Good morning. Welcome to the video conference to announce GPA's results of the second quarter of 2026.

If you need translation, just click on interpretation button in the globe icon at the bottom of your screen and choose your preferred language. The information contained in this presentation and any statements that may be made during this video conference regarding GPA's business prospects, projections, and operational and financial goals are beliefs and assumptions of the company's management and are based on information currently available.

Forward-looking statements are not guarantee of performance because they involve risks, uncertainties, and assumptions as they refer to future events and therefore depend on circumstances that may or may not occur. Investors should understand that general economic conditions, market conditions, and other operating factors could affect GPA's future performance and lead to results that will be materially different from those forward-looking statements.

Today with us we have GPA CEO, Alexandre Santoro and GPA CFO and Investor Relations Officer, Pedro Albuquerque. Now, I'm going to give the floor to Mr.

Santoro to start the presentation.

Thank you, Rodrigo. Good morning, everyone, and thank you for being once again with us here in announcing the results of the second quarter of GPA.

This is a second quarter that starts to show the first effects of the changes that we started just over six months ago. We have advanced in profitability, reducing costs and expenditures, and strengthened our financial discipline.

Obviously, we still have a lot of work ahead of us, but the initial results start to show and indicate that we are going down the right path. When we arrived here in GPA, we found a business, brands with strong assets, very loyal customers, with a huge potential to generate value.

Over time, the company has become very complex. As the business has reduced in size and changed its profile, it has not simplified in the same speed.

We started to carry structure, processes, and systems which are no longer compatible to the new reality of GPA. This complexity has increased costs, reduced agility, and made the execution at the edge more difficult.

This is why our first decision was to return the focus to the company: a focus on customers, a focus on the operation, a focus on executing the strategies, and discipline and strictness in using our resources. The big challenge here is to concentrate energy on what is truly the point and to make the basic things very well done.

It's with this vision that we've defined the three main priorities for GPA: to increase our customer's experience, to increase operational commercial efficiency, and to strengthen financial discipline. Talking about the first part, which is client-centricity, since the onset, we have strengthened that it has to be at the center of all company decisions and improving the experience at the edge continues to be our main priority.

The behavior of consumers has changed. Today they mix different channels, formats based on each occasion and purchase journey.

The same customer can have a purchase to supply in a supermarket as Extra, uses Pão de Açúcar for buying perishables and high-added-value products and all, and uses Minuto or Mini Extra for purchases during the week. They always have the option of using the convenience of e-commerce depending on the moment and the needs.

Our responsibility and challenge is to guarantee that each one of these flags has a clear value proposition, which is relevant and well executed. We also believe that a company with a presence of GPA needs to deeply know the characteristics of each market we are in.

A more regionalized management allows us to offer a better supply, increase frequency of customers, and to strengthen, as a consequence, the relationship with them. The second priority we decided is, obviously, the operational commercial excellence, the heart of our business.

Efficiency doesn't mean only to reduce expenditures, it means to reduce complexity, revisit processes, adequate structures, increase productivity, and enhance the quality of our operation. This is something which is ongoing and involves the entire organization: our systems, logistics, stores, and even the way in which decisions are made.

The same logic guides our investments. We will not grow just to grow.

We will use capital and direct it to where we have higher return: proving our stores, the stores that already exist, to strengthen and enhance our logistics, and to increase the productivity of assets and, at the end of the day, enhance our customer's experience. The third pillar is financial discipline.

This means that we have to make choices to allocate capital with discipline, control expenditures, and increase cash generation. It is with this mentality that we have structured our efficiency program.

We have already advanced in reducing costs from the organizational structure to general expenditures, identifying a series of additional opportunities which need to be captured with speed and urgency by our team. This agenda also requires a change in culture.

We need to have a more simple organization with clearer priorities, quicker decision-making, and greater responsibility on costs, productivity, and results. For this to happen, we need to have a team aligned and engaged.

Today, we are over 35,000 associates placing this strategy in practice every day, store by store, distribution centers, and here at our service center to the stores, which is the way we call our headquarters in São Paulo. This only exists for one purpose, which is to make the lives of those who are out in the field easier.

