Welcome to the earnings call for the first quarter of 2026 at Grupo Casas Bahia. We want to highlight that if you need simultaneous translation, we have this feature available. On our platform to access, please select the interpretation button on the bottom part of the screen and choose your language of preference, Portuguese or English. For those listening to the earnings call in English, we have this option by selecting the new original audio option. We would like to let you know that this earnings call is being provided on the company's IR website. You can download the presentation on the chat icon in English. During this moment, all participants will have their mics off, and then we'll begin the Q&A session. The information in this presentation and possible statements that could be made during the earnings call about the business prospectus, projections, and financial operational targets in the company represent assumptions of the company's management, as well as information that is currently available. Future statements are not a guaranteed performance. They involve risks, uncertainties, and assumptions. They involve future events, and they involve risks that could occur or not. Investors must comprehend that general conditions in the market can affect the future performance of the company and lead to results that materially differ from those listed in such future statements. Today, we have the presence of the company's executives, Renato Franklin, CEO. Elcio Ito, CFO and IRO, and Gabriel Succar, Investor Relations Director. I'm gonna pass the floor on to Renato Franklin. Guys, good afternoon and welcome to our earnings call as we talk about the first quarter of 2026, a bit of the home appliance retail market, technology and furniture markets, and the prospectus for the year 2026. Moving on here before we talk about the highlights of the quarter. As we move on, I want to reinforce the consistency of the execution of our entire Casas Bahia team. We began about two years ago with a very different agenda: prioritizing profitability, not buying growth at any cost, demonstrating discipline in credit granting, and bringing incremental improvements, managing the company based on cash flow. I think the most important and is more challenging market scenario is to reach a sustainable cash flow, as a company to start generating cash and then start the discussion of the current capacity of the company to generate profit, value, and a good spread on the cost of capital. We were able to complete this at the end of the year, 31st of December. We reduced leverage a lot. The disclosure of this new balance sheet capital structure started in the middle of March. After this disclosure was when we started renegotiating the financial costs that still carry on the historical cost of the company. When we look at this, we see that there are some levers that we need to apply and to fix the company and generate value. We need to use our competitive advantage, differentials, logistical differentials, and gain scale and operational leverage and really be competitive. We've been doing this, and we've been able to once again deliver top line with an important reflex in the cash flow of the company. The second aspect is to improve the monetization platform. Without having to grow retail so much, how can we increase penetration, the retail media? We've been also advancing in these initiatives that has allowed us, even in this mixed difference, add incremental margin gains and that can be reflected in the company's P&L. The fourth pillar is financial expenses that, as we renegotiate, right? Some of these items have already been renegotiated. We're gonna give you some more color on this at the end of March. We start capturing new issuances with the new spread. Until you actually switch the entire CDC line, takes about 14 months, 190 days, 120 days, we can actually see the impact. We're going to deliver this incremental improvement, also reducing financial expenses. We're really confident about the company's business plan. On the highlights, we want to highlight the free cash flow of the company, and that's a reflex of the capital structure, BRL 162 million as improved working capital captured by this. Of course, there still are some advances in the working capital lines, but no doubt the transformation was really big, allowing for us to have the best free cash flow in the company for the first quarter in the company's history, BRL 1.2 billion above last year. The GMV advances online as well that we're going to discuss. About 14.6% is not trivial. In a market that doesn't grow, we've been gaining a lot of share in core categories. Which is reflected in the 1.7 percentage points with consolidated results. The consolidated EBITDA and the reduction of our net debt of BRL 2.7 billion due to the capital structure changes. We leave that phase of the quarter question of survival, now people are asking when and how much will the company's profit be? When does this value creation possibility take place? We were able to grow our portfolio despite the macroeconomic indicators. Let's go over to the slide where we can talk about sales and markets. If you look at the physical stores, we were delivering very strong growth in physical stores levered by our credit solution. Throughout last year, we saw delinquency deteriorating in some clusters of customers, we became more conservative. I think the macro results this year, in our view, still have a lot of volatility in a volatile geopolitical scenario, and there's a lot of inflation impact that could really delay the drop in interest rates. In this sense, we feel that delinquency is a risk. Now we're being very rigorous in our credit granting. The closing and requirements of a smaller entrance. We don't have a commitment to growth, and that led to the - 1.6%. If you look at the figure for two years, it's really strong growth. Our view in 2026 is that the physical stores will still be a channel, and it depends upon the macro scenarios, where the rating of the population is, and it really depends on credit, there's demand, and we're gonna be very assertive with this, right? We've been improving our model. There's more granularity. We are able to offset part of this worsening in the macro environment, but we're not gonna take on these risks and see this conservative approach. On the digital, we've been growing 27%. You also have an omni-channel approach. Customers sometimes prefer to buy at 1P instead of physical stores. It's a very profitable channel that we're able to affix the contribution margin for and now it's working pretty well. The 1P online channel, all of the channels grew, right? Our own channels grew with significant growth. On the path of this growth, then the marketplace channels already bringing contributions, and we have new partnerships coming in from the second quarter that are gonna bring in additional contributions up ahead. An important highlight, the market share. The market's at that stage, but our market share is pretty high. Now it's really 14, 15. It's gonna grow a lot. As we noticed, we'd also participate in part of