Operator: Good morning, everyone, and thank you for waiting. Welcome to the earnings call for the second quarter of 2025 at Assaí Atacadista. [Operator Instructions] We'd like to let you know, this call is being recorded and will be provided on the company's IR website at ri.assai.com.br, where we already have the release available. [Operator Instructions] We want to highlight the information in this presentation and possible statements that could be made during the earnings call related to business perspectives, projections and operational financial targets represent beliefs and assumptions of the company's management as well as information that is currently available. So future statements are not a performance guarantee and they depend on circumstances that could not occur. So investors must understand that market conditions and other operational factors could affect the future performance of Assaí and lead to results that differ materially from those listed in future statements. And now I would like to pass the floor to Gabrielle Helu, the Investor Relations Director.
Gabrielle Castelo Helu: [Interpreted] Good morning, everyone, and thank you for participating in the earnings call. For the second quarter, we want to present the executives present here. Belmiro Gomes, our CEO; Aymar Giglio, our temporary CFO; Wlamir dos Anjos, our VP of commercial and logistics; and Anderson Castilho on operations. Now I'll pass the floor to Belmiro so he can begin the presentation.
Belmiro de Figueiredo Gomes: Thank you, Gabi. Thank you, everyone for participating. It's a pleasure to be here. Thank you so much for this participation. I want to start by thanking our team for the work done in this quarter and I must also say that the numbers we're going to present today are also very important because we're going to provide also, of course, more context about the market opportunities and challenges we've seen, now looking into 2025, especially in the second and third quarter. We believe that the second quarter was very positive in our assessment. When you look at the overall scenario in combination with a competitive environment and market demand and the purchase power of the consumer and revenue reaches BRL 21 billion. So the same-store sales is below the level of the food inflation, which has been internally around 7% or 7.5%. Of course, the objective of the company is to search for same stores at the level of the inflation. So what we see is the persistence of the trade down movement of about 3.5% to 4%. And this has a variation according to the social levels and regions in Brazil, this exchange and the swap for cheaper products and economic products and trade downs. And we've already talked about the causes of this high interest rates and the sports bet et cetera, which has really made us keep up with the scenario where consumers are forced to buy cheaper products. So this is a movement that not only affects Assaí because when you look at the shares, it was completely stable. But when you look at the progression of the volumes in the quarter, excluding part of this, where we've seen a strong trend of part of the market with a real high concession of timing and deadlines that impacts our reseller customers. And besides all that, we still have a stable volume. So within the scenario, the company has as you mentioned, working on store maturity, and I'm going to talk about this a bit more especially for the converted stores. And I think maybe mentioning a number that could surprise a lot of people about the results of this project, which is still not at its final phase, but the company has searched for balance. And so having -- there's an important balance that was made from an expense maintenance rate. And despite some expenses of projects, that are really important, considering the wave of innovation in the company. And so with this, we've been able to have a series of expansions in services and battery, [indiscernible] bread, et cetera, and bakeries, which could lead to some effects and impacts on the expenses. But -- the inclusion of these downtown stores, et cetera could maybe pressure the EBITDA, but this demonstrates this as the company is delivering an EBITDA margin pre-IFRS of 5.7%. This is an increase of 30 bps compared to the previous year, reflecting the store maturity and innovation that was made despite this combination, of course, of strict expense controls, which helped us increase our EBITDA margin by 30 bps. Now when we look at the EBITDA pre-IFRS, we see that it is important if it leads to actual cash. In the second quarter, when we look at the LTM, Assaí has really been able to deliver a conversion rate of this EBITDA margin into free cash flow of about 90% of EBITDA which has been transformed into cash. So as the investment cycle is a lot lower than what we had in previous years. we present free cash flow before the payment of interest of BRL 2.7 billion either in the evolution of the EBITDA and reduction of the investments, but also major discipline also on the working capital and the policy on receivables and granting of [indiscernible] since we saw a relevant movement of increasing prices and the strategy of the company has proven to be quite assertive when we consider our leverage, the company is focused on deleveraging at this moment. And this combination of this amount of BRL 0.5 billion plus a reduction of BRL 200 million in the net debt at this moment, where we may be at the peak when it comes to the Selic rate 15%, of course. And so the fact is we have probably one of the highest actual interest rates in the world, which leads to financial results that are quite strong, especially when you consider the net sales. But when you, of course, paying off the investments the company made in the last few years. So with this, leverage drops at about 50 points closing at 3.17 dropping 0.48 in the ratio we've seen in the second quarter of last