Grupo Mateus S.A. ($GMAT3)

[Interpreted] Good morning, everyone, and thank you for waiting. Welcome to the earnings call of the Fourth Quarter of 2025 at Grupo Mateus. [Operator Instructions]. We'd like to let you know that this earnings call is being recorded and will be provided on the company's IR website, where you will also find the full material for the earnings call. And you can download the presentation as well on Chat icon in English as well. [Operator Instructions]. Information in this presentation and possible statements that could be made during the earnings call related to business perspectives, projections and operational and financial targets of Grupo Mateus represent beliefs and assumptions of the company's management as well as information that is currently available. Future statements are not a guarantee of performance. They involve risks, uncertainties and assumptions as they refer to future events and therefore, rely on circumstances that can or not occur. Investors must comprehend that general economic conditions, market conditions and other operational factors may lead to impacts in the future performance of the group and lead to results that differ materially from those in the statements. Today, we have the presence of the company's executives, Mr. Ilson Mateus, the Founder and Chair of the Board; Jesuino Martins, the CEO; Tulio Queiroz, the VP of Finance and Investor Relations; and Sandro Oliveira, the VP of Operations, Logistics and Commercial. I'll pass the floor to Mr. Ilson Mateus.

[Interpreted] Hi there. Good morning, everyone. First of all, I want to thank God and each person watching us at this moment. And I also want to thank our Chair, Tulio and Sandro. And today, I wanted to start this meeting in a different way. I know the market was really concerned after our last release. But I wanted to say that we are going through some growth pains. Ever since we had the IPO, our company started experiencing a major transformation. Focusing always on the evolution and improvement of criteria for decision-making, improvement of controls with more responsibility and of course, with our over 60,000 shareholders. And I wanted to go over to the next slide and show you some of the measures we've implemented ever since we went public. So here in October 2020, soon after going public, we knew that we had to structure the company to support the major growth level. And this is why we went public. When we had our IPO, we had all of the North and the Northeast left out. We knew what we wanted, which was to expand strongly in the region. At that moment, we wanted to position ourselves in the North and Northeast as the biggest retail and distribution company in the region. In order to have this growth that we imagined, we knew that we would have to structure our HR area. We needed to have a strong HR department because we were aware that retail needed a lot of people. And we also had many internal processes we need to improve in our structure for HR. And that's when we began to search for a professional that would be experienced, and that's when we met Regis. He's a professional with over 30 years of experience in HR, and he's been working with public health companies, and we felt at that moment that Regis was the person that would really demonstrate what he was here for, and he would help us structure all of our HR department. We had to hire over 10,000 employees and all of this works. And that's when we began to go through the other chairs. We restructured our [organogram]. We thought of everything, and we were able to then take on a major step in August '22, which was the split of our positions. I agreed that Jesuino would take on the role of CEO, and I would move on to Chair of the Board. Why did we implement this strategy? Well, Jesuino has been working with me for 28 years. He knows the company on the top of his head. Jesuino helped me train most of the directors, managers and supervisors. And Jesuino knows our company's DNA and our biggest concern was always guaranteeing our DNA and the culture of the company because we needed to bring people from outside. We needed to attract more knowledge. We needed to bring in more oxygen, but we would never be able to lose our culture and our DNA that we needed to preserve. And Jesuino agreed, and that's when we created this [ organogram ] with Regis, and we defined that we had many different positions within this new structure that we needed to attract and occupy, and that's when we kept moving ahead. Then in August '22, the market was already starting to demand a lot, and we knew we had to hire a CFO that was strong enough and that really had experience working with publicly held companies. And we had 2 pillars that were very important that we needed to have this professional. First of all, we needed to have someone that really had broad experience in publicly held companies, which was what we needed urgently. And then the second thing was considering the size of the transformation we had he needed to come live in Sao Luis. And Tulio was able to bring these pillars, and that was very important. When Tulio came in, me, Tulio, Jesuino and Regis from HR gathered together, and we were able to work on filling out all of the other positions, right? We needed to have this governance plan and a control plan that would be strong enough for the level of growth we wanted. And so then in December 2022, we were already prospecting this and Tulio was working on this for quite a while, and we started searching for these professionals. And we needed to urgently get a financial director. We went after this person. We interviewed many people. Regis had a lot of candidates that we reached Marcelo's name. He was a professional with 20 years of experience in companies that were publicly held, and that's when we brought Marcelo in, he really fit into that position. Then we started to work on all of the processes in the company. And in the second semester, we started -- once we had the structure set up, we were sure about this position that was the legal department, internal controls and risk. And that's where we reached Paula's name, someone with over 20 years of experience in the sector in publicly held companies as well. And we understood that she had the profile we needed to adjust this position. So we went from top down and occupied the positions, attracting and working on the policies we needed and the structure and the work of all of the governance plan we needed. And that's where we defined the positions that would be below us. And then we moved on to the market once again. We trained and worked on preparing people internally. And we had to, of course, bring some people from the market. That's when we had the need to attract someone from HR, right, Investor Relations. And that's when we reached a professional with over 15 years in the market with a lot of experience as well that would be able to help us in this process as well, and that was [indiscernible]. And then we had the need to have the compliance and risk management and internal controls area and then we went to the market, we found Erica. She's someone with over 17 years of experience, and we understood that she could fit into this position and help us with all of these processes I already mentioned. That's when we had the next chair, which was the internal audit manager, a chair that was very important in this committee that was created. And once again, we went to market and we were able to find someone