Good day, all, and thank you for waiting. Welcome to the earnings call for our second quarter in 2023 at Assaí Atacadista. I'd like to highlight, if you need simultaneous translation, we have this tool available on our platform. Thus, you must select the interpretation button through the globe icon on the bottom part of your screen and choose your language of preference, Portuguese or English. We'd like to let you know that this earnings call is being recorded and will be provided on the company's IR website at ri.assai.com.br, where you can already find the earnings release. During our presentation, all participants will have their mics off. Soon after, we'll begin the Q&A session. To submit a question, please select the Q&A icon on the bottom part of your screen. Write your name, company, and language to enter the queue. As you are announced, a request to open up your mic will appear on your screen. you'll open up your mic to be able to submit questions. We'd like to instruct you that all questions should be submitted at once. We also want to highlight that the information in this presentation and possible statements that could exist during the video conference related to business perspectives, forecasts, and operational targets and financial targets at Assaí, represent beliefs and assumptions of the company's management, as well as information that's currently available. Future statements are not a guarantee of performance. They involve risks, uncertainties and assumptions because they relate to future events, and thus rely on circumstances that could or not occur. Investors must understand that general economic conditions, market conditions, and other operational factors can affect the future performance at Assaí and lead to results that differ materially from those presented in future statements. We'll pass the floor on to Gabrielle, the Investor Relations Director at Assaí. Thank you. Good morning, everyone. We'll be participating in this earnings call for the second quarter of 2023 at Assaí. I'm going to present the executives we have present, Belmiro Gomes, our CEO, Deni Sabbag, our CFO, and our VPs, Wlamir dos Anjos and Anderson Castilho with operations. Before we begin the presentation, I'll pass the floor on to Belmiro for his initial remarks. Thank you, Gabby. Good morning, everyone. I'd like to thank you all for your presence as you're participating in this earnings call today. We'll begin by talking about our second quarter. The second quarter, of course, in 2023 is a very challenging year. The numbers we're gonna be presenting here, first of all, I wanna thank our teams and everyone in our stores, from different areas that have been working intensely throughout the first quarter to deliver the results that we have at this moment. It's very important for the company, considering the amount of the expansions and new stores that Assaí has been adding to its space. Even for this year, which should be the second biggest year when it comes to store openings historically, in our Assaí trajectory. I wanna highlight the main points in the second quarter. It's a quarter that is, a quarter that has been very important when it comes to deflation in some categories, where you had a real big peak in prices in the beginning of the pandemic, and then there's this movement towards a drop in prices, especially for commodities, which impacts the sales and the same store sale base. As from the moment when you have this drop in prices, it is natural that our customers that are contractors, which represent about 40% of our sales, will reduce their level of purchases in stock as they see the prices in a growing movement, just as we also perform some re-reductions whenever there's a drop in prices. When you have this contrary effect, you see consumers that are still very pressured with the payment of interest, their income levels are still very low. This is mainly due to the impact we had in same store sales in the second quarter, and also the effect created last year with this movement that was done by Assaí with the closing of the extra stores. At the end of the first quarter of 2022, we had 105 hypermarket stores as the second biggest operator in this format in Brazil, which of course benefited most of the market, especially in São Paulo and Rio markets, where you had the biggest amount of these stores. Of course, there's a base effect that now we'll notice as we start reopening the extra stores. Besides this, in the second quarter, this is something very important. Due to many factors, we had a growth of 21%. Without the inflation, even with the deflation in food, we added a total volume of sales that represents almost BRL 3 billion, so a growth in total customer flow of about 25%, and we reached 70 million tickets within this quarter. That represent about 105 million-110 million people going by the Assaí stores. This growth is mainly supported by the expansion and the conversions and transformations, since one thing is if you convert from one format to another, and the other is if you transform, like from the hypermarket to the Cash & Carry, you need to have this heavy-duty process for transforming the physical structure of the store. When it comes to construction, placing the equipment and really changing the entire concept that the store had. That it can have the necessary stock capacity, meet the needs of customers and also contractors. Sorry, also the small businesses, the B2B customers. These are stores that are very well located, and as we had already mentioned initially, there was an expectation that there would be quick maturity in these stores and a drop, or not very significant impact on results. This is very visible when we look at the margins delivered in the second quarter. Even with a huge amount of almost 35% of our sales area, with stores open for less than three years, we can still deliver a gross margin that's about 16%, with a variation of only 0.10% compared to what we delivered last year. Even with the impact of the provisional measure that started to be active in the first of May, that also had a marginal effect on our margin effect. The margins have been very positive. An important highlight in this quarter is mainly in the expense lines. Even with this amount of stores, adding all these services, we have about 60 stores open last year, almost 100. When you look at the three-year period, expenses were extremely stable, with a variation of 9-9.3. This is because we've already included in this percentage of expenses, the cost of occupation in the stores that are still under maturity, personnel costs, and all of the trends and movements that are coming from this expansion process and maturity in the stores. The expenses are a big highlight, and this variation, the EBITDA, is about 0.4 compared to the previous period. Keeping up the delivery, consistency and being able to grow sustainably with our own cash generation and keeping up the levels of results even when submitted to a high growth rate. Danny will highlight this a bit more in the EBIT and the net income, and we're gonna be closing with margins, that even with the interest costs and the carryover costs and level of debt and investments the company performed to be able to acquire