Hi, everyone. Good morning, ladies and gentlemen. Thank you for participating in our earnings call for the fourth quarter and the year of 2025. Now we're going to be presenting the executives that are present here. We have Belmiro Gomes, our CEO, Aymar Giglio Jr., our CFO, Anderson Castilho, our Operations Director, Wlamir dos Anjos, and Sandra Vicari, our Human Resources and Sustainability Director. Now I'll pass the phone to Belmiro to begin the presentation.
All right. Hi, Gabby, and thank you, everyone. First of all, we want to say sorry, we had to make an adjustment for our agenda. We originally had scheduled it for tomorrow, but considering that we have a carnival and a lot of people traveling, we decided to anticipate this, right? Instead of having it on Friday, prior to Carnival.
So about the fourth quarter and 2025. We are going through a quarter with some effects that we had already mentioned, and that, the market is, most likely aware of from a consumption and debt level. So first, I want to highlight, the aspects of the fourth quarter, and as we talk about 2025 and reinforce this, just how the company is really focused on reducing leverage due to the volumes of the interest rates we have.
We can reach levels that we had actually presented as guidance to the market, that we're considering an interest rate that was a lot higher than what we're subject to, reaching a 2.55x leverage, and a total volume of sales of BRL 84.7 billion in the year, the growth of same-store sales of 2.6%, and the opening of 10 new stores, which would wrap up 2025 with 312 stores under operation. We were able to look at the commercial execution and store maturity and the new pricing systems we've been implementing. Despite some tailwinds that I'm going to explain up ahead, we had some important evolution in our margin of 0.3 percentage points in 2025. Our expenses were a bit pressured.
We have a lot of new projects going on in the company, and we're going to highlight this up ahead. We are entering into a new cycle of changes in cash and carry, and cash and carry, and we have a lot of new projects up ahead, and some initiatives that are going to be unleashing value and also growing customer loyalty and sales volumes. With this, the company's EBITDA also had an evolution of 0.2 and a margin of 5.8%, with a volume of the net income of BRL 847 million in the pre-IFRS view, and BRL 645 million in the post-IFRS view. You've probably already seen this in the release, that the impact with impairment considering the split with the FIC. About the environment in the fourth quarter, what we've seen.
We had a very significant trend of deflation that took place simultaneously in different commodities. So ever since, we've life is life, we've seen commodities go up and down, and that's normal. But normally, what happens is you have deflation in a certain category, and this is quite common, but then in another category, you normally have some kind of inflation. But what we've seen in the fourth quarter is that there was deflation that was persisting in multiple categories that have a big share of among low-income customers and also in the overall food basket, right? Because they're low added value products, and normally, farmers and producers don't deliver door to door, which is different than, like, health and perfume and cleaning supplies. Commodities are a big channel that supply cash and carry, right?
So as commodities drop a bit, you'll see, like, rice had a drop of almost 37% compared to the prior system. Milk, 16% drop, sugar, 11% drop, beans, 10%. So, wheat as well, with almost 5% drop in prices within this normal variation. And of course, this, as this category has a high share, will reflect in the volume of sales. So in the fourth quarter, we brought a breakdown of what the volume would be, right, in tons, and we also increased sales in kilos compared to last year. But of course, with the category that's so important, in this deflation, the nominal volume, considering this, the same store sales, is below IPCA, right? Once, we're quite exposed within this commodity, right?
Another factor we've been highlighting also that, and we also have data in the release, which is what we've been demonstrating here with the K Effect, let's say, with inflation, right? So, "Oh, now he's going to complain about the interest rate." No, but the, regardless of this, when we look at the mix of the basic food baskets the population buys, we've seen an expansion at a level we've never seen before, which is when you look at the formats that service high income, they continue to gain volume, they continue to gain sales values because there's a switch for more expensive products, right? So in the fourth quarter, we've seen the formats geared towards high income and a growth of 4%.
When you look at the same formats that are normally supplying themselves with us, which is where you have this persistence of trade downs, these formats dropped to about 9%. And so, of course, maybe high income was going more than low income. Yes, but that variation of 4%-9% is on one side positive, but also negative, right? Yeah, compared with the previous year, right? So this is what we call the K effect. So, with interest, a part of this becomes consumption, and then part of the population, of course, loses this effect, and then it becomes formats it, right? Because, most of the volume of interest obtained was also headed to consumption. So we have BRL 7 trillion in fixed income in Brazil, according to the data that ANBIMA has been receiving.
On the other hand, we have low income with BRL 4 trillion of debt paying really high interest rates. So this, of course, influences the pack of who's more subject to low income. EBITDA in the fourth quarter was stable compared to the previous year. There's a negative variation, considering the volume of deflation with a margin of 6.3%. So we can advance to the next slide. So this is where Aymar will be able to highlight this, considering the efforts in leverage from a debt perspective and how things have been evolving. Aymar, it's you.
Hi there. Good morning, everyone, and thank you for your presence. With this context that Belmiro's mentioned, the company was able to, in 2025, reduce its net debt.
The net debt was reduced by BRL 1.2 billion, and this was all in a year where, according to our judgment, was a very positive year when it comes to operational cash generation, a major EBITDA conversion of BRL 3.7 billion. This cash generation was enough to pay for the CapEx. It was enough to pay for the services of the debt and the dividends, and still had a final cash generation of almost BRL 600 billion. This, combined with a reduction in the anticipation of receivables, explains this variation of BRL 1.2 billion, sorry, BRL 1.2 billion, in the net debt of the company, which led to this leverage here on the right side of the chart and of 2.56, right?
