Core Insights - President Trump signed an executive order to expedite the rescheduling of marijuana at the federal level, potentially reshaping the regulatory framework and recognizing its medical use [1][11] Executive Order Details - The executive order directs federal agencies to reclassify marijuana from Schedule I to Schedule III of the Controlled Substances Act (CSA) [2][11] - An executive order does not create new laws but instructs federal agencies to implement policy changes consistent with existing laws [3] Current Classification and Implications - Marijuana is currently classified as Schedule I, alongside substances like heroin, which are deemed to have no accepted medical use [4] - Reclassifying marijuana to Schedule III would align it with drugs recognized for medical use, such as ketamine and testosterone, which have a lower abuse risk [4] Medical Use and CBD Developments - The order emphasizes marijuana's legitimate medicinal uses, particularly as an alternative to opioid painkillers, while clarifying it does not legalize recreational use [5][11] - The executive order may also allow certain CBD-based products to be eligible for Medicare coverage by April 2026 if prescribed by a physician [5] Industry Impact - The executive order is seen as a significant regulatory milestone for the cannabis sector, which has long sought to remove marijuana from Schedule I [7] - Moving to Schedule III could alleviate tax burdens, improve profitability by eliminating IRS Rule 280E, and enhance research access and industry credibility [8] Cautionary Notes - Experts caution that the executive order may not be as transformative as anticipated, as it does not legalize marijuana federally or resolve state-federal law conflicts [9] - Access under Schedule III would remain strictly medical and prescription-based, with no pathway for recreational legalization or unrestricted sales [9] Market Reaction - The announcement has sparked renewed investor enthusiasm, with notable gains in cannabis stocks such as Tilray Brands, Canopy Growth Corporation, and Curaleaf Holdings [12] Future Considerations - The ultimate impact of the executive order will depend on the speed of agency actions, regulatory implementation, and Congressional follow-through, which has historically been inconsistent [13]

Tax Liabilities - Companhia Brasileira de Distribuição (GPA) is responsible for tax liabilities arising from events prior to December 31, 2020, as per the Separation Agreement with Sendas Distribuidora S.A.[3] - The listing of Sendas' assets due to tax liabilities does not freeze the assets or restrict their sale, transfer, or encumbrance[4] - GPA's tax contingencies related to the listing of assets are reflected in the financial statements in accordance with applicable accounting rules[5] - The company will continue to cooperate with Sendas to meet the demands of the Federal Revenue Service[4] Forward-Looking Statements - Forward-looking statements indicate that future operations and financial results are subject to risks and uncertainties, with no guarantee of expected outcomes[10]

Legal and Dividend Obligations - The estimated amount to be paid in all lawsuits is approximately R$165 million as of December 31, 2023, compared to R$142 million as of December 31, 2022[530]. - The mandatory minimum dividend is set at 25% of the adjusted net profit, which is calculated after accounting for legal and contingency reserves[529]. - The company is required to allocate 5% of its net profit to a legal reserve for each fiscal year until accumulated losses are offset[529]. - The total amount of the "Expansion Reserve" may not exceed the amount of the company's share capital, which is determined after establishing legal and contingency reserves[525]. - Dividends can only be paid from net profit earned in a given fiscal year, reduced by accumulated losses and provisions for income taxes[526]. - The company may suspend the distribution of mandatory dividends if it threatens liquidity or the normal course of operations[524]. - The legal reserve account must equal 20% of the company's share capital, and it can only be used to increase share capital or offset accumulated losses[524]. - The company may implement a profit-sharing plan for employees and managers, but this can only occur in fiscal years where mandatory dividends have been declared[529]. Financial Performance and Assets - The