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CBD Cia Brasileira De Distr-pao De Acucar - ADR

Participants
Guillaume Gras VP of Finance
Jorge Faical CEO
Carlos Mario Giraldo CEO, Grupo Exito
Ruy Souza CFO, Grupo Exito
Call transcript
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Operator

Good morning, everyone. Thanks for standing by and welcome to the Earnings Conference Call to discuss the results of the Third Quarter of GPA.

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participants of company's instructions] microphone and [Operator disabled. during have the presentation as made that the conference out GPA point that start During operational contained will Q&A assumptions and in and statements we'll and this the the goals currently well the available. management, all presentation, session. projections We Then be the information may business of financial regarding the information company's beliefs constitute prospects, the as any

circumstances those should and call Jorge Faical; other for Forward statements. expressed economic CFO differ guarantee risks, future materially from performance. looking conditions, and involve understand conditions, are could may market could factors Exito, that I'll GPA They of results Guillaume no and to not Giraldo; occur. Relations Investor Grupo Carlos may CEO CFO to Gras presentation. the Gras and Mario Ruy Today are that Officer, the that the Grupo lead Exito, in or turn depending general Investors assumptions, GPA's affect and statements with CEO on operating uncertainties and the therefore, to of of us Guillaume of such and him Souza. forward-looking results start

Guillaume Gras

compared the Slide to by strategy also the consolidated present over numbers Four, rate X.X performance will thank to in dilution and the The of environment, and or would financial hand on decreased business same to of the of I BRLXX.X I morning, the the Jorge a of compared which for In year, you attending who On and the talking I of consolidated bps year. you. XX.X% SG&A, floor nine period, Thank group's the challenging quarter, will everyone. briefly performance. the and the control about presentation call XXXX the quarter start like we perspectives. QX results the for third Good GPA then Group. highlights bps last by this we third XXXX, of our line will earnings operational of XX in growing with the totaled in to the by 'XX. quarter billion of which maintained sales period in first months a of strict presents comment

the Our by period discussed X.X same million be year reached consolidated an which the line in first EBITDA in last nine we months, versus XXXX. will later. that down period points In BRLXXX and XX% the EBITDA higher BRLX.X than Brazilian with of activities, impacted the XXXX, billion of of had

as the of order seasonal quarter. a of account importance were as a that 'XX, our by the 'XX and compared third BRLXXX GMV had online in drugstores, and the of seen rate business Proximity Christmas the X.X% GMV QX put high and than that XX% which million food to is In in higher in of XXXX, In in same even Moving such the efficiency 'XX to effect productivity were gross grew highlights the mitigate expected, strict improve months first order the SG&A of the of growing in In QX effect in effect X.X% sales of versus in line quarter, Brazil, the unemployment the double-digit still discontinued in strategy. formats of Friday. the months will results the also XXth operations investment below in margin the which excluding of margin the the in prices and quarter more and we nine XXXX now, some with of consecutive the context, growth remained carry. and comparison to XXXX. by Brazil, of continue XX.X%, the of and XX.X% From sales Gross the rate both difficult work five we the period slide of inflation promotions, and which In and point high mitigate X.X the between and nine of distribution of of broke in strong bp quarter the macroeconomic record was XX.X%. cash this XXXX to grew for are of posting quarter when and first E-commerce reaching operation growth at reflecting centers. announced XXXX gain hyper repositioning in format paper nine view, rates our and inflation, versus QX the was versus resumption group's of vision In our that on be competition to control the XXXX. for quarter. period increased revenues than the consumption. models QX a sales, the this GPA recovery stable margin, and presented unemployment holding pressure we strong extra in price, the QX regular the stores faced store month back that mainly much XXXX, Black we

to last of dilution months. of the XXXX, to months last the of XX.X% quarter, net initiatives X.X compared revenue level This revenue. X.X delusion In year by reached XX XX% nine reaching net first we of bp the implemented a the over had driven bp of

