[Foreign language]
Margin at a solid level and discipline in controlling expenses. We achieved results that reflect a highly committed effort and a clear focus on efficiency and profitability. These advances are even more relevant when we look at the current macroeconomic outlook, which remains very challenging with high interest rates, selective consumption, and high competitiveness in retail. Moving on to the results of the quarter on slide three, I will start with the sales pillar. Total sales reached BRL 4.9 billion, a 2.2% increase over the same period last year. Same store sales grew 4.1% with a highlight for Extra Mercado, which accelerated and grew 5.5% compared to the previous quarter last year, reflecting the positive effects of the Assortment Review and Category Management project, which began at the end of quarter two 2024 and over 60 stores that were remodeled over the 12 past months.
Pão de Açúcar remained strong with a 3.5% increase in same store sales, reflecting the consistency and strength of the premium brand's value proposition. The Proximity format also stood out with 17.3% growth in total sales driven by the opening of 49 new stores in the past 12 months. In e-commerce we continue on a solid growth trajectory. Total sales reached BRL 604 million in the quarter, an increase of 9.8% over the same period in 2024, totaling BRL 2.4 billion in the last 12 months. All brands grew with Extra Mercado once again standing out, increasing its penetration in this channel by 2.4 percentage points. E-commerce accounted for 13.1% of the group's total sales, an increase of 0.7 percentage points over Q3 2024 driven by the evolution of the sales mix mainly with the growing advance of digital penetration in the Extra Mercado and Proximity brands.
This performance reinforces the effectiveness of the 100% ship-from-store model, which ensures efficiency and capillarity in operations. We continue to capture growth opportunities with the expansion of the service to 60 more of its Proximity and Extra Mercado units this quarter. It's worth noting that the sales of perishable goods remain strategic, accounting for 36.1% of total sales in our 1P channel with a pre-IFRS 16 EBITDA margin of 10.3%. Digital reinforces its role as an efficient, profitable, and enduring channel in our multichannel strategy. High profitability consolidates our leadership in this segment, both in our own channels and on the main partner platforms. In terms of market share, we maintain a positive pathway, advanced 0.6 percentage points in the premium segment according to Nielsen data, considering total sales in all cities where we operate with Pão de Açúcar and Minuto Pão de Açúcar.
The Proximity format also showed a strong growth of 1.6 percentage points among small supermarkets in Greater São Paulo, a direct result of the effectiveness of our expansion strategy. In the past few years, the share of wallet of loyal Pão de Açúcar customers grew by 1.5 percentage points, showing an increase in frequency and average spending. These advances reinforced the growing relevance of our premium and Proximity brands, which are fundamental pillars of our business strategy. Moving on to slide four, profitability remains on a consistent trajectory reflecting the company's focus on efficiency and quality implementation. Gross margin reached 27.6%, sustained by the resilience of our commercial strategy and continuous advances in store operations. In addition, specific initiatives aimed at increasing profitability stand out, such as the reduction of breakage and the evolution of the retail media front.
SG&A fell to 19.5% of net revenue, an improvement of 0.3 percentage points, and we kept nominal expenses stable even in the face of inflationary pressures in a more competitive environment. This result reflects above all the effectiveness of the cost and expense reduction initiative we have been implementing combined with strict budget management. I could also highlight that in Q3 2025 we moved forward to the second stage of our administrative structure simplification process. This new phase accounts for annual savings of BRL 90 million. Added to the first stage implemented in Q4 2024, totals annual savings of nearly BRL 190 million. As a result, adjusted EBITDA margin rose to 9.1%, possibly the best margin in Brazilian food retail even in a challenging environment. This consistent evolution reinforces the strength of our operation and gives us the flexibility to calibrate promotional levers balancing profitability and competitiveness.
Finally, on slide five, I'd like to highlight that this quarter we reversed the sequencing of previous losses and recorded a net profit from continuing operations of BRL 145 million. This was possible by the federal reg. The BRL 480 million losses are counted in the line on the liquid net. This recognition was possible due to the changes in the federal regulatory environment which expanded the possibility for using these credits, including as a form of payment in federal tax transactions. It's worth noting that between 2024 and 2025 the company has already monetized BRL 374 million in tax loss credits to settle agreements and debts of this nature, which reinforces the consistency and rationale for additional recognition made this quarter. It's also important to mention that in the beginning of this year we settled tax contingencies using BRL 200 million in loss credits.