company reported revenues of R$1,378 million for 2023, a decrease from R$1,411 million in 2022, representing a decline of approximately 2.3%[623]. - The net income for the year 2023 was R$293 million, compared to R$245 million in 2022, indicating an increase of about 19.6%[623]. - The total assets of the company were R$9,650 million in 2023, down from R$11,714 million in 2022, reflecting a decrease of approximately 17.6%[623]. - The company completed negotiations for the indirect sale of its interest in Cnova N.V. to the controlling shareholder Casino Guichard Perrachon for a cost of €10 million (R$53.5 million) in November 2023[623]. - The company reported current liabilities of R$5,351 million in 2023, compared to R$2,329 million in 2022, indicating a significant increase of approximately 130%[623]. - The shareholders' equity increased to R$1,758 million in 2023 from R$1,577 million in 2022, marking an increase of about 11.5%[623]. - The company lost control over Éxito in July 2023 due to a segregation process, impacting its financial structure and reporting[621]. - The company reported a total of 2,190 million in consolidated liabilities due within one year[634]. Inventory and Receivables - The company's inventory balance as of December 31, 2023, was R$1,952 million, down from R$2,046 million in 2022[590]. - The allowance for losses on inventory obsolescence and damages increased to R$86 million in 2023 from R$49 million in 2022[590]. - Trade receivables rose to R$458 million in 2023, up from R$417 million in 2022, with credit card receivables from companies increasing to R$109 million from R$79 million[606]. - The allowance for doubtful accounts remained stable at R$2 million in 2023, consistent with 2022, despite write-offs of R$25 million in 2023 compared to R$38 million in 2022[607]. - Accounts receivable from the GCB amounted to R$588 million in 2023, down from R$603 million in 2022, while accounts receivable from Assai were R$108 million, a new entry for 2023[608]. Financial Liabilities and Debt - The Group's financial liabilities are recognized initially at fair value, net of directly attributable transaction costs, and include trade and other payables, loans, and borrowings[547]. - The company’s financial liabilities are primarily measured at amortized cost, which is the most relevant category for the group[566]. - The net financial debt increased to R$1,844 million in 2023, compared to R$1,695 million in 2022, resulting in a net debt to equity ratio of 39%[702]. - Total borrowings and financing decreased to R$5,273 in 2023 from R$5,863 in 2022[714]. - The weighted average rate for debentures and promissory notes is CDI + 1.60% per year, with total amounts increasing to R$3,350 in 2023 from R$2,679 in 2022[714]. Impairment and Asset Valuation - The company evaluated financial assets for indications of impairment on each reporting date, impacting the recognition of impairment losses in the financial statements[544]. - The impairment loss recorded for property and equipment was R$8 million in 2023, reflecting ongoing asset evaluations[654]. - The company assessed no need for impairment charges on goodwill and tradenames with indefinite lives, indicating stable cash flow projections[686]. - The average sales growth rate used for impairment testing was 5.7% for periods exceeding the next five years, with a discount rate of 8.4%[675]. Investments and Capital Expenditures - The company allocated R$919 million for additions to property and equipment in 2023, focusing on expanding activities and improving existing facilities[654]. - The company’s strategic focus includes investments in technology and infrastructure to enhance operational efficiency and market presence[658]. - FIC's investments increased to R$864 million in 2023 from R$833 million in 2022, with no provision for investment losses related to Cnova N.V. in 2023 compared to a loss of R$863 million in 2022[646]. Cash and Cash Equivalents - The Group's cash and cash equivalents include R$74 million denominated in US Dollars as of December 31, 2023, compared to R$79 million on December 31, 2022[561]. - Cash and cash equivalents increased to R$2,971 million in 2023 from R$3,751 million in 2022, with cash and banks in Brazil rising to R$246 million from R$99 million[604]. - The company’s cash and cash equivalents decreased to R$2,971 million in 2023 from R$3,751 million in 2022[702].