year. So the net income also had an important evolution. Of course, the interest rates and the debt carryover costs are pretty high at this moment. But there's an important evolution in the net income, even when just part of it is the recognition of some credit that was made. You have all the information in the earnings release as well. We can advance to the next slide. And then as we were saying, we bring in this page here, which is Campinas store, very important store. And then you can see this vision of how things we're doing. We all know that this was one of the most challenging projects in Brazilian food retail but also from the perspective of shifting paradigms, which was the objective of the company to really place stores in downtown region so that we could expand the target audience we had, right? So obviously, putting in stores in central regions like the store in Amoreiras if we consider Campinas [indiscernible], these are stores that have a different rationale. So -- of course, they also bring in a higher interest rate and an expense-related tariff, which was also requiring this gross margin that was more healthy in the store. So when you look at the EBITDA margin pre-IFRS discounting the rent or the lease. There's a leap of 4.1% to 5.1%. And so that was delivered in the second quarter and an average sale per store, it's way above the average sale in the company of about BRL 26 million. So they still don't have the same level of productivity, if you look at the sales per square meter the organic store network, but these stores are still in this maturity period. And the first store opening just entered the third year. We still have stores with 2 years or 1 year of operation. And so however, they do have a store maturity hired up ahead. But -- and we can, of course, advance to the next slide, and we're bringing this research that we've done with over 19,000 respondents, that was conducted by [indiscernible] company, and they're helping us in important projects in the company. And after this conversion period, Assaí has stores that are 1,400 square meters of sales area and 10,000 as well. So there are stores that are located in the outskirts of the city, but there's also stores that are in regions that are downtown regions, very important cities in Brazil, especially the big capitals such as Brasilia, Goiania, Rio de Janeiro, Sao Paulo and so on. So what was the result we've seen? Well, the strategic objective was to break down some stigma as there was with Cash & Carry because it used to be just limited to specific type of public, right? So meeting the public -- the B2B public is challenging, right? But when we look at this research in the market as Assai's President, it's a penetration rate that's really high for Class A, B, C and maybe actually, this research was done by electronic means, but that demonstrates how now the company is really within its portfolio of stores, has, especially based on its customer portfolio, a penetration and potential. And so when we look at the gender, which is 60% men, 61% women. When you look at age ranges, that's another important metric for us since age range has a different purchase power, right? But if you also see a lot of stability in this, especially from -- the customers that are 18 to 24, 25 to 29 and so with 61% penetration rate. So this is the split today of the more than 0.5 billion people go by our stores, the 500 million customers today that Assai services, and that's why the brand became the most valuable. And so this completeness also allows us to break down on some signals. And it's not just about having this -- what's really about what this is going to provide for us is up ahead, right? So in these last 2 years, the company has really been focused on delivering the conversion, the level of productivity and EBITDA margin that we had in the organic network and implement new store services, which are also vital to this kind of model, but the company has not stopped here. So the fact that we have this penetration in social levels, gender, age ranges, et cetera. This really allows us to explore new product categories and really search for an increase in share of wallet, important projects in the company start and there's a very important project also starting up now where Assai is going to start taking its first steps, which is exploring its private labels, especially in the Southeast region of Brazil, and especially in Sao Paulo, where you have a logistical cost that's lower and that's providing a course of broadness that's going to help us really improve the margins we have. So there is a movement towards either in and out projects whoever has been watching us, has seen our entrance into home appliances and electronics, which is like the air fryer, et cetera. So there's this movement and that's a very important process within the pharma channel. And that really has been evolving. We've been very vocal and participative. And I believe that the project and the way it was presented now allows for greater potential to explore another product category and other categories that are correlated just as the in and out project that in our perspective, should bring in relevant gains and also financial services now with Assai's credit card machine project bringing in another opportunity for the B2B customers as well. So I think we've already seen this on the release with the pre-IFRS EBITDA. It goes from BRL 965 million to BRL 1.079 billion. And then after this, you have the cash for the company and the net income of BRL 86 million in tax credits. It goes from BRL 165 million to BRL 164 million and I think Aymar is going to get into that as well, considering the impact of some of our debt reprofiling work. There's also an occasional impact in the second quarter with the prepayment costs. Now move on. We can advance to the next slide, Aymar. So we're going to talk about Aymar deleveraging this as well.