the market that we thought we wouldn't participate in. That's why in the short term we're gonna see online growth. What's interesting here is that we're gonna also improve margin as this growth comes in, because our biggest commitment is with profitability and not the growth. We increase the take rate of this amount that impacts GMV, but less of the net revenue. We're able to deliver revenue, improving profitability. Our challenge was in how we could bring sustainable growth, improving profitability so the operational cash flow can be more robust, reducing financial expenses, and that we can reach this level after positive interest. We've been evolving a lot in line with the execution of Casas Bahia. Let's talk about credit. This business is very relevant for us, and we're explaining a little bit of this dynamic. When we look at the active portfolio, BRL 6.3 billion, there's seasonality. Every first quarter is a little bit smaller than the fourth quarter. You can see that we had this a little bit broader. We were able to control credit granting, especially in physical stores, and this was partially offset by the growth in digital. In digital, we've had growth by now pay later. What's interesting is that in physical stores, we have like 500 cities of an addressable market, and online we have 5,000. We already have a contract in basically all of the municipalities in Brazil. We are growing, and we delivered another all-time high penetration, and we're gonna deliver another increment. Every quarter you're gonna see an increment, going up 1 percentage point, 1.5%. That starts one way and finishes the next quarter in a different way. Kinda starts the next one a little bit higher. That's been bringing in consistent growth in our credit portfolio, increasing the profitability of the company as a whole. We were able to stabilize it, being below 11%. The net loss was below 5%. Our projection, as you can see, comparing to the first quarter of 2025, shows our conservative approach. Here you can see our resilience, and here we're talking about keeping it below 9, 8.8%. Even with the worsening in the fourth quarter, the cycle is pretty short, 14 months. Our assertiveness in forcing delinquency is really high, and we're able to adjust these parameters that every quarter we can deliver within the guide of keeping below this at a pretty growing business that's profitable, but above all, without taking on unnecessary risks, right? Let's talk about the market now. Here we can show how our delinquency is stable. If you look from the first quarter of 2024 to the first quarter of 2026, it's pretty stable. The company was a market where overdraft credit went from 12% to 18% and in credit cards, unpaid through installments. You can see most of the financial institutions demonstrating deterioration. That has been demonstrating our soundness in credit construction here at our group. Now I'm gonna invite Elcio, so he can share the main messages. Elcio, please? Okay. Thank you, Renato. Good afternoon, everyone. Thanks for your presence. The first quarter really reinforces the consistency and discipline and execution in every aspect of the business, with the focus on profitability and cash, as we've always mentioned, from the beginning of the plan launch. The macro scenario, as everyone knows, has been quite challenging. We just want to highlight how we always talk about the buy now, pay later. That's a central pillar, key pillar, for our strategic planning. Here we had a lot of discipline and a conservative approach in granting, although this maybe cost a bit of sales, right? Let's move on. On the next slide, we're going to start off with the evolution of the results ever since the launch of this plan. On the top graph, to the left side, you can see the net revenue reaching BRL 7.4 billion. It goes up 6.1% in regards to last year and 16.8% in regards to 2024. That was a significant GMV and the evolution of the strategic commercial measures with a focus on core categories in the company. On the top graph, the gross profit of BRL 2.2 billion, gross margin of 30.2% and an improvement of 0.1 percentage points in regards to last year. Here you can also see resilience. Despite what may seem like not much, we have resilience and greater share from the online market that has a bit of a tighter margin, right? Here you can see that from our mix and our strategy as a whole, we will be delivering this consistency and this resilience in the gross margins. When compared to 2024, there's an improvement of 0.2 percentage points. On the left bottom graph, as shared, the percentage of the revenue had a reduction of 0.1 percentage points. Once again, you have the continuity of the discipline for expenses and gradual capturing of this, you have this gain of 1.8 percentage points. That's consistency of our operational leverage and strategy and a lot of discipline and control. Finally, on the right side, as a result of the strategy, the EBITDA added up to BRL 597 million. This is a growth of 4.7% in regards to the previous year and a margin of 8.1%. That's where you have a significant growth of 54%. We continue to operate at a very consistent operational profitability level, reflecting the structural advances in each of these processes. There's no, like, silver ball that will increase the profitability of the company from one day to the next. There are different consistent measures and gradual measures that will help. The objective here is to expand the nominal value of the EBITDA, really focusing on growth in nominal values. Here in the company that is what's gonna really help pay the financial costs and fixed costs. Here we've already talked about most of the operational lines, and I wanna highlight the financial expenses that are up to BRL 1.2 billion in the quarter. It's worth mentioning, as Renato mentioned, we disclosed the transformation in March this year, and these initiatives to renegotiate the spreads will have their benefits captured throughout 2026. We already have hired, as mentioned in the investor day, one of the biggest lines in the company to fund the CDCI and the buy now, pay later. We've already been operating about 3.5 percentage points lower than what we had before, but this is a gradual effect, and we're gonna be capturing this as we renew the portfolio monthly. We have BRL 800 and 100 million that are gonna expire, and then we renew this portfolio with smaller costs, as we have 14 months of an average term. Throughout this period, we're gonna have this effect that's gonna be the full benefit of these spreads next year, right? Regardless of Selic. Another important point, if you compare financial results, excluding only the debt modification, you can see a sequential reduction in regards to the fourth quarter of BRL 116 million. When you consider this versus last year, then you have an increase of almost 200 points in this average Selic in regards to the previous year. In regards to the income tax line, we had this provision. Considering the scenario of uncertainty that we have in Brazil and around the world, we kept this conservative approach and to not include the