more were actually heading to the opposite side here, when we talk about expenses I think we can add some here and you can you can highlight some different initiatives and how we've been able to really keep up with this level of expenses that, in our view, is obviously [indiscernible] ?
First of all, great question. First, expenses in Assaí something that we're very disciplined with. So it's not like a single line. If we have different initiatives we work on -- and I was mentioned as the main pillar with customers at the center of the business. So we have some different initiatives with recurring expenses.
We also have so check with this labor scenario on about 90% of the stores already having this equipment. We're talking about an average of 6 to 12, depending on the store. Especially for customers that are buying for replenishment or even like owners of restaurants, et cetera, which this is a big differential. But what we see as a team is that, well, expenses in the company are involved in all areas like a single process something that with you. over the years. And our expenses are pretty stable. We don't see anything very different from this. From now on, we kind of have the same dynamics, trying to be more efficient, trying to be quicker with their processes, but without losing track of the customer. And I think this is the main work we do, right?
So when we look at expenses up ahead, there's nothing very different compared to what we've been doing.
Yes. So just to add on, when we look at the stability of the customer flow, we see that, obviously, we're already preparing for scenario inflation would obviously reach a point where mostly shopping your bulk shopping would lose a bit of attractiveness and you increase replenishment levels. So this is very efficient including services. There's actually a lot of criticism when we have [indiscernible] even now the subject out. But this is for people that want to buy quick like day-to-day shopping. If you want to have like an actual -- so there's a bunch of projects when it comes to investors and using technology to keep expenses under control besides us check out mother data also and important advantage of cameras and data transfers in good quality, which allows certain functions in the store to be done in the central manner, reducing costs, et cetera. and we listed this in other departments.
So there's a bunch of projects the company is being working on at this moment. Some are really focused on what we consider to be innovation or some projects that I highlighted that we should be discussing more now in the third quarter. But there's a lot of timing when it comes to efficiency and productivity. Just to have an IT lab, and we have some initiatives for the cuisines that have been helping us in marketing content production, et cetera, that could also help us with productivity within administrative funds. And so we have a JV with GPA and Biraj. We're discussing this, and we're very close to wrapping up with this negotiation process. And so we had a waiver metal to develop the sale of the terminals with the BT in end customers on BTC, we see big opportunities also to sell in churn and other financial services as well. So this is one part that's kind of released, but there is an expectation to unleash relevant value in the company with especially in lower income levels to we don't expect to increase our credit concession.
The company is actually focused on deleveraging and also because we don't believe it's going to bring in a bigger volume of sales. But with partners shifts for the customer public PCBs, then yes, there is a demand for pet and that could help us to expand our sales, help you at question, Danny.
Our next question comes from Luiz Guanais btg.
Good morning, man. I have a question here about profitability. We are looking into demo expense control if you could break this down maybe this deleveraging path next -- for next year, you reinforce the company's guidance and part of this is also senting an improvement in margin. But if you could give us a little more detail in regards to CapEx and working capital, which is also a highlight in the last quarter, that would really help us in our projections?
Thank you very much. While the deleveraging path, of course, there is one aspect that's not in hand, which is really great. and that would be one of the biggest components, right? But what's in our hands, which is a manageable perimeter with like working capital. We expect to have stability, of course, and we're always searching for improvements. But our view at this moment and where we're taking up a bit more with our suppliers because high interest rates apply to everyone. So -- that would probably come in pricing, but the objective is to keep discipline -- then in the closing of the third quarter, we actually had a -- we're a little more stocked up. Now in this scenario that what we've seen, especially in B2B. With this volume we, for example, wouldn't have any stock elevation. Because these customers are really pressured with working capital, and they have to replenish the amount of products in [indiscernible] . The third quarter, in our view, was a fortunate point, especially for food service in September at the bar was almost 12% downlinked we saw the methanol prices for the bar industry. people don't go, they don't order portions of food and the public, we have a lot of penetration of fire snacks separate and because of this methanol scandal, we had a major impact, right? So when it comes to the levels of investments, we've already actually -- we gave them a warning and there was an expected and about [ BRL 1.2 million ] will become material for the next year in 2026 to be restricted. So the forecast we have is that it should be at most BRL 700 million, and that's kind of what we have when it comes to projects the new stores that are important [indiscernible] to have quicker deleveraging. So the objective out ranging is to focus even more on deleveraging since the interest rates are still a bit higher than what we expected. So I think that's equal. I hope I answered not just having your questions so.
