Financial Data and Key Metrics Changes - The company reported revenue of 21 billion reais for the second quarter, with same-store sales lagging behind food inflation, which was around 7% to 7.5% [4] - EBITDA margin pre-IFRS increased by 30 basis points year-over-year to 5.7%, reflecting store maturity and innovation efforts [6] - Free cash flow before interest payments was 2.7 billion reais, with a conversion rate of approximately 90% of EBITDA into cash [7][21] - Net debt decreased by 200 million reais year-over-year, with a leverage ratio dropping to 3.17, down 0.48 from the previous year [9][22] Business Line Data and Key Metrics Changes - The company is focusing on store maturity, particularly for converted stores, which are still in the maturation phase [5][12] - The average sales per store in downtown areas reached approximately 26 million reais, indicating strong performance despite ongoing maturity challenges [11] Market Data and Key Metrics Changes - The company noted a persistent trade-down movement of about 3.5% to 4%, influenced by high interest rates and changing consumer behaviors [4] - The penetration rate across various social classes has improved, with significant engagement from classes A, B, and C [14][16] Company Strategy and Development Direction - The company is focused on expanding its product categories, including private labels, particularly in the Southeast region of Brazil [16][60] - There is an emphasis on enhancing customer experience through new projects and services, aiming to break down the stigma associated with cash-and-carry formats [16][46] - The company is also exploring opportunities in the pharmaceutical sector, pending legal approvals [70] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the second half of the year, despite acknowledging the challenges posed by inflation and consumer purchasing power [32][44] - The company is cautious about the trade-down phenomenon, noting that it may not solely be driven by economic factors but also by changing consumer habits [36][38] Other Important Information - The company has implemented various ESG initiatives, including social inclusion programs and sustainability efforts, which have contributed to its brand value [29][30] - The company has been recognized as one of the best places to work in its segment, reflecting its commitment to employee satisfaction and customer service excellence [30] Q&A Session Summary Question: How is the company positioned in the current disinflation scenario? - Management indicated that while there are pressures on consumer purchasing power, they expect some normalization in product categories and are focusing on new projects to drive volume [32][34] Question: What is the reason for the higher tax rate observed? - The higher tax rate is attributed to changes in tax substitution processes due to reforms in certain states, impacting the correlation between net and gross sales [39][40] Question: Can you elaborate on the private label implementation project? - The private label project aims to increase margins and competitiveness, with expectations of launching in the second half of the year [57][60] Question: What is the current status of the drugstore project? - The drugstore project is still under discussion, with potential benefits for the company once approved, leveraging existing infrastructure to enhance competitiveness [70][72] Question: How is the company addressing the challenges in the B2B segment? - Management noted that B2B sales remain stable, with a focus on adjusting payment terms and pricing strategies to maintain competitiveness [48][51]

EARNINGS RELEASE 2nd QUARTER 2025 August 8th, 2025 ATACADISTA TSS EBITDA MARGIN ADVANCES +0.3 p.p. Increase in gross profit and expenses dilution Sales Expansion Guidance: 10 stores in 2025 and 10 stores in 2026 August: 1 new stores in SP Net Income Leverage EBITDA Marq Cash Generation Guidance 2025: ~2.6x 2 Gross Revenue: R$ 21 bn (+7.2%) 'Same Store' Sales: +4.6% ● Market share stability ● Pre-IFRS16: 264M (+60%) ● ● Post-IFRS16: 219M (+78%) Operational efficiency, despite ● the high interest rate -3.17x, ...