the POSs and real estate from the extra stores, and also perform the transformations and conversions necessary, we are still able to deliver in this scenario. We believe there's gonna be some changes in the interest rates that will impact our costs. That'll help us, of course, get back to the more normalized scenario. We have strong cash generation capacity, and we should also highlight this up ahead, which really makes the debt indicator drop compared to the first quarter, which is very close to 2.8, and now it reaches 2.6. Moving on to the projects with the extra conversions. We have, at this moment, a opening of 57 conversions. We're still missing nine. If you can go back to the previous slide, we opened. You can see a store in Maca. Maca is a store that was built. It's a building that was built in 1988. Sorry, 1888, and we were able... We had to do some renovation and restructuring. The company currently has 20 construction projects underway, which keeps us, allows us to have this estimate of approximately 30 new units this year, with an important participation also coming back through the organic expansion process, since our land bank of projects is still being set up, and the company really has a set of projects for store openings, for organic store openings now in 2023 and 2024 and 2025. We can advance into the next slide, please. The sales, multiples and the performance of the extra stores, as I mentioned in the first quarter, we know how people are very anxious for the sales, but these are stores that have even less than eight months of full operation, so it's still a very new project. The new, the first store openings were concentrated in August last year. Next month, we're still gonna have, like, the first stores completing a full year anniversary of operations. Even with the impacts of deflation that we had, which of course, will impact the same stores and the existing, units as well, and the new units, the stores already performed 2.5 in the sales multiples. I think the main point here is that these stores continue to keep up their growth, ramp up with an evolution of almost 10% compared to the second quarter, especially delivering a EBITDA margin, which total EBITDA margin, with a degradation of 0.4 in the total base, meaning that the expansion already came in very strongly with an EBITDA that's close to 6%, even with this short period of sales. Another topic we would like to also highlight within this group of stores that came around in the second batch of the hypermarkets, Assaí will start having a gross area of 220,000 square meters, which represents, probably this, it would be, like, the second biggest shopping in Latin America. In total, it's 1,300 shop owners split between these units. The focus in the company mainly was delivering, first of all, the part that was from our operation. This year, we're completing this within the investments. We already have about half of these galleries complete, so this should help us when it comes to the revenue. The revenue from these galleries, in the stores are not considered in our lease line. We received some questions about this. The company looks at the revenue coming from these shops in the stores, in our Cash & Carry stores, and this revenue of the galleries come into the gross profit. These 1,300 small stores are gonna help these stores with a bigger customer flow when it comes to maturity, dilution of the rental costs and occupation costs that we have in the stores, such as the property tax, water, sewer taxes, and other fees. It's a really intense project with 220,000 square meters of rental space, and we received some questions even about this, and it's important to highlight this point. I'll pass the floor on to Danny, and she'll talk about our EBITDA cost of debt results, and then after, I'll come back a little more up ahead. Thank you so much. All right. Thank you, Belmiro. Good morning, everyone. Now, once again, moving on to slide five, where we're gonna talk about EBITDA. We bring important evolution in reais, quarter over quarter, and also important evolution in the second quarter, compared to last year, and also in the quarter. In the semester, sorry, with reais 334 million and an EBITDA that already reaches reais 2 billion. Our margins have a little bit of pressure of about 7% compared to 7.4% last year, and this pressure is mainly due to the maturity of the store. An important point to highlight here is that we have a store network with over one-third of the stores in maturity. 35% of these stores are in this maturity phase. When we highlighted to you guys the evolution of the E-Extra margins, as an important point to highlight is that if we exclude the effects of the conversions and the margins of the conversions, the EBITDA margin remains quite stable year-over-year. Here we have results that demonstrate the resilience of the company, and this is a very important point, also reflects the maturity, we have a very stable margin year-over-year. If we move on to the next slide, I'm gonna talk about our financial results. Here, the results of BRL 628 million, it's important to exclude some of the effects with the lease liability. When we look at this parcel here, that's blue, we can see that there's a financial result, pre-IFRS of BRL 221-BRL 420. This evolution of BRL 200 million year-over-year is mostly related to the cost of debt and the biggest volume of debts as well. That, that's a result of the fundraising we performed in 2022, to be able to handle the expansion project of the company, to support our investments in expansion as well. to explain this variation, we can say that BRL 7 million would be coming from these higher costs of debt, and the other BRL a hundred and some million are also related to the capitalized interest, which is already at a smaller amount than what it was before, since we already reached 90% of our conversion project for stores. This kind of explains the variation in our financial results. Moving on to the right side of our slide, we have a lot of stability in our net debt and BRL 7.9 billion last year, and strong cash generation as well, which is an important point here in this slide, where we end the last 12 months with a cash generation of BRL 5.4 billion, an improvement of BRL 2.6, coming especially from the management of the working capital. For suppliers and stock, we have significant gains, and this strong generation is really what supported the investments of the company. When we take a look at the first two lines of BRL 3 billion in these investments that in the past 12 months, represented almost 60 new stores and a sales area that grew. It's important to highlight that we grew 34% in our sales area, and plus, BRL 1 billion, which are the payments related to the acquisition of the purchase of the commercial real estate. We supported this high level of investments, besides the cost of debt that we bring in here, with a total amount of BRL 1.3 billion. With this, we have a net debt and a leverage going from 2.7 last year to 2.6. If you remember, in the first quarter of this year, we had a level of 2.8. This is an important advance in the deleveraging of the company. Now, I would like to also make another point here, where Great, yeah, go