Almacenes Éxito S.A. (EXITO) Earnings Call Transcript & Summary

Good morning, everyone. Thanks for joining us today for Grupo Éxito's Fourth Quarter and Full-Year 2024 results. Please note that this conference is being recorded. [Operator Instructions] It is my pleasure to introduce Mr. Carlos Calleja, CEO of Grupo Éxito; Mr. Carlos Mario Giraldo, General Manager for Colombia; and myself, Ivonne Windmueller, CFO of Grupo Éxito. Please move to Slide #2 to acknowledge the note on forward-looking statements. Turning to Slide 3, we have the agenda. We will begin with words from our CEO, Mr. Carlos Calleja followed by an update of the ADS and BDR listing process, then we have the review of the financial and operational highlights to continue with our financial performance for the fourth quarter and full year 2024. The call will end with key takeaways and Q&A session. [Operator Instructions] I will now turn the call over to Mr. Carlos Calleja.

Thank you, Ivonne, and hello, everyone. It's great to be here today with all of you. I prepared a few words, written down a few words so that I can go over some points regarding what we've achieved, which has been quite a lot in the last year. So here goes. Thank you for joining us today as we review Grupo Éxito's 2024 performance. It's been a year since the acquisition and change of control. And I'm pleased to share that we're genuinely thrilled with how it's unfolding. We're united as a team driven by a shared ambition to deliver meaningful value to our shareholders. Our interests, our Board of Directors and governance, and our strategy are fully aligned with all investors, and we are working relentlessly to turn that alignment into results. Grupo Calleja and Grupo Éxito share a powerful common vision, a purpose-driven approach that shapes everything we do. Together, we're crafting a differentiated value proposition to connect with and serve every market segment effectively. Beyond that, we're committed to leveraging our business as a force for good, driving economic and social progress through our corporate responsibility programs and foundations. At Grupo Éxito, our commercial strategy rests on 2 pillars. First off, we are focused on enhancing our value proposition and brand efficiency to create extraordinary customer experiences while delivering value through a smart mix of excellent assortment and competitive pricing. Secondly, but just as important, we're sharpening our focus on cost efficiency, optimizing processes, boosting store profitability per square meters, and building a leaner, more agile organization. We believe in fostering an owner's mentality across the company, stewarding resources wisely, and working with passion and purpose to secure our sustainability over the short, medium and long term. To our investors, I'll echo a timeless truth. We like to say this in our company. We focus intensely on taking care of the pennies, knowing the dollars will follow. Our business hinges on 3 key fronts: sales, margins, and costs, and we're pulling every lever to drive results. In terms of gross sales, we're collaborating closely with our teams and suppliers to unlock the full potential of our store network. By expanding our assortment, amplifying savings through a high-low pricing strategy, and keeping our textile and entertainment categories vibrant, we aim to be the one-stop shop for essentials and more. Speed and proximity matter. We're strengthening supplier partnerships and simplifying our brand structure under Éxito Carulla in Colombia to boost same-store sales and efficiency. In terms of gross margins, our margins are solid, but we're not standing still. We're working hand-in-hand with suppliers to deliver greater savings to customers without compromising profitability on our end. Dynamic promotions built on collaborative supplier relationships are key, especially as we navigate economic headwinds together. In terms of costs, we're streamlining our organizational structure and simplifying processes to hit our cost reduction targets. This is tough work, but it's where we see the greatest opportunity to fortify the business and lift margins over time in a consistent way. Thanks to the dedication of our teams and partners, we're seeing a shift in momentum. While we're not yet at our ultimate goals, the last quarter of 2024 signals a promising trajectory, fueled by strong retail and real estate performance in Colombia and growth in Uruguay. We're confident we're on the right path. Let me spotlight a few numbers before Carlos Mario and Ivonne dive deeper. Consolidated revenues reached COP 21.9 billion, up 6% year-over-year, excluding currency effects, powered by a robust fourth quarter. Net profit surged 23%, including currency effects in the fourth quarter, closing the year at MXN 54,786 million, a positive result we are proud. In Colombia, sales grew 2.2% in fiscal year '24 with double-digit EBITDA margins in Q4, driven by food and nonfood recovery and gains in e-commerce and direct channels. I should add also that the numbers we're getting in from Nielsen and our own numbers and our suppliers' numbers are telling us that we're gaining important market share. Uruguay delivered the group's highest EBITDA margins with sales outpacing inflation, thanks to our 33 Fresh Market stores and stellar traffic during the Punta del Este high season. In Argentina, local currency revenue rose with real estate growing at 90.6%. Our strategy is taking root, unifying operations under Éxito and Carulla, expanding the assortments nationwide, refreshing thematic days, and doubling down on unbeatable price and high-low tactics. Amid inflation, we've kept food price increases to 0.9 points below the national level in Colombia, easing the burden on Colombian families through early buying and creative promotions. We're building toward better returns for our shareholders, those who stood by us, and those considering joining the journey. With that said, I'll hand it over to Ivonne and Carlos Mario so that they can dive deeper into the numbers.