Well our next question comes from [indiscernible].
If we explore a bit of the private label issue that you mentioned in the beginning of the presentation, but maybe if you could give us a little more of an update when we should see the rollout of this initiative. Let me focus on the short-term results as well, and we take more of a high-level base concluding the Cash & Carry in as a whole. I think that over the last few years, this is very clear, right? The Cash & Carry movement was capturing these sales. And I think that throughout last year, you guys been talking about than carry a little more starting to capture supermarket sales. And I just wanted to maybe get an update on how you guys is minded about this industry trend overall, not only Assai, right? But to start capturing the sales of supermarkets as well. I think going backwards first, the Cash & Carry model. We always try to make it very clear because I [indiscernible] get a lot of confused with the Cash & Carry model and other formats. And now most of the distribution for small businesses have done environment update within patient carriers. As always is the difference of performance among social levels, which is really strong, right? So you're at this moment where you're strongly moving towards income transfer, right? So lower income to higher income at an interest rate level that sees well, high interest [indiscernible]
Yes, what we've seen is when you look at the economy, look at all of the social levels in a single package, but on average Well, because this year, we're going to have a payment of over BRL 600 billion in fixed income, which is we may go to 17% of population. So that's going to patient as well as other aspects. So when you look at CDE process, we have all pan-high debt level month over month. So that's where you create the Cash & Carry format is more exposed to low implement high income. So when you look at retail formats, we noticed that, that's where performance is even worse than Cash & Carry because it reflects that public entirely. So that's where we brought in the information to highlight this. And while interest rates remain high, we should remain. I think there's open expected now after the methanol crisis. And we had this end of year period where the consumption is a little bit higher. And you also have the exemption of income tax. It's going to help with this public -- and part of this should be headed to consumption, right?
So -- this is the movement that we see in the industry that private label projects and why we believe this is going to be the moment Brazil is a continental country and the difficulty with private level because if you look at the map behind me, you can see that we have this very high decreases -- so we try to take this to the contrive a lot more expensive. And but that's because of the resin tax scheme of great then we were able to reach a level of 10 of these were the logistics costs are less high-end bench strength. When we brought in a lot of expertise and the expectation in the first quarter, we already have products continue which should help us to capture margins, but also customer demand of researching tires of lower cost, and we believe that this aims persistence. We've seen this not only here in Brazil, but in other markets as well.
Our next question comes from Tales Granello at Safra.
Good morning. themed -- we have a question about the CapEx, you talk about BRL 700 million next year. There are discussions canyon maybe interrupting expansion momentaneous to really accelerate deleveraging due to higher interest rates that were not in the base scenario case last time it was reviewed expansion. And also in regards to the batch of stores in 2023. And there's a level of sales that's already similar to the legacy stores free conversion. But margins are below. So this is mainly due to the cost of the lease or is it a effector and so -- is there another factor that's not on our radar.
Yes, we did discuss this -- the stores that are being opened now are going to definitely be the sort with the best levels of retentions that we had because these are projects that are -- and these are projects where the value is paid with the new stores of about BRL 700 million, BRL 220 million, BRL 240 million would be the equipment part. So all of the other projects, we start them up with the landing for projects that are required the company's capital to property, et cetera, all of this, we won't be investing in, as you mentioned, because interest rates got way above expectations.
But now especially in markets where we have a little quicker maturity next year, we actually open up number. We already received a lot of questions in regards to this. And now, for example, in Osasco, basically for for store there, we're discussing, we're opening on to [indiscernible] In fact, [indiscernible] don't have an apace. So as you see, we have low levels of investments in turn for their emboli and really have a ramp-up at really justifies the maintenance of the look. And that really renaiportant, of course, for deleveraging that -- so that would also not be relevant enough to the plant of removing these 10 units to stores. So all of them with the exception of one in a migraine No, this is a -- these are projects where the upside brand is really high and 23, then you have a significant weight of leads, and this is we've been working on as well to bring in this strong network when it has profitability, but we need to at least take a look at the strong network in 2025 and 2026. Which is better than what we had. So I know at the moment in Cash & Carry in the market [indiscernible], but its going to be a store network with better performance and a better ramp-up -- and that's very, very much convinced about the store openings.
