Felipe Rached: Yes. Thank you, Belmiro. That was very clear. Thank you so much.
Gabrielle Helú: Okay, thank you. Our next question is from Bob Ford, sell-side at Bank of America. Bob, we’ll enable your audio so you can proceed. Please Bob, you may proceed.
Bob Ford: Thank you very much. And congrats on the quarter, Belmiro. How can we think about the store maturity for 2022 in the long term? And we had a big improvement in the cost structure, also considering a context of greater services in the store. But from now on, how much more do you think you can improve this? And what’s the percentage of sales that are identified? And also, can you talk about the functionalities of the Meu Assaí app and how this has been impacting the frequency and the size of the transactions and how you expect this to evolve, please? Thank you.
Belmiro Gomes: Okay. Thank you, Bob. When it comes to maturity, I think the store network of 2022 and 2023, as I mentioned, the average sales within this store network of 28 stores, we have half that’s organic, with a maturity store that’s a little slower. But despite this, when we look at the average sales per store, we don’t have like a positive sale. And the stores that were opened last year should follow the same route. So nothing from a location perspective. And the sequence of openings – reopenings of the hypermarkets were a lot more connected to licenses than to our actual desire for these openings. So the expectation is very similar to what we had in 2023, compared to the network in 2022. So nothing new in this sense.
And the cost structure is something that’s very important. And so this major transformation, and one of the main, I’ll say, was a protagonist. It was strategic change, monitoring some market trends, because we have a lot of changes. We saw the amount of closings in Brazil. And so there’s also a demand for stores that are closer with better levels of services. We had many scale gains, considering the size and costs. And the scale gains in our vision also kind of offsetted these increases, considering the levels of services. And when we consider this, of course, this brings in greater expenses. The services that were added, like the battery, the coffee shops, and that of course, also represents an increase in the headcounts. But on the other hand, it also brings it revenue and margins.
And that’s why we highlighted this level of expenses. So, as Anderson mentioned, it’s like, expenses are like nails, right? You always have to cut them down. And so we want to hold on to expenses as much and control them. I actually want to pass this on to him. So you can talk about the levels he expects and then we can talk about the app. When it comes to the percentage, identify the expectations we have up ahead.
Anderson Castilho: Thank you, Belmiro. Good morning, everyone. Bob, actually, the expenses are really a big part of highlighting. In the last quarter, we had a big differential. And we’ve already demonstrated this as something that’s very sustainable. So in the first quarter, once again, we’ve been very much in line with what we’ve been doing. And what we can see especially, and this is consistency. So expenses is line by line. There’s no big line. Each store has fundamental role in this. And it’s important to highlight all of our store teams that, of course, we get into major details. And so also the store maturity that helps with the expenses. And on the other hand, we have a team with some initiatives and strategy in our business has also gained greater strength.
The team has more maturity. And we also search for efficiency to be able to reduce our expenses and always balancing this out very well. So balancing out expenses and the purchase experience for our customers. So in the cash segment, we really want to stand out. We want to bring a value proposition that’s very unique. So customers can really feel comfortable with a store that not only has services and a differentiated mix, but also keeping up our costs. So we continue to deploy new services. We have until July this year, another 70 stores are going to be deploying and with CAFE Compound emporium [ph], the battery, but always taking a look at the expenses. So we always have this balance point between working on expenses in the day to day activities and also improve our experience – our purchase experience for customers.
So I think that’s pretty much it. We understand that there’s maintenance requirements that are really in line with this. And of course, considering the consistency in regards to expenses, so I think that’s pretty much.
Belmiro Gomes: Well, Bob, also, if we can talk about the [indiscernible], we have about 28% of our customers identified, and this number has been evolving. Of course, we have a difference between stores. This is an average. We have stores with greater share, with smaller share, but the strategy here is to evolve in this identification process so we can have better knowledge from our customers and that we can also adjust many of our offerings for services and products and the company’s value propositions to what these customers are demanding. So the plan is to increase this volume of purchases identified so that we can work with this better.
Vitor Fagá: Well, if I can contribute, I think an interesting point here is that these customers that identify themselves on the app, we added about 1 million customers in the first quarter and this is a competitive differential. And we’ve been also delivering things that make a difference. And the CRM has also helped us to have these offerings in a more precise manner. And when we measure this from the customers that download the app and use the app, they have a frequency of 50% more than the average recurrence in the month and they spend 33% more. So we are able to increase the ticket and add more items to the customer’s basket. So it’s an app that has really contributed to these advances. Besides the services and federal experience, we’ve been able to really stand out and continue to grow our customer base, which is where we presented here, the 13% increase in the customer base.
Bob Ford: Thank you, Vitar.
Gabrielle Helú: Moving now on, our next question is from Felipe Cassimiro, sell side Bradesco BBI. Felipe we’ll enable your audio, so you may proceed. Please, you may proceed.
Felipe Cassimiro: Good morning, everyone. Thanks for taking my question, just a question here about the stock level. So you talked about the normalization to 41 days. And I want to understand if this stock level is what we should expect up ahead due to the lower volume of openings. So I think we reached a peak in the last two years because of the conversions. So just understanding what the optimal stock level would be that we should expect from now on?