Thank you, Carlos. Please move to Slide #6 to review the rationale behind the listing of Grupo Éxito's American depository shares from the New York Stock Exchange and the Brazilian depository receipts from the Brazilian Stock Exchange. [indiscernible] relevant information released on December 20 of 2024 and February 14, 2025 Group Éxito's board of directors approved the voluntary releasing and the registration of the company's ADS New York Stock Exchange and the BBRs from the Brazilian Stock Exchange B3, with the objective of seeking for a more efficient float distribution. At the end of 2024. The shareholding structure of the company included more than 40,000 holders, representing a 13.2% float distributed across the 2 markets, of which 9.7% was in Brazil, 1.8% was in Colombia and the remaining 1.6% in the US. From December 31st, 2024, after January 21st, 2025, the float in the Colombian Stock Exchange increased to 2.2% following the process of the ADS delisting. As of February 25th, the float in the Colombian market increased to 2.5%, while in Brazil decreased to 9.4%, and in the US to 1.3%. Grupo Éxito's intention is to bring this 1.23% growth from the US, and the 9.4% from Brazil to the Colombia Stock Exchange by already delisting the ABS and recently requesting the discontinuation of the BBRs, following the company's strategy to focus on maximizing returns to all shareholders with the aim of having a more efficient shareholding structure, as well as considering that Colombia is the natural market of our shares. The company will continue to comply with its information disclosure and other obligations as a listed issuer under the relevant rules of the Colombian Stock Exchange, as well as other applicable laws and regulations. To illustrate the stages of this ongoing process. Please move to slide number 7. According to the ADRs delisting process that started on December 20th, 2024 and it has been informed to the market on January 21st, 2025, it can affect the termination of Group Éxito's ADS program. As stated by JPMorgan on its BM marketing announcement released on December 20th for Q1 days starting after the program termination on January 21st, this means at the close of Business New York Times on March 3rd, holders may instruct depositary Jp Morgan about surrendering their ADS from cancellation to convert into common shares in Colombia, to remain as shareholders, or to definitively sell their position. On February 14th, the Board of Directors approved the voluntary discontinuation of the DDR program, aligned with the previous decision to terminate the ADS program in the United States. That same day, the company submitted to the Brazilian Stock Exchange B3, the DDR discontinuation request. The Brazilian Stock Exchange has to deliver its evaluation and opinion to the Brazilian Securities Commission, the CVM, then the CVM needs to grant its authorization for the discontinuation of the DDR program. The D3 and CVM have no legal term for the revision and approvals, but the company estimates a time frame of up to 30 days, with an estimated date of March 28th. Once the approval is granted by the CVM, the DDR holders have up to 30 days after the release of the notice to the holders to inform the depositary about the surrender of their DDR for cancellation and conversion into common shares in the Colombian Stock Exchange. The estimated baseline will be until May 9th, when the digital conversion period concludes. The sale of the remaining DDRs that have not been submitted for cancellation will begin. We advise to consult with your local market agent to ensure that the delivery of the instructions of the deposit securities are properly and timely provided to the depository, and please contact J.P. Morgan for further information. Now I will turn the call to Carlos Mario to present Group Éxito's operating highlights for the fourth quarter and full year 2024.