So we reach the guidance that was provided back then, for this leverage mix of about 2.60. We had the 2.56 here. And for 2026, the idea is that this financial discipline and effort in the reduction of leverage can really not only remain, but be intensified in the sense that multiple actions and initiatives can positively impact this reduction, such as a CapEx that we estimated at BRL 700 million. We've been keeping, although we have already provided a new expectation for the new stores, five new stores. But obviously, these BRL 700 million at this moment remain because the five new stores, compared to the 10 previous stores, were BTS, built to suit.
So the equipment for the stores, which would be an investment in the 700, we've been keeping here, considering all of the new projects that we've been working on and prioritizing for 2026. So we keep the value of BRL 700 million, but we also have the possibility of reviewing the portfolio and monetizing assets. So when a company reaches the size we've reached and the amount of 312 stores, we can and should begin to have this ongoing task of reviewing the portfolio, seeing what we can leverage in this portfolio, and maybe some monetization as well through an SLB. That could happen throughout 2026. So from a debt leverage perspective, I think this was pretty much the information we had that we wanted to share with you. Next.
Well, Belmiro, now here, at this point, Aymar shared and we should look at the portfolio as well. And the company is super focused on reducing leverage, and this focus doesn't make the company stop growing, right? Of course, we all know that cash and carry went through a very strong expansion cycle and became the company with the most valuable brand in food retail and the biggest customer flow as well. And so we've mentioning these initiatives to increase the share of wallet and different projects the company's been working on with a focus on this investment, right? So here we can show you one point that was actually a bit of a polemic, which was the butchery and the cold cuts or deli area, right?
Which represents 5% of the total sale at Assaí, but that's 5% of a company that's making almost BRL 90 billion. So 5% divided by this amount made Assaí really become the biggest protein seller in South America. So this was a challenging project, and there was actually a certain level of CapEx with a higher cost. But in our view, it was also a way to adapt to this change, which is a trend of switching carbs or reducing carb volumes and increasing the general consumption of protein. So these two projects helped position the company within this point. As Wlamir mentioned, we saw BRL 1 billion per year, and this is a category, right? The drop in the rice prices, but other categories as well that are growing within this moment.
So I want to show you this, quickly here, just to mention how each of these avenues for growth are behaving, right? And what's the biggest point we base on our activities on? Well, the 40 million people that go to our stores monthly, and in the fourth quarter, this was completely stable. So moving on to the first point, you've probably seen that we announced a partnership yesterday with Mercado Livre. We're going to be starting with Assaí in the marketplace through a fulfillment model. We had a challenge in the food sector as a whole to have our own efforts in this sense, but there are some operations that are a lot more efficient because they have other categories and other products that dilute their costs.
This is an important partnership, will be the first cash and carry in Mercado Libre for about 400 SKUs. That should be worked on. Of course, these are non-perishable products, and since we're one of the biggest operators in the food format, we have the conditions, prices that are differentiated. I believe this is an important partnership because we'll have a new pillar in the digital channel. And for Mercado Livre, they'll also start having more competitive prices. So we should evolve into other initiatives with the supply and the use of consumption of our stores, and with Mercado Libre performing adjustments. And Mercado Libre has the best and biggest logistical structure as well.
Another channel that's also going to be accelerated is our partnerships with the Last Miles, and that's highlighting the partnership with iFood. That goes from 56 stores. We should have 100 stores within the platform by the end of the first quarter. On average, the mature stores add about 3% of additional sales. We have also brought Malu in together with Julio. They're leading this project. We still see big potential because the Assaí brand is very strong, and the customers are searching for this. Some optimizations in the store as well as the expansion of the Meu Assaí app, with 60 million registrations, and customers on the app have unique prices and a frequency that's almost 61% greater, and they spend 40% more in the stores.
We can move on to the next page, please. The other initiative, which here is a means to replicate, let's say, as we've seen in previous opportunities, Assaí became one of the biggest tire sellers in Brazil. And if you look at this flow of 40 million people, of course, we've been trying to expand the share of wallet. So the In & Out project basically is to replicate what Costco does very well. So we have one product with an unbeatable price, and this product is not going to get into the regular assortment, but if it's going to be there today, if the guy comes back a month later, it probably won't be there. We brought in two examples. One is a Philco refrigerator that's on sale today.
If you go to the Anhanguera stores or Jerônimo, it's only 3,599. It's a side-by-side, 486 liters. We're going to be exclusive. It's a smart refrigerator. It's a lot cheaper than what you'll find on the internet or any other channel, just to provide characteristic for this opportunity sale. So in 60 days, in 20 stores, we sold more than 1,000 units of these motorcycles. And then you have a bunch of other items that are going to get in, like televisions for the World Cup. And all of this, we're going to be replicating into the Brazilian reality and what we see abroad. So why am I mentioning this?
Well, because remember the butchery project and some other projects where since we put in services, a lot of people looked at it and said, "Oh, it's going to be a hypermarket." Well, what's the reference operation? Well, it's probably the Costco American operation that sells the refrigerator, the motorcycles, jewelry, Rolex. No one calls it a hypermarket, right? But the fact that we're putting in durable goods as opportunity items really demonstrate that this is an evolution because you have a potential for sale, and we already have a fixed cost in most stores, and the increment of this other product line should help in this customer flow, to help set the positioning of the company when it comes to low prices. And in our view, there's a lot of potential for sales, and we should see results that are quite interesting.