back a bit. Okay. In this last little chart here, we would also like to highlight that, we have the indicators and our ratios, for debt. On the blue line, you can see how we present this in the release. We know that there are some analysts and investors that look at this indicator of 2.6, adding the payments up to GPA, we would be adding on maybe 0.8 on this indicator. For the effects of covenants, contractual covenants that we have, on our debt contracts, The number for these contracts is the orange line. We're taking a look at a difference of 1.8 to 2.6, and this point, 1.8 is what interacts with the three times covenant. This slide, basically, and this graph is to present to you all that in regards to covenants, we are very comfortable with the levels that we have achieved at the moment. When we look at the forecast in the future, for deleveraging in the company and our commitments for payments to cash flows, we will have this deleveraging in a very gradual process, but also in 2024 and 2025, at levels that are a lot lower. We're very comfortable with these numbers up ahead. Moving on to the next one. As we bring our net income, as we mentioned, the factors we presented during the presentation, so we have our financial results impacting our profits, stores under maturity, as I mentioned, and we'll end the quarter with BRL 156 million. Evolution is very significant compared to the previous quarter because we end with a margin of 1%, and last quarter, we had a margin of 0.5%. We have an evolution quarter-over-quarter, and in the semester, BRL 228 million, with a margin of 0.7%. These are the comments, the main comments, about these two slides. Now I'll pass the floor back to Belmiro to talk about ESG advances. Please, Belmiro. Okay, thank you, Dani. Of course, the company is the second-biggest retailer in Brazil, with 76 employees, 105 million people going through our stores. That the equivalent to the Brazilian population comes to our stores in total. We have an important target audience where our stores are part. This is a topic where there's always things you can, there's always things you can improve and work with. Also within this quarter, with the exit of our former controller, our company became 100% fragmented capital. With this, we become a full corporation, and Assaí is recognized as a company that really focuses on ESG. We have 5.5% people with disabilities, and we're above the legal quota. Some other important advances we've had with, such as the reduction of our emissions in scope one and scope two. Another interesting point is the Assaí Academy to train small businesses and B2B customers. We've been able to train people and advance a lot in these levels of reuse of the waste, that reached for 44%. We also had a special campaign to gather donations of blankets and clothes as well, for a special campaign for winter. With the new board, Assaí also has two board members, two women board members. In the board, we have a lot of work to do still because we have a total of nine members. Before, we only had one woman, now we have Leila and Angiada, so we have two now. We also have important advances also when it comes to diversity, equality, and opportunities. We have 43 people that are considered to be Black or Brown in leadership positions. This is a topic that we're also advancing constantly and in line with the concerns of the society, and over 25% women in leadership positions. I also want to highlight that, I'm sorry, it's not on the presentation, but the company was once again signing up to the Great Place to Work, GPTW, as also among one of the 10 best retailers to work at. This is something we're super proud of. This is something, like, where the company started being 60% fragmented, so the new board is really fully independent. From the new board members, five had never even been in contact personally or professionally with me. The company really has, from a governance perspective, some very recognized professionals, highly qualified professionals that can support management and provide us comfort when it comes to governance, especially for our shareholders. Having said that, we've finished the presentation, and we'd like to open up for Q&A. Thank you so much, everyone. Now we'll begin our Q&A session. We want to remind you that if you do have a question, you must select the Q&A icon on the bottom part of your screen, write your name, company, and language to enter the queue. As your name is announced, a request to open up your mic will appear on your screen. You must activate your mic to be able to submit questions. We'd like to ask that you please submit your questions all at once. Our next question, we'll have Joseph Giordano. We'll open up your mic, please. Joseph, you can begin. Hello, everyone. Good morning, and thank you so much for taking my question. We would like to explore three main points here. The first one is maybe a positive surprise with the quarter, with the working capital dynamic, especially for, on the account for suppliers with quite a bit of volatility. Belmiro, could you give us a little more color on what has been done to improve the terms with suppliers without leading to major impacts on the other side, which would be the gross profit, the gross margin? The second point is the cost of occupation, which has been growing a lot. Back then, when we had the purchase of the extra stores, you were mentioning something about, like, 1.5 of the revenue. The first question is that if these 1.5 already considers the revenue of the renting out of these galleries or stores in the stores, and what would be the actual potential when it comes to revenue from rent coming from these gallery stores? We would get into the governance issue. Belmiro also mentioned the diversity of the board. We had a board member that was a related party in the company currently. Could you maybe talk about this? I want to hear from you guys about how the situation is with this board member, if they should continue to be in the company, and if this would also be used to improve the diversity in the board as well. Thank you, Joseph. Now we'll talk about Belmiro, he'll be answering this. He's going to talk about the working capital aspects. The occupation, fees, yes, when we consider already considered the net effect, which is how we look at this daily. The rent of these properties, the store area, occupied by Assaí, and these from the 220,000 square meters, it's actually going to move on to almost 400,000. This, of course, if you consider a match with this, the focus last year was more like to finish the areas, to reopen the stores. Of course, there was an impact when it comes to licenses. Why don't you open up everything at once? We could take even longer to open some stores, which is why we waited, especially the stores that have a big area for rental of these extra stores, the galleries. This year, we have a huge effort from our construction team to complete these areas in the store. 