Financial Position - As of December 31, 2024, the company had total borrowings of R$16,175 million, with R$1,991 million classified as current borrowings and R$14,184 million as non-current borrowings[41]. - The company is still a guarantor for contracts worth R$1.4 billion related to legal proceedings, which may pose financial risks[90]. - Sendas must pay at least 25% of its annual net income as dividends, but this may not be available if the board determines distributions are inadvisable[197]. - The company may incur significant costs for environmental remediation if soil or underground water contamination is identified[135]. Revenue and Sales - For the years ended December 31, 2024, 2023, and 2022, 50%, 49%, and 49% of the company's net operating revenue was represented by sales in installments, primarily through credit card sales[66]. - The company generated more net sales in the fourth quarter, particularly during the Black Friday and Christmas sales season, which significantly impacts overall performance[98]. - Approximately 13.9% of total sales for the year ended December 31, 2024, were derived from five main suppliers for beverage and beef products[115]. - The company is dependent on credit card sales, and any changes in the policies of merchant acquirers may adversely affect its revenue[66]. Market and Competition - The company faces significant competition in the Brazilian cash and carry sector, which may adversely affect its market share and net income[39]. - The company faces competition from internet sales, which have increased significantly in Brazil, potentially reducing reliance on traditional distribution channels[102]. - The company faces intense competition for attracting and retaining key personnel, which is essential for maintaining its competitive position[75]. - Seasonal fluctuations in sales and operating results may not meet investor expectations, adversely affecting share prices[101]. Operational Risks - The company may not be able to renew lease agreements for stores or distribution centers on acceptable terms, which could adversely affect its operations[58]. - The company’s operations rely on information systems for managing manufacturing processes, and disruptions in these systems could significantly impact operations[52]. - Labor shortages and increased turnover could lead to higher employee-related costs, negatively impacting profitability[67]. - The company must manage inventory effectively to avoid stockouts or excess inventory, which could adversely affect financial results[78]. Regulatory and Compliance - Non-compliance with Brazil's General Data Protection Law (LGPD) could result in fines up to 2% of the company's revenue in Brazil, capped at R$50 million per violation[71]. - The company may face penalties and operational disruptions due to failures in personal data protection, which could adversely affect its reputation and financial results[73]. - The company is subject to extensive environmental laws and regulations, with potential fines ranging from R$50 to R$50 million for non-compliance[128]. - Regulatory changes affecting the financial operations of the company could adversely impact profitability compared to competitors without such operations[120]. Economic Environment - The Brazilian economy's GDP contracted by 4.1% in 2020, followed by growth of 4.8% in 2021, 3.0% in 2022, and 2.9% in 2023[139]. - The unemployment rate in Brazil decreased from 9.3% on December 31, 2022, to 6.2% on December 31, 2024, but high interest rates (SELIC rate at 12.25%) continue to limit credit availability for consumers[116]. - The Brazilian General Price Index (IGP-M) recorded inflation of 6.24% in 2024, deflation of (3.2)% in 2023, and inflation of 5.5% in 2022[155]. - The depreciation of the real could lead to inflationary pressures, increased interest rates, and reduced consumer spending, adversely affecting the Brazilian economy[160]. Corporate Governance - The absence of a controlling shareholder may expose the company to hostile takeover attempts and conflicts among shareholders, potentially affecting corporate governance[82]. - The company's new board of directors was appointed in April 2023, consisting of a majority of independent members following the divestiture by Casino Group[225]. - The protections for minority shareholders in Brazil are less developed than in the U.S. or Europe, making enforcement of rights more challenging[203]. - Disputes involving Sendas must be resolved through arbitration in Brazil, which may discourage shareholders outside Brazil from bringing claims[202]. Strategic Initiatives - The company’s growth strategy includes opening new stores, which may require new distribution centers or expansion of existing ones[65]. - Sendas acquired 96.57% of Éxito for approximately R$9.5 billion, expanding operations into Colombia, Uruguay, and Argentina[211]. - The Extra Transaction involved converting up to 70 Extra Hiper stores into Assaí stores for nearly R$4.0 billion, with 66 stores converted by the end of 2024[217][219]. - Digital partnerships with last-mile delivery services expanded to over 70 cities, enhancing customer convenience and shopping experience[215][216]. Financial Instruments and Capital Management - On January 13, 2025, the company raised US$100.0 million (R$608 million) with a 3-year maturity for working capital reinforcement[230]. - A swap contract was entered into on January 13, 2025, to hedge against exchange rate fluctuations, with a cost of CDI + 1.22% per year[230]. - On March 18, 2025, the board approved a capital stock increase of R$184,074,731 through partial capitalization of the expansion reserve, raising total capital stock to R$1,455,769,805[233]. - The total number of common shares remains at 1,352,215,647 with no par value after the capital increase[233].

Core Insights - The article emphasizes the importance of in-depth research and insights for informed investment decisions in the Latin American equity market [1] Group 1 - The company has over 5 years of experience in equity analysis specifically focused on Latin America [1] - The research provided aims to assist clients in making informed investment decisions [1]

Core Viewpoint - The Company intends to voluntarily delist its American Depositary Shares (ADSs) from the New York Stock Exchange (NYSE) and transition its ADR program to Level 1, allowing investors to trade ADSs over-the-counter after the delisting [1][4]. Group 1: Delisting Details - The Board of Directors approved the delisting of ADSs, which represent five common shares of the Company, from the NYSE [1]. - The Company plans to file a Form 25 with the SEC to make the delisting effective by January 9, 2025, and expects ADSs to trade over-the-counter immediately after the delisting [4]. - The Company reserves the right to postpone or cancel the filings related to the delisting at any time [4]. Group 2: Market Strategy - The Company believes that maintaining a secondary listing on the NYSE is not beneficial, as approximately 87% of trading occurs on the Novo Mercado in Brazil [3]. - The delisting aligns with the Company's long-term strategy of maintaining efficient operations as a low-cost company [3]. Group 3: Governance and Compliance - The Company's common shares will continue to be listed on the Novo Mercado, which is its primary trading market, and it will maintain all required disclosures under Brazilian regulations [4]. - The Company is committed to high standards of governance and will continue its current corporate governance practices post-delisting and deregistration with the SEC [4]. Group 4: Communication with Stakeholders - The Company will keep shareholders and the market informed of any material updates regarding the delisting and related matters [5].

