Grupo Casas Bahia (BHIA3) investor relations material

Transformation journey and strategic repositioning

• Over two years, a comprehensive transformation plan shifted the company from a generalist retailer to a specialized leader in appliances, electronics, and furniture, emphasizing operational efficiency, capital structure, and governance, with a robust omnichannel presence.

• Profitability was prioritized over growth, reducing CapEx from BRL 1 billion to less than BRL 400 million, with most investments in technology and AI, resulting in significant cost reductions, productivity gains, and improved EBITDA margin over nine consecutive quarters.

• Market share in core categories increased, with 96% of revenue from appliances and furniture, leveraging a unique logistics infrastructure and 1,042 stores for third-party fulfillment and omnichannel growth.

• Strategic partnerships, such as with Amazon, and expansion of 3P categories, positioned the company as the largest 1P and 3P seller in its segments, with a focus on credit solutions, customer experience, and digital reach.

• Cultural transformation emphasized discipline, KPI-driven management, diversity, and engagement, resulting in a leaner organization, reduced headcount by up to 22%, and improved workplace recognition.

Financial restructuring and capital optimization

• Debt was reduced by 77%, from BRL 5 billion to BRL 1.1 billion, with leverage dropping from 2.2x to 0.4x, through renegotiated credit lines, asset monetization, and debenture-to-equity conversion.

• Asset monetization, including the sale of financial company stakes and real estate, is expected to generate over BRL 1 billion, with tax savings and judicial deposit recoveries further strengthening cash flow.

• Operational improvements led to nine consecutive quarters of better results, with EBITDA gains, inventory optimization, and disciplined capital allocation prioritizing ROIC and working capital efficiency.

• AI and data analytics were leveraged for supply chain, pricing, and inventory management, achieving 40% productivity gains in logistics and 22% e-commerce growth.

• Financial solutions, including Buy Now, Pay Later, credit cards, and insurance, are central to value generation, with proprietary credit models enabling controlled risk and significant growth potential across a 116 million client base and a R$6.6bn portfolio.

Strategic focus, ESG, and competitive advantages

• Repositioned as Brazil’s leading omnichannel specialist in electronics and furniture, with 25.9% physical market share and 13.7% online share, leveraging a national logistics network and proprietary fintech for financial inclusion.

• Embedded ESG and sustainability into the business model, with 94% renewable energy use, circular economy initiatives, and strong diversity and inclusion programs.