Aymar Giglio: [Interpreted] Thanks, Belmiro. Good morning, everyone. Thanks for being here in our call. I'm going to talk about how due to all of these operational context Belmiro mentioned. From a financial perspective, we ended up having the main highlight in the quarter operational cash generation of BRL 3.9 billion in the last 12 months, right? So that demonstrates the capacity the company has to generate cash despite or even after paying the 12 months of CapEx of BRL 1.2 million, and the free cash flow generation was BRL 2.7 million. And so with this, after paying interest and everything, the net debt of the company ended up dropping by BRL 200 million year-over- year. You can just notice that before the adjustment of the discounted receivables, the variation of the net debt -- financial net debt was BRL 700 million year-over-year. Now another thing that we also observed in an interesting manner here, and we start observing more over time is that on the left bottom chart, you can see that in the second quarter of '25, our net debt dropped BRL 1.3 billion in regards to the second quarter of last year. So of course, a reprofiling process and prepayments and then also an absolute reduction of the gross debt as you have over time and over the years paid and refinanced a lot less than what we pay or what we have as debt maturities. And so with this, and with this cash generation behavior, we had in the quarter a reduction of almost 0.5% of EBITDA and so there's still this important move towards reducing the leverage, now reaching half an EBITDA year-over-year and that allows us to a imagine or state that the guidance of about 2.6x net debt to EBITDA will be reached at the end of the year. So I think this is an important milestone, this number for the end of the year. When it comes to financial net debt, it's about 2x leverage. And when we consider the contractual covenants in the second quarter, we're at about 1.78x against a maximum covenant of 3x the EBITDA. So that's what it is when it comes to the leverage and debt and on the next slide we also have the information on the continuity of the debt reprofiling. This process has been super important and actually not only extended the time frame, but it also reduced the average spread of our debt in a very important manner. So as you can all see on the right side of this page below the flow of maturities here, we have an average timing of 39 months. And a year ago, it was 31 months. So it's an increase of over 25% of the average term in 1 year. So the average cost that was now at CDI plus 1 a year ago was CDI plus 1.46. So it's almost 20 bps of the spread reduction in a year. And so we understand that there is a possibility considering the current fixed income market and that are next transactions in regards to reprofiling our debt, we'll be able to even reduce the spend a little more even. So to add on to the slide, besides all the movement we had in '24 where we prepaid and postponed BRL 3.6 billion with new fundraising of BRL 3.6 billion in that total amount of BRL 6.6 billion. In this second quarter of '25, we had another BRL 1.5 billion fundraising to prepay debt of BRL 2 billion. This already took place and that's already been reflected in our balance sheet. And now we have this operation with opportunities that appeared where we prepaid a commercial note from December of BRL 500 million and we refunded basically at the same spread, CDI plus 0.95. And this is an all-in cost and basically almost the same value BRL 50 million less but maturity in 3 years. And this operation is already reflected here in this flow of maturities where once again I can highlight that in 2025, we already have finished all of the payments. There is nothing else to be paid. And in '26 and '27, the level of total maturities of the principal amounts to BRL 1.2 billion and BRL 2.4 billion. And when you compare with our potential EBITDA in those 2 years, you see it's going to be a value that is really like non concerning when it comes to payment capacity and that helps us stat that we are relatively comfortable in going past these 2 years, that could be -- maybe continuity in the turbulence of the financial market without needing to have new fundraisings for the company, at least in 2026. So that's very probable. And the maturities of '28 and '29 are a little greater. We have nothing else basically after '30 and '31. And then what that will consider is that we should remain throughout '26 performing our prepayment movements and extensions of maturities in '28 and '29. So I think that's it, that's when we consider basically leveraging the company.
