Grupo SBF SA

BOVESPA:SBFG3

Good morning to everyone. Welcome to the results call for the SBF Group for the fourth quarter and full year of 2024. I'm Pedro. I'm here with Luna and Victoria and Salazar, who is always together with me here on these calls. Also with Gustavo Furtado who will assume within the next few weeks as the CEO of the SBF Group. In this call, he will still be part of our process of transition. He's listening in. I know that he's anxious to hear more from him, but on this call, he is -- it will still be me who will conduct and answer your questions. And starting with the next call, the ball will be with Gustavo.

So we're going to continue the same routine as usual, I'm going to start with a few highlights, our results. I'm going to pass it over to Salazar to give a little bit of the results from the fourth quarter, and then, we'll open up for Q&A. And Salazar and myself will answer the questions. And at the end, we'll close -- the usual closing, especially for me, it will be my last call as President of the Group to close and say goodbye and pass it along the baton to Gustavo. Okay.

So starting our principal messages, our reading of the results of the fourth quarter of 2024. The results were very good. We proposed, for a few quarters, as was well known, as you knew, as you followed along on these calls several times, that the group would focus on 2 principal metrics: cash generation and -- we're very proud of what was delivered in these quarters and in the year of 2024 in these 2 metrics.

In net profit, we reached BRL 418 million. We had -- we represented a growth of 82% compared to '23. And we have a perspective of the year since the IPO in 2019, a growth -- an annual growth, a CAGR of more than 22%, 22.6%. So good results for the year and once again showing the capacity of the company to present growth.

In earnings, well above the average. These results was due to the -- our declared strategy of focusing on the growth of gross profit. So here we have 2 directions to deliver this profit. One, deleveraging, we're going to talk about that a little bit, and then growth of EBITDA. EBITDA grew by 27% to -- we have had a -- came back to a 2-digit margin compared to the margin of last year.

And the growth of EBITDA was due to the strategic decision to grow in gross profit. I think all remember that 2023 was a year in which we started to give a lot of discounts with just our stocks, our inventories and compared to the year in which the gross margin was hurt to -- several units were then positively impacted by that strategy. And so '24 is the year for gross profit. We're very content with the results.

So when we look at it, it's evident that this has an impact on revenue as was anticipated. The gross profit grew to an expansion of gross margins of 2% compared to '23. Our gross margin got up to 49.2%. So we closed the year this recomposition of margins after 2023. So we brought the -- I mean, this talks about our EBITDA. We also talked about the net profit, which is impacted by the deleveraging that we had. We're also able to include this process in a very efficient way, even more quickly than we anticipated. We reached at a moment of 3.3x EBITDA -- net debt to EBITDA, and we closed 2024 with 0.38% of EBITDA.

We continue to be very efficient in the management of our cash -- our working capital management. Our days of stock have fallen as we have planned from 180 days to 168 days in 2024. Our inventories, some highlights, and afterwards, I'll open this up a little more, but Centauro got to sales of BRL 4.4 billion this year and had excellent results, BRL 4.5 billion, headed up by Gustavo, growing revenue at the same time in which it expanded its gross margin, which is a huge challenge.

The gross margin of Centauro was a record. It got to 50% for the year. And even so, revenue grew by 4.4%. In fees, you got to BRL 5.1 billion in revenue. The company -- and it's a little bit of intercompany, but it was -- with growth was flat compared to '23.

Fisia was the company which was mostly impacted by the discounts in '23. So the revenue was flat, but the margin went up by 2.1%. And it's the highest gross margin we've had in this operation since it's been managed by the SBF Group reaching 43.7% from the standpoint of omnichannel operation through 2024, was growing in our omnichannel offering and the profitability -- the possibility of connecting to the sellers of Centauro.

And we also activated 100% of our exchanges in e-commerce, whether they be through with a consumer who bought any product ordered by -- from Centauro or from a seller that can be exchanged in our stores. This project was very successful, both from the perspective of the consumer to be able to resolve a problem of exchange, which brings him in the most convenient way from the standpoint, from the financial standpoint, whether it be through a more efficient freight or for a purchase, which, in general, in this exchange is reflected in 70% of the cases in exchange for a product more expensive than that which was recently purchased.