quarter the in which loss last includes rate impact. to the by remains an quarter XXXX, X% driven consolidated we date XXXX EBITDA quarter, million At presented in XX XX.X% increase in XX.X% largely XXXX, down when year which third third to foreign company rate. six, year, rates, prices, economy As to by exchange at the reaching from of XXXX that exchange by value concentrated the versus the effects, we Exito and constant results in onto million BRLXXX recovery. was a investment year of penetration and for sales Exito Grupo in events, compared drop strategy Grupo of to the BRLX.X sales accounted as XX% of format, stable Growth Slide reaching the both bps driven versus show by of of reopening the of positive and Colombian the with The compared compared sales of of total last points continues Well, billion negative BRLXXX the results third XXXX. is third move the to digital hypermarket quarter these where an result of a the adjusted X.X grew commercial sales. X.X% quarter against

customers [indiscernible] in inflation in growth in and galleries. complimentary from the recorded Tuya an of estate the last Grupo finally share in potent that both countries and the all Argentina, regard worth in traffic negotiation inflation profit result expenses, recovery activity Exito an XXXX, by important With expenses better efficiency performance its complimentary third up of they gains the restrictions BRLXX Grupo such In contributions in was physical expenses context the and greater in X.X% increase stores, sales, of improvement stores Columbia stores? and with BRLX of the against has above country good the to with businesses. of and in mentioning of addition In a business, as net result operates, of reaching delusion billion as below year, it's real to card digital increase and in the in this managed where a activities. the we In driven reduction in with and circulating below of of totalled the revenue. operational suppliers gross in Exito an grew to quarter inflation improve XX.X% Thus the credit

amount of to XXXX, X.X we growth adjusted the And As low a in EBITDA reaching third these EBITDA. quarter XX.X% It's short-term in versus to third compared BRLX.X still presented position, ensures effects, with the an like and a group presentation impact from of to an X.X revenue. million stores adjusted quarter times the over floor ended result of important the billion. kept of end cash in to our would that XXXX. level you. mention our leverage turn net corresponding quarter BRLXXX here the of Slide haven't third two the which to this my the position XXXX finally BRLX.X Thank margin excellent at of of transactions bp we quarter our debt, a seven, We on I the times EBITDA now X.X% The and George. liquidity. had hyper billion we I

Jorge Faical

call. and for I results results Guillaume. everybody. on will for to up our earnings us of the of factors the date highlight of to joining Guillaume year strategic our Thank Thank operating showed business you, you everyone us QX

has our GPA some our stores. in close XX because the converted is XX within to We and transformation is carried order assets QX, of understand This our GPA First and to site stores We're be four recent strategic a the not highlight transaction its the most in hypermarket now in decision points of and it exit the in foremost, This call transforming strengthening I'm to important that important only is to this performance out country. announced this billion, this to understand stores. or and carried BRLX.X of Ex. out and We a is them Mercado format. story stores all but transaction in format transaction also a XX of stores these all going future. remaining including of the will to

and value that to this a has that compared done highlight our we to important is in anything it history. of creating transaction have potential Now

strategic more Now, businesses opportunity that this business focus on order all to is profit. value our a in rationale and unique generate

[indiscernible] E-commerce positive reality to is have through e-commerce. obviously that formats country into do we that in brand, a show Here, groceries the their our and proximity trend buying

more Now our we foundations structure basis with retail. much the have of leaner a and focused main will on this, with

to out to better here day, logistic broaden a operational to shareholders, and in results the the our order are provide focus of customers. the also We to stocks. or day avoid retail strategies, change quality going providing on only These value going our customers, on best of operations our and but to focus our are not we're service to best to product more on to more assortment

in we Here, are efficient fashion. an things simplifying

more decision a favor mix this margin enabled the to we future the our on the remains be greater that cash of will and proceed margin EBITDA Not generation. positive this completely have and is business will Now with a after higher leverage, only because company new transition, that of have Therefore, favorable. this have performance a but what line bottom a transformed. XE profile will transaction with the brand impact cash generating us our

what exit, governance highlight board slide, was to with members. exit this of the we BRLXXX one carried using our Brazil, of We, this quarter. We with see of quarter, during On platforms the the here when have talking And expand in This a with Black the can from to We it's In about quarters, vote level last had what in we've first high platforms that to the business, out that history. this quarter and been different record would the this. with sales. hypermarket not are be but million are business. during more is our broke than transaction independent were here past creating three Friday here the we clear our of seen we're the had last Christmas. year I've the and growth do in pillars, our digital digital. third we able you

