Good morning, everyone, and thank you for waiting. Welcome to Magalu 's Conference Call regarding the quarterly earnings. For those who need simultaneous translations, click the interpretation button via the globe icon at the bottom of the screen and choose your preferred language: English or Portuguese. We want to inform you that this event is being recorded and will be made available on the company's IR website at ri.magazineluiza.com.br. The earnings release and presentation are already available in Portuguese and English. The link to the presentation in English is also available in the chat. During the presentation, all participants' microphones will be disabled. We will start the Q&A session. If you have questions, please click on the Q&A icon at the bottom of your screen and enter your name, company, and question or language. Upon being announced, a request to activate your microphone will appear on the screen. You must then enable your microphone to follow up with a question. Questions received in writing will be answered later by the Investor Relations team. Now, I would like to give the floor to Frederico Trajano Inácio, Magazine Luiza's CEO. Fred, please, you may go ahead. Good morning, everyone. Thank you for attending our conference call on Magalu's Earnings of the Second Quarter of 2025. I'd like to begin by emphasizing that this was yet another period with consistent execution, with important efficiency gains, growth in strategic fronts, and resilience of our main categories. Without question, the main highlight of our quarter, once again, was our profitability and our financial discipline. We reached EBITDA of R$727 million in the second quarter of 2025. Noting that this is in a context where interest rates, the SELIC rate, reached 15%, so a huge increase compared to the interest rates of last quarter. That implies a series of challenges in terms of P&L for the company, top line, bottom line. In this context, we maintained our discipline, as we had in previous quarters, to improve margins and increase our operational profit. In that sense, the main highlight to reach margins was the control of expenses, with SG&A well under control, as well as our capacity to manage them. There are things that are out of our control. The interest rates are not in our hands, but our expenses, our costs are, and we've been working efficiently, even considering an inflation of 5%. The costs of any Brazilian company are indexed by inflation, and we've been able to control our expenses and reach this 8% margin. I would also like to point out another emphasis that's been important to our results, which is the discipline in cash management. We had a good quarter in terms of cash generation, R$497 million operating cash. Roberto Bellissimo will detail this further in his presentation. A big highlight, I think two top highlights, is the reduction of R$150 million in inventories in this quarter and monetization of taxes. That is another line that we monitor in our cash committees and working capital. It's one of the most important committees in the company. We have full control. Fabrício can also talk a little bit about the inventory formation. Since we're getting into the third quarter now, I'd just like to let you know that we formed the inventory of the second quarter at a higher US dollar that was at the beginning of the year. It got close to 6 at the beginning of the year. The inventory formation was at a higher dollar value, and we believed it was good to reduce these inventories now. We had a clearance sale in the middle of the year to reduce inventories. Fabrício can detail this. We formed the inventories of the third quarter at a lower US dollar. When we negotiated, it was lower, and we're confident we had good negotiations to be more competitive, especially in 1P and websites and stores for the third quarter. I think this inventory reduction was important in the long run for the negotiation conditions. That makes us confident we will get to the third quarter definitely with better competitive conditions than we had in the second quarter for those channels that we have. Not only Magalu, we did the same for KaBuM! and other companies in the group. Next slide, please. Now, on sales, I'd like to point to the resilience of our main categories. We've been able to increase 1% net revenue in the context of high interest rates that end up impacting not the market. I want to make it very clear. The market remains heated. It's still in full employment. The employment rate shows that we're at historically low levels. The population is employed. Social benefit levels are increasing, and there's a lot still to come. Potentially, a reduction of income tax for families with up to R$5,000 income. It's a good economy. When interest rates are high, the capacity of us to have sales with 24 installments with no interest, the capacity for us to be aggressive and have a positive contribution margin is lower. It's not that the market is—the consumption market is affected as much as the actual capacity of a retailer with high ticket categories to have more aggressive sales with prices at the best terms. I think that's how the market is. In the third quarter, SELIC rate will remain high, but we have costs that we have been able to get good negotiations for the quarter. I believe we will have an even better third quarter in terms of sales, continuing with this rationale of efficiency with the second quarter. The second quarter here, we saw growth in physical stores at 3.5%. It would have been 5% if we excluded Rio Grande do Sul. That was a much smaller value in the south because of the floods. If we exclude that, that is concluded now in June, same-store sales would have been even better. It also decreased. There was a slightly higher dynamics compared to the first quarter. 