Thank you, Ivonne. Let's go to Slide #9 and speak about the consolidated highlights for the quarter and for the full year. The fourth quarter was no doubt the best quarter in the year following a very promising third Export and its low-level expenses, EBITDA, net profit. And it shows a trend that we hope and we are working hard to see going to 2025. For revenues in full year, we have revenues for 21.9 Colombian pesos billion. That is an increase of 6% without a foreign exchange impact and of 3.6 with the FX impact. Our recurring EBITDA grew by 2% without FX and was a -0.9% with FX. That is a flat versus the previous year. It is important to note that the Q4 had an important contribution to the EBITDA, with the growth of 21.1% and with the best margin in the year of 10.1% margin. SG&As kept at the same percentage level versus 2023, regardless of the important inflation that we had in all the countries. And it is important to highlight the performance of Colombia that in SG&As came near to zero during that year. The net result, the consolidated net result was COP 54,786 million Colombian pesos imposed by the COP 146,000 million that were recorded that arrived during the fourth quarter. Let's go to slide number 11 to speak about the top-line performance at a consolidated level and at each country. It's important to highlight that Colombia had a net revenue of plus 4.7% in the fourth quarter, improving year versus the previous quarter, and with a like for like market share, important game for the year of 60 basis points arriving to 25% of the total market. Retail sales for the full year at a consolidated growth of 6% without FX, with Colombia at plus 2.7%, Uruguay increasing 5.9% in Argentina, 62%. Colombia inflation in food, fourth for the whole country and the full year was 3.3% measured by then. And that compares against that 2.4% increase in food inflation. It's too late. The idea is that we are performing our promise of creating savings in the investment of our customers in your food basket. It is important to highlight the non-food trend, and we saw non-food growing by 5.8% in the fourth quarter, which is clearly a sign of an improvement of consumer demand and companies. Point to slide #12. In our strategic focus, it is consistent in enhancing the experience of our customers first and the gradual conversion of stores into Éxito and Calleja, which are top of mind in leading brands, and which a mean 88% of the total revenue who Grupo Éxito in Colombia. As a whole we did 26 conversions during the year. That added to 14 that we have done in this first part of the year. That leads to a total of 40 converted stores, up a potential of 150 stores. It will be executed in the following years and in this year, of course but in simultaneous, we are making an intervention on the full store portfolio with the different brands to enhance the experience of our customers, and we are working in a consistent way to have the best assortment for our customers so that they can always make their food and purchase of a food and some non-food items. And we increased this assortment by around 2000 SKUs to use. That is an increase in average of 30% that new products in the assortment now represent around 5% of receipts. We continue to perform with innovation around the pillars of love, next to stores and fresh market [indiscernible] . An example of those are the textile boutiques, the electro specialists and look and feel of the store. [indiscernible] and personal care and beauty are some of these examples. Going to slide #13. It is important to say that we continue to be consistent in the pillars of customer savings across all brands and to our customers. That is very important today, and we do it with things which are completely tangible and real at the moment, and very well received and perceived by our customers. I start with that generic space. Those are space in which we have a consistent and discounts in specific categories every Tuesday in all the brands, all the stores, we have a fruit and vegetable and discount and which now see fruit and vegetables in this space increasing by 28% versus previous year. Previously we are seeing a meet. The very key of destination favorite is the food supermarkets, with our very important discounts and arriving to an increase in sales in all the meat in our 54% versus the previous year and in the prior days, we're seeing spirits and snacking discounts with an increase of 45%. This makes and gives reasons to all the customers to have a special menu benefits in this day of the week. Of course, it is important to say that during the weekends we have consistent, high and low offers in collaboration with our suppliers and taking profit of the payment weekends. This is an expertise that Grupo Calleja has been done to remain years in Salvador, and that has been brought in a very important way to the Colombian market. We continue with that unbeatable products promise in price about a thousand products, half of them be private brand and new and national brands and international brand products. Also, the whole growing by 40% and in the branded offerings of our suppliers is growing by 50%. According to slide number 14. We are also working a and we spoke about the experience for my customers. We spoke about pillars of savings for the consumers. But at the same time when working in a very is a reliable and consistent way and comprehensive in costs and expense that Carlos said in his introduction. This is a key pillar for the performance of results and in our Grupo Éxito. And then we had very important results throughout the year. For example, in Colombia, for the full year, total SG&A grew by 0.1%, compared with a 9.3% inflation that we had a suppression from the previous year. Total savings capture worth around COP 438,000 that is around $140 million. And that's not only it. It's also in material negotiation of our contracts, in control of shrinkage levels and our source and the synergies that we have been working as a group in the different countries, putting together Uruguay, Argentina, Colombia and of course, in El Salvador. Slide number 15 is let's speak about saving in Colombia. And they have that the best quarter with an increase in sales for sales, up 4.4%, with a positive performance of the [indiscernible] brand growing 4.8% and the Calleja brand growing 10.9%. We had a very important summit coming from North Pole with a 5.8 growth in the Q4 and are low cost performance. Super Inter, Surtimax, SurtiMayorista, FFO grew 2.7%. In slide number 16. We continue to be very strong and aggressive in our omni channel sales as a competitive and comparative advantage arising in Colombia COP 2.3 billion, growing 6.5%. And that is the total sales figure of around $550 million. Completely material. And with that share in retail sales up 14.7 percentage. And that is also important in full . We speak only of consumer goods with 13.4% share. Our best bets include our [indiscernible] that grew by 27% and in then home delivery we had 23.5% orders of home deliveries growing by 21%. Going to slide number 17. If I start to speak about our complementary businesses, as you have seen, real estate is becoming increasingly important. And it's consolidating its leadership position in Columbia. And it's the number 3 position in Argentina. The current valuation of Viva Malls, for example, our vehicle in which we own 51% is COP 3.7 billion Colombian pesos. That is around $450 million. Our total G&A, including Viva Malls and the other additional commercial galleries that the company hopes that 100% is 807,000 square meters, with a very strong occupancy level of 98%, and with revenues growing by 13.6% for the full year. We have highlight Viva Envigado with the inclusion of the Ikea store. 17,000 GLA square meters and Viva Malls survives to be the most important shopping mall in Columbia, with around 160,000 square meters of GLA. Slide 18 speaks about our other 2 material complementary businesses [indiscernible] and Puntos Columbia. Puntos Colombia is growing at an exponential manner. It now has a penetration according to canter measurement of one inch 3 households. It is the number one brand perceived in loyalty coalitions in the country, and it has a powerful database coming from Colombia and Mexico. They are a [ 7.8 million ], which are a frequent users of Puntos Colombia within our brands and also with our allies. We arrived up to around [ 4,900 ] this week and redeem points or issue points within the Puntos Colombia and to just flat out a group at Fort Walton, it maintains the triple A rating, and with a loan portfolio of COP 2.1 Colombia million and 1.3 million credit cards with a very important percentage of people, that is, those credit cards that are being used every month or that have some charge in that credit card. The most important point to have a improvement in non-performing loans is increasing by 571 basis points, and getting to single digits, something that we have not seen in the previous 8 years. I hand it back to Ivonne for financials and then we will come back to the conclusion.

