Grupo Mateus S.A. (GMAT3.SA) Earnings Call Transcript & Summary

Good morning to all, and thank you for waiting. Welcome to the video conference with the results from our third quarter of 2025 for Grupo Mateus. For those who need simultaneous translation, click on the Interpretation button through the Globe icon at the bottom of the screen and choose your language of preference, English or Portuguese. For those who are following the video conference in English, the option to mute original audio exists. We would like to inform you that this video conference is being recorded and will be on the company's website where you can find the full information of the results call. You can also download the call through the chat. [Operator Instructions] And I would like to highlight the information in this presentation and any other declarations that may be made during the video conference regarding the business prospects, projections and operational goals for Grupo Mateus are based on beliefs -- of the company's beliefs as well as the information that's available. Future considerations are not any type of guarantee for certain performance, they refer to future circumstances that may or may not take place. Investors should understand that general economic conditions and market conditions as well as other operational factors may affect the future of Grupo Mateus and caused results, which differ from those which are expressed here. Today, we will have the presence of the founders of the company, Mr. Mateus also; Jesuino Martins, CEO; Tulio Queiroz, VP, Financial VP and Investor Relations; and Sandro Oliveira, Logistics and Commercial Operations. I'll pass over to Mr. Ilson Mateus.

First of all, I would like to thank God for another results call. We are here thanks to God, who allows us to sit here with you with good health. I would like to thank everyone who is listening also and watching us at this moment. It's a very important and special moment. As it marks our history, we're going to bring lots of different results, and within these results, we are bringing our first consolidated balance. As we all know, Sandro and Tulio, it was months of efforts of our teams. So we could not forget the chance to thank these 2 teams, which -- the team, which brought us to this consolidated balance. So I would like to thank the team. Thank Ismael, thank Estevão, thank Daniel, the President of the company, Vitor, Debra, Roberto, these people worked hard. I would also like to thank our team, which made huge efforts so that this could be a possibility. So in the name of Jesuino Martins, our President, who had all of the strategies and questions. Calm things down when we needed, guided us so that this could happen. Tulio, Leandro, Regis, giants within the company and all of the team that is working of our leadership. So lots of people were working hard to make this happen. And that's why we were able to have this first balance sheet balance, and that's what makes us very happy because this is an important moment in our history, and it is also the joining of 2 regional groups. So when we joined So when we joined Grupo Mateus and Novo Atacarejo, these are groups, which learned a lot with each other. This through our 40-year journey but we're also learning a lot through this fusion, through this merger. This merger also allows us to join great brands, 2 great brands. It allows us to broaden our presence geographically. We are in 3 different states with 3 new states because this fusion brought us a lot of competitive upper hand and a huge logistical facilitation. So we are able to occupy the space that was open, thanks to this results, thanks to this union, this joining of forces, we got to this result. And I'll pass the word to Jesuino Martins now.

Thank you, Ilson. Sandro, Tulio, good morning to everyone. Thanks for watching us and joining us on this call. I'd like to share some data from our consolidated balance as our VP just told you, you can see on the screen, 26 stores of G Mat brand and 36 stores, Novo Atacarejo. And what you see on the third column, this adds up to 62 stores. That is what the new company is made up of in those 3 states that Mr. Ilson has had mentioned. If you notice a good part of the stores are in Pernambuco, 47 stores in Pernambuco, so almost 80% of the stores in the state of Pernambuco and lots of work to do in that state still. And also lots to be done in the state of Paraíba, Alagoas you'll see below a snap of our gross revenue, BRL 1.6 billion in GMAT, BRL 1.7 billion in Novo Atacarejo. So this brings the company together to BRL 3.3 billion in revenue. So a company, which is already born huge. When we look at this annualized data, gross margins below, you can also see 19.3% of gross margins on the side of GMAT and 20% gross margins on the side of Novo Atacarejo and the new company with 19.6% of gross margins. And below, you'll also see the EBITDA of each company. So GMAT 4.7% of EBITDA margins. Novo 7.6% and the new company of 6.2% altogether in EBITDA margins. You can see to the right, the sales percentage, we have most of the stores that are in the new -- at least 62% of the stores have -- are at least 1 year old. So you'll see that we also have almost 30% of the stores already over 4 years old. So there's a difference there in terms of the maturity of the stores. And this can be explained -- well, it explains a bit of the differences that we still have in some of the indicators. Our intention is, well, as time goes by, and Sandro can share more of this with you about everything we have done, everything we will do. The integrations. So well, we're full power here. I also wanted to share with you that you can see the new company in these 3 states, we reached 37.7% of participation in the states, which are so important to us in the Northeast. We're super happy with this participation. And when we joined retail, and if we look just at cash and carry, the new company probably has more than 44% of market share in those states. So a very important step forward. We're very happy with that. As we also mentioned, also the arrival at Novo contributes to GMAT in all of the Northeast. But Pará, if you look at the bottom right, GMAT with a new joining with Novo takes us to 37.7% market share in the Brazilian Northeast. So very big conquest for us, and we consider this to be a successful phase that we have closed. I want to thank everyone who did that. I won't repeat the names but people from GMAT, people from Novo, we're now a new team, Novo Mateus, as we're calling ourselves. So very happy, very satisfied. I want to thank everyone for the effort for the integration, which is still taking place, full power. As I mentioned, Sandro can later give you more information regarding everything that was done. I want to go and pass the word back to Mr. Ilson, who has something new to share with us.