3P posted a decrease, and that was a tactical decision of not entering especially into competition in the market dynamics of free shipping and so on. We have very strong discipline of not selling products with negative contribution margins. That was a tactical decision for the quarter, not a long-term strategic decision. Noting that even low ticket categories, we had great performance in market categories and consumer goods. Effectively, we did not enter that discussion. We didn't join the discussion of categories with negative contribution margins. We believe here that this condition, I think this will pass. It's not perennial, and we are fully capable of resuming over the quarters. What I want to make clear in market's view is that Magalu is a company that has an economic model with three growth engines. It's different from other markets that only have one engine, only 3P, only physical stores, or retailers that only have physical stores, or only the 1P engine. We have 3P. We have the growth engine of 1P, and we have the engine for growth in physical stores. With that, I believe we have been able to be resilient even in situations that are adverse in the markets. Now, with the engine of the 1P finding rough terrain because of a specific economic condition, 1P and same stores or physical stores will make up for it. When we have a drop in 15% in same-store sales, 3P helps. The stores at that time, when 1P faced difficulties in 2022 and 2023, when we were rebuilding inventory, there were some aspects there that we needed to evolve. 3P also helped. Having this balance between 1P, 3P, and stores is a competitive edge that is important for Magalu. That's how we built our operation. When we put together our 1P, we did not put it together to the detriment of physical stores. It was integrated. 3P, when we put it up, it's not to the detriment of 1P and physical stores. We want this ecological balance between the three growth engines, the three important channels for the company. That's how we move on. We have a highlight as well that for the category, especially where we're leaders in the market, in the Magalu channel, categories with tickets above $1,000, we had 5% growth, 1P and 3P. Combining the technology categories, these protect our shares and gain share in these categories. That's an important highlight. What happened on the online was very specific for very low tickets, a lot due to the short-term issue. Another important point, in addition to the important categories for Magalu, it's important to note how well the companies we acquired are doing, which are part of our diversification cycle. I'll talk a lot about our ecosystem. Ecosystem is not an end. We didn't adopt an ecosystem strategy as a buzzword of ecosystem. The idea is to invest in companies for the acquisitions that we made in this period to diversify our results lines as an asset fund manager has to diversify results, not put all the eggs in the same basket. Magalu also wanted to diversify results to complement the core category, like electronics, with other categories. This is shedding light into three companies that we acquired that are doing very well: KaBuM!, Netshoes, and Época. All of them operated with good results. KaBuM! with $12 million net income in the quarter with the GMV growth. Netshoes as well, $24 million, was very good for the quarter in terms of results. Growth as well, that was very significant. Same thing with Época, with income and growth. It's not only a very important position that we have in good durable goods and categories, but we also have an important position in computer accessories, gaming, and a very important position as well for healthcare products, sports items. Netshoes is at a very good phase now, and beauty and cosmetics. Magalu has been able to gain a competitive presence in these categories as well, with profitability. All of them following these lines. Later, I'll talk a little bit about this because for these operations, we also want to have the three engines. A lot of these operations are only 1P. We added 3P. For example, Netshoes, 50% of it is 3P now. KaBuM! has also increased 3P, and Época is entering with 3P now. For all of them, we are adding an engine of physical stores. I'll talk about this towards the end of the call with the launch of our main, our big new format that's Galeria Magalu. Still on ecosystem, I think one of the situations, if we were to face an interest rate at 15% and high interest rates, we would feel this very strongly in our results more than we do now. The ecosystem is not an end, but it's a means for us to be able to achieve less of a sidetracked result, which has always been traditional for our categories. The standard for traditional categories was that. That's exactly what we're working on. I'd like to point some fronts of the evolution of a strategy that I would say is the this was the last big year for the cycle of ecosystem. I'd like to start with logistics. Magalog, that was a department in the company. Then we bought three or four logistics companies, and it turned it into an independent company, independent from Magalu. Magalog