we This represents an million higher orders in amount than So XXXX. important. what very BRLXXX of is had

one the year than in So practically we had quarter, more XXXX. in orders

projection, million of we we and yearly analyze a you business BRLX of XXXX, BRLXXX have a our BRLXXX BRLX In and is digital and business between you these a billion If now in BRLXXX this area. out around sold million billion. carry

this proud these result very of are construction. of We

important stakeholders We have a scenario know. is to shareholders this for and good and

our early Now digital is stage.

is to this to means our steps. going making the All of of this. our growth store for has our potential more I'm the also a about first [indiscernible] the are The brand proceeds with future. talk grow, pillars we transaction. retrofits and So one market The

provides growing favors We goods give that above better the others of that that services announced better of are average is that perishable going to accelerate stores. the We our can is latest model purchase model that GX this. the --

the is Pão we de Açúcar, will turning of we received. So going Therefore, we of end stores at this next refurbish are proceeds all to that them year, invest into the a where of model. the part GX

to accelerate of expansion Pão supermarket new the had We form XX the up format of We are stores Açúcar. going announced XXXX. de until at traditional also the

XXX a open an until to commit Açúcar we This Now de of is expansion. Pão accelerated stores XXXX.

been have going approved stores, prospecting and that we countries, we Currently are throughout XX We more properties XXX the these conversions even the and out of of to stores are around new have hypermarkets. expansions. accelerate XX

within of store a in quarter Pão below the this they throughout Paulo we of years. XXXX, de see de have this Pão sales and Two Today next reversion practically an still around above Pão year would expansion, project, construction. now we how pipeline. we two are beginning de the Pão there growing premium the in other Açúcar. we and inflation Brazilian sites market a is the of with construction we're the So now XX one players. Pão in same trend. of and self-services under de in the start but vis-a-vis de Sao Meda industrial one year. X.X%. above be will stores, and This underway, And [ph] or the is the like in Açúcar beginning Açúcar, the grew We are new same share Açúcar GPA, Açúcar other this level

So the positive here, our perspective banner. for is very

pillar, we accelerating expansion our also proximity program. the are Now,

Here XXX will we we proximity have stores until These -- new like would to are a stores. XXXX.

opened year. will have retrofit expanded. will go this We through approved be and over Then are stores stores XX that that three have we

important XX few have has of format. positive to are is the quarters this is double This format national that see we this, out very replicable you had that have a profitable can a of with consecutive format and we the the and a Now formats strong proximity out, chains, one of and model. And roll digit.

member first for service we vegetable Pão Açúcar product. expanded This to have and proud market new that the are de is fish format fruit to This We butchery, in an be announce perishable vagary would that order store called mongrel Fresh, of and is that a neighborhood. meters neighborhood, that square has is Brazil format meters. between the in we the XXX and between to Paolo. store City already [indiscernible] in square opened a we've a supermarket has copied [indiscernible] and traditional be It throughout great XXX San potential have

you with going to number have of of that hundreds one, this great is that neighborhood it would be convinced compete there call These for these is first are in to is and three in are green pillars. stores. country are order a grocery the stores this GPA this convenience in in pillars format of believe because mind, because a success being would we pillars, new GPA We and strong bear the three that are more the the can demand achieve I we expertise opened. the result I formally, growth format units work leaner growth. This of And futures and that to like GPA and because what fluid deal a faster to the formats, the

slide. go let's next to Now, the

the still matter retail with when hand see Brazil, can business portfolio in on this exit right leader Now, the food. you are from in about that side, and our on the we the hypermarket in

this. highlight to have We

We continue big with a size.

