Brazil Retail May 31, 2023

Equity Research / Retail

Data Expert | XP Retail Big Box: Talking with food retail stakeholders
Feedbacks from our recent talks with non-listed retailers and food industry companies

Danniela Eiger, CFA

In this month’s edition of Big Box, we share feedbacks on the food retail landscape based on our recent talks with different players (non-listed retailers and industry). Retail
The key messages were: i) São Paulo’s increased competition is being felt across the space; ii) Smaller/regional industry players supporting the retail format through danniela.eiger@xpi.com.br
better purchase conditions; iii) Retail as a strategic format for branding; and iv) Players are already perceiving GMAT’s professionalization. We keep our Buy on Grupo
Gustavo Senday
Mateus (GMAT3) and Assaí (ASAI3) and Neutral on Carrefour Brasil (CRFB3) and GPA (PCAR3).
Retail
gustavo.senday@xpi.com.br
Higher competition in SP being felt across the space. According to Nielsen, São Paulo posted the first negative SSS since the beginning of the study, down 1.5% yoy
during Jan-Apr/23, with the decline accelerating in May. This dynamics is mainly explained by (i) a decelerating food inflation, which should hover around low single Thiago Suedt
Retail
digit for the rest of the year and is expected to hit its lowest level on Aug/23; and (ii) increased competition, driven by ASAI and CRFB’s recent conversions of
thiago.suedt@xpi.com.br
hypermarkets into Cash&Carry. Also, some non-listed players noted that the retail format has been outperforming recently, potentially explained by a better value
proposition, while we believe a channel trade-up could take place as consumers’ purchasing power increases.

Smaller/regional industry companies supporting retail format. We visited the APAS fair (the largest F&B fair in LatAm) and talked with a few industry players to get a
better sense of food retail dynamics. Overall, we noted that smaller/regional players are providing better purchase conditions to help the retail channel to remain
competitive vs. C&C as the format is strategic for the industry in terms of product launches and branding. We also spoke with multinationals but note that they
haven’t changed their sourcing strategy.

Players noting GMAT’s higher professionalization. Industry players have already noted a difference on GMAT’s negotiations, with the company asking for increased
payment deadlines while also improving trade marketing practices towards ASAI and CRFB. However, companies highlighted that GMAT continues to have a
cooperation approach with the industry.

GMAT as our top pick. We keep our Buy on Grupo Mateus (GMAT3) and Assaí (ASAI3), though placing GMAT as our top pick in the space given a better short-mid
term balance. Moreover, we keep our Neutral on Carrefour Brasil (CRFB3) and GPA (PCAR3) as we expect CRFB to continue to struggle with Grupo BIG’s
integration while we see execution risks with Pão de Açucar’s turnaround.

EQUITY RESEARCH 1
 Equity Research / Retail

Brazil – Macro Overview

Sector Data
E-commerce
Apparel

Summary Supermarkets
Pharmacies

Valuation Comps

EQUITY RESEARCH 2
 Equity Research / Retail

Brazil – Macro Overview

EQUITY RESEARCH 3
Brazil – Macro Overview May 31, 2023
Equity Research / Retail

Figure 1: Brazilian GDP Figure 2: Brazilian core inflation (IPCA) - LTM Figure 3: Brazilian Inflation breakdown by Component (LTM)
10,0% 14% 25%
8,0% 12% 20%
6,0% 10% 15%
4,0% 10%
8%
2,0% 5%
6%
0,0% 0%
4%
-2,0% -5%

Oct-10

Jan-13
Oct-13

Oct-16

Oct-19

Oct-22
Jan-10

Apr-12

Apr-15
Jan-16

Apr-18
Jan-19

Apr-21
Jan-22
Jul-11

Jul-14

Jul-17

Jul-20
-4,0% 2%

-6,0% 0%

Oct-10

Oct-13

Oct-16

Oct-19

Jan-22
Oct-22
Jan-10

Apr-12
Jan-13

Apr-15
Jan-16

Apr-18
Jan-19

Apr-21
Jul-11

Jul-14

Jul-17

Jul-20
2022e

2023e
2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021 Food & Beverage Apparel Furniture

Personal Care Personal Expenses

Figure 4: Unemployment in Brazil Figure 5: CAGED - Monthly jobs created (in thousands) Figure 6: Default (million of consumers)
16% 400 600 72
14% 300 70
200 400
12% 68
100 200
10% - 66
8% (100) 64
6% (200) -200 62
(300) 60
4% -400
(400)
2% (500) 58
-600
0% (600) 56
-800 54
Feb-14

