Good afternoon, everyone, and welcome to this call to talk about the second quarter of 2026. No doubt, all of you are anxious as we talk about the decisions made by the company with a lot of transparency as last night.

We're going to talk about this change in our trajectory. We're going to split this presentation into three blocks.

Elcio will talk about the numbers in the second quarter and explain the non-recurring effects. Then we're going to talk about the phase two transformation plan and how the judicial recovery is a real instrument for this plan that's not the destination, it remains the same, a profitable and good discussion, but it's an instrument to be able to solve structural liabilities in the company, keeping the same destination and strategy.

The third block is a Q&A session to be able to clarify any questions on this process. Let's start off here, Elcio, as you talk about the second quarter, and then we'll get back.

Thank you, Renato. Good afternoon, everyone.

Let's head to the next slide. I'm going to quickly summarize the results in the quarter.

The objective is not to get into too many details, but we would like to talk about this from now onwards. Then we have the operational results, right, for the second quarter, which demonstrate a resilient operation despite a more challenging environment, where all of retail, of course, have suffered quite a bit and all of the credit restrictions.

Our net revenue grew 1.6% in the annual comparison. The GMV reached 10.5 billion with an important highlight with the online 1P advancing 15.3% as a consequence of the partnerships that we have that are still performing in a very positive manner.

The adjusted EBITDA, 518 million Reais, with a margin of 7.4%, demonstrating a reduction when it comes to the prior year of 8.3%. This reduction already reflects this macro environment that is more challenging.

It required some discipline in credit granting in a stricter manner, and consequently impacted sales at the physical stores, which are a channel with the biggest profitability. That's a bit of the scenario that we've been facing gradually and has been accumulated over time with this challenge, especially considering the base of our pyramid in Brazil.

When it comes to our cash flow, we had a positive cash generation of 798 million Reais, mostly due to the reduction of our stock, reflecting the redimensioning of the company and the closing of 298 stores, and along with the credit restriction factors that we've observed in this period. Then about the capital structure, we ended with a leverage level that's stable compared to the first quarter.

Let's move on to the next point. Then here's a point I want to discuss a little more.

The numbers that really stamp this are elevated, but we should consider clearer distinction of the impacts here in the second quarter. We had a lot of non-recurring impacts, 9.1 billion Reais in the results, mainly due to this phase two of our plan for transformation.

The main effect, individual effect, is considering the drop in the deferred income tax. We've already performed the same movement in the fourth quarter at a 1.5 billion level, and the company still has the full right to these credits.

At this moment, what we're doing is an accounting adjustment for the recognition of the balance sheet, we keep the right to use these credits in the future. Then due to this plan, on this phase two, we had impacts related to reviewing contingencies and contractual obligations, considering the store reductions.

We had some targets to consider, and due to a lower store network, there's some implications, right? A drop in goodwill, expenses with restructuring, and adjustments related to the fixed assets.

This whole set of factors, and where we're headed, where we're taking the company, and just to talk about the results and numbers in the second quarter excluding these effects, the net adjusted loss would be 980 million Reais. Of course, that's still lower than what we would like, but just considering this trend, it was lower than the first quarter of this year.

Just to highlight this, but of course, the results are still way below what we would like in the future. I want to get back here to talk about the next steps with Renato and talk about the judicial recovery process, the RJ, and our phase two of the transformation plan.

The RJ, for those of you who don't know, would be equivalent to a Chapter 11 process. Let's talk about this phase two transformation plan, right?

Even if you deduct the non-recurring effects, it's still a big loss, and you can see the operational evolution is still not sufficient. Next slide.

Now, I'm not going to take too much time here, but I just want to provide some clear evidence here in consistent margins. It's very resilient despite the macro scenario that we're experiencing.

This evolution operationally is not sufficient to handle all of the liabilities we have and our financial costs. Let's go on to the next slide.

Here we can show you the debt when we talk about financial debt. This was addressed when we reformulate the balance sheet.

For covenant purposes, 0.5 times, and you have all of the liabilities and adjustments required in a more structural manner. The cash flow, as Elcio mentioned, has strong evolution over time, demonstrating this operational evolution.

For the first quarter of 2026, we had a strong effort here captured through extending our payment terms with suppliers that did not represent an increase in credit limits, and then that was benefited by the reduction of our stock. Yes, the operation has been working, but from a liquidity perspective, it's pretty tight, right?