Suga, Brazilian or brand of will strengthen jus recover a profitable to transactions market. the of that that in In XXX more in Therefore, see three whole way. the XXX you Although assets of stores. supermarket main brand until Suga different one self-sustainable it to years from formats also fresh, most we XXX XXXX, In XX and we our can XXX XX in that here we figures stores our a jus around or valuable see is future have can bone Approximately, future asset says the company approximate exited amongst total we these will proximity the the way, XXX be bone have a XXX XXX for hyper you stores. Noto and we'll the these are with size stores is but from Ex Mercado protecting as stores to the [ph], from here. the

to going of are We concept strengthen loyalty, of the purpose happiness. its the purpose

of solutions, loyalty stores continue and of will rescue foundations recovering We new levers. and the talked SG&A, assortment, guarantee, our brick pavement, -- digital between we self-checkout. retail ways about mortar I one digital differential sustainability integration will the of greater program, main

future are confident this company. we So regarding

can is. we be our wherever they going on Now this highlight that that that ourselves as and customer their talking declared fronts fixed and you demonstrate customer, are. doesn't matter this chart, collaboration want are in chart open ecosystem. side, beside the assets can of important are right the platforms, It the we of be Slide beginning about our digital mission since be It market if is journey. the to wherever company our mantra, of they're this the platforms. In [ph] of would on platform, third-party digital We see see the own is to XX, center a you the Medalla to hand our right our

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already during delivery. a to will this are strengthening our are we launch with own and working be strongly elderly. deliver of quarter, bolt There also WhatsApp personal Therefore, of people during and the disabled to project, a use This next but We quarter number initiatives hybrid. are the pilot platforms. via will we

assertive Now out this business than with an our year, of was since partners carrying decision of the more beginning here decision. the

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a To like colleagues in the I'm congratulate them work segment [indiscernible] priority XXX part, in for end of the with the growth. this have women partnership have like work total inclusion point for is to thank very the see also I And Argentina development the estate places main fronts graduate group. and agenda, is their social can first form the not considering like our ESG promoting So which climate partnership for quarter. for in to new It diversity to to to that a they've for this the support -- Columbia would which would and I impact. like for accounts new and going black you important chart, discuss I us. the real businesses to XXX the initiatives, pillars, out climate done, some of program also have but read and exponential change, to part in different we we would people, I participated some out University. leadership the program especially but would to includes and with like fighting Columbia to of extraordinary our point the that would

more Port are [ph] to and staff case program have one investments, X.XXXX institutions more than for messages are black Columbia, typical are in I we the been and food to than this themselves say have social a and complimentary And We children was slide, end, this children. that favored of for year the of these very for XX% more okay, proud tons donated our declared of quarter. nutrition that, of and in by main please been with XX,XXX the

the food we profitable wherever one eCommerce is and and Brazil the I and are exploited the the first ESG strengthen and in we going the leadership digital especially, exit increase platform. execution hypermarket the to with the interest for and and excellence The on accelerates of market the on rates exposure proximity, priority and key reducing format and the accelerates operational [indiscernible] are. strengthening leadership this leverage as formats So in cash, retail said, in our our focus aspects in the absolute expected It to basis the months of in come. considering of

now innovation and the Q&A Q&A key messages the to the I are So going to the we continue, quarter. these like to thank open and would for initiatives start attention we session. are for channel and going now omni are And our the you session.

Operator

Soares Joao Our from at instructions] analyst [ph] comes Citibank. sell first question side [Operator

that ask we're please. Soares to open can microphone going [ph] so you your question, your

proceed. may You

Unidentified Analyst

you me? Good morning, hear everyone. Can

Jorge Faical

ahead, Go please. Yes.

Unidentified Analyst

And Thank you for the a idea opportunity dynamics is the to the to ask for the on understand what's question. side year. promotional our

macroeconomics. some had terms difficulties You in of

fourth looking to main be the especially the for we refer XXXX, you So positioned the what group, are to going [ph]. ahead And in have when mind Suka XXXX? banners in quarter how for do

Jorge Faical

that In quarter we for quarter, going Felipe, a to the supermarkets. be the is that Thank understand with fourth question. the you, of this a transition

empty of in site the merchandise, goods, stores no with stores to middle our going no the are the We deliver to XX January.