with over 27 years of experience and auditing and she had gone through many different companies that were publicly held, and this person is Cristiano. Then once we structured all of these chairs and processes and positions, everything was designed and mapped out, we were working on this. That's when in the first semester of '24, we actually had some shareholders mentioning that we needed to have a consulting company brought in that could help us because we had a lot of processes, and we need to track some lot of experience and then we consulted a lot of people, and we reached Visagio. And this company really helped us a lot. They had a lot of work mapping out processes, diagnosis, opportunities for improvement in the accounting front, implementing action plans and 4 main initiatives: processes, people, technology and governance. Well, then once we had done this, we designed all of our work plan, and that's when we finally reached the conclusion that we would need to have a more senior name that would be a accounting manager. And then we went to market and we're able to attract Gilberto, a professional that's very experienced, and we knew -- he knew about the demand and adjustments in certain systems and processes. And we brought in Gilberto, and he helped us to structure this major governance and controls plan. Once we did this, we advanced a lot. And then in December 2025, the Board approved the hiring of new professionals to support us in back-office functions, and that helped us with the accounting teams and controlling services, et cetera. And so these professionals already fit into these roles. And in the first quarter of '26, we reached the conclusion and approved the deployment of an integrated system. This integrated system for the back office, which is accounting, treasury, fiscal and people. And we went after a system that could help integrate our ERP. And then we're seeing what would be best, would be SAP, Oracle or any other robust system, considering the massive amount of data. We need to have a very robust system, and we are discussing this topic a lot internally and working on hiring the system. So finally, I want to make it clear that my commitment is to prepare the company for the next 40 years. So all of the work done was really structuring this next phase. Everything we needed to do, we were able to implement and invest in, and we're going to continue to work strongly on this. Now we're going to head to our day-to-day operations here, and I wanted to start off talking about expansion. So we'll show you what our expansion and plan for closing in 2025. On Slide 8, you can see we opened up in 2025, 22 new stores. And I want to call your attention here to a point, which is the [ Spazio ] brand here for services. One more innovation we're attracting. We worked on this for many years. And thankfully, it's now the right moment, right? And we also brought in a store in Salvador. We reached another capital, an important capital occupying the space and gaining share. And then on the right side, you can see 3 stores of the Novo brand in this Pernambuco, Paraiba, Alagoas expansion process. And here, you can see many different stores that work on the consolidation of our participation in Maranhao, [ Paraiba ]. So this consolidation really brings in this market consolidation with strong share that we've already had in these regions. And so here, I'm bringing in 2 brands that are very important. The Spazio brand that we structured in this sector with the commercial sector as well because it's a brand where there's a pretty big gap in Brazil at the moment. The AB public, we normally say is kind of orphan, and we have 2 stores with this brand already, and we saw that the results are very good because they're between one super store that we call hyper and we have some stores with the best results and then the cash & carry as well. So this store has a super important role which is this trend of working with the AB public that require -- that would like to have a more premium product and the experience has been very good. So this is a brand we can scale up on easily as we've already created the main structure, which is commercial operations and logistics. So on the right side here, you can see another brand as well, which is a market that is really open and our company has a DNA that's a multi-format DNA. And we've always been testing new models, and we've been working on testing a sector that could service the food service market, the transformers in-store we saw that these stores and these consumers and customers for these brands have a bigger portfolio need, and we saw that we weren't servicing them well enough in our cash and carry operation. And that's where we created this store, which is a test, and we've had very positive experience, and there's a huge opportunity in the market that we can scale up on with this model. And we've been very optimistic with this in our -- towards our future. On Slide 10, I'm bringing in a summary of our scenario at the moment. As you can see, 302 stores in total with many different formats. And as everyone knows, we are a multichannel company. And we don't place all of our eggs in the basket because we know retail is constantly transforming itself. And with this multichannel approach, we attract more revenue, more margins and a better purchase experience. And with this, we can service all of the different target audiences with this brand. And so here, I have an observation from Electro. Electro is a sector we always discussed because there's a need and it occupies space in our portfolio. And we had some stores that were not profitable. But then within this plant work on governance, we were able to work on these different studies and we were able to produce 28 stores. We got our app, and we're able to strengthen it. And all of this has brought in very big results. We reduced a 28 stores that we don't have a drop in sales and the results of this sector really got better. So then I have an observation here as well. I want to share of a channel that is very strong. When I'm talking about multichannel, our cash and carry -- our wholesale operations, sorry, has a very important role. A lot of these brands we discovered because of our wholesale operations. So wholesale is a channel that grows. It is a channel that relatively -- has relatively low cost, and we have over 47,000 customers service and with food service -- food and our app on add customers. We want to increase our customer service or self-service through the app. We have 19 distribution centers, over 1,700 cities service, over 6,400 commercial reps. And we've already started off with the food service brand. This new store, the apps has already been opened and over 70% of its sales are already customers accessing the app directly, and we're just delivering to them. So we improved our logistical network for this brand as well a lot. And I want to just share an observation amidst all of this process and projects that we worked on in the when we IPO-ed. And I'd say that now we feel fulfilled because in 2020, we had about BRL 14.3 billion as revenue, but we ended '25 with BRL 43.5 billion in revenue. And so we understand that we gained volume, gained market share and purchase power. And now with all of this plan that we've structured to cut down on costs, gain efficiencies, gain margins, we feel we are prepared for the future. Thank you so much. And now I want to pass the floor on to our CEO, Jesuino. Thank you.

