Sendas Distribuidora (ASAI) 14 May 222022 Q1 Earnings call transcript

Good morning, everyone, and thank you for waiting. Welcome to the Earnings Call for the First Quarter of 2022 for Assai Atacadista. [Operator Instructions] We would like to let you know that this earnings call is being recorded and will be provided on the Company's IR website, at the ir.asai.com.br where you can read the release. The presentation will be available on our website.

During the presentation, all the participants will have their microphones off.

the start we'll after, Q&A session. Soon Now, Helú, she’s Instructions] I'll pass Gabrielle to word the the on [Operator Investor Director. Relations

Logistics participation morning, Assaí. at good today VP. much for our Anjos, ladies gentlemen. First in CEO; your the Thank Call Castilho, the who's and of Operations The Belmiro speakers dos VP, Well, Daniela Wlamir Quarter VP, Earnings Sabbag, Gomes, Anderson you our and are and for 'XX so our present Commercial and

I'll on the presentation, Belmiro the his initial to begin for we Before pass word consideration.

more disclosed everyone business, a also of take Thank Thank Q&A really a just we're VP, the of talk presence participating. little Gabrielle. our available because so to Financial the of market you, executive's our of the them about and to teams' you here the showing already trends. the of here, want quicker time we're our can you the presentation results. previously, and advantage and Director, be for to and of Commercial you And The with present we presence the we quarter Operational numbers going the leaders have now Assaí the final as with some value and moment, first little we've here,

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sale [indiscernible] the base in the this had maybe we but X% last to growth unique same one the So year period, had most about quarter quarter. compared of

stronger and March a progression a the January. in differences better lot than the substantially better is progression, than was April So, of now March. was February February, December-- lot but, than

would where make the in from in businesses food [indiscernible] So, our get but service we a our well shifts to level activity. strategies to back end-customers, from had as also behaviors,

negotiations in and our the Just commercial, many made although different were operational representative the margins of the And and adverts with a of as little by period regular in stable, more numbers we of invest of of suppliers. harmonized the the reduction are of areas of pandemic competitive stability with out entrance some May good negative different with really projects overall economic positive of the the margins scenario, players, new opinion our points markets advantages. and and we balancing but margins all advantages, in the also with especially to competitive the levels end considering in where which have some still enable our

and be is work on huge to there effort optimize all able in to this market we some put reduction Something Operations that's lot especially a reached Logistics our in cost which the Which the in that with to strong the overall coming strength, so from [indiscernible] efforts inflation team, us expectancy. to. quarter, be the a also more going with projects, also area, allowed

timing Although we really pre-operational high. time all have an cost is do from expansion this

to people that and that have initiatives hired in this different variation a We and overall quarter, expansion X.X%. in expansion, should the manage a or even more the really little second projects trips, the increased out new X.X%, the expenses with we've that bit organic of We EBITDA stores training Extra. a generates then chapter, in accelerated this, and year stores XXXX, for about have the moment, XX expense handle projected well, we our pressure. in but from the of talked were had it specific we has have another maybe and foreseen. At The have made are strong performance organic so level, which expectations the as timing XX of for units kind new stores this in balancing projects approval. advanced two return, our but other We of with objectives XX new the as

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Thank Belmiro. you,

we the X.X% Xx, the impacted the Moving about we went our sales. increased the to onto $XXX Slide results We've it the interest with these and of rates, X.XX%. the in I relevant. financial It's throughout remind CDI and want ended extend debt. very were all able maturity to by We our reduced debts. you representing XXXX of increase refinanced million that so the And strong X.XX% debt were the by X. X%, from quarter And to of

average CDI plus our So CDI was, XXX.