The settlements was possible due to a casting vote decision by CARF. The credits used in this transaction have already been approved by tax authorities at the end of the period added to the amount recognized in the third quarter. The total balance of credits of this type activated in the balance sheet reaches $1.2 billion with expectations of use over the next 10 years. In addition, the company maintains another $1.2 billion in credits not yet recognized on the balance sheet, which may be reevaluated and activated in the future as new transaction opportunities arise. Raising the total potential credit is to be monetized to BRL 2.4 billion. Now I move I give the floor to Rodrigo who discuss the results.
[Foreign language]
Thank you, Rafael. Good morning to everyone attending our earnings call. On the next slide, number six, we present the management cash flow for the last 12 months, a period in which we generated BRL 1.4 billion in operating cash flow. This performance was driven by a significant improvement in adjusted EBITDA pre-IFRS 16, which reached BRL 853 million, an increase of BRL 158 million or 23% when compared to 2024. We also had efficient management of working capital for goods, generating BRL 480 million in the period, resulting from a 12-day improvement in the working capital cycle compared to the previous period, mainly reflecting specific negotiations with suppliers and reduction of excess inventory in stores. Next, CapEx totaled BRL 675 million, a slight increase of 2.3% compared to the previous period. This increase still reflects the most significant investments made in expansion, technology, and renovations in the previous quarters.
A good benchmark for assessing the trend is the CapEx carried out in the quarter, which reached BRL 146 million, a 20% reduction year on year, already reflecting the discontinuation of the expansion target, the reduction in store renovation, and the greater rationalization of investments in technology. Moving on to other operating expenses, we continue to observe reductions compared to the previous year. The line totaled BRL 718 million during the period, a decrease of BRL 83 million. Of this total, BRL 146 million corresponds to response to recovery effects, while BRL 572 million are extraordinary items, mainly related to tax agreements, labor lawsuits, and restructurings. Finally, the total net financial cost amounted to BRL 806 million, an increase of BRL 194 million compared to the same period of the previous year. This variation mainly reflects the rise in SELIC interest rate, the higher level of net debt, and the renewal of surety bonds linked to tax-related disputes.
Approximately one third of these guarantees were renewed this year and in many of them the premiums are paid in advance, which puts pressure on cash flow at the time they are contracted, although the accounting recognition occurs gradually. On slide seven, I will present details of our financial leverage. As the chart shows, net debt increased by BRL 660 million in the last 12 months, mainly impacted by extraordinary effects already mentioned in other operating expenses and net financial costs. Pre IFRS 16 financial leverage reached 3.1 x in the quarter compared to 2.9x in the same period. I now hand over the floor back to Rafael who will detail other initiatives aimed at generating cash flow.
[Foreign language]
On slide eight, I would like to highlight the main factors on which we've been concentrating our efforts to build a cash generation trajectory that is positive in the coming quarters. As you might have seen in the publication yesterday, the top management approved a plan that was to be implemented throughout 2026. This plan has two main verticals. The first, an expressive reduction of CapEx between BRL 300 million and BRL 350 million. The second, a reduction of at least BRL 450 million in expenses connected substantially to support of stores and administrative structure and in working capital. We'll continue capturing optimization opportunities by reducing excess inventories and managing suppliers and receivables more efficiently. Moving on to CapEx, we have identified significant opportunities in the past few months and the discontinuation of the expansion plan may lead to BRL 200 million.
We have also initiatives to reduce over BRL 100 million based on being more strict in IT and technology processes. In the cost and expenses vertical, we have already observed a series of initiatives to optimize our operational support and administrative support. Among the main initiatives we have the reduction of personnel already made in the previous months. The optimization of costs in communication, publicity, advertisement channels, reduction of facilities, contracts, reduction of consultancies, freight and IT expenses. We have organized these initiatives into three main blocks. Eliminations, reductions of consumption and alterations and optimization of scope. Highlight that we have an execution plan to sell non-strategic assets and the totality of them will be given to the reduction of the debt, the growth debt, so it can reach more stable levels.
On slide nine, I reinforce our sustainability agenda which continues to be transversal and cross-cutting in the business decision. In this quarter, we launched our GPA's new sustainability strategy built on a comprehensive materiality analysis and fully aligned with the strategic pillars of our business. This new agenda reinforces our commitment to nourishing dreams and lives based on four main areas of action: respect for people, food, the environment, and business. This concludes our presentation of financial results. I propose that we open our Q and A session.