A strategy alone, we know, does not transform a company. Execution transforms it, and it is our capacity to make this company more simple, to change the way we work, and to execute with efficiency, which will determine how quickly GPA is able to recover.

Going now to the second slide, this is one of the most important steps to highlight this part in my presentation, that in order to make this agenda feasible, one of the important steps for us to execute it was to reorganize the financial structure of the company. When we arrived, we found a company with an indebtedness which was incompatible with the business reality, and especially with the debt expiring in a very short term.

Only in '26, we had approximately 2.3 billion reais in debts expiring, and this concentration of obligations and passive in the short term used cash, limiting our flexibility and restricting our capacity to execute any strategy. It also would take an important amount of the time of the company's leadership.

That is why, amongst the options we had, we decided to have our extrajudicial recovery process. We understood it was the best manner to enhance the company's financial situation, continuing with what we continue to believe is unnegotiable: the operation, our customers, our associates, our suppliers, and our stores.

In May, we protocolled our plan with the support of creditors which represented over 57% of the credits for this process. Then after that, approximately 95% 95% of the creditors opted for one of the participation with a very low number of questions, which shows that this is a balanced plan.

At this moment, we are waiting for the judicial approval, which we hope to conclude during the third quarter. The impacts are very significant for the company.

The debt at the end will reduce in more than 50%, the average term will go from approximately 2 to 6.4 years, the cost of CDI + 1.8 to .5, and the consequence of all of these factors is that the payments from '26 to '28, which were foreseen of approximately 5.2 billion reais between the principal and interest rates, will be reduced to 400 million reais. Above all, more important than these numbers is what they will make possible.

Our recovery process was an instrument to strengthen the company and not an objective in itself. Our objective has always been to create the conditions for GPA to concentrate its energy on what really adds value: customers, operation, and executing our strategy.

The approval of this process represents an important step in this direction. It gives us back financial flexibility and creates the conditions to accelerate the operational transformation of our company.

That is what we continue to be focused on day in, day out, because at the end of the day, credibility is built through execution. Now continuing with our presentation, going to slide 3 to talk a little about our quarter performance, and then Pedro will go into more detail.

The results presented start to reflect the changes which we started throughout the last few months. We are still aware that we are just at the onset of this journey, but we already have a relevant evolution in indicators we consider to be crucial for the recovery of GPA, which is profitability, operational efficiency, and financial discipline.

At the same time, we are aware that we still have relevant challenges ahead of us, especially to have a growth of sales and to strengthen cash generation. The second quarter had factors which were timely which impacted our revenues, and at the same time where we follow decision-making, which is important to have a more simple, efficient, and better prepared company to grow in a consistent manner.

The total sales reached 4.7 billion reais, which is a reduction of 7% compared to the same period of last year. This performance was influenced above all by three factors.

The first was the temporary impact of our recovery process on the supply of stores. The announcement of this process create a care by some of our suppliers, temporarily increasing our levels of stockouts.

We were very close to our commercial partners in order to minimize this impact. I would also like to make a recognition of the majority of our vendors, which were big partners during this entire process and continue to be so.

The most challenging moment, as you can see in the graph, took place between April and May, right at the beginning of this process, and in June, we already are able to see an improvement not only of supply, but allowing the growth of sales in this graph, which is comparable in the same moments. The second factor which led to the drop in revenue, we made some decisions to improve the quality of the business.

We prioritized operations and channels with a greater capacity to generate cash, discontinuing the format of Aliados, Allies, and rebalancing initiatives in e-commerce and a more regionalized management of our product supply. Our objective continues to be to grow, but to grow maintaining profitability, generating cash, and return on invested capital.

The third factor, which obviously impacts the revenues, is the macroeconomic landscape. The food retail as a whole operates in a very competitive and challenging scenario.

Despite indicators such as employment and income continue to be resilient, consumers have growing pressure on their budget: high interest rates, greater indebtedness, increase of default, and a higher fight for this available income. In this context, this changes the behavior during the purchase process, and we permanently need to adapt this sector.