income tax in this quarter. The company continues to have this benefit. We just haven't been registering this in our accounting. Now moving on to the next slide. I think that's one of the highlights here in the company with our cash generation and addition of BRL 851 million in free cash flow in the company. This is pretty atypical, and this improvement is mainly due to more efficient management in our working capital due to the transformation of our balance sheet. Here you can see evolution from this. You have operational evolutions and in the financial results as well. There are many movements in this sense, right? The first we had from this moment was this extension of terms and an improvement in our cash cycle from a structural perspective. If you remember in Investor Day, we demonstrated this mismatch considering the original terms. There's the stock payments and also considering the fact that we sell high added value products to end consumers and the capacity for consumption that we have to offer credit and payments that are a little more extended. That's what we've been trying to adjust structurally in our financial cycle when it comes to suppliers also and stock management, searching for more efficiency as well, which is what we should be observing in the next quarters. Another important point is the reduction of the interest payments. As you see, when you look at the cash situation and interest, as you can see, and you have this level of BRL 662 million. It's still pretty high, but there's a sequential reduction of BRL 234 million. There's a bit of a volume effect here, but you can already see that the interest already start off in a very gradual manner and then it grows over time. The graph on the right side shows this combined dynamic between the fourth and first quarter. You can see this positive seasonality where most of the cash, Black Friday get into the fourth quarter. A part of this, the payments of the same products we sell happen. You have this combined view of the last six months demonstrating the structural reality of the company's cash generation event. On this, we generate BRL 2.7 billion cash in the last six months, the biggest level in the last five years. The next page, just, so we can open up, we can see the capital structure. As you all know, we had the big transformation in our balance sheet, and we continue with the net debt pretty stable. After this transformation in the fourth quarter, we ended at BRL 1.2 billion. The financial leverage ends at 0.5x net debt in regards to the previous year. We had a significant reduction, because of course, there wasn't a transformation happening at the end of the year with a reduction of BRL 2.7 billion or 68% of the reduction of the net debt versus the previous year. The other advance. You don't notice this, but there's a robustness in the company's balance sheet from the transformation where we were able to also advance with the profile of the debt remaining. Now 65% of the remaining debt is long-term versus 41% that we had in the fourth quarter last year. This liability management process is fundamental to be able to continue to improve balance sheet. Once the balance sheet reduce the risk for refinancing in the short term, and that will automatically impact the credit risks and reducing this even more with pressure to reduce the spreads up ahead. We continue with a capital structure that is a lot more balanced than what we had previously. We continue to advance in our objectives of gradually reducing the cost of debt and improving the profile of the remaining debt as we perform the renewals and structure new operations. Also, back to you. Thank you Elcio, we can, as on the slide here, it's a very clear message. If we look at this, that we have this reflection on the last 2.5 years in the company. We've been delivering in a consistent manner growth in core categories and what we know how to do and profitability being improvements in operational efficiency and sequential all-time highs in the company's indicators, including the free cash flow, which is super relevant. Looking up ahead, we will be identifying where the new improvements come from. There's operational leverage, and we started this with another two partnerships. We announced a partnership with Amazon on the Investor Day, and then we already had a partnership with Shopee. They used to only sell low-ticket items, and then they also started accelerating the home appliances and technology categories, accelerating significant growth. That's gonna bring in important growth. We're not gonna buy growth like this. We're not gonna do anything that'll demonstrate a more positive quarter that will hinder the long term of the company, right? It's gonna be gradual, consistent, and we wanna have initiatives that can bring in more granularity and allow us to gain share, right? There's a lot of expense reductions, artificial intelligence and transforming productivity. I think productivity in all companies will significantly grow because all of these activities and different functions will be able to be automated and expanded through AI. We have a lot of cases here. They're moving a lot quicker than what we imagined and results are also appearing. On the credit side, it's like what we mentioned, short-term credit is gonna be still growing. When we look at the second quarter, it's a similar reality. A lot of demand at the store, but families' debt levels are really high. We've been really conservative in credit granting. There's a rating that's a little bit better in e-commerce. We're working through CRM to bring these customers that have a bit of a better rating also in the physical stores and control delinquency. With this, we're gonna grow a little more digital than the physical stores for the next quarters. In the midterm, we've been expanding credit share in the company. Since May, we changed all of the visual merchandising, all of the commercial strategy. That's a buy now, pay later product at Casas Bahia. Initially, we were really focused on cost reduction to unleash funding. Now we have no blocks with funding. We have a lot of appetite. Now we're gonna focus all of our strategic plan in the company and all the tactics focused on advancing the sale of buy now, pay laters, which will change this reality. Also the multiples. If you see this mix, you'll understand that there's a lot of different profitability in credit. I wanna talk about what's coming up ahead. In the bottom part of the balance sheet, we see the cash flow is a little better, and that's gonna bring in an increment capital structure, lot better. We still need to take advantage and capture the benefits of this new structure. I think it's very clear to everyone the capacity of execution that the team has in this company and the evolution of the balance sheet and the capital structure over time. The movements we had from August 2025 with the subversion, the FIDCs and the total transformation December, this is very strong, right? Elcio mentioned some initial gains in the structure in like 15 days in March. We went basically around the second quarter after the announcement