Thank you, Jesuino. And following our presentation, internally, we have been discussing that -- well, we have to talk about innovation, specialization. And we don't -- we can't stop thinking about that because we always have to think what will our company look like in 5, 10, 15 years. And since we see these markets coming together, we see how big the demand is to have specialized channels for better reaching each type of client, each type of consumer. That's why we decided to join these brands. And thankfully, God gave us this opportunity to open the store and brought a team full of experiences to participate in this. Why do we believe so much in this? Because it's a complete solution for our clients. It's a professional mix. Our Atacarejo stores are unable to deliver this mix of products and of purchasing, which this channel demands and requires. We're always thinking about how we can better improve our efforts to reach our clients, and we're going to have an opportunity to transform this market. This is a space for building capacity and building trust of our clients. So this is our strategy. This is our position, a channel, which is very relevant in Brazil, building this channel, which is still missing and faulty and in need of strengthening. On Slide 6, you can see our expansion, our normal expansion. So 13 new stores have been launched by this third quarter, and you can see that we have strategic stores in Maranhão, we've been consolidating ourselves and presence in that state. Stores in Pernambuco. We also opened a store in Sergipe, in Bahia, where we are now marking our presence in that state and also marking the consolidation of our brand in Pará, a state which we see as a very strong possibility for the company. Here on Slide 7, you'll see what we highlighted are the 306 stores, especially thanks to this new merger, which makes us more relevant in the market and more relevant, especially in the Northeast and a part of the north of the country, which to us at this moment is extremely important. So moving forward on Slide 8. We bring relevant novelties as well. We recently opened a store -- a service store in Teresina. It's a store that we call gently lovingly João XXIII, John 23, a service store, a store which was born busy because the public was missing something. These clients and the clients who went to Atacarejo are now coming back because they want more service. They also want specialization. Well, it's a store that was born with a positive EBITDA in the second month. And this proves that we have to invest in this channel more, and we have great expectations as well. And when we bring in this expansion in October, we opened up 4 more important stores that you're seeing, Pernambuco, Fortaleza, and as I've already mentioned, the food service in San Luis. And moving on with Page 9, we also bring in some news within the service bag, which is very relevant. We've created a commercial internal structure to support these stores, and we're going to bring in some important news one in Shopping Sao Luís and another in Olho D’áGua. We created a structure of logistics, not only for commercial but also logistics. And that's a store that brings in 4,000 SKUs. And in this Spazio premium segment, we also want to bring in innovation with a specific team that will really focus on this moment and this channel because we know the importance of this. And moving on, about next year following our expansion project, we've been thinking about this for quite a while. As we mentioned in previous presentations, we're very strong. We focused on the more strategic stores that will bring in a bigger tier. And now we can be more selective. We are really in this process with another 15 stores underway, as you can see, and Piauí is an important state for us, Para also and some other stores as well, consolidating our expansion. So now I'm going to pass on the floor to Tulio. Tulio, the floor is yours.