[Foreign language]
We will now open the Q and A session. We would like to remind you that to ask questions you must click on the Q and A icon at the bottom of the screen and write your questions to get in line. When being announced, a request to activate your microphone will appear on screen and then you must unmute your microphone to ask your questions. We kindly request that the questions be asked all at once. Let's move on to our first question from Lucca Biasi, analyst of UBS. We will open your audio line so that you can ask a question. You may proceed, sir.
[Foreign language]
Good morning, Rafael. Good morning, Rodrigo. Thank you very much for taking my questions. I have two quick questions on our side. First is related to the CapEx announcement.
Considering the significant reduction for 2026, we would like to understand how we are going to look at the maintenance CapEx down the road. My second question is related to tax credits. We would like to confirm if it would be possible to use those BRL 2.4 billion credit even with the company not being profitable. We would also like to understand how could be the utilization curve of this credit in the short term. Thank you.
[Foreign language]
Lucca. Thank you very much for the two questions you asked. CapEx. As to CapEx, we are reducing it quite significantly. As I mentioned, there are some items that were completed last year and because our expansion guidance was discontinued, we had reduction which was quite significant. BRL 150 million of expansion that we removed from the scope because of the mentioned discontinuation.
In addition to that, we had some renovations in Extra Mercado stores, 67 stores that were renovated. We are also renovating the headquarters that consumed about BRL 35 million. We can see that this amount has been reduced due to those reasons. As I mentioned, we are being more selective in terms of projects, especially those associated with logistics and IT. We hope to have savings amounting to BRL 100 million. We are referring to a reduction of BRL 300 million in a mechanical manner. We should have a maintenance CapEx from BRL 200 million-BRL 250 million. We believe that all the renovations can be completed and after all the moves of selecting the best stores and associated reductions, we might not need to repeat those amounts constantly.
We believe that the maintenance level would range from BRL 200 million-BRL 250 million and BRL 50 million, maybe more depending on how everything plays out, depending on the growth projects we implement. Basically, this is what I had to say about CapEx in relation to tax credits. We like to make it clear that we use those credits as a result of some agreements and some settlements related to past contingencies. As I mentioned, in the last 12 months we settled about BRL 374 million by means of loss-related credit. This was a result of some agreements that we made with the federal government and we settled some specific cases.
I would like to mention one in particular which was a settlement that we made in the beginning of this year because it was related to quality in the CARF that allowed us to make such settlement by May using loss related credits. There's always a period where you present the credit for the settlement and there's a period for the proper approval. This approval period was very accelerated for that specific settlement and that gives us confidence that the government is accepting those credits for settlement purposes. The approval happened quite in a fast manner, providing us with the confidence that we are going to have different opportunities in the future so that we can go after different agreements. You know that we have a number of contingencies to look at and as create those opportunities.
As law also permits us to use those credits, we are going to use all those credits as money. We have this amount of $1.2 billion in the balance sheet and we have another $1 million in the books that are not activated yet. If there are potential agreements in the future that would allow us to use those credits in a more assertive manner, without a doubt we are going to bring into our assets and we are going to use them for settlement purposes and we will consider what we can do with the federal credits. I just would like to add something related to the recognition that you mentioned. If we look at our notes, we have BRL 660 million that are being discussed and with likelihood to be approved.
We also looked at considering the history track that we have, there is a great likelihood to use those credits when those probable amounts that we must pay, we are going to use those credits.
[Foreign language]
That was very clear. Thank you very much for the answers.
[Foreign language]
Our next question comes from Kelvin Dechen , Itaú BBA analyst. You may proceed, sir.
[Foreign language]
Good morning everyone. I have a question on my side related to the efficiency plan. Could you provide more color on the main initiatives related to the BRL 450 million cut and how can we ensure that this cut has no impact on the store's operation? Thank you.
[Foreign language]
Perfect. Yesterday we had a plan. There are two pillars for this plan. One is CapEx. I have already mentioned some about it, some information about it.