We can move on as we talk about this scenario change and our adjustments. When we finished back in the end of last year with the conversion of our debt into equity in the 31st of December, we established this to the market.

In March, we had an Investor Day, and then we demonstrated our optimism. We had this macroeconomic scenario that was very positive, and it was an all-time high for foreign capital, and we had a lot of companies also working, and some equity transactions, IPOs and follow-ons, and we had these four expectations.

First, negotiating with the new balance sheet, this new payment terms with our suppliers. Then we were able to.

We had relevant extensions, and that helped with our working capital. Second, we wanted to have this new balance sheet and increase our credit limits and buy the same amount or even a little more, but we weren't able to.

Then in April, we started having this very different macro scenario with war in the US and Iran. We had pressure also from petroleum going up, prices, and due to this war, that was an inflation impact.

We had electoral confusion, some scandals generating a lot more volatility, and that brought a lot of impacts to the interest curves, which led to a reduction in our credit availability, right, compromising our purchase capacity. We had two relevant initiatives.

One was for debt in the international and national markets. Then looking at the equity markets, we did consider it would be possible to have a follow-on after the balance sheet adjustment due to the transformation we're working on the operational evolution.

In the end of March, when we had this non-deal roadshow to understand market perspectives and see if we had a window or not, but in April, the equity's window was closed completely, and this hypothesis was discarded by the company. The debt transactions, we worked on some different things in the local market, and then we continued to advance, and we had some relevant structural changes, right?

In this shift in the macro and geopolitical scenario, this extended, and we had an increase of costs going up, pushing over month after month, and we weren't able to close this. Transaction was not completely cancelled, but we don't have an effective date or commitment that would give us necessary security for this, right?

We considered that we weren't able to bring this in in the second quarter. We had a significant reduction, and so it would be really difficult for us to continue, right?

That's when we started this phase two transformation plan, and how would we have this profitable operation, but with this new trajectory that could go through this redimensioning of the company, right? That I'm going to discuss in greater details now.

When we talk about the transformation plan phase two, what changes is, well, we have the same commitments, but what's changing is the size, right? In this environment with greater cost of capital and credit restrictions, we really need to redimension the company to a size that can be self-funded, right, and how we can bounce back to have a healthier cash flow, right?

The plan, one, we wanted to improve the macro environment. This would make it easier for us to bring in operational leverage through growth, and so really leverage the structure we have, but we went back to that structure we had: redimensioning and prioritizing cash generation and profitability; and third, anticipating this, right, not reacting.

The balance sheet had been strengthened, and with this, we had to adjust the company normally in a strong manner to be able to defend the operational gains that we had already conquered and improve, of course. When I redimension this, I'm going to cut off channels and stores with less profitability, making the company have higher profitability in the EBITDA after this redimensioning, strengthening the cash position.

Let's move on with more details here, and then we'll explain what this transformation plan phase two would be. When we talk about redimensioning the company and optimizing the employed capital and having a sustainable operation, we go through these eight pillars here.

The first one is the closing of the less profitable stores. It costs cash, right?

It costs a lot to redimension, and we decide to hit the button and just eliminate the non-profitable stores in the company that consume capital with less penetration of the buy now, pay later like carnê and we have seven percentage points less in these stores, so that compromises the profitability. Then the profitability also on online channels and the cash flow pressure, we've kept some channels where you had negative margins, and that sometimes is part of the funding, right?

You have deadlines with suppliers, and you're kind of relying on this, right? We made the decision to cut down on these and make the company more profitable in the mid-term, right?

We have some non-core assets that could be monetized, and we need to accelerate this, and we need to have an instrument that can allow for this. We had major reductions.

We reviewed all of the projects. There's major optimization when we consider expenses, right?

We had a reduction of CapEx, almost 40%, with essential projects only. There's a lot of advances, and that allows for the developments that are relevant, such as migration to the cloud and adding all of the systems for modern technology.

We continue to advance, but with a lot more productivity. Reduction of financial costs, we need to renegotiate and rebalance the credit facilities, and redimension also the quality of the stock, size and quality of our stock.

We adjusted the cluster with aging rules also for the company, and of course, restructure all of the liabilities, the company to preserve these pillars of our operation, keeping this healthy operation, right? When we talk about reformulating this, that's when you get into the judicial recovery as a necessary instrument to do this.

Can we move on? Now we can give you more color here.