Financial Data and Key Metrics Changes - The company reported a gross revenue growth of 6.3% in Q4 2023 and 11.3% for the year [4] - Gross profit reached BRL 1.3 billion with a margin of 25.7%, showing a 3.1 percentage point increase compared to Q4 2022 [14] - Adjusted EBITDA totaled BRL 404 million with a margin of 7.7%, reflecting a 0.7 percentage point increase over the previous quarter and 1.8 percentage points compared to Q4 2022 [14] - Operating cash flow was strong at BRL 1.1 billion for the quarter, contributing to a cumulative operating cash flow of BRL 907 million for 2023, an improvement of BRL 1 billion compared to 2022 [15][25] Business Line Data and Key Metrics Changes - Pão de Açúcar revenue grew by 6% in Q4 and 19.3% for the year, with same-store sales increasing by 4.3% in Q4 and 5.9% for the year [4][11] - The proximity format saw a 5.6% growth in same-store sales and a total growth of 19.3%, with a 2.9 percentage point increase in market share in Greater Sao Paulo [12] - Extra Mercado reported a same-store sales growth of 2% in Q4 and 3% for the year, with total store growth of 7.9% driven by new store openings [12] Market Data and Key Metrics Changes - The company gained 0.3 percentage points in market share despite a strong comparison to Q4 2022, marking the fifth consecutive quarter of growth [26] - E-commerce sales grew by 20% in Q4, reaching BRL 538 million, with a 33% penetration of perishables, an increase of 6.2 percentage points compared to Q4 2022 [28][34] Company Strategy and Development Direction - The company is focused on accelerating earnings and consolidating its position in 2024, emphasizing the strengthening of its proximity and mainstream brands [3][70] - The turnaround strategy is in its third year, with a commitment to improving customer experience and operational efficiency [70] - The company plans to continue expanding its store formats, particularly in proximity stores, and enhancing its digital capabilities [20][29] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2024, highlighting strong sales in January and a positive response from customers [58] - The company is focused on maintaining a disciplined approach to expense management while enhancing customer experience [59] - Management noted that the market environment remains competitive, but the company is performing better than the average market [64] Other Important Information - The company achieved a 10-point increase in NPS (Net Promoter Score) compared to the same period in 2022, indicating improved customer satisfaction [27] - The company has made significant investments in sustainability, including reducing Scope 1 and Scope 2 emissions by 10% [8] Q&A Session Summary Question: What insights can you share about the acceleration in 2024 and the KPIs? - Management indicated that they are committed to their strategy and expect to see improvements across various metrics, including product availability and customer experience [38][39] Question: Can you clarify the same-store sales dynamics and the impact of inflation or competition? - Management clarified that the observed dynamics are not a slowdown but rather a reflection of market conditions, with gains in volume despite deflation in several categories [46] Question: What is the reason for the closure of 11 stores? - Management explained that some closures are temporary and part of a performance review process, while others are due to underperformance [47][65]

Discontinued Operations - The Company reported a discontinued operation related to the divestiture of its subsidiary Almacenes Exito S.A., resulting in a total amount of R$1,555 million, which includes R$1,360 million from recycling comprehensive income and R$760 million from the remeasurement of the remaining investment[40]. - The company recorded a net result of R$1,564 million from the transaction related to discontinued operations[149]. - The Company completed the segregation of its subsidiary Exito in Q3 2023, enhancing operational focus and efficiency[142]. Financial Performance - Net income for the year was a loss of R$2,271 million, compared to a loss of R$172 million in the previous year[96]. - Comprehensive income for the year was a loss of R$621 million, significantly improved from a loss of R$2,498 million in 2022[96]. - Adjusted EBITDA for Q4 2023 totaled R$404 million, with a margin of 7.7%, an increase of 1.8 percentage points compared to the previous year[82]. - Gross profit rose to R$4,728 million in 2023, up from R$4,126 million in 