Thank you, Ilson. Thank you, Jesuino. Well, the idea is that we'll have a balance that's consolidated, as Jesuino mentioned, and Jesuino also mentioned. So I'm going to try to be more objective and more clear. I'm going to start off with the next slide here with the cash conversion cycle and the topic about valuing stocks. As you know, the company today after the IPO has been dedicating significant energy to restructuring and improving accounting processes and back office as a whole. And the accounting area is one of these. So this topic involves different initiatives, the processes themselves, people, team, systems. And in the beginning of 2024, we hired an external consulting firm to help us conduct this process related to improving processes in the accountability area. As a subproduct of this process, we began working on at the end of 2024, rewriting this and Kardex is the checking account of that stock, let's say. Any product that goes through this goes through CapEx purchase sale transfer tax credits, all of the elements related. And through conducting this project, we began to have a Kardex and a view of the stocks that are 100% traceable. We're also going to have automatic integration and all of the standardization of these criterias and tax parametizations. And of course, you can have an improvement of governance on this. So in this quarter, we identified the need to review these financial balances of the stock. And here, I'm talking about the actual valorization of the stocks. And we also reviewed the comparative balances and following the same criteria. And you can see this in the explanatory notes of our financial statements. And -- with the revision of these, our cash conversion cycle, as you can see on the right side, ends the quarter in 57 days. And in regards to the access we were working on up until the previous quarter, you have an improvement of 17 days. And then when we talk about the third quarter of '24, which is our comparison base, we see 68 days, however, that represented an improvement of 14 days. So if you compare with this language, that's more up to date with 57 days and 68 related to the third quarter of '24, then you have an improvement of 11 days. But what's most important here is this new access with all of these indicators, the cash conversion cycles and stocks as well. So you have the revision that has no cash impact or any type of derivative from these indicators related to cash positions exclusively. So on the bottom part of the slide, you can also see that there is a cycle of the main cash conversion cycles for Grupo Mateus that's already consolidated with the Novo Atacarejo, and I'm referring to the dark blue graph where you have the consolidated cash conversion cycle and that ended the quarter at 48 days. So in our previous -- we were mentioning in the last quarter of 72 days. And now with all of these movements, we're talking about a cash conversion that's consolidated of 48 days. And on the right side, you can see the cash conversion cycles that are exclusively the turnover. So we have a cash conversion of minus 1, and then you have levels of stock that no doubt. In these interactions, we're going to have really been inspiring us to search for processes and systems and learn with this so that we can really focus on this in our operations as well. And -- when we look at the Slide #13, we have the numbers of our gross revenue in the company. And as you can see, we created this dynamic to be 100% comparable. So we start off with the third quarter of '24. This is going to work for all of the indicators we show here. And that's going to go over the quarters. And then in the third quarter, we bring in this ex Novo perspective, so we can be 100% comparable to a historical basis. And then on the right side, we have this view of Novo, where we can see this yellow bar and that's the graphic illustration of the amount related to Novo. So just to explain this mechanic -- the mechanism. So we can see this in the quarter ex Novo was 300%. And when we talk about this with Novo, this gross revenue reached BRL 12.1 billion in the quarter, and then you have a growth of 28.3%, plus BRL 2.4 billion. In the accumulated results in the year, this absolute growth is even greater. We're talking about growth of BRL 4.5 billion or 18.9%. And in regards to the commercial dynamic, Jesuino will explore this a little more, but we have an important point here. We had a quarter where in the anniversary month performed pretty well but then the month of September was a lot more challenging. And so there was a shift in the performance axis. And I believe that, that's an important point to manage and observe these operations from now on as well. Now moving on to the next slide. We have our numbers related to the gross profit of the company. And here, I want to be careful with trying to be objective and trying to be as clear as possible about the elements we consider to be like one-off elements and explain each one. So as you can see in the first column, the consolidated gross profit adds up to BRL 2.292 billion. And then what happens is we have 2 one-off elements we wanted to share with you guys. First, is related to additional losses related to new inventories or an increase of frequencies. And here, I'm referring to physical inventories, operations of the stores where you can see the physical quantities of the stores. And when we increase the frequency or we increase the amount of inventories in practical terms, you anticipate the accountability of this loss that you would have had in future periods. That does not mean a structural increase in this loss. But I want to ask, Ilson, contributions to give us an overview on this change.