We had this CapEx reduction and the first move that we announced was the interruption of the expansion plan that was announced months ago. In itself it would be a very important step towards the new CapEx target that we're going to execute from now on. There are other initiatives that involve, as I've already mentioned, some reviews in logistics dimension and IT as well, where the expenses are very high in relation to costs. We are not talking about store operations, but we are talking about supporting operations. I'm gonna list some of them so that you can understand what we're talking about. By the way, it's important to see this very clear so that we can follow this and the market can understand. We have BRL 14 million. That is the minimum target for reduction.
One step would be for elimination, second would be consumption reduction and the other is to review the scope. When we talk about elimination, we are including some things like headcount reduction as announced previously, simple things like the use and distribution of leaflets. Today we use our trust company for leaflets and we are going to create a more rational system so that this material can be sent to the hubs and to the warehouses and the material will be distributed by means of our own structure. Non-core systems such as internal systems that we are optimizing and we are trying to find way to optimize the internal systems in the stores. In this optimization front we are considering a reduction of about BRL 104 million.
As for consumption, we are focused on reducing consumption using some services in a more rational way. We refer to logistics efficiency, reductions of some systems, and also reduction of consulting services, and this can amount to BRL 100 million. As for the scope that I mentioned, we would include an additional BRL 180 million. We are insourcing some services that today we use by outsourced companies, and we are going to insource into our activities advertisement. For example, we are going to direct our advertisement, and we use different channels for advertising purposes. We are going to optimize this. We are going to go after a more optimized ROI depending on the advertisement that we want to focus on. The idea is to look at the structure, to review what we can review, the scope, and the consumption.
We are going to be much more cautious as I mentioned and we are going to bring this mindset to execute our business plan in a more austere way.
[Foreign language]
That is very clear. Thank you very much.
[Foreign language]
Our next question comes from Pedro Caravina, XP analyst. Your line is open. You may proceed, sir.
[Foreign language]
Hello. Good morning. Good morning, Rodrigo. Thank you very much for the possibility of asking questions. Thinking about breaking down how the growth has been happening in the quarter, could you provide more color on the mix and price and in relation to volume and also thinking into the future next quarters, considering the brands and what is the consumer behavior, considering the feeding dimension, do you see any elasticity in prices? The promotions have been bringing good results. Could you provide more information about the competitive dynamics as mentioned in the release?
In terms of gross margin, is there any impact coming from the items that I mentioned? I think this is my question.
[Foreign language]
Pedro. In terms of dynamics, we have been noticing some improvement, slight improvement in the consumer behavior, less order. We noticed behavior and this is applicable to all retail sector. As you probably saw, in spite of all the difficulties that the macro scenario has posed to us, we had expressive growth. Of course we have to consider the performance of our competitors and the situation we are living in. We had like for like 4% increase. We are very happy with this performance. Of course we have to consider the relative scenario that we are in. Little by little we have been noticing an improvement in the consumer behavior and we have also seen stable prices and volumes. Stable as well.
As you saw in our releases, we reported market share stability and that reaffirms this view, this vision into the future and provides support to my argument in terms of price elasticity. Yeah, of course we are operating in a commodity related sector and what happens to our group? We operate in a more affluent level of society. We have some brands which are more focused on a premium channel, premium population. The thing is that there's less elasticity when we consider this type of consumer. As you saw, in spite of all the hurdles and all the difficulties, we managed to grow 74% on the same store level. At the same time we managed to remain our gross margin without changes. We saw 26.7% and this quarter we are delivering 26.6% in terms of performance.
This is a very important achievement, showing especially the strength of our brands, our commercial strategy and the resilience related to our value proposition and also how the consumer sees the value in the proposition we deliver.
[Foreign language]
Thank you very much.
[Foreign language]
Next question comes from Ruben Couto , analyst from Santander. Ruben, you may unmute your mic, please.
[Foreign language]
Good morning everyone. Just a quick follow up and then I'll ask a question. Considering the expense reduction plan, do you estimate any level of non recurring costs that end up generating throughout 2026 because of the whole plan of staff structure, headcount structure that have affected this in the past two years? Do you have an idea of how this current plan can go into 2026? My question is that. Rafael, the company is going through several changes in control management since the last composition of the council. Can you give us an update on what we can expect in terms of management composition and how will the company focus change besides these efforts on efficiency? I have been changing best practices.
How can you help us understand this new moment besides these efforts on efficiency that you discussed?
It would be great.
Thank you.