And so closing this cycle in this year of 2024, more efficient, more profitable and with a capital structure quite convenient for the moment in which Brazil is, which we believe will be adequate for a retail company in Brazil. And this also -- the results also works as a basis for the company to continue evolving and taking the next steps in sustainable growth, always with a model of discipline and resilience that the company has always had in its 43 years of history to take advantage of the opportunities in the Brazilian market.

Highlights here are some of the big numbers. I mentioned a few of them, but I'm going to reinforce them here. And again, when we look at the net revenue, I had talked about gross revenue of BRL 7.2 billion, growth of 2.3% compared to '23. Gross margin growing by 2 points. This growth of revenue grew by 2 points, which is a growth in net revenue -- gross revenue of 6.7%, which was the main driver, which we had 6.8% in the fourth quarter and a little bit more than 6.0%, 6.1% for the entire year of 2024, for the full year.

The EBITDA margin passed 2 digits, double digits and resulted in a growth of 27% or BRL 772 million of EBITDA, 27.3%. Also, the leverage is 0.38x compared to our peak leverage in June of '23 when we had 3.1x EBITDA compared to the fourth quarter of '23. Looking at the equivalent seasonality, it fell by -- to 0.31%. So we had BRL 1 billion in cash on hand with no anticipation of receivables, BRL 236 million, very solid numbers.

Please, next slide. Here we're looking at the -- since the IPO, this is the 38th call -- results call that we've done -- 34th call since we opened our capital, and this shows how we always compare year-on-year. A basis of comparison sometimes can be -- can emphasize some elements. So I think we've been able to look at the results in details, but we also step back and look at the history of this company to see the possibilities that the SBF group has going forward and how it has taken advantage of these possibilities over time.

And as you can see, there's a company crest that grows and grows a lot. We have a CAGR since '19 of 23%. It's evident that anybody that opens up here, the Fisia operation, but we've been able to grow double the operation of Fisia, and Centauro growing at a CAGR of double-digit CAGR as well over this period. This was done with discipline -- margin discipline, looking at a -- the gross profit is equivalent to revenue.

It wasn't at the cost of margins that we grew. We had growth with quality showing that the EBITDA was -- went to BRL 330 million, more than double in that period, and the net profit to BRL 418 million, so BRL 150 million to BRL 418 million. The longest trajectory of the company shows our potential and helps us to think about the possibilities, future possibilities that the SBF Group could have.

And now into looking at the numbers, a little bit highlights for each one of the units, the business units. Starting off with Centauro. Centauro in the fourth quarter grew by 3.2% versus growing to BRL 1.1 billion compared to -- with the same-store sales of 6.6%. So there was an expansion of gross margin of -- has resilience to grow even at the moment in which the gross margin is expanding.

The digital, which was an operation which is very well run in terms of our profitability during the year -- I mean, last year, is now in this year, take advantage of a growth phase, and it grew in the fourth quarter, 19.8%. I think it had a very good strong performance, very positive performance. And here we look at stores, the major highlight was the coupon, items per coupon per ticket. It was intentional and good for the company, especially trying to take advantage of items baskets, which had sneakers and also have another category added to the basket, which was the capacity of the company to take advantage of the flow and the moment and work with these clients to impose to push sales in the omnichannel.

The strength of our omni channel here is that we have the numbers to back it up, more than 50% of the exchange products were done in the stores and 78% of these credits utilized were at amounts higher than the original purchase. So Centauro continues its focus on sales per square meter and delivered a great deal of profitability and quality in the third quarter.

Fisia, as I commented, it was more impacted in '23 by our discounts, and this adjustment was an expansion of gross margin. And on the other side, a higher impact on elasticity in the revenue. So the net revenue of Fisia grew by 0.4% due to an expansion of margin of 2.3 percentage points. The gross profit, which was 5.4%, which is our main variable, and putting this in perspective, this growth of revenue, again, the basis of comparison is a base.