provides services to 1P and to Magalu stores, also starting to provide services for sellers, but providing more and more services for companies outside Magalu's ecosystem. Now we got to 90 external clients at Magalog, generating significant revenue. It's no longer a center of expenses, but it becomes a center for revenue for the company. We're gaining a lot of share in segments like fashion. Zara in Brazil operates through Magalog. Renner operates through Magalog. The pets love use Magalog sports electronics. We have an important extension of our network, and that helped us dilute costs and have competitiveness for Magalu as well. It's going very well. Magalog has been able to achieve this with a level of excellence that it has also provided. Magalu's NPS is 80, 85 for 1P and stores, 75 for 3P, so 80 on average. Magalog is transporting this service level to its own clients. We received now recently an award, a seal, RA1000, and a lot of excellence awards with these external clients, awarding Magalog as the best logistics operator in the quarter. We transformed it into a company. Last year, we already have 90 clients, and we keep on growing. Also, with other highlights, going back to 3P a little bit, is the penetration of fulfillment. I'll let Fatala and Garrido talk about this later. From 21% of orders in the first quarter went to 27% in the second. We have a lot better distribution level. There's 10 distribution centers at the company that are working for sellers as well. That's an important evolution for us. We increase, we grow 3P where we have more control and more competitive conditions as well, more resilience for the future. We're replacing partner shipment to sellers who use Magalog. Dropping with partner shipments, we're offsetting with that by growing with Magalog. Another highlight that has been a highlight for some time in this quarter, even more so, worth of notes. Beto will talk about it in New York's year as well. MagaluPay, we have all of the companies here in our credit financing and financial services that performed very well. We have records at Luiza Cred of R$100 million in the second quarter, ROE of 19%. Once again, compared to last year, delinquency indicators going down with high coverage. We will have here in New York, we'll be able to detail this. There's something new that we were able to get authorization from our financial institution with the central bank who will operate with the Buy Now, Pay Later lines and Direct Credit to Consumer Credit. We'll start operating now in the third quarter of this year. Through that, we'll obviously get great opportunities to continue to increase penetration of products. Our penetration is on physical stores slightly over 40%. There are physical retailers in Brazil who operate with the penetration of financial products of 70%, regional sometimes getting to 70%. There's a lot of room for growth. It's one of the situations today, even on physical stores, the opportunity to increase penetration of services. On online, a huge opportunity to increase. We only have 10%. There's a series of initiatives to increase penetration of services on the online sales. He will be able to detail these initiatives. On the third quarter, I believe we will evolve in these aspects. MagaluPay as well, I'd like to highlight within the MagaluPay umbrella, the excellent moment for the consortium, Magalu Consortia, that has another quarter of significant growth. Consortium, at a moment of high interest rates, goes very well. It's a good alternative both for investments and for savings and for purchases. It has been growing steadily with a lot of profitability as well. Another pillar of the ecosystem that has been supporting us. Next slide, please. [Foreign Language] Let's begin the question- and- answer session. To ask questions, click the Q&A link at the bottom of your screen. Write your name, company, and the language of your question to enter the queue. When announced, a request to turn on your microphone will appear on the screen, and then you should activate your microphone to proceed with your question. Our first question is for Luiz, can I ask from BTG? Please, Luiz, you may go ahead. Good morning, Fred, Beto, Vanessa as well. I have two questions on my side. Fred, first, I know you talked a little bit about this ecosystem of physical stores and different brands within the same ecosystem and how important this is to generate value and improve margins. If you can give us more detail about the drivers that you see for the expansion of margin that Magazine Luiza is looking forward. The second question would be if you can talk about the evolution of the conversion rate of the sellers and how credit may be important in this indicator. Thank you. [Foreign Language] Hello, Luiz. Good morning. Thank you for your question. I think drivers for monetization and so on and increasing margin in our strategy are very based on things we've been presenting here and part of the channels I described. I see that the penetration of ads is still very low, even though it has increased significantly in the second quarter. There's still huge room to penetrate ads and what improves the online margin. It will also improve for physical stores because our ads will be relevant for physical stores as well. I'd also like to point that Magalu, more than the marketplace, Magalu is a brand place. We are the best channel for brands because we don't have an excess of white label products imported from