Oct-18

Dec-19

Feb-21
Sep-14
Apr-15

Jun-16
Jan-17
Aug-17

May-19

Sep-21
Apr-22
Nov-15

Mar-18

Jul-20

Nov-22

-1000 52

May-21
Jan-17
May-17
Sep-17
Jan-18
May-18
Sep-18
Jan-19
May-19
Sep-19
Jan-20
May-20
Sep-20
Jan-21

Sep-21
Jan-22
May-22
Sep-22
Jan-23
Dec-20

Dec-21

Dec-22
Jun-20

Sep-20

Jun-21

Sep-21

Jun-22

Sep-22
Mar-20

Mar-21

Mar-22

Mar-23
% Unenployment rate (LHS) bps yoy change (RHS)

Source: IBGE, Serasa and XP Research EQUITY RESEARCH 4

Brazil – Macro Overview May 31, 2023
Equity Research / Retail

Figure 7: Consumer Confidence Index (from 0-200) Figure 8: Households’ consumption intention (0-200) Figure 9: Retailers’ confidence index (0-200)
120 160 120
110 110
140
100 100
120
90 90
80 100 80
70 70
80
60 60
60
50 50
40 40 40
Jan-19

Jan-11

Jan-16

Jan-21

Jan-17
Jan-10

Jan-11

Jan-12

Jan-13

Jan-14

Jan-15

Jan-16

Jan-17

Jan-18

Jan-20

Jan-21

Jan-22

Jan-23

Jan-10

Jan-12

Jan-13

Jan-14

Jan-15

Jan-17

Jan-18

Jan-19

Jan-20

Jan-22

Jan-23

Jan-11

Jan-12

Jan-13

Jan-14

Jan-15

Jan-16

Jan-18

Jan-19

Jan-20

Jan-21

Jan-22

Jan-23
Figure 10: ICVA - Cielo Retail Index (YoY) Figure 11: Retail bankruptcies (# of filings) Figure 12: Retail Chapter 11s (# of filings)
50% 60 90
Nominal Real
40% 80
30% 50
70
20%
40 60
10%
50
0% 30
-10% 40
-20% 20 30
-30% 20
10
-40% 10
-50% 0 0
Jan-15

Jan-16

Jan-17

Jan-18

Jan-19

Jan-20

Jan-21

Jan-22

Jan-23

Jan-15

Jan-16

Jan-17

Jan-18

Jan-19

Jan-20

Jan-21

Jan-22

Jan-23
Jul-15

Jul-16

Jul-17

Jul-18

Jul-19

Jul-20

Jul-21

Jul-22

Jul-15

Jul-16

Jul-17

Jul-18

Jul-19

Jul-20

Jul-21

Jul-22
Source: IBGE, Cielo, FGV, LCA and XP Research EQUITY RESEARCH 5
Brazil – Macro Overview May 31, 2023
Equity Research / Retail

Figure 13: Brazil Core retail sales (YoY) Figure 14: Retail sales by segment (LTM) Figure 15: Retail sales by region (YoY)
30% 50%
25% 40%
20% 30%
0% 20%
15%
10%
10% 0%
5% -10%
0% -20%
-5% -30%
-50%

Oct-19

Oct-20

Oct-21

Oct-22
Jan-19
Apr-19

Jan-20
Apr-20

Jan-21
Apr-21

Jan-22
Apr-22

Jan-23
Jul-19

Jul-20

Jul-21

Jul-22
-10%

Jan-15

Jan-16

Jan-17

Jan-18

Jan-19

Jan-20

Jan-21

Jan-22

Jan-23
Jul-19
Jul-15

Jul-16

Jul-17

Jul-18

Jul-20

Jul-21

Jul-22
-15%
-20%
North Northeast Southeast
Jan-15

Jan-16

Jan-17

Jan-18

Jan-19

Jan-20

Jan-21

Jan-22

Jan-23
Jul-15

Jul-16

Jul-17

Jul-18

Jul-19

Jul-20

Jul-21

Jul-22
Hypermarkets and Supermarkets Clothes and shoes
Furniture and White line Pharmacy items
South Midwest
Books & Magazines Office Items