Thank you. Let's continue. Slide number 19. Reducing unit performance by country. In Colombia as previously presented. The provisions for departure of 4.5 billion Colombian pesos, growing 4.7%, and for the full year, 16.2 billion Colombian pesos with up 2.7% growth. Sales in the quarter posted depressed performance of the year. The group, in line with the local inflation, the recovery of the non segments and the only chance. Although revenues grew 17.1% for the quarter and 11% for the year, driven by the recurrent real estate operation and other complementary business performance, both with double digit growth. Quarterly gross margin of 23.6%, gaining 57 basis points in a 22.1% for the full year, reflected the strong commercial activities compensated by the positive real estate investment performance that grew 12.7% and G&A within spending performance decreased 5.9% during the quarter. Improve 174 basis points, reaching an historical double rate of readiness to highlight the full year expenses that were stable with previous year. Taking into account the extension of expenses for the CTI 9.6% in an uneven minimum wage increase at double digits. This was achieved thanks to the ongoing cost control of and efforts that amount 438,000 units Colombian pesos. Colombian maturity deepening for the purchase of [ 132,211 ] Colombian pesos increased 30.5% and and historical 11.3% break. That includes 223 basis points. For the full year EBITDA , increased 4.7% and gained 34 basis points when excluding property sales meetings. This result reflects a positive change in the sales performance trend. The positive contribution from the real estate and other companies, small businesses, as well as a strong action plan in costs and expenses. For the [indiscernible] with a top line that do above inflation, are 6.1% in the factory and 4.2% in Colombian pesos, and a one year revenue that grew 5.8% in the district. The positive top line evolution was supported by a solid commercial strategy and a performance of the Fresh Market. Quarterly gross profit in local currency group, 6.6% above revenues growth. Full-year gross profit reached a rate of 36.2%. Improving 58 basis points thanks to the solid sales solid sales evolution, the logistic cost, and better position with suppliers to support the commercial activities. And juniper [indiscernible] low inflation at 1.7% in any group 150 basis points in rate, thanks to the hospital action plans and efficiencies, which really dig for the quarter of COP 136,326 million, Colombian pesos increased 22.9% when excluding effects. For the full year EBITA grew the local currency 13.5% and the double digit margin of 11.4%, including 76 basis points. Then the quiet operation remains the important and the most profitable business unit in the group. I can see now with a 2 year revenue growth 61.2% in local currency. Sales performance, reflecting the economy's adjustments to address the inflationary context affecting the consumption partially compensated by the real estate business contribution that grew 72.5% and continued with some occupancy rates. Gross margin was 29.7%, reducing 452 basis points. Showed that higher price competition and business performance. At [indiscernible] may have been impacted by inflationary pressures, partially mitigated by the ongoing plans and efforts in the cost controls. [indiscernible] for the quarter dropped from full year figures and to negative territory, reflecting the lower sales evolution, price investments and inflationary effects on costs and expenses. At consolidated level. Net revenues for the quarter posted its business performance, in which COP 6.3 billion Colombian pesos improved 16.1% and 3.8% when excluding FX effect from international operations. Net revenues of 21.9 million Colombian pesos that grew within 6% in the 6% when excluding FX. Top line, reflected the consistent commercial strategy. [indiscernible] the recovery in the Colombian retail operation and its solid real estate performance. Full year gross margin impacted by the strong commercial activity from new strategies to improve customer finance. In terms of [indiscernible], the consistent focus on natural plans and custom expenses compensated by inflationary pressures in wages and other interest expenses, leading to a stable expense rate. [indiscernible] to close with a consolidated security is a COP 338,290 million Colombian faces improved 21.9% in a 28% [indiscernible] previous year improved 2% when it's doing at [ 60 ]. [indiscernible] like 20. The net results for the quarter, which COP 146,160 million Colombian tests. And for the full year COP 54,785 million. The effective net results for the quarter were first, the positive operational contribution from Colombia and Uruguay was offset by the operating performance, which we already review. Second, a better performance for the financial business. So just reflected improvement by over 500 basis points in the low performing [indiscernible] third and on net financial result, we suffer financial costs in Colombia, offset by higher costs in Uruguay due to additional debt to 7.5% of minority stake. The positive effects were offset by higher taxes from a better operational performance, and an increase in your return expenses from the restructuring plan. Emergency benefits for the full year with lower operational contribution. We're beginning to take a break from Argentina, completely offset the positive contributions from Colombia and Uruguay. However, the expenses for the restructuring process in Colombia, Argentina amounted around COP 66,000 million. This increase was partially compensated by the better performance from the financial disclosure that showed a consistent recovery throughout the. Going to Slide 21. In terms of cash. The company closed the year with an impressive free cash flow coming from the expected working capital by the cancellation of a special structuring operations to reduce the financial costs. When excluding this effect. Positive cash flow improving when compared to 2023. These results reflect a better operational performance and higher challenge received from the wider operation. Net financial debt reflecting unstable [indiscernible] cash but impacted by a [indiscernible] in the back year. Promising to finance the working capital affected by the cancellation of the special tax rates. Nevertheless, there are other lower, with a lower change at around COP 300 million. The affected working capital strategy achieved through close operating results has to mitigate the inventory levels when supporting the commerce [indiscernible] will remain strongly focused on optimizing and prioritizing the investments to ensure the liquidity and protect the cash flow of the company. As a summary for the financial performance, the company posted an improved cost management performance during the first quarter. Thanks to the efforts, sales growth and the recovery [indiscernible]. To highlight the solid performance and the positive return. Also very unexpected. The consistent and should postpone expenses action plans, compensating the inflationary pressures, allowing the Colombian operations to be stable. Quarter by quarter the company improves its EBITA results and closing costs from a challenging perspective. The improved operational performance, the strategic management of the working capital and the investment prioritization partially mitigated the inputs from fracturing operations in the cash flow generation. Thank you for your attention. And I will now hand over to Carlos Mario for the conclusion.

