Q2 2023 Via SA Earnings Call Pre Recorded

The earnings call for the second quarter of 'twenty three P M.

Speaker 1: Hello and welcome to the earnings call for the second quarter of 23 at VIA. We'd like to remind you that this video is available along with the earnings release so that tomorrow we can also have our live session for Q&A. Before we move on to the earnings for the second quarter and our transformational plan, I want to highlight the main pillars in our strategy that guide all of our initiatives.

I'd like to remind you. This video is available along with the earnings release. So that tomorrow. We can also have our live session for Q&A before we move on to the earnings for the second quarter and our transformational plan I want to highlight the main pillars in our strategy that guide all of our initiatives first of all I want to <unk>.

Let that customers are at the center of our entire strategy, where leaders and protagonist in our core categories and we have the responsibility to deliver to our customers. The best experience. Each employee is a sales consult that specialize in each of our categories with the scale number of stores and relevance of our online channel we had the opportunity.

Speaker 2: First of all, I want to highlight that customers are at the center of our entire strategy. We're leaders and protagonists in our core categories and we have the responsibility to deliver to our customers the best experience. Each employee is a sales consult that specializes in each of our categories with the scale, number of stores and relevance of our online channel. We have the opportunity to sell more and better to the customers that are already in our ecosystem.

To sell more and better to the customers that are already in our ecosystem. This is the base for our best marketing customers are well serviced get back and buy more and refer other customers. The second pillar is having people that are passionate and happy about what they do the deliver more and transmit this passion to our customers here I want to highlight.

Speaker 3: This is the base for our best marketing. Customers are well-serviced, get back and buy more and refer other customers. The second pillar is having people that are passionate and happy about what they do, that deliver more and transmit this passion to our customers. Here I want to highlight the huge team that VIA has that really makes us achieve and have these robust objectives ahead. In the few months I've been working here in the company, I can already see the spirit and passion of each of our employees.

The huge team that via has that really makes us a cheap and had these robust objectives ahead in the few months I've been working here in the company. If you noticed the spirit and passion of each of our employees.

For these brands that are still valid, but we're going to invest in training the super team to really lever, our competitive advantages and make us stand out even more in our stores and online sales that take place with the Miss Shaman Wasabi program. The third pillar is focused on austerity. We've been reinforcing this is a pillar of our culture a commitment to <unk>.

Speaker 4: for these brands that are so valuable. We're going to invest in training the super team to really lever our competitive advantages and make us stand out even more in our stores and online sales that take place with the Mishama Nuzapi program. The third pillar is focus on austerity. We've been reinforcing this as a pillar of our culture, a commitment to profitability and efficiency. This is going to be the basis for sustainability of our business.

Profitability and efficiency this is going to be the basis for the stability of our business.

Or choose what we're gonna do where we'll allocate capital and do what we do well done in a simple and osteria sway without waste retail is about scale that generates value, but we cannot have waste we have a transformational plan that we're going to approach up ahead that has 18 levers.

Speaker 4: Well, choose what we're going to do. Where will allocate capital? And do what we do well done in a simple and asterious way without waste. Retail is about scale that generates value, but we cannot have waste.

Speaker 2: We have a transformational plan that we're going to approach up ahead that has 18 levers.

That can be unleashed into over 100 initiatives to maximize operational efficiency generate cash and profitability with new metrics for profitability and a lot more granularity incorporating cost of capital we start having more control over what we do and how we do it and the fourth pillar is fundamental to capture all of the potential.

Speaker 4: that can be unleashed into over 100 initiatives to maximize operational efficiency, generate cash and profitability. With new metrics for profitability and a lot more granularity incorporating cost capital, we start having more control over what we do and how we do it. And the fourth pillar is fundamental to capture all of the potential the company has. There are opportunities with a lot of value generation and we need to be prepared for this capital.

The company has there are opportunities with a lot of value generation and we need to be prepared for this capture and so this is why we have been modernizing our main funding sources with different initiatives, among which will use a F. I D. C instrument to fund our buy now pay later system. This will help us with.

Speaker 4: And so this is why we have been modernizing our main funding sources with different initiatives.

Speaker 4: Among which will use a FIDC instrument to fund our by now pay later systems.

Our balance sheets and the banks unleashing our reach with this modality for funding for customers that generates a lot of value to via and to our customers. Besides this we also had the opportunity to access new sources of liquidity and new levers for monetization of our assets that will make the company lighter had better liquidity and have a balance sheet ready to.

Speaker 2: This will help us with our balance sheets in the banks unleashing our reach with this modality for funding for customers that generates a lot of value to via and to our customers. Besides this, we also have the opportunity to access new sources of liquidity and new leverage for monetization of our assets. So we'll make the company lighter.

Speaker 2: have better liquidity and have a balance sheet ready to really make

To really make the development of our company, even more feasible I want to present, our sales performance in this quarter are Jim V of the physical stores had an advance of one 2% to almost 6 billion reais, keeping a positive level, even with a comparative basis of 18% growth in the same quarter last year our performance in the one P.

Speaker 4: The development of our company even more feasible. I want to present our sales performance in this quarter. Our GMV of the physical stores had an advance of 1.2% to almost 6 billion reais.

Speaker 4: keeping a positive level even with a comparative basis of 18% growth in the same quarter last year.

Online has a drop of 5%, but we had a significant improvement if you compare with the drop of 15% that was presented in the previous quarter. We continue to have market share gains without an investments in prices, which allowed us to reach the maximum levels. Historically in this company and this channel three P grew 9% with a G.

Speaker 2: Our performance in the 1P online has a drop of 5% but we had a significant improvement if you compare with the drop of 15% that was presented in the previous quarter. We continue to have market share gains without investments in prices which allowed us.

Speaker 4: to reach the maximum levels historically in this channel. 3P grew 9% with a GMV of 1.5 billion rehires. And our commission rate reached 12.4% in the second quarter.