[Interpreted] Good morning, everyone, Sandro and everyone watching and I want to quickly share with you some of our indicators and our earnings in the fourth quarter of '25 and the full year of '25 as well as we've done always. And I want to start off by sharing in the first block on the left side on the top part, we would have our gross revenue for the fourth quarter of '25, and we were able to achieve BRL 12 billion in revenue in this quarter of '25 with a significant growth above 20 percentage points. And at the bottom part of the first block, we reached a historical level of revenue, and we go over the barrier of BRL 40 billion in revenue, we reached BRL 43.6 billion in revenue. And here, we also have a growth that is very significant as all of the growth levels is almost 20% growth. And so here, you have an important point that I want to share here. The bottom part of this first block, you can see an increment in revenue of BRL 7.2 billion more than in 2024. This is an important milestone because of significant increment in this revenue. Half of it comes from Novo. Novo comes in, in the second semester of 2025, contributing significantly. And the other half comes from an increment in GMAT. So when we look at these results in our gross revenue, it's very significant for us, right? And we also have the issue with the share. When we look at 2025, with these results, we're able to achieve almost 30% share in the market in the Northeast plus [ Para ] in this region we're in. And for us, this is a major milestone in the region so important in our country with all of these efforts made and Mr. Ilson mentioned that we're able to reach levels of share that are so significant in a region that's so important as our Brazilian Northeast. So -- if we look at this from an isolated perspective in the 3 states, Pernambuco, Paraiba, Alagoas where we completed our operation with Novo now, our market share is even more significant. If we look at only the cash and carry brand in the 3 states, we can -- we see we go from 40 percentage points in share. So from a revenue perspective and from a consolidation and market share perspective, we are very happy. It's an important and relevant share in the Northeast, our beloved Northeast. And when we look up ahead in the last quarter of '25, this revenue of BRL 12 billion, we can annualize to about BRL 50 billion in revenue. This is an important milestone. So we're super happy. We feel like we're advancing more and more in our expansion efforts in the Northeast and abroad in the capitals and in the smaller cities as well in the Northeast as we've been sharing with you. The second block from the left to right, on the top part, you can see our Same-Store performance. We know we've been coming from a pretty high base last year in the fourth quarter of '24. We reached almost 6 percentage points in Same-Store sales growth, pretty high base. But the last quarter of '25, we reached a level that is slightly negative of 1.1 percentage points and at the bottom part of the second block, you can see our Same-Store performance in 2025. And we know 2024 also had a very strong base. We went from a year of almost 7% growth in Same-Store sales growth and now 2.9 percentage points of growth in the Same-Store. So I think there's an important point to share here in a very objective manner. We know that the macro scenario and macroeconomic scenario you guys have been watching closely, and you know the scenario has been very challenging, especially in retail, modern retail. We've noticed that with this families consumptions have lost strength throughout '25. Due to everything that's going on in the market, whether this is due to interest pressure or debt of the families, we noticed that the strength, right, slowing down over the year of 2025, and it becomes a little more intense in the second semester of '25, start '25 with more significant strength, and we end the second semester in a very intense manner. All over Brazil, we look at the data, we see the volumes slowing down a bit, reaching levels of 0% growth in volume. And we also noticed that in all of the studies we work on, consumers take less products home. There are studies demonstrating this about 8% less items in their cars than what they were taking in '24. So '25 was very challenging with all of this macro scenario we're experiencing. We see B2B, and we also felt this impact a lot in the second half of '25. We noticed that small grocery stores and independent retailers that depend more on low-income customers dropping even more than the modern retailers. If you look at these channels, it drops sometimes even more than 5 percentage points like small grocery stores and Mom-and-Pop shops. And we know that they buy from our cash and carry stores, right, to supply their own stores. So when this drops there, B2B also drops to the Same-Store performance as well in cash and carry and modern retail as they feel more pressure throughout the second semester of 2025. And then we also have a deflation scenario that's very accurate, especially for commodities as we've been monitoring the basket of commodities, we see baskets that drop over 35% throughout 2025, reaching levels of growth of 0% when we look at the last readings of data. So it's important to mention also that this is not isolated in the Northeast. We see through public data that Nielsen discloses that Brazil has been impacted -- has felt this impact of the Same-Store sales drop. We noticed in the Midwest in the last quarter of '25, they dropped a lot, almost 3 percentage points in Same-Store sales in Rio as well. All over Brazil, really, you feel this impact due to the macro scenario we just mentioned here. So the first quarter is still challenging in the sense, but we are very confident about our multichannel approach and exploring all the channels as [ Ilson ] mentioned, so we can continue to deliver quality results as much as possible with whatever we have at our reach, and we're very confident that we'll continue to deliver the best possible. And then on the third block from the left to the right, I wanted to share our performance in gross margin, and we reached a level of 22.5% in the fourth quarter of 2025. And here, if we look at this without Novo, Novo arrives and contributes a lot with volume. The margins are a little bit lower. So if we exclude this effect of Novo in our gross margins in the fourth quarter, this level will go up to 22.9%. We know you guys have been accompanying our historical gross margin of 22%. So the margin is really resilient and very consistent and sustainable over all of 2025. And here, no doubt at all, all of the work we've been doing on controlling stocks has really helped with the resilience of our gross margin and keeping it stable as it has been throughout the year. And of course, all the work we've been doing with commercial budgets and commercial incentives from a trading and logistics perspective as well. And so we're very confident and consistent on this. But in the fourth block from the left to the right, I want to share our EBITDA, right? So we have been achieving an EBITDA of BRL 652 million and an EBITDA margin of 6.2 percentage points. On the bottom part of the fourth block, you can see our EBITDA in the year, BRL 2.8 billion. This is a significant growth and a margin of 6.2%. Here, there's an important point to highlight with you. We noticed that the EBITDA is pressured in the fourth quarter. And no doubt, we have a significant impact here in our expense level in the fourth quarter, especially. And we know that this pace of growth was reduced, and this was combining with an expense projected to grow. So this combination, no doubt, will pressure our EBITDA as well. And this is the main reason why our EBITDA was a little more pressured throughout this fourth quarter. Soon Tulio will share a little more clarity on this expense level and what most weighed in, and we'll be able to look into this, bring in more information as well. And here, due to all of these factors during 2026, our strategy has really been to look in-house. Mr. Ilson, Tulio and Sandro, we want to search for greater productivity in all of the different company sectors at the administrative level, at the back office. This work has already begun now in the first quarter of the year, and we know about the importance this represents as we need to adjust and adapt the company to this new reality we're experiencing in this macro scenario. So we would like to do this very well as much as what's in our hands, of course. Whatever depends on us, we want to do very well. And we know each percentage point that we are able to search for when it comes to efficiency will contribute significantly to our EBITDA because 1 percentage point based on the revenue of BRL 43 billion, we don't need to do math to understand it's going to have significant effect. We are conscious of this and very disciplined about this dynamic as we search for efficiency. Despite all of this, we're very confident, Mr. Ilson, Tulio, Sandro, about the need to deliver these results that can be consistent, resilient and in line with what we've been reporting to you throughout the last months and quarters and years. And finally, in the last block, the fifth block from left to right, we see our net income, and we've been able to achieve BRL 340 million of net income, net margin of 3.2%. And in the bottom part of the last block, you can see our net income in the year at a historical level of BRL 1.6 billion and a net margin of 4.1%. So I wanted to share this performance with you. Once again, I want to ratify our trust in delivering results that are more consistent with what we've -- what's in our hands, right? And I'll pass it on to Tulio who provides more details on the financial information, then we'll get into Q&A. Thank you all so much for now.