What we're considering here is we need to perform this phase two of our transformation plan, but also protect the company's cash position and guarantee the continuity of our operation, and the liquidity restriction was kind of putting this into check, right? You guys saw the comments from the audit from auditing firm as well, and that's an important instrument to strengthen this, allowing us to have short-term credit facility availability and monetize those assets to preserve the pillars of our operation and having a more stable continuity of our business here, negotiating in an organized manner with all of our creditors with this plan that will provide the sustaining that we need.

Now we're going to talk about how this will be up ahead, right? With this instrument, the company's strengths will be preserved, and it's worth mentioning here that a tool like this, judicial recovery, used to have very different impacts in the past, in the last few years, right?

Unfortunately, because of the macro scenario that's very challenging, we had a big amount of restructurings of different companies judicially and extrajudicially, and the stakeholders market really matured a lot with these tools. In our case, we have another advantage, the fact that our commercial scale gives a lot of relevance and interdependence with the suppliers network, which allows us to have good agreements because everyone wants to make the business work, and the biggest asset here is the company's operation, right?

When it comes to creditors, we have major interdependence. We have material numbers with big concentrations with two big banks that allows us to negotiate this in a more organized manner.

Credit also gives us a lot of relevance with customers, yes, there is an expectation of having more stability in sales than in the past, right, where we had major ruptures. We have operational continuity in the existing channels and stores.

We have more sales channels working and plugged in to continue to sell. We have logistical infrastructure that's still capable of monetizing and freeing these resources, and we're going to continue working on this.

When we look at the bottom part, we have opportunities to unleash value that are the same, right? When we look at this scale and working on the opportunities that are going to contribute a lot to this, right, we can see the evolution and a lot of upside, right?

We need to kind of eliminate the weight of this structural liability that we haven't been able to address yet, and we've tried to address this without a judicial recovery with other gradual movements, and considering the size of the liability and the diversity of this macro scenario after the third quarter, we consider this to be the best choice with the guarantee of the continuity and using this judicial recovery instrument, right, to be able to organize these liabilities. Now we're going to pass the floor on to Gabriel to start off with the Q&A and answer some questions, and provide a little more color on any points you may desire.

Thank you so much again for your presence.

Thank you. Good afternoon, everyone.

Now I'm going to call on Alexandre from Morgan Stanley for his first question. Alexandre, please.

Hi, good afternoon, and thanks for taking our question. We have two here on our side.

The first one is, in your presentation, after you talked about how the size is a consequence and not an objective, right? Of course, at the end of last week, we saw the news, and you talked about the closing of those stores as well.

I wanted to understand if this is the final adjustment, or if we should wait and expect any other plans for even more closings of stores up ahead. The second question is, you also talked about the focus on profitable sales from the online channels.

In this sense, I wanted to understand how you guys are considering this strategy, right, for the sales within the marketplaces you announced throughout the last year basically. Those are the two questions.

Thanks.

Thank you, Alê. First, we chose to have a single wave, and that was an operational challenge with the execution there.

We understood that would be the best way to do so, right? You solve this all at once, you don't have this anxiety for future adjustments.

We looked at all of this and did the numbers to understand what would be feasible for the company, what would be this fit in the future after these short-term impacts. This was an adjustment we had to work on, eliminating all of the stores that were kind of in the ICU that could maybe impact a possible closure in the future, right?

In this macro scenario, this is really the size that would fit. When we consider the profitable sales for the online channel and how this would impact partnerships, we were very vocal in the last quarters mentioning that the marketplaces were kind of on average of our digital channel.

We have organic sales with more profitability, but then you have paid sales and commission sales that have worse profitability, right? The marketplaces are also a means to make the operational adjustments feasible as we're working on this in our digital channels, right?

Some operations in the digital market are really expensive, and then it's better to use our reach with the marketplace. It's more profitable for the company, more efficient, and also part of this process, right, to cut down on these less profitable lines, right?

Increased prices, and then you have elasticity that can actually adjust this to the size we chose, which would fit in when we look up ahead. Thanks for the question, Alê.

Thank you, Renato.

Thank you, Alê. Now we're going to call on our next question from Wellington at Bank of America.

Please, you may proceed.

Hi there, guys. Can you hear me?

Yes, we can. How's it going, Wellington?

Hey, good afternoon, Renato, Gabriel, and Elcio. Thanks for taking my question.

I have a few actually on my side. When you guys talked about the macro scenario, I think you guys really nailed the point on the capital structure and how that affects your different strategies.

I wanted to understand this from the other perspective, right, from a consumer perspective. How do you consider consumption today at the stores, right?