N V up 1.5 billion Reais and our commission rate reached 12, 4% in the second quarter when we observe the accumulated numbers in the year, we have an increase in the commission rate levered, mainly by the monetization of services. The buy now pay later and logistics that made us Gulf from 11.5 to 12, 2%.

Speaker 2: When we observed accumulated numbers in the year, we have an increase in the commission rate levered main need by the monetization of services, the buy-out pay later and logistics that made us go from 11.5 to 12.2%.

We complement these numbers, we can see that we continue to have market share gains and another quarter online and offline.

Speaker 4: When we complement these numbers, we can see that we continue to have market share gains in another quarter, online and offline.

This period, we were able to reach an all time high at Villa with 15.3% sure.

Speaker 4: This period we were able to reach an all-time high at VIA with 15.3% share.

According to the company trusts, we have an increase of 2% compared to last year, even with the online market dropping in physical retail we had one percentage point expansion keeping a predominance in the channel. According to JFK this market share gain reinforces our positioning and our brands and Brazilian retail, especially in.

Speaker 2: According to the Confidio Trust, we have an increase of 2% compared to last year, even with the online market dropping.

Speaker 4: In physical retail, we had one percentage point expansion, keeping our predominance in the channel according to JFK.

Speaker 4: This market share gain reinforces our positioning in our brands and Brazilian retail, especially in our core categories. And as we mentioned in the pillars of our strategy, customer satisfaction is at the center of everything we do. In this pillar, we've been keeping up our investments, delivering a lot of improvement.

Our core categories and as we mentioned in the pillars of our strategy customer satisfaction is at the center of everything we do and this better we've been keeping up our investments delivering a lot of improvements and we have a lot more to launch in the short term. One example is the evolution we had in our score from hit come at key all of our channels had an increase.

Speaker 2: and we have a lot more to launch in the short term. One example is the evolution we had in our score from Hitcom Akey. All of our channels had an increase in our scores year over year.

In our scores year over year, and I want to highlight the high rate we've had in our physical stores, which allows us to have customer loyalty in our channel with the greatest profitability as recognition for our work via received another two awards that really make it evident around the right track the Latam client SA Award and the.

Speaker 2: And I want to highlight the high rate we've had in our physical stores, which allows us to have customer loyalty in our channel with the greatest profitability. As recognition for our work, VIA received another two awards that really make it evident that we're on the right track. The Lifetime Client Essay Award and the Executive of the Year for Tech.

The executive of the year for Ted.

And a award with a case for the internationalization internalization of customer service from the authority for customer right and our structure for logistics with a 29 C. D's is another important advantage our infrastructure is ready and we have added capacity to develop business without additional capex needs, we've been expanding our appraised.

Speaker 2: and an award with a case for the internalization of customer service from the Authority for Customer Rights. Our structure for logistics with 29 CDs is another important advantage. Our infrastructure is ready and we have the capacity to develop businesses without additional CAPEX needs. We've been expanding our operation for customers out of our VA ecosystem, bringing revenue, diluting costs, and profitability for a network that already exists.

For customers out of our via ecosystem, bringing revenue diluting costs and profitability for a network that already exists our fulfillment operation in a multi marketplace had an increase of 70% of the amount of customers and 18% in the amount of orders and our operation.

Speaker 4: Our fulfillment operation in a multi-market place had an increase of 70% in the amount of customers in 18% in the amount of orders. And our operation...

With our expansion for logistics for third parties grew 21 times, the amount of customers and 181% that amount of orders I want to highlight the evolution in over 400% of the revenue from this modality and here. We're just at the beginning besides this with technology advances and operational levers, we'll be able to have more speed more routes better.

Speaker 2: with our expansion for logistics for third parties, grew 21 times the amount of customers and 181% of the amount of orders. I wanna highlight the evolution in over 400% of the revenue from this modality. And here we're just at the beginning. Besides this with technology advances and operational levers, we'll be able to have more speed, more routes, better reach, lower costs, and better terms for delivery, which reflect in the customer experience.

Reach lower costs, and better terms for delivery, which reflect in the customer experiences.

And to highlight that this is an advance in all of our modalities not only when we look at the annual comparison, but also when we look at the previous quarter. The deliveries in the marketplace that are not managed by via had improvements of 20% in their terms, which is a proof of a more active approach in closer to our sellers deliveries that are managed by a company already have low return.

Speaker 4: It's important to highlight that this is an advance in all of our modalities, not only when we look at the annual comparison, but also when we look at the previous quarter. The deliveries in the marketplace are not managed by VIA had improvements of 20% in their turn.

Speaker 4: which is a fruit of a more active approach and closer to our cellars.

Speaker 4: Deliveries that are managed by our company already have lower terms if compared to the modality mentioned before Also got 20% better and our fulfillment and deliveries for 1p with the best terms and Designs with more control of our entire customer journey Also had important evolution from 22 and 10% respect

If compared to the modality mentioned before also got 20% better and our fulfillment and deliveries for one P. But the best terms and deadlines with more control of our entire customer journey also had important evolution from 'twenty, two and 10% respectively and here we have another advantage from a competitive perspective.

Speaker 2: And here we have another advantage from a competitive perspective that's structural for VIA. Our iconic financial failure was a portfolio of 5.3 billion default rates at an historical level in the company. Our effective losses was delays over 180 days, represent only 4.9% of the total amount of our portfolio. Delaids over 90 days represent a 9.1% of portfolio. So very stable compared to the previous quarter.

That's structural for via our iconic buy now pay later with a portfolio of <unk>.

$5 3 billion.

A default rate that's at a historical level in the company, our effective losses with delays over a 180 days.

It represents only four 9% of the total amount of our portfolio today is over 90 days represent a nine 1% of the portfolio, so very stable compared to the previous quarter.

Stability in the short terms allow us to have the coverage rate for the provisions for losses. This is a massive portfolio with excellent history and allows us to capture value with new models for funding that allow us to expand with this project product the ESG agenda in the company has.

Speaker 2: Stability in the short terms allow us to have the coverage rate for the provisions for losses.

Speaker 4: This is a massified portfolio with excellent industry.