Belmiro de Figueiredo Gomes: Okay. Thank you, Aymar. And to wrap up, we bring in the evolution of the targets and policies in the company and different initiatives from an ESG perspective, Assai is recognized as one of the companies with many different initiatives when it comes to social inclusion and diversity. So we highlight some important points. We went over 1,000 employees, including migrants and refugees. This is something our area has been working on when it comes to labor. And we also had a solitary kitchen, 10 kitchens in over 8 states around Brazil, over 530,000 meals and more than 100% of our goal. The brand became considering this the most valuable brand in food retail of 500 million customers, demonstrates how the brand has become very strong, and we're ready to adopt different initiatives from now on. And once again, within the GPTW research as one of the best places to work, especially the best in the segment when [indiscernible] in the retail, wholesale and cash and carry categories when it comes to excellence in customer service, besides a series of other initiatives when it comes to climate, impact reductions, reusing waste and an increase of over 30% of the stores that have composting project in place. So I think when it comes to presentation, that's pretty much it. Now I'll close and we can get into -- straight into the Q&A process so we can value our time as much as we can.
Operator: [Operator Instructions] We'll start off with first question from Joao Soares at Citibank.
João Pedro Ribeiro Soares: Belmiro, we are in the scenario of disinflation and I think this is going to be important for the sector since the consumers' purchase power is really pressured and with the prices going up. But I want to understand how you guys in the overall Cash & Carry have been positioned, right? We also see the price slowdowns in categories that should be a little less significant. And so if you could explain your expectations and if this could be beneficial to generate more volume. And then we also see this situation with the working capital, right? So could you explain a bit of this effect? And if we can exclude this or how would this impact the third quarter, right?
Belmiro de Figueiredo Gomes: We talked about the closing of the stock after July and we see the working capital and we see this the last half of June for the overall details as we've seen in all sectors was way below expectations. So this ended up making the stock and the quarter ended up being a little higher than what it was stated and as our core objectives, but when it comes to the stock and of our accounts receivable or accounts payable, and our category that we work with also allows us to perform group adjustments when it comes to stock. So the stock that we closed was in June was already 100% normalized. When you look at the inflation, we should see some movements, like some categories of products that had high inflation. And so you would imagine some normalization when you consider batch, that's very positive. And so some of these impacts, of course, our expectation is that they should get part of the resources -- when we consider trade down, it's not only due to a brand substitution, right? And some of these, we also saw the size of the reduction of the packaging and consumers having shorter purchase periods, et cetera. And this could, of course, generate a positive point for us. But what we look at when we consider from now on is that the scenario over the second quarter would be relatively stable and not necessarily repetition because the second semester, of course, is more important than the first, but there's no like big expectations from the perspective of a drop in volumes or so. So the company's focus at this moment has really been towards new projects, including new products, new categories and assortments. As I highlighted in the presentation, maybe in a more broad manner, but the commercial team has also been working on this daily in a granular manner in micro categories, and I hope to have answered your questions.
João Pedro Ribeiro Soares: Yes, you did answer it, but just a quick follow-up on trade down. What do you guys see as trade down and do you think the trade down itself, how much of room do you have to improve in the second quarter. When it comes to volumes, that's clear, but I think this metric would be maybe a driver for acceleration, would you say?
Belmiro de Figueiredo Gomes: Well, it should be. We have to be cautious, though, as we're careful with whatever is happening in the market because the trade down we've seen was not expected from last year and this year, all right. Well, we've had quite tough food inflation years. But when you look at the unemployment rate, even the levels of social programs that we've seen, we wouldn't -- we shouldn't have the levels of trade down we've had in certain categories. So we see there's another phenomenon, which made company with families with lower income, lose even more of their available income. So that becomes more visible when you see this each region in Brazil. And so we're -- in the next season, we should have results disclosed in a more complete manner. But this is quite visible in the Northeast due to other kinds of habits and activities that are forcing the population to this. Should this get back? Well, it should, but if part of this is not due to a lack of income but because of new habits such as the sports bets with BRL 270 million, even if you have more cash coming, this could actually make more money going to the bets market. So we have to be very careful about how we consider this as there's a drop in prices and that we're going to have resuming in trade down because where we see is sometimes the behavior is different. It's not what it should be or how it should be. Was that clear?