Belmiro Gomes: Okay. Now, as we get into supply overall, I think you guys can expect some stability in the levels of stock. As you mentioned yourself, we reduce the expansion pace and with this, we can also have a lower level of stock and openings. We’re more disciplined in the commercial logistics area, in the controls and product interest levels. And throughout the quarters we should also have maintenance in the levels of stock coverage, and also in the maintenance of the purchase terms. So we should not have major variations in this that are very similar to what you saw in this first quarter. So we’re going to consider the discipline and efficiency in the control of the working capital. So you can have some things that vary from one quarter to another. So for like Christmas or birthday campaigns, there could be some variations, but that won’t lead to much impact on our cash position. I hope that was clear.
Gabrielle Helú: Our next question is from Gustavo Senday, the sell side at XP. Gustavo, will enable your audio, so you may proceed. Please, Gustavo.
Gustavo Senday: Hi, guys. Thanks for the questions. I just have one that’s more occasional, maybe more directed to Vitor. Just taking advantage of the fact that it’s the first call you participated. And I want to hear the opportunities you’ve already identified and that you plan to advance with capital cost, working capital, et cetera, and a bit of your vision for the company throughout this year and up ahead as well?
Vitor Fagá: Okay, perfect. Thank you for the question. I’m going to highlight two initiatives. First of all, we highlighted one point, which is operating with the biggest offering of financial services to our customers, especially for B2B customers, which is something we need to work on in a very integrated way with operations, commercial, and also with FIC, which is a partnership we have with Itaú. So this is one of our priorities, and then we also need to reprofile our debt, so we had a recent issuance, 500 million, considering CDI + 1.25% [ph]. And we saw opportunities to bring in other operations that could improve our debt profile, especially when it comes to costs and timing. So these are the two priorities that we have to be able to work on this in a more intense way.
Gustavo Senday: Okay, perfect. Thank you so much.
Gabrielle Helú: Moving on, our next question is from Nicholas Lahaing [ph], the sell side at JPMorgan. Nicholas will enable your audio so that you may proceed.
Unidentified Analyst: Thank you for taking my question, guys. Here I think most of these questions were already answered, but I wanted to ask you Belmiro about this from the expansion side for this year. How have you considered the plans for 2024? And also considering this, leverage is a little more favorable for this year and some room to accelerate this also from 2024 to 2025. Thank you.
Belmiro Gomes: Okay. Thank you for the question. As I mentioned, this year we’re going to reach 300 stores. We have important units being built at this point in time. The store in Manaus, in Guarujá [ph] the first Assaí store in Guarujá, actually, and we should start with the construction of our first store in San Jose [indiscernible]. I want to highlight this because these are markets that are well known. Everyone knows about the potential and they still don’t have Assaí stores. So if there’s some fear when it comes to market saturation, there are still – important cities. And for this year, we’re keeping the level of 15 stores. We’re already anticipating prospects for 2025. Up until now, we don’t have a decision yet about increasing the amount of stores for this year, considering a lower level of leverage.
But of course, if you have a project come around and if you’re able to get the licenses and stores, especially when you consider the app, which is where the measure we use for each of the new stores and units, it could be anticipated, but maybe the beginning for this year. However, the opening would still be 2025, so we would be keeping up with the target for 500 units. So.
Unidentified Analyst: Okay, perfect. Thank you. Very clear. Thanks.
Gabrielle Helú: Now our last question. Here is a question in English from Andrew Rubin, sell side at Morgan Stanley. Andrew will enable your audio so that you may proceed. Andrew, please. You may proceed.
Andrew Rubin: Hi, thanks very much for the question. I’m curious if you could help update us on the latest for the CapEx per new store. We understand this was fairly inflationary over the past couple of years, but I’m wondering if the inflation and opening CapEx has started, started to stabilize or come down. Any update there would be very helpful. Thank you.
Belmiro Gomes: Thank you, Andrew. Thanks for the question. Yes, we did have inflation and construction materials and equipment, especially cement, steel and the metals, which is also very strong. And this year we’ve already seen a drop in this level, but it’s still a level. And of course, this depends a lot on the type of products. Right. So the unit in Guarujá, the stacking levels, and you have a higher investment as well. And the ROIC is always a determining factor in this decision for the store openings. But today, if you were to consider the average type of stores, we’re considering a total invest about R$70 million for the deployment of a new unit. So we’ve been operating stores that have different variety of sizes. It gives us a lot of flexibility and our own expansion plan to operate different kinds of stores, stores with different levels, but on average, this would be it. Thank you for that and I hope I answered your question.
Andrew Rubin: Very helpful. Thank you.
Gabrielle Helú: The Q&A session has ended. Now I want to pass the floor on to the company for the final remarks.
Belmiro Gomes: And we’ve already presented an expectation for 2024. I want to thank you all for your participation and all of the directors and team responsible for this work in the second quarter will continue. The company intends to keep up with this strategic aspect and evolution of the new store units and expansion. In the morning, we also have an important event, which is the annual general meeting. We have some important topics when it comes to the future of the company, and I want to also thank the board for all of their support. As I mentioned, Assaí has been going through a transition process. And so we stopped being a subsidiary and we started to be a controller. And then we really became a true corporation. And we noticed that the company continues to be stable, trying to meet the needs of our customers more and more, and also working with our people and our understanding our social role within society, considering the challenges in Brazil with a lot of social inequality.
And we hope to once again have your support in the second semester and support us in the general meeting that will happen tomorrow. Thank you all so much.
Gabrielle Helú: The earnings call for the first quarter of 2024 at Assaí is officially ended. The investor relations department will be available to answer other questions. Thank you so much to all participants and have a great day.