Our next question comes from [indiscernible] Peter will never are, you may proceed, please.
Well, first of all, with October coming in stronger, you could -- maybe you could imagine that Q4 would have a same or sales less similar to what you presented in the first -- that's the first question. The second one is about what we think about increasing the hygiene and beauty category. How is the scrap going do you imagine that could be impacted in some way in the market. considering competition in the marketplace?
Yes, there is an impact. It's not going to reach the lower social levels, but it does affect A&B and the movements that have been going on in the market place. So we've also been assessing this and the social levels is not something that's relevant from a volume perspective, but there is an impact. Actually, the movement we had in the drugstore project so we can also put pharmacy in the store, and that would also help us in this category, which sometimes you would use the pharmaceutical channel for. So normally, they can deliver non-perishable products to high value which is what you can justify a volume rate. So any product reduces at credit value, especially when it comes Well, there's an impact now getting more from pharma and superior income. So -- if we consider this is going to be a regression and this is probably to consider the Nielsen research which is independent pharmaceuticals and pharmacies that did receive them on [indiscernible] already. So the performance difference is huge, right? So you actually see this anomaly within pharmaceutical at this moment, which in some way distorts and brings pharma to perform level that's a bit or it or very different than the other sectors. And with the first question, me if you could think about how the fourth quarter resources so very similar considering that this is very strong brand, yes, expectation and actual was strong. There was a petite campaign, but there's also other initiatives in November and December. And what can we say? Well, of course, you have to be careful because in September, no one was expecting the impact we had for the overall market, right?
So if you look at the sector as a whole. And so let's say I have to be more cautious, but we do look at this to consider the sectors that are selling back, and we believe our sector should recover a little bit. Of course, it is an expectation we have. There are some strong Black Friday initiatives until the end of the year. But of course, we're subject to reflecting on what this B2B public is all about. So we have to be careful about this. We can look at October with the one month only campaign, right.
Our next question comes from Felipe Rached at Goldman Sachs. Felipe will enable your mic so that you may receive safely.
I want to explore a little bit more of the self-checkout topic. I understand that helps us. Since they have evidence it's relatively low, but to do open up the percentage of the tax cards that are below the limited items. And well, then just a quick follow-up on expenses, how much would the SG&A be impacted if you were to consider all of the open vacancies and how the challenge of hiring employees and check out of operators and how this could be impacting the value of the format and how this could be impacting sales Well, thank you for that question. We've definitely had a lack of labor for businesses as a whole. And what we've noticed is that cash and carry is a format that's more go to a little income, there's a bit more tolerance. But of course, it's difficult to say how much we're losing sales because the lack of personnel has been a general factor for all sectors for super, many markets, decenter and the fact that you have a bigger amount of employees in a cash and case store or even a higher rate of absences and then -- in our case, we have an average group of about 300 people per store, [indiscernible] , but it's going to depend on the size of the store, force, but obviously have an impact. But the objective we have in self-checkout was to point.
In our view, as a sequence of services to make the model also more attractive for smaller day-to-day shopping and also because it's pressure. In finding employees, right? So when it comes to sales, I can't break down the number share this, but in transactions, we're about 20% of which gets of course, the business is not going to go like [indiscernible], but we have so many shopping at BRL 50 BRL 60 purchases or BRL 7,000, BRL 10,000 but it really helps reduce the perception of the Q at the checkout and also [indiscernible] our levels, we're going to have a turnover this as the overall commerce of 95% of our vacancies filled that and our people management department has been doing pretty could work trying to replace these vacancies. But overall, people get that, then they have to be hired to get the benefit, they go from they've spent money on their bets. -- but -- and then that's something that's going on, right? But that's going to be 5.5%, 0.20, et cetera. But anyways, now this level is already pretty persistent, right? So from the base perspective, that wouldn't be too much of a difference very clear.
Our next question comes from Bob Ford at Bank of America. Bob will enable your audience that you can proceed to.
Thank you very much Belmiro, could you update us on the app delivering sales and how the treasury work has been evolving as well. And also on the Black Friday?