We'll bring this with a broken down quarter-over-quarter, and we can advance into the next slide. Another important initiative that's been gaining traction is Sérgio Leite, together with Leni, we brought from the market with a lot of expertise within the private label operation, and we're just going to start having the Sheffy brand, which was already exclusive, besides Econobom, and we're going to start using the Assaí brand in a bunch of different categories of products. We hope to have about 200 SKUs with good penetration till the end of 2026. These are very important items.
The S.A. brand will start now in the first quarter, and the objective of this project is to, first of all, if we've seen that most of our customers are searching for low prices, of course, they're trading down, but they want to continue to have quality, right? So it's a product that's similar to the leading brand, and we want to have a category with a level of margin that's higher. Always, there was always this challenge, in you needed to have a really big volume and density, which is what we currently have in some markets.
Within the São Paulo metropolitan region, we have about 60% penetration in most municipalities, and we expect that with the entrance of the private label products, we should also start having our own commercial conditions with big industries because they're going to start having one more competitor within the POS. So it's a super important project that's keeping up with a pretty fast pace. And now the other project, just to give you an overview, is a project that most people already know about, which is dividing in two initiatives, right? One initiative, we're already going to be starting now in the first quarter, which is space created specifically for supplements like creatine, whey protein, protein bars, and all of this.
This is the first plan we're implementing in 93 stores, and also we've seen this acceleration in a shift in habits and maybe the GLP-1 Analogues, and that probably helped lever this movement. Of course, now we have to anticipate this movement and adjust, right? This is an important project that we've been calling the Health World, and while we do this, we're advancing in this pilot also with the drugstores. We have 25 stores that are going to be deployed and under operation till July 2026. This is a pilot, right? Because the systems part is really different than what we've operated today. We have a team that's very dedicated to this, and yeah, Sergio also brought in someone that's a specialist in this area.
And so in the first phase, the stores are going to be implemented, coexisting within this, store area. We're still discussing the approval to, have access within the same store. So they're going to be at the entrance, coexisting with the stores, faced with specific entrance, according to the current legislation. But as we advance with this discussion, since we got approval at the Senate, and it should be approved at the House of Representatives, then we're going to modify the layout so customers can, from inside the store, can also access it. So it's an important category as well. Just as the in and out, you have the fixed costs, IP, property tax, and all of this already included, right? So, most of our, contracts are fixed, rates, right?
So if the IPCA goes up, our sales and inflation are 0.9%, and so you add more sales, and that increases the share of wallet as well. We can advance into the next slide. Now, I want to go back because I think there's no one that's more specialized here in this than us to explain the FIC transaction, right? And share this. We've already had multiple opportunities, but this FIC topic, I'm going to—since it's a topic that's a little more difficult, and we highlighted this in the release, well, you can contact our IR department, and we have someone also in the tax area to explain... We'll get into these topics, and you can concentrate any questions you may have about this directly in the IR department.
Well, well, this is just like a background to explain why we have this transaction with FIC and also to get into our next initiative here with the development of our financial services, right? So we've already talked about this over time. We had this FIC that started off with GPA and Itaú back in 2004, and over time, it gained complexity because they added the Casas Bahia, and then after, with the split between SAE and GPA, SAE also became a partner at FIC, right? So in the last five years, I'd say, we had three retailers... Sorry, he's on mute. Sorry about that.
So we had these three retailers, and each of them had a different business model, a different moment, and even the Itaú partner or shareholder was not very excited with this design and this partnership that had lost its essence. That used to be more dynamic over time. So we had already been talking about this for a while. All of the partners agreed, and then we announced a split from the FIC that should be approved. And so we hope this happens before, right, by the central bank. But this split from FIC represents the exit from GPA and Casas Bahia, and Assaí and Itaú would continue with the FIC for another two years. And we actually value our Passaí Card a lot and this partnership.
And so when you start the approvals, we begin to have the permission of exploring a series of other products that in the current partnership, was not really, the focus or the interest justified by partners. But through the approval of the central bank, within this period, we can explore it immediately. And then I'm getting into the next, slide, but I just want to say that this phase with the FIC finishes in 2028, right? So we'll be able to have a new card that can substitute the Passaí card, that continues extremely valid, and it's operating in the same characteristics, the same value creation for the company and for customers.
Value creation, that is, especially the value proposal paid by FIC, where customers can buy one unit for the wholesale price, the Passaí customers paying with the Passaí card, and an equity method that we're going to continue to apply together with Itaú, and this new stake and this new design representing 40%. And so from the approvals, we can demonstrate the new products we plan to explore quickly, and the first one is the private label card. The private label card is here to add on to the existence of our co-branded Passaí card, because it'll be able to penetrate customers that have lower purchase power and also in B2B, right?
So B2B customers that quite frequently are confused with B2C customers, that own a very small business sometimes, have greater chances of using this private label card, right? So we've seen the experiences of our regional competitors, and all of them have a private label that's really and they've been really successful. And that shows adhesion from this closed-loop model for this type of customer as well. So we have a very big expectation to generate earnings and results with this product in the first years. And once again, this is a product that's complementary to what we already have at the FIC, and that's also a product that generates a lot of value, but it's geared to a smaller amount of B2C customers. Maybe 20% of them can actually access or use this card.
So the private label will take on an important role. This card, depending on the partnership or contract we're going to develop through the split here, could be operating by the end of the year, of course, subject to the approvals of the central bank. The other processes and products we're considering here, we also have positive expectations about, because we have 44 million customers circulating throughout our stores every month. The companies operating that already sell and have partnerships in these other products have always been really interested in starting this channel and working on this with us.