Speaker 4: and allows us to capture value with new models for funding that allows us to expand with this project. The ESC agenda in the company has been even stronger with evolutions very important, increasing our desire to do even more. In the environment, we have over 800 tons of waste sent to recycling through the HIVIVA program. And we're able to collect one ton and a half of electronics through the collection systems in the stores.

Then even stronger with evolution is very important to increasing your desire to do even more in the environment. We have over 800 tonnes of waste sent to recycling through the Veeva program, and we're able to collect one ton and a half of electronics through the collection systems in the stores at the phone the phone causes by year, we renewed.

Speaker 5: At the Fulnesseln Cases Valle, we renewed projects to have education inclusion programs and training and education for teens.

Projects to have an edge.

Inclusion programs and training and education for teens, we encourage Oliver employees to also be volunteers and initiatives, but the foundation at the social level, we were recognized as a company that the reference and best practices for sustainability and inclusion at the at those Institute.

Speaker 2: We encourage all of our employees to also be volunteers in the initiatives with the foundation. At the social level, we were recognized as a company that the reference and best practices for sustainability and inclusion at the SOS Institute.

Along with this we launched campaigns focus on maternity fighting gender discrimination and homophobia.

Speaker 4: Along with this, we launched campaigns, focus on maternity, fighting gender discrimination and homophobia.

Which were very well accepted by our employees and customers. When it comes to governance. We published three reports that really provide details and clarity and transparency on the initiatives of the company at annual via report following the guidelines from G. R. I the transparency physical report, which is a very unique initiative in the sector to provide more visibility on it.

Speaker 2: which were very well accepted by our employees and customers. When it comes to governance, we publish three reports that really provide details and clarity and transparency on the initiatives of the company. At annual via report, following the guidelines from GRI, the transparency fiscal report, which is a very unique initiative in the sector to provide more visibility on our tax initiatives and a report from the Cousin Bay Foundation providing details on our fund investments on social

Tax initiatives and a report from that caused by a foundation providing details on our.

Investments on social projects and our board also approved the election of al Sui towards our new CFO ever since the 10th of July I want to take the advantage to welcome LCL and invite him to present the main financial highlights.

Speaker 4: And our board also approved the election of El Suey through their new CFO ever since the 10th of July . I want to take the advantage to welcome El Sue and invite him to present the main financial highlights.

Thank you Hannah and Hello, everyone now I'm going to present, our financial highlights for the second quarter. Our net revenue had a reduction of two 1% in regards to the previous year, considering a scenario for consumption that they're challenging the online market is at a slowdown and the company's decision to transfer the depot.

Speaker 5: Thank you, Hanna Thuwen. Hello, everyone. Now I'm going to present our financial highlights for the second quarter. Our net revenue had a reduction of 2.1% in regards to the previous year, considering a scenario for consumption that's still challenging. The online market is at a slowdown and the company's decision to transfer the default entirely. The growth profit was 2.1% realized and a margin of 28.5%.

Entirely the gross profit was 2.1.

Yes, and a margin of 28.5%.

With a reduction of 2.9 percentage points compared to the previous year. We have three main points that explained as production number one a drop in net sales a mix of the category sold and third point, the beginning of a process to reduce and adjust our stocks in the company.

Speaker 2: with a reduction of 2.9 percentage points compared to the previous year. We have three main points that explain this reduction. Number one, a drop in net sales, a mix of the category sold and third point, the beginning of a process to reduce and adjust our stocks in the company.

Then when it comes to expenses. We also had a reduction of two 6% in regards to the previous year and as a percentage of the revenue we presented an improvement of 0.1 percentage point.

Speaker 5: Then when it comes to expenses, we also had a reduction of 2.6% in regards to the previous year. And as a percentage of the revenue, we presented an improvement of 0.1 percentage points.

So we reached an adjusted EBITDA of 469 million right.

Speaker 2: So we reached an adjust EBDA of 469 million RION and a margin of 6.3% compared to 9% from the previous year. We had the reduction.

And a margin of six 3% compared to 9% from the previous year.

We had the reduction of two seven percentage points.

Essentially due to the reduction of our gross margin.

Speaker 5: essentially due to the reduction of our growth margin. The 500 expenses as a percentage of our revenue had an increase of 3.2 percentage points.

The financial expenses as a percentage of our revenue and had an increase of three two percentage points.

Moving on to 10, 7%.

At a nominal level, we had an increase of $227 million, adding up to 801 million rise in the quarter.

Speaker 5: Moving on to 10.7%. At a nominal level, we had an increase of 227 million, adding up to 801 million, re-eizing the quarter.

This dynamic is mainly due to the increase in the selic rate the increase of the discount of receivables coming from a reduction of the supplier aligned by 1 billion compared to the previous year as a result of the dynamics mentioned before.

Speaker 5: This dynamic is mainly due to the increase in the silly grade, the increase of the discount receivables coming from a reduction of the supplier line by 1 billion compared to the previous year, as a result of the dynamics mentioned before.

We registered a net loss of 492 million rides with a negative margin of six 6% now I'm going to present, the dynamic for the cash flow that represents especially the losses registered in the quarter that consumption of 169 million in the working capital and despite the reduction in stocks from.

Speaker 2: We registered a net loss of 492 million rise with a negative margin of 6.6%. Now I'm going to present the dynamic for the cash flow that represents, especially, the loss is registered in the quarter, the consumption of 169 million in the working capital. And despite the reduction in stocks from 100,

<unk> hundred.

$670 million, we had a negative impact on the suppliers line and a reduction of liabilities of the C. D. C. I due to the lower origination and the spirit in regards to the monetization of taxes. We had a result of 659 million that was higher by 318 million compared to do.

Speaker 5: 670 million. We had a negative impact on the suppliers line and a reduction of the liabilities of the CDCI due to the lower origination in the spare.

Speaker 2: In regards to the monetization of practice, we had a result of 659 million that was higher by 318 million compared to due to some labor claims and liabilities. So we had an operational flow that was practically stable with a positive balance of 12 million rates.

