Americanas S.A. (AMER3) Earnings Call Transcript & Summary

Good morning, everyone, and thank you for standing by. Welcome to Americanas S.A. earnings audio conference call for the fourth quarter and full year of 2024. Please note that simultaneous interpretation is available on the platform. [Operator Instructions] Please note that this audio conference is being recorded and will be made available on the company's Investor Relations website, ri.americanas.io, where the full earnings release materials can also be found. The presentation is also available for download in the chat icon, including the English version. [Operator Instructions] We emphasize that information presented here and any statements made during this audio conference regarding business outlook, projections, and operational and financial goals of Americanas are based on the company's management beliefs and assumptions, as well as currently available information. Forward-looking statements are not guarantee of future performance. They involve risks, uncertainties, and assumptions as they refer to future events and therefore, depend on circumstances that may or may not occur. Investors should understand that general economic conditions, market conditions, and other operational factors may affect Americanas' future performance and lead to results that differ materially from those expressed in such forward-looking statements. Today, we're joined by the company's executives, Leonardo Coelho, CEO of Americanas S.A.; and Camille Faria, CFO and Investor Relations Officer. I will now turn the floor over to Mr. Leonardo Coelho, who will begin the presentation. Please go ahead, sir.

Thanks, operator. Good morning, everyone. I'd like to start by thanking all the 50 million Brazilians that have been in all of our stores in 2024 and honored us with their purchase decisions in our physical stores and in our marketplace. And in addition, I'd like to thank each one of the over 30,000 associates of Americanas and their families that believed in our mission of transforming the company and that have been putting the effort to deliver to the clients the best purchase experience ever. And they've been working a lot. And then every choice of ours -- every choice of our clients is a better experience. I'd like to thank all the teams involved in this financial results demonstration and everybody in the stores, in the marketplace, in our client platform, and partners that contributed decisively for one more quarter and one more year to rebuild and reorganize our enterprise. So the year of 2024 represented a milestone, a very important milestone in our rebuilding history, in our reconstruction history. We are still supported by our 50 million clients and our suppliers, our partners, our shareholders. And as a result, the team is absolutely focused on our purpose that is to be retail, with many variety, resilient, and with the recurring service for Brazilian families. Then we took another step to keep being a player in the Brazilian retail market in 2024. We could meet the commitments, generated better results quarter-over-quarter, And of course, we're talking about comparable quarters like Q4 '23 was different from Q3 '24, '24 was better than '23. And this evolution can be seen in the numbers of '24 that we're going to show you today. And they come from the actions that we put here with the main goal of seeking efficient operational and commercial efficiency without forgetting our purpose that is to serve our clients. So the first half of the year had a highlight. We had our Easter event that was historical. We -- the sales rose expressively and the volume was remarkable, and it was built with a partnership with the industry. And we are still a major player in the Bomboniere sector. So throughout this period, we reorganized the assortments, the logistics, we perfected the service in our physical stores. And we also re-dimensioned the digital presence for it to keep being a complement in the purchasing journey of our clients. So when we talk about strategy, I'll go into further detail. But as a product of those initiatives, we could reduce the operating costs. We rediscovered, revisited some segments that were relevant for the company in the past and they are still relevant in the assortment, the current assortment. And we could see possibilities for a better regionalization that are better connected to serve the basic necessities of the Brazilian people. From July on, with the execution of the judicial recovery and the debt reprofiling, we could accelerate the strategy of our business. And with that, we had some new leaders joined us like Eduardo Noronha and in the operations area of Fernando Dias; Financial Services, [indiscernible]; and in our digital services, Renato Drumond. They are like seasoned professionals with solid experience in retail. So we strengthened the physical stores strategy that counted with [indiscernible] talking about the commercial strategy. But the digital transformation with this new layout of the marketplace that Drumond and his team launched this year, and all the remodeling of our client members club and financial services. So we had a Black Friday and a Christmas event that meet all the expectations that we could see that we expected. And it proved the capillarity of the company from the north and south and all the municipalities that we are in. And I've always said that it's a process, and we recognize that there is like a lot to do. We have many steps to take for us to reach the completeness of our restructuring and our transformation. But we have a macroeconomic environment in Brazil and in the world that's very challenging. That brings more complexity to this process, but the potential of our company and our value proposal and the commitment of our teams show that the results obtained are sufficient to bring us confidence that we are going, walking at the right direction for the full recovery of Americanas. So let's talk a little bit about the agenda of today. Camille and I will present the results of the quarter of 2024. And following that, we will update the strategic plan of the company. Camille, it's up to you. Can you talk about the financial results?