So through this approval, we can work on partnerships with these companies in these different sectors, and the expectation is that we'll have a very significant volume of financial revenue generation. And all of these, with assistance, consortiums, insurance, are all revenues coming from origination. We don't want to have companies that are like an insurance company or consortium. We just want to originate or provide these services to our customers through a partner. So we understand that there's a very restrained demand for these products that are massified, although there is the context of reduced income, et cetera. But these products have their place, let's say, and so we're really placing a lot of expectation on this and some other digital solutions as well for B2B customers.
All of these products are connected and included into our app. Our idea is that our customer, through the Meu Assaí app, can have these other products as well embedded in the app. The initiative for acquirers through the Assaí Pay terminal, credit card terminal, and this pilot project is already going to be applied to some stores, so we can quickly conquer about 1,000 customers using this machine. From this moment, where the first phase of these 1,000 customers are at a state or level of operation that we consider to be ideal, we'll roll this out into the other stores in 2026. So the idea here is we're working on this through a partnership. The funding, the discounts, and processing is all going to be under the responsibility of this partner company.
As a final result of this initiative, we really want to have a relationship with these B2B customers and be able to have initiatives that can make this B2B customer have exclusive advantages here in the store. Not only generic, but also very much connected to their segment, right? So, the transformers will have specific advantages, and so on. So this is our plan for 2026, when it comes to financial services, as we create this new ecosystem within the company, based on the approvals, of course, of the central bank. Thank you, Aymar. Let's go back one slide, please. One point here. A lot changed in this market, and so I think this FIC had adherence, as we have 42% of the sales done to B2Bs, and the other 58 are for individuals in all social levels.
At the end, Assaí was adherent to about 20% of our public, right? So we're talking about 8 million people, let's say, and that actually generated a revenue and will continue to generate a revenue of over BRL 150 million net per year, and that considers the equivalence of these value propositions. And then, now you have the opportunity for the other 80, right? So this is a market that changed a lot with the growth of the digital banks, and they don't need that much the retail operation that much to access this. But when it comes to cash and carry, we believe that this is where we had the biggest opportunities, right?
With individuals and also in the owners of these commerces that have that prefer to do some credit operations within the actual business, right? So these two products have a bigger potential than the revenue we currently have, and we'll be working on this to have something by the end of this year already when it comes to private label. So before we get into the next slide, you probably saw the communication about the arrival of the new CFO, Rafael Sachete. He's going to join the team in the second half of March. He had a period to close his activities in the other company he was in.
So in a few days, we'll have a new CFO that will be able to support us, and I think it's a role that will really help Assaí when it comes to capital discipline. It'll be an important reinforcement for the team. I want to take advantage also for this moment to thank Aymar. Of course, he continues working as an interim second director, and he'll be involved in this a lot when it comes to financial services. But I just wanted to publicly thank Aymar for his effort, his work in these different initiatives, and for taking on these dual roles, let's say, balancing out both dishes at the same time. So on behalf of Assaí and all shareholders, I want to thank you.
Thank you, Belmiro. It was a very important period, and you can count on me as well for the next projects and developments. And Aymar can't leave before we pay off all of our debt, so that's it.
Anyways, next slide. We talked about different initiatives, and we've been spending a little more time than what we expected, but from a perspective here on reinforcement, we're a low cost business, right? So we have some different initiatives, and the SG&A of Assaí is stable ever since 2011. So we continue to evolve with low costs, and when you look at new categories, we're searching for ways to reduce expenses. And of course, the incremental margin is equal or the same.
And also, and, there are other projects, some other processes as well as we are getting into an expansion cycle, and we should readjust this within our group. We have different projects, even in the operation, which is the remote supervisor or inspector, and so we have someone servicing the checkout person remotely, so that reduces the time to 22 seconds. And we have another pilot as well, that we're processing the receipts. So instead of having one person per store with technology, you can have the receipt of the invoices and receipt. We're also changing our safety systems, and we're also reducing the amount of people that we have, even with a better level of coverage. And we've also been working on pricing improvements.
We've been considering the artificial intelligence, and the biggest gains were in the marketing areas, where we can create, in just two minutes, a video that's directed to that store, with a personality, price, and to consider this in social media and a lot of productivity. We'll have a new people management system as well that will simplify this ecosystem when it comes to training, selection of talents, and within the system, it's under deployment at this moment. So there are different initiatives as we search for ways to reduce operational costs and expenses, since we're still in this deflation period in commodities. And also, last but not least, we have also kept our initiatives from an ESG perspective. Of course, the company once again received a series of awards and recognition to the benefit of the time.
We're also highlighting this in the release, with when it comes to brand positioning, respect for consumers, and work consistency and other initiatives, right? Where Assaí is really a reference, right? Including Black people in leadership, some strong efforts also with our employees that are immigrants and refugees, as well as some other initiatives we have been working on. And so thank you all, everyone, and now I'm going to quickly go up to Q&A now, okay? To the benefit, due to the benefit of our time limitations.
Now we're going to begin our Q&A session. I want to remind you that if you have questions, you should select the Q&A icon at the bottom part of the screen, write your name, company, and enter the queue.
As you're announced, your request to open up your mic will appear on the screen, then you must activate your mic to submit any questions. We'd ask you to please, submit your questions all at once. Moving on here to our first question from, Danniela Eiger at XP. Danny, you may proceed, please.
Hi. Good morning, everyone, and thank you for taking my question. We have some here on my side, but I'll focus on two, so we have time for others. But the first one is, from a market dynamic, you've been being very vocal on all of the challenges, with purchase power and even food deflation.