To some labor claims and liabilities. So we had an operational flow there was practically stable with a positive balance of 12 million, whereas we had a capex of 99 million reais in the quarter considering a cycle of Capex is less expansion is when you look at the previous years.

Speaker 5: We had a cappix of 9.9 million reais in the quarter, considering a cycle of cappix is less expansionist when we look at the previous year.

After a significant reduction of suppliers in the first quarter, we had a recovery of 106 9 million in the second quarter.

Speaker 2: after a significant reduction of suppliers in the first quarter, we had a recovery of 169 million in the second quarter.

The leasing of 207 million and 555 million and the amortization of the debt this amount and the amortization is the most relevant that we had for this year.

Speaker 5: the leasing of 275,555 million in the amortization of the debt. This amount in the amortization is the most relevant that we had for this year.

So we end the quarter with a position of liquidity of $2 8 billion Reais.

Speaker 2: So we end the quarter with a position of liquidity of 2.8 billion reais.

In regards to the graph that we have $8 7 billion reais.

Speaker 2: In regards to the growth debt, we have 8.7 billion re-induced according to the expaturing notes of 14 that consider loans and funding. This amount includes 5 billion related to operations for CDCI.

According to the expansionary notes 14 that consider loans and funding. This amount includes 5 billion related to operations for cdti.

And for purposes of calculation of the covenants and to provide more understanding on the capital structure of the company. These liabilities have an asset that's a corresponding which is the accounts receivable of the sea Dci.

Speaker 4: And for purposes of calculation of the covenants and to provide more understanding on the capital structure of the company, these liabilities have an asset that's corresponding, which is accounts receivable of the CDCI.

Which is why we call these operations for the transfer of financial institutions.

Speaker 4: which is why we call these operations for the transfer, financial institutions, considered CDCI. This timeline for the death.

<unk> C D C. I this timeline for the debts does not consider the amortization of the C. D. C. I because every month, we generate new contracts for cdti and we have a decession subsequently generally the necessary cash for the monthly payments. So the timeline considers the payments.

Speaker 4: does not consider the amortization of the CDCI because every month we generate new contracts for CDCI. And we have a decision subsequently, generating the necessary cash for the monthly payments. So the timeline considers the payment flow of 3.7 billion according to the explanatory notes 14, excluding CDCI. After this disclaimer, when I highlight the extension of 1.1 billion realized through an issue of the bend.

LOE of $3 7 billion. According to the explanatory notes 14, excluding cdti. After this disclaimer I want to highlight the extension of one 1 billion realized through an issuance of debentures.

So from these $3 7 billion, 66% have maturities above one year.

Speaker 4: So from the 3.7 billion, 66% have maturities above one year.

It is important to highlight that we are complying with the covenants.

Speaker 4: It's important to highlight that we are complying with the governance for our financial instruments. And we have been working strongly to improve our capital structure that we'll discuss up ahead. I'll pass the floor back to you now.

For our financial instruments, and we have been working strongly to improve our capital structure that will discuss up ahead of plan.

As the floor back to you now.

Thank you also hey, guys. We just started now with the second part of our presentation to start talking about our transformational plan before you start presenting the plan I want to highlight our main competitive advantages and our unique positioning we have a very important asset base, which are our bonds at our customers as we're top of mind.

Speaker 4: Thank you all too. Hey guys, we just started now with the second part of our presentation. To start talking about our transformational plan before you start presenting the plan, I want to highlight our main competitive advantages and our unique positions.

Speaker 2: We have a very important ad space, which are our bands and our customers, as we're top of minds for the core categories with a long-term relationship with our over 30 million tons.

Core categories with a long term relationship with our over 30 million customers.

We have a competitive unique positioning and I want to highlight three dimensions protaganism in our national market.

Speaker 4: We have a competitive, unique positioning, and I want to have three dimensions. Protagonism in our national market, logistics, and our footprint in Brazil and scale and commercial strength. From a training perspective, we have a platform that's an omnichannel. It's very unique in Brazil with an extensive customer base and high sales of power. And a very unique, by now, pay later program with excellent returns and quality of the credit grant.

<unk> and our footprint in Brazil on scale and commercial strength from a training perspective, we have a platform that's an omnichannel and it's very unique in Brazil, with an extensive customer base and high sales of power and a very unique buy now pay later program with excellent returns and quality of the credit granted on the other side of us.

You can see our favorable position up there when it comes to new players due to our concentration in one P. M. CT categories with higher average ticket than higher entry barriers such as logistics for heavy duty items and funding for customers. Our three P is organic and complementary to our core business, it's not part of our strategy to compete with.

Speaker 2: On the other side of our side you can see our favorable position at FIA when it comes to new players due to our concentration of one P in court categories with higher average tickets and higher entry barriers such as logistics for heavy duty items and funding for customers. Our 3P is organic and complementary to our core business. It's not part of our strategy to compete with generalist platforms.

Generalist platforms, while we consider these competitive advantages are just presented we reviewed our strategic plan with the objective of making via a company that is more long lasting more resilient despite adverse scenarios with a robust and sustainable liquidity in the next years and support to give you some context the execution of the previous years.

Speaker 5: When we consider these competitive advantages are just presented, we reviewed our strategic plan with the objective of making via a company that is more long-lasting, more resilient, despite adverse scenarios with

Speaker 2: robust sustainable liquidity in the next years. And some more to give you some context, the execution of the previous years affects you to a different moment for the company and also for the macro environment. The focus from 1922 was the growth of the GMB expanding new sales channels, new categories and building adjacent businesses. The macro scenario favored this.

Reflected a different moment for the company and also for the macro environment. The focus from 19 to 22 was the growth of the gym be expanding new sales channels, new categories and building adjacent businesses. The macro scenario favored this bet and the execution was made and now we have a platform, that's better and bigger and more.