[Foreign language]
Ruben, that's an excellent point you made and that's the reality. We do have a paradigm shift moving forward. We see that and the board, through Andrea, our chairwoman and other board members, have brought into the company a side of mine and an idea to work more actively. Andrea has worked more actively and has tried to dive into the accounts to precisely understand where we can look for better efficiency. This has helped us greatly to, quite frankly, reflect upon the status quo. This is a big company, an open company, open market company. We needed a more regional perspective.
Andrea has brought this and has brought details on prices, on the number of 1,000 bags or if you should hire truck driver, I should buy the truck in itself. I mean, it is a more regional view, a more precise view on how the operation really works. Bringing this perspective into the company, into the board once again helps us to reevaluate our paradigm here in this past few weeks. In spite it is a short period, it feels like it is longer than that and has helped us to move towards this new pathway. It has helped so much and it is a present management, as I said, it is. I mean, for those who are in retail, they like to be, to understand about the operation on the store operation, how on cost management they go into detail.
This has helped us enormously and this will keep us helping us and I mean moving forward too. Regarding your question, Ruben, on administrative costs, I believe that was your question. Let me remind you that we made a very important reduction movement in the head count by the end of last year, in the beginning of this year. We have this on an annualized basis in a savings of BRL 100 million. Recently we have complemented this, this action with a reduction of over 700 people, especially in the head office here. This may bring BRL 90 million, additional BRL 90 million and a combined move, combined effect of these two movements in annualized result of BRL 190 million. Let me remind you all that we are coming from a very large company.
Some years ago when we had eggs large supermarkets, we had almost BRL 90 billion in turnover. We are still a very great company. BRL 20 million in turnover. We need to adapt to the new phases of the company with its specific needs of this company. This is a movement we have been implementing and in a way it looks like it was already cut and it has been cut in the past few years. When we look in detail, we always find new things we can do. Many of them will see in this BRL 450 million as we have set as a minimum target for 2026.
[Foreign language]
Excellent. Thank you, Rafael.
[Foreign language]
Next question comes from João Pedro Soares , Citi analyst. João, you may make a question, please. Ask a question, please.
[Foreign language]
Good morning everyone. Rodrigo and Rafael.
Just a quick question just to guide us now looking into these additional credits. If we consider into them in terms of remaining contingency and how much of this in terms of billions of reais, how much of this is interest on fines? And if we can think of this activation of 2 and 400 in tax credits, how much we could look into realistically picking in terms of you paying, maybe you will, won't need to pay this fine this on this interest rate. You may renegotiate that if possible. Can you discuss this?
[Foreign language]
That's a sensitive matter because we talk about very significant amounts which change or have the potential of deeply changing the perspective of the company. Perspective from now on.
What I have said in this past, earning calls and in meetings with investors and analysts, is that we have tried and this is a priority given to us by the board. We have looked for a solution for almost BRL 40 billion, almost BRL 15 billion that we have in terms of federal contingencies in the company. To remind you all, this is. We have inherited this. I just mentioned the size of the company. This comes as a legacy of these different changes in the company, changes we have gone through in the past few years. We kind of inherited this gigantic contingency that we've been trying to solve. Once again, this is a top priority for the board, for the company as a whole, for the investors as a whole. We have actively tried to find a solution for that.
As I mentioned, we have active discussions with the PGFN. It clearly depends on a hard discussion. PGFN, let me tell you, this is a group of people who are extremely serious people, extremely competent, and people who know, they deeply know tax issues on the companies, and they understand the importance of companies in the market, in the ecosystem where they operate. They understand the social importance of companies. They are pretty sensitive to these matters. What I can tell you is that all of these people we have interacted with in these meetings are highly competent, and they deeply understand these issues and the importance, or how important it would be for us to solve these issues. To tell you about fines on interest rates, interest accounts for 70% of the total contingencies we have today. Why?
Because when these fines or these penalties are applied, they usually are applied with a fine or it can be an aggravated fine, a simple fine or an aggravated fine varying between 75%-150% of the original value. We start with inflated amounts much higher than the main or the original value that is owed. Also, these discussions, these disputes, they take years to reach a solution. Most of them rely on SELIC annually on the principal amount. These amounts are updated significantly too. To answer your question objectively, nearly 70% of the amounts reported represent fines and interest. We have been actively working towards a solution for that. We do not have any specific timing. That is a long discussion, tough discussion, depending on laws and understandings.