[Interpreted] Thank you, Jesuino. Thank you, Mr. Ilson. Good morning, Sandro. Good morning, everyone. I think Mr. Ilson and Jesuino have already given you the main messages here, but now I'm going to quickly go over the main indicators and just going back to the main points Jesuino highlighted. So on the fourth quarter, we clearly see this deleveraging trend, and we see also the operational deleveraging with the Same-Store sales going down as well with families with higher levels of debt coexisting with such a high level of interest for such a long time. We see a shift in consumer profiles among these consumers and the overall basket of the families. So expense and consumption levels that didn't happen 3 years ago, but start happening, and we see a major deflation in commodities that is structural and very important. Grupo Mateus also has an important share in the commodities, in the sales mix. And so we can't separate one thing from another. And I think this macro scenario of the top line is a topic we should. We need to manage in the best way possible. As Jesuino mentioned, considering everything we have in our hands. And so now we're going to talk about a little more of the other topics we've been discussing that are in our hands to keep the levels of profitability in 2026. In the year, we're talking about revenue of over BRL 43 billion, growth of 20% year-over-year and Same-Store sales of 2.9% in the year as a whole. And we consider the operational deleveraging as well when we look at the year of '26 up ahead. And so besides this, the retail and cash and carry channels demonstrate this slowdown in sales and we also have the wholesale topics included. So additional tension when it comes to productivity as well that we're going to discuss up ahead. And so on the next Slide, #15, we have the gross margins and the company closes at 22.5%. And here, it's a very important point. It's been a difficult quarter from a top line perspective. So keeping this consistency is important and this level of 22.5% already includes Novo's operation. As you can see, there is a margin level that is lower considering the business characteristics of the Novo flag as well as the level of maturity and the ramp-up. And so we consider that in the states beyond the Grupo Mateus universes margins at 23.7%. And that demonstrates the consistency and resilience of this topic. So here, it's also important to mention that throughout '24, we're already discussing this and in part of '24 as well, we were sharing this. And we were working on all the sensitivity tests regarding price, and we had continued to focus on profitability as well, looking at this beginning of 2026 and the overall scenario. And then in the year, gross margin of 22.4%, growing 20% over year. And this balance year-over-year it's very important in this gross margin scenario as well. Moving on to the next slide, Slide 16. We have the operational expense levels. And here, clearly, we can see the operational deleverage topic really pressuring us -- as we can see the operational expenses on net revenue at 17% in this quarter. And it's important to mention that this scenario that is stronger that we experienced in the fourth quarter really lit up an important structure for work and productivity when we consider expenses and the company had been preparing for this with different initiatives and preparation of the basis and analysis for a structural management of expenses. Here, we had an important component of all of the analysis being ready to be able to make the decisions we needed to as soon as possible with a lot of quality. And I think the quality of the decision in productivity moments and structural productivity work is really important to preserve the operation, right? So I think we have a very important point here. And in the year, operational expenses grew 22%, 15.4% of the net revenue. But once again, the same scenario, but with more intensity. And on the next slide, we also bring in a little more details on the expenses. Partially, you have the elements of the incorporation of the new company. And this is all part, of course, it's still a very young company, ramping up with a level of results that's very good. The stores at Novo are completely adherent to the maturity access, and we see the incorporation of the new company and another important point related to new store expenses and the expansion of our operations. And so also related to the growth of the company, opening up new routes and another important point also is on the termination -- contract termination expenses. We could also consider this as something that's occasional or nonrecurrent. But we wanted to put this on current because -- and give some clarity on this because here, no doubt this seems to be a sign on the productivity work beginning, right? So it started in the fourth quarter with initial intensity and it gained strength throughout the first quarter, especially, right? So here, we're going to see this an interesting journey on productivity up ahead. And then the other points we already provided disclaimers on and just to mention that the topic definitely pressured the fourth quarter, and it's a topic that the company has been working on with the greatest priority possible. And in the next slide, where we have the EBITDA numbers, we exclude the effects of the Pernambuco program. And so we have an EBITDA of BRL 652 million and an EBITDA margin of 6.2% and so the pressure we had in our operational expenses dropped into the EBITDA, a clear sign of operational deleveraging. And here, we have an important caution point. And so in the year-over-year, the level of EBITDA margin was at 7.3% compared to 7.4% last year, a growth of 18% annually. And of course, this is pressured by the fourth quarter, right? So as you know, operational expenses in retail represent more fixed and variable characteristics, right? So when you have a strong slowdown, it's important to react as soon as possible and as quick as possible. You can always react at the same moment. And I just want to remind you the context