Sendas Distribuidora (NYSE:ASAI) Q4 2025 Earnings call February 12, 2026 09:00 AM ET Company ParticipantsAymar Giglio Jr. - CFOBelmiro Gomes - CEODanniela Eiger - Head of Equity ResearchIrma Sgarz - Managing DirectorConference Call ParticipantsAndrew Ruben - Research AnalystJoseph Giordano - Stock AnalystJoão Soares - Senior AnalystLucas Steves - Senior Equity AnalystRodrigo Gastim - Equity Research AnalystTales Granello - Equity AnalystNone - AnalystOperatorHi, everyone. Good morning, ladies and gentlemen. ...

Sendas Distribuidora (NYSE:ASAI) Q4 2025 Earnings call February 12, 2026 09:00 AM ET Company ParticipantsAymar Giglio Jr. - CFOBelmiro Gomes - CEODanniela Eiger - Head of Equity ResearchIrma Sgarz - Managing DirectorConference Call ParticipantsAndrew Ruben - AnalystJoseph Giordano - Stock AnalystJoão Soares - Senior AnalystRodrigo Gastim - Equity Research AnalystOperatorHi, everyone. Good morning, ladies and gentlemen. Thank you for participating in our earnings call for the fourth quarter and the year of 2 ...

Sendas Distribuidora (NYSE:ASAI) Q4 2025 Earnings call February 12, 2026 09:00 AM ET Speaker1Hi, everyone. Good morning, ladies and gentlemen. Thank you for participating in our earnings call for the fourth quarter and the year of 2025. Now we're going to be presenting the executives that are present here. We have Belmiro Gomes, our CEO, Aymar Giglio Jr., our CFO, Anderson Castilho, our Operations Director, Wlamir dos Anjos, and Sandra Vicari, our Human Resources and Sustainability Director. Now I'll pass t ...

Free Cash Generation of R$2.8 billion and leverage of 2.56x (vs guidance of 2.60x) Gross profit optimization, focus on expense control, and financial discipline EARNINGS RESULTS 4 TH QUARTER 2025 FEBRUARY 12 TH, 2026 • Free Cash Generation: R$ 2.8 billion • 84% EBITDA to cash conversion • 2.56x, below guidance (2.60x) • Reduction in Net Debt: R$1.2 billion • R$84.7 billion (+5.2%) • SSS excl. Calendar effect: +2.6% • +10 new stores, 312 in operation • Pre-IFRS 16 EBITDA: R$4.5 bi | Margin 5.8% (+0.2 p.p.) • ...

Financial Data and Key Metrics Changes - The company has achieved a reduction in net debt by BRL 500 million, starting from an operational cash generation of BRL 4.2 billion, which is higher than the previous quarter [15][16][20] - EBITDA increased from 5.5% to 5.7%, reaching a margin of 7.6% [13][20] - Net income for the quarter was BRL 195 million, slightly down from BRL 198 million, reflecting the impact of financial results and tax credits [20][22] Business Line Data and Key Metrics Changes - The company has seen a performance difference between sectors, with classes A and B gaining volume while classes C, D, and E experienced a retraction in volumes [7][9] - B2B sales, which represent about 40-45% of total sales, showed a significant drop in volume, particularly in cash and carry formats [6][9] Market Data and Key Metrics Changes - Brazil's interest rates reached an all-time high of 15%, impacting consumer debt levels and spending behavior [7][9] - Retail formats serving classes A and B saw a volume increase of 2.7%, while cash and carry formats experienced an 8.3% drop in volume [8][9] Company Strategy and Development Direction - The company is focused on deleveraging and maintaining a strong cash generation strategy, with plans to continue opening new stores selectively [15][22] - There is an emphasis on expanding private label offerings and enhancing digital channels, particularly through partnerships for last-mile delivery [27][28] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging economic environment but expressed confidence in the company's ability to maintain stability and continue deleveraging [4][20] - The company anticipates a potential recovery in the bar sector and expects strong sales initiatives during the end-of-year period [49] Other Important Information - The company has set a public goal to achieve zero landfill by 2035 and is actively working on sustainability initiatives [23][24] - The app has registered 21 million customers, with 16 million being contactable, indicating strong customer engagement [55] Q&A Session Summary Question: Financial services dynamic and core business expenses - Management discussed ongoing initiatives to control expenses and the potential for further efficiency improvements without compromising customer service [30][31][32] Question: Profitability and CapEx guidance - The company reinforced its guidance for margin improvement while managing working capital and maintaining discipline in supplier relationships [35][36] Question: Update on private label and cash and carry trends - Management highlighted the importance of the cash and carry model and its exposure to lower-income consumers, while also discussing the potential for private label growth [39][40][41] Question: CapEx and store expansion strategy - The company confirmed plans to open new stores with high return potential while being cautious about overall investment levels due to rising interest rates [42][43][46] Question: October sales performance and competition in hygiene and beauty categories - Management expressed optimism about October's strong sales and acknowledged competitive pressures in the beauty market, particularly from higher-income segments [47][48] Question: Self-checkout impact and labor challenges - The company noted that self-checkout has improved customer experience and efficiency, despite challenges in hiring and maintaining staff levels [50][51][52] Question: Updates on app and Black Friday initiatives - Management shared plans for Black Friday promotions and highlighted the app's strong customer base as a key growth avenue [54][55]