of this capital structure. What's coming ahead? A lot of this is already hired and the reduction of the spreads. We start switching the facilities, right, the credits, the funding facilities. Can you imagine we have BRL 800 million per month and then to switch BRL 6.2 billion is gonna be 14 months, right? This is all moving slowly and then we adjust and adapt. With this, at every quarter you can switch like a 20% or so. You'll see this full impact in the new capital structure in 2027. Of course, in the second half of the year you're already gonna have a big impact and we'll show that. That's gonna impact the P&L, the cash flow. We're really confident about what's coming up ahead. We have other levers as well. We have an increase in working capital. We've already captured a part. We have a bit to capture as well. We have a lot of optimization in the stock turnovers and work also with suppliers to optimize. The company says that we have the biggest showrooms for home appliances and electronics. There's a bunch of things we are monetizing through retail media and also optimizing this because today with AI and all the tools, we can perform the sale to customers. We already have a lot of omni-channel sales at the store. We can optimize this and keep the sales conversion, improving profitability. Besides this, you can remember that the stock of e-commerce is the same where you have the partnerships. That's why it's really important to have the stock turnover that will also improve the marginal ROIC. We're super confident with what comes ahead. We can move on to the next slide now to talk about what we consider as the path to profitability. When does profit come along and how does it arrive? To summarize, our main message here is we have a defined strategy. We're conscious of the macroeconomic scenario. If this improvement comes, it's gonna be an upside. We have a clear plan to address the macro scenario that is challenging and transform the company into a profitable company that can generate value, that considers a reduction of financial expenses, improvements in operational efficiency, operational leverage, with cash margins coming in, growth in the short term with e-commerce and physical stores and a lot more credit, more services, more take rate for 3P and more retail media. We have more suppliers coming and we opened just this week, on Wednesday, the first store in Sorocaba. Haier, the biggest worldwide manufacturer, arriving in Brazil with a long-term agreement with a lot of retail media investments. We'll already see some other stores this week as well. These are players that increase competitiveness and also the investments in the incumbents. The big supplier was going to be present and we can monetize the platform and bring in additional profitability. We're still very conscious. We have a structured plan, a TMO and a lot of discipline as well with the leverage, rigorousness in the deliveries and so that everyone can perform what needs to be done. A team that's really aligned with a strong culture that can help us be very efficient in delivering these levers. Gabriel, if you can conduct this, we're gonna share a bit of the questions and answers here. Yeah, for sure, Renato. Well, our first question is from Pedro at XP. Pedro, you can proceed. Hi. Good afternoon, Renato. Renato, Elcio, Gabriel. We have two here. For Elcio, if you could share a little more color on the working capital. I think you talked about this a bit, Or you consider this? If you could give us some, like, color on these movements. What should we expect? Then the sales dynamic. The effects of the partnership with Mercado Libre. You already had, The business is really moved by this partnership. What are the lessons learned? We have a bit more than 6 months of sales at Meli. What are the lessons learned you already captured, and how can you use this to lever sales with other partners like Amazon, Shopee, or even in your environment? I think these are the main points here. Thank you. Let me start off here, and we'll share with Renato about the working capital. As we have this transformation of the balance sheet again, and we can transform and eliminate excessive risks we had in regards to the capital structure of the company. We start focusing a lot on how to adjust the company's cash flow with more intensity. I think the first one is, we showed this in the investor days. We have a negative cash cycle, mainly due to the original term for the sales to the end customer. What we've done is some ongoing work with the different gains. We had to work on extending this with the suppliers. It's not a, like, a one-off event that comes and goes. It will be a little more structural. With this, we'll be able to continue to search for optimizations and also in the stocks. We can see this in the preparation of the seasonality of the Mother's Day and World Cup in sequence. I think we're really prepared from a stocks perspective. Also with a lot of conservative approach. There's no, like, bet to have a stock that is beyond what's necessary or the macro scenario with the adequate stock to reach this good seasonality. We'll continue to optimize this stock turnover with this new channel we entered. Up until last year, we did not have this, and we use the same stocks online. What we would like to do is, we would increase the revenue quarter over quarter. I think this is our challenge, really searching for efficiency in the management of these stocks and a lot of intelligence and processes, distribution and understanding and predictability also of the demand. We have over 1,000 stores, so this is work that needs to involve data understanding on the supply chain. We have a team working this and, also this additional channel we brought in, right? I think once again, we'll be Even when we consider this and we sell to these channels, cash position is even coming in before. Everything is really driven and focused on cash generation, and we want to continue to advance. We don't provide, like, any guidance or numbers, but I think we want to continue to advance with stock turnover. The only thing we're not able to promise is, well, we did this, but we have some sales elasticity that's really strong. When you decide to reduce from 10 x to 8 x, it's a little bit of the market and up until where the market can stand this, 'cause we won't be able to work on this on our own. Sometimes we try to search for this from a structural perspective in the company. To give you a little more color here on the lessons learned, I think you mentioned the business really well. A big lesson learned here is assortment management. We identified additional assortment that for us would be like, say, like a CD long tail product where we thought there wasn't that much scale, but that did gain scale more and more. We're gonna rebalance. We're still at this phase where we're prioritizing capital allocation as an important factor. Some items and some categories, since they have lower margins, we're not capturing the potential growth we have. We saw, we reduced our 50, but we've been conservative in this process of accelerating