What calls our attention when we look at what we had already known about in the previous quarter with the same-store of 5% in October and with the same-store of 1%, but at the same time, you bring in this variable of volume growth. If you could help us a little bit on equating this and how we can think about this up ahead, if you're also bringing this initiative with supplements, which I think is a super interesting movement, as we've seen consumer changes in habits as well. But just to get a view on what your impression is throughout the year, right? With these components of volume, price, et cetera. And that would be interesting to get a view on.
But about your comment on portfolio reviewing, what can we think could be a sale of a certain group of stores in a specific region? Are you talking about closing certain stores? What store profile is this, right? Are these stores that maybe have a more outdated model than what you're searching for today? Would it be worse profitability? Just anything you can share with us would be great. Thank you, and congratulations on the results.
Thank you, Danny. Well, we brought in data about the volume in the fourth quarter, but as you can see, the basket of cash and carry is very different. We have this mismatch between high income and low income, right? And we already see this performance difference, but it's not as high as what we've seen at this moment, right?
So you still have an important trade down movement. When you look at what we broke down in the release, the formats, it's not like they're selling less in kilos, they're just selling a cheaper product. So that's why we call it this K Effect, right? Because you see the opposite, actually. Brazil is a world of inequality, and sometimes we forget about this, right? So especially in cash and carry, where it's present in many different social levels, which is different than retail, where you normally have, like, a niche focused on a specific group, right? Like Sam's Club. Normally you have customers with a similar profile. In our case, we have a lot of different movements taking place at the same time.
One we've highlighted is this loss in purchasing power, due to the level of debt, and unfortunately, you have the debts that are still kind of eating away a lot of resources, and we're seeing how this really impacts, especially the Northeast Brazil. So customers are buying or trading down still on brands, and there's this movement that's almost the opposite, right? So that's why we brought in this volume. Of course, if you have deflation, that's really high with a lot of commodities at the same time, you'll have this variation. Just as when you have inflation, commodities were benefited as well. So that considers the flow and volume in the fourth quarter that's been growing, right? But now what we've seen is an acceleration in consumer behavior trends and also with carbs and protein.
So, with this, the company's been really well positioned, and we have this movement throughout 2026 migration that's been more accelerated between the consumption of beef and protein. And so, also, how to adjust these changes. So normally, these changes can be quicker even than people imagine, right? When it comes to our portfolio revision, we normally consider a inflationary cycle of over 313 stores, right? So now we're looking at each region, and there could be that when we closely look into this study, there are some stores that may be at a deficit that we could decide to close down or sell to another business format, or even in regions where we grow a lot, you could possibly even have an internal overlap, right?
So we're going to try to optimize this. We're not discarding the revision of our current portfolio with adjustments in our store network and stores that are maybe not performing as planned. I hope to have answere d.
Okay, thank you. Yes, you did.
That's great. Thank you.
Our next question is from Rodrigo Gastim at Itaú BBA. Rodrigo, please, you may proceed.
Two questions here. First, Belmiro, I would like to keep discussing this topic on the sales dynamic. 2026 is an election year, and that's where you normally have better consumption, a lot of fiscal incentives, et cetera. And of course, we're talking about a category that is not discretionary, but that had a lot of trade down in the last few years, as you mentioned, right?
So when I look at the profile, especially, we can see this in different regions, right? So, when you consider this and all of these challenges, in the last quarters, but where you have a lot of - a lot more cash in the economy, in regions where you operate and, considering the profile of income you have, how do you equate this variable in your budget or your perspectives for sales in the year? And also, if you've ever seen something in the first 45 days of 2026, let's say. That's the first question, and the second one, I know you asked us not to talk about details on the tax credit.
I don't want to get into details here, but when you consider the relevance of the topic, I just think it's important to ask you one thing, which is: Do you see this as something recurring? Do you consider this to be a recurring event, and did you re-recognize this over time, or do you really think that this is something that, in your perception, you would be able to continue to capture, considering a lower cost throughout the next quarters? So I think I just wanted to focus on this part of the question, right, which I think is very relevant. Well, as it's a there's two factors, right?
The two things that are certain, death and taxes, right? But taxes in Brazil are very complex, so this could also be answered by the tax team a little better.
But in practical terms, we considered this as contingency asset, and that's probably gonna become result as we are able to monetize it. So today, what we have is an estimated value of BRL 1.5 billion in this topic. We continue to assess the next few years, but at a coincidence, we'll have a change in 2027 for the new tax reform. And what we can see at this moment is, yes, it'll be at least until 2026, and then we will look into 2027, because from then on, you have a new tax that would stop existing, right? So you would lose the recurrence considering the basis generating these different items and category. But the results are not related to this. That's related to the capacity to transform that into cash.
Since it's an uncertain asset, the accounting rules make us only consider the results when we are certain that this became cash. So as it becomes cash, you transform that into results, and then it's still a topic that later on we can look into because we'll have the tax team actually working closer on this to provide more explanation on this. But the expectation is that this will be monetized within two years. Looking at the curve, of course, if there's no legal changes in this period, right? About income, of course, we've seen that it's a World Cup year. There's it's an election year. We should have some government programs and even exemption of income tax, et cetera, et cetera, but we haven't seen this effect yet.
But what we have to be careful about is we have two phenomenons. One is the level of families that are really carrying on heavy debt levels, so interest rates were kept too high for too long. When we see there's still a part of the population that has real high debt, and so a lot of people had zero payments because there are even some credit granting programs, and so there's a service of debt that must be paid. You're concerned of when that's going to be transformed, but it is a positive expectation year. When you eliminate this variation, the commodities, you see, rice is not going to keep at that level, right? There's rice that's like 5 kilos, and it costs BRL 12. That's not going to be there for too long, right?