Speaker 5: Bet and the execution was made and now we have a platform that's better and bigger and more complete Now for the next two years we have significant adjustments in our strategy as we have the main objective To generate cash and be more profitable to prepare the company for a whole another cycle of growth after 25

Complete now for the next two years, we have significant adjustments in our strategy as we have the main objective to generate cash and be more profitable to prepare the company for a whole another cycle of growth. After 'twenty five in line with this we've gone deeper on the tiers per category suppliers S Skus and sales.

Speaker 2: In line with this, we've gone deeper on the tiers, per category, suppliers, SKUs, and sales channels, in core perroding discipline in our capital allocation to maximize value generation.

Channels, incorporating discipline in our capital allocation to maximize value generation. This strategy allows us to have the profitability of our existing platform as well as reduces the risks of execution with a big focus on the company's court.

Speaker 2: This strategy allows us to have the profitability of our existing platform as well as reduces the risks of execution with a big focus on the company's core.

On this slide we bring in a summary of what was done from 19 to 22.

Speaker 2: On this slide, we bring in a summary of what was done from 19 to 22. We just open up over 200 stores and 150 new markets. We added on over 12,000 SKUs and 20 new categories and are 1P category. The focus on online sales from 15, 5 billion to 15 billion per year, if we consider 3PR online sales already go over 50% of the company. There was also an accelerated construction of the marketplace and SKUs and sellers.

We did open up over 200 stores in 150, new markets. We added on over 12000 S. K as in 'twenty, new categories and a one P category.

<unk> the focus on online sales from 15 5 billion to 15 billion per year. If we consider three P. Our online sales are already over 50% of the company. There was also an accelerated construction of the marketplace and S Skus and sellers.

Pretty much in line with our main three P players with high cost of acquisition. However, and we also invested in tech companies to reduce our technology gap. This is complete and now we're establishing new priorities focusing on cash generation and improving profitability.

Speaker 5: Pretty much in line with the main 3p players with high cost of acquisition.

Speaker 2: However, and we also invested in tech companies to reduce our technology gap. This is complete. And now we're establishing new priorities, focusing on cash generation and improving profitability.

Our main priority is to first of all have a free cash flow that is robust with a coverage on interests improve our ROIC being a reference in the sector for the matrix, where the spread on cost of capital EBITDA and G. M. D are a consequence of our two previous initiatives the EBITDA margin should be higher than our current margin.

Speaker 5: Our main priority is to first of all have a free cash flow that's robust with a coverage on interest and prove our Royk being a reference in the sector for the metrics for the spread on cost of capital at Bdai and GMP our consequence of two previous initiatives

Speaker 5: The EBITDA margins should be higher than our current margins and the Jim V should reflect the adjustments focused on returns, reducing non-core categories and focusing on capturing opportunities in our core business where we generate more value. With these priorities, we have a transformation plan with two main initiatives.

In the gym beachhead reflect the adjustments focus on returns, reducing noncore categories and focusing on capturing opportunities in our core business, where we generate more value with these priorities. We have a transformational plan with two main initiatives.

Operational levers and structures for our capital, we'll start off with our operational levers here and I want I mentioned, the new metrics for margin and cash that are going to be used to manage the company. Instead of just having the gross margin. We're also going to adopt a more specific vision on profitability also considering other direct expenses the stock cost.

Speaker 2: operational levers and structures for capital. We'll start off with our operational levers here, and I want to mention the new metrics for margin and cash that are going to be used to manage the company.

Speaker 2: Instead of just having the gross margin, we're also gonna adopt a more specific vision on profitability, also considering other direct expenses.

Carryover and the funding for customers. Consequently, this changes our entire management process in the company, we have a commercial team that really reaches gold's and the adjustment of these goals with more granularity provides better decision, making maximizing our results on our last night. This adjustment of the <unk> goal, then routines and the company really lever the <unk>.

Speaker 4: the stock cost of carryover and defunding for customers. Consequently, this changes our entire management process in the company. We have a commercial team that really reaches goals and the be adjustment of these goals with more granularity provides better decision making, maximizing our results in our last line. This adjustment of the

Speaker 4: goals and routines in the company really levered the cultural change.

So a change we're trying to promote and making the company really focus on cash margin and return on invested capital generating a sense of urgency to sell idle capital issues, such as exceeding stock levels. We also have levers that go through our entire P&L and income statement, we're bringing in some expectations.

Speaker 5: We're trying to promote making the company really focus on cash margin and return on a messy capital generating a sense of urgency to solve idle capital issues such as exceeding stock levels. We also have levers that go through our

Speaker 2: P&L and income statement. We're bringing in some expectations, the level of maturity expectations, and other examples here with some of these initiatives that we're presenting. So we have 18 different levers that can be unleashed to over 100 initiatives. And the next slide I'm gonna provide more details about some of these, but I wanted to cover quickly the main initiatives and where we have the biggest impact on our income statement.

The level of maturity expectations and other examples here with some of these initiatives that we're presenting so we have 18 different levers that can be unleash into over 100 initiatives in the next slides I'm going to provide more details about some of these but I wanted to cover quickly the main initiatives and where we have the biggest impact on our income statement.

The impact on revenue, we're reviewing our pricing and promotion model screening systems at a mathematical models for decision, making reassessing the profitability of each product and each channel and reviewing the mix of what we want to work with on one P. On three P initiatives for capital structures, such as the F. I disease instruments that are gonna be mentioned by Altoona.

Speaker 2: Our Impact on Revideo, we're reviewing our pricing and promotion models. Green systems and mathematical models for decision making.

Speaker 2: reassessing the profitability of each product in each channel and reviewing the mix of what we want to work with on one PR on three P. Initiatives for capital structures such as the FIDC's instruments that are going to be mentioned by all students, it's a bit also contribute to unleash the recovery of our penetration in the vinyl palladium system with additional services that can bring positive impact to almost 250 million per year.

Submit also contribute to unleash the recovery of our penetration in the buy now pay later system with additional services that can bring positive impact of almost 250 million per year.

Two a production reduction of some of our variable costs, we changed our new marketing agency. So instead of just bringing now you bring more speed and use artificial intelligence, but we also materially reduce our SG&A and we have a rebate game. We also reviewed some super dimension expenses as we focus on core businesses and what generates.