Financial Data and Key Metrics Changes - The company reported a revenue exceeding R$20 billion, an increase of R$1.714 billion compared to the same quarter last year, with a total store base growth of 9.3% [14] - The EBITDA pre-IFRS reached R$1.21 billion, reflecting a 12% increase, and a 21% increase year-to-date compared to the previous year [30] - Net income in the pre-IFRS vision grew by 10%, driven by an increase in profits before income tax, which rose from R$142 million to R$260 million, an 83% increase [35][36] Business Line Data and Key Metrics Changes - The company operates a mixed business model with 60% of sales from B2C and 40% from B2B customers, with same-store sales advancing by 2.7% despite lower performance in the reseller segment [15][16] - The gross profit increased from R$1.1 billion in 2019 to over R$3 billion in Q3 2024, demonstrating a stable gross margin despite the opening of 117 stores in three years [24] Market Data and Key Metrics Changes - The company has a significant presence in Brazil, serving over 40 million customers monthly, with a cash and carry model that is well-known across various social levels [26] - The company has seen a shift in consumer behavior, with a noted increase in ticket size, indicating new customer acquisition rather than increased volume per customer [83] Company Strategy and Development Direction - The company is focused on reducing leverage, aiming for a net debt to EBITDA ratio below 3.2 times by the end of 2025, with a current ratio of 3.52 times [40] - The management emphasizes cash generation and disciplined working capital management, with 90% of investments funded by internal cash generation [37][39] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the inflationary pressures in food prices and expects a higher inflation movement in Q4 compared to Q3, influenced by currency fluctuations and climate events [63][64] - The company is optimistic about maintaining margins and expects an increase in margins for 2025, despite the current challenges [67] Other Important Information - The company has implemented sustainability initiatives, including animal welfare standards and social impact actions, such as donating over 3.5 million meals [50][51] - The company has received multiple awards for its ethical and sustainable practices, including recognition as the Best Retail and Wholesale Company [54] Q&A Session Summary Question: How is the company viewing food inflation and its impact? - Management noted an inflationary trend in food prices, with expectations of higher inflation in Q4 compared to Q3, influenced by various factors including currency and climate events [63][64] Question: What competitive advantages does Assai have? - The company highlighted its cash and carry model, which serves both B2C and B2B customers, providing a competitive edge in sales per square meter and store performance [72][73] Question: What is the company's strategy regarding store openings in 2025? - Management confirmed that most store openings for 2025 are already planned, with a focus on maintaining cash generation and evaluating the macroeconomic environment [80] Question: How is the company managing working capital? - The company is focused on maintaining a balanced working capital approach, negotiating longer payment terms while managing stock levels effectively [90] Question: What is the outlook for new services and their impact on revenue? - Management indicated that new services are being rolled out across stores, with significant potential for revenue and margin growth as these services mature [92]

| --- | --- | --- | --- | --- | |-------|-------|----------------------------------------------------|-------|-------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ATACADISTA ano | | | | | | EARNINGS RESULTS 3″ QUARTER 2024 November 8™, 2024 | | | EBITDA Growth: commercial strategy, maturation of new stores and improvements in the shopping experience Increased profitability: operational efficiency, expenses control and improvement of financial results ...

Tax Liabilities - The Company received a Notice of Listing of Assets from the Brazilian Federal Revenue Service, totaling R$1.265 billion related to tax liabilities in dispute with Companhia Brasileira de Distribuição (GPA) [2] - GPA is responsible for R$11.654 billion (90%) of the total R$12.913 billion in tax contingencies incurred prior to the Spin-Off, with the remaining amount under Assaí's responsibility [5] - The Company intends to appeal the Notice of Listing of Assets and will take necessary measures to defend against the tax liabilities [6] - Assaí's operations have always been segregated from GPA's operations, and the Company reaffirms GPA's responsibility for its own contingencies [6][7] - The management will keep shareholders and the market informed about material developments regarding the tax liabilities [7] - The Company emphasizes that the listing of assets does not prevent the transfer or disposal of the listed assets, subject to notification to the RFB [3] - The Spin-Off on December 31, 2020, established that Assaí and GPA are not jointly responsible for liabilities incurred prior to the Spin-Off [4] - Brazilian tax authorities may demand payment of tax debts jointly and severally from the entities involved, regardless of agreements made [4] - The Company is closely monitoring the situation in collaboration with GPA [5] Forward-Looking Statements - Forward-looking statements in the report indicate that future performance is subject to various risks and uncertainties [8]