What I can repeat here is that the people we have discussed and talked with in these meetings, they are highly competent professionals and they understand this and that within the legislation, within the law, they have a constructive perspective towards finding solutions for these measures.
[Foreign language]
Thank you very much.
[Foreign language]
Next question comes from Andrew Ruben from Morgan Stanley. He is an analyst of Morgan Stanley.
Hi, thanks very much for the question. I just like to get a bit deeper on the comments on competition. Specifically when you consider the different segments, different consumers with Pão de Açúcar versus Extra versus Proximity, how the competitive backdrop varies between the three and again, just your outlook for how that is going to evolve. Thanks again for all the color.
[Foreign language]
Andrew. Thank you Andrew for your question.
Competition, the competitive backdrop is what you can see in the results that are being reported by the companies. This is the moment in which consumers, they suffer more pressure, they are more selective consumers. Now we have sustained interest rates that are extremely high for several months for a very prolonged period. Even if Brazilians are used to, I mean unfortunately Brazilians are used to such high interest rates, there comes a time in which the debts in the credit cards, they accumulate and it happens pretty quickly and then it has a higher impact on the appetite of the consumers. What I can tell you about our business is that we have same store growth, Pão de Açúcar growth around 3%. It is superior growth if compared to other competitors, especially public competitors.
We have seen a growth of Extra Mercado of 5.5% also on same store basis and Proximity in 2.8% growth. This shows our multi format strategy has prepared us really well to face scenarios like this. We can capture these changes in customers in each of the banners, in each of these groups of more high end people or consumers that look more towards price. We can work and capture these movements in a competitive manner. What we can show based on this growth movement we have seen in this quarter is that precisely we have a migration of more premium basis into the more mainstream basis. We see this difference of growth. If we compare the premium banner Proximity, most of it is also premium banner and is also included into more high end neighborhoods. And also Pão de Açúcar which is a premium banner.
We see the growth of these two businesses. This is a little lower than the growth we see in mainstream outlook that can capture this. When we have more focus on price and more competitiveness, it captures better. This is what we see in terms of movements. We hope, all of us, we hope that there will be a change in the economic scenario, a turning point, that we can change the interest rate outlook so we can find a balance again among this clientele, this customer base which is divided into these three main formats. These three main banners we operate. Just an information, an additional information on market share. It is also important to highlight that we see premium market market share 0.6 drop in 12 months according to Nielsen data. We have seen this Pão de Açúcar value proposition and Proximity value proposition.
In spite of this more challenging scenario of the market, but in also the Proximity segment, we still continue to gain market share in the segment 1.6 percentage point. When we consider this perimeter of smaller supermarkets here in the city of São Paulo. You asked about the computer competition. We see that we have in this premium and Proximity strategy significant advance as well as what talked about.
[Astra.]
That's great. Thank you both.
Awesome.
[Foreign language]
Thank you. Our next question comes from Nicolás Larrain, JPMorgan analyst. Nicolás, you may proceed.
[Foreign language]
Good morning, Rafael. Rodrigo, thank you very much for taking my question. I have two questions on my side. First is the efficiency plan. The BRL 450 million already include the BRL 190 million from the first round. And the second one that you are announcing for the third quarter. I would also like to know about the working capital. You said there is room for improvement. Could you help us understand to quantify how many days would improve so that the cash flow conditions would improve.
[Foreign language]
Thank you, Nicolás. Let me make it clear. There are two moves that were implemented that will cause impact as of this year. Last year is the first move amounting to BRL 100 million. And this is not in the efficiency plan.
The other move, which is much more recent, that took place in the past two months especially, there's an impact. This amounts to BRL 90 million. This is the objective answer to your question in relation to the working capital. Maybe we had mentioned this before, but today we run the operation well. When you look at the average with the inventory of BRL 1. 85 billion. We have a big dispersion of inventory per store. There are some stores that operate with a much more optimized inventory level. The number of days is much more significant than the average. We operate at an average of about 42 days, just to make it recorded here. There are some stores that operate at 60 and some stores operate at 35 and maybe even less than those.
There are some Proximity stores that have been recently opened. The inventory level is zero, yeah, so as to say. What I mean to say is that the inventory is very optimized. All the goods are on the shelves. When we look at all the parameters that define the ideal inventory level, we should operate at an inventory at about BRL 1.55 billion. There is an effort underway. On this quarter we see the results as a result of the plan of really going to an ideal inventory level in a more direct way. Our plan is to search for the improvement in the inventory levels. On average, of course year-end inventories are higher, but on average BRL 1.85 billion. We want to operate at about BRL 300 m illion less. We have BRL 40 million for each day in inventory.