220,000 sq m represent 40 organic Assaí stores, basically in sales area. It's a huge effort. We would not like to provide, like, an estimate for revenue yet, but in the first semester, although half of these galleries are ready, we have a big effort till the end of the year to deliver the rest, and they already did bring some revenue in the first period of BRL 44 million. There's a potential to at least double this amount of revenue. Of course, this is a situation that varies from site to site. From the, Of course, we can't only look at the revenue from the galleries, but this also helps us with other costs, such as the cost of occupation, the property taxes, which is a very relevant weight when it comes to expenses, but it also helps when it comes to flows. Most of these store owners also benefit from this, our own store flows and traffic, but especially in the downtown regions, where you have levels of service consumers and a whole other level of social level. Sometimes it's better to have an extra support, like a cafeteria, a snack stand, a gym, or other convenience stores. From a board perspective, we had the exit of the controller. This is a topic that, of course, we're still going to be discussing. We just had the ways. It was one position among nine. I don't think this is going to be that relevant, but if there are some changes that need to take place, it could be that they would happen on the next few months. I'll pass the floor now to talk about the working capital. Vladimir will be with us now. Okay, good morning, everyone. Thank you for the question, Joseph. When we talk about working capital, I think that there's been quite a while since we've been negotiating the increase of terms that are quite significant, and we just materialized and completed these negotiations now in the 1st quarter. This, of course, reflected on this gain of greater terms with our suppliers. The improvement in the working capital is not only coming in the detriment of the adjustment in the terms, but also the adjustments of the levels of stock. We had a period where we had the opening of many stores, and we were structuring our stock and inventory, but now we're readjusting this. Now we have a history of what the stores sell, especially the ones we recently opened, and now we can balance out the stock levels a little better. We also had some contribution in the reduction of stock with the deflation issue, especially in commodities, where we also reduced the levels of stock due to the deflation scenario. Up ahead, what could take place is some variations between the quarters with the opening of working capital, but nothing very relevant. What could happen now, as we talk about the second semester with the working capital, is that we'll enter a accelerated process for expansion with 20 stores under construction, and we need to supply these stores. We have proper southern campaign. We even have the seasonality of the second semester, and we have the Black Friday campaigns as well, and Christmas. I can keep you at ease by saying that we always were very disciplined with the working capital, and this is gonna be kept. We're not gonna lose this. We're gonna continue to work and look at these aspects and adjusting to the macroeconomic scenario. If we keep up at a deflation pace up ahead, then maybe the strategy will have to change. We're gonna adapt, but I can keep you at ease that the working capital will keep our discipline as always. I hope that answer was clear. Yes, you did. Just a quick follow-up here with Belmiro to understand why it would be the ramp-up of these leases. A lot of these stores are being opened in the second semester last year, some now. How should we look at the rent in the future? This is going to lead to relevant impact in the next quarters when it comes to occupation costs. Our expectation is that some stores, even due to licensing, we will be completing now around November, December. We should already have some evolution in the third and fourth quarter, but we should be capturing these effects in the first quarter of next year. For the leases, we always wait for the Assaí stores to be ready because of a certain level of activity. This helps us also negotiate the leases per square meter of these stores and stores in the galleries. Okay, thank you. Perfect. Well, the next question will come from Vinicius Strano, our sell side analyst. Vinicius, we'll open up your mic so you can proceed. Please, Vinicius, you may proceed. Well, hi, guys. Good morning, everyone. Thanks for taking my question. I wanted to discuss how you're imagining the ramp-up of the extra stores up ahead. Today, for example, how do you expect these stores to be close to their full potential? Could you talk about what the cannibalization levels are that you've been noticing? Also about this topic, if you could just mention a bit of the expectation of how you're imagining the same store sales influencing this. Well, thanks, Vinicius. There's no way out. Cannibalization exists, especially when you look at the São Paulo and Rio markets, which is something I mentioned, and even in Brasília, where you have a huge amount of extra stores. A point we have been highlighting a lot is that we have to separate what's cannibalization and what's just returning what was delivered last year. In the north and northeastern Brazil, there wasn't Extras, so that didn't affect. There wasn't a positive effect for whoever was operating that region. Differently than here in São Paulo and Rio, where us and the overall market have been benefited with the closing of the Extra stores. As Extras reopen, the stores that receive the store volumes will start having a bit of this as a return. There's also a bit of cannibalization as well, where the consumers, if you see the stores in Congonhas, for example, we had customers there that would buy at Marginal Pinheiros. Now there's a newer store that's more modern, closer to where they live, and they're gonna buy in that, they're gonna switch. There is a bit of cannibalization, but there's also a part which is just like the temporary effect of the closing of the Extra stores. To be honest, the best in Rio, São Paulo, Brasília, where you had the biggest concentration of these stores, but the best thing would be to use the same store as sales looking at two years, 'cause they're gonna see the period where Extra closed and also the period with the reopening of the stores. Of course, there is a cannibalization effect. Part of this maturity and cannibalization, it was also a bit more contaminated by the deflation, because as B2B customers become more careful and they're holding on to stock due to the visibility with the price, Normally, B2B people, when they see the oil prices are dropping, they're not gonna go out and shop for big volumes. When you have store maturity, for example, of course, this is very like store-to-store based, but our expectations that we'll have three times sales, we've already disclosed the number, is of the last quarter. In the first quarter, this was quite stable, and now we're moving on to 2.5. Of course, we've been working on this as quick as possible. We should, of course, be looking at the final numbers in the project in 2024. The time to plant and the time to reap. Now is when we're investing and we're starting this process with the activities, where you have the biggest amounts of operational expenses, investments. We're super satisfied and confident of beginning our work in these stores, even