As you have seen it during the presentation, I would say we had the best opportunity Q4 driving here at the end of the year to have a stable EBITA and a net profit in positive [indiscernible] Colombia, also with a very positive quarter in sales and EBITA. And I think that was 11.38% margin and growing by 4.7% for the whole year. Our focus continues to be on a stronger commercial strategy around the experience for the customer savings a clear savings for their consumers. And the efficiencies at all levels. We continue to strengthen our omnichannel, differentiated capabilities with a 14.7% share of sales. And with that competitive advantage in the food market, we're in the omnichannel capabilities and in the different alternatives. We have more than half of the total market share in the country. Complementary businesses with a very positive contribution coming from real estate. And reinforcing the leadership that we have in Colombia. With a 2 year gradual improvement in returns and in results. And with Puntos Colombia as a deeper differentiate you by remaining with high margins and EBITA growth and innovation in its fresh market that now will present 60% of the total sales in the country. Argentina with the adjustments in the economy, which make us to be optimistic at the future view, and that, of course, impacted in the short run, given that a result, a unique perspective and a consumer demand. And finally, we announced that the listing of 8 yards and that discontinuation of [indiscernible] to create a strong floating in Colombia for our shareholders as a whole. As a tradition, we opened it to a Q&A session and then at the end in the end we will have the final remarks coming from Carlos Calleja.