Well, you can talk about investments in technology but then after I'll cover also other. We approved a budget of another BRL 15 million per year to hire more people. And so when you provide a bigger frequency on this, you reduce the losses, right, because we're being -- we're acting with more austerity and greater speed. And with this, we can inhibit a series of processes in the stores with robberies and that generate losses. And we're also bringing in artificial intelligence, which is very important, something we started to perform facial recognition of the people that perform deviations in the stores. And we also know Tulio and Jesuino that from the back of the store, and we're developing a system for artificial intelligence where cameras are interconnected with our ERP, and they're looking at those loads there and that are unloading there, and they're also comparing with what comes into the system. And in some stores and states, we started noticing that you had the invoice coming in and not the product. So we're kind of surrounding ourselves from -- with everything we can with artificial intelligence and technology to contain this, and we already see a bit of a reversal in this loss. So we're super satisfied and we're investing. We're bringing in more losses at this initial moment but this is a moment to solve this and to search for efficiency as much as we can when it comes to loss prevention, right?

And then just to add on, Tulio, we anticipated future losses, right? So we had an inventory we had every 4 months, and then we bring in this inventory process to a shorter period. Now we have items, for example, I've been working on daily inventories even in sectors that we performed every 4 months, but now we do monthly. And this is why we imagine this future loss just to reinforce what Ilson mentioned, our attention in regards to this topic retail is going through a cautious moment at this moment when it comes to controlling losses. And what we're doing, as Mr. Ilson mentioned, is just doubling our level of concern and paying more attention to this, and that's why Tulio has shared this data with you guys about the loss of stocks due to these additional inventory.

I wanted to reinforce a little more with more granularity, Jesuino. We had some months where we had a big loss of some product categories that where employees were picking up more expensive products and the POSs passing a code that was cheaper. You can see like sausages that are double the price and then they will be left over in the cheapest one and lacking in the more expensive ones with facial recognition and recognition at the POS, we can already see that, and we've found a lot of occurrences within the stores. So that's going to help also to inhibit and the people that perform these deviations are really going to notice that we're focused on these.