these levers that have maybe a lower contribution margin. Where we have greater penetration and profitability guaranteed, and we also have a lesson learned on the additional assortment, so that after some more advances in the company's cash flow, we can gradually accelerate. Another lesson learned for us was in a scenario of cannibalization that seemed to be lower than what was expected. We hadn't considered this, like, traffic increment that was very material. We can establish growth in our own channels. Part of this comes from the increase in relevance of our brand digital platforms, work on customer acquisition, and there's some space complementarity. We're really strong with class C, D, E, and of course, proprietary credit or our own credit. Some people don't want to work with this, and those that do have this have sometimes a lower average ticket or rating is a little better. We also have some buy now, pay later leads that help us to monetize this, it brings more operational leverage. All of this is with our fulfillment. Here in logistics, there's an important lesson learned. The mini hub structure we work with today was very limited and very focused on what we saw as opportunities. Customers are paying to receive on the same day. Now with the new channels and the potential is huge and we've been expanding this concept. We're gonna really transform this into scale with the big box that we used to have for the lighter items, with the same day delivery. That's been advancing a lot with some players, even, for third party assortments as well. When we look at the logistic ecosystem, it's not a short-term journey. It's a pillar in the company that maybe has one of the biggest value unlocks. The numbers, we're executing this and transforming the numbers. They already changed a lot. We have more than 100 external customers, but these agreements with big platforms, really making a difference in volume is transformational. We hope that in the next Investor Day, we can give you more color on this. It's gonna be super relevant, and it's one of the biggest competitive differentials in the long term. It's really what helps us be searched for by the platforms. GenAI platforms already understand this is also very important for e-commerce. We know that the big flow of e-commerce goes through electronics and technology, and they wanna have us as partners. When you look at this from today to the end of the year, we'll have a whole nother market with new channels. Omni channel is gonna be a lot more present and a trend that's very different than what I see as valuation and returns that this company could deliver. Thank you. Thank you, Renato. Thank you, Elcio. Thank you, Pedro. Our next question is from Gustavo Fratini from Bank of America. Gustavo, you may proceed. Hi, Renato, Elcio, Gabriel. Thanks for taking my questions here. We have two. First, I wanna understand what pressured the selling expenses, what it grew about 7%, a little bit higher than revenue. Renato's comment also about stronger growth, especially with the higher tickets. You guys already had this store for a while. Now that's back, but could you give us a little more color here on how much growth of 1P coming in from each marketplace and the potential and how this shopping move really makes, if it makes sense for you. Thank you very much. Let me start off. I think we had a small nominal increase in regards to revenue. You follow a positive trend, it's also a little bit because of the different commissions we have with the increase in marketplace volumes. Overall, of course, when we look at the profitability in these channels versus some others that are paid, it's even better. We manage this, and this is why it's a channel we didn't operate in before. The entrance into the channel allows for more efficient management of the stock and profitability of the company. We're not in the mood here to grow at any cost, we wanna grow with the sustainability and profitability. We're gonna be really leveraging the volumes and growth between channels, and online, if you have different channels and marketplace as well, we'll be able to manage this right. I think that's pretty much it, guys. Thanks. Just to add on, another comment here. Back then you had a lot of performance media when you're talking about e-commerce, right? Throughout last year, this changed a lot. You have, the dates with Shopee and then Mercado Libre also came in with like discount coupons, which is like a gross margin, right? Here we've been investing it. We've been seeing that investments in marketplaces sometimes are very heavy duty. Sometimes you kind of pay take rate here, but you have to see what's cheaper. If you have 2, then the ad cost for some sales channels may go from 5% to 8%, and then that went up a lot. You have another coupon, and when you add up these, it's a lot more efficient to use like a third-party channel and pay the take rate, right? Where this is gonna come in is maybe a little less relevant and more important when this last service in the last line. Getting into a little more details here on the marketplace, the first quarter is very strong, with Mercado Libre dominating. The plan is if we look at Brazil, Mercado Libre for these categories is the biggest. But the difference is gonna We have Shopee deciding to come into the game, with this plan of being really relevant in a very short period. There was this target, there in December, and they're gonna be above what was projected. I think that this is quite consistent, and it could become significant in these categories. With the dominance of the Mercado Libre. For us, Amazon is still kind of new. We have this connection phase, organizing. We're learning more about pricing and competition there as well, which is different. The panel and the portal for sellers is also different. We have some lessons learned. They're in a long-term journey. They wanna capture this market sustainably, and they have major ambitions also for Brazil. It's like a competition between all three. The potential is that they all have big potential. From these, the strength that they have there, Mercado Libre is the biggest share. The others are coming along to challenge this. We still can't really judge the future, but there's a lot of investments, and we need to be present in the AI platform. Today, customer acquisition is only through CRM, paid media, Google Shopping channel, and influencers and affiliates. All of them use kind of the same tools, but we've been working with organic leads and from the different agents of artificial intelligence that are still not connected. We're gonna start being connected to all of the agents directly in our e-commerce and the platforms. We're gonna see which attributes are gonna be more valued by each AI, because it's not like the commercial condition. Our expectation at the beginning is that there shouldn't be like a commercial condition, right? Some of these platforms want to have a plan to monetize media. Others believe that this could maybe distort credibility on the tool. Initially they're going to use the business without having paid media. It's