João Pedro Ribeiro Soares: Yes, very clear.
Operator: Our next question comes from Tales Granello at Safra.
Tales Granello: I have 2 questions here on my side. I want to understand why you have a higher tax rate, and this is a bit higher than what we expected in last year, et cetera. But I also want to understand a bit more about if you guys are still noticing deflation or a reduction in packages, right, sizes, which would be like this package reduction inflation.
Aymar Giglio: Well, about the tax rates, as Belmiro talked about this also with the smaller packaging for products, but the difference of this net and gross sales, this is related to the movement towards the tax substitution process because of the tax reform. So in Rio de Janeiro, they actually removed some of the products from the tax substitution process. So as this takes place, you have a bigger part of these taxes that would be in the cost and that doesn't really change the gross sales. But just to switch the sale -- net sales, you can see the complexity of this tax system in Brazil. But at the end of the day, these are shifts changes that the states have with the inclusion of categories and removals also in the tax substitution. And then you get into the credit debit regimes and at the inflow and outflow, you have more products paying ICMS tax and then this tax impacts the correlation of the net and gross sales and not necessarily reaching the COGS. I hope that's clear. Belmiro, if you could maybe talk about this a bit and reductions of the sizes of the packaging.
Belmiro de Figueiredo Gomes: Well, good morning, everyone. Thanks for the question, Tales. And just to talk about the reduction of packaging. We -- this is a movement we imagined in a softer manner in '25. But to our surprise, the industry continues to try to search for ways to make their products fit into the consumers' pocket. And beside this, although it's not as strong as what it was in the pandemic or in other periods, it continues to be an important movement. And besides this, we also see that prices -- the modification of the chemical composition of the products produced -- like products like chocolate or juices and cream and condensed milk, et cetera, you have modifications in the actual formulas of the products that keep prices stable, but basically have a reduction in the quality of the product. So the industry has been moving in this direction with the reduction of packaging and the shift in the composition of the products. So it doesn't impact consumers anymore. I hope to have answered.
Tales Granello: Very clear, Belmiro. Now just a follow-up on all this. And this entire scenario mentioned in the beginning of the presentation and even in the release. Having said all of this and considering the fact that maybe price accommodation in the second quarter. Do you guys think it would be possible to accelerate this level and recover a bit of the same-store sales as we had in the first quarter or should it be like a slower second quarter?
Belmiro de Figueiredo Gomes: Well, there is an expectation for recovery. Of course, there are economic scenario factors that could impact this, but the company's focus is to recover. You always focus, of course, on having same-store sales above the inflation not below. But when you look at most of what we have as bets to recover this, we can see a possibility of an increase in share of wallet. So over 70%, 80% due to the new projects the company has considering the customer base we have at the moment. And so also margining, there's a bit of reversals also when it comes to behaviors or trade down. So -- of course, this is a lot more connected to the competitive advantage we have between us and the cash and carries and other retail channels as well. And the biggest bet really that we see up ahead is really from a new project perspective and an increase of the share of wallet. That was already the strategy when we had the acquisition of Extra and really breaking down a bit of the stigma that cash and carries are just for poor people, but really to add this format into all of the customer classes and levels because that allows you to enter new products, selling new categories of products and generating a positive pressure on the same-store sales.
Operator: Our next question comes from Lucca Biasi, UBS.
Lucca Biasi: I have 2 actually. First, on the product mix, if you could talk about the demand you've seen breaking this down into individuals and B2Bs. And if this changed in the third quarter? And the second point is about price elasticity. Could you talk about how you imagine this in the current scenario? And if you guys think it make sense to maybe have a little more competitive advantage in pricing to gain volume?