Well, we've been working on some changes. We brought someone else here to help us with in and out -- and Black Friday, we're going to have some products that are going to be very cheap. So we already have some -- most of the power services in the end of the third quarter and they're going to be in the stores for Black Friday. And especially from next year onwards into different products. Of course, we're going to start testing these categories. You have some that are geared towards higher customer level -- social levels and this should lower social levels, but I can't give you the numbers of the prices yet. But if you can visit the are, you're going to see you can buy a set of cases at spectacular prices. So these are some items that are going to come in as well as other home utilities, utensils, sets of cups and plates initiatives, et cetera. So these products are available in store. Then the app has a penetration rate that's pretty strong numbers with 21 million customers registered with 16 million contactable and so we finished for the month of October, and there is a -- that increase adhesion rate and the base that we're building with CM should, in our view, be really important because that's a so anxious about the financial services because we really believe it's going to help us explore 16 million customers, right, which is one of the biggest customer bases in Brazil. And with the level of loyalty to the fan, it's also really high. It creates a lot of avenues for growth in the sense -- thank you, Bob. I hope I answered your question.
Our next question comes from Lucca Biasi, UBS Luca?
Most of our questions were answered, but it would be interesting if you guys could talk about possible updates in regards to the the preliminary injunction issued with GP in Casino.
We're still having the judge and listening to the parties, and that's why we can't talk about this. Yet, we should have a decision, but the judge so listening to the parties. So required some information and ask for more assessment. So we see waiting on some precisions in a sense before we can disclose information but from -- the contingency perspective is a big effort on behalf of GPH perform a transaction with a ready, they want to -- they actually highlighted this in the release call. Of course, this is a topic that we understand that we can't be jointly responsible, of course, but if they can find a solution on the other to be something positive. And we also see -- it adds to be very positive with the changes in GPA with the shareholders and controllers, and this is something that will always be more positive with the big potential. So we've seen this these changes very positively as a good GPA.
Our next question comes from Eric Huang at Santander, Eric will enable your audio.
I said here we wanted to cover the gross margin a bit. We've seen a significant evolution, and we want to understand a bit about how you've been considering this gross margin level when it comes to sustainability and also additional opportunities of this comes from the other store network that in maturity and these more relevant projects with conversions are going to reach maturity. So what would be additional levers here? And what can we think about in regards to your gross margin from now on?
Thank you,. Well, is an effect, as I mentioned previously and the fact that B2B reduced versus the 2 prices in sales area. We have the consumer prices [ '17, '18, '19 ] and the price for businesses, which are people at by quantities as you have a drop in B2B, you're obviously in margins. And then along with this, you have a series of measures, right? So -- from a pricing perspective, the company has also been working on a project that's going to improve our capacity for pricing as when we look at this associated quality in the country. One example I like giving you is if you look [indiscernible] the airport there and you have the lag store from ratio, [indiscernible] same avenue, [indiscernible] income level of 20,000 monthly to level about BRL 3 to BRL 4 month. So you're going to be operating as if they were different countries. So that requires a discipline in the different pricing. But in our view, especially the stores that are more like Centor downtown, in the cost of services, we deliver will allow us to continue with the evolution of the gross margin, of course, looking at competitiveness. So there's also expectation in our private label product project that should bring in significant contributions when it comes to gross margin.
So we believe that we went through some positive cycles [indiscernible] in the margins keep up quite stable.
Well, thank you, Belmiro. And just a follow-up here on this point in regards to the benefit with the mix of be able to keep -- could you just quantify this a little bit just so we can get some more color on this Well, there's an impact of approximately [ 0.10 ], [ 0.15% ] We'll also a B2B reduces the volume of purchases. We increased this and reduce the prices to them. But -- what we noticed is that this customer obviously has the do replenishment so they have a drop up in the volume of sales since the supply side was very short for food service, for example, customers that come in every day. The average of foodservice remain presented a new Investor Day here was 162 visits per day. So almost one day, yes, they know. I suppose the store when they reduced volumes, they reduced immediately. And with service, you can can't reduce price because we do surprise of he's have it's a peso 1/3, right? So free metals, it's passable, right? The pizza as a drop in their volume of pizza delivered, they just stop immediately buying the amount of cash boes.Andedusty for prices are a lot more in regards to distributing with other cash in cars, but not really increasing customer volumes, right, which they won't do.