going to be like a new SEO, organically structured with the capacity to have a description of their products and their site. That could be the preference of the artificial intelligence tools. We've been working on different tests, and what's interesting is that today you can adapt using AI. It's like despite having more things to do, it's quite quick. It's been very dynamic and fun. When you look at Black Friday this year, it's going to be like a new Black Friday. Thank you so much, Renato and Elcio. Thank you, Gustavo. Now we have our next question from Lucas Esteves at Santander. Lucas, please. Hi. Thanks, Succar, Renato and Elcio. I have two questions here. First, to follow up on the partnerships with the marketplaces is to understand how the profitability dynamics works, because it's gonna gain relevance in the overall top line. How is this gonna work when it comes to profitability, considering instead of selling like from your own marketplace, you're talking about maybe it makes sense to sell on theirs than on yours because of the cost of ads. In the profitability gain levers could maybe this negatively impact at the moment. I thought it was interesting because it also generates some leads, right, for the buy now pay later. I'd imagine that the penetration of the buy now pay later in the total sales of the marketplace is maybe lower than in your own sales. Right. How do you think about adjusting this so you don't lose track or of the financials of the business? Another dynamic you also talked about a lot, which is strategic, is to increase profitability, is a reduction of financial expenses. It makes like 14 months to generate some of these credit facilities. But excluding this, what you can see is some non-recurring items related to tax issues. You can still see a pretty high level of some of these expenses. If you keep the current interest levels, what do you guys think would be like a normalized level right after this back in around 2027 when you have this turnover in all the portfolio? Hey there. I'm gonna start off here and then Elcio you can add on a little more. First about the partnerships and profitability. I want to remind you here. We have part of this as organic and part of this is paid traffic. I have CRM. I want to grow a lot because it's customers mine. There's a LTV that's higher and a cost acquisition, a CAC that is smaller. We have paid media. You have this cost kind of doubling. You see major inflation, right? Considering all of this competition between the generic platforms. When we look at the profitability marketplaces, they kind of fit in in between both. It's above paid media and below the main channel, the organic channel. As we grow, we diminish from other channels, and we've been able to grow, that also brings in organic traffic, and that's great. It increases brand relevance. That's been a very important contribution. What you mentioned is you have a dynamic pricing that also helps concentrate sales in the best channel for me. Some negotiations are really good, and all of them are long-term. We really have this stimulus to work on these marketplaces considering our relevance and competition amongst them. What we see as a trend in the midterm is not to have less platforms, but more. We think our decision-making power should continue for the company, right? I think credit here is an important gift, right? We do see a big potential, and we're under discussion to place this in the platform. Of course, for some of them, credit is not core. You have more chances of having a credit platform that can really be relevant within this ecosystem. For others, it could be more limited, kind of on a long tail of the credit. Because it's also in their DNA of credit, even though it'll be a little more difficult for them to execute. We do believe in the Buy Now, Pay Later as a service and as an accelerator for the growth of the platform, as an important ally, because we know how to provide credit to the same population to buy discretionary items above BRL 200, BRL 2,000. Here we have good profitability with consistency as well. It's all transformational, and it's where we're working. When we talk about financial expenses and the normalized levels, we're not providing guidance. What we're saying is you went from margin 15 Buy Now, Pay Later at CDI. If you look at the spreads and the cost of capital and the company, you'll see there's facilities with historical costs that I'm not even gonna mention here because they were very expensive. We did perform some funding that was necessary to get here. Now, after this transformation of the capital structure, we must switch these facilities and have some opinions. The spread should drop significantly. Besides this, you have our volume. We already have this reduction in the first quarter, but we still do a lot. As the operational cash flow gets better, and we're gonna see more of an increment this year, we can drop this volume. We need to work on the spread and the volume, asset monetization and stock turnovers and all this will help us reduce the volume. When we get to the seven, we will have a better volume. Normalized will be like no overdraft credit and where the company performs this anticipation. I have financial revenue, right? In the long term, I think it is going to be a little bit longer than this, but we should already have a significant number demonstrating profitability. In the long term, I need to have my own funding as well, right? I am considering BRL 2.5 billion. If this reaches BRL 3 billion, of course at some points it could be BRL 3 billion, it could be BRL 4 billion. That's gonna be bringing in this financial result, which is gonna be significantly changing, especially when you consider some projections analysts have, right? We're very convinced about the profitability potential in the company, even in a macro diverse scenario. That involves growing the credit business, and creating, consolidating this credit business to suppliers, and that'll be a very profitable business, right? Very clear. Thank you. Just to add on here, Lucas, it is actually a journey to get to this point, Renato was mentioning, and even yesterday we spoke about this a little bit. We see there are many different facilities, so we have a CDCI. Or we hope to have this reduction of 3- 4 percentage points. It's already higher, and it's already in this. It's going to take this a while to convert into actual effective results. Even in overdraft credit, we're going to be reducing this perspective. The forfait, and that's going to depend on the cash operations. We also consider a spread reduction as we structure different facilities. Also as we had, you work on the transformation, you eliminate a lot of debt, and then you're going to continue to improve the profile, right? You throw this ahead and most of your remaining debt, right? You throw that into the long term so that you can search for more of a reduction in the spread. That's what we expect in CDC and for FIDC. We can see this reduction that might not be this big, right? Because the cost won't be like Casas Bahia. It's gonna be a lot smaller, but we