And 2 perspectives I would like to offer. First, the growth of gross profit, which neutralizes a little bit of this impact. And the second, to see the capacity of growth that we have in Brazil, which is taking a picture of when the fourth quarter of '23 compared to '24, and we isolate the effect of the fluctuation in margins versus going down and going up.

If we look at this photo of the growth of Fisia from 2024 versus the third -- the fourth quarter of '22 was 26.2% -- 26.4% in Fisia. In the digital channel, 8% of the exchanges were done in the store in the test we're doing, but I think that was a journey that we're going to continue with. And we point out the reduction of debt -- of a stock to -- 14 days of our stock to 42 days compared to the third quarter of '24.

And we're very happy with the consistency of these results. I think the result has come, has come in our profit and our cash generation, and it comes in the way that we proposed, and this leaves me quite content and confident.

So I'm going to pass this over to Salazar to go into more detail about our results, talking about our fourth quarter. And I'll be back for the questions and answers for the Q&A. Salazar?

Thank you, Pedro. Good afternoon. Before anything else, I want look at the results. As Pedro mentioned, the last call -- results call that he is participating with us here. So I wanted to thank him. It has been a pleasure and a great deal of pride to share with him this stage with him during recent years with you all. I think the work that you've done was very gratifying and with good results. So thank you very much for that partnership.

Speaking about the group, and looking into a little more detail, the first point here in the net revenue, any gross profit, we see the consistent growth since the fourth quarter of '19 with a CAGR of 16.9% with a very important consistency in the delivery of this growth and having these results and also showing specifically in the last quarter of '24 that even though we have a basis of comparison.

I'm sorry, I thought I had problem. Resolved my problem with the camera. Trying to work out a little technical difficulty there with this camera. So I'm going to continue without the camera. There seems to be some issue there, some technical problem here, but coming back here, even as a base of comparison, a very strong base of demand in the fourth quarter.

In terms of revenue, relative to the promotional operations that we did last year, even though we were able to regain our gross margin, both in Fisia well as in Centauro, we still presented growth in both. So this shows the resilience of the brand, both Nike as well as all the other brands that we sell in our multi-market channel, which is Centauro.

On the other hand, we grew -- we came from a moment of large discounts last year, and we have been systematically recovering our gross margins. Since the beginning of the year of 2024, finalizing with the growth -- with the highest gross margin that we've had since we started working with Fisia.

In relation to the last quarter of last year, gross of 2 percentage points, both in our gross margin, it was generated. It generated a gross margin, which grew by 6% quarter-over-quarter to 28% quarter-over-quarter, our strategy of growth -- a disciplined and responsible growth has worked, and we recovered part -- we were able to increase the profitability even though we've had growth in revenue, which was lower, but with the recovery of prices and the removal of these discounts, we've been able to grow our gross profit due to this recovery, which is very healthy in gross margins, which we believe we have reached our full objective for 2024.

The operational expenses are under control, we have a very important work, which has begun in the second semester of '23 and has generated fruits during 2024 as a whole. We had, specifically, in the second semester of '24 -- second half of '24, a small growth in expenses due to the provisioning of the bonus for the SBF group, all of the employees of the SBF Group since -- we have said to the market ahead of time in 2023. We had results that were below that which we expected.

And so, therefore, the provisioning of bonus was also below that, which was expected in 2024, especially starting in the second half of '24, and since the perspective of our results were better than that, which we had in our budget, we started beginning in the second half of '23 to provision these bonuses reflecting these results. And we then would be to create a curve for the provisioning of this bonus over these quarters due to the results which was already showing itself to be higher than we had imagined at the beginning of the year.

Taking away this specific question, the expenses are absolutely under control. So I think it's also a very strong efforts of controlled expenses than during 2024. This was reflected of gross profit as expense control was reflected in an improvement of the EBITDA margin, which went from 9.9% in the fourth quarter to 10.9% in the fourth quarter of '24. And for the full year, an improvement of 2.1 percentage points, went from 8.7% in '23 to 10.8% in '24.

So we've been able to -- through the recovery, which is a very strong of gross margin, and control of expenses improved the EBITDA margin of the company. We weren't much impacted by the measures that we took. We're then, I mean, now adding 2 important factors, the first being, we worked quite a bit for cash generation in the company, reducing the debt level of the company. And with the reduction of this indebtedness, we paid less expenses, less financial expense, which is an important point.