-Our next question comes from Joseph Gerdau, JPMorgan.
Good morning, everyone, and thank you I have 2 topics here in the first one, what is going back to the top line and looking more towards the end of the year as we have performance in October. As you mentioned, it's not 100% comparable due to the anniversity campaign Balan. I understand what you're seeing when it comes to presentation we see the third quarter -- there was still a gap compared year-over-year. So it's favorable 2 points favorable, but now maybe it's going to be a turnaround because of the food inflation in same-store base last year was stronger. So -- how are you looking at the ticket issue? And can you imagine a possible trade up, as I mentioned, I guess, now. The second question is about the subvention and understanding at the tax -- if this higher level that we've seen throughout the first semester should be something more recurring. I will answer afterwards. I'll talk about the inflation and then Aymar can talk about the subvention. If there's any questions that are on, we can come back. So of course, as I mentioned, we don't see any trade-up actually, as you mentioned, what we see is one thing that's called our attention a lot, which is a has a penetration rate in social levels that's very equivalent, right?
So the same penetration rate we had in past, we haven't pressed and D&A and even considering age ranges. So a slide we had in some presentations that called our tension. So what we can have this vision and the time in the market, of the behavior, right? So we have never seen evdisparity among social levels in Brazil, as you've seen now, so you see a gaming purchase power, gaining volume in some categories of products, increasing sales. And then when you look at the other side, you have a trade down that's significant. And so if you observe the volume, which is what else brings in the the independent players have a drop of 8% volume, and that's relevant. Those small businesses that are close to their home, et cetera. So these are the customers that supply at our stores.
So that's a reset have to be careful at the top line because, you can see that the last impact was this buy now pay later because in August and September peas outside of that that they have. And we see this as still persistent. Of course, we have many different initiatives, maybe September was a month of kind of standing out of the curve. But we expect that the fourth quarter will be better than what we had in the third quarter. But the structural issues Leading to the staff and purchase cars. We already talked about the bed, et cetera, will continue. And then data is difficult to analyze because, as I mentioned, when you see this income transfer special levels and the highest level increasing purchase are pressure, and that's why interest rates are already at a level where they can be inflated maybe is not a better sector to demonstrate this than the fluid sector, right? So -- as we like mentioning Brazil is a country with soticquality and this movement going on. And so this bid, we believe that keep up the volumes, and we're actually begin an increase in sales to social levels we had -- and so that's where we can very careful about any signals, right? While we don't see as risk, the leverage trajectory and I think the third quarter, what it shows us is that even in our sales level, that's below what the market expected, and we're trying to understand this, of course, this could be happening quicker. And I think that's the main point, Joseph.
[indiscernible] on the event we had BRL 34 million from previous periods. But from a return, we are you sitting about BRL 10 million per quarter. So we had actually talked about the number of core, but there's nothing that will change this trend recurrence normally with the exception, of course, of some extraordinary event that is not on the radar, I mean related to income tax Okay.
Perfect. I hope I answered. Our next question comes from Fabio may proceed as thank you. Good morning, everyone. Well, 2 quick questions here on my side. One is a follow-up of about the issue related to the earn injection, just about the timing, as you mentioned. It's been about 30 days since we spoke about this and 30 days of the period for the company to provide the response. Of course, it depends on the orders and effects from the judge. But I'm imagining if we're going to have any additional answers from a timing perspective also, and that's the first one. But the second one is about calendaring the CapEx. So if we could see what we've done as CapEx year-to-date inciting the guidance, and you guys talked about how you're going to have deleveraging and -- so we imagine maybe we will reach in BRL 1.2 billion CapEx this year and next year, but I'm imagining would it be lower than BRL 1 billion and would be selling less to next year to be applied, but I want to understand this issue a little better and really see this leverage really is preservable the companies needing more spending more projects, postponing them.