Belmiro de Figueiredo Gomes: Well, thanks for the question. There hasn't been any big change in the product -- in the customer mix. About 42% of the sales are made to B2Bs. And so well we've seen ever since last year that we had a competitor with the policy to search for volumes, right? There's 2 ways to achievements right, reducing price or increasing terms -- payment terms. So it's very relevant, especially for the reseller public. So looking at the numbers we've seen and that the company has already disclosed that, expanded even more, they burn a lot of cash, and that doesn't seem such a good -- like such a good strategy because the reseller public is really focused on pricing in terms. If you eliminate this public, you can see there's really low levels of elasticity, because consumers have low levels of elasticity. So all of the tests we've been working on since we're in 25 states allow us to have adopt different initiatives. And what we see is there is no price elasticity. So the moment of reducing margins, imagining that it will lead to positive aspects is really not what we've seen at this moment. So that is why we've been working on the maturity and services brought in this improvement in the margins. And if this were the strategy, maybe we could say, okay, well, that would be stable in the margin to deliver 27 bps, but with the same-store sales of 7%, 8% or 9%, but that would not happen. You only see this when you look at the share effect which is rigorously stable. So the best combination that's least worse is the company's strategy. And so the market has not had elasticity. When it comes to customer mix, we haven't seen any big movements in this since. I hope that was clear.
Operator: Our next question comes from Vitor Fuziharo, Santander.
Vitor Jun Fuziharo: The first one is a follow-up for the deflation segment and B2B. So I just wanted to understand if you already see some of a slowdown in B2B with this dynamic. And the second one is if you also looked into different points about the store is maturing. And since you still have this small gap, and I wanted to understand if there should be a sales per square meter that's above what we imagined.
Belmiro de Figueiredo Gomes: Well, Vitor starting off with the last one, there's an issue with the size of the stores, right? The average square meters, considering that the hypermarkets were bigger stores. There is a potential to operate with a sales per square meter, that's greater than the organic store network. But part of this is also due to other projects. And so the objective was really to be enabled to enter new categories of products and expand our scope and so some new projects the company has that are imagined understand this. Of course, the deflation movement, we don't see any loss of stock because B2Bs don't have highest levels of stock with the interest rate, the levels they were at and at the level of purchasing because the consumer that perform trade down was the reflex of the entire population. So even for the B2Bs from food service, they are already operate with minimum stock levels, but the resellers didn't really stock up. So -- our vision is that they should react according to their sales. So their sales will determine the purchase more than a purchase acquisition moment would determine and that's because of the frustration, it's possible to trade down lower consumption level that impacted everyone in the sector. So I think there's a real clear vision on this. And that's probably why the company created a strategy to expand or increase payment terms.
Operator: Moving on to our next question comes from Pedro Caravina at XP.
Pedro Caravina: Belmiro, I wanted you to talk about the private label implementation project. And if you could talk about the main impacts this could lead to when it comes to margins and the potential relevance also for other brands, please?
Belmiro de Figueiredo Gomes: Well, obviously, within the limits of what we can discuss what we see is one of the main reasons for this private label project, is that private label around the world is about 20% of the food sector in Brazil, it's like 2% to 3%. And why does this happen? Well, because you don't want to fall into the same mistake, right? So this is really related to the logistical costs and volumes and tax issues and the objectives are really to try to improve the levels of margin the company has due to the volume. So -- when you look at food service, we have over 60%, 50% of the consumption in Brazil. There are products we have like 40% share. And so when you look at the cities of Sao Paulo and Rio de Janeiro, the shares were really relevant. And if you consider the phase where the company was focused on the conversion of hypermarkets and declining services. And so the implementation of this private label market process, we really intend to have a more competitive price for the B2Bs, and it's also an option for consumers and also considering the pressure in with some suppliers as well considering the size we have and represent almost 50% of our revenue. So this makes us now really be able to implement a project this without having such high logistical costs are being subject to tax issues that may be force you to produce a product with private label, but then you maybe have to face different scenarios with than a regional brand. So regional brands, of course, represent an opportunity that could come from the private label brand. And this is going to start off now in the second quarter -- second semester, sorry, but there is a major potential for this.
Operator: Our next question is from Rodrigo Gastim at Itau BBA.