Speaker 5: to reduction of some of our variable costs we change our new marketing agencies. So instead of just bringing...

Speaker 2: Now we bring more speed and use artificial intelligence, but we also materially reduce our shinii and we have a rebate gain. We also reviewed some super dimension expenses. As we focus on core businesses and what generates value we have a total gain of 200 million reais in our costs per year. In fixed costs we reviewed our personnel with the savings of $370 million per year. We reassess our investments in technology, reducing the annual cap bags from 1 billion to 600 million reais.

Thirdly, we have a total gain of 200 million rise in our cost per year.

In fixed costs, we reviewed our personnel with a savings of 370 million per year, we reassessed our investments in technology, reducing the annual Capex from 1 billion to 600 million Reais.

We reviewed our footprint of stores, making decisions that should bring in savings between 80, and 150 million annualized I also want to highlight the deployment of technology in our disease as long as the revision of our scope adjusting the focus onto the core of the business improving productivity at justice.

Speaker 2: And we reviewed our footprint of stores, making decisions that should bring in savings between 80 and 150 million reais. I also wanna highlight the deployment of technology in our DCs, as well as revision of our scope, adjusting the focus onto the core of the business improving productivity, adjust this process in our stock, and it makes feasible to have a reduction of 90 million reais.

This process in our stock and it.

It makes it feasible to have a reduction of 90 million reais per year.

And the L. A and when we looked at the impact on cash and cost of capital. We are migrating items from one PD therapy, and reducing seeding socs that will help US released over 1 billion raising their cash effect. Some examples of initiatives, we already implemented I'm going to start talking about our personnel structure, which our main focus in capturing of synergies between departments in the company a lot.

Speaker 4: in the LA. And with we're looking at the impact on cash in Calc capital, we are migrating items from one page to three feet. I'm reducing exceeding stocks that will help us release over one billion reais in their cash effect.

Speaker 5: Some examples of initiatives we already implemented. I'm going to start talking about our personal structure, which are main focus and capturing of synergies between departments in the company. Allow us to reduce sticks.

This reduced 6000 full time employees, leading to savings of 270 million, whereas besides savings. This structuring adjustment will also bring in more simplicity and greater speed in the company on this slide we have the initiatives that also bringing positive impacts in all of our stores.

Speaker 4: thousand full-time employees leading to savings of $370 million. Besides savings, the structuring adjustment will also bring in more simplicity and greater speed in the company. On this side, we have the initiatives that also bring in positive impacts in all of our stores.

And we also detailed some of the impacts with the closing of stores. The impact is a reduction of two to three per cent of the G. M. B, but we have gains of almost 30 to 50 million rise in our margin at almost 80 to 150 million, whereas in contribution to the eye and the release of almost $200 million in stock. So when we focus on what generates.

Speaker 4: And we also detailed some of the impacts of the closing of stores. The impact is a reduction of two to three percent of the GMP. But we have gains of almost 30 or 50 million in our margin and almost 80 to 150 million in contribution to the LA. And the release of almost 200 million in stock. So when we focus on what generates value, we reviewed our mix of assortments and categories we operate in our 1P category.

We reviewed our mix of assortment than categories, we operate in a one P category.

Categories that have negative margins are going to move on to the three P. We already have 23 categories that have migrated completely to three P. With the results in this initiative, we have 1% to 2% of the gym via a one P being transferred to therapy and a reduction of 150 million rise in our stock as well as gains in our margins of $50 million right.

Speaker 5: Categories that have negative margins are going to move on to the 3P. We already have 23 categories that I've migrated completely to 3P. With the results in this initiative, we have 1 to 2% of the GMV of 1P being transferred to 3P. And a reduction of 150 million reais in our stock.

Speaker 5: as well as gains in our margins of 50 million reais.

Besides representing less than 5% of our active customer base for the customers. This change is transparent and it can do to service them and work with rupee with better margins without having to invest more capital in this slide we're going to show you. Some disclosure of the initiatives that had been deployed that are helping us to reduce stock we adjusted our purchase plan and a cool.

Speaker 4: Besides representing less than 5% of our active customer base, for the customers, this change is transfer. We're gonna continue to service them and work with RIP with better margins without having to invest more capital. In this slide, we're gonna show you some disclosure of the initiatives that have been deployed that are helping us to reduce stock.

Speaker 4: We adjusted our purchase plan and a full rejection will take place after the sales term for the exceeding stock. We already reduced our stock by almost 800 million RAs if compared to the previous quarter with an improvement of 14 days in our stock period, but we are on to 98 days.

Reduction will take place after the sales to them for the exceeding stock we already reduced our stock by almost 800 million raised if compared to the previous quarter with an improvement of 14 days in our stock period moving on to 98 days. This is an important advance but with the execution of these initiatives on the right side of the slide we have the objective of reaching the term <unk>.

Speaker 4: This is an important advance, but with the execution of these initiatives on the right side of the slide, we have the objective of reaching the term below 90 days. Now I'll pass up Lauren to Elfio to present the main levers for our capital structure. Thank you, Anato. Now I want to start off just by reminding you that our focus on our transformation plan is to generate cash and profitability.

Oh 90 days now I'll pass the floor to <unk> to present, the main levers for our capital structure. Thank you and also now I want to start off just by reminding you that our focus on our transformation plan is to generate cash and profitability.

So as and as I mentioned previously this time has a fundamental pillar, which is a cultural change where their cost of capital is completely visible and transparent and relevant in the analysis and processes for decision, making our day to day, that's why we're going to reinforce our discipline in capital management that is employed.

Speaker 4: So as I mentioned previously, this plan has a fundamental pillar which is a cultural change where the cost of capital is completely visible and transparent and relevant in the analysis and processes for decision making our day to day.

Speaker 2: That's why we're going to reinforce our discipline in capital management that's employed. Henneth has already mentioned the stocks, and we also have an initiative to prioritize.