Those are our main points -- thank you very much, Pedro. Obviously, we had a series of cuts to reduce the volume of CapEx. One is related to the PMG, which is this model that helped us reduce the cost of conjunction very well. And we still don't have the closing of the fourth quarter, but the levels we saw are the maximum levels of investment. We would like the market to work on these -- with this number, right? So some initiatives we had actually in the end or not totally cater captured, right? But we're working on the maximum level of investments and it could be lower than this. At the moment, it's the maximum we could talk about. And yes, of course, we've also been assessing different measures, right. We're a strong cash on year and ever since we began this, we never had investments previous shareholders or everything the company did with one with its own cash generation. Yes, as you all know, it's difficult. I would see half of the cash relation being consumed by the cost of debt or is it competing [indiscernible] at this level, right? So that's an important lesson from a company perspective. And we want to get back to comfortable cash levels in a short period of time. So all the initiatives we can capture will be captured summer are being assessed. And so the company is not intending to deleverage us with as possible right from the prime injection and this lawsuit, the expectation would be to have another 15 days.
And -- of course, the gel provide as much as possible information and then, of course, better, we would expect to get care of another 15 days.
Next question comes from Daniele Hower at HSBC.
Good morning. 2 questions here. The first one is that I would like to explore the issue with the B2B B2C dynamic. You shared some comments that I believe were very interesting. But I wanted to under understand if you had considered the drop in the average ticket and also the reduction in the volume of small businesses and -- we also had the methanol issue. I don't know if you can break down the weight of beverages. -- in on -- and I wanted to understand how you've been seeing this trend now in the beginning of the fourth quarter. How you have been working on B2B, B2C working on this mix of B2B, B2C and so maybe interest rates would just drop around April. But what would be the main tools, right, to work on this in these 2 channels.
And so I think both channels, you can split this by about 8 subtitles, right? When we look at B2C. [indiscernible] our share in our sales and very close to what each places within -- so the councils have a real elevated perspective on this, right? But as I mentioned, I'm not seeing such an increment movement with this, right, in such a disparity, right? you can go and buy some dog food at a store. But anyway, even in businesses that service hiring and customers, we didn't have much of an impact, but in low income, which is most of the population that we're above what we expected -- so that was the issue with the panopilator and a level of high interest rates.
So you're at this beer perspective, right, getting a lot of money with fixed income -- and so you can just see the levels of in 1 we reach, right? But of course, in a challenging scenario like this, we're going to have to review this from an assortment perspective, we should really consider the more effective price of these items. It's not too much more of the same. For these items that we can work with. But of course, the methanol is comes for sales were always a category very well service due to -- and that's almost 1 indirectly have products for portion for food and ethane people are going to consume. And so -- and so maybe you can just look at the results of 2 companies that's clear now in the third quarter, and there's a significant reduction in consumption. So alcohol is a category that's been dropping and advances with a GLP-1, but I'm going to also lead drop. and also -- well, the interest rates remain high, and so we expect that part of this should be converted to consumption.
Just a follow-up here, a question about the decision of the company to lean entente right? So considering that the company has a limited number of -- and so we consider your competitors that's very resistant engine into private label. So now you can share with us with the team set up with the amount of SKUs, if it's going to be just a few categories. So in the net, would this bring a lot more than the investment in the structure in the sourcing -- that was kind of a answer that nice -- as has always been the most innovative format, right, even though this sometimes may be challenged common sets. This is when we implemented services in the store were central stores and when you consider like a store in congress will be successful, people would say it would be impossible, right? But we were able to service and reach these higher social levels but private label is a reality around the world. If you notice this has been growing in the scenario where you have a reduction in purchase power is always a period where the label grows. But in Brazil, of course, this is never -- I mean that worked very well because I cause you have to have more scale in a specific region. To make sure the success. But in fact, in terms of you see Cash & Carry, it grows industry overall looks at our pharma?
Is okay this cares a lower operational cost that maybe is produced at levels of discount private is going to help, not only in the items of private already balancing it out with over 60% penetration in the houses. And so the strength of the brand and especially the moment where the pub agents is willing to do this right. So we would understand that this would be a margin additional margin? [indiscernible] was one of the persons -- one of the most experienced professionals in this front. We also rely profession with a lot of knowledge and experience in the market with private label, and so we'll have a full team to make this project advanced and very completed then when we look at the shape and is the most valuable brand in SA is ratability. And so that's where Brazil is an exception, right, when you consider this and we also believe that this movement is not that simple or easy, now we wouldn't have this penetration of 3%, but we believe we have the scale capacity just as we shifted other paradigms that maybe 3 years from now, we're going to be talking about a high share rate, right?