Paraguay. For brands, there is a place with the best brand safety. It is to announce in Magalu's ecosystem. This is also very good. Also, because we are a lot more strict in the type of product that we allow on 3P. I think ads are an important channel and we're having a lot of good developments and traction with the brands and announcements and ads with the tools as they evolve and best indicators we have. Also, as I said, the penetration of financial products in physical stores, we have 40% of penetration of the cards and direct customer credit. In digital, there's still room to increase penetration without increasing risk. Jörg can talk about this later on. On the online, there's a huge opportunity. The penetration is below 10%. We can and should, must improve our penetration of financial products on the online. We have a series of initiatives and definitely, but not exclusively, the new financial company and the investments that Jörg has mentioned making in terms of team, improving products, as well as in the purchasing journey that they may vary. In terms of conversion, this is the year where we're working not only for 3P, but overall for the company to improve conversion rates. We've been evaluating all different aspects at 360 degrees, including the time, the delivery times, pricing, and upfront and installments. We are assessing to improve bidding algorithms for marketing to bring visits with more conversion rates. There's a series of structural investments for improvement that we're making so that we can see an increase in conversion looking forward. We had a quarter with SG&A expenses. expenses. SG&A, there's this S that's selling expenses. Part of the evolution of this quarter was also in the sense of discipline for media investments and what we brought to convert more. There's still a lot to evolve and to seek in terms of growth. What we're cautious here is that we're not getting into a war that generates conversion at a negative contribution margin, like low cost freight or free freight, free shipping that we don't see that brings negative contribution margins. We do not see a reason for our Magalu business to get into a war, even in the long term. At a time where we have interest rates of 15% a year, discipline must be good. Our features give us the option of seeking conversion as long as it has a positive contribution margin. There may be a great increase of conversion in other senses. Later, I think, maybe Fatala and Garrido do you want to talk a little bit about initiatives and conversion? I think it's important to talk about the market category and what we're having, if you can add. [Foreign Language] Thank you, Fred. Thank you for your question. As Fred said, I think one of the main features that we had, benefits or edge that we had this quarter that's important to convert sellers is precisely the growth of fulfillment. We grow Full as we can make the most of the virtuous effects of multi-channel, omnichannel. We make the most of DCs and collections and deliveries from 1P and physical stores. With that, we're able to offer coverage even for free shipping for on-store pickup. We have 97% of deliveries made by Magalog in this store pickup operation that we believe is a differentiator. With that, Full can offer customers faster shipping and more coverage of free shipping in a way that fits into this culture of rationality on expenses that Fred mentioned. Full has a conversion that is three times bigger than deliveries made by the sellers themselves. As we can increase the share of Full on orders, we got to 27% now, 3 percentage points more versus the last quarter and 6 percentage points compared to last year. We are able to bring the sellers to a conversion level faster. The main evolution from now on, we just launched in August. We had a soft launch on products. We are going to explore more in the Magalu Expo at the end of this month. We have already enabled a feature to attribute free shipping as the shopping cart gets to R$200 in supermarket purchases in Full. That's for 1P and Full. That values categories with lower tickets without hurting margins. We believe this is a next frontier for growth in the share of Full. I would also say that in our pickup operations, we've been able to move more than 2,000 sellers that were shipping from post offices, move them to the Magalog network, even using external clients that are coming in, as Fred mentioned. That improved for those 2,000 sellers their delivery times in more than five days, a conversion of more than 20%, and for us, savings in operating costs. All of these logistic operations and services for sellers are very important to be able to move conversion forward as we protect the business margins. Excellent. Thank you for the answers. Thank you, Luiz, for your questions. Our next question, Antonio Cardoso. Please, Antonio, may go ahead. Good morning. I have two questions. One, you talked about MagaluBank a little bit. If you can evolve the subject a little bit further, now on the second half of the year, where are we going to be able to see a difference or a possible result? What are the opportunities either for growth or cost savings that we believe is mentioned? Maybe get Jörg to talk to us. A second question. Marketplace. How do you see marketplace positioning in the medium and long term? What should we expect from the marketplace? Growth in line with inflation to happen as the market growing? As the market grows, what's the medium to the