As already mentioned the stocks and we also have an initiative to prioritize the capex for the next two years and finally, we're gonna be valuing the business opportunities that have more profitability and less execution risks. This time does not consider profitability of unknown territories are creating something very different we just wanna folk.

Speaker 4: the CAPEX for the next few years. And finally, we're gonna be valuing the business opportunities that have more profitability and less execution risks. This fund does not consider profitability of unknown territories or creating something very different. We just wanna focus on leveraging businesses that we know how to do well, which are a core. Such as focusing on the sales and physical stores and increased penetration in our buy-and-out pay later.

On leveraging businesses that we know how to do well, which are a core such as focusing on the sales in physical stores and increased penetration in our buy now pay later.

Besides the positive impacts of the operational levers.

Speaker 4: Besides the positive impacts of the operational levers with strong financial biases, we also have some levers that are focused on capital structure. The binopulator is one of the main assets and differentials that we have as a competitive advantage of the sale lever generates more low-teap among customers and increments profitability. Today, our binopulator is funded by the banks in CDCI operations. The banks anticipate to be of the payment flow

With strong financial biases. We also have some levers that are focus on capital structure. The buy now pay later as one of the main assets and differentials that we have.

Competitive advantage of yet the sales lever generates more loyalty among customers and increments profitability today, our buy now pay later was funded by the banks in C. D. C. I operations the banks anticipate two via the payment flows.

To provide it to the end customer and the maturity of the installments the customer pays to via that then pages to the banks the banks use a corporate credit limit to be able to perform this operation thus the availability and costs of his life credit facility is vary according to the bank market conditions.

Speaker 4: provided to the end customer and the maturity of the installments, the customer pays to be that then pays these two.

Speaker 4: They're banks use a corporate credit limit to be able to perform this operation. Thus, the availability and cost of these line of credit facilities vary according to the bank market conditions and corporate risks that VIA has.

Corporate risks that via has the benefit of having a portfolio for the benefit of that is highly fragmented and an excellent credit reputation is not captured correctly and our funding.

Speaker 4: The benefit of having a portfolio for the binopulator that is highly fragmented

Speaker 4: And an excellent credit reputation is not captured currently in our funding.

So the objective that we want to migrate from a CDC I modeled two the F. I D. C model. This is a funding product process, that's gonna be segregated idea as we access the capital market directly taking on the benefit of a risk of it.

Speaker 5: So the objectives everyone am I great from a CDCI model to this FIDC model. This is a funding product process that's going to be segregated at the, as we access the capital market directly, taking on the benefit of a risk of a portfolio that's really fragmented with a credit availability and quality. This will help plus have credit limits for the CDCI to be used in other needs. This is a transformational movement in our capital structure in the company.

Portfolio, that's really fragmented with the credit availability and quality. This will help us to have credit limits for cdti to be used in other needs. This is a transformational movement in our capital structure in the company.

The graph on the left side shows the credit exposure in the second quarter, where the March the bank market and the capital markets and we have 82% in the bank market and 18% in the capital market.

Speaker 5: The graph on the left side shows the credit exposure in the second quarter where the bank market and the capital markets. And we have 82% in the bank market and 18% in the capital markets.

From the total 50% is related to cdti.

Speaker 3: From the total, 50% is related to CBCI.

And to see your motto, if we migrate to the F. A D. C structure, we have released potentially a five built in in our bank limits and we can advance in the buying up in EDA with greater flexibility. We have two models in the F. I D. C instrument, we can keep our dismissing their balance sheet and the structuring of the quote.

Speaker 5: In this new model, if we migrate to the FIDC structure, we have the release potentially of five billion in our bank limits. And we can advance in the binocular with greater flexibility.

Speaker 5: We have two models in the FIDC instrument. We can keep or dismiss in the balance sheet and the structuring of the quotas will determine the model. But the priority at the company level is not to remove this from our balance sheet. We're very comfortable with our credit and the risk of our portfolio. Our priority now is to release the bank limit.

It is well determine the model, but the priority at the company level is not reasonable to remove this from our balance sheet, we're very comfortable with our credit and the risk of our portfolio. Our priority now is to release the bank limits.

So we are in this process to implement the infrastructure to performance execution, and we have to ensure the independence and segregation of EFI do see instrument towards via we have customers like all the way to the start to pay their buy now pay later in cash to segregate the F. A D C, but we need to create a 1100 stores.

Speaker 4: So we are in this process to implement the infrastructure to perform this execution. Now we have to ensure the independence and segregation of the FIDC instrument.

Speaker 4: towards VIA. We have customers that go all the way to the store to pay, they're by an operator in cash. To segment the FIDC, we need to create in our 1,100 stores a structure for a bank correspondent so that the bills can be paid and released directly on the FIDC's bank system. And as the cash can be segregated between VIA and FIDC. We hope this infrastructure can be ready by the beginning of September .

A structure for a bank correspondent so that the bills can be paid and released directly on the F. I D. C. This bank system and that the cash can be segregated between via and P. J F. I do see we hope this infrastructure can be ready by the beginning of September .

Historically via I've been using bank debts, and a little bit of the capital market in Brazil as a source for funding in the company.

Speaker 5: Historically, VIA has been using bank debts and a little bit of the capital market in Brazil as a source for funding in the company.

But what we're doing now is that we're assessing new opportunities for fundraising and other liquidity sources, such as the capital market internationally.

Speaker 4: But what we're doing now is that we're assessing new opportunities for fundraising and other liquidity sources, such as the capital market internationally.

Investment agencies and access to other partnering banks. So this is how we will be prepared to axis.

Speaker 2: investment agencies and access to other partnering banks. So this is how we will be prepared to access different pockets for liquidity. Megan Sundance offered terms, higher volumes, or better competitive prices. The diversification of this funding will be important for strategy and the liability management work is ongoing and constant to improve the debt profile in the company.

Pockets for liquidity lagging, sometimes offered terms higher volumes or better competitive prices. The diversification of this funding will be important first strategy and the liability management work is ongoing on constant to improve the debt profile in the company.