Thank you, Leo. In the year '24, there's an improvement in profitability. Our GMV total for the whole year of '24 was BRL 6.5 billion and BRL 21.4 billion, a decrease of 2.3% and 5.1% regarding the same period of '23, and it was impacted by a decrease of almost a 50% decrease in the digital strategy. In function of that, as we said before, we are decreasing the digital presence. And on the other hand, our physical platform is still strong. We grew by 7 point -- '23 and almost 12% in the year. And it's almost 70% of our total GMV, repeating the great performance of the first months of '24 that we presented last year is an evidence of a result of a series of improvements and actions that we took, and I'll go into further detail later. Talking about our profitability, our strategy is still positive and we have increase in profit with expansion of the gross margin with an improvement of 3.9 percentage points if we exclude the convenience stores in '23, because in '24, we don't have this operation anymore. So we compared oranges and oranges just to see the evolution of the performance of the business. I think the great highlight is the increase of our EBITDA, our adjusted EBITDA before the rent payments. We showed that the IFRS 16, and in the fourth quarter of '24 we improved BRL 1.4 billion, and in the year BRL 3.4 billion, reaching BRL 180 million in the quarter and BRL 947 millions in the year respectively. So we also had a great evolution of our adjusted EBITDA before lease payments that we showed to the market internally, and we had an improvement of BRL 1.4 billion in the trimester and BRL 3.4 billion in the year. So our profit was BRL 8.2 billion, but I -- it's important to highlight that this net income was positively impacted by various effects related to the implementation of the judicial recovery plan, especially the -- haircuts applied to the settlement of the pre-petition debts with creditors and suppliers. In the fourth quarter of '24, we had a loss because we didn't have the positive effects, the one-offs of the judicial recovery plan execution. When we compare the fourth quarter '23 to Q4 '24, it's important to mention that we had an effect -- extraordinary effect of BRL 4.8 billions positive in the net profit of '23 Q4 that was coming from deferred tax, income tax. So without this one-off, our profit would have been negative in BRL 2.2 billion. So you can see in the net profit line, without the effects of judicial recovery, it was an improvement, a very, very important improvement compared to '23. Moving on to Slide #4, we see the gain of the physical platform in our GMV that I mentioned before. In Q4 '24, in the full year, we were 72% in Q3 increase to 79% in Q4 and 62% in the whole year of '23 and 74% in the full year of '24. As we said briefly in this slide before, the GMV total dropped, still impacted by the digital GMV, but in Q4 '23, we had a critical inventory sale that was an activity that we deaccelerated. So we sold the inventory that impacted the comparison basis, and we are still doing that in 2024. So on the other hand, the physical GMV grew by 7.1% in the quarter and 11.9% in the year despite the reduction in the total number of stores and a strategic decision to stop selling certain high-ticket items. This result was driven by the strong performance during key events in the quarter, as Leo mentioned, at that day, production Black Friday and Christmas Day, and with an increase in both the number of transactions and items sold. The strategies implemented so far are already showing some results. Just to name a few, new layouts of stores increased by the -- the average number of items available in store by approximately 30%, and the new logistics tools have reduced the stock-out levels, up 6 p.p. -- 6 percentage points. So the lack of items was reduced in 6 p.p.s, and we still could see a 50% drop in the GMV of the digital in Q4 '24, mainly due to significant inventory sale in '23. We were done doing that now in '24. But the main point here is that the relevance of the digital within the company is now at more stable level. So we don't expect to see in '25 such steep decreases. So we are still advancing several initiatives focused on omnichannel integration with O2O, online to offline, like you buy on the digital and then we pick up at the store. That's the O2O. It gains, increasing importance within the digital business. Our omnichannel strategy reinforces our customer-centric approach and the trust that they have in Americanas to -- to follow them in different journeys, whether by buying complimentary categories through physical stores like kiosks, receiving home delivery, or what we say in-store pickup, that is you purchase some item online and then you receive that very quickly in one of our 1,600 stores, physical stores across the country. Moving on to Slide #4 (sic) [ #5 ], we present the same saved stores. This quarter, we revised the calculation criteria, so we excluded, from gross revenue, cancellations, returns, and discounts for us to have a better indicator. And that is perhaps our most important indicator at the moment, as it captures the true impact