of the company, which is Ilson and Jesuino can talk about this with a lot more. So all of the expense structures were dimension to consider this expansion design. And now '26 is a super important year to look in-house. And so that involves all of the margin strategies. And so if we look at these 2 different sectors, the margins and expense dynamics, we can really face this macro scenario with a slowdown in sales, keeping our profitability levels. So that's why we're super confident about the numbers in 2026 because of everything we've been doing and especially in these 2 areas. Moving on to the next slide, we then get into the net income. of the company, and it's important to also provide a disclaimer on income tax, we had BRL 196 million positive in the fourth quarter. Here, we had some points. We tried to be as clear as possible in our release, but it's important to highlight this, right? And we had also the reversal of provisions on the subvention topic, BRL 28.9 million related to '24 as a nonrecurring or extraordinary event, BRL 58.3 million upon the exercise of 2025. We've already mentioned this a little bit in the third quarter, but it's important to mention this again. the company and the market overall gained a lot more trust based on decisions on the thesis of subvention, which is why we had this decision of reversing the provisions made. And besides this, we also had a positive effect of interest on equity of BRL 50 million and BRL 29 million of the deferred income tax because of the provision topic. So a combination of all these effects generates a specific phenomenon of our income tax in the fourth quarter. So the net income would add up to a total of BRL 340 million in the quarter and BRL 1.567 billion on the year, excluding the extraordinary effects, not only what I mentioned now about the fourth quarter, but especially the biggest ones we mentioned throughout the third quarter. So I think that provides a really good clarity on the recurring levels. Then on the next Slide #20, we have the numbers related to the cash conversion cycle. And here, for whoever is keeping up with the company for a bit longer, you'll see the size of the priority and the intensity and the focus the company has given to this topic. For us, it's an important achievement. We know how relevant this topic is in retail, especially for a company that grows like ours. So closing the year in 43 days is a significant achievement. In regards to last quarter, we had a significant evolution. We go from 48 days to 43 days, basically 10% improvement. And in the year-over-year, 18 days. So of course, we have the incorporation of Novo, but we also did our homework there. We learned a lot in that region. We learned a lot with Novo on these different topics with open to buy and then Sandro and we implemented GMAT as a whole. And so we know that we have space to go through when we look at the number of suppliers was 54 days, stock with 63 days. And so this is what we're going to bite into, right? And you can see '26 is a year to gain efficiency with what's in our hands. So we're talking about margins, expenses and a cash conversion cycle. And so I think we have 3 different initiatives considering that the macro scenario is a little more challenging. So we also have the numbers in regards to the net debt. When we look at the numbers, we can see there's a very important role of working capital that we just discussed because as you've seen, it's been a quarter from an EBITDA perspective that was tighter, and we had all of the deleveraging effects. So we had less funds from operation and cash generation, but we were able to lock in a lot more of the working capital. So when we combine both elements, working capital, keeping up the consistency and improving what we've been able to evolve and especially when it comes to our suppliers and stock when we fit in profitability with the gross margins and expenses. Once again, we'll see funds from operations contributing to this. And this is exactly what we've been searching for, right? We want to be a company where as Ilson as the Chair and Founder, he has a very clear guidelines. When we have high interest rates, we have to be more disciplined with our debt level. And so the guidelines in high interest moments, we need to be very careful with any cash allocation or cash consumption. And then Ilson can talk about this more later on. But we've been even stricter in decisions for investments in new stores, tier levels and all of these new formats are initiated from a conceptual manner where they can also bring a ROIC that is very interesting. So we've really been keeping on an eye on these ROIC and these different opportunities with food service to the [ Spazio ] a brand and other elements that Ilson already mentioned. So Mr. Ilson looks at the cash level every day basically. And this is an indicator we're going to keep an eye on and look at closely. And we know we can keep this discipline because this has been very important in the last few years. So we closed the year with a level of leverage of 0.4 already considering Novo. And we know that this has the potential to continue evolving. So on the next Slide #22, here, we have the numbers of the CapEx in the year. You can observe at the bottom part of the slide, the level of CapEx is a little smaller than what it was. But when you look inside the main element was properties where we've been very careful with this topic. And here, you have different focus areas where we've been opening up opportunities for growth, getting greater in [indiscernible]that we've been working on properties as well that with partners in real estate that's contribute with this process ever since the beginning of the project. And we've also talked about the Novo transaction ever since the beginning, the dispute for property prices in the 3 states where Novo was present, which is something really important and also contributed a lot with this. So guys, these are our main comments at this moment. And now with the team available, we'll get into Q&A. Thank you very much.