Source: IBGE, LCA, Google and XP Research. *Jan. 03, 2020 to Feb. 06, 2020. EQUITY RESEARCH 6
Brazil – Temperatures Overview May 31, 2023
Equity Research / Retail

Figure 16: Average historical temperature by city (°C) Figure 17: Average temperature variation by city (yoy) Figure 18: Average max temperature variation by city (yoy)
30,0° 2,0°
3,5°
3,0°
26,0° 2,5° 0,0°
2,0°
22,0° 1,5°
1,0° -2,0°
0,5°
18,0°
0,0°
-0,5° -4,0°
14,0° -1,0°
-1,5°
10,0° -2,0° -6,0°
jan/23 fev/23 mar/23 abr/23 mai/23

4,00
1,00
2,00
3,00
4,00
5,00
6,00
7,00
8,00
9,00

1,00
2,00
3,00
10,00
11,00
12,00

Brasilia Porto Alegre (Jardim Botânico) -8,0°

2022 2023 jan/23 fev/23 mar/23 abr/23

Rio de Janeiro (Copacabana) São Paulo (Interlagos)

Brasilia Brasilia Porto Alegre (Jardim Botânico)
Porto Alegre (Jardim Botânico) Rio de Janeiro (Copacabana) São Paulo (Interlagos)
Rio de Janeiro (Copacabana) Belo Horizonte
Belo Horizonte
São Paulo (Interlagos)

Source: INMET and XP Research.

EQUITY RESEARCH 7
 Equity Research / Retail

Sector Data
E-commerce
EQUITY RESEARCH 8
Ecommerce May 31, 2023
Equity Research / Retail

Figure 19: Small value imports via international orders (US$ million) as a proxy for cross-border plataforms

1 800 200%

1 600

150%
1 400

1 200
100%
1 000

800
50%
600

400
0%

200

- -50%

Small value imports via international orders (US$ milion) YoY

Source: Bacen EQUITY RESEARCH 9

Ecommerce May 31, 2023
Equity Research / Retail

Companies’ Insiders’ Trading

Table 1: Companies’ Insiders’ Trading tracking; (selling as - / buying as +)
R$000 Magazine Luiza Via Americanas
Month Treasury Controller Board Executives Treasury Controller Board Executives Treasury Controller Board Executives
aug/22 - (91) - - - - - - - (1.953) - (46.134)
sep/22 - - - - - - - - - - - (129.152)
oct/22 - - - - - - - - - - - (28.353)
nov/22 - - - - - - 754 - - - - -
dec/22 - - - - - - - - - - - -
jan/23 - (874) - - - - - - - - - -
feb/23 - (940) - - - - - - - - - -
mar/23 - - - - - - - - - - - -
apr/23 - - - - - - - - - - - -

Source: CVM, XP Research. EQUITY RESEARCH 10

E-commerce May 31, 2023
Equity Research / Retail

Historical Multiples
Figure 20: MGLU3 Historical 12M Forward EV/EBITDA Figure 21: VIIA3 Historical 12M Forward EV/EBITDA

20
90 18
16
70 14
12
50 10,9x
10
37,8x 8
30 7,2x
6
17,3x 4 3,6x
10 10,3x 2 2,6x
-3,2x 0
-10

Sep-19

Nov-19

Sep-20

Nov-20

Sep-21

Nov-21

Sep-22

Nov-22
Mar-19

Jul-19

Mar-20

Jul-20

Mar-21

Jul-21

Mar-22

Jul-22

Mar-23
Jan-19

May-19

Jan-20

May-20

Jan-21

May-21

Jan-22

May-22

Jan-23

May-23
MGLU3.SA EV/EBITDA MGLU3.SA Avg. MGLU3.SA + 1dp MGLU3.SA - 1dp VIIA3.SA EV/EBITDA VIIA3.SA Avg. VIIA3.SA + 1dp VIIA3.SA - 1dp

Figure 22: ENJU3 Historical 12M Forward EV/Sales

80

70

60
56,2x
50
46,1x
40 41,1x
36,0x
30

20
Aug-21

Aug-22
Sep-21
Oct-21

Sep-22
Oct-22
Jun-21
Jul-21

Nov-21

Jun-22
Jul-22

Nov-22
Jan-21
Feb-21
Mar-21
Apr-21
May-21

Dec-21
Jan-22
Feb-22

Dec-22
Jan-23
Mar-22
Apr-22
May-22

Feb-23
Mar-23
Apr-23
May-23

ENJU3.SA Sales ENJU3.SA Sales ENJU3.SA Sales ENJU3.SA Sales

Source: LSEG Refinitv and XP Research EQUITY RESEARCH 11

 Equity Research / Retail

Sector Data
Consumer Discretionary
EQUITY RESEARCH 12
Apparel May 31, 2023
Equity Research / Retail