with the amount of time they have. If you look at this total amount of flow and this increase of 25% we highlighted, of course, this is gonna be levered by the opening of these units. They continue to follow this ramp with maturity, and this is some work that we do month after month and week after week. There's some stores with a potential to have a higher ramp-up. Of course, there's stores where you have a reaction of competition also. I think this is super visible when we look at the public numbers for the retail operation, and we can see how this has been affecting the opening of these new Assaí stores. I hope that's clear, Venetias. Thank you. Thank you, Pamida. Just a quick follow-up here. Do you already see any kind of evolution with the sales? What's been the progression throughout the quarter? What have you been noticing? Thank you. Yeah, well, we know how the market's very anxious about these stores, and they go from 2.2x with a sales multiple to 2.5x. Of course, there's some evolution within the quarter ever since we looked at this from the other period, from March to June as well. Moving on, the next question is from Daniela Eiger, Sell-Side Analyst from XP. Danny, please, you may proceed. Good morning, everyone, thank you for taking my question. These guys are starting to put place their first questions before me. People are moving quicker than I am, because I always used to be the first one in the queue. Anyways, a follow-up here on Venetias's question, just to expand a bit to the broader store base. You talked about how in the release, the same stores were already positive, and there is an important evolution throughout the quarter, this calls our attention because the food inflation is quite weak and actually has been slowing down. If you could maybe talk about this and show us a bit of the vision on July for the total base, not only the conversions, and also some color on what the volume dynamic has been. Have you noticed any kind of recomposition or trade-ups? Then finally, going back to the conversions and talking about profitability a little bit, the 6% seems to be very strong. I don't know if this is already in line with your expectation towards the ramp up, or if this is overcoming expectations of what you had planned. If you could talk about if this is in line or above, and where you're headed. This is, if it's really those 150 basis points, and above average, or if there's room to be even better than this? Thank you. Thank you, Danny. I thought you weren't on the call. I was missing your name, but great to hear from you. Anyways, the ramp up of 6% is in line with the project. We highlighted this in the beginning, that there would be a ramp up that's a little more accelerated compared to organics, considering the location of these stores and even the level that they have with the category and public surrounding these stores, it's a whole other level of income with a higher average ticket. This, of course, helps to reduce expenses. I wanted to highlight this because when we worked on the conversion project, you're gonna remember that a lot of people criticized the issue with services and adding other items that we were kind of modifying the Cash & Carry model. This could, of course, impact the costs. We look at the expenses, and we see that they were actually very stable. If you consider the amount of stores we had, and if the store is not good, then it's not gonna start off with good expenses. This, of course, would impact the maturity curve, so it's in line with what we expected. The same stores, of course, in April, we had some competition effects, which also impacted this. We had major effects when we look at this from a perspective of sales. Now, the same store sales with deflation should be a little shallow. When we look at this internally, the effect of extra with cannibalization is also something we have to discount. You're concerned with the same store sales, but you don't have any other movements that would explain the reason why it's dropping. Fortunately, we haven't noticed a recovery in volumes when it comes to consumers. The difficult choices, the trade-downs customers did during the pandemic to face the food inflation that didn't keep up with their increase in income, now their purchase choices remain. We haven't seen. I had mentioned that there would maybe be an expectation that with the stability of food prices or even that consumers could maybe go back to their original habits, but we haven't seen this. We've noticed that there were some new expenses in the pockets of these consumers. These are consumers that are really pressured due to interests, high interests. You also have a big market for sports bets that really rob a lot of income from these consumers, they haven't been able to resume their purchase volumes. This is totally stable, basically. We have this expectation that's actually a lot more positive for the third quarter, because naturally, the third quarter is stronger when it comes to this, and we can see this in July. We should see the market as a whole, with same store sales, kind of pressured. Also, when you look at the movement, this is also pressured a bit. Anyways, I hope that the Desing Hala will also help consumers as well. Okay, thank you. Yeah, our expectation is that this government program will help. We've been monitoring this closely, and we see that the population is still suffering a bit, but some categories where there was an expectation, we still haven't seen happen, actually. As interests drop, this is gonna release a significant amount of cash in the market that could also be used for food. Basically, the good news is that we have a population that is not consuming what it should be consuming or would like to be consuming. As soon as there's any kind of improvement in income or with other expenses, such as interest or debt, then this cash should go back to the food market. Great. Thank you. The next question is from Ruben Couto, sell side analyst from Santander. Ruben, we'll open up your audio so that you may proceed, please. Hi, good morning, everyone. Thank you for taking my question. Belmiro, could you give us an update on what the expectation is for CapEx in the year? Most of the conversions have already come through, but could you help us? As we see, there's a lot up ahead still. What's the dynamic like for inflation in the universe of construction? Has this also been reducing along with the inflation headlines? I wanted to hear from you about this topic. Thank you, Ruben. The CapEx expectation is pretty much kept. It's about BRL 3 billion or BRL 3.5 billion. The costs of construction are very similar to food. They went up a lot in the pandemic, then they stabilized. There's a little bit of deflation now in some products, but, then I think the actual trend or movement towards having 60 constructions or transformations of stores also generated an increase in market prices. When we, kind of held on to this a bit to be able to handle the cost of the 40 stores to 30, we held on to some organic stores, which helped us with some negotiations. The cost of construction is still at a real high level, just as the food prices. We haven't seen any signs or room for increases, but they