long-term positioning for marketplace? Thank you. [Foreign Language] Thank you, Antonio, for the question. This is Jörg. I'll start talking about the opportunities for the short and medium terms in MagaluBank. We have a lot of opportunities related to operating and fiscal efficiency, migrating retail direct to consumer credit. Maybe Fred can talk a little bit more about this, about easing back. I also see gradual evolution in Luiza Cred. Both Beto and Fred talked about this. I think the second half of the year will be able to capture the benefits of the investments made at Luiza Cred, both in terms of improving the product and controlling delinquency rates. I am very optimistic with consortium sales. As we mentioned, consortium sales have been becoming a sales powerhouse and a platform growing more than 30% a year. The second quarter total sales totaled more than R$1.5 billion. In addition, this is something new, we have been investing strongly in data and credit expertise so that we can expand our capacity to serve recurring clients in the ecosystem. These clients, obviously, have a less risky profile, but they are not enjoyed at full capacity in MagaluPay today. Next week, we're going to bring a very senior executive as the Head of Credit, with more than a decade of experience in companies such as Nubank and Capital One, to help us raise the bar of these disciplines in our ecosystem and start to materialize this potential in the short term. Now, answering the rest of your question, I think I talked a little bit about this already. I think the role of 3P for the company, we don't have a guidance for each of the channels, but I think without a doubt, we expect to grow above inflation and above the market, not only on 3P, but in 1P and stores as well. We want to grow on all three channels. We don't have one engine. We have three engines. 3P, just as 1P, gives us strong scale. Stores give us margin and closeness and help us in logistics operations. 3P also guarantees assortment relevance because with the frequency, we can include items that have more frequent consumption for us and profitability. Well-managed 3P can help greatly at the company's EBITDA margin. The issue here is to have discipline, not to seek growth in 3P at all costs. To be very disciplined and make sure that it falls into the value proposition for the company as a whole, contributing to specific aspects where they have the vocation to contribute. As I said, assortment, relevance, margins, and growth where the market presents opportunities. We need to have a technical eye to the market to accelerate. I'm certain that for the long term, we will have one of the big options for a lot of sellers and to see brands that will have a huge level of safety to increase their operations here. In addition, for example, a brand that has a DTC, Samsung, they have 3P, but they also have 1P and physical stores. Having this relationship, there's a lot of synergies in the process. For sellers as well, who make the most of the same omnichannel structure that we have, store pickup that we mentioned. I think all of that is important, not only for 3P, but 1P and physical stores. We want to grow above the market and above inflation. When this is possible and we have a positive contribution margin, there may be a time or a quarter where we choose margin more than growth, which was the case of this quarter now. That depends on the dynamics. Now we're in a context as a retailer that a 1P and 3P has high tickets. At a moment of high interest rates, any decision, usually we leverage sales of high tickets in terms of payment terms and so on. With a SELIC rate at 15%, that becomes too expensive. That limits our firepower temporarily. Once the SELIC rate goes down, and you look at Magalu's pattern of growth, when SELIC goes down, we grow well above the market. We're at a very specific context of high SELIC rates. We have a little bit less capacity to grow specifically on online. I'm confident the SELIC has reached the maximum, and once it starts dropping, once again, we will be one of the main retailers and Brazilian online retailers to capture this growth with profitability. Now we have to be disciplined and focused on our project without getting into a war for growth at any cost. Very clear. Thank you. [Foreign Language] Thanks very much for the question. Maybe just to focus on stores a bit. We see the speech and focus, I think, shifting even more towards multi-channel. You mentioned the Galeria Magalu. I'm curious how you're thinking about store growth as part of the more normalized strategy. What would you need to see to begin a more steady pace of core store openings? Is it just about interest rates or anything else you want to see in terms of, say, the store level returns? Thanks very much. [Foreighn Language] Thank you for your question, Andrew. Next question, Rodrigo Garcia. Please, you may proceed. Please, you may proceed. Please go ahead. [Foreign Language] Good morning, Fred. Thank you for taking my question. Already with a follow-up in the previous answer Thinking about the value levers. Talking about 1P and physical stores, I'd like to ask you what exactly is the focus on these two channels for the next 12 months? Thank you. [Foreighn Language] I'm sorry, Garcia, could you repeat your question, please? I think I had a problem here with my connection. Sure, Fred, no problem. Following up on your last answer, you talk about both 1P and physical stores. As we be