It's, when you consider they would pay 53 sacks with a production cost of BRL 75. So there's gonna have to be an adjustment into the prices because commodities are perishable goods. If they drop because of different market factors, you're going to reflect that into sales, but that doesn't mean it's gonna be a new, price basis, right? So if, rice, for 12, goes minimally back, you'll have an important sales add-on, right? So this is also applicable to rice, beans, sugar, and this is a movement that is adjusted, per area, right? So the reduction in the area will probably be very significant in the next year due to the prices, that farm, that producers received, per sack, right. I hope to have answered your question.
Yes, very clear. Thank you, Belmiro.
Our next question comes from Joseph Giordano at JPMorgan. Joseph, we'll enable your audio so that you can proceed. It seems Joseph's off the list, but now we'll move on to our next question that comes from João Soares at Citi. João, you may proceed, please.
Hi, guys. Good morning. Thanks for the call. I wanted to understand two points about keeping up the guidance for the CapEx with a lower amount of stores, right? What's the amount of BTS? And is there going to be breakdown on this, if there's going to be more maintenance at CapEx? If you could show us a bit more on these two points.
Since you guys have been able to do the sales leasebacks and you guys have been delivering the guidance also on, tax credit monetization, et cetera, it seems that the balance sheet would allow you to keep up, a consistent expansion pace, right? So I want to understand, because there's a more strategic aspect with markets that are maybe a little more challenging to open up new stores, and I wanted to understand if there's something else, besides this, environment, right, of the balance sheet that could have led to maybe this, revision, right?
Well, just, we have two or three years where we had an estimate, and even if you look at the Focus report, the guidance actually of 2.6 when we made that, if I'm not mistaken, the expectation was that we would be landing at around 12.5, and it's now 15. So there are other components that, until we're able to reduce our leverage more, we have to be careful about with expansion, which are investments that are higher. So what we did was postpone some projects that were really important. So we're going to be opening up some projects that are all in the state of São Paulo, where the brand is stronger, the ramp-up of the store is quicker and higher.
As we also review the portfolio revision, but also consider the changes in the new business that were added to the current model. So, we should have 25 drugstores till July, but if maybe we even have 100 till the end of the year, so we can gain speed and scale, right? So why is the CapEx still capped? Well, we have a bit of a carryover as well. The CapEx last year was smaller. We have the maintenance of the investments, and there's also an initiative for the new projects, right? So we could even review this, but at this moment, we can't. So that's why we kept this number of BRL 700 million, because we understand that there are going to be some factors that are going to reduce this.
Most of these stores, we already, we're working on with, third-party capital. So not necessarily reducing the amount of stores will be reduced proportionally in CapEx, right? But at this moment, what we still have are the BRL 700 million in CapEx, and so there's a strong investment in technology, even in, the areas for picking, with iFood's operation, and also Rappi, as well as some other initiatives at the store as well. So that's why we didn't want to mess with this number yet. We prefer that the market can work with this number, which is more certain at this point in time. I hope that answers, João.
Yes, you did. Thank you. So I just have two follow-ups here.
In regards to what we should consider as the average CapEx for these stores, and if it's worth keeping these 10 openings from 2027 onwards. We're not going to be disclosing this information yet until we have better view on this, because we already have 3 projects that are being done with BTS and 2 with our own capital. It could be that this is still going to change a bit, so we're also looking at this and the ramp-up curve and the legal licensing processes, and we could still maybe switch projects a bit. So, now in the beginning of March, we should have a better view on this. And so from the network we have, we still don't have complete certainty of which five stores they'll be.
Okay, perfect. Moving on here.
Now our question from Joseph Giordano at JP Morgan. Joseph, you may proceed.
Hi. Good morning, everyone. I know it's a year where we've seen the company work a lot on G&A, and I wanted to separate this question a bit here into three parts, right? First, looking at the selling line, where are we now? Which would as versus what would be the ideal number for the head count of the store? I think that's the first point. Second point, I understand the company also worked on corporate efficiency work. That was very relevant in January. So if you could also share what could be poss ible gains coming from this line. And finally, wanted to explore the disparities between the profitability of legacy stores for 2022.
We had maybe a significant margin drop, about 30-40 bps, as well as those that are maturing still. Maybe we can consider a more difficult year, where expansion was a little tighter, and if we should also consider revisiting this store network.
Well, thank you, Joseph. Let me see if I understood your question, right? There is a performance difference again, right? So, our oldest stores have a greater stake in commodity, right? So if that drops, it's going to be more affected than the store network at Extra or the more central stores that have a different product mix, right? So maybe this difference is not that obvious. We brought in a little more details in the Investor Day, but... It was huge, right?
Between high-income stores, such as Congonhas, all the way to Teotônio Vilela , right? So it's a whole other universe. What you sell in one is liquid soap, then powdered soap, and successively. So the mix is affected differently, right? So there's a drop of 37% in the rice, 10% in beans, in beans, right? So, for big sales reps, this won't be affected, right? But, of course, you still have, why do we have to be careful about some points, right? Well, because, rice is not going to keep this price forever, right? It's going to go up again, and anyways, whether due to a reduction in the planted areas, et cetera. We don't know how this is going to keep on, but we'll have some, a more...