did stick around, still have high increases, especially when we look at steel and metal costs, and it is possible that we will have a reduction. We did have some optimization when it comes to project perspectives, to search for ways to reduce costs. This is gonna be even more visible in our organic stores, but there's no, like, big expectation for an increase in CapEx volumes compared to what we had projected. This is pretty much kept. Thank you, Ruben. I hope I answered your question. Thank you. Yes, you did. Thank you very much. The next question is from Jerome Sladis, sell-side analyst at Citibank. Jerome, we'll open your mic so that you may proceed. Jerome, you can proceed. Thank you, everyone. Good morning. I have a question about expenses. I think it's really clear that you mentioned that the margins of the converted units are in line with the plan. When you look at the operation as a whole, it seems like there's been quite a bit of work to reduce, at least when we look at the G&A, year-over-year, dropped 8%. I wanted to understand if there's any kind of broader plan to cut down on expenses and gain efficiency, or maybe you could even revisit the soft guidance you guys provided about stable margins, stable EBITDA margins for the year? Well, it's a huge effort. As I mentioned twice, the expense factor, there is an effect of the dilution. I don't know if Anderson wants to maybe talk about the huge efforts to hold on, hold costs, Anderson has been caring for this. Yeah. Good morning, everyone, and thank you so much for this question, Jerome. I think that I always talk about expenses just like nails. You have to be cutting down all the time. There's a general line, especially in the operations team, which is store to store, each detail when it comes to power, water, safety, security, costs, et cetera. It's something that we really go down in a very detailed way, especially when we look at our operation, our day-to-day activities. We have been monitoring this from a general perspective, and we always say that any type of a BRL 1,000 saving is a lot of money when you look at 270 stores, right? We're very careful, detail over detail, and we have a team that's very focused on expenses. We're a low-cost operation, and our cheap prices need to be based on lean expenses. This is just the discipline of our team. Our team is very careful when it comes to this topic, and we have a major effort when it comes to administrative, operational, and store levels in our operation, also in our logistics when it comes to freight costs. The sum of all these factors really makes us have these adjustments. A lot of small factors or topics that altogether make a difference. Regardless of any new topics we add to the business, it's really the expense control is the focus. I hope that's clear. Thank you. It's really about our day-to-day discipline. For the year, do you have any expectation when you think about? I don't know if there's, like, a magic number you can share with us, that you think these projects could deliver when it comes to savings? I think it's still quite early to estimate this, but of course, it's a effort to reduce expenses. Part of this, you also saw that we have a dilution of administrative expenses, because last year we were prepared to open up 60 stores. The amount of temporary workers we had also were quite significant. This year, we're opening up 30. Naturally, you have a dilution due to the actual growth. As Anderson mentioned, we're gonna be always working towards reducing expenses. I think mentioning a guidance at this point is not what we would like to do. Believe that we'll be working to operate with the lowest expenses. From an expense perspective, going back a bit, and I think it's important to highlight that we had many changes in our model. We had a lot of curiosity or anxiety about how this could maybe generate greater expense pressure, but this is not what we've seen. Just visit one of these stores, and you'll see that there's a better purchase experience, keeping low costs, which is such an important characteristic of our business model. Great, Belmiro. Thank you so much. Thank you, Anderson. Next question is from Luiz Guanais, the sell-side Analyst at BTG Pactual. Luis, please, we'll open up your mic so that you may proceed. Please, Luiz, you may proceed. Good morning, Danny. Good morning, Gabi, Belmiro. I think two questions here on my side. The first one is, if you could talk about this breakdown at the converted stores from price and volume throughout the quarter, and help us understand how this has been evolving. I know that there's a ramp-up of the store, and you had also talked about the performance in June, which was better performance. The second question, still in line with the working capital point, after the conversion process of the stores, could you maybe talk about the differences in the working capital processes and dynamics in the converted stores, plus versus the legacy stores? Well, Guanais, 100% of the growth that comes when you look at this from a sequential perspective is volume and traffic or customer flows. Because the price we measure, and they've been stable for about 12 months, the price on average of what you're selling compared to last year, is actually dropping, about 2%, which is what we see as deflation. You have to operate with 2% more volume to be able to have the same sales value last year. The evolution in the stores, it comes due to volume and customer flows or traffic. Deflation also affects the ramp-up curves, and if we had a food inflation, which is what we had expected, and the project would be about 4% or 5% only, and then it would be 4% or 5% more in sales. When it comes to working capital, yes, there will be an improvement, which is not related to the fact that it's a conversion, but it's just because of the location they're in. Since most of these are in the big urban centers and major states, where the stock time for supply is a lot shorter than what we see in stores that are in the north of Brazil, in the Amazon region or other remote locations, where you see we're present all over Brazil, and it's really about a geographic aspect, which makes them deliver a stock supplier ratio that's better than what we have compared to the legacy part that we had highlighted before. I hope that's clear. Thank you, Belmiro. Thank you for the answers. The next question is from Vitor Pini, the sell side analyst at Safra. Vitor, we'll open up your mic so that you can proceed. Please, Vitor, you may proceed. Good morning, everyone. Belmiro, just a follow-up here about the gallery issue. I wanted to understand if the 50% that are already complete, have already been operating full, and the other 50 that are in construction work, so how long they'll take to be ready? Could you give us any guidance about the expectation for sales with these BRL 44 million that you had in the first quarter? You can already expect some kind of proxy or if there's a big ramp-up still, compared to what's under operation. The guidance, of course, we have been avoiding. The proxy is very good, in my opinion. The other 50% have been delivered at this point. They should follow the sequence as you have the store openings, and we'll be