of the actions we have implemented so far, our strategic operational actions. And we also added a new -- a new indicator, as I said. I haven't said it yet, sorry. We adjusted for the mix effects, we showed you the gross indicator and after the mix change, and the primary effect was the reduction of high-ticket items, such as large screen TVs and white line goods, as well as the expansion of our traditional portfolio. So in the fourth quarter of '24, same-store sales grew by 15%. Excluding the impact of the mix change, especially the 10% decline in electronic appliances sales, we would have grown about 20%, 5 percentage points higher than reported, and this compares to a 4.5% growth in the retail in Brazil during the fourth quarter, according to the IBG Institute. This strong performance reflects successful execution of our 2 main event period, Black Friday and Christmas. During Black Friday, we saw a double-digit growth in SSS, same-store sales, number of transactions, and quantity of items sold. Our average ticket increased by nearly 10%, and this is very relevant when we take into consideration the strategic decision to reduce the availability of high value, high ticket products. We achieved this sales performance while maintaining a focus on profitability, that's another important point, and food, hygiene, cleaning grew between 20% and 30%, while electronics declined by approximately 20% compared to the previous Black Friday in '23, aligned with our strategy to reduce exposure to those categories that have like lower profitability for the company. Talking about the Christmas, we expanded our assortment with the arrival of imported items, large format stores featured Christmas themed displays that helped drive the client intake in the stores. The stores also offered everything from exclusive products to giftable items at attractive prices to our clients. And the result was again a double-digit growth in same-store sales, and number of transactions and items sold. The average ticket remained stable during the event, but we achieved commercial margin expansion. In 2024, same-store sales grew by 14.8% and without the impact of exchanges, this growth would have been approximately 20%, so 5 percentage points figure if we disregarded the -- the strategic decision of changing the mix. Another factor that positively impacts the same-store sales is the closure of some underperforming stores. We've still advancing optimizing our -- optimizing our store portfolio by focusing on greater operational efficiency, increasing sales per square meter, reducing occupancy costs, and we closed the stores that even after implementing various strategies, they showed no signs of performance recovery. So reinforcing our commitment to maintain scale and strengthening our market presence, we opened a new store in the city of Eusebio, metropolitan region of Fortaleza, Ceara. This opening supports our strategy of increasing relevance in the Northeast region, aligned with our goal of optimizing layouts, including store organization, and ensure more efficient customer flow in physical stores. Moving on to Slide #6. Now we're going to talk about gross profit, talking about that. For the sake of presentation comparability, we excluded from this indicator here the results from convenience stores operation in Q4 '23 and '23 in general. Just for us to compare oranges to oranges because those convenience stores, they do not exist anymore in '24. So thus in Q4 '24, the gross profit grew by 1% when compared to Q4 '23, reaching BRL 1.3 billion and the gross margin expanded by 0.1 percentage points, representing 29.7% of our net revenue. Also excluding that same effect in '24, the gross profit grew by 10.8% year-over-year and gross margin expanded by 3.9 percentage points during the year, representing 32.3% of our net revenue. It's worth highlighting that in previous releases, we highlighted certain one-off operational events that positively impacted gross profit in the quarters and consequently affected the year's performance. In Q4, there were no extraordinary events affecting the margin. So this is the recurring margin of the company. Looking solely at the performance of the physical retail business, gross margin increased by 4 percentage points in Q4 '24 and by 6 p.p. in '24 compared to the same periods last year, the previous year, I mean. That was the result of improvements in category mix, expanded assortment in stores, reduced its stockouts, and other ongoing operational initiatives that we implemented and are still being developed. In addition to that, SG&A expenses, excluding depreciation and amortization, totaled BRL 1.5 billion in Q4 '24, representing a 15.3% reduction compared to Q4 '23. Those expenses accounted for 33.8% of net revenue, a reduction of 4.3 percentage points compared to Q4 '23. And when we look at the year, the full year of '24, SG&A expenses represented 32.8% of net revenue, a significant reduction of 5.4 p.p., compared to the 38.2% recorded in '23. Those reductions that happened throughout the year were due to recurring decreases in selling and general and administrative expenses, primarily