And then the second point, we worked very strongly on the part of the effective after-tax profit of the company. After several activities, most notably in this recent quarter, the interest on capital for SBF Commerce, we were able to optimize the effective profit of the company. So putting all these factors together, we were able to improve during the year the gross margin -- net margin of the company in 2.6 percentage points, reaching a level of 5.8% of net profit.

Cash flow was very positive. Obviously, we generated BRL 231 billion in cash flow. Compared to last year -- fourth quarter of last year, we took advantage of the seasonality of our business to be able to sell our inventory -- our excess inventory. This year, since we started the year in 2024 with less inventory than we had at the beginning of the fourth quarter of '24, we were able to recompose our margins. Even recomposing our margin, the cash generation was positive.

We generated BRL 231 million in the fourth quarter of 2024. We see this reflection and this generation -- cash generation helped by the working capital, we saw the financial cycle improving by 8 days in relation to the previous quarter, reaching 12 days. We saw the stock, also reducing our inventories, and we also had a behavior of inventory in Fisia closer to the reality that we want to have for that company and for Centauro, separating this possible better recovery during 2025.

We see the PMP stabilizing, starting from the moment in which we come back and return to purchasing -- and return to the cycle of purchases. Part of this was done in sales last year, part of this was done with the reduction of purchases. Starting with the movement that you readjust these purchases, you start to get back to an original level or structure of accounts payable of the company. And also in the accounts receivable, we've done very important starting with this quarter last year. And now it's a very fine symphony.

Some specific stores, we have to extend a little bit more the receivable -- the period for receivables. Certain [indiscernible], you have to give a little bit longer terms for receivables, but nothing that changes structurally the working capital structure or working capital. Our working capital is very interesting.

So when you put the operating results of the company with the reduction of the level of debt, the improvement in the structuring of working capital of the company, we see deleveraging -- a huge deleveraging, we believe, from almost 8x year-on-year. Definitely from the previous years, when we're normally starting in the second quarter, you have an increase in your leverage, which was done during at the end of 2023.

And during 2024, we had a curve -- a leverage curve, which was declining quarter after quarter. And so we had a first quarter with 1.33x. By the third quarter, it was 0.78x. And we finished with the greatest quarter for the generation of cash of 0.38x EBITDA, which is the situation very, very comfortable of leverage with the scenario of high interest rates. So we're practically without debt, debt free, and this is very good at this moment with a very difficult -- with the very difficult interest rates in Brazil. And also permits the company to be prepared for a phase of growth in which the company -- whenever the company is ready to grow. So I think we have a very good capital structure. We have our margins in line having recovered our margins.

And we are -- with the debt profile, which is absolutely tranquil, which permits us to go into this next cycle with a great deal of tranquility. And as Pedro mentioned, it was a positive year for the company with all of our strategic objectives. We had a 30-month plan. We reached all of the objectives of that plan. And with a positive highlight reinforcing the point which Pedro mentioned, which was the deleveraging happened more quickly than we imagined. We reached this level of leverage, which we expected for the end of 2025. We finished at the end of 2024, and this opens up a great deal of flexibility for the company.

So that's it. And now we can go to any Q&A, any questions you might have.

[Operator Instructions] Our first question comes from Vinicius Strano from UBS.

Congratulations for the conclusion of your cycle there at SBF. I think cash generation was -- came better than it had. It was helped by working capital. So I want to see if you could comment, what do you see in terms of opportunities for the generation of capital going forward, both in the question of inventories as well as suppliers?

If you also could comment a bit how do you see the question of monetization of your tax credits? Another point if you could comment on the levels of inventories -- levels of markdown in Fisia compared to the historical levels. Do you think that you have found the correct level? And if you could also comment how the effects of exchange rate is on the -- more higher effect of exchange rates on Fisia?

I'm going to divide the camera with Salazar since he's not working at the moment. Very well, thank you for the question. l just said I am going to share the camera here with Salazar who is having a bit of a technical difficulty. He wanted to try and answer Vinicius' first question, cash generation, working capital.