We can go after something like a two or three days to improve the average. This is something that is feasible considering all the exercises, all the efforts we have been putting in. In addition to what we have already announced and disclosed with you for this quarter.
[Foreign language]
That was very clear. Thank you very much.
[Foreign language]
Our next question comes from Wellington Santana Bank of America analyst. Your line is open. You can ask your question. You may proceed, sir.
[Foreign language]
Good morning, Rafael. Good morning, Rodrigo. Thank you very much for taking my questions. I have two questions on my side. The first one is about the strategy for assets for sales. You mentioned [Denise], Proximity in the operations. How are you considering assets for sale stores or any other type of asset. My other question is related to.
I would like to understand how can we think about the level of B2B. B2B dimension.
[Foreign language]
Perfect. Okay. Sale of assets. We have a commitment, a commitment of selling some assets, particular assets, be them stores or other assets. There is a willingness to sell some specific assets, more relevant assets. We have made headway in this front and we are going to bring information to the market at the right time. We have a very well defined pathway for the completion of a more significant transaction. I hope that this will happen in the short term. I am being cautious enough to say what I can say without disclosing too much information about this transaction. This is a point we are after. There is another initiative, maybe I made some comments about it in other calls.
For example, we have project to sell or we would like to have a broker, a captive broker for us. We buy lots of insurances, collaterals and other property insurance policies. We buy insurance of more than BRL 200 million. We pay commissions for different brokers who help us in transactions. Willis, Wiz and other different insurance companies. They are our partners. What the European American markets do, they do something that they refer to as capped insurance. I establish a partnership with a broker and we have an exclusivity agreement. From this transaction I may sell my exclusivity of brokerage activities. With this movement I can have two results, two financial results in addition to other good results as well. The first one is with the upfront.
For example, we have sales of financial services, operates in a very similar way in terms of business. We sell the exclusivity and we can anticipate some amount, present value, and we receive an amount because of this exclusivity point. I create a system where I pay commission to that new group that was established and I'm part of that group. Part of the commission that I pay will come back to me. What is a center of expenses will be transformed into a center of revenues. This is something we are also considering. If everything goes well, we are likely to disclose to the market what we have done in relation to allies. Allies is not the core of our business. Our core is retail. Aliados is a B2B transaction considering commercial representatives to small merchants.
It is still an operation which is focused on our negotiation capacity. Considering the competitive that we see, especially in the retail market and B2B in general, we see that this competitiveness is reflected in our own business of Aliados . The purpose is to take advantage of this channel as a potential possibility to reduce costs. This is what has been happening in the past few periods. Considering the competitiveness and the reduction in the sales level, we understand that this is a more competitive business. We are likely to have more expressive reduction up to the end of the year in the line along the lines of what we have seen along the year. Next year we are likely to have more stability in this business.
Of course, in the beginning of last year or when we prepared the budget for this year, we did not have back then the visibility of all those movements of competition that we experienced this year and the impact of Aliados as a result of the higher competitiveness, especially in the B2B and retail market. This is what happened along the year. We expected that this is going to be leveled off up to the end of the year. We keep on watching the movements in the market so that we can understand what is going to happen next year.
[Foreign language]
Perfect. Thank you.
[Foreign language]
The Q&A session has come to an end and now I would like to turn the floor back to Rafael for his final remarks.
[Foreign language]
Thank you once again for being here in our conference. We are now entering the two most important months in retail. 30% of our total sales are made in this quarter. With the end of the year approaching, we are confident in the value proposition we've built in our different formats and different labels to meet the needs and requirements of our consumers and achieve an expressive results in the next quarter. Before I close, I would like to thank the entire team that remains committed and focused on delivering the strategic plan we have developed and settled for this year. I reinforce my commitment towards working together with the support of the Board of Directors. They have been extremely important and supported us including entirely in our actions so we can move forward with consistency and focus on long term delivery.
Thank you very much for your attention and I wish you have a good day.
[Foreign language]
This video conference is hereby closed. The IR team will be available to answer further questions and thank you very much and enjoy the rest of your day.