[Operator Instructions] The first question through the chat from [indiscernible] . And why is the presentation still in English. Well this stuff doesn't really come from the US. [indiscernible] is for several reasons. The first is because we are listed company in the midst of this change, and we follow a lot of good practices. Second, we are still undertaking teaching is in the district from the New York Stock exchange, but the guys still bring it in under the SEC. We are waiting for the registration. And third, because we have international investors I think Nicolas Larrain has raised his hand. So can you hear me? Okay.

Yes, I hear you on that. I wanted to touch a bit first on the on the conversion of banners like that, the unification strategy. I just wanted to understand what have you been seeing from from those claims that maybe where we used to going, to this would be much [indiscernible] . How are you thinking about including those type of clients? You know that maybe more professional. They were the casino the [indiscernible] into our strategy. You know how how are you envisioning including them eventually into the value proposition. That's my first question and most interesting to very interested to know how have you seen January and February specifically in Colombia? How have the consumer reacted to the changes in the site? Thank you.

Thank you. Nicolas. With your first question, you touched a good point. And it's something that we are very, very focused on because the idea behind our strategy is to continually add without subtracting customers. We don't want to lose customers. So we're very focused on how we are rolling out that expansion of the state store banner in some stores. First, I think we have to we have to start off by the fact that when we dove into [indiscernible] . The reason why we're talking about migrating them is because those were not profitable store banners. So the model in itself wasn't contributing value to the shareholders being present. As it stood now, the stores that we converted so far have shown an uplift in sales and uplifting margins. So that's telling us that we're moving in the right direction. That said, there's a specific customer. There's a specific customer that you mentioned, which we have our eye on to make sure we don't lose, which is the institutional customer. So we're taking measures within the strategy so that we can service them in a certain way with the right pricing and the right value proposition so that we can keep them on board. That said, we hope to penetrate much further into the end consumer in those stores with the migration. But even before the migration, because we're bringing our massive smart strategy to those stores and the increased assortment, even before we change some of those banners, is bringing an uplift in sales. And by bringing in an increased assortment as well, we can bring an uplift in margins because we're no longer just selling, let's say, staple or commodity products with low margins, which is one of the challenges that [indiscernible] . So the idea is to build a more valid value proposition in terms of product assortment, but not lose competitiveness in pricing. And we were seeing really good feedback and from the work that we've done so far. As Carlos Mario has stated, this is like a 2 year process that's going to take us to do this roll out completely. But the idea is to not lose customers but build incrementally on that base. So that that is sort of I hope that answers your question somewhat. And we're clear that we have to cater to those institutional customers. [indiscernible] et cetera, restaurants, et cetera The other thing you asked, I think you asked January in February. We're optimistic with what we're seeing. We're always very careful. We don't like to sort of give guidance or anything like that going forward. It's not our stick, but we can say that we're optimistic with what we're seeing, what's coming in. And Ivonne gave a great presentation in terms of how the business has evolved. Quarter over quarter and we're seeing that this first quarter of 2025 it's coming in well. So what you're seeing or what you're seeing in the last year I think is reflective of the work that we're doing. And that work continues. And like I said, we're not where we want to be, but we're getting closer. And I think in Q1 of 2025, relative to Q1 of 2024, we'll be consistent with that messaging and those results. Carlos Mario I don't know if you want to add anything.