We think that we still have work to do -- our structural work, which can be done in Fisia. Historically, we have a deal that Fisia has to have 30 days of inventory, more than Centauro. This differential is done due to the question of the larger volume of imported goods and to have products that are still onboard ships coming from overseas, and we have still not reached that difference of 30 days. We -- if I'm not mistaken, we're working with 20 days of difference, and we still have this work to do to continue to improve our inventory.

The second question was in relation to gross margin. We think, yes, the big challenge that was already met, we were able to -- going forward, we're going to be able to have some timely adjustments, just looking for the optimization of this gross margin. But that big push for discounts, which we had given, that which we had to recover, we think that we have now been successful in that operation.

In relation to the monetization of tax credits, we're going to continue in this rhythm of 2024. In the old days, the operation of Fisia, it generated a lot of credit, the ICMS credits due to the way in which Fisia had been operated previously prior to the acquisition by SBF Group. And starting from the moment in which we developed the importation channel and we passed starting to take care of all of this importation ourselves and do it in -- miniaturize in a dry port, we were able to unlock a lot of this. We've no longer accumulated these credits, and in fact, they have begun to consume these credits. So I believe that we have this vision that this consumption of credits -- of these credits will continue due to these changes, which we've done, these operational changes.

In relation to the fourth question, and I think taking advantage here because it's a question also similar to Victor's question [Foreign Language] take advantage and answer his question at the same time, which I'm looking on the text, the reaction to our exchange rates. As we see in recent moments with the market, we have been commenting that we have a plan -- a historical plan to continue to use fiscal incentives for Fisia, the same incentives that we had in Centauro.

So at the beginning when we bought Fisia, we were able to get some fiscal incentives from the bonus. And when we migrated to the SAPs, we were able -- we got an incentive from the importation channels, and we only lacked 2 incentives -- fiscal incentives for us to be able to, they were one for stores and the incentive for their part. So to get these incentives, these fiscal incentives, we had to have our own distribution center, which was concluded last year, which came from our logistics partner, and we internalized that operation starting in for this condition, which was a precedent. It was important for us to have this CD -- this DC.

We started to work in obtaining of these 2 fiscal incentives, which we basically started working at the end of last year. And they will be gradual. The first will come in, the interest of them is gradual. First, we get the incentives for physical stores, and then, we get the incentive for the wholesale.

When we initiated this journey, to try and get these synergies, also for Fisia, we imagined at the beginning that we would be generating extra profitability for Fisia, and then, it would impact positively results. However, the fact is that due to the changes in exchange rate during 2024, the entrance of this incentive -- fiscal incentive will only compensate the exchange rate losses, almost totally the effects of the exchange rates that we had in Fisia for 2025 due to the fast rise of the exchange rates in 2024. It's coming in gradually, this effect.

In the first quarter, it will be coming as we have impact of the exchange rate. In the first quarter, for example, of '25, we practically did not have any fiscal incentives, but we also had no impact from the exchange rates. Starting in the second quarter, as the exchange rate impact is higher, we came in with the physical stores' credits in the third and fourth quarter when we, in fact, had the highest impact of exchange rates with the run-up of the exchange rates at the end of last year, and we started to see the impact of these incentives in the wholesale world, not that we almost by coincidence, we calibrated the entrance of these fiscal incentives exactly at the same time to know the effect of the exchange rate variations.

I give you a very long answer for an important point. We do not imagine big impacts in profitability in Fisia due to the exchange rates. Why? Because this effect of the exchange rates will be compensated by the entry of these new fiscal incentives. Having said that, it's important to say that in the P&L of the company, there will be 2 effects. The first effect is in our gross margin, where the effect of the fiscal incentives, fewer, will not compensate completely the effects of the exchange rates -- impact of exchange rates.

So I have an add-on in the gross margin due to exchange rates, and I have a growth in these expenses due to the incentives, fiscal incentives, but one does not completely compensate the other. Therefore, when you go to the net profit, with the fiscal incentives not taxable, I have an improvement in my fiscal incentive, which is not taxable, had a gross margin, which previously was taxable.