Despite this environment, we continue to advance in executing our strategy. Though in an environment where we reduce our revenues, we are able to grow our EBITDA in 7.3% compared to the same period of the last year.

We were able to obtain more than half of the efficiency foreseen for the year. We've reduced cost and expenditures in a relevant manner and strengthened the profitability of our operation.

These results do not mean that the transformation has reached an end, far from that, but they show that the strategy is starting to bring concrete results. Now we need to speed up this process.

We still have a lot to do regarding adequating our costs and contracts, for example. We shall continue to simplify the company, bringing new efficiency opportunities, strengthening cash generation, and creating the conditions to continue to grow in a consistent manner.

That is what will determine the speed in which GPA will recover. I will stop now, and I will give the floor to Pedro, my partner and CFO, to detail the financial performance of our quarter.

Thank you, Santoro. Thank you, everybody who's with us.

Now continuing on slide 8, I would like to highlight the evolution of gross profit and adjusted EBITDA. In the quarter, the gross margin reached 30.5%, an expansion of 3.1 percentage points compared to the same period the previous year.

This evolution was explained mainly by three factors. The first was profitability, a prioritization strategy, the rebalancing of e-commerce sales mix, and other profitability actions.

The second was the change in certain products of the ICMS-ST regime to ordinary ICMS. Finally, we had incremental and non-recurring recognition of credits.

These factors had an impact in the contribution of gross margin expansion. We move forward with rigor and discipline.

We want to implement continuing improvement and the very judicious use of resources to improve the experience of our customers. In the quarter, SG&A had a face reduction of 23 million or 2.6% year-on-year.

In real terms, considering accumulated inflation of 4.6% in the period, the reduction was of 6.9%. As for CapEx, we invested 162 million BRL in the first half of the year, down 55% compared to the same period the previous year.

This reduction mainly reflects the greater selectivity investments in technology and logistics and discontinuation of the plan to open new stores. We expect to end the year with investments between 300 and 350 million BRL.

At the same time, we continue to prioritize essential investments for store maintenance. In costs and expenses, we captured 244 BRL million in gains.

These results reflect mainly the adaptation of the workforce, the review of relevant contracts, gains in operational efficiency in freight, and implementation of new spending policies. As a result of this set of initiatives, the adjusted EBITDA margin reached 10.6%, up 1.7 percentage points compared to the previous year.

Moving to slide 9, net loss of continuing operations was 204 million in the quarter compared to Q2 '25 adjusted for the positive and non-recurring effect associated with tax proceeding. The loss was reduced to 28.5%, reflecting the operational and financial advances mentioned before.

On slide 10, you can see the evolution of cash flow, which was influenced by two important factors. The first was a more cautious posture of suppliers, and then were very diligent in managing these commercial relationships, seeking to preserve supply and limit levels of disruption.

Even so, we had a reduction of 12 days in the average term of suppliers, with a negative impact of 677 million BRL in the annual comparison. We have already observed a recovery of the times after the conclusion or the completion of the definitive agreement.

Another relevant effect for cash flow was the sale of sticks, which resulted in a disconsolidation of 185 million. Excluding this accounting impact, we generated 663 million BRL in operating cash flow after CapEx.

This generation was supported mainly by three factors: first, the evolution of the adjusted EBITDA; second, improvement in the line of other non-operating assets and liabilities; and third, a reduction of 287 million BRL in CapEx in lining with initiatives in the efficiency plan. Also considering the improvement of 236 million in line with operating revenues of expenses, free cash flow increased by 267 million compared to the previous year in the 12-month period.

The quarter's results already reflect part of the benefits of the initiatives implemented by the company. At the same time, this has been a difficult quarter.

We remain focused on executing our strategy with the aim of resuming sustainable sales growth, improving profitability, increasing cash generation, and maintaining a disciplined capital allocation. Now I'd like to give the floor back to Santoro for his closing remarks.

Thank you, Pedro. Before opening for Q&A, I'd like to leave a last message.

In the last few months, we have taken some very important steps to build the basis of our GPA plan: to strengthen the company's financial conditions, we've started to simplify our structure, we've reduced costs, and obviously with a focus of increasing the efficiency of our business. The quarter's results start to show the first effects of this work and job, but we are very much aware that this journey is only at the beginning.