[Interpreted] Now we're going to start with the Q&A session. [Operator Instructions] We're going to our first question Vitor from [ Safra de ].

[Interpreted] Well, my first question about this deleveraging, especially the growth. So when we look at the main opportunities and how we should consider this? And then also on the income tax perspective, where you have a reversal of the provision in regards to subventions. So I wanted to add on a bit with this.

[Interpreted] I think I can start off, Well, Tulio because we have different initiatives, but I think it's worth mentioning here that the ones that are more accurate or latent, right? We are really focused on productivity and expenses, whether these are operational or whether these are administrative in retail, there is a very significant weight in the business. And if we capture productivity that we're designing here in this block, it represents a lot in this journey. So I think here, we have a first point to share with you of where these bigger opportunities are. And we know that people, energy, power are very important mines. And no doubt, we have another front that's also profitability with all of these initiatives in this sense. And so we want to capture more efficiency gains. And there's another block that we should share as well as with the working capital, right? So we know how much weight this had in cash generation in the fourth quarter. And I think the stock controls and purchase budget as well. We have a long journey to go through throughout the year. We still have a significant difference, as Tulio mentioned, between suppliers and stock. We know how much value this can attract if we are able to evolve with it. So if I could highlight Vitor some points. Of course, we have some other initiatives, but these are the ones that I believe are maybe the most accurate that I should share with you.

[Interpreted] Well, Vitor, on to the second question here about the reversal of the provisions. I think it's worth sharing with you a bit of the history of the topic. In the company. Before the famous Law 14,789, the company, as you all know, was taking on all of the benefits of subventions for investments with an effective income tax level that was pretty low because of this. Then after the change in the law at the end of from '23 to '24, we took on a stance that was really feet on the ground and a little more conservative. We started provisioning all of this, the PIS/COFINS topic and also income tax. And despite provisioning all of this so that it could be absolutely adherent, we always really believed in this thesis, right? The federative impact, constitutionality, also the benefits of this. And we see major journey in this investment process and always considering the plans. So we always believe in this thesis from a judicial perspective and Paulo led all of this process as well. But the main decisions and measures -- legal measures that were published. And we had an improvement in the quality of these legal provisions and measures. In our case, we already had a decision about the income tax issue that was favorable. And with the maturing of this topic in the third quarter, we had a first block of revisions on our provisions. Just to give you a disclaimer here, we discussed this topic closely with our legal advisers such as Mattos Filho, Pinheiro and others. And now in December, we completed this analysis of the rest of the values, right? So tax topics in Brazil are always vary a lot, and we have to be closely watching these matters. We have a tax committee here in the company that we closely look at these topics that are important, relevant and structural. And so '26 is going to be the same process, right? We'll keep up with this, and we're going to continue to be closely watching this topic. We also have the monitoring of the tax reform that also requires a structured program in the companies due to the level of relevance, right?