I think these 2 effects together, a small -- followed up by an effective rate in the net profit of the company, we have this compensation practically totally on the impact of the exchange rates. And this is, as I said previously, the first quarter. In the second quarter, had a small impact with the entrance of the fiscal incentives. First quarter, no impact. Second quarter with the physical stores. In the third quarter, we're going to have the physical store incentives and the wholesale incentives.

So I'm very comfortable about this entrance. It's a migration as always. But we've already done this before. So in March now, we're at the end of March, we already started to see a little bit of the effect of these fiscal incentives, the physical stores incentive, which will compensate the effects, principally in the second quarter.

And in the fourth quarter, we will finish this phase of the migration to physical stores. And over the second half of the year, we're going to have the migration to wholesale incentives. And then, we start in this -- in the third quarter of '25, we started to capture these full incentives.

So, Vinicius, I think that I answered everything. Tell me if there's anything missing.

No. I will watch more curiously...

Very good. That was very clear.

Our next question comes from Irma Sgarz from Goldman Sachs.

Pedro, congratulations for your -- for finishing this cycle, and good luck in your new challenges. We're going -- we'll be missing you here, but I think the company is in good hands.

Talking a little bit about the comment that one of you -- perhaps Salazar had made, the potential growth of Centauro, if you could design a little bit -- tell us a little bit how we would think about this growth, especially in Centauro, but also a little bit for Fisia for this year. What do you see currently at this moment for the consumer and also in the availability in the wholesale to make stock -- to build stocks up and stock up and plan?

And principally, obviously, I'm asking about unless due to the effects that you are going to pass through, but more through the effects -- the macro effects of higher interest rates and some parts of the portfolio, which are more exposed and others which are perhaps less exposed due to interest rate hikes. So if you could explain a little bit how you plan to -- your planning cycles for inventories, which is always a little bit longer? But also, we see this preoccupation of how difficult it is to see the future in Brazil. So just curious to see what you're thinking about this year.

Thank you, Irma, for the question and for the partnership. I'll pass it over to Salazar.

Okay. I think that when I wanted to say about the perspectives of growth for Centauro in 2025, I was not talking about -- specifically about the year of '25. I was saying that the company is ready for a growth spurt, and we believe that the opportunities for growth continue to exist. We're going to do a very strong work to increase the gross profit of the company, the optimization, the maximization as much as possible.

Maximization of same-store sales, we have a lot of work that's being done by Gustavo in that area. I believe we haven't yet begun to collect all of the fruits of this work which is being done. He took over Centauro in '23. He worked almost the entire year, 2024, up until the second half of this year. But we believe that many of the things which are being done help -- going to help us in 2025.

Looking at the type of growth, if you look, as I mentioned, the company has now -- has unlocked and ready to grow, we're ready to continue with lots of possibilities. We believe that we're in a market which is favorable. The sporting goods market is large, its huge. We have a space for growth, both Fisia and Centauro. And we believe that we have a capital structure -- correct capital structure, which permit us to do that.

And going back to your question in relation to macro, I think that we could -- we've taken this care in 2025, specifically, when we went -- when we're not purchasing for 2025. Normally, these purchases are made one year ahead of time. We were still investing based on our plan of being very cautious in terms of growth. So these purchases were done from a scenario in which we're able to guarantee these sales.

We're not optimistic to the point where we thought that because now that we have our capital we will be with our capital structure lined up that we cannot take more risks. With the macro scenario in Brazil, especially in terms of interest rates, it would be contradictory to be able to working with leverage to get down to a capital structure, and at the same time, imagining that because we would pass through this interest rate that we're sort of planning for a scenario growth, macro scenario much stronger.

So I would say that maybe in our vision, we did a -- we have looked at a scenario which is very safe and secure in a way that we do not imagine any type of adjustment that we would have to do in 2025 to an excess of optimism when we did the planning in 2024. We already did a planning, which was relatively safe and responsible, perhaps a little bit bolder than the planning, which was done for '24, but nothing which will cause us to run the risk of finishing up with leftover stock or to be able to -- we'll have to offer discounts. So we have a capital structure, which is lined up, is adequate. Our purchasing and inventory is adequate for 2025 and with a very good flexibility and opportunities for growth that we see beyond 2025.