Sector Data
Figure 23: Footwear and Apparel Sales (LTM) Figure 24: Apparel Inflation (LTM) Figure 25: Apparel and accessories production (MoM)
30% 25% 40%
30%
20% 20%
20%
10% 15% 10%
0%
0% 10%
-10%
-10% 5% -20%
-30%
-20% 0% -40%
-50%
-30% -5%

Jan-17
May-17
Sep-17
Jan-18
May-18
Sep-18
Jan-19
May-19
Sep-19
Jan-20
May-20
Sep-20
Jan-21
May-21
Oct-19
Oct-10

Oct-13

Oct-16

Oct-22
Jan-10

Apr-12
Jan-13

Apr-15
Jan-16

Apr-18
Jan-19

Apr-21
Jan-22
Jul-11

Jul-14

Jul-17

Jul-20
Jan-15

Jan-16

Jan-17

Jan-18

Jan-19

Jan-20

Jan-21

Jan-22

Jan-23
Jul-21
Jul-15

Jul-16

Jul-17

Jul-18

Jul-19

Jul-20

Jul-22
Figure 26: Malls penetration on retail sales (as a proxy) Figure 27: Foot traffic (MoM) Figure 28: Reclame Aqui – Clients’ grade (online stores)
10,0
22% Shopping Malls Street Malls
8,0
20% 200%
20% 150% 6,0
20%
18% 19% 19% 100% 4,0
19%
17% 18% 17% 18% 50%
16% 2,0
16% 0%
-50% -
14%
14% -100%
12% -150%
Jul/20

Jul/21

Jul/22
Oct/20

Oct/21

Jan/22

Oct/22
Jan/20

Apr/20

Jan/21

Apr/21

Apr/22

Jan/23

Apr/23
10%
Last 6 months 2021 2020
20102011201220132014201520162017201820192020

Source: IBGE, Serasa and XP Research EQUITY RESEARCH 13

Consumer Discretionary May 31, 2023
Equity Research / Retail

Historical Multiples
Figure 29: ARZZ3 Historical 12M Forward P/E Figure 30: VIVA3 Historical 12M Forward P/E Figure 31: MLAS3 Historical 12M Forward P/E
40 10
45
35 9
40
30 8
35 7 6,8x
25 26,7x
30 6
27,1x 20 5,2x
25 20,6x 5
20 21,4x 15 13,4x 4 4,2x
10 13,3x 3 3,3x
15 15,8x 2
10 15,1x 5 1
5 0 0
0

VIVA3.SA P/E VIVA3.SA Avg. MLAS3.SA P/E MLAS3.SA Avg.

ARZZ3.SA ARZZ3.SA Avg. VIVA3.SA - 1dp VIVA3.SA + 1dp
MLAS3.SA - 1dp MLAS3.SA + 1dp
ARZZ3.SA + 1dp ARZZ3.SA - 1dp
Figure 32: ALPA4 Historical 12M Forward P/E Figure 33: NTCO3 Historical 12M Forward P/E Figure 34: PETZ3 Historical 12M ForwardP/E
60 160
90
50 140
80
120 72,5x
40 70
100
30 29,6x 60
80 50 49,9x
20 18,6x 60 67,9x
40
10 16,1x 46,3x
7,6x 40 30 27,2x
28,4x 20 24,7x
0 20
10,4x 10
0
0

ALPA4.SA - 1dp ALPA4.SA P/E

NTCO3.SA - 1dp NTCO3.SA P/E PETZ3.SA - 1dp PETZ3.SA P/E
ALPA4.SA Avg. ALPA4.SA + 1dp
NTCO3.SA Avg. NTCO3.SA + 1dp PETZ3.SA Avg. PETZ3.SA + 1dp

Source: LSEG Refinitv and XP Research EQUITY RESEARCH 14

Apparel May 31, 2023
Equity Research / Retail

Historical Multiples
Figure 35: CEAB3 Historical 12M Forward P/E Figure 36: GUAR3 Historical 12M Forward P/E
60
250
50
200
150 40