[Interpreted] Now our next question comes from Nicholas, the sell-side analyst at JPMorgan. [Operator Instructions]

[Interpreted] I had 2 actually. The first one is more related to the business unit of distribution, wholesale distribution. And I wanted to understand how the volumes are behaving since the food inflation is negative at the moment. And normally, B2B suffers a little bit more in these scenarios, right, with deflation. And I wanted to understand how B2B is behaving because it's one of the divisions in the company that's been quite resilient. And then about working capital, you've mentioned in the release that year-over-year comparisons are difficult due to Novo. But I wanted to know if you guys can maybe give us some color on how this improvement in the cash cycle would have been even if we consider Novo in the fourth quarter? Any details would be very much welcome.

[Interpreted] I can start off here. Well, thanks for the question, Nicholas. It's important because, in fact, you're right, B2B seems to have suffered a bit more in a more acute manner with everything we've been experiencing. When we compare growth of grocery stores and independent retailers, it becomes negative in the last readings we've seen, right? Over 5 percentage points drop in volume. When you look at the other channels, this volume is more resilient. So you're right, B2B suffers with this and there's significant penetration within cash and carry. But -- we are fortunate to count on a multichannel, multi-format approach, right? You see we have over 6,000 commercial reps split around the Northeast in Brazil. Over 50,000 POS is serviced by us. And here, we have an important force or penetration in this channel. You can notice small retailers receiving up to 20 commercial reps. So we try to extract from this channel even in this difficult scenario we're in, we try to extract the best possible. So despite all of this, this channel and the volumes of B2B are resilient, as you mentioned, right? So that's pretty much it. This is the scenario. It's very challenging, but I think our multichannel approach and our expertise in servicing small retailers because our company was born as a distributor. So that's when we had all of this history of retail over the past year. So our DNA of distribution and wholesale has significant importance in this struggle to minimize this impact. So this is pretty much it. But then Tulio, you can help me maybe with the second question about the Novo impact in working capital, if you could help that one.

[Interpreted] Nicholas. Thank you for your question. And this topic on working capital, I think, is a topic that, as I mentioned quickly in the initial remarks. We've learned a lot with the guys there. And you probably remember that internally, the company has also been evolving a lot. We started to treat these topics in a closer manner our cash conversion cycle used to be 115 days. So now we worked in different areas with suppliers, with stock levels and discussion on the long tail products, et cetera. We had many discussions, and we finally -- we've been working on this journey, right? And we're super excited in keeping this journey going, right? But specifically in the fourth quarter, when we compare with the third quarter, not year-over-year, but we improved 5 days. And here, we already have Novo. So you can give you an idea, right? These 5 days of the fourth quarter are 100% comparable because Novo was already being considered in the third quarter, right? So when we compare with last year, we estimate that we'll have an improvement of over 12 days, excluding Novo. So here, you have an important point. We know that in our day-to-day as a whole, this cash effect is super relevant. We've been working with our teams with a complete tool set for this topic. You've already been keeping up with this discussion, but it's important to remember that the working capital topics already are part of the variable compensation indicators for the team. So we bring the importance of this to the forums and discussions and there's a day-to-day demand and also the variable compensation calls of the managers. There's also investments in the set of tools for controls. And you kind of cover this topic and naturally, the topic will evolve and improve. And generally, as I really speak with Jesuino and Sandro, and I see that our big dream is to be closer and closer to the stock and bring our suppliers closer. So I think this path is being gone through with intense -- important intensity, and we've been searching for ways to bring consumers and suppliers closer to stock levels, right? So we know there are companies that demonstrate this. But clearly, when you connect suppliers and stock, you can provide some relief and in a very significant manner. So did you start managing the receivables topic as well. So it's a topic that we're very excited about, and we know we can continue to unleash value.

[Interpreted] our next question is from [ Pedro Caravina ] the sell-side analyst at [ XP ].

[Interpreted] I think we have 2 topics I wanted to explore. First, if you guys could talk about the expansion strategy for '26 and '27. You guys have a lot of leverage that's okay 0.4x, right? No space in the balance sheet -- still space in the balance sheet. But would it make sense to keep up this more accelerated pace of openings? And if so, which channel? Or would it make more sense to focus on improving processes and integration with Novo? I think it would be interesting if you could discuss this topic a little bit. And then just a follow-up on the productivity program. Do you guys -- do you think you could quantify this a little more and understand what would be the impact for 2026? So expenses really accelerated a lot from the third to the fourth quarter. And I understood that it was a little bit related to preparing for growth that never came, right? So is this productivity process after it's implemented, would you go back maybe to the levels of expenses you had in the third quarter? Or do you see this space to be even lower when you consider this. So these are the topics I wanted you guys to approach.

[Interpreted] Great questions, Pedro. On the expansion strategy, the idea is that we should have less stores than last year. And the stores that we had are going to be analyzed closely. We will be working on stores that are actually more strategic. And one example are the stores for the [ Spazio ] brand where we're going to expand. And we'll be very careful about this. Our focus is going to be improving cash levels and reducing debt levels.