But moving on to the next line here. We have the revision of the stocks in regards to the first semester of 2025. And here, it's the topic I mentioned on the previous slide. So the revision of our accounting policy and specifically related to the first semester of 2025 was also accounted for in the results of this third quarter. So we expressed this to be able to calculate what the results would be. And like this, the gross profit ex extraordinary effects adds up to BRL 2.43 billion, and that's considered a gross margin in the consolidated results of 22.2%. When you look at the gray column, it's the same kind of rationale but that's where you see a gross margin of 23.2%. And so when you get into the bottom part of the slide, you can see we have the same rationale in regards to the first 9 months of 2025. The only line that's not here is related to the first semester, right? So since we're talking about the first 9 months, all of these effects need to be considered, right? But when you see the consolidated gross margin in this way, that continues at 8.7% and ex Novo in the first 9 months, the gross adds up to 22.8%. Now moving on to the next slide. we have the graphic visualization of this topic just to give you a better view on the last quarters. You can see that if you consider these extraordinary events of 23% that remains in the third quarter of '25. And when we exclude Novo, then we start moving on to 22.7% and the gross profit, considering Novo represents 31.7% and that adds up to BRL 2.447 billion. And so when you look at the cumulative results in the year, on the right side of the slide, we can see the gross profit added up to BRL 6.324 billion and the cumulative results in '25 with growth of about 22% and a gross margin of 22.7%. Now moving on to the next slide, we're going to talk about operational expenses. And so this has been a very important topic for us in the last months in the company. The company has really been making an effort to bring in more view on this topic. Now we're delivering a quarter with an expense on net revenue of 15.2%, basically the same axis for the year '25 as a whole and especially the 15.2%, which also had an effect, which is slowing down sales, as you mentioned, and actually more fixed expenses such as personnel, which do pressure things a bit more. And in this line, the company has been structuring itself more and more with productivity and expense control and bringing in the methodologies of expense management, and we've been also having very interesting discussions that have been generating a lot of value. And I think the company has a very constructive view from now on, on this topic with intelligent discussions and actual productivity. Since when the macro environment becomes more challenging, it's really important for us to adapt the level of expenses to keep up the efficiency and profitability. And when you look at the accumulated results in the year, expenses added up to BRL 4.190 billion and a growth of 19.5% and the ratio on net revenue was 15%. Now moving on to the next slide, we have the EBITDA composition. And here, I'm going to follow along with the same rationale on the gross profit, and I'm going to bring in some topics. I'll explain case by case and we're talking about an EBITDA post IFRS of about BRL 833 million and an EBITDA margin of 7.7%. The 2 next items we bring in are the numbers we just mentioned with the topics that we already had on the reflection and construction of the gross profit. And so I want to hedge straight into the third topic, which is the REFIS Amnesty Program at Maranhão. The company worked on and this topic is related to divergence of payments of the ICMS ST and we have nothing -- this is not something super specific but there is an important financial result, and we adhered to this, and we're going to pay this in a few years in installments. Now the next item of BRL 180 million, then we have that reduced, which is a positive effect in the results but that refers to previous exercises. So here, you have P-COPINS credits and ICMS credits of some different topics we've been developing, and we shared a lot of them with you guys. And so within our tax committee as well, as you all know, the company has during many years, been working on all the tax planning incurred by subvention on investments. And then ever since in '23, the law changed, we've been working on intensifying additional opportunities such as this that we're bringing here in the EBIT composition. But the EBITDA margin consolidated in the quarter adds up to 7.9% with an EBITDA of BRL 855 million. And when you exclude Novo to have the 100% comparable basis, we're talking about an EBITDA margin post-IFRS of 8%, which adds up to BRL 744 million. And when you look at the accumulated results in the year, the rationale is pretty much the same. We talk about an EBITDA margin ex Novo of 7.7% and in the consolidated view, 7.7%, also showing the profitability axis and in the gross margin and the EBITDA margin. And the next slide is to give us more of the sequential graphic view. So we're talking about, as you mentioned, an EBITDA margin in the quarter ex Novo of 8%. In the second quarter, we had a margin of about 8%. Then when we include this, we're talking about an EBITDA of 7.9% and a growth of about 32% year-over-year. Now the accumulated results, the EBIT adds up to BRL 2.147 billion with a growth of 21.8% and a margin of 7.7%. Now on the next slide, when we consider the TRE topic. If we keep the same right now, we have the composition of the net income. On the first column, we can see that the consolidated net income in the quarter was BRL 846 million. The first line is the extraordinary effects that are condensed here as we just mentioned, the EBITDA and the gross profit. And I'm going to talk about them that referring to the impact on the net income. And the first item is about the PIS/Cofins for the JCP Intercompany. This is when you have subsidiaries and you increase the resources you have to pay the PIS/Cofins upon this equity and this year, we decided to part of this in the third quarter. So this is just like a shift between quarters. And actually, it brings in pressure in the third quarter, and it provides some relief. And as a comparison base, we added this year to be able to compare, right? And the next item, which is the most important is the reversal of the provisions of subventions for investments. So this is a topic and everyone watching the company knows about the company ever since the rules changed has been adopting a conservative policy, provisions on the taxes for this. But we need a legal discussion with really top quality, and we remember the constitutional topics, the federative agreement terms. So the company has a favorable view on this among the companies that are considered references. This is one of the last ones that we are missing to reverse. So we got a lot of confidence and we're able to make this decision from this almost BRL 211 million referring to 2024 and BRL 129.714 million related to the first quarter of 2025. And the next elements have less impact but here is just the income tax on extraordinary effects. And the next topic for capitalization of the interest on loans from previous years. Here, you're just going to be adopting the CPC rule where throughout the construction of a store, you consider the interest of funding related to this topic, and you can capitalize according to the existing accounting rules. So in this way, the net income, excluding these extraordinary effects adds up to BRL 508.991 million and BRL and a net margin of 4.7%. When we look at the same rationale excluding, we're talking about a net income of BRL 407.799 million net margin of 5.1%. And when we look at this, the bottom part of the slide, we're considering a net income of BRL 1.514 billion in the consolidated numbers and considering the necessary adjustments that adds up to a net income in the first 9 months of 2025 of BRL 1.246 billion with a net income of 4.5. Now when you exclude that it's BRL 1.28 billion and a net margin of 4.6%. Now moving on to the next slide, the sequential view. And here, it's interesting because we saw consistency in these criterias and we also saw consistency in the EBITDA axis. And now we have important growth in the net income, which is the main topic of the reversal in the income tax. And here, you have the recurring values related to the current period. So we go back to this topic of tax efficiency that is really strong as we've already seen in the past. And then in the accumulated numbers in the year, net income of BRL 1.246 billion and a growth of 28% when we consider this quarter considering Novo 48.5%. Then moving on to the slide where we're going to talk about the net income. We can observe that the sequential line is in dark blue, and then we add the new company with a combination of GMAT and Novo with the sequence only GMAT. We end with a net debt of BRL 943 million and a leverage level of 0.39x EBITDA. Now the new company has a debt of BRL 489 million. This new company on its own has a leverage of 0.8x the EBITDA. And then you add up a consolidated net debt of BRL 1.438 billion. Novo and even the same-store -- even the stores of GMAT that incorporated this new company, they were stores that were really new at the beginning of their maturity curve and GMAT even more, as Jesuino mentioned in the slide, initially here in the presentation but Novo is also a really new operation, right? So you have a level of leverage that's really balanced with an operation that has been growing at a very interesting level. So the consolidated leverage is at 0.5 and even the consolidated results in this variation access among quarters in the company. So these are our initial comments. And now we are available, of course, to get into questions and answers. Thank you very much.