Rodrigo Gastim: Two quick questions here. First, everything you mentioned so far, trade down in deflation and using the base effect you mentioned in June to understand how the third quarter started. Well, one question I had was when I read the release and the supplier financing that got better in July, matching this with what you mentioned and the improvement in the stocks. Was this due to a recovery in levels of days in stock or was it a nominal stock difference, right? So just to match this would be important? And the second question is what you just mentioned about some of the gross margin projects. I wanted to detail this a little more, right? So how much do you imagine would still be the gross margin issues and where you can still -- you can already capture from the pricing project? Could you share a few of the details about this?
Belmiro de Figueiredo Gomes: Well, yes, somethings, yes, but others you can't. So when you look at the second quarter and you see, obviously, it's better, but if not, we wouldn't have adjusted this as quickly -- so this correction is really related to the number of days. But of course, we have to be careful with this because the second quarter really demonstrated this, right? The performance in April and June was pretty weak, especially for the last half of June compared to what we had seen in April and May. So July is the positive month. August is starting now. So we have to be careful, right, because you could have July positive and then August positive and September being more challenging one. So the phenomenon in June had happened last year as well. We had seen last year that June was weaker -- and then July was getting back to after back-to-school phase. That was strong as well, but now we're going to wait on the third quarter to get a little more details on how this is going to behave, right? So when you see the margin evolution and the levels you've been operating with, you'd probably imagine that it would be impossible a while back. So of course, now keeping the competitive advantage the company has been searching for improving margins and -- once again, I want to highlight that especially what we believe in strongly is the project since once this has been completed, you've had the deployment of this service. And then you also have, of course, the self-checkout of 9%. And so why I'm highlighting this? Well, obviously, in a scenario with higher prices, this would be our objective, right, to keep up this as one of the biggest solutions for bulk shopping, but also for smaller day-to-day shopping. So this is also behind or backing up different projects we've been working on in the company. And when we think about why we share that slide with the penetration per age range or social level, it's really just to show you that there are opportunities for the companies, because if you look at the gender effect or the social level effect and especially the age range effect, it's not very common to see what we have in that slide, right? It's not common for like a company or one specific brand to achieve this, right? It's either variable position for B or CDE or one specific customer profile. Assaí has probably the most complete penetration rate because of this diversity and being able to work with many different formats and people. So if we want to sell a new category or this other person -- this other product, then we have people in the stores that are faithful to our brand and they can buy. So I think that's what we really bet on and that's why we've been highlighting this quite a lot.
Rodrigo Gastim: Excellent. Super clear, but we now just have a quick point of curiosity here, just to understand here on our side, how -- or what happened in June in your perception with consumers? Was it more like from B2B or B2C? Or is it also something difficult for you guys to understand month-by-month, but just a point of curiosity. Is there a highlight?
Belmiro de Figueiredo Gomes: No. To be very honest, it's really difficult. We looked at the market, Nielsen and everything else. And you see that the market overall -- and so when you consider this movement in the next month, it tends to be stronger. And so the next month tends to be fuller -- or the next month would tend to be stronger.
Operator: Our next question comes from Irma Sgarz at Goldman Sachs.
Irma Sgarz: I just have a question about the potential drug store in store. And I just want to get an update. I know that this is still a legal issue in parliament, still hasn't been approved as a law. But I want to get your mindset on how this format has been evolving and understand how this has been going on and so of course, not polluting the ticket of the existing store. And I wanted to understand better about what the mix would be. And so the level of profitability as well, and maybe you don't even have a pilot yet, but I just want to understand your mindset on this.