We still have important opportunities to capture here, both in the operation and reducing costs in productivity, and as a consequence, in cash generation. Our focus will continue to be exactly the same: to place the customer at the center of decisions, simplify the company, execute our strategy with discipline, and to build an operation which is more and more efficient and competitive.

The results of the quarter point clearly that we are in the right direction, and it is now up to us to be able to speed up this transformation with focus and discipline and execution capacity. That is how we will build a more simple, agile, and better prepared company to generate value for consistency with clients, associates, vendors, and shareholders.

Thank you very much, and let us continue now to Q&A.

Good morning, everyone. Thank you very much for this opportunity, for accepting our questions.

Congratulations for your restructuring plan. I have two questions from my side.

I think the first question, and I think you very well touched the situation on the negotiation with vendors, that you had some stockouts during your recovery process, but I'd like to understand, I know that this is close to being normalized, but I'd like to know if there has been any change in terms of payments, obtaining funding, etc., with your vendors after this situation has become more normal after the month of May, to understand if you are now working with a different approach in terms of cash availability, and we'd want to know how the situation with vendors is currently. My second question, you're currently making a very significant advancement, especially in G&A, but I'd like to understand what you highlight as the main internal changes, how do you see what are the main leverages which still are available, and how are you balancing this reduction of cost and customer's experience in the store?

What do you see that you're going to be able to handle very well this cost reduction and to maintain customer's experience in stores? I think those are my two questions, please.

Thank you very much.

Wellington, thank you very much for your question. As you very well mentioned, I'm going to go a little bit into the dynamic with our vendors and cash flow.

Obviously, when we do this out-of-court restructuring process, this is something which allows us to define the perimeter: vendors, clients, rents, etc. This is never part of the big dealings, right?

All our operational vendors were all protected, and we continued without any delay, with any default, in no way whatsoever. Obviously, this is something which generates some noise and concern, therefore we've had to adjust some specific aspects in negotiations: the amount of limits we had, and that's...

This was natural. There were some business processes, and what was going on.

As we started the reorganization and once we normalize, and there is the final agreement, and we somehow recover, and then we move on and continue with the objective of finalizing the approval to go back to more normal levels in terms of working capital. This is what we've been seeing, but we didn't change anything more structural in the way we operated.

I don't think there have been any major changes. Much to the opposite, I think that the process has been very intense and strong throughout the process.

Now, following on your second question, Wellington, and thank you once again for the opportunity, but going to more detail. Now sort of discriminating what's been done and what we still have to do.

We have reorganized, first, structure in terms of staffing and personnel. We had clearly an opportunity of streamlining not just the administrative headquarters of the company, but also some operations in some regions.

We did this with a lot of discipline. Part of your question is how can you isolate the customer, what is clear is that we want to have the right staffing per store, and this is the last thing we are going to do something about.

If there are any changes, it needs to be done. We are very clear understanding of the reality of the store in order to avoid negative effects because we were losing sales just because we didn't have the appropriate structure.

We're very surgical, very accurate, precise in some stores or some of our units that could have some adjustments. This was more in administrative, but with no impact on the day-to-day operation of our units.

The other area with relevant gains we still have opportunities, we have centralized direct purchase, but everything that is indirect for the company, this was very much decentralized. Our company has lots of departments, lots of people, lots of contracts all spread throughout the company.

There was an area we reinforced in redesigning the company, and there have been significant gains. There is new negotiations, sometimes it's service provision, cleaning, rent, labor, third parties or temporary labor.

Many things. A company as big as complex as us has great benefits once you centralize these kinds of negotiations.

In parallel, we also have an expense committee. All expenses maybe it may sound too much, above 40,000, it's not 40 million, it's 40,000, needs to have an approval.

Then we want to leave some ideas that might be good, but we're no longer doing. One thing is to renegotiate, to buy better, to speak, to find new partners, new suppliers for these indirect services, but there have been decisions of no longer doing things that were not priority at this time of the company.