related to our commitment to lower the spending on technology, marketing, personnel, judicial. And this result reflects the company's consistent progress in restructuring its operations with a strong focus on operational efficiency. Our restructuring process is still ongoing, it's still in course with new phases and further challenges, but they are constantly being evaluated and implemented without losing the focus in our operational group. Slide #7, we see BRL 1.4 billion improvement in adjusted EBITDA after lease payments going from a negative BRL 1.4 billion in Q4 '23 to a negative BRL 58 million in Q4 '24, practically 0. In the year -- for the full year, the evolution was by BRL 3.4 billion from a negative BRL 3.4 billion EBITDA in '23 to a negative BRL 41 million in '24, almost 0 in the adjusted EBITDA after these payments. The quarterly EBITDA was adjusted by BRL 361 million in impairment. Just for you to -- for me to explain the adjustments, they are all the same and the same adjustments in the previous period. This quarter, they were adjusted for BRL 361 million for impairment expenses related to goodwill recoverability from certain acquisitions and mostly investments in Hortifruti Natural da Terra, plus BRL 78 million in costs related to judicial recovery investigations and BRL 27 million in revenue from an additional haircut applied to supplier payments. It was reminiscent from the judicial recovery plan. So we got BRL 27 million with that. In addition to these quarterly adjustments, we had other effects disclosed through Q3 '24, we had BRL 259 million in judicial recovery and haircut, supplier haircut gains, BRL 268 million -- BRL 286 million, I'm sorry, from the self-regularization, BRL 110 million from the stock option haircut. So everything here is connected to the judicial recovery plan, incomes and expenses, and we adjusted the EBITDA just to have a closer figure to operation. In 2024, EBITDA was also benefited from extraordinary operational events, as we mentioned before, such as the reversal of the write-down on recovery of ICMS tax credits totaling BRL 508 million -- BRL 502 million, I'm sorry, previously detailed in our last period's disclosure and BRL 254 million in reduced contingent liabilities, mainly due to a favorable court ruling related to D-I-F-A-L, DIFAL. And this is also related to our gross margin. And talking about our capital structure. If we look at the structure of the company, the implementation of the judicial recovery plan, as we said before, allowed for a significant reduction in Americanas' indebtedness. In the results of [ quarter 3 ], we had disclosed the reprofiled debt in the balance sheet because we had the plan organized. So as of December 31, '24, the total gross debt was BRL 1.8 billion. This was inclusive public debenture issued as part of the judicial recovery plan, already net of cash sweep and interest and monetary adjustments accrued in the period, as well as BRL 66 million in bonds and financing from nonrecurring entities within the Americanas Group. So at least 95% of the total debenture matures in 4 to 5 years and includes a 2-year interest grace period as detailed in the lower section of the slide. The company also has commitments to settle debts with certain suppliers to be paid in up to monthly, 48 monthly installments, which began in April '24 and we paid that monthly. We're not talking about suppliers that work with us day-by-day. We're talking about supplier debts related to RJ. The total credit is approximately BRL 496 million. We also have, related to the judicial recovery, some payments to creditors that opted for restructuring option 1 with discounted to the present value totaled BRL 13 million in '24. Although, these balances are not included in the debt accounting standards, we believe it's more appropriate to include them here when calculating financial leverage as we did in the previous release. And it doesn't have operational nature anymore. So from the gross debt and with all the liabilities, we have a passive of BRL 2.3 billion. So adding receivables, cash, and card, we have a net cash position of BRL 453 million today. In Q4 '24, we regained access to credit from financial institutions in addition to the terms provided for in the judicial recovery plan. And specifically, we entered into an agreement with the financial institution to enable early settlement with suppliers, with anticipation of charges borne by the suppliers themselves. It's very important to highlight that. And in the operations that we know as a risk that's commonly used by retail companies. And the accounting treatment of these agreements complies fully with accounting standards, and it's detailed in our earnings release and in our explanatory notes. So this second to last column in the chart showing BRL 49 million reflects this contract, which although classified under its own adding online, representing our vision. So including this contract, we ended the year with a net cash position of BRL 404 million. Those were the financial highlights of '24. And I'll turn the floor back to Leo, who is going to give some color on our strategic plan.