And the objectives here are very clear, we want to manage liquidity and debt guaranteeing the sustainability financially and all of the market periods, we will have greater flexibility financially to execute the operational levers and finally, we'll prepare for greater growth.

Speaker 5: and the objectives here are very clear. We want to manage liquidity and debt, guaranteeing the sustainability financially in all of the market periods. We will have greater flexibility financially to execute the operational levers, and finally, we'll prepare for greater growth.

From 'twenty to 'twenty five onwards, besides all of the initiatives operationally and the capital structure that we discussed we have another chapter just on monetizing assets to continue to support the company's cash position in the short term.

Speaker 2: from 2025 onwards. Besides all of the initiatives operationally and the capital structure that we discussed, we have another chapter just on monetizing assets to continue to support the company's cash position in the short.

And our recurring manner, we have the fiscal and tax credits, adding up to $2 5 billion raised for this year.

Speaker 4: In a recurring manner, we have the fiscal and tax credits adding up to 2.5 fitting reds for this year.

As we've mentioned, we have 1 billion reais of stock that we're bringing to this material number we have some stores that we hope to.

Speaker 4: We have one billion reais of stock that we're bringing into this material number. We have some stores that we hope to close down. And finally, we'll sell a subsidiary that has tax assets as well. In total, we have a potential for monetization that adds up to approximately four billion reais in 2020.

<unk> closed down and finally, well salaries subsidiary that has tax assets as well in total we have a potential for monetization that adds up to approximately 4 billion reais in 'twenty two 'twenty three.

Thank you so much and I'll pass the floor back to an awesome. Thank you I was too.

Speaker 5: Thank you so much and I'll pass the floor back to Renato. Thank you, I'll see you.

We have a declared mission to make via by 2025, a reference and benchmark in retail and value generation as well as return on invested capital on this side, we reinforced where were headed and where we want to reach one have a robust free cash flow a healthy ROIC with a good spread on the cost of capital robust EBITDA margin in our business.

Speaker 4: We have a declared mission to make via by 2025 a reference and benchmark in retail and valley generation as well as return on a basic capital.

Speaker 2: On this side, we reinforce where we're headed and where we want to reach.

Speaker 2: We want to have a robust pre-cash flow, a healthy roiq with a good spread on the cost of capital, robust EBITAM margin and a business that's really resilient despite challenging economic scenarios. Overall, we have 18 levers with 11 that have already been deployed. We're going to be reviewing our capital structure and a major mindset change in the organization to value profitability and cash and a focus on what we really do well and what generates value.

That's really resilient despite challenging economic scenarios overall, we have 18 levers with 11 that have already been deployed we're going to be really reviewing our capital structure on a major mindset change in the organization to value profitability in cash and a focus on what we really do well and what generates value.

We'll have another company, that's profitable cash generator with a strong balance sheet, which will allow us to explore all of the competitive advantages we already have our strategic plan and the long term will be presented at the right time. After we mature some of the levers on these transformation plans.

Speaker 2: Soon we'll have another company that's profitable cash generator with the strong balance sheet Which will allow us to explore all of the competitive advantages we already have

Speaker 2: Our strategic plan in the long term will be presented at the right time. After we mature some of the levers in these transformation plans.

But just to illustrate a bit of the huge potential for growth and opportunities will have a bad we included this slide.

Speaker 2: But just to illustrate a bit of the huge potential for growth and opportunities we'll have up ahead, we included this slide.

As a top of mind in home appliances, and electronics with over 30 million active customers in our CRM, we have a huge potential to offer other products and services to our customers.

Speaker 2: As a top of mind in home appliances and electronics with over 30 million active customers in our CRM, we have a huge potential to offer other products and services to our customers.

Generating more profitability in operation were a destination for core products such as furniture.

Speaker 2: Generating more profitability and operation were a destination for core products such as furniture.

White line items at home appliances, and TV, but we have a huge capacity to expand our share in different regions in Brazil, and the online market through a unique structure that already exists and low capex needs. So we can take advantage at most of our omnichannel approach to have a national reach and deliveries on the reverse logistics of light and <unk>.

Speaker 2: white line items, home appliances and televisions. But we have a huge capacity to expand our share in different regions in Brazil and the online market. Through a unique structure that already exists and low cap ex-nates, we can take advantage at most.

Speaker 4: of our Omni Channel approach to have a national reach in deliveries and the reverse logistics of light and heavy duty items, really monetizing our logistical network, providing services to third parties as well. We have many opportunities for new commercial partnerships based on our existing platform.

Judy items.

Really monetizing our logistical network, providing services to third parties as well we have many opportunities for new commercial partnerships based on our existing platform on the online channel, we're going to reap the fruits of the investments to improve the purchase experience and improve conversion expanding our relevance and share in this channel and unleashing possibilities.

Speaker 2: On the online channel, we're going to reap the fruits of the investments to improve the purchase experience and improve conversion, expanding our relevance and share in this channel and unleashing possibilities for monetization of services addition.

For monetization of services. Additionally.

When it comes to financial solutions, we are unleashing limitations to grow or buy now pay later that should take on greater sharing ourselves and of course, we also have alternatives to explore even more of the motto of the service and.

Speaker 2: And when it comes to financial solutions, we are unleashing limitations to grow our binocular litter that should take on greater share in our sales.

Speaker 2: And of course we also have alternatives to explore even more of the model of the service and expand our

Expand our strategic partnerships so to sum it up we're very confident and very excited with what's coming ahead I want to take advantage to greatly think are a huge team at via that has been really being engaged in this transformation accelerating the results, we captured and will inspire us to do even more. Thank you all so much and see you tomorrow at our earnings.

Speaker 2: strategic partnerships. So to sum it up, we're very confident and very excited with what's coming ahead. I want to take advantage to great think, our huge team at VIA that has been really being engaged in this transformation, accelerating the results we captured and will inspire us to do even more. Thank you all so much and see you tomorrow at our earnings call.

Scott.

Okay.