finishing the galleries till the end of the year. We want to be careful about this. We'll bring some updates, probably quarter-over-quarter. Okay, perfect. Thank you. The next question is from Vitor Trevisan. He's a sell-side analyst at Itaú BBA. Vitor, we'll open up your mic so that you can proceed. Please, Vitor, you may proceed. Hey, guys. Actually, this is Macruz. I wanted to understand this a little better. We had noticed some very interesting stability in the gross margin and the industry as a whole. We saw that. We've been receiving some feedback from regional players as well. It seems that the suppliers are quite good partners at this moment, with the deflation scenario, this kind of keeps up. How I've been looking at this dynamic, if we look at the next quarter, is there room for suppliers to continue to be partners in regards to this? Is the stability of the gross margin something that we should look at as long-lasting? I think that's pretty much the question. Thank you, Macruz. The margins, of course, are a consequence, and in our model, we price this based on cost and the margin needs. When the companies are always going to be searching for a way to be stable with our margins, unless you have any big effects from a competitive perspective, it is necessary to make the sector continue to be healthy and generate cash. The company will always, always be searching for stable margins, so especially when you have an inflation process or a deflation process. That's why the control of the stock is so important within the stability of the margins. There could be an occasional situation where you have to invest, but the price of the cash and carry overall, especially for us, as we have a lot of stores in new locations and people that are starting to buy in this format, it's a really advantage-filled price compared to these other retail channels. This allows us to have margin stability. Of course, you can vary a little more with deflation, but what we've seen is that we can have a volume of the B2B customers. When you have a growing price, they're gonna set up a stock, right? When you have a movement where you have a price drop, they're gonna reduce their stock levels. There's no point in having, like, a special offer because you can look at the quantity and say, "Look, soil went down, it's gonna go down even more." There's no point in organizing, like, this big purchase. The offering could even bring in more volume. This kind of explains the very good control of the margins. Of course, when you look at the margins, and we have to keep our eye open, you can see this from an expense perspective. If the store is not a store that has good performance expectations, the expenses are gonna start off a lot higher than they should be. That's why we're being very careful with the efficiency and discipline of our expense controls. Excellent, Belmiro. Thank you for the answers. Now the next question is from Irma Sgarz, the sell side analyst at Goldman Sachs. Irma, we'll open up your mic so that you may proceed. Please, Irma, you may proceed. Good morning, and thank you for taking my question. just one more point here on my side. From the converted stores that you're already operating with at a margin of 6%, based on the comments you guys made before in the release, could you maybe talk about how this margin would be if we were to take a look at the EBITDA in the pre-IFRS level? Considering the cost of occupation in these converted stores already in the margins, just so we can get a feel, also how you would compare this with the organic stores that are just as old. I think this was very interesting, and this kind of comparison is very useful. Just another question then about the market gains. Of course, a bit of this also comes from the expansion in the store networks, but when you look at the stores that are mature, do you also feel that there's a bit of a gain in these new converted stores, maybe that have gains from the competitors? Maybe there's some market share source that you feel or some segment in the market, where you guys think you guys are gaining more market share, either from the stores or regions where you're making more of a market share? I think that would be very interesting to have this extra information. Thank you, Irma. Thank you for the question, we had some opening also of our EBITDA in a pre-IFRS vision, and that demonstrates this variation in the pre and post IFRS, which is 0.4. It's basically the same. The converted stores, of course, they're on a maturity ramp, so they have, they're still gonna have the gallery revenues coming in. Of course, the EBITDA, the pre-EBITDA is more pressured. Today, we would have these 6.3, that would drop to maybe 4.5. I'm gonna confirm this later, and it's important to mention this. We can talk about this number a little more, but even in a pre-IFRS vision, the conversions are very positive. In our model, it's an important cash we generated. They already started contributing with this perspective. We wouldn't be able to operate in this EBITDA margin pre-IFRS, but the rent differently, it's all being paid now. You already have a dilution of this expense, as there's a ramp up of 2.5-3. Most of the galleries that we also wanted to highlight are in these stores. Most of these galleries, 80% or 90% come from the conversion stores now that we recently worked on the big stores that actually used to operate with the hypermarket format. There's still like a normalization that needs to be done in pre-IFRS vision. We still have this vision in a post-market. The pre vision also, they have to deliver, of course, the pre EBITDA, which is bigger than our organic store network. Very, very useful. Thank you. The second question was about the market share? Well, about the market share. It really depends on the store region. We highlighted this throughout the project, but the fact that Assaí is part of this, where we're avoiding before we used to avoid open source, close to Extra, and Atacadão would avoid to open close to Carrefour. Now we're entering the central areas, where a lot of our competitors were very strong for quite a while. There's important gains within these expansion stores, but most of them have been coming from retail. There's an important part that was remind the market about which 40% of our market is B2B. This is very strong, and you don't have a very clear vision also, about how these stores also provide these services. They have some gains in different aspects, but there's also a big variation from store to store. Some, most of the gains come from other competitors in Cash & Carry, and in others, most of them come from retail operations. I hope that was what you wanted to hear, and that was clear, and that question was clear. The next question is from Vinicius Preto, the sell side analyst from Bank of America. Vinicius, we'll open up your mic so that you may proceed. Hi, good morning, everyone. Thanks for taking our question. When you look at the performance of the Extra stores that have already converted for longer period, what surprised you guys when it came to the original plan? What was the expectation for returns? How do you see this comparing with the acquisition period for these stores? Also, if