EARNINGS RESULTS 3 rd QUARTER 2025 November 7 TH, 2025 1 PROFITABILITY EVOLUTION: MARGIN IMPROVEMENT AND EXPENSE CONTROL Strong cash generation results in the lowest leverage level since 2021 B2C: Stable sales and behavior • Attractiveness of the model • Stable Flow • Maintaining the trade down level B2B: Volume reduction • Flow maintenance • Average ticket price drop • Market Performance | Supermarkets(1) that serve: o Classes C, D, and E ( -8.3%) • Same -store sales in the four -month period (July 2025 to ...

Financial Data and Key Metrics Changes - The company reported revenue of 21 billion reais for the second quarter, with same-store sales lagging behind food inflation, which was around 7% to 7.5% [4] - EBITDA margin pre-IFRS increased by 30 basis points year-over-year to 5.7%, reflecting store maturity and innovation efforts [6] - Free cash flow before interest payments was 2.7 billion reais, with a conversion rate of approximately 90% of EBITDA into cash [7][21] - Net debt decreased by 200 million reais year-over-year, with a leverage ratio dropping to 3.17, down 0.48 from the previous year [9][22] Business Line Data and Key Metrics Changes - The company is focusing on store maturity, particularly for converted stores, which are still in the maturation phase [5][12] - The average sales per store in downtown areas reached approximately 26 million reais, indicating strong performance despite ongoing maturity challenges [11] Market Data and Key Metrics Changes - The company noted a persistent trade-down movement of about 3.5% to 4%, influenced by high interest rates and changing consumer behaviors [4] - The penetration rate across various social classes has improved, with significant engagement from classes A, B, and C [14][16] Company Strategy and Development Direction - The company is focused on expanding its product categories, including private labels, particularly in the Southeast region of Brazil [16][60] - There is an emphasis on enhancing customer experience through new projects and services, aiming to break down the stigma associated with cash-and-carry formats [16][46] - The company is also exploring opportunities in the pharmaceutical sector, pending legal approvals [70] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the second half of the year, despite acknowledging the challenges posed by inflation and consumer purchasing power [32][44] - The company is cautious about the trade-down phenomenon, noting that it may not solely be driven by economic factors but also by changing consumer habits [36][38] Other Important Information - The company has implemented various ESG initiatives, including social inclusion programs and sustainability efforts, which have contributed to its brand value [29][30] - The company has been recognized as one of the best places to work in its segment, reflecting its commitment to employee satisfaction and customer service excellence [30] Q&A Session Summary Question: How is the company positioned in the current disinflation scenario? - Management indicated that while there are pressures on consumer purchasing power, they expect some normalization in product categories and are focusing on new projects to drive volume [32][34] Question: What is the reason for the higher tax rate observed? - The higher tax rate is attributed to changes in tax substitution processes due to reforms in certain states, impacting the correlation between net and gross sales [39][40] Question: Can you elaborate on the private label implementation project? - The private label project aims to increase margins and competitiveness, with expectations of launching in the second half of the year [57][60] Question: What is the current status of the drugstore project? - The drugstore project is still under discussion, with potential benefits for the company once approved, leveraging existing infrastructure to enhance competitiveness [70][72] Question: How is the company addressing the challenges in the B2B segment? - Management noted that B2B sales remain stable, with a focus on adjusting payment terms and pricing strategies to maintain competitiveness [48][51]

Financial Performance - Gross Revenue increased to R$ 21 billion, a growth of 7.2%[11] - Pre-IFRS16 Net Income reached R$ 264 million, up 60%[12] - Post-IFRS16 Net Income reached R$ 219 million, up 78%[12] - Free Cash Flow reached R$ 2.7 billion LTM[13] Profitability - EBITDA Margin Pre-IFRS16 increased by 0.3 percentage points to 5.7%[5, 13] - EBITDA increased by R$ 0.5 billion Pre-IFRS16 LTM[12] Debt and Leverage - Net debt decreased by R$ 0.2 billion[12] - Leverage reduced by 0.48x to 3.17x compared to Q2 2024[12] - Net Debt + Discounted Receivables was R$ 13.8 billion as of June 2025[21] Cash Generation - Operating Cash Generation was R$ 3.9 billion, representing 90% EBITDA conversion to cash[21] - Total Cash Generation was R$ 0.7 billion[21] Expansion and Sales - Same Store Sales increased by 4.6%[11] - The company plans to open 10 new stores in 2025 and 10 new stores in 2026[7] Sustainability - Achieved a 20% reduction in scope 1 and 2 emissions compared to the target, aligned with a 42% reduction by 2030 (base year 2021)[29] - Reused 44% of waste, an increase of 1.2 percentage points compared to Q2 2024[29]