Investment Thesis - Sendas Distribuidora's Q2 results were mixed, showing an 11.8% revenue growth but a slowdown in same-store sales growth, leading to a cautious recommendation to hold shares [2][17]. Financial Performance - The company reported a net revenue of BRL 17.8 billion ($3.2 billion) for Q2, reflecting an annual increase of 11.8% due to an expansion strategy that included the opening of 24 stores, 9 of which were renovated [4][5]. - Same-store sales growth was only 2.9%, a decrease of 0.5% compared to Q1 2024, and significantly lower than competitor Atacadão's 7.4% year-over-year growth [5][6]. - Gross margin improved to 16.5%, up from 16.2% year-over-year, while adjusted EBITDA increased by 18.4% to BRL 965 million [7][6]. Cost Management - The company achieved gross margin and adjusted EBITDA expansion through strict cost and expense control, with no promotional campaigns during the quarter [6][7]. Debt and Leverage - Sendas Distribuidora reduced its leverage to 3.6x EBITDA from 4.25x in Q2 2023, with net debt reaching BRL 13.9 billion ($2.48 billion) [8][10]. - The company aims to further deleverage to below 1x EBITDA, which is seen as a potential trigger for share price increases [10]. Net Income - Net income fell by 21% year-over-year to BRL 123 million ($22 million), impacted by higher financial expenses and accounting adjustments [11][12]. Valuation - The P/E comparative evaluation indicates a P/E of 13.3x for Sendas Distribuidora, suggesting a downside of 6.7% for its shares based on an average P/E of 12.4x among competitors [14][15]. Market Rumors - There are ongoing rumors regarding a potential merger between Sendas Distribuidora and Grupo Mateus, which could significantly impact the market perception and future performance of the company [16][17].

Financial Data and Key Metrics Changes - The company reported an EBITDA of R$965 million, an 18% increase compared to the previous year, driven by sales growth and margin expansion [14][23][24] - Net income for the semester increased to R$258 million, reflecting a significant growth compared to the previous year [26] - The leverage ratio improved to 4.25x, a reduction of 0.6x compared to the previous year [29] Business Line Data and Key Metrics Changes - Same-store sales growth was close to 3%, with overall growth of 11% year-over-year [13] - The company opened 80 new services in existing stores, contributing to customer attraction [12] - The gross profit margin remained stable at 16.5% for the second quarter [19] Market Data and Key Metrics Changes - The company welcomed over 2 million new monthly customers, reaching a total of 79 million customers [8] - The company experienced a significant increase in customer traffic, being the most present in Brazilian households [9] - The competitive environment remains challenging, with pressure on consumer purchasing power due to high debt levels and interest rates [9][10] Company Strategy and Development Direction - The company aims to preserve cash positions while focusing on store maturity and maintaining competitiveness [10] - Expansion plans include opening 15 new stores in 2024 and 20 in 2025, with a focus on organic growth [46] - The company is committed to enhancing customer loyalty through strong marketing campaigns, including a significant 50th-anniversary campaign [37][39] Management's Comments on Operating Environment and Future Outlook - Management noted that the second quarter was slightly below expectations but anticipates a more positive second half of the year [45] - The company is closely monitoring inflation and its impact on consumer behavior, with expectations of stability in the market [58] - Management emphasized the importance of maintaining a balance between sales growth and margin recovery [44] Other Important Information - The company generated R$7.6 billion in operational cash over the past two years, funding 88% of its investments through cash generation [27][28] - The sustainability strategy focuses on efficient operations, community development, and ethical practices, with recognition for diversity and leadership initiatives [34][35] Q&A Session Summary Question: Competitive environment and growth dynamics - Management acknowledged shifts in the market and the need for tailored services in different regions, with expectations for a more positive second semester [42][45] Question: Same-store sales performance - Management indicated that while the second quarter was slightly below expectations, they expect improvements in the third quarter [48][62] Question: Food inflation dynamics - Management noted that while there are month-to-month variations, overall stability is expected, with attention to external factors like currency fluctuations [58][59] Question: Working capital dynamics - Management clarified that working capital behavior is expected to remain consistent, with a cash cycle of about five days [52][53]