Belmiro de Figueiredo Gomes: Well, yes, thanks, Irma. As you mentioned, it's a project that is still under discussion. And we've been accompanying this discussion and the way that this new project has been presented. So there was a demand to sell over-the-counter drugs. But now we're working on having a complete pharmacy or drugstore with the pharmacist with all the bonuses and notices and performing the segregation required since we would have a controlled or prescription-only product area. And so we see that it is -- there are challenges, but probably it's not more complex than a drugstore -- than a battery that we already have, for example with refrigerated goods and specialists. So once this is approved, the advantage we would have is that most of the expenses or costs are already in-house, costs like safety, lease, power, and all of this would already be available. So we would have the possibility to be even more competitive in this category. And I don't believe that customers are going to come into Assai to just go to the drugstore specifically. But if they know they're going to Assai and they know they can find certain drugs like ongoing chronic purchases where we want scheduled purchases and people already know about what they need to buy. So we don't expect them to leave the hospital with a prescription to come into Assai, but the ongoing day-to-day shopping is really like when you consider the amount of customers we have today. I believe we do have a potential to address this opportunity as well and include this department into the store because that becomes more than just the department, right? And that's the drug sales outpace Brazil at the same level as other markets that are mature such as Europe or other countries where this already happened. And when you look abroad, it gives us a good idea of what could happen within the Brazilian market. So it is a category that is so important. And it gives us the opportunity to reach other subcategories with vitamins supplements. And as you start having some space for items geared towards health, right? So once this is approved, I believe it's going to be very relevant for our industry as well.
Operator: Our next question comes from Nicolas Larrain at JPMorgan.
Nicolas Larrain: Belmiro, I have 2 points here. You talked about new categories, projects. But could you share like how much this category is representing today for Assai sales and maybe some categories that the company wasn't selling a year ago or 2 years ago? And then also getting back to Irma's question. What's the working capital structure now with this potential sale of pharmaceutical products and drugs? What would be the structure change in the company when it comes to stock, the suppliers, et cetera?
Belmiro de Figueiredo Gomes: Thanks, Nicolas. I think from drugstore, still really early to talk about this. We still need to have approvals and whoever operates with drugs, they would basically have some when it comes to sales and results, but also when it comes to working capital, of course, although you sell, it's not maybe such a relevant volume to change the fundamentals when it comes to working capital. We're just going to reflect on whoever is already in the sector operating considers, right?. So about the new categories, some projects we already discussed now are at the initial phase. Others we've already shared the offsite last year, such as tires. Assai became one of the biggest sellers of tires in Brazil. We had over 4% of the tire market in Brazil and over 5% of air fryers. So -- and the off-site now, we should have more visibility about share and even more, I think probably the other bigger point is going to be captured up ahead considering that a lot of the projects are still starting off and now, of course, the company will gain -- will provide more speed.
Operator: Now moving on to our last question, it's going to be in English, and it comes from Andrew Ruben at Morgan Stanley.
Andrew R. Ruben: I'm curious if you could provide some more detail on the converted stores. I think you said they've reached a bit over 90% of the organic and some narrowing of the EBITDA margin gap. But if you could refresh us a bit on the targets for those figures and how far along you think you are for full converted store maturity?
Belmiro de Figueiredo Gomes: Thank you, Andrew. In fact, the numbers we shared demonstrate their performance, but there still is maturity up ahead. And so most of these projects, especially some of them from an operational improvement level. And so they intend to continue with the store maturity. But there is still some maturities to be hired. It's not a standard procedure because the competitiveness also in the region, et cetera, but you have a similarity among these stores, and they're split into different regions. So -- but of course, getting back to this, they were -- this was a project that allowed for that penetration rate in classes A and B, and that brings us a few different opportunity windows, let's say, to be able to really explore this more and add on more gains and opportunities in the next semesters or years ahead of us.
Operator: The Q&A session is officially ended. And now we will pass the phone back to the company for their final remarks.
Belmiro de Figueiredo Gomes: Thank you, Rodrigo. I just want to thank everyone once again and thank the team. We've seen the market has a lot of challenges from a competitiveness perspective. And before we never expect the same-store sales at this level, but the company has not stopped. The company has a series of projects and innovations. And it's really been the brand that has been a protagonist in changing the sector. So there's a lot of stigma saying that it was good towards lower income public and that brings us a lot of opportunities. But with a lot of hard work, I'm sure we'll make it. Thank you so much, everyone, and let's hope for a great third quarter.
Operator: The earnings call for the second quarter of Assaí at 2025 is officially ended. The Investor Relations department is available to clarify any other questions or issues. Thank you so much for participating. Have a great day and weekend. [Statements in English on this transcript were spoken by an interpreter present on the live call.]