2022, marking an increase of 14.6%[25]. - The company reported a profit from operations of R$620 million in 2023, compared to a loss of R$697 million in 2022, indicating a significant turnaround[25]. - The company recorded financial expenses of R$1,069 million in 2023, up from R$737 million in 2022, indicating increased borrowing costs[25]. - The company generated net cash from investing activities of R$19 million in 2023, a significant decrease from R$3,457 million in 2022[139]. Credit Losses and Risk Management - The Company adopted the full lifetime expected credit loss model for provisions related to accounts receivable, which reflects a significant change in estimating credit losses[11]. - The Company considers a financial asset to be in default if it is overdue by more than 90 days, which is a key criterion for assessing credit risk[13]. - The expected credit losses are measured at present value based on cash insufficiencies, with losses discounted by the effective interest rate of the financial asset[15]. - The Company applies a practical expedient for trade accounts receivable, utilizing a loss matrix for different maturity ranges to estimate expected credit losses[11]. - The Company evaluates the credit risk of financial assets based on historical losses and projections, which are critical for determining expected credit losses[12]. Tax Provisions and Liabilities - Management recorded provisions for tax claims amounting to R$1,108 million as of December 31, 2023, with additional claims and assessments outstanding totaling R$13,376 million for which no provision was recorded[55]. - The company is contingently liable for tax claims related to divested subsidiary operations totaling R$1,739 million, with no provision recorded[55]. - Management's assessment of the likelihood of loss on tax claims involves significant judgment due to the complexity of Brazilian tax legislation and case law[55]. - The audit concluded that Management's assessment of tax credit recoverability and related disclosures are acceptable within the context of the financial statements[53]. Operational Developments - In 2023, the company opened 61 new stores, primarily in the Proximity format, under the Minuto Pão de Açúcar banner[82]. - E-commerce revenue grew by over 20% in Q4 2023 compared to Q4 2022, supported by operational changes that integrated e-commerce with store operations[82]. - The company achieved a product availability level of 95%, a benchmark for Brazilian retail, through a large category management project[82]. - The company's Net Promoter Score (NPS) increased by 10 points compared to Q4 2022, reflecting improvements in customer service[82]. - Market share increased by 0.3 percentage points in Q4 2023 compared to Q4 2022, marking the fifth consecutive quarter of growth[82]. Asset and Liability Management - The company reported a total asset value of R$21,942 million as of December 31, 2023, compared to R$22,050 million in the previous year[89]. - Total current liabilities decreased to R$6,129 million in 2023 from R$6,404 million in 2022[89]. - The company’s long-term assets and liabilities are adjusted to their present value, while short-term assets and liabilities are not subject to this adjustment[5]. Strategic Initiatives - The company aims to accelerate earnings in 2024, focusing on consolidating its position in the premium market and strengthening its brands[82]. - The decision to sell remaining shares in Exito and the stake in Cnova has made the company a 100% Brazilian entity, enhancing its focus on the national food market[82]. - The company plans to focus on market expansion and new product development to drive future growth[102]. - The Company approved the sale of its indirect equity interest in Cnova for R$53.5 million, with 80% of the payment (R$42.8 million) received in cash and the remainder to be paid by June 30, 2024[179]. Audit and Compliance - The Company’s financial statements for the year ended December 31, 2023, were audited and presented fairly in accordance with Brazilian accounting practices and IFRS[37]. - The Audit Committee evaluated the quality and integrity of the financial information, including management reports and financial statements[66]. - The individual and consolidated statements of value added were appropriately prepared in accordance with technical pronouncements and consistent with financial statements[56]. - The Company’s financial statements are prepared in accordance with IFRS and presented in millions of Brazilian reais (R$)[181].