So Camille, our next slide, please. Here, once we understood all the numbers, the process, and how we assembled and we adjusted the adjusted EBITDA to reflect what's the closest number to our value generation. It's important to go a little back to the design of our strategic plan recap. Let's move on to Slide #10. Thank you. For those who are following our calls and our earnings calls, we started the schematic of our store 2 years ago in 3 pillars, but different pillars. Where the first one that was like to stop the crisis. That was talking about our responsibility on delivering and giving transparency to all the institutions that were investigating the fraud. And we could disclose all the information they needed. The second was capital restructuring that was conducted and concluded during the judicial recovery. And we have the operational recovery pillar. And this third one, we will break in 2 new pillars, that is the client customer value proposition and commercial products, commercial services, operational efficiency, and financial efficiency. And the third pillar that is the restore of credibility is an evolution of the stop the crisis. And this is our commitment to generate transparent information and very clear to everyone that is analyzing our company. Therefore, in this year of '24, we turned the page like we overcame the crisis. And now we are going to break down in detail the recovery strategies based on those pillars, commercial efficiency, financial efficiency, and the restore on, how to restore our credibility. And it's being done by people with a strong culture that is the basis of this job. So we reinforced the team, as I said, we have a management team that's very solid, very coherent, that has been working day by day. And we have this team reviewing, performing the revision of processes, quality assessing the management for us to be able to have a performance review in a systematic way. So we revisited our purposes, our values. And I mentioned that in previous calls, and we did that aligned with this new moment of the company and mainly with what the client expects from Americanas. Moving to Slide #11. Here we show our value proposition that was obtained throughout many surveys with the customers. And we help Brazilians save time and money, making their life more practical, full of discoveries, and good experiences. We are always close and solve the lives of our clients, their families and their homes, offering a variety of quality products for everyday use and special moments. This is the result of this value proposition proposal, and we center this new purpose on those 6 new journeys that we believe we can do that; confectionary, house, products underwear, lingerie, hygiene, and smartphones, like babies and toys, beauty and care and cell phones. Next slide. Here, after the value propositions, after showing the 6 categories, we have a model that is an analogy of how we are structured. So we have a continuous and strong integration among our channels. Therefore, we had 3 isolated structures with sole objectives and different companies. During this transformation process, we started to become a little more agnostic with the channel. So we put the client, the customer in the center and the customer chooses where he wants to be served, and we have to offer the experience in a fluid way with no friction. Talking about that perspective, the physical stores, the brick-and-mortar is the heart of our business with a focus on client being our model. And the intelligence on this behavior is the brain of our operation, [indiscernible] PCP. And we want to understand what the client is looking for in their journeys and develop specific strategies to improve this experience with this client and from there on to increase the frequency, recurrence, and the number of items that this client purchases. So in this context, the evolution of digital is centered in O2O. That is the form we have to use our stocks in store and serve the digital client. But we have our design of marketplace focused always on that we mentioned before. So bringing the concept of infinite shelves. And inside PCP, we prepared the basis for new credit products, CRM, and members club very specific. So Slide #13 shows a little of the new projects that we've been working. Next slide, please. Main projects. There are 4 that we could mention today. In each one of those, we've got to have a passion for the client. Who is client A? Is the members club. It's in the late stages of development, is going to be launched. It's going to be very simple, but will give benefits for the customer that login in our stores. So it's organizing missions and engagement, and this program has an objective to expand recurrence and the acknowledgment of our client. It was restructured in '24, but it's going to be launched and start its operation in '25, seeking that focus on the clients, we're going to increase the financial products in an omnichannel, everything in this what we call passion for the client. The better store project launched in '24, as we mentioned before, we designed a new store layout based on correlations between shopping baskets and the underlying product category. So we had some preliminary tests. Now we are ready to roll out this initiative in some selected regions later this semester. The project also includes real estate optimization. After a very detailed review of our store portfolio history, we identified the need, the necessity to reevaluate location of certain stores. We identified that some areas we were present changed the flux of pedestrians. And for us to adapt to this new reality, we decided to close certain stores in certain locations. We tried to revert that, but when it didn't work, we had to -- we also conducted various tests to optimize store size. And one of the main takeaways here is that offering a broader assortment amplified with some new services and products in addition in '24. In an area slightly smaller, we led to higher conversion rates. So based on these tests, we launched a space reconfiguration, a layout reconfiguration program in selected units. And this adjustment are part of an ongoing optimization strategy embedded in our business, not different for Americanas. In this smart negotiation front, we developed closer relationship with our suppliers since the crisis, but especially in '24. And we show harvest great fruits in '25. We expanded our commercial calendar and the preservation of our suppliers in our business plans. So today, we discuss everything with our suppliers involving the capacity to offer a more complete experience to our clients in the O2O in the digital and a very fluid experience with no friction. And on the right product front, we implemented a new commercial structure, dividing the operation into 4 end-to-end business units. And those are multidisciplinary teams that group categories together, manage the purchasing process from start to finish. And then we streamline the product offering for the customer. And this new team led a review of our assortment strategy to grow with better margins and optimize the store layouts. We introduced exclusive new items in categories. The Americanas client today, when they go to our clients, they have access to products that are very exclusive, very specific, specifically delivers to us. And it's growing step by step. And then we reinforce those 4 different categories like toys, dolls, and many other categories, and it makes it easier for us to -- to set a standard and to give the client more customer and more fluidity in our -- in his or her purchasing experience. So this slide shows a little what we're doing here, just to illustrate the advancements we had in some of those projects, maybe the most interesting case is the cleaning department. So we reinforced categories with higher recurrence and tested the market with the supply and offer -- supply and demand, and we could almost double our assortment in this category. And this led to a reorganization of the store layouts in partnership with the supply category management teams. In other words, everything in the stores is helped by the suppliers to help us put the location of the product in our stores. So as a result of this initiative, sales in cleaning category grew by over 100% compared to 12% market growth according to the associations. We believe that significant potential when we look at the size of the market and the -- Americanas is a journey of origin to its clients. And therefore, there are many interesting things that are coming in '25 to this -- in this way. So it was a strategy presentation. So I think we can start with the Q&A session.