And I think this is the moment, right? So there's also we looked at [indiscernible] we would consider that there would not be adherence. So there needs to be a major scale, right? And you can't transfer products with low added value rate. So, if you try to take this product here [indiscernible] going to spend on pre and income and taxes is going to be more expensive, right? So that's why even if we don't want to provide details, it's not going to be the same in every region in Brazil. There may be regions where -- we do have suppliers now have received an it's an imported product. Both objective is not to have a private label full portfolio, but we want to have [indiscernible] in certain categories where it does where it can be cheaper compared to the leading brand and also help us with more negotiations in the brands we have today, and they can also add, of course, a higher level of margins than what we have today. So it's a -- we have a -- we're being very cautious about this project, and we believe it's going to be very interesting. Well, we're going to monitor this closely.
Q&A session is officially ended. And now we will pass the onto the company for their final comments.
And so I want to thank everyone for being here. First, it's a more challenging environment. And the main message is that were transmitted as it is a model or a company that's always been innovating, creating and continuing this process and it's also come very stable from a cash perspective. And -- with this this movement that we believe this is going to stabilize as a measure in the next year. Thank you so much, everyone. All the earnings call for the third quarter 2025 is officially ended the Investor Relations is available to answer the other questions. And so thank you all for participating, and have an excellent day.
Sendas Distribuidora S.A. - ADR — Q3 2025 Earnings Call
Financial data from Sendas Distribuidora S.A. - ADR
Revenue
Revenue is the sum of all sales generated by a company, e.g. for its products or services.
Revenue (TTM) metric explainedDirect Costs
Direct costs are the costs incurred directly in connection with the manufacture of the product or service.
Gross Profit
Gross Profit indicates how much of the revenue remains in the company after deducting direct production costs. If the percentage share of sales is calculated, this is referred to as the gross margin.
Gross Profit metric explainedSelling and Administrative Expenses
Selling, general and administrative expenses (SG&A) include all expenses for marketing and sales as well as the general administration of the company.
Research and Development Expense
Research and development costs (R&D) provide information on how much the company invests in the research and development of its products. The costs are particularly interesting as a percentage of revenue and in comparison to direct competitors.
EBITDA
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is the company's earnings before interest, taxes, depreciation and amortization. The EBITDA margin is calculated as a percentage of sales.
Depreciation and Amortization
Depreciation represents reductions in the value of the company's assets (e.g. due to wear and tear on machinery).
EBIT (Operating Income)
EBIT (Earnings Before Interest and Taxes) is the company's profit before interest and taxes, also known as the operating income. The EBIT Margin is calculated as a percentage of sales at
.
Net Profit
Net Profit represents the profit or loss after deduction of all costs.
Net Profit metric explainedStocksGuide Premium
| Jun '26 |
+/-
%
|
||
| Revenue | 15,014 15,014 |
2%
2%
100%
|
|
| - Direct Costs | 12,303 12,303 |
0%
0%
82%
|
|
| Gross Profit | 2,710 2,710 |
10%
10%
18%
|
|
| - Selling and Administrative Expenses | 1,422 1,422 |
4%
4%
9%
|
|
| - Research and Development Expense | - - |
-
-
|
|
| EBITDA | 1,286 1,286 |
18%
18%
9%
|
|
| - Depreciation and Amortization | 329 329 |
7%
7%
2%
|
|
| EBIT (Operating Income) EBIT | 956 956 |
22%
22%
6%
|
|
| Net Profit | 187 187 |
5%
5%
1%
|
|
In millions USD.
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Sendas Distribuidora S.A. - ADR Stock News
Company Profile
Sendas Distribuidora SA engages in the retail and wholesale of food and other products through its stores. It operates through the Cash and Carry, and Éxito Group segment. The Cash and Carry segment includes its business under the Assai brand. The Éxito Group segment consists of its businesses in Columbia, Argentina, and Uruguay under the Éxito, Surtimax, Super Inter, and Carulla brands. The company was founded by Arthur Antonio Sendas in 1974 and is headquartered in Sao Paulo, Brazil.
StocksGuide Premium
| Head office | Brazil |
| CEO | Mr. Gomes |
| Employees | 90,000 |
| Founded | 1974 |
| Website | ri.assai.com.br |