Financial Data and Key Metrics Changes - The company reported a 10% growth in gross revenue compared to Q3 2022, with same-store sales increasing by 6.6% [3][17] - Adjusted EBITDA totaled BRL 333 million with a margin of 7%, reflecting a 0.7 percentage point increase from the previous quarter and a 1.2 percentage point increase from Q3 2022 [20][34] - Net profit from discontinued operations showed a loss of BRL 2.1 billion, primarily due to the spin-off of Éxito, while excluding these effects, the net loss would have been BRL 22 million [21][47] Business Line Data and Key Metrics Changes - Pão de Açúcar same-store sales increased by 7.2%, driven by a strong increase in volume, while the Extra Mercado brand saw a 2.5% growth in same-store sales [8][18] - E-commerce sales grew by 15%, totaling BRL 47 million, with both 1P and 3P channels showing double-digit growth [19][37] - The Proximity format reported a 7.7% increase in same-store sales and a 21.7% increase including expansion [44] Market Data and Key Metrics Changes - The company gained 0.6 percentage points in market share according to Nielsen data, indicating successful customer delivery and recognition [34] - The out-of-stock rate reached a historic low of 5.8%, with inventory levels at 94.2% [36] Company Strategy and Development Direction - The company is focused on a turnaround strategy that emphasizes operational and structural improvements, aiming for sustainable results over the next three years [12][112] - Expansion plans include opening more Proximity stores, particularly Minuto Pão de Açúcar, which has shown strong performance [39][72] - The company is committed to improving gross margins through better commercial negotiations and inventory management [54][56] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to continue delivering consistent growth despite challenges such as deflation in commodities [67][101] - The company anticipates that operational improvements will continue, particularly in the premium segments, which are less affected by commodity price fluctuations [67][101] Other Important Information - The company has achieved 41% of women in leadership positions, reflecting its commitment to gender equality [13][40] - Significant progress has been made in reducing Scope 1 and 2 gas emissions by 11% as part of its climate change initiatives [14] Q&A Session Summary Question: What are the company's strategies regarding debt equalization? - Management indicated that they are working on reducing structural debt and have started replacing long-term debts with shorter-term debts related to working capital [26][56] Question: What leverage does the company expect in 2023 and 2024? - Management reiterated their commitment to deleveraging and stated that proceeds from asset sales will be directed towards this goal [28][58] Question: How does the company plan to address out-of-stock issues? - The company is focused on improving inventory management and expects to reach best-in-class out-of-stock rates in the future [106] Question: What is the expected impact of the assortment revision process? - The company has completed the first stage of the assortment review for Pão de Açúcar and is working on similar improvements for Proximity brands, expecting to conclude by 2024 [81][93]

Capital Structure and Shareholder Rights - As of December 31, 2022, the company had a subscribed and paid-up capital of 270,139,069 common shares, with a potential increase to 400,000,000 common shares authorized[60]. - The company is required to distribute a minimum of 25% of its adjusted net profit as mandatory dividends, which may include dividends or interest on shareholders' equity[65]. - The legal reserve must be maintained at 5% of net profit until it reaches 20% of the company's share capital[65]. - The company has the authority to suspend mandatory dividend distribution if it deems it incompatible with its financial condition, subject to management's justification[65]. - Shareholders holding at least 5% of shares can call a meeting if management fails to do so within eight days after a justified request[84]. - The quorum for shareholders' meetings is at least 25% of total voting shares, with a higher requirement of two-thirds for bylaw amendments[88]. - Dissenting shareholders have the right to withdraw and receive book value for their shares if certain actions are approved, such as changes in corporate purpose or mandatory dividends[90]. - A public tender offer must be launched by any acquirer of more than 25% of equity interest to ensure equal treatment of all shareholders[96]. - The company must pay 80% of the book value of shares immediately after a resolution that triggers withdrawal rights, with the balance due within 120 days[95]. - The company’s bylaws require a tender offer for minority voting shares at a price equal to at least 80% of the control price upon a sale of control[99]. - The affirmative vote of shareholders representing more than half of outstanding shares is required for significant corporate actions, including mergers