So when you look at these, these important movements, considering the reduction in expansion and some projects that were finished, we also had some changes within the administrative front. We had a reduction in our employee base, and these are all, readjustment movements, and also in the store, stores with the checkout, self-checkouts and other points as well, where we also readjusted, looking at the headcounts per store. So we had, over 92,000 employees. Now we have a lot less employees, but of course, we're also hiring some people for picking. But our expectation is, that while the company is really well-positioned and focused on these different initiatives for innovation, but we, also, see the numbers. In Brazil, things happen after Carnival, right?
So January is a month where people have a lot of expenses to pay, with back to school and other taxes, and so, you start having better consumption, normally at the end of February and March, when things kind of get back on track in Brazil.
Okay, thank you, Belmiro. Perfect.
Our next question is from Irma at Goldman Sachs. Irma, please, you may proceed.
Good morning, and thank you for taking my question. About the partnership with Mercado Livre, I would like to understand two points, right? If you could discuss how we should think about profitability with these sales made through the platform, and also, how we should consider if these are going to be incremental sales or if potentially there would be a migration from store sales to online.
And so, how you're going to perform this analysis, considering how you're going to identify, who's going to perform the sales, et cetera. And so, the second question is about the strategy, the two brands, Sheffy and... I wanted to understand your mindset, right? We have two different, and if this could be more diversified, considering if there's some other SKU doesn't work. So I wanted to understand how you're looking at these two strategies. I hope that's clear, this question here on private label. So those are the two points.
Thank you, Irma. We should also use the Econobom brand for first, price products, right? Of course, the product is starting now, and it's going to go through a lot of adjustments.
Brazil still has, when you compare with other countries around the world, two historical conditions, right, in Brazil, logistics and taxes. So you have an expectation also for the tax reform with greater standardization. We have a lot of regional brands with specific regimes and the logistics issue, which is super difficult, especially with low added value products, where you have to transform things and transport things to São Paulo. And so in our view, for the product to be successful, you have to have a level of density and low logistical costs. And today, we have a big volume, right?
You have a product, sometimes—it's not that they're going to be focused only on São Paulo and Rio de Janeiro, right, where we have more than 150 stores in a very small or low perimeter. And the volume, the Assaí in some categories, we had 35%-40% of everything that the category sells in both states, right? So that's why I believe we finally reached the right moment to reach this private label product strategy. Of course, the Assaí brand is a brand that's loved by consumers, but at the same point, you can get it wrong with this kind of brand, right? So if I can contaminate other products, so we separated the Sheffy brand.
It's gonna gain a lot more strength in some categories within the food service public, and also Econobom, that should also have some of the first price products. And the main focus is gonna be to launch the Assaí brand products. So we plan to have an improvement in the margins and also an increase in competition, right? And so, about the partnership with Meli, we believe that it's an incremental sale, right? So, customers buy through the platform, and we see customers have a purchase occasion that's very different and for different categories.
So when you look at the food sector, a lot of people talk about how it's sometimes like a single group, but these are actually unique categories, when you consider products you need to choose, like tomatoes or perishable goods, and also soap products, where you know exactly what product you're getting, right? So, what we negotiated with Mercado Livre is really that will be the first cash and carry. We also want to keep our low price level without compromising margins, right? So, we've seen. The objective is to have an additional channel with incremental sales for Assaí. I hope I answered that.
Thank you. That's perfect.
Thank you. So our next question comes from Lucas Esteves at Santander. Lucas, please, you may proceed.
Good morning, Belmiro and Aymar. Thank you for the opportunity. We noticed that there is a relevant factor in cash generation, which is the increase of revenue related to commercial contracts with suppliers for allocation of media space, exposure of products, and other commercial conditions. And I wanted to know if you consider this to be a structural change, and how we should look at this recurrence up ahead. Well, I'm gonna pass this on to Belmiro. We had a very unique negotiation that was made, and that ended up leading to this impression, let's say, right? So Belmiro, if you could discuss this.
Hi, good morning, everyone, and thanks for the question, Lucca. The effect is just accounting, right? We were negotiating contracts for the backlit and suppliers, and the allocation also annually.
This year we made the decision, considering the scenario and difficulty we had in the market, to work on this, right? Instead of having an annual contract, we created a biannual contract, right? And to the detriment of this, we increased balance sheet revenue. But for a cash effect, this was zero, right? And so this is gonna be considered during 24 months as we receive these amounts. So this is an accounting effect. What we modified, however, was instead of signing this contract that's annual, we started having a biannual contract. And so there's no change or perspective, and we should probably keep this up in 2027. When we renew this, we should probably keep up this at biannual.
Of course, we're gonna understand this up ahead and see if it really makes sense for us and for suppliers. The suppliers understood this as a positive point as well, this negotiation, with some compensations and agreements we had with suppliers. So it's just like an accounting balance sheet effect, right? There's no actual cash effect.
Okay, thank you. That's very clear. Thank you for this opportunity.
Okay, just a correction point. I saw that Joseph Giordano wrote, "The tax credits that were billion there, the credits are not in the results." The tax credits are not in the results. They're just a contingency asset, so it's only gonna become a result, as it is monetized.
Considering that we identified the accounting procedures of registering this as a contingent asset, which is just notifying the market, but it's not included in the results, Joseph.
Moving on. Our next question comes from Gustavo Funchini. Gustavo, you may proceed.
Well, good morning, guys. Two questions here on our side. First, how do we consider the gross margin from now on, right? You showed significant gains during 2025, but some of the main levers are maybe a little lower, which is store maturity and expansion of the services. And we also have all of the discussions with the ICMS-ST that also hindered this delta between the net revenue and the gross revenue, and that also impacted the margins. And the second is about the G&A expenses.