[Operator Instructions] Our first question is from Luiz Guanais at BTG Pactual.

I have 2 questions here on our side. First, Tulio, is about the controls and processes you mentioned that impacted the company's cash cycle. But I wanted to understand what will be the cycle if you look at stocks and the recurring view from now on. There's some work you guys have been communicating about that you've been working on for many quarters to try to improve this level of stocks. But after these adjustments with more precise controls, what could we consider to be the recurring cycle? And then you have a second question, which is related to the slowdown. And would you already have a diagnosis maybe of the cause of this or the loss in traction consumption in these categories. So is this related to government incentives? Is this related more like to income pressure? So I wanted to hear a little more about this.

Thank you for the question. Now I'm going to start off here and then Jesuino can also hop in. But the numbers we saw here in the presentation for the cash conversion cycle and in the release, are already following the reviewed language, and these are the recurring levels for stock and cycle. But of course, the operational aspects on this topic remain at the same pace, and we're very much focused on this, especially in the fourth quarter. So throughout this discussion with Novo, one of the topics we learned about a lot and their financial cycle demonstrates this, they have 53 days of stock. And we've learned a lot with them. We've brought in some dilemmas here. And I think it's a very interesting topic to share with you, and we really defended our understanding of what we have as open-to-buy, and this is a topic we've been improving more and more. The other elements you already know what we've been connecting is variable compensation of executives in regards to this. And there's also been a level of relevance in management's meetings in a very concentrated manner. So more and more, the team has become conscious of this value creation perspective, not only the sales, margins and results but also all of the capital consumption aspects -- and this is a topic that has been gaining maturity. So when we look at this from a consolidated perspective, we're talking about 65 days of stock. And when we look at this without Novo, we're talking about 68 days in this quarter. And of course, we want to search for opportunities from now on.

So then, of course, all of the variable compensation that is really focused, right, Tulio, on this indicator and sales contributing Guanais answer. And -- but no doubt, we should consider this recurring level and a search for this improvement. We can really see this when it comes to the growth in July and August and at least half of the growth in these 2 months, right? But it's difficult to set a specific reason for this. We've been coexisting with a weak consumption environment, and we know about the entire scenario. And so these consumers, especially in the Northeast, they have very limited budget, right? Their pockets are pressured. And when we look at the data that Nielsen audits in the Northeastern and Brazilian retail, you can see the level of adjustments and inflation. It's at least 3 percentage points above. So despite the scenario in the Northeast, we also have this inflation scenario in retail that indicates even more pressure. And we also noticed families that have more and more debt. This is growing more and more and delinquency is also growing. So I understand that the merger of all these factors has certainly been the reason for this weak consumption environment but we know that consumers also migrating to categories that are cheaper, they shift categories. The guys that are buying beef now prefer to buy chicken. And so they buy protein but it's cheaper and sometimes trading down to cheaper brands. All of this behavior contributes to this, right? And this is a scenario we have been experiencing throughout the quarters. But now it's important to mention that even in the scenario of weaker consumption, let's say, we continue to grow. And when we look at data that Nielsen also audits and the growth we had in the Brazilian Northeast and the market rates, we've been growing above market levels, and we've been gaining share in the market with Novo even more and -- but now we need to reinforce our commitment to the EBITDA margin, and we've been really trying to balance these factors to be able to deliver a resilient EBITDA, as Tulio just mentioned. So maybe just to take advantage of your question and share that in the fourth quarter, the scenario hasn't changed. It's still very similar to what I shared with you, but we still have in the fourth quarter, Black Friday, the end of the year, and we're still betting a lot on our multichannel aspects that are very important for us. And that's pretty much the view we've had, and we continue to work on delivering the best results possible as we've shared with you. I hope I answered but just to reinforce your comment here, we've been really trying to find a balance between the growth of sales and margins. What matters at the end of the day is our EBITDA, and we've been highlighting this a lot and really cutting down on expenses as we can carefully.