still face search for this reduction. From the more operational lines of the debt, we're really going after this. We need to understand that ever since March, we've been modifying this. It's not like in a month or 15 days we're gonna already see the final effects of this, right? There's no doubt in regards to the need for transformation. It's just this natural process. The macro scenario is still difficult, but from the company's perspective, I do feel like there's a relevant improvement. Very clear, Elcio. Thank you, everyone. Thank you, Lucas. All right. Thank you, Lucas. For our next question, we're gonna call Gabriela from Goldman Sachs. It'd be great to get into this, give us some color on how you've been seeing this difference between the category mix and different partnerships with Shopee and Meli. We already have a bit more data on the average ticket and even the customer's profile. Still with the partnership topic, since you've been leveraging the operational logistics, how have you seen this reflected in the gross margin dynamic? Have you already seen a dilution of the logistical costs affecting the gross margins, and how can we expect this evolution up ahead? My second question is on the credit environment and delinquency. You've been very controlled with the concession terms, and over 90 has been pretty stable. We've seen a bit of a deterioration. Any color you can give us on this, and how you've been seeing the dynamic, and how to consider the risk appetite from now on, that would be great. Thank you. Excellent. Thanks for the questions. First about the marketplace. We have an agreement with them, and there's a lot of discretion on disclosing one to another, right? Here I can't give you too much detail, but I can mention that there is complementarity. There is some kind of a shadow with some of these, and others are still kind of niched. We have an NDA with them, and we cannot provide this strategy so that the others don't compete with the others. It's not really expose them, right? There's clear dominance in some categories and types of these marketplaces, right? All of them have this target for the investment plans. They're gonna be able to advance significantly, right? When you look at the gross margin dynamic and looking up ahead also, we see a lot of combined effects. It's difficult to go over them, right, but when you look in the marketplace overall, sometimes there's even a better gross margin and than an impact. Today we have the pure operational leverage. You can see this is a little bit higher. To be very transparent here, I think it's a challenge for everyone in the current scenario, right, to keep this percentage of logistical costs, right? I think we've been capturing other efficiencies to offset this because if fuel goes up, that impacts freight and logistical costs for everyone in the country. In my view, we do have some idle capacity, right? We're addressing this a little bit better. Maybe we need, like, another year to capture this significantly, right? Besides this, the gross margin dynamic of the impact of this mix of products, physical stores are a lot more profitable. When you increase this online and physical stores and in categories, there's really different margins. Here you have two challenges, right? The private label is the most restrained, and that's the biggest public in physical stores and also for furniture, right? From a guidance perspective with this scenario and the macro environment that's so challenging, I think the dynamic here with the inflow of partnerships and other levers of service improvements and increasing take rates, they have been contributing a little bit, right. If we consider this, I think it's gonna be a little more conservative until we can have this improvement. That's gonna be considering this, right, this fiscal agenda, right. On the other side, when you talked about the credit, you see the fourth quarter has a lot of volume. Production is pretty big. When we look at this, I don't have any concerns in the short term or mid-term. We adjusted the CDC large. Historically, it's been like this, and we see this with a lot of precision. Basically, next week you already know what's gonna happen according to the different batch. On the day people start estimating this with a big level of certainty and everything's kind of under control. It's not like everything's the same. Our customers have a worse rating. We do see control and high predictability here at our NPL and on our profitability and our delinquency indicators. The funding cost then, of course, the margin, the net margins are gonna get better and that should improve over time, right? Just to add on here, it's exactly what Renato mentioned. There are different risk profiles, right? Clearly delinquency in the market as a whole, we see as a challenge. It's more difficult, but this quick adjustment is really important because we've been careful with our execution discipline. Of course, we've focused a little Due to the higher delinquency from different batches, we had to adjust in the first quarter, in the beginning of the year, to be able to get it right and be certain that the second quarter would be in line with parameters and indicators that we consider as objective. It's really quick and it happens really quickly, right? What we see, and we've been monitoring this daily, have this predictability of really seeing what's gonna happen with these indicators. As this started to grow, we also performed the necessary adjustments in the first quarter to be able to work around the results of delinquency in the second quarter. Very clear. Thank you so much, guys. Thank you. Thank you, Gabi. I'm going to call Lorenzo from Bradesco. Lorenzo, please, you may proceed. Good afternoon, guys. Can you hear me? Yes, we can. Great. Pleasure to meet you, Renato, Elcio, and Gabriel. On our side, we have two points. First, on the optimization of the store network, you guys have been advancing with this. In this quarter, we had three closures. I wanted to see how much space you see to continue to advance. We've seen a very positive effect, right, with unleashing court deposits, there's still relevant potential here that you could see as an important lever for cash generation, right? I wanted to ask you guys how we can think about the evolution of this lever and any color and magnitude of what you guys can bring in. That would help a lot. About the utilization on the store network, I think we have major discipline also in assessing the profitability of each store. Today, all of our stores have positive contribution margins, but we do have a classification of some stores that we consider to be like ICUs, where the risk of becoming a negative contribution margin is imminent. Depending on the cost of capital, you have stock allocation and especially the funding of consumers, and you have to anticipate the capital receivables. We still have a big part that buy in installments, on credit card, within the stores. We have to keep our eyes open. Of course, the dynamics of the macroeconomic scenario interfere the feasibility of some of these stores, right? Of