and changes in corporate purpose[88]. Financial Performance and Results - The company reported net operating revenue of R$17.321 billion for the year ended December 31, 2022, compared to R$16.298 billion in 2021, reflecting an increase of approximately 6.3%[265]. - The company incurred a loss from operations of R$69 million for the year ended December 31, 2022, compared to a profit of R$111 million in 2021[265]. - Financial expenses for the year ended December 31, 2022, totaled R$1.528 billion, up from R$943 million in 2021, indicating a significant increase in financial costs[265]. - The company attributed a net income of R$132 million from discontinued operations for the year ended December 31, 2022, compared to R$691 million in 2021[265]. - The company recognized share-based payment expenses of R$10.9 million, R$10.1 million, and R$15.0 million in 2022, 2021, and 2020, respectively[113]. Business Operations and Strategy - The company discontinued its hypermarket business under the Extra Hiper banner and completed the conversion of all remaining hypermarkets to Pão de Açúcar or Mercado Extra supermarkets by September 2022[109]. - In 2022, the company converted 25 Extra Hipermercado stores into Pão de Açúcar and Mercado Extra stores, and opened 49 new stores, including 38 Minuto Pão de Açúcar[122]. - The company has implemented a digital transformation plan to enhance e-commerce capabilities and improve customer experience[109]. - The company is focusing on the Brazilian food retail segment in premium and proximity formats under the banners Pão de Açúcar, Minuto Pão de Açúcar, and Mercado Extra[226]. - The company aims to enhance its private label portfolio, focusing on quality and price competitiveness, with ongoing improvements to its Qualitá and Taeq brands[258]. Market Environment and Competition - The Company faces intense competition in the Brazilian food retail industry, particularly from cash-and-carry sectors and online retailers, which may adversely affect market share and financial performance[152]. - The company is exposed to risks related to customer financing and loans, which could impact financial stability[154]. - The economic environment in Brazil, including inflation rates and consumer purchasing power, significantly affects the food retail industry[153]. - The company anticipates that the trend of increasing online retail sales will continue, posing challenges to traditional retail operations[152]. - The company faces significant competition from internet food retailers, which may adversely affect market share and net income[175]. Regulatory and Compliance Issues - The company must disclose material acts or events to the CVM and B3, including changes in shareholding exceeding 5%[60]. - The company is prohibited from issuing shares without voting rights or with restricted voting rights under its bylaws[62]. - The Brazilian General Data Protection Law imposes penalties of up to 2% of revenue for non-compliance, limited to R$50 million per infraction[182]. - The company is subject to extensive regulation as a financial institution, and changes in the regulatory framework may adversely affect its operations and profitability[204]. - The company is subject to environmental regulations that may increase capital expenditures and operational costs if compliance becomes stricter[187]. Economic Indicators and Financial Outlook - Brazil's GDP growth rates were 2.9% in 2022, 4.6% in 2021, and (4.1)% in 2020, indicating a slow recovery from the recession following the COVID-19 pandemic[200]. - The unemployment rate in Brazil decreased to 9.3% in 2022 from 11.1% in 2021 and 13.9% in 2020, reflecting improvements in the labor market[203]. - Brazil's annual inflation rates were 5.5% in 2022, 17.1% in 2021, and 23.1% in 2020, with the SELIC rate at 13.75% as of December 31, 2022[194]. - The SELIC rate was decreased to 13.25% as of August 2, 2023, impacting the cost of indebtedness for the company[194]. - A recent decision increased the tax rate on net profits by 9%, which may impact the company's financial results[109]. Transactions and Investments - The Éxito Segregation Transaction is expected to unlock value for shareholders through a capital reduction of R$7,133.4 million, delivering approximately 83% of Éxito's common shares to shareholders[162]. - Following the completion of the Éxito Segregation Transaction, the Company will retain a minority stake of approximately 13% of Éxito's common shares, while Casino will retain a voting stake of approximately 47%[163]. - The company completed the acquisition of the remaining equity stake in Cheftime in August 2022, making it a wholly-owned subsidiary focused on ready-to-eat meals[252]. - The Extra Hiper Asset Sale included the transfer of commercial rights of 66 stores for R$3.9 billion and the sale of 17 real estate properties for R$1.2 billion[227]. - As of December 31, 2022, the company had received all expected amounts from the Extra Hiper Asset Sale, which included asset write-offs of R$1.0 billion and expenses of R$1.3 billion[251].