you could give us some color of this almost BRL 1 billion of drawn risk, and how we should imagine the payment of this in the next quarters. Thank you. Well, the Extra stores, as Danny mentioned, the issue. You basically, what surprised us when it comes to flow, adherence, and about 25%, it's quite easy to perform this calculation, right? We have to see how many people were added to the store. Although we already had a series of projects, of course, we have some fear from the customers to accept this kind of model, but we noticed this strongly, so we had some surprise that were positive in this area. Also, when it comes to customers that use the store and, but then after also for, like, shopping process, and this project is very new. This, of course, demonstrates how strong we have been in bringing in the Cash & Carry in this downtown region. A lot less than it really fulfilled our expectations and with having a lot of work, and this has been demonstrating the project overall, with stores that have better performance and stores that have more work to be done. There are some other competition processes as well, but the project has been achieving this within expectations. Yeah, basically about this risk issue. I think this is important because nonrarely, we have questions about this and if we should add the debt or not. Our understanding is that the operations are quite normal for discounts and the anticipation of the supplier. The risk, the drawn risk operations, are in this calc bill, and they're part of our cash flow for payments, and we have expected these payments just as the suppliers in CapEx. The criteria is exclusively to these ones. This level of the CapEx drawn risk should be at a regular normality level, about $300 million-$500 million. That's our estimate. It's important to mention that when you look at this guideline from the central bank, you can see that this is done by the suppliers, and we sometimes find out because we look at this, what's the criteria, once again, considering that it's exclusive criteria for these suppliers, and they manage their cash flow with their financial partnership. We don't always have the supplier asking for this. What I would like to say is that we should have a drop in the BRL 500 million, the levels you see. If you look at the history of the company, you'll see that there's always a percentage of merchandise that's quite regular in the business. If you wanna clarify any points on this, I'm super willing to help with more details. Okay, great. Thank you. This always existed, but of course, this is just a matter of the suppliers. Even from a CapEx perspective, we see some work that we're already having expenses for now. Besides what we highlighted, there's some construction work that's gonna be open in 2024 that already started. We have services with, like, groundwork and other preparation work. Suppliers, since they had a bigger level of this drawn risk, it's gonna be keeping up with a bigger level of investments due to the 60 stores last year and the amount of stores that we're gonna have for 2024. Thank you. Very clear. Well, moving on, we're gonna head to our last question. It's a question in English, and it came from Andrew Ruben, from sell-side analyst from Morgan Stanley. Andrew, we'll open up your mic, so you may proceed. Please, you may proceed. Hi, thank you. You mentioned the land bank, and just mentioned some plans for 2024. I'm curious, what kind of visibility you have for the organic openings, your latest thoughts on what the pace of new stores might be over the next couple of years? Thank you. Thank you for your question, Andrew. we would still not like to disclose this number for 2024. As I mentioned in the first quarter, we held on to some openings within our land bank, and we have about 50 project for about 50 new organic stores. Part of this level of leverage that the company is expecting a drop in the interest rates, the management of these debts, we're done holding on to these investments. we're still gonna assess this a bit, so that by the end of the year, we can provide information on the exact numbers for 2024. There's still a lot of units in many regions still that we need to penetrate. next week, we're gonna open our first store in the state of Espírito Santo. Tomorrow, we're gonna have an organic store opening in Limeira, a market where we only had one store. Assaí is continuing to expand. There's some cities where we're gonna have our first store still. Sometimes they're big cities, it's almost like half a million inhabitants. There's still a big amount of cities to enter, but we would like to wait and analyze this before we can disclose this information about the expectations for stores in the next years. Very clear. Thanks, Romero. The sessions for Q&A have been officially ended. I'll pass the floor on to the company for the final remarks. First of all, I wanna thank you all at the team, not only the directors that are present with us in this earnings call, but all of our Assaí team, 76,000 employees. We went through a challenging period in the past with the amount of store openings, not only with the 60 units that we highlighted, but we wanted to bring these 230,000 meters of galleries, the amount of certain new services, butchery, emporium, or cold cuts. We're really at this investment phase, and we know that this is what's gonna guarantee relevant positions when it comes to the growth that the company has up ahead. The expectation now is that we already survived the most challenging period in the first semester. The second semester always has a more positive perspective when it comes to income and stability in the economy, which is an important factor. Of course, the companies like Assaí that have a leverage, there's a bit of a weight when it comes to results. There's a very positive expectation, and most of these conversions are already performed. We have another conversion in Guarulhos, with a very important opportunity there, and I wanna thank the team a lot. Besides this, I wanna highlight that this quarter is an important milestone for the full transformation of the company with the controller leaving. We had, we were an integral subsidiary, and it stopped being a subsidiary. We started to be reporting to the controller that sold their positions. The company started to be a publicly held company that's really fragmented. The company continues to generate cash. We wanna thank the members of the new board for the support that they've been giving us within this transition process. Also for some shareholders that have been monitoring us and subsidized us with information. I wanna thank our team, especially, that's been really making a big effort. It's a company that's made by 76,000 people that together delivered these results. That have been working tirelessly to continue to deliver this in the third, fourth, and fifth quarters with excellent performance. This is what I wanna thank you all. Have a great day. A videoconference de resultados referentes ao segundo trimestre de 2023 do Assaí está encerrada. O Departamento de Relações com Investidores está à disposição para responder as demais dúvidas e questões. Muito obrigada aos participantes e tenham todos um excelente dia!