Our next question comes from Danni Eiger at XP.

I have 2. First, about the accounting revision, and this is really clear with the consulting company and also I just want to understand what are the possibilities of other possibilities for revisions. And we want to understand if we could have other movements like this or if in your view, the work was completed there's not much more to be done but I think it would be great to get more visibility in regards to this. And then a second point, more geared towards next year now that you're more consolidated with Novo and with this new company that's more structured and discussed and you already talked about how you're working on encounters with management to define synergies and next steps. And maybe you guys can share what your mindsets are for next year when it comes to expansion. You still have a scenario of uncertainty of some factors that could improve income and even the issue with the benefits from the government that don't have major shifts in this sense. But then you also have this new format, as Mr. Ilson mentioned. And so I'd imagine that's smaller but then there's also Novo with more opportunities. So how are you going to consider this mind set on returns on investments versus maybe taking advantage of this opportunity considering the weakening of this competitive scenario, that would be really good.

Okay. Danni, thank you for the questions. We'll start off with the first one, and then I'll pass it on to Mr. Ilson, Jesuino or Sandro about the risk of having variations here. I think the work then developed was finally reaching a level of maturity that's really great. And today, it's already traceable. And I'd say that the chances of having some item on this is low and definitely nonmaterial because we have more visibility today with a lot more security and full traceability. So with this, we're really confident. Now the general topic for back office and other areas and some derivatives for accountability are very much complementary. Of course, we're on this pace for evolution, and these are topics that we believe to be central. And now since the work is really mature, and you have very small phases where we have more than 95% of the work completed and the visibility and traceability and standardization of the criterias and parameters will be implemented now with integrated automatic integration and you really have a level of security that's really high. And so the level of confidence becomes a lot higher.

And I think if there's any other questions, you can add on later on to Jesuino's answer. But in regards to expansion, your question is very interesting because we've actually been discussing this a lot. And I'm always thinking about what Professor Marino mentioned in the '90s, where a company needs to have cash, and we're keeping a close eye on our cash. We're being a lot more selective with the expansion because now we can actually -- we're basically in all states. And we've already advanced a lot in cash and carry in retail, and we're also considering a food service brand that we think we're at the beginning of with a Spazio service store, and we have a long path ahead. But we're really keeping a close eye on what the tier is, right? So if this return rate is not above average, we're not going to keep on, right? And we want to be very comfortable because with this kind of interest rate, we have to really take a close look on our steps and really keeping up with the guarantee of the future of the company and without risks, right? So we're going to continue with this expansion but with our feet on the ground, which is what we've done in the past 40 years.

Perfect. And so also just a follow-up point here. I want to understand the revision itself. I'm sorry about maybe not having the technical knowledge but what was this revision of the financial balance? Was that because you were reviewing the stock and so you had mentioned the losses that maybe weren't accounted for but just to have some more tangibility here on this.

And this is a very important question with the valorization of the stocks, and this is an accounting topic but the topic that Jesuino mentioned on the inventories is more of an operational topic, considering the physical amount of inventory in the stores. And so both topics permeate stock but they're noncommunicable. In one, you have like the physical inventory and looking at the amount of items. And the other is related to revision of the accounting policy. with all of the elements that transact and should be considered in the company's stock with all the parametizations. And then when this work is completed and you have a clear value here on trust and traceability, we compare the stock balances, and that's when we work towards reviewing this.