important $X.X not this positive that CRI fundamental from a positive-- in our what million standards the relevant require. in effect impacts about accounting the effects will earnings $XX was to line the billion, had this here well. onwards. non-cash of And the So which year. be with And in we interest expect trend by the help increase as results It's the beginning of us we quarter, of estimate financial results reduce in of

in a three the levels of as be different venture expected led fundraising quarter of And funding completed we out is had that of in which XXXX. billion, able $XXX plus commercial the in well. This total So a we $X investments in the quarter, were billion recent initiatives we all but to to $X also also of of finally, January note. April handle the completed result, million to

is cash very our And cost of total also can highlight by and half. capital. have the robust to debt. very a variation the the levered working efficiencies generation growing strong to on Belmiro side and you of net the I of plus you this the Slide, one the as And mentioned continues right So where is debt a want CDI that see that's much in be

growth investments Slide, significant. strong in had we just $X.X in And we this generation the have quarter. cash-generating billion So continued as was XX months. of we bring this a billion, also And you in in very you all than higher last very to this so that that a a $X.X And cash was EBITDA have remind were know, model. we the to

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on the pass back initiatives. for to his I'll word comments the on Now, digital Belmiro,

Dani. you, [indiscernible]. previously, new a [indiscernible] GPA, business projects it position comes you of And after I as mentioned our on led we're by We and waiting as When started off to operation for-- initiatives digital, to going worked have a in split with the be development with that's Thank the he series past

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some So we topic should have news up ahead. this on

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long few increase to projects Extra. very is So of reinaugurate people to When where topics it going the especially still And it from the efforts, we the and diversity. can the path related more [indiscernible] also more this have that and We have we of other is and in liability can there advances comes because are and bringing adding coming in with be units that a to company We women we in perception when of in of is of precise it to focus especially advances, number more comes we operate the we in some when we positions food. believe comes company related with the have is overall, with this diversity these move been an a know but to social the training, ahead, to leadership on. moment a others more this disabilities. sector improving company. that issues And

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we So or and also for panel tyke able be to when to advance power new projects to provide incentives are some with continuing generation. portable generation solar

well for Assaí this with entering as entrepreneurs first in also women. quarter in the small and micro So working is movement as XXX-degree

So bit I'll to the We've on acceleration in Europe, trends section, impacts within regards last an from the the to And a in we stability some quarter. this about first of the commodities discuss seen inflation in a the let price Dani and second ahead. more were different moving gained After that talk Gaby up increases. strength coming some reaching quarter. now

company And inflation. of in to see, kind are chains high-level don't the the a it assessment currency the prices of maybe And normality. impact month have variations comes affected scenario last also we've in in not as a the disruption The China a seen also rate is supply but we peak now the still have not that led Brazil. recent in have will where when stabilized. to prices, Some still April some

the mentioned, very actual all a also years fell within ramp-up, and three because the Easter persistent, increase population the generates and typical for month and a strong the generates price positive moved in challenge it sector, a So was past the to as the goes we of inflation also a has it an our for but expected. long-lasting, movement unique than on on noticed, In We've April. really quarter other hand, movement business. important bigger when been that I this In more that on it's food lot April, April. had this everyone

with April another their to shoppings, with we even and this had a holidays is a what carnival in bigger bigger end that second but Food to also since our is with a utilizers homes users Service for restaurants monthly movement noticed We the year, with related these and like, churches special in Service in even like trade-down, pandemic, other Sector snack the activities Sector, presence bars, and stores. Food the Ever from customers and tourism, stands schools find make growth really May impacted consider was quarter in as bid relevant that grew more our movement April the of performance April a group. Hyper XX% actual but have results. really a above about this, With this this have second total very makes and us the a the in again, month stores. April's for in XX%. and re-inaugurate month course, lot period our April in us Once movement was extremely positive with we we unique a an or

grocery And on So before, expectation behalf stores. it their suppliers. big the from businesses, small to a comes we stands, was big the restaurants and for have bars, items. there's best with shopping stores, expectation when there's option these surrounding of population a Among big snack of many and expectation very also the another also food reopening really these

suppliers specifically with to will in also that see we lines So will region, advantages and region in contributes the also in this which have major a some density central our sold they Cash-and-Carry as to movement. of be more options sell, product

focused I the the that's is behalf, is our continue, on company path. and its On like this once strong Q&A pretty so begin plans scenario can and So again growth it. session. Gaby, in word would pass the much very to we to my a favorable

up coming you mic proceed. [Operator at from Danniela, Instructions] South-Side so that your We'll move Analyst may question we'll on the to first XP. Eiger, open our Danniela

have I questions. two

the although of The And second more first about confirm profitability. sales of know year, of also lot there's how, uncertainty in a a one is bit we'd discuss like the beginning in just to and quarter. also dynamic the the

wait reversal expense So, the but pressure see should mentioned Belmiro Extra a expect we that you probably bit we and more as should open. second in quarter, stores a are the

are of points as second of if that question to that the be those could points. the about the be a repayment for So, should in billion receiving another two would $X maybe Dani you you prepayment be quarter, And talk would two these These great. this about use debt?