I would only add, Carlos, to your very complete answer that in January, February, one thing that we are seeing is a consistent growth in non-food which is important given the sign that that means for consumer, number one. Number 2, a consistent reduction in non-performing loans in our Tuya card and going to the bottom line we continue with a very strict control in expenses and probably with good news about profitability.

Thank you, Carlos Mario. So the next question is from, sorry for last.

I just wanted to say thank you for the answers. Thank you, guys.

Next question comes from Javier David. Javier David-Villegas is from Columbia. What he says he made a cap-ex from updating the 150 stores?

Do you have those numbers, Ivonne, in terms of?

Yes. So we have approximately 70% of our CapEx from this year's to expansion and maintenance but for the 150 stores, we are estimating of around $50 million U.S. dollars. Okay.

I want to add something. I would only add, Carlos, that this year it's going to be around between $40 and $50 million U.S. dollars for the conversions and then next year probably something similar or higher. It all depends on the number of stores that we convert. And this year in our plans we already did 14 and we hope that we can do at least 40.

One of the things I want to add was, in this question, Nicolas' question as well, what we call the triple S's which is [Foreign Language] sortie max, sortie mayorista, and sortie inter. So the total in sortie max, there was also a need for investment in maintenance. So we're not going to wait for those conversions to give those stores that need maintenance in refrigeration capacity or lighting capacity which is important, super important for the customers. We're not going to wait for store conversions to do that. Like I said, we want to bring and we put ourselves, we put on us a mandate to bring our value proposition to a standard where we can feel proud of what we're doing in every single store. And that's an objective that goes parallel to the store conversions. Like I said, we want to dignify the lives of our customers with our value proposition. So there's a budget above and beyond what we've had in years past to do that sort of maintenance, which is important. Any questions, additional questions?

Nothing. Again, maybe for last.

Just if I may, guys, abuse a little bit here. What are your, I mean, you mentioned CapEx and the companies, of course, turning the corner in terms of operating results. What is your head around, what's your mindset around dividends and potentially increasing the payout from the current 50%? Just to the extent that you can share, of course.

To be honest with you, we've been so focused on the operating that what we've done is respect the past sort of policies on dividends, which is 50%. We can look to that in the future. And obviously, we're going to be interested in looking for that. As a group, put yourself in our shoes, as a group, as a family, we invested in buying this company. We did not put any leverage on the company because with respect to the company, we wanted the company to be in a space and a place to grow. But as investors, like our other minority investors, we are interested in being able to receive a return on that investment eventually. So that will be taken into account, obviously, in terms of, you know, dividend policy, et cetera, et cetera. But I don't want to get ahead of myself and say exactly what we're going to do. But as to now, what we've been doing is respecting the past. But obviously, the idea is for the group to actually go to help us generate those returns on that investment we did when we acquired the company, which we acquired without putting any debt on the company. So that means that obviously, we're going to be looking to dividends for that return. So dividends will be important for us. But we're very, we want to take care of the company. And that's why we're doing sort of, I would say, this historical policy. We don't want to, you know, put too much pressure on it. But obviously, to future investors, I could say that dividends are important and we'll take that into account. I don't know. Does that answer your question in any way?

It does. It does. Thank you, Carlos.

Our next question is coming from Javier David Villegas from Colombia Regarding debt, what could be the current average cost. We managed last year to reduce our financial costs, our debt costs, over 300 basis points. It came first because of the reduction of the reference, but second, for the structuration of debt. What we are expecting for this year, as you know, we are waiting for the decisions of the central bank in terms of revenue rate. But we are looking into continuing the renegotiations, the structuring of debt. I cannot mention any spreads or anything, but to be efficient in the debt renegotiations throughout the year. Next question is coming from Gloria Hernandez, a group where it plans to buy back the retail balance of shares.

Buy that? Yvonne, how do you understand that question? If we're thinking about.

Buy back program. Yes.

Buy back times in the company and buying off the 13 or 14% shares that are out there, is that the question?