100 30
50 54,4x
20 21,1x
21,4x
0 14,1x
-11,7x 10
-50 -38,9x 8,0x
0 7,1x
-100

CEAB3.SA P/E CEAB3.SA Avg. CEAB3.SA + 1dp CEAB3.SA - 1dp GUAR3.SA P/E GUAR3.SA Avg. GUAR3.SA + 1dp GUAR3.SA - 1dp

Figure 37: LREN3 Historical 12M Forward P/E Figure 38: SOMA3 Historical 12M Forward P/E

40 50
35 45
40
30
27,4x 35
25 30 30,5x
20 21,9x 25
16,5x 20
22,6x
15
13,4x 15 14,7x
10
10 14,3x
5 5
0 0

Sep-21

Sep-22
Aug-21

Aug-22
Jul-21

Jul-22
Nov-20

Jun-21

Nov-21

Jun-22

Nov-22
Dec-20
Jan-21

Dec-21
Jan-22
Oct-20

Feb-21
Mar-21
Apr-21

Oct-21

Feb-22
Mar-22
Apr-22

Dec-22
Jan-23
Oct-22

Feb-23
Mar-23
Apr-23
May-21

May-22

May-23
LREN3.SA P/E LREN3.SA Avg. LREN3.SA + 1dp LREN3.SA - 1dp SOMA3.SA P/E SOMA3.SA Avg. SOMA3.SA + 1dp SOMA3.SA - 1dp

Source: LSEG Refinitv and XP Research EQUITY RESEARCH 15

Sports Apparel May 31, 2023
Equity Research / Retail

Historical Multiples
Figure 39: SBFG3 Historical 12M Forward P/E Figure 40: VULC3 Historical 12M Forward P/E

50 18
45 16
40 14
35 34,1x 11,4x
12
30
10 9,5x
25 23,9x
8 7,7x
20
6 7,6x
15 13,8x
10 4
5
6,7x 2
0 0
1-Jul-19 1-Jan-20 1-Jul-20 1-Jan-21 1-Jul-21 1-Jan-22 1-Jul-22 1-Jan-23 1-Jan-18 1-Jul-18 1-Jan-19 1-Jul-19 1-Jan-20 1-Jul-20 1-Jan-21 1-Jul-21 1-Jan-22 1-Jul-22 1-Jan-23

SBFG3.SA P/E SBFG3.SA Avg. SBFG3.SA + 1sd SBFG3.SA - 1sd VULC3.SA P/E VULC3.SA Avg. VULC3.SA + 1sd VULC3.SA - 1sd

Figure 41: TFCO4 Historical 12M Forward P/E

20
18
16
14
12 12,1x
10
9,1x
8
6 6,1x
4 5,7x
2
0
1-Jan-21 1-Jul-21 1-Jan-22 1-Jul-22 1-Jan-23

TFCO4.SA P/E TFCO4.SA Avg. TFCO4.SA + 1sd TFCO4.SA - 1sd

Source: LSEG Refinitv and XP Research EQUITY RESEARCH 16

Consumer Discritionary May 31, 2023
Equity Research / Retail

Companies’s Insiders’s Trading

Table 2: Companies’ Insiders’ Trading tracking; (selling as - / buying as +)
R$000 Arezzo&Co. Alpargatas Multilaser Grupo Soma
Month Treasury Controller Board Executives Treasury Controller Board Executives Treasury Controller Board Executives Treasury Controller Board Executives
- - (271) - - 34 - - - - - - (16.376) - -
ago/22 (1.780)

- - - - - 109.011 - - - (1.608) 771 - (6.868) - -

set/22 (6.756)

- - - - - (2.369) - - - 3.861 - - (15.433) - -

out/22 (5.490)

- - - - - - (12.799) - - - - - - (8.251) - -
nov/22
- (79.384) - - - 2.700 - - (3.121) (72.394) - - (15.948) - -
dez/22 (3.121)

jan/23 - (19.643) - - - 28.497 - - - - - - (268) - -

(4.494)

fev/23 - - - - - - 2.904 - - - - - - - -
(2.222)

mar/23
- (3.206) - - - - (35.912) - - 1.779 - 201 - (2.350) - -
apr/23
- (7.444) - - - - 4.328 - - 11.701 - 2.820 - (39) - -