So as selling is very well controlled, G&A has been increasing a lot due to the new projects that are gonna lead to a lot of positive results. But how should we look at this from now on? Maybe like a phase out of the expenses now that projects are more developed. Thank you.
Well, obviously, you have one part of this, which is the deflation. So when you have a deflation, you dilute this, but the expenses keep on as the same, right? And so this not necessarily will affect the store results, right? So there is a phenomenon which is temporary, as these commodities recover pricing some way or the other. They're always. You have to be careful, right? Because sometimes it looks like everything's here forever.
No, it's not going to be 12 BRL a package, right? You're going to go back to the price, even because of the reduction of the planted area, and also because of the balancing out of the supply and demand law, right? So even if you suffer a bit of this during the period, if it's because of this as an identified and reversible reason, you don't want to make the wrong decisions, especially for store operation. There was an increase considering the new projects. Of course, first you plant, and then you reap, right? So there's no way out, and we are investing in people, training, skills, until these projects can once again generate the impact. So when it comes to the expansion of the margins, I disagree. Private label is a project.
We're not here just to make the store look cute, right, and fill out a big portfolio of products with the SA brand. We want to increase margins. This is one of our objectives. So there's also been an advance in our negotiation systems and advances also in pricing that allow us to have margin gains as well. So even with these new projects, the sales, when they're accretive, they also help with the margins at the end. So once again, we still see a sea of opportunities and especially when it comes to financial revenue.
Okay, that's clear. Thank you, Belmiro. Well, our next question comes from Tales Granello at Safra. Tales, you may proceed, please. Tales, the floor is yours.
Hi, guys. Can you hear me? Well, good morning, everyone. My first question is coming at the store network.
I want to know how many stores are being reassessed in the company, if you can break this down, and if there are stores that are at a deficit or not, and if there's a specific market that's been more difficult, where these stores should be reassessed. And then you have this five-by-two work shift, and some companies in the sector are already testing this model of having two days off and five days of work. And looking at the reduction of the employees to in the beginning of the year, how will this interact with this new scale as it is today? Or if you'd maybe have to increase in the future the amount of employees.
Thank you, Tales.
Well, first, the five-by-two scale, well, we've obviously kept up with this, and we've seen some pilot projects, but most of them are in retailers, right? Not any cash and carries or wholesalers. So I think it's going to be a very strong political demand this year, and I'm not going to say whether I think this is right or wrong, but I want to say that if this is applicable to everyone in cash and carry, we have a labor expense that's lower than retail. So normally 50%, let's say, and that impacts everyone, but it's going to be basically null at the end of the day, an offset. And we have a lower impact in cash and carry, right?
So if it's a change that's approved, we'll adapt to it, and maybe we'll have a little less pressure, right? Because there are days where you have a purchase cycle that's very different. But of course, if it did come in, we would have to increase this to be able to manage this modification and shift scheme. And the store network, we already provided some initial signs. We ended the results this year, and we're reallocating this per store. So it could be that there's some closings, the margins with negative contributions, but obviously, we're going to be reassessing the store network, and we should bring in more data about this in the first quarter.
Okay. That's great, Belmiro. Thank you.
Keeping on here, we'll head to our last question. It's a question in English from Andrew Ruben at Morgan Stanley.
Andrew, you may proceed.
Great. Thanks for taking the question. Maybe, could we get an update on how you see the B2B business first, just a general view on the health of the B2B customer set overall? And then second, as some food categories go into deflation, any relevant behavior changes you're seeing from B2B customers, if that's having an impact on results? Would be curious to understand it. Thank you.
Thank you, Andrew. Very interesting question, because the behavior of a B2B customer is different than B2C. So you can imagine businesses that are seeing price of rice dropping month after month, right? They reduce the volume of purchase because they're afraid of losing cash upon their stock levels, right? So maybe they're not going to be able to resell. So decision-making for who's going to resell is very different than who's going to be consuming, right? So when you have an increase in inflation, normally you'll increase volume. But when you also have a deflation, then you also have a drop in volume in this public because they're afraid of accumulating stock, because they've been keeping up with the price.
In the B2B basic items, they normally keep up really well, but it's a customer that's been impacted by the lack of cash and low income. So they've been working with a stock cycle that's pretty short. There's a demand for credit, and when there's a price drop, then they get into what they consider the cautious mode. And so actually, there are some other points where the market was not expecting we would increase margins, even in a sales scenario, right? Because there are some categories where there's no point in dropping prices because customers are not necessarily going to increase their purchases, right? Because they're afraid of their stock cycle, right? And I hope I answered your question, Andrew.
Yeah. Yes.
The Q&A session is officially ended, and now we'll pass the floor back to the company for their final remarks.
I want to thank the team, Anderson, Belmiro, Sandro, Aymar, and Gabi. And, 2026 is a year where we have really good expectations, right? We expect that we'll have a drop in our interest rates, and we consider that we have 40 million people visiting us every month in our stores. So maybe we have a vision that is very significant in the food sector, right? And so this has really been highlighting the effect. We see low-income customers suffering a lot, right? So there's a big expectation.
But generally, Assaí has been keeping up with this transformation, and there are years with challenges. But of course, the company's moving along with new projects and initiatives to be able to lever and continue to deliver customer satisfaction and shareholder satisfaction. So I want to thank the team for the year of 2025, and we're getting into 2026. I want to mention also support from our board as well when it comes to positioning changes, and that's going to help us have a company that's very different than what we currently have. So thank you everyone, very much. The earnings call for the fourth quarter of 2025 at Assaí is officially ended. The Investor Relations department is available to clarify any other comments or questions.
Thank you so much, for participating, and have an excellent day.