I'm not sure if I answered your questions.

That was very clear. Perhaps any comment about the wholesale channel by Fisia.

Okay. I forgot that. Any wholesale channel, we see in a way that is -- we look at it cautiously in the sense that we believe in a recovery, a stronger recovery in the wholesale, especially in the second half of the year, we understand that it's part of the economics. We've had a -- our channels very strong in Fisia. In a certain way, this impacts the wholesale channel. They have an exchange of share from wholesale to retail, which is good for the company, but also the wholesale channel was affected directly by our discounts -- by the discounts that Fisia did to be able to reduce its level of inventories.

And this channel takes time perhaps to gain the confidence that is necessary to buy when we look at the possibility of losing money if these discounts have to be continued. I think that during 2024, with all of this recovery of gross margins that we've had, that we showed through that channel that we're not concerned whether the discounts will continue. And starting possibly doing this starting the second half of last year, wholesale began to prepare for the second half of '25. So that's why this normalization happens over the year of 2025, notably in the second half of '25.

Our next question is from Victor Rogatis from Itau BBA.

Our next question comes from [ Eric ] [indiscernible] of Santander.

And congratulations for the conclusion of your cycle there with the company. I think pulling up on the side of the questions, when -- perhaps it's a bit of a follow-up and should gain relevance going forward, especially looking at the growth and expansion having in mind this important change that you've done during 2024. Please just tell us how do you see this year, depending on how this year behaves, what would be the eventual triggers? Do you see some acceleration, whether in the opening of Centauro or Fisia, especially looking at the side of renewals, perhaps have a legacy -- a pack of legacy stores from Centauro and more formatting for the -- for how we look at the company in this context?

And finalizing one question, you mentioned a bit the year 2024 has a focus between the exchanges in the stores, and we can start looking at '25, which will look at this operational slide, talking a little bit more about the strategic focus that we'll be able to accompany and you're also going to be speaking with a little more recurrence.

Thank you, [ Eric ]. I'm going to pass it back over to Salazar.

[ Eric ], so I think that the perspectives of growth for the company, this trigger that you mentioned, I think that in a certain way, this was -- this has been reached, the company to be able to balance its growth into a faster growth -- a higher growth rate exactly due to the question of the capital structure. I would think it would be difficult for us to go into a strong expansion phase with the structure of capital which was not adequate and also with profitability below that which we would like to have.

So I think as Pedro talked a lot about in recent years, especially in his last 2 years, the compatibility of the growth of net revenue with the growth in revenue that we want to have. So I think now in 2024, we have a certain compatibility between these 2 indicators. We have a base -- a good base to go back to growing again. And also together with the capital structure, which permits us to have this kind of growth.

I think that in relation to opportunities, I'm going to talk a little bit here -- a little bit about opportunities that are relatively -- opportunities that are more comfortable, more tranquil, that are easy, that won't be -- constantly be tested. These are questions that I have already been tested. We think that both Centauro as well as Fisia have the potential for opening more stores, especially in the model of Centauro -- of the Centauro Stores and in the DIS model of Fisia.

We think that Fisia today has, if I'm not mistaken, 9 stores [indiscernible]. If you look at a shopping center, you'll see at least 50 shopping centers that have highly relevant public, which could stay in one of our stores -- support one of our stores. I think Centauro also, even though we already have a higher level of penetration, there is still a number of shoppings in which we could enter. Obviously, with a revenue -- with a recipe for a smaller store than those that we have in the main shopping centers, but still a return on invested capital, which is very attractive.

I think that the question of growth is a question that is point by point these stores are individual questions specific for the moment in which we're living and how we are now more freed up to go forward. Beyond that, as you mentioned -- as you sort of mentioned, we have a store -- a number of stores which need to be updated, not necessarily G5s were -- as we're accustomed to because they're smaller stores.