[Interpreted] All right. So now moving on to productivity, I can cover this, and Jesuino will add on. But on productivity, I think Jesuino already brought the main points, the main topics, but I just wanted to add on with some different aspects here, taking advantage of your question here, Pedro, because here, we have a combination of the methodology, business knowledge and leadership. So this is a very important tripod, let's say, to be able to work on expense reductions in the correct way, so we don't get in the way of the operation. So on the -- what's cool about this is when we start talking and we start working on this, just to make things very transparent here, we have a committee working on this topic weekly, and this is led by Jesuino. So I think here, you can see the weight of this. And so the Chair speaks weekly, providing guidelines. So leadership's role here is super important. That along with management, we have the top -- everything is done together with managers. It's not just top down, and we compare productivities, gaps and opportunities. And we always look at our own business. We don't want to use external benchmarks, so we don't lose the identity of the business and culture, but we have a very important opportunity also to look at what we call productivity benchmarks internally for each of these roles and understand what some people do differently, right, to be able to get better numbers. So normally, when you go into deep details, you understand their processes and aspects of their processes that one store does better than the other. So as leaders, we need to look at the processes and understand if they're correct. And if so, we can standardize this and make it a standard operational procedure in the overall company. And then as a consequence, you improve productivity and then you can save on expenses a bit. So there's a rationale, a constructive process in this and then the process becomes a standardized mapped out managers when they visit the operations and supervisors, they have the script to monitor the process and then the topic tends to gain more efficiency with deliverable quality. Here, we have a really important point on this sense. And about intensities, as you mentioned, Pedro, our idea here is not to just share guidances, but to provide a message on the importance and intensity of this. So I think Jesuino mentioned this, and this is an important guideline. But the construction of the topic started off in the gained traction really and intensity in this first quarter. And so now we really believe that from the second quarter on, we'll look at the clean numbers on this topic, right? And of course, in the first quarter, we will provide all of the necessary transparency discussing the contract termination effects and how this intensity took place throughout the quarter. And then, of course, we'll bring the greatest level of transparency, right? But at this moment, the idea is not just to share guidances, but to say that it's a means to protect a topic that is a more challenging macro scenario topic. And because the company dedicated all of its attention to expansion in the last few years, we hadn't been looking in-house as much. Of course, we always look in-house with our -- everyone looks for opportunities at a high level, right? But with this intense concentration in-house and the mechanisms and participation of top leadership. And I think it's a year where we're really cleaning up and closely watching and focusing on productivity improvements, best capital allocation and profitability. So expenses on one side, margins on another capital allocation, as we also mentioned, and an improvement in working capital. And with these variables and these factors cared for, we'll really be able to go through this slowdown in sales and make a year of 2026 that is a quality year.

[Interpreted] So just to add on here a little bit with working on numbers here, but I think to summarize, we need to say that we're already working on adjusting the company to the new reality, right? And that's it. So this is where our mind is at. And with everything Tulio mentioned here, I think this helps give you a better notion or feeling of the intensity we are searching to reach.

[Interpreted] Well, just a quick follow-up here, guys, but it was clear. So Tulio mentioned, if you exclude Novo in the base, you see an improvement of 12 days in the cash cycle. Is that it versus '19 that were reported?

[Interpreted] Yes, Pedro. I think there's some important points because when you look at [5Gs] , it's already a 100% comparable. When you look at 18 days, and these 5 days, the base was already comparable, right? We're already working on this ever since the beginning of our integration where our team that went to Novo already implemented a whole set of [ OTB ] structures and the GMAT stores we're already working on adjusting to this tool. So we brought a lot of know-how in-house here, and we're able to accelerate this even more in Grupo Mateus as a whole. But to be very transparent here with you guys in our day-to-day activities, we already look at the businesses integrated. We don't even divide what's Novo and what's not Novo. We look at the consolidated cash levels. We look at the leverage levels, consolidated and the days consolidated communications already done and the setting of all the data is also done in an integrated manner. So even for systems with Novo, this was a topic advanced a lot in a very intense manner. And so the integration process is moving along very well. And internally, we've already kind of turned the key. We see everything from a consolidated perspective.

[Operator Instructions] [Interpreted] The Q&A session is officially ended. Now we'll pass the floor back to the company for their final remarks.

[Interpreted] Well, to wrap up our presentation today, I just want to, first of all, thank God. And on behalf of Jesuino as well, I want to thank our over 75,000 employees that are working at our stores and our operations and guaranteeing our efficiency to improve our results. And I want to thank our shareholders and ask them to continue to believe in our business. We hope to continue to deserve you as a trust. And we want to say that we're working and focused on the operation, the strategy of the business and in searching for efficiencies so that we can have better results. If we can -- so we consider that the worst phase is over, but now we tend to reap fruits in all of the work that's been done for governance, compliance and improving results in all of the company's sectors. So thank you all so much. And I hope that we'll be able to work together in the next -- and be together in the next session. Thank you very much.

[Interpreted] The earnings call for the fourth quarter of 2025 of Grupo Mateus is officially ended. The Investor Relations department is available to clarify any other questions that may be outstanding. Thank you so much for participating, and have a great day. [Statements in English on this transcript were spoken by an interpreter present on the live call.]