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].

Companhia Brasileira De Distribuicao (NYSE:CBD) Q4 2023 Results Conference Call February 22, 2024 8:00 AM ET Company Participants Marcelo Pimentel - CEO Rafael Russowsky - CFO Conference Call Participants Gustavo Senday - XP Gustavo Fratini - Goldman Sachs Felipe Cassimiro - Bradesco Operator Good morning, everyone, and thank you for holding. Welcome to the video conference to announce GPA's Fourth Quarter 2023 results. [Operator Instructions] We would like to inform you that this video conference is being ...

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].

Companhia Brasileira de Distribuicao SA (NYSE:CBD) Q3 2023 Earnings Conference Call October 31, 2023 9:00 AM ET Rafael Russowsky - CFO & VP, Finance & IR Vitor Fuziharo - Santander Operator We have with us today GPA's CEO, Marcelo Pimentel; and CFO & Investor Relations Director, Rafael Russowsky. I'll pass it over to Marcelo Pimentel, who will begin his presentation. I'm going to start with our main deliveries and talk about the progress we made in the last quarter, starting with a 10% growth in our gross r ...

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].

Pão de Açúcar 1 DISCLAIMER 2Q23 HIGHLIGHTS Marcelo Pimentel, CEO • Gross Revenue reached R$ 5.1 billion, showing an increase of 14.7%; FINANCIAL PERFORMANCE NEW GPA BRAZIL 2Q23 EARNINGS PRESENTATION 2 Statements contained in this release regarding the Company's business outlook, projections of operating / financial profit and loss, the Company's growth potential, and related to market and macroeconomic estimates constitute mere forecasts and were based on the beliefs, intentions, and expectations of the Man ...

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].