Because I want to understand if this plan you guys consider is already kind of incorporating the worst-case scenarios, or if there's still space for some additional adjustments, right, if we see any kind of deterioration or worsening or even a more slowdown in the economy. Then I also want to understand what you guys consider to be the assets that you could monetize in your base, right, just so we can consider this from a strategy perspective and where the assets are, and also from a scale perspective.

Thank you.

Thank you so much. Wellington, thank you for the question.

Let's start off with the macro scenario and consumption first, right? From credit, I think it's very clear for everyone in that financial market with the difficulties of credit restrictions in Brazil.

When you see consumers, there's three factors, right? The interest rates that are so high, obviously it becomes a lot more expensive.

The consumer power among Brazilians is limited, and for durable goods like ours and as discretionary, this interest rate can impact prices. Then family debts, right, which are higher and higher, impacting our credit granting, concession capacity, right?

We've been a lot more restrictive with credit granting. Then there's an aggressive dispute for the available budget among consumers, right?

In the new channel, you have new numbers appear every day with a capital consumption of the bet companies, and that consumes available income for families, right? You can see this when you look at the physical stores versus the online 1P, where the pyramid is a little better from a rating perspective, and you see consumers a little more resilient.

When you look at the higher classes, there's more resilient consumption, and these are considered almost essential. When you have lower-income customers, then you have more challenges as they rely more on credit, right?

We're not considering an improvement in the macro scenario, right? We consider phase two considering worse scenario in 2027.

We understand that debts will continue. We understand some levers provide a little more oxygen to consumers like the buy now, pay later or payroll credits solutions, but we could still have some deterioration in the credit scenario.

We looked at this. Our cutoff is pretty big.

We eliminate almost 30% of the stores and the costs, but in practical terms, we're going to reduce our revenue a little more, but you still have the infrastructure necessary to recover growth in this same structure. We don't have this expectation in the next two years.

We consider that we need to look at a very realistic feet-on-the-ground approach with a challenging macro scenario until we actually feel if we can have more trust in this macro scenario. We dimension things like this, and we don't plan to have more adjustments.

Of course, every year, the macro scenario gets worse, and if it does get even worse, then we're going to have to go back and do our numbers, right? If we consider the base scenario, we already did what needed to be done.

When we look at the assets, we can mention everything. The company does have a lot of fiscal credits and non-core assets.

The judicial recovery instrument allows you to have structures that can provide a little bit more protection to negotiate these assets, right? Yes, there could be more attractiveness among some assets.

We've already had a lot of funds contact us today as they would like to consider this, and this instrument brings more protection to these creditors that are willing to acquire any of these assets. There are different kinds of assets, and we're going to dispose this to the market at the right moment.

Thank you so much, Wellington.

Just wanted to add on one point. I think in your question, you talked about the capital structure and the macro impact.

Of course, the interest rates impact directly our financial expenses, and then, of course, the credit as a whole. In Brazil, you have the private offering, right, of credits.

Just another important point to talk about, delinquency in Brazil, which has gone up, right? When you look at the same tax ID and you compare with a year ago, you see sequential worsening of this credit, right?

Our portfolio, we haven't even brought it here, is still quite resilient and at the same levels as delinquency and loss rates and the same portfolio size, right? Of course, with a restriction towards credit granting that's a lot more disciplined and rigorous, looking at this delinquency as a whole in the market.

We, of course, in a macro scenario that's worse, that should be more impacted. Then as you also have the economy improving, we also worsen this, and then we'll be able to face these waves, let's say, positively and negatively in a more accelerated manner.

Great, thank you so much.

All right, thank you, Wellington. Now, Renato and Elcio, we do not have more questions here, I'll pass the floor back to you, Renato, for the closing remarks, okay?

Thank you, Gabriel. Thank you, everyone, for your participation.

It was a quite intense quarter. We have a real adjustment need here.

We see all of the company's strong points with a lot of value creation potential, but we had to take on this important tool to preserve the company's continuity and really protect the operational stability and organize this negotiation with creditors so we can define the cost of all of the liabilities the company's carrying on, right? We're excited about the future.

We have a lot of work ahead. We'll get more details about this, and as always, we'll keep the market aware with all of the necessary transparency that the best governance practices require.

Thank you all. Let's keep selling.

We have a lot of special deals, a lot of new opportunities, and support from our suppliers as well. You can count on us to buy your home appliance, phone, or computer.

Thank you all. Have a great afternoon.

Take care.