Financial Position - As of December 31, 2024, the company had total borrowings of R$16,175 million, with R$1,991 million classified as current borrowings and R$14,184 million as non-current borrowings[41]. - The company is still a guarantor for contracts worth R$1.4 billion related to legal proceedings, which may pose financial risks[90]. - Sendas must pay at least 25% of its annual net income as dividends, but this may not be available if the board determines distributions are inadvisable[197]. - The company may incur significant costs for environmental remediation if soil or underground water contamination is identified[135]. Revenue and Sales - For the years ended December 31, 2024, 2023, and 2022, 50%, 49%, and 49% of the company's net operating revenue was represented by sales in installments, primarily through credit card sales[66]. - The company generated more net sales in the fourth quarter, particularly during the Black Friday and Christmas sales season, which significantly impacts overall performance[98]. - Approximately 13.9% of total sales for the year ended December 31, 2024, were derived from five main suppliers for beverage and beef products[115]. - The company is dependent on credit card sales, and any changes in the policies of merchant acquirers may adversely affect its revenue[66]. Market and Competition - The company faces significant competition in the Brazilian cash and carry sector, which may adversely affect its market share and net income[39]. - The company faces competition from internet sales, which have increased significantly in Brazil, potentially reducing reliance on traditional distribution channels[102]. - The company faces intense competition for attracting and retaining key personnel, which is essential for maintaining its competitive position[75]. - Seasonal fluctuations in sales and operating results may not meet investor expectations, adversely affecting share prices[101]. Operational Risks - The company may not be able to renew lease agreements for stores or distribution centers on acceptable terms, which could adversely affect its operations[58]. - The company’s operations rely on information systems for managing manufacturing processes, and disruptions in these systems could significantly impact operations[52]. - Labor shortages and increased turnover could lead to higher employee-related costs, negatively impacting profitability[67]. - The company must manage inventory effectively to avoid stockouts or excess inventory, which could adversely affect financial results[78]. Regulatory and Compliance - Non-compliance with Brazil's General Data Protection Law (LGPD) could result in fines up to 2% of the company's revenue in Brazil, capped at R$50 million per violation[71]. - The company may face penalties and operational disruptions due to failures in personal data protection, which could adversely affect its reputation and financial results[73]. - The company is subject to extensive environmental laws and regulations, with potential fines ranging from R$50 to R$50 million for non-compliance[128]. - Regulatory changes affecting the financial operations of the company could adversely impact profitability compared to competitors without such operations[120]. Economic Environment - The Brazilian economy's GDP contracted by 4.1% in 2020, followed by growth of 4.8% in 2021, 3.0% in 2022, and 2.9% in 2023[139]. - The unemployment rate in Brazil decreased from 9.3% on December 31, 2022, to 6.2% on December 31, 2024, but high interest rates (SELIC rate at 12.25%) continue to limit credit availability for consumers[116]. - The Brazilian General Price Index (IGP-M) recorded inflation of 6.24% in 2024, deflation of (3.2)% in 2023, and inflation of 5.5% in 2022[155]. - The depreciation of the real could lead to inflationary pressures, increased interest rates, and reduced consumer spending, adversely affecting the Brazilian economy[160]. Corporate Governance - The absence of a controlling shareholder may expose the company to hostile takeover attempts and conflicts among shareholders, potentially affecting corporate governance[82]. - The company's new board of directors was appointed in April 2023, consisting of a majority of independent members following the divestiture by Casino Group[225]. - The protections for minority shareholders in Brazil are less developed than in the U.S. or Europe, making enforcement of rights more challenging[203]. - Disputes involving Sendas must be resolved through arbitration in Brazil, which may discourage shareholders outside Brazil from bringing claims[202]. Strategic Initiatives - The company’s growth strategy includes opening new stores, which may require new distribution centers or expansion of existing ones[65]. - Sendas acquired 96.57% of Éxito for approximately R$9.5 billion, expanding operations into Colombia, Uruguay, and Argentina[211]. - The Extra Transaction involved converting up to 70 Extra Hiper stores into Assaí stores for nearly R$4.0 billion, with 66 stores converted by the end of 2024[217][219]. - Digital partnerships with last-mile delivery services expanded to over 70 cities, enhancing customer convenience and shopping experience[215][216]. Financial Instruments and Capital Management - On January 13, 2025, the company raised US$100.0 million (R$608 million) with a 3-year maturity for working capital reinforcement[230]. - A swap contract was entered into on January 13, 2025, to hedge against exchange rate fluctuations, with a cost of CDI + 1.22% per year[230]. - On March 18, 2025, the board approved a capital stock increase of R$184,074,731 through partial capitalization of the expansion reserve, raising total capital stock to R$1,455,769,805[233]. - The total number of common shares remains at 1,352,215,647 with no par value after the capital increase[233].

Core Insights - The article emphasizes the importance of in-depth research and insights for informed investment decisions in the Latin American equity market [1] Group 1 - The company has over 5 years of experience in equity analysis specifically focused on Latin America [1] - The research provided aims to assist clients in making informed investment decisions [1]