[Operator Instructions] Let's move on to our first question. It comes from [ Renato Junior ], investor. It's a text question. The Americanas store was a reference in online stores. It tends to become a major player through the intake of sales as a marketplace. That's the question of Renato. Amazon and MercadoLibre.

Renato, thanks for your question. I will share the answer in 2 parts. The first part is Americanas used to be a reference in the marketplace in the comparison that you have because of some steroids that were applied in this process. We sold products that you could buy everywhere with like thin margin, with a long-term payment, no interest, free shipping, and cash back. That was not consistent -- value proposition consistent with the judicial recovery company. So we had to review that. And at first, we had a very extensive project to keep the sellers active in the platform. As time passed by, at the end of '23, the beginning of '24, we started to understand that our location inside this marketplace design was much more connected to the big sellers. And we had a good conversation with them, a different market position, and we negotiated with the sellers in the physical market. So we centered at first our strategy -- our digital strategy in the second half of '24. We focused on the rebuilding of this channel with the sellers, but fundamentally with the bigger sellers that had the capacity to bring journeys that were different from the journeys we had in stores. Now in '25, Camille mentioned that we will move on to journeys that we have in the stores, in the physical stores that our clients are interested to bring that to the digital. And we will tackle the digital clients as well. And we will give them access to the brick-and-mortar products in a digital way. So we believe in O2O, online-to-offline, like in-store pickup. And we offer to our sellers, regardless of their size, access to 50 million clients that go to our physical stores and through the kiosk or the O2O options and finish their -- end their purchasing journeys inside Americanas. So we designed that. So we are stable now. And now the focus in this non-friction O2O operation, we believe that we will keep growing a lot in '25.