Without a doubt, we have started to do this at the end of last year. So you'll see that our CapEx grew, and one part of that was investment in stores. We believe that with these reforms of these stores, with the renovation of these stores, this will also help to bring same-store sales to a better level.

Beyond that, as I mentioned, it was difficult. Gustavo made a series of change in Centauro related to the allocation to better attend and to sell and to allocate correctly the products in the different stores of the company, specific conditions to make combos conditions to make differential discounts region by region. This type of thing that as we evolve, we are able to start to gain in gross margin because also it reduces the amount of discounts in [indiscernible] so all of the specific questions as well as the actual omnichannel offer itself.

And we have been working very hard to deliver this at the beginning of the year, and we're working very hard in the middle of the year. So now we're delivering. When you put all these questions together -- these operational questions together, I believe, and also the organic questions of the potential of the market, we believe that the -- that this lock that we were faced with limited to a market, but also to specific questions within the company, which was solved, and that we could think about something that is more aggressive.

Having said that, we cannot forget the question, in which you said 2025 is a complicated high interest rates where we are a little more conservative. But the potential starting in '26 for growth, we believe continues to exist.

Our next question comes from Victor Rogatis from Itau BBA.

This session of questions and answers is now closed. We'd like to pass the microphone to Pedro Zemel for his final considerations.

Thank you all very much. I'm going to make a final comment in 2 short parts. The first part is to present somebody who is already well known by you, but who's been with us here with my -- in this journey for all 12 years that I've been here in the company in which I've had -- I've been here as the CEO running these projects, the most critical projects and the most important and what I evaluate as a journey, a successful journey. And I appreciate greatly his contribution. It's my last call. The next one will be his first call, so I wanted to pass this over to Gustavo, and then, I'll come back to make my final comments.

Gustavo, please?

Good morning, everyone. Before anything else, I wanted to congratulate Pedro for his trajectory. The numbers, which we presented, have crowned the end of his trajectory, but not even close to describing what his leadership has been during these 9 years as CEO. I had the opportunity and a privilege to accompany him closely and to be inspired by these 9 years. Once again, I wanted to congratulate him for his trajectory, which was incredible.

The idea is also to say hello to you. I think during the next few months, we'll have the chance to get to know each other better and to learn more about the business of the group. But briefly, in April, I will complete 12 years with the company. And during these 12 years, I've had the opportunity to lead various areas of the company and constantly to be very close to several projects, which I consider to be central for the development of the company.

I participated a great deal in the scale up of the digital sales. I participated greatly in our implementation of the omnichannel offering, the conceptualization of our G5. And more recently, I was responsible for the project of the integration of Fisia into the group. And afterwards, I led the SBF Ventures. And finally, most recently, I've had the privilege and opportunity to lead Centauro, which is very cool at the end of 2 years to be able to present these results, the best historical results. So I'm very excited about this new challenge.

And I'm also very confident that we're going to be able to continue to write one more chapter of success in a company which over these last 44 years has been innovating and marking the sporting goods industry as a whole. So once again, I just want to say hi, and we'll be seeing you again more. But before giving it back to Pedro, I wanted to wish him a super success in his new undertaking. I'm sure he is going to be very successful. But in any event, Pedro, success in your new undertakings. Thank you.

Thank you. I'm very happy to close my cycle as these -- with good -- cycle with good results with an internal results when you see the company that is -- the company that we're passing along, the company that will continue to evolve and will jump from this level to even higher levels.

And to close, I just want to thank each one of you, the banks and the partners, especially for the analysts from the sell-side, thank all of our stockholders and our Board for their partnership during this journey and also thank the IR team. This is my 24th call -- and make a special thanks and to express my confidence in the company with the arrival of Gustavo and for the partnership, which he will build with Salazar.

This is my 24th call that I make as a CEO and my 24th with Salazar. It's been an incredible journey, a restructuring of IPO, a follow-on of M&A. And we have -- we're only here in this place because Salazar was together and has always been a strong hand conducting the company, and I'm very, very happy that he will now continue building the future of the company together with Gustavo, so thank, Salazar. Thank you, all. That's it. Thank you very much.

The video conference of SBF Group is now closed. We thank you for your participation. Please have a good day.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]