levels. in we terms end So we very terms of cautious are are of year. promotions the in very of And the purchases for the inventory the cautious with

we're to sufficient a opportunity. -- So a are adopt going creating destocking of going we to model

are going going are we proceeds out Friday is our the are those be Part to those going stocks So Christmas used project the this marking used be inventories constructions have as and to for to our also costs. and and down also part it, to Black of related stocks of site. to of sell our or

going So as like of Fridays the the selling Friday stocks. was on is so first first say -- Black years the the to very Black focused to traditional be in United the States that in

to So intention. store out our we going inventory, the are sell

there They're a to promotions. focused other demand formats, from is on more growing for consumers As price.

considering key the price So is situation. macroeconomic

are high. the probably and of gone is very when we that inflation income low facing distinct the We situations is the most through one very have

price So is now. key

important So Suka a to Christmas. are for price is and have Black [ph] both component Friday going price. a related to key strong factor for and in very promotion Mercado very is promotions,

some growth that weak. expect XXXX for Christmas very was considering We Christmas

So to of we have gifts repressed may a demand families. an a with their expect will And gather and expect situation food. for be that people we effect together where

strategic and scenario The For the our XXXX, are we midst is in cautious. very volatile. have of very planning we been

So it's to any difficult very of sort projection Philippe. make

would not to provide So risks like very take honestly, scenarios could I precise. to and be that any future

market. to happening to we point the the are attentive is So what's very that

can are looking that at We happen. everything

be be scenario somehow it's are demands watching any by very support whether that to We also us the a to government there's cautious. going but government,

Unidentified Analyst

Okay. Clear.

Okay. Thank you, Faical.

Operator

and pose [indiscernible] from question you next proceed your Our may question.

Unidentified Analyst

digit. another but margin know, I that know with your adjustments? pound? on have about XXXX, that very the have in EBITDA is planning because question close hyper hypermarket? to double have margin regarding you what see Now, And Can their don't for profit close to can [indiscernible] we we fresh, something You you visibility total the planning, piggybacking we when now how of double-digit expect is after markets

Jorge Faical

happen. this second are the model made question. double-digit Well, is to fresh, All Fresh, for I'll we start pursuing profit. the by business yes,

soon as as this for by, appetite of replication will what format. and go So we a months will two be know operation three

margin. Now regarding the EBITDA

Now, mechanically, of it exit the will increase hypermarkets. with

expect of We margin transition EBITDA an increase that the take until QX. will stage place after

will Something we right transition now, not I'm for is this next bps. in to year. QX remain give of end the the here of organic but end QX is But And you target observe at XXXX. perhaps guidance of growth. any going our will growth to

EBITDA between XX% and a entire hypermarkets. that have is new next sales [ph] digit, having will the this XX% the of Suka Now, with in year. in will QX of please we're margin Therefore double of natural the that bear consequence GPA growth mind be transactions as that it

Operator

Q&A company has over remarks. hand to [Operator the end. to I now for would to like And the final instructions] Our come it session an

Jorge Faical

Well, a our all to suppliers, of I like to challenging to because us I in as the all evolution that of in challenge us. would of partners We've for the the that company. thank well, of joining you thank one the participants, because this another. would constantly from This our supported QX of all it's have the being a undergoing had quarter the like is addition it company we're transition end year. a industries

and a a GPA prospect large, towards by stakeholders levers the going group entire the with and our with new shareholders, the opening. are we So -- positive growth business for that lever are

being opportunity new reality, Now, and challenges important. overcome scenario. And them in we a We continue there must is challenge the macroeconomic must them.

this grow year proposition, to an And used our our to the plans. opportunity value opportunity doing, throughout I've model. action digital, in business after we're the word something this is budgets, also to change after different that different We and have change

deliver. their operational Here pathways forgetting strongly taking still a and of but we have would and convinced focus on the our are Brazil, to country. a like without we on is adaptation customer. losing we bets the constant to -- to and about efficiency I effort, this team reality, GPA resilient GPA, convinced on for on we the thank the that power betting there lot without are of are the all

to you morning good everyone very much. and So thank

Operator

conference end. The very all and good answer an further have much Thank the to participants any come questions. is a to your disposal department Our at to day. has you IR call video