This sets the backdrop for many things and things that we have already captured. There is a capture of gain in terms of cost reduction.

When we streamline, we have associated costs in terms of terminations, the benefit is yet to come, more than we saw in the first quarter. There have been a number of initiatives that were implemented, and I'm going to give you more details further ahead.

There are some specific adjustments to be made, which is natural in terms of structure, but there are two major initiatives where there is a lot to be done and is not going to be done in one month, they're going to be done over the next few months. I would point out logistics and technology.

Logistics, clearly, I can give you examples. We have a logistics system that has been designed for a reality that is no longer true, we have distribution centers with idle capacity.

This is because we had hypermarket, it's different structure, big units, but now we have some idleness. Our business, you know very well, the margins with which we operate, it's impossible to have any idleness.

These are contracts and not easy to solve, they're not simple problems to solve, but they're being addressed with focus and discipline. I think logistics both in terms of redesigning distribution centers that we have already started doing and we have recently announced an action, and then freighting, contracts, distribution partners on the last mile of our business.

Logistics is an important aspect considering the size of the company and our complexity. Technology is important.

These are changes that are kind of complex, and we do things with lots of responsibility considering a company as big as ours. Just to give you an example, we have mainframe.

We operate with mainframe. Aside from banks, I don't know of any other companies working with mainframes.

This is a heritage, a legacy system. Today we don't have much flexibility because of the mainframe, many different systems that do not interact with each other as they should.

This is cost. It's cost not just in terms of structure, but also in terms of expenses with suppliers, different systems, which is not reflected into productivity.

If I could summarize, a lot has happened, there's a lot going on right now, there are relevant things going on right now, but we're being very responsible when we talk about our units and how we define them. We have a specific department where we can define the size per sector, and we're being very accurate in doing that.

There is a significant set of stores, we have more staffing. We have increased the head counting instead of reducing because we wanted to have the appropriate head count, but well in some other places it was the opposite.

We've been doing it with lots of discipline and a very close follow-up.

Thank you very much, that was very clear.

Good morning, everyone. Thank you, Santoro, Pedro.

I have a few questions here. The first is I would just like to confirm something which you've mentioned in your initial comments regarding the gross margin.

If I understand well, the gross margin was split more or less between those three different channels and also the credits. I just wanted to confirm that item.

My second question is related to FIC, you were still waiting for the Central Bank to approve the operation. I want to know if you have advanced in obtaining a new plant for the stores and if you're able to share how much this could be in terms of money available for the company.

My third question is related to your tax partners. I'd like to understand if you have any update on that process and anything you can tell us would be very welcome.

Thank you.

Thank you, Nicolás. Let me go here to the more financial issue.

Yes, you are correct. The impact is a 300 one It's normally 1/3, 1/3, 1/3.

Yes, that is in line with what we said. Regarding FIC, we already have met some of the conditions for the wrapping up of this transaction.

We have the approval of the Central Bank. We continue operating.

Again, just reminding you that this is a JV which is linked to Casas Bahia, SA, and this is a relationship of several different parties, including Itaú Bank. We are looking at this step-by-step.

Once again, always trying to maintain the customer's experience, and this is a bit in line with your next question, what we will be doing. We don't have a clear forecast.

We think this is something which will go towards the beginning of the year, and it ended up being a bit delayed on the Central Bank process. Regarding the exploration of the financial bank services, we are studying possibilities and potential partnerships.

I believe that this has to be dealt with very carefully because I believe the FIC is something which has had objectives and priorities which are slightly different when this has become a partnership with much complexity considering the amount of partners. Then remembering this, like everything we are doing here, we're trying to set up a strategy which works for the different flags we have and different formats, and financial services will also be talking with this design.

Now in the beginning, in this recovery process, we might delay the definition of this service because we have to have more clarity on what we're going to develop with this partner. That's not something that we're going to be doing the short term, I can't tell you exactly what would be the impact and value, but obviously, the Pão customer has a very relevant value for the exploration of this type of service.

We see this in the card. In the last aspect regarding the tax partners and what is the negotiation status, we have been advancing.