That's the question. Yes.

No, that's not in our plans at the moment. No, what we're thinking about doing, and I think Ivonne spoke to this, is bringing the shares back to Colombia and aspiring to have a float of, say, 13%, 14%, 13% float in Colombia, where the company is known and has been loved by Colombians for many years. If we can get liquidity into that float, we think we can position the stock in a positive way in Colombia. There's not that many companies or stocks in Colombia that can offer the food retail sector and exposure to the entire country. I mean we're one of the few that can do that. So I think that can play a role for investors in terms of diversifying their risk in the country. And that's what our objective is. As Ivonne said, we've taken measures with regards to the ADRs, and that's a process that's begun. We've begun a process where we've asked for approval by the regulator in Brazil to do the same and bring those shares back. And when we spoke to people in Colombia, we feel the strategy is the right one for now. That's what we're interested in doing. Ivonne, I don't know if you want to add anything to that.

No, Carlos. I think it was very clear. Next question is coming from Sebastian Palacio. What is the outlook for 2025?

What we have said, and we stated it before, is that first, we're looking for a CapEx of around $115 million, of which 65% would be in Colombia, 30% percent In Uruguay and the rest in Argentina, that we will continue with the conversion plan in Colombia as the main destination for CapEx, that we will continue investing in our real estate for the entertainment areas in Milano and Barranquilla as something clear to do in the next months. And we hope to be able to begin with super shopping mall if the permits are received on track. And a gradual improvement in EBITDA level. Still I wouldn't give a number, but we are seeing that in the short-term.

Strategically, I'll say the following with regards to 2025 because we don't like to generate expectations as the guidance. We're going to continue to be doing what we've been doing. Last year, the focus was on Colombia. That focus will stay in terms and you can see it in the results in terms of how the costs have been impacted in the benefit of results. That work continues. But also last year was a year where we focused on Colombia. I'd say the good thing about 2025 is with the results that we're beginning to see in Colombia, we can focus, I personally as well, next week, I'm flying down to Uruguay, focus on even improving Uruguay, which even though it's a good business, we think it could be better. And our philosophy is do things better today than yesterday and do things better tomorrow than today. And we've spoken to the management in Uruguay, and we want to improve the results there as well. And we want to grow the company there. So what I would say is from our role and my role specifically, we're advancing and we're seeing good stuff in Colombia. That's going to continue. And with the bandwidth now that we have to -- because we're seeing stuff improve in Colombia, we can get to work on Uruguay too in terms of improving and lifting the margins in that business as well.

We have Jairo Julian Agudelo with Bancolombia. So next question is from [indiscernible] Do you think the stock price is reflecting the price of the company?

Personally, definitely not. If you look at the stock price, it's well below what we paid for the company, and we're happy with our investment and the company that we're building.

Carlos, I will complement by only giving one figure, and it is that the book value of stock in Colombia at December 31 is 5,153, and the stock price today is around 40% of that book value.

And initially, what we are seeing the stock price right now is that it's reflecting the efficiencies that we have in the separation of the loan book and [indiscernible] So I think there are no further questions at this time. So I will now turn to Mr. Carlos Calleja for your closing remarks.

Thank you, Ivonne. Thank you, Carlos Mario. I'll just close by saying that at Grupo Éxito, we are a results-driven team, and we know the numbers matter. Experience teaches us that with the right strategy, execution and people, those results will follow. Our mission is to enrich our customers' lives with an aspirational yet accessible shopping experience because that's what fuels our long-term growth and resilience. The core of our entire strategy is customer-centric. We will never lose sight of that. The road ahead demands focus, excellence and an unwavering commitment to sustainability today, in 50 years and beyond. We are transforming retail, uplifting communities and adapting boldly to market challenges. These aren't just goals. There are opportunities to emerge stronger, more innovative and closer to our customers. With steady effort, positive results increase, and that's what we're chasing across Colombia, Uruguay and Argentina. We remain committed to driving strong performance, and we look forward to building on our progress in the year ahead. And like I said, we are optimistic about what we can achieve seeing how January and February have started off our business year. Let's keep moving forward together, creating a future brimming with opportunity and growth for Latin America. Thank you for your trust and support, and I wish you guys all a great day. Thanks for joining us today.

Carlos, so this concludes today's conference. Thank you all for participating.