The next question is from Rodrigo Gastim at Itaú BBA.

Two questions on our side. The first is in the stock adjustment topic, Tulio, I think it would be great to get a little more of a view on the adjustments backwards. If you look at the explanatory notes, there's an adjustment of BRL 1 billion in stock that you considered in 2024. So it would be good to understand? And if you could also share a bit of how much of this adjustment was really from 2024 and how this moved along in the results, right? So I think that's the first question. And then the second question is in regards to Novo, when we looked at the calculation here, we're reaching a net debt of Novo of about BRL 500 million. If you get back to the anticipation of receivables that you broke down, it would be about BRL 650 million. So just to understand about this, how this took place within Novo and how much cash you dedicated to this and how the net debt actually reached this level. And if that was in line with what you guys had expected, I think it would be good to understand this net debt with Novo. These are 2 points. Great.

Thank you, Gastim. Thanks for the questions. The stock in the past related to -- this was adjusted from a net perspective, discounting income tax and the value you mentioned refers to the past and the specific value of 2024 is BRL 94 million. So when you consider this, it's all from the past. considered was considered as results in this third quarter were the amounts related to 2025 that we considered where we had more clarity when we discussed the gross profit and the EBITDA. So we excluded the values related to the first semester, and we absorbed this at GMAT with the effects of the quarter. And so this is the topic related to your first question. Now on your second question, you're right. If the net debt for the company and combined between the GMAT stores and Novo stores adds to about BRL 500 million. So BRL 489 million with a leverage of 0.8. But how does that happen? Well, Novo is a new company, relatively new company that's been working on its operations, and that's been growing a lot. And to grow, they take on some debt instruments with the anticipation of receivables to be able to have a self-sustainable growth. When you have the GMAT stores, they stores that were extremely new. So when they went in the mechanic, the receivables were at GMAT and these stores or all the rest of the working capital went to Novo but these are new stores that need cash, right? So in order to stabilize this, we had the anticipation of the receivables. And at some moment, we had this mix between GMAT and the new company and then we had this paid back to GMAT. So just to give you the overall panorama about if leverage was in line with what we expected, it was. It's a new company that had an initial investments but the idea was always to grow in a self-sufficient manner. And so the 0 in combined results, we understand to be the numbers and 100% in line with the expectations ever since the initial conversations.

Perfect. Very clear. And Tulio, just what's behind these adjustments.

This is important. It's not only related to quantities but it's the average cost, right? So all of this Kardex work really provided for this element.

Our next question is from João Pedro Soares.

First of all, I mentioned the disclosure here and the points in regards to Novo and Mateus. So great work, but I wanted to explore 2 points here. First, a more operational aspect about capital allocation, amidst a scenario that is still challenging last year. We're still to have those BRL 5,000. How are you imagining the expansion? And would this make any chance to change your mindset on some specific format? It's really important to understand if this is something that makes sense maybe to open up less of a mix or by opening up more Camiño stores, just to understand capital allocation in a scenario that seems to take a little longer to recover. And the second point is, Tulio, we had this reversal of the subvention. And so just to share, you guys we're seeing a lot of companies that are not provisioning for a presumed credit anymore.

Mr. Ilson was mentioning how this works in our mind and in regards to this topic, keeping the pace or accelerate or reduce pace. Your question here is, is there going to be a change among formats considering what we shared with you now with this new model and Mateus food service as well. But the answer is not necessarily. In our view, we're not really thinking of things in this way. Our strategic expansion plan remains on the same axis, and we actually shared the stores we're already building and most of our store network is brands that we already have in our day-to-day. We have 2 new business opportunities that arrive as service store that's small. And so also Mateus food service is also a reality. We really believe in these channels. And what's happening now, João is we're really keeping our eyes open to always search for ways to innovate and adapt to consumers' behavior because consumers have changed their behavior. We've been keeping our eyes open and we've tried to adapt to this. The transformational market is a reality. We understand cash and carry sometimes does not service this customer as much as it should with the level of excellence and a complete solution, as Mr. Ilson mentioned but we understand that here in the Northeast in Brazil, we have this role but maybe the new brands kind of have this role trying to adjust this need with new markets. But the main expansion axis remains, and I don't think you should consider any drastic changes in brands or business models.