Financial Performance - Gross Revenue reached R$ 5.1 billion, showing an increase of 14.7%[5] - Gross Revenue (excluding gas stations) totaled R$ 4.7 billion, an increase of 16.7%[15] - Same Store Sales (excluding gas stations) increased by 6.4%, highlighting Pão de Açúcar banner which grew 8.6%, an improvement by the 5th consecutive quarter[15] - Adjusted EBITDA totaled R$ 299 million, with a 6.3% margin, 0.3 p.p above 1Q23[15] - GMV of Digital was R$ 453 million in 2Q23, with growth of 9.8%[19] - Total sales of New GPA Brazil totaled R$ 5.1 billion in 2Q23 with an increase of 14.7% or 16.7% excluding gas stations[38] - Net Debt reduced by R$ 1.5 billion vs 2Q22[54] Strategic Initiatives & Expansion - Total GPA is growing 0.8 p.p vs Brazil Self-Service market[17] - 101 new stores since 2022 with R$ 1.7 Billion in incremental sales, being R$ 509 Million in 2Q23, with a contribution of 10 p.p in sales increase[22] - Women in leadership position reached 40%, accomplishing the target established for 2025[23] Profitability - Gross Profit reached R$ 1.2 billion with 24.8% margin, 0.4 p.p higher than 1Q23[15]

Financial Data and Key Metrics Changes - The company reported a gross revenue growth of 14.7%, with same-store sales increasing by 6.4% in consolidated figures [2][13] - Gross profit reached BRL1.2 billion, with a margin of 24.8%, showing an improvement compared to the last three quarters [16] - Ongoing net income decreased to a net loss of BRL322 million, impacted by financial results related to the sale of hypermarket operations [17][39] - Adjusted EBITDA totaled BRL299 million with an adjusted margin of 6.3%, reflecting a sequential increase [38] Business Line Data and Key Metrics Changes - Pão de Açúcar saw a same-store sales growth of 8.6%, marking five consecutive quarters of growth [2][64] - Compre Bem experienced an 11.5% decline in same-store sales due to a commercial repositioning strategy [15] - The Proximity format reported a significant increase in same-store sales of 50.5%, driven by new store openings [35] - E-commerce GMV reached $453 million, growing by 9.8% with an online penetration of 11.1% of total sales [37] Market Data and Key Metrics Changes - The company gained 2.3% in market share for the supermarket format compared to small-sized supermarkets [14] - The premium format achieved a market share growth of 0.5 percentage points, while mainstream formats grew by 0.3 percentage points [3] Company Strategy and Development Direction - The company is focused on a turnaround strategy based on six pillars and 12 strategic projects aimed at long-lasting results [24][72] - A significant project involved reducing the total number of SKUs by 10%, focusing on mainstream and proximity formats [4] - The company aims to enhance profitability through improved commercial negotiations and a focus on perishables [44][101] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery of the business, highlighting improvements in customer experience and market share [24][120] - The company is committed to reducing breakage indicators and improving trade margins as part of its strategic plan [120] - Management noted the importance of maintaining a long-term focus on profitability rather than short-term peaks and valleys [72] Other Important Information - The company completed the registration process with the SEC for Exito Group, making it a publicly traded company in the U.S. [18] - The company has a high cash position of BRL3.2 billion, which is twice its short-term gross debt [39] Q&A Session Summary Question: Can you elaborate on the profitability dynamics and margin pressures? - Management highlighted three key aspects: improving commercial negotiations, enhancing rupture performance, and maintaining expense control [20][44] Question: What is the impact of food inflation on margins? - Management noted that GPA has faced deflation in basic grocery items, which has affected margins but also allowed for market share growth [49][50] Question: Can you provide updates on the Exito Group proposals? - Management clarified that the board rejected a recent proposal due to insufficient terms and the ongoing spin-off process [56][99] Question: What are the expectations for the Proximity format and its contribution to margins? - Management indicated that the Proximity format is expected to contribute positively to gross margins, with significant improvements already observed [105] Question: How do you expect occupation costs to unfold in the second half of the year? - Management explained that over 90% of stores have lease contracts that are renegotiated annually to mitigate inflation effects [108] Question: What initiatives are in place to improve working capital? - Management emphasized the reduction of inventory days and improved assortment management as key strategies to free up working capital [112][114]

Acquisition Offer - The Board of Directors unanimously rejected a non-solicited acquisition offer from Campbelltown Inc. for the total equity interest in Almacenes Éxito S.A., valued at US$ 836 million, as it did not reflect adequate financial reasonability[5]. - The decision to reject the offer was based on advice from legal and financial advisors, emphasizing the best interests of the Company and its shareholders[5]. Equity Interest - The Company holds a 96.52% equity interest in Éxito, which was the subject of the rejected acquisition offer[5].