Next question is made by [ Cesar Honorato ], investor. The growth increased in same-store sales and the percentage of online was stable and the strategy is to not selling the white line. However, the result was negative. What is your perspective on profitability of the business when you keep the current strategy? Please share your long-term strategy. Like focusing on low-margin ticket products will be sufficient -- positive result.

I'll start and Camille can complement. First, losses, maybe you're mentioning the loss in Q4 and the adjusted EBITDA, it was almost this process of transformation, you have to remember the size of the crisis that we started suffering since -- suffering since '23. Every earnings result, we have to emphasize, this is a long-term process. You cannot have a turnaround. And you have to be responsible and make the company prepared. We cannot accelerate. We cannot like comparing to the results that we expected. We are not ahead nor behind. We are in a good position. And we believe that the comparable basis is the base that we have from the third quarter of '23 when our balance sheet starts to be less subject to the effects of the judicial recovery and our operations are, again, the focus of our team in '24. Besides that, when it comes to the ticket, we have always had a relatively low ticket, and we believe it's great, if we're talking about resilience for the future. We have a very interest rate macroeconomic scenario, pushing the pocket of the consumer. And our tickets do not hurt any journey of purchase. Maybe the only exception is smartphones area. And we are very happy with our average ticket because what we are focusing is the recurrence and frequency of purchases that those are the topics we are talking within the members club and the O2O digital channel, and especially with our CRM, understanding a lot more about the behavior of our clients, our customers. So we have a long journey ahead, but this process, as I've been repeating, is a long-term one. We have at least 5 to 6 orders in this recovery module. But everything we've been building is not for a company that's going to recover very quickly and have problems in the future. We are building a long-term company, again, that is capable of living the next 95 years of life very well and in the same format from the beginning.

No, Leo, you covered it all.

Just another point that's very important to emphasize. When we talk about the loss in the Q3 '24 Camille said about that, important to highlight, against the profit, we have to compare the same basis. So when we exclude the effects, we come from less negative 2 point some billion to negative BRL 500 million. It's like far from good, but it shows evolution in the operation inside the strategy of long-term reconstruction.

Just to complement here, I believe that the important is what we've been showing from semester to -- quarter-to-quarter. We are showing evolution. We cannot look at the picture. We have to see the film. We have good perspectives to keep improving and revert the results.

Following up, next question comes from [ Mikhail Zhukov ]. Is this value related to a one-off and noncash as other incomes and expenses is 3 things: The haircuts of suppliers that -- it's a noncash item and BRL 286 million?

It's in the release, the detailed expansion regarding that specific program that is related to the fraud, judicial recovery. And we have BRL 502 million with the ICMS reversion that we launched in Q3. This is an economic item, and it turns to cash along like throughout the time as we consume its credit. So we have a bit of everything, have judicial recovery, some provisions that we do related to opening and closing of stores. But here, it's essentially those 3 points I mentioned. Most of them noncash, but plus the credits, but the credits become cash with the time.

Moving on, next question, [ Cesar Honorato ]. What's your prediction and perspective when Americanas will leave the judicial recovery?

Thank you, Cesar. The usual is that the company is going to be under supervision for 2 years. So that's the legal deadline. This period will be end -- ended in February '26. After 2 years, they will evaluate if we complied with our obligations, if we've been doing that. Since the execution of our plan was very focused on the first and third quarter last year, we reprofiled the debt and there's the supplier payments is still hanging and we did -- we paid almost 50% up to February '26. And since some debts are so low, we expect that at the end of those 2 legal years, we will leave the judicial recovery because we will have complied with 95%, 92% -- 96% of the obligations within the plan. But the judicial recovery judge will make this decision after a thorough assessment. And they will say that we can leave the judicial recovery or not. So Leo, any addition?

No.

Next question comes from [ Mario Govone ], buy-side analyst, [ Torque ]. Could you talk a little bit about cash -- recurring cash generation of Q4? And what's the expectation this -- your expectations for '25?