Thank right. All Dani? you.

second for dynamics the of The course. expected, are quarter

be expenses we're advantages, the to be XX in expenses present, where of and at bigger in going in important to second but just an sales. which as won't be and sales positive. optimizations, our operational the super have more generates our control. invest and our generates out affected movement will capital actually that create gains in are second open Our to quarter, dilution where productivity that's a that there's rebalancing the moment, we're store but was difference already We in this sales in bigger about expectations, continue expenses dilution. represent under some maybe there maybe acceleration quarter, of also greater But cities Since are of expenses a these an this because stores competitive volumes impacting also a a level this bids our dynamics

Belmiro?

strong maybe the difference about look but impacted give by I expenses have our expenses we is compared operational mostly part I year, expenses When to here in work. operations our-- very the would with like and in really Extra. our an you expenses, teams store quarter to think contribute We and have our teams small, first low to answer last DNA, at pre-operational very of

a XX diluted. importance last little open little a a we up last we opening more and ends that And the the stores forget this yourself, up in quarter. mentioned can't as open were maybe we'll more and second start stores have stores quarter the also already in you year Now, they of record being XX

I think initiatives much Assai different there of that within business. we a it's There's say but not significance, that when that are to a see So since low-cost discuss. there's expenses many bit

don't Of our other off our at also volumes line support teams course, and so areas, we look carefully and with we dilute get a business, We're store help low-cost costs. operation low-price each track. teams and sales

very of so looking is at really So expectations, that lines positive all can initiative we positive these have we have daily team effort this but the and returns. from very

$X hope and the especially So second to the other so obviously, really add a the stores. in our pre-operational be with prepay the with the very on as on, have the we reimbursement our lot Real with teams of we and being not mentioned, we work more Extra can billion already project, this the considering we successful. the employees, the about professionals training clear. point, will quarter careful that this there's We're at we cash receive investments their so teams on but moment that in to that store from was aspects debt, other done Fund, launches it and will will very at working really up line make in sure the all Estate strengthen work ahead. I And to flow able are

So thank much. moment the at in priority but prepaying really possibly little store investments at won't a All very up guaranteeing you debt, ahead, moment, the right, more we this is launches. the Extra this be

Our next Analyst Felipe. mic open Felipe, is proceed. Sales-Side a question we'll so from can HSBC. up He's from you your

on more the you're interesting of Extra But Xx of searching in go don't caught to want on my these need of of attention moving but sales share are mindset process because maybe really the markets the is to to for really some mentioned still it very much to consumers, since Extra behavior my the migration consumers, to us to what of need in this recovering or different confident information where confidence attention gain what you understand the more these that recovering regards you and Cash-and-Carry. time I and your consumers want here, up consumer, about caught take this part You more. convenience Well, in consumer because of Xx gave goods. towards within I but assortment supermarkets, they're perishable too XXX% passes

to question think was a bit I to wanted mindset in regards bit this I recovery. So, but understand a of this long, your little

Felipe, that question. Thank you, for

the more there As been reached clear. demand was a was the of these bit the this has stores and Cash-and-Carry, in all for restrained so sales so ended, network, a of multiplication

conversion the between up level even a of is So smaller. store opening risk

see these we this the stores, more doubt that pressures and even considering have in that's quality of there's of and the that's closed, numbers past the no we'd need activities, course You the level of to competition population buy the stores on the initially surrounding positive can stores. when the and a closest them with estimated, the amount other but we that were cost all than of And and move into migrated and in places set of the to for have savings.

for As consumers savings. businesses too much bigger low to continues a for and need This that lose search it's have prices even want the expanded also as not to and small well time.