thinking about the value levers, what are exactly the main indicators or the main things you're focusing on on these two channels thinking about the next 12 months? [Foreign Language] The next 12 months. We have, again, to consider looking at a SELIC rate at 15%. I think we need very strong discipline in terms of margin and management of working capital and cash. Very strong discipline. Without a doubt, we're seeking and investing our attention a lot in how to conciliate the margins, the margin levels that we reached with more operational leverage and sales. The next 12 months, we'll try to conciliate this better. The margin we reached this quarter with the expressive growth on top line. For the next 12 months, I would say these are the alternatives we're going to explore: 1P, 3P, and physical stores, margins with this opportunity for monetization that I described, as well as growth in our acquired companies. I think it's a lot of conciliation of the margin with greater growth looking forward. That's our challenge. Of course, if we have to choose, I prefer to bring in a positive result. The ideal would be to have positive results and top-line growth. Excellent. Thank you. Thank you, Garcia, for your question. Next question, Lucca. You'll be asked. Lucca, please, you may go ahead. Moving on to the next question. Next question is from Felipe at Citi. Please, Felipe, you may go ahead. Hello. Good morning, everyone. Thank you for taking my question. It's a question more in the sense of the expense control that you've been able to be very disciplined and maintaining it stable, even in a scenario of high inflation. I'd like to understand the main drivers for this control and how you look at this going forward. Thank you. Thank you for the question. We had another microphone on. I apologize. I think the control of expenses, again, is the only thing that we have in our hands. It doesn't depend on the market as much. So G&A, it's more a matter of discipline in terms of cost control. We have the matrix management of expenses. We had the zero-based budget last year, reducing administrative structures and physical stores last year, reducing the share of salespeople and backup control of expenses from electricity to leases, negotiation leases. We have a very strong committee focused on these items. We already expected this to be a difficult year in terms of increasing interest rates and financial expenses. While we could control, the SELIC rate is not, but G&A control is. In terms of selling expense, there's a little bit of our management that I've been talking about, the conversion, the focus on conversion. I explained it, Arise, the question to that end. There's initiatives to increase conversion. I'll take the opportunity, Fatala, if you want to add about our more technical initiatives to increase conversion. You can add. I didn't turn the floor to you that time. Maybe now it will be good. That's great. Yes, good morning. Talking about the work we've been doing focusing on conversion. We have three main fronts. One focused on competitiveness. One is the service level for deliveries. Then everything that we do working on customer experience in digital channels. In digital channels, there's great effort being made, and we're working very focused on surveys with consumers to raise points of improvement. In terms of searches, we're removing all types of friction in the checkout process with greater opening in terms of payment methods to make it easier for our customers to make a purchase. A lot of work is being done in the seller space as well, building tools that they can operate better for their sales, and also to simplify how they operate their stores inside Magalu. The combination of these different fronts, especially including what Garrido mentioned that we've been focusing on fulfillment that already brings compared to shipment from the partner themselves. With our full delivery, we increase conversion 3x. These are the main fronts focused on how the seller's operating and the customer experience in the channel. In addition, there's also strong work being done for conversion with the investments that we have in traffic. We've been working on changes in the algorithm and building models for investment in media and structural work where we are building a strategy to get more diverse traffic, drive more diverse traffic through video ads. We're building a community that can build videos, and we're going to work more focused on social channels to drive visits from an experience that also brings a lot more opportunity to demonstrate our products, to showcase our products. We saw a very strong trend built by agents. We saw the impact, made internal tests, and now we're working structurally to scale this up. There's also worth mentioning part of a future work, but Fred's already mentioned on the last call, and we are working on them and testing, is an AI commerce front. We already have a soft launch for the Cerebro da Luz, Luz Brain in WhatsApp. We have about 1,000 employees at Magalu testing that. Based on their feedback, we made improvements. It's also a channel where we believe the consumer experience will improve, and conversion levels through this channel will be or should be a lot higher than what we see in traditional channels just because of how easy it is and how much it reduces friction in the purchasing process through these assistants that may be of great help in the decision-making process of consumers. Thank you.