We can talk about '25 -- '24 because '25 is still guidance. We're still consuming the cash. We have a negative EBITDA plus CapEx and financial expenses, cash. We have not only the accrued interest from the debentures, we have like financial collateral, the operations, the cost of the judicial recovery. So we have a cash consumption, but we have lots of tax credits. So we can -- we did many things with taxes and then we are receiving some credit taxes and they conserve our cash, they protect our cash. But we are like consuming as the time passes by few and few quantities of cash.

Our next question comes from [ Luiz Guerra ] buy-side analyst, [ Logos ]. I'd like to understand if you think it's possible to generate positive EBITDA this year, and what's the desired EBITDA margin?

We discontinued the guidance in the third quarter of last year. Explaining a little this decision, we -- why we changed the guidance, because when we were at the end of the judicial recovery, since we had -- the previous numbers were a fraud, so we presented the restated numbers with adjustments. The market was very lost, like, what is real, what was Americanas for real and what's it going to be? So we thought it was important to give some reference to the market. But now that we've been publishing our financial statements every quarter. And you can see that we are like showing the adjusted EBITDA to be very transparent about the operation. And we don't believe that there is a necessity for releasing guidance. I think the market can judge the performance of the company. But what I can say is that we've been improving semester over semester, and we believe that this journey is just at the beginning. We are not where we want to be. There's plenty of space to keep expanding the revenue per market square, profitability, margin, expenses optimization, cash generation. So we've been -- we ended the year minus BRL 58 million of adjusted EBITDA with a one-off effect, but they are extraordinary. Those effects are not predictable, but they happen recurrently, as I mentioned in some other occasions. We're still in the journey and the curve is still going up.

I'll repeat myself. Maybe you get bored, but this is a process that is far from ending. I said that before, and nobody frauds a company that doesn't generate results. So the transformation process of Americanas involves for -- like from beyond accounting and balance sheets. We've been very transparent with the market, but it involves a redesigning of the operation. So we showed about the assortment situation, the stores, what to do, financial products, the digital redesign. So this is a process that will take some time.

Moving on, next question comes from [ Guilherme Hamada ], investor. The initial idea after the judicial recovery process was like to sell HNT unit. So we saw a considerable increase in the CapEx of this unit. Company is still selling this unit. And what's the perspective of company for the future CapEx? That's -- those are the questions of Guilherme.

So Guilherme, I'll talk about the sales. I cannot talk about future perspectives, but I can be generic here. We have inside, within the judicial recovery plan, the obligation to conduct a competitive bidding for the sale of HNT. So up to February next year. So in the past, we decided to put this process on standby, because of 2 things, because it was at the beginning of our judicial recovery. Maybe the market had a different perspective. They thought we would have to sell it in a hurry, but it's not true. And we are very, very focused in negotiating and implementing the judicial recovery plan. And at the same time, having this turning point, and we didn't want to deviate our attention from this plan to that smaller sale, let's say. But throughout '25, for sure, we will implement the sale process. And depending on the proposals, we will analyze the future of this business in or out of Americanas. But in relation to the future, I can't give you some guidance in relation to EBITDA and CapEx for this year. But I would say that in a general way, our strategy is very similar to ours. HNT is suffering with judicial recovery. It doesn't exist as a separate corporate entity. It's just a business unit of Americanas. And it's also under judicial recovery, the suppliers, HNT obviously way less than ours, their numbers weren't solid. But HNT is also following the recovery process. And we believe that it will present good results, solid results as following the same line as Americanas.

The Q&A session is now concluded, and we would like to invite the company to share its closing remarks.

Thank you, operator. From our side, I think that I'd like to emphasize that we are very aware and we recognize that there are like plenty of things to do, many steps to be taken for us to reach the totality of our restructuring and reorganization process. The macroeconomic environment here in Brazil and in the world adds another layer of complexity, but we understand that we have team, we have product, we have value proposition. We have commitment with our suppliers. We have different channels. And mainly the results that we collected so far put us facing the right direction to keep building the Americanas of the future, solid and serving the Brazilian customer really, really well. This is what we have to say.

This audio conference is now concluded. The Investor Relations area is at your disposal to address any other further questions. Thank you very much, and have a very good day. [Statements in English on this transcript were spoken by an interpreter present on the live call.]