course, if the scenario gets better, then profitability will increase significantly. If it gets worse, that's also going to increase the waterline, and then we could have some footprint adjustments. We've been discussing this and although there's a positive contribution margin, how can I optimize this, right? If you look at the ROIC, you can see in an ideal scenario, it maybe will reach 13, 14. How is this profitable? Well, what profit rises this is the buy now, pay later, right? If the bank were to pay this, then the profitability would increase a lot and you would reach this value contribution. Today, it's not a matter of credit restrictions, right? I don't have to adjust it, like, due to this. There is some relief in the working capital, right? What we do discuss always and assess as opportunities here, but of course we don't see a need for a structural or stronger movement, right? Other place is also that maybe is not in the ideal spot, right? But I can leave that up to reopen, but nothing that would be material, right, for the store network with over 1,000 stores. These are like one-off adjustments, right? That's gonna be adjusted over time. In the macro environment, we should have more openings in the good or bad macro environment, right? You can always optimize this and look at the omni-channel approach and how much it can migrate this, right? Other service channels without losing sales or losing the least possible. That would be added on to another story performer. You have a very positive dynamic. Here we have almost BRL 2 billion of deposits as a whole, and we follow this process with some cases where this already happened positively. We even have, like, a more bureaucratic process, and that's where we're gonna be also searching for. In some cases in the past, we even had some cases where we put in cash. Then, we'll be substituting this, and that could be an important unleashing of value for the company. It's difficult to understand the timing, but it should be another source of monetizing these assets. I wanted to mention that it's not a completely predictable process that's under our complete control. Okay. Very clear. Thank you. Thank you, Elcio, Renato. Andrew asked me to share his question here, and I'm gonna translate it here. He just says that the EBITDA margins have been kept at levels of about 8% in the last periods, and the path to profitability indicates a few additional gains. Could you help us understand what could lever this and the main drivers and how you divide this evolution between efficiency gains and added value and credit? Great. I think we gave some color during the Investor Day. Thank you for the question. Well, looking up ahead, we have an important path for operational leverage. Partnerships are important. Growth in 1P is important, and this helps us. The first quarter is always more challenging and that helps a bit, and the second quarter is stronger. The macro scenario as it is gonna maybe extend the capturing of the operational leverage. This year we're not gonna see this macro scenario getting better as expected at the end of last year. We got it right again in being more conservative and really believing that this improvement will take a little longer. That affects the consumption of discretionary items, and we're actually seeing a setback in certain categories, and that's why we have an important share gain. At these moments with pressure, our commercial scale and logistical and financial solutions along with the omni-channel approach really make a difference to continue to capture share. Now, this will continue to bring in a little bit of the impact, but I think it's really gradual and more focused on next year. There's an increment in digital, the second impact that's really important is credit. Here when you, when you're speaking, the company has this Project Baseball, used to be called CD 25, which was fixing up the operational cash flow and the capital structure. We delivered at a level that was better. Now our plan is called CDC 27. Talking about the buy now, pay later and how to increase penetration by the end of 2027, right? We have a target that's challenging here, but that can transform the company completely both through the physical store and digital. In digital we've been advancing. There's a better rating. Even with this macro environment, we're gonna be able to advance more and more and we'll demonstrate evolution, heading towards the target we have in 2027, making digital really profitable. The increased penetration requires a little bit more of the macro environment. We're not gonna provide more credit by taking on risks we can't control, right? We're gonna have to keep the discipline. It's relevant. There's some monetization of the ecosystem. When you look at the size of the cash that is smaller, when you see some things are very significant, right? If you look at retail and you add this up over the year, it's relevant and it brings in incremental growth, right? If you look at 2025, we closed at BRL 8.5. We want to add this increment and we want to get close to the target that we believe we need to have with a new level of EBITDA that's an all-time high for the sector and for the company. That can really support the financial expenses in a more challenging macro scenario. That's what we've been working on, is better productivity and optimization of the SG&A, artificial intelligence optimization, et cetera. That's gonna offset this. Most of the SG&A gains come from the dilution of these expenses, right? The maximum amount that can be provided here without giving guidance, right? Just sharing a little bit of color here. Thank you, Renato. We have no other questions here. Now I'm gonna pass the word on to you for your final remarks. Thank you, Gabriel. Thank you everyone for your presence and for your questions. Just to reinforce our message here, a lot of consistency on the execution, a new company without the challenges, right? That really kind of sucked in a lot of time and energy. For 2026 you can expect execution capacity that's more focused on the business levers, adjusting operational efficiency, bringing in operational leverage and monetization of our ecosystem and really changing the value perception. This is our journey. It's long term. There's no silver ball in the quarter. There's an increment that's gradual. Just as financial expenses are gonna evolve, operational will as well. We'll finish 2026 once again with a company that is very different than the company that started off in 2026. Thank you so much for your trust. It was really important. Thank you all, the team and the group. Let's take advantage of the World Cup special sales. Buy televisions. You can make a pick that's almost BRL 1,000. TVs just grew. Mother's Day went on sale to Sunday, and then all of a sudden on Monday we had a turnaround. Televisions weren't really being sold, but we had a major peak in sales. So telephones and televisions and come to one of our 1,000 stores or app and our website with our WhatsApp also with AI selling a lot. Thank you all. Have a great afternoon and thank you so much. Bye-bye.