Source: CVM, XP Research. EQUITY RESEARCH 17

Consumer Discritionary May 31, 2023
Equity Research / Retail

Companies’s Insiders’s Trading

Table 3: Companies’ Insiders’ Trading tracking; (selling as - / buying as +)

R$000 Lojas Renner Grupo SBF Petz Vivara

Month Treasury Controller Board Executives Treasury Controller Board Executives Treasury Controller Board Executives Treasury Controller Board Executives

ago/22 - - - - - - - - - - - - - - - -

set/22 - - - - - - - - - - - - - - - -

out/22 - - - - - - - - - - - - - - - -

nov/22 - - - - - - 12 - - - - - - - - -

dez/22 - (3.121) (72.394) - - - (394) - - - (630) - - - - -

jan/23 - - - (20) - - - - - - - - - (5.604) - (18)

fev/23 - - - (20) - - - - - - - - - (9.980) - -

mar/23 - - - - - - - - - - - - - (154.230) 440 -

apr/23 - - - (17) - - - - - - - (622) - (4.000) - -

Source: CVM, XP Research. EQUITY RESEARCH 18

 Equity Research / Retail

Sector Data
Supermarkets
EQUITY RESEARCH 19
Supermarkets May 31, 2023
Equity Research / Retail

Sector Data
Figure 42: Food and Beverages Inflation (LTM) Figure 43: ABRAS - Supermarket Sales (1990 = 100) Figure 44: ABRAS - Supermarkets Sales (Real YoY growth)

25% 650,0 20%

20% 600,0
550,0 15%
15%
500,0
10% 10%
450,0
5% 400,0 5%
0% 350,0
-5% 300,0 0%
-10% 250,0
200,0 -5%
Oct-10

Oct-13

Oct-16

Oct-19

Oct-22
Jan-10

Apr-12
Jan-13

Apr-15
Jan-16

Apr-18
Jan-19

Apr-21
Jan-22
Jul-11

Jul-14

Jul-17

Jul-20

Jan-18

May-18

Sep-18

Jan-19

May-19

Sep-19

Jan-20

May-20

Sep-20

Jan-21
Mar-21
Mar-18

Nov-18
Jul-18

Mar-19

Nov-19
Jul-19

Mar-20

Nov-20
Jul-20
150,0

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021
F&B F&B home F&B on premise
Figure 45: ABRAS – Operating stores (#000) Figure 46: ALELO cards – payments data (vs. 2019)
94 30%
92 20%
90 10%
0%
88
-10%
86
-20%
84
-30%
82
80
78
# of supermarkets Payments value
76
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Payments volume

Source: IBGE, Serasa and XP Research EQUITY RESEARCH 20

Supermarkets May 31, 2023
Equity Research / Retail

Historical Multiples
Figure 47: CRFB3 Historical 12M Forward P/E Figure 48: ASAI3 Historical 12M Forward P/E

24 20
22 18
20 16,9x
19,2x 16
15,0x
18
16 16,2x 14
13,0x
14 12
13,3x 10,5x
12 10
11,8x
10
8
8
6 6
4 4

CRFB3.SA CRFB3.SA Avg. CRFB3.SA + 1dp CRFB3.SA - 1dp ASAI3.SA ASAI3.SA Avg. ASAI3.SA + 1dp ASAI3.SA - 1dp

Figure 49: GMAT3 Historical 12M Forward P/E Figure 50: PCAR3 Historical 12M Forward EV/EBITDA
25
12

20 10
17,3x 8
15
6,7x
13,0x 6
10 10,9x 4,9x
8,7x 4
3,4x
5 2 3,1x

0 0

Dec-18

Oct-19
Dec-19

Oct-20
Dec-20

Oct-21
Dec-21

Oct-22
Dec-22
Feb-19
Apr-19
Jun-19

Feb-20
Aug-19

Apr-20
Jun-20

Feb-21
Aug-20

Apr-21
Jun-21

Feb-22
Aug-21

Apr-22
Jun-22

Feb-23
Aug-22

Apr-23
PCAR3.SA EV/EBITDA PCAR3.SA Avg. PCAR3.SA + 1dp PCAR3.SA - 1dp
GMAT3.SA P/E GMAT3.SA Avg. GMAT3.SA + 1dp GMAT3.SA - 1dp

Source: LSEG Refinitv and XP Research EQUITY RESEARCH 21

Supermarkets May 31, 2023
Equity Research / Retail

Companies’ Insiders’ Trading

Table 4: Companies’ Insiders