This is nothing new to report to the market. As soon as we see a transaction, we will see this.

This is something that I've arrived 5 months ago, and we have had very interesting conversations with this process. I think this out-of-court recovery process in a certain manner helps us to look at the sense of urgency and all the issue of Capag, how we can evolve this, and this comes from speeding up some of the processes inside the attorney's office and the tax revenue service, but we have nothing to share with the market.

As soon as we have any information, we will share this with you and update this with the rest of you.

Thank you very much and congratulations for the advances you have obtained.

Thank you, Nicolás.

Hi, thanks very much. I'm curious if you could detail a bit more about the consumption backdrop, how you're planning for the second half compared to the first half.

We saw you mentioned the impact of sports betting. I think that was a new call out, just to understand anything behind that specifically.

Then, bigger picture, if you're seeing any divergence by banner, by socioeconomic class, or the talk of consumption difficulties is more broad-based. Thank you very much.

Your first question on the consumer behavior in terms of indebtedness and above all, the issue of what we are seeing for the future, if I understood your question well, Andrew, I would say that we're not going to see any change in this sense. The macro scenario today, I think food retail has always had a very correct relationship to income availability.

If you had an increase in income, a reduction in unemployment, this naturally generates an increase in consumption. We have not seen this for some time already.

The scenario is slightly different. You speak to our competitors and to specialized people in the sector that do research and have data readily available, what we see is that the performance has reduced a bit, the income has improved, but consumption hasn't increased.

It's over 20 months that the sales and volumes in our sector as a whole reduces, it drops. This is a trend which is few signs of improvement in the short term, and this is for several reason.

I think income, the letter of interest rates that we see, obviously, the families are becoming more indebted and are consuming part of this additional income in this indebtedness because of a natural situation of interest rates. Today, the habits have changed a lot.

I think people have streaming services and very similar things at home, which end up consuming part of their income. Sports betting, I think become something very important in the country.

We have access to service that shows that 26% of homes that declare, obviously, the number might even be bigger, 26% of households today bet, they get part of their income and use it to place bets believing that a bet will increase their income, which obviously is not what happens. In this type of survey, which we've been able to go more in depth in, the half of these people that place bets, 50% of them adjust their budget in food purchases.

Let's suppose if a person places a bet, the income that already had some restrictions has improved a bit, what is available is reduced, and the main adjustment placed in the household in that example ends up being in food. That is a fact that is happening.

We can see that our other competitors, everyone is saying the very same thing. At the end of the day, we are competing for this available income, which is not only a competition in our sector, it's a competition with new habits and other aspects, and obviously, the macroeconomic scenario.

I'm not able to see a reasonable timeline where we will see a big shift in the scenario. It is much more how you adapt this, how you create a supply and be more appealing for your consumers for you to grow in this dispute.

I said this very quickly at the beginning: the importance of the product supply, regionalization of the appropriate value prop for each one of our formats. In that sense, you have the issue of the pens, which I'm not going to go into much details here.

This is a habit which is going to change, the weight loss pens. This is a situation which we have an important burden in terms of fruits, vegetables, proteins.

This is a very big level in Pão de Açúcar as these are categories that are growing. I think we also have some important advantages which we need to know how to do this well done to become attractive and appealing to our customers for us to gain a share in this challenge, or this dispute, which is not easy for the income availability considering that there are other things that are fighting for the same income availability.

He was just talking about consumption, the expectations for the second half of the year as Santoro was saying. Pão de Açúcar and our brands are very strong in terms of perishables, fruits and vegetables.

Sometimes even though you might have a lower volume, there is a priority, we have a more resilient format. This recovery of growth is going to be very much based on these areas: our own bakeries, perishables, fruits, vegetables, and this is what we're working on for the second half of the year.

Great, that's very clear on the backdrop and how you're addressing it. Thank you.

Basically, I would like to thank everybody for your attendance, for your questions. Since Father's Day is going to be soon, it's 67 years, very proud of Pão de Açúcar, please enjoy everything, all the opportunities in our stores.

We are making many very interesting offers and promotions, lots of good things, go there. Once again, thank you so much for your participation in our video conference.