was for which profile, region at was last store was really So Extra a the in best coming year, in our stores with conversion vision, our this really reinforces concept moment that the was positioning this a for performance that example. from store. The we the a really opened

So, in movement for this the our to vision increase don't inflation, regions. but we want the these consumption in of the celebrate price-increase

here, the a there's will to impact advantage? Cencosud understand vision which even be point but maybe relevant little the want difficulties of that will we just our going been with big to change one this, the management. most for brand. jointly GIGA I I this for have because with more some by a expectation in a more in team, don't follow-up acquisition have teams So regions, the the see reopening competitive bit to any And consolidation. of your Assai on the you reporting that Cencosud now space limited bring with Cash-and-Carry, discussing it's just managed No, know Cash-and-Carry

open about but be you At stores market. of of of four some the that these are strong, or that to outside the at look overall least the change Extra much are impacted in this reopenings with won't be very brands five a going when there going Some scenario stores. to are

Okay, thank much. you very

from Well, from João comes may continuing Soares, open proceed. you our question we'll Citi. Analyst your João, mic Sell-Side next so up that

bit optimistic, on to attention. little I so your like was thought would a I my more more explore some points this. called a discourse

I of that First, to store possibility the this also the organic these conversions. opening year, review this and revision there's noticed

year? in And there these things That's $XXX at more how those this review this Do question. conservative first the is is evolve, to at billing so this billion opportunity expect? conversions or How you depending moment? sales that on store could think an start looking you we

The second that market this as labor seller's GIGA macro the so itself. market overall There's the little but question more with We that point saw performed, is situation opportunities really. it's [Phillipe] some a about the of with Cencosud with is I difficult. mentioned acquisition the store, the understand

store You're opinion and the other some also assets want we maybe the with is about on busy organic to opportunity hear point but store analyze inorganic Extra is, market. the openings? your openings conversion, in should work I the there maybe any or available

look point there's places price the the of position a positive balancing a of of company. normally, course, that out this a at noticed level more that on to sales would that it for ratio we in a more moment, possible companies. bit acquisition. is when sustained us values the what the Because expectations not the at a this versus amount bit regional this for At of be gives So the we've paid realistic correct regards operation of some levels is

really focused So on in our we're case, Extra.

units Extra XXX plus Assai has the units. Now,

the point, of the most which a overlaps different that's are the In when players make acquisition Because is want POSs is back policies, in knowhow. capital have cities because So the relevant. to but the on as than they the Cencosud, system's when to the areas. volumes is really a Extra going of always our company but comes stores, our other geographic focus case, reduce national even the up it really especially level which this interesting in working territory, expertise. commercial just also on example, gives track, of that players for what's us systems, to it an for conversion are the just We're you moving comes or footprint regional

bought be that So also material up any another and this Extra another bought that besides we we going is for stores. looking movement unit our of from and at to opened furniture company construction kind also project construction stores, really the we

the on of and difficulty areas, these in will focused the in So [indiscernible]. the logistics disputes a be urban market there's

rely conversions, on been than So the may disclosed, when with have what comes complexity. documents with lower volumes the all authorizations the store we company. are of our there some There of be to although it store not that, so just higher working levels refurbishings teams

you but So I'm know projects possible as open if done make quick as construction plan what or soon up as some possible. to assets and course, and about, billing to refurbishing, talking you've start ever of selling we these as

be more than the to this we'd but need from confident question. confident So a we this company $XXX I target, it a of more past. million were course, lot security. nominally are bit we review don't this bit about a moment, necessarily we've and about the and customer, this search kept it, even generating hope your of in correcting the the more to at is answer we And the

Eric, you And [Eric of open so may question the next audio proceed. is course that up from Wong]. we'll your

the to side, pricing. like On how you've understand towards we sensitivity would have consumers our that seen

could bit margins inflation look this maybe want affect we super whether throughout topic also trade-down it significant, the so to not, as So movement. the year like more or how gross the a towards and we I is the understand

coming a have more the would up bit These levels historically, this inflation for Hyper understand capture at high keeps but bit the we this a a our Consumers, this as the to see longer, main formats? from you just be trend more questions. from supermarket a lot So seen to

this think Wlamir, VP Commercial I So answer one. can

question. Yes, Thank of you for course. that

the this we format. going customer As to customer that's a something whenever initially inflation inflation talking and for the migration trade-down, Cash-and-Carry years on search movement. for call at between This going start is migration but about I'm been channels, this few accelerates not

due volume et trade-down, importance what months, where-- overlap January, talk had Even the an The products especially the reached as a cleaning March, and been been a different in products, continued We in gain. pressure. of considering a issues of with quantities Store the general work logistical to sale what's a we already lost co-existing and we and as this in this significant have past how scenario, the already capture Assai that related some market cetera, inflations supply we [indiscernible] a been in February, with significantly scenario we we able weight. Belmiro issue have these soap, market to share trade-down. and don't precise this year, because dropped that's Slightly such XX expected lot the more but When and speed. categories to to but we've bleach levels little has highest little There're down be first market expected. did price with inflation and and quarter, they share were trade-down, We on had chain we on contribute consumed cleaning the we inflation Extra in longer about grow the Brazilian XXXX, of and of that's we've about hygiene closing the this not strong and a in traction to, we've did point on have alcohol. than inflation to of currency in going to able internationally export, lot speech, Hyper market had challenging pandemic very We and so this X% or detergents, the

idea, but of as products we an flows we the this able have an in lead a offer for customers seeing well very as renovation So of back by give stores. in go new we modification as whole, what hand, way. the on increase so revision can a monthly, customers to of to market XX% this And the other a we a just with on also to to to at look you [indiscernible] our that impact a as assertive with customer depending introduction [indiscernible] the have to policy mix the be prices in the the

so of for because we and these very confident answered this really us marketing, month after combination, hope and with been very supplier but commercial has policies capacity to trade-down this a our services businesses. new not to customers, our the month We and question. a been issue, the week specific positive have to to your this of losing some migration is able in combination and market that commercial I solution without eliminated making as policies promotional service, this such deliver direct have policies and battery adjust the week So of operational cost our inclusion precise part very calendar. in a this the small we after and we've and great with and hand and

about Thank but you you in some issue So maybe that May. of I just could follow and very competitors on of maybe little of much. be We've noticed if you session, lost would performance the talk the could up talking sales related this of the beginning bit to bit, tiny if a the our great. Q&A month numbers. the April a about

Do you this, want Belmiro? answer to

did we about Yes, speak this. can. I Yes,

very special grew unique and acceleration, of April Of normal had XX%. dates, and the a is effect. we of calendar April course, month of strong had because out a Easter about also this course, sales curve had we a as [indiscernible] April

a second quarter, of we'll set estimate So in that target the we above XX%. probably

the this once this look you when again. course, to from allows at us May, numbers re-estimate Of

So moving on.

from is up sell-side microphone, [indiscernible], Suisse. so question next we'll Gabriel, analyst Credit your the you from may open Our proceed.

for this sales We've Hakim and dynamics most [indiscernible]. Marcela already in profitability know submitted is I following answering the seen I contrasting industry wanted people the effect. with [ph]. have the Thank but just that you my question to about This question. some

that are as effect their are there margins, a you players at sales, their more margins, are prioritizing of of, this and moment protecting kind balanced bit accelerating a up others the sales and some margins. such in in So investing giving

what consider much. you'll and to you peers you're want compared I very to this your protecting So in dynamic if order grow level continue to to sales know that balanced Thank a keep in we margins. more considering in could

Actually, sales, so open you more much quarter, of thank there acceleration total the process. look this growth Marcela, of the levels our this of you we've vision have stores question. if that one the of size for because and in the due you the market had Well, is at biggest you to growth ramp-up first have

were [indiscernible] sales for As you've in percentage mentioned, points. two sale part total of influencing these

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your with question, [Melissa] the up As have from mic, open from Melissa, so area. sell-side your with America continue we you proceed of we question. Bank Well next our may

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[Melissa]. you, Thank

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The Q&A officially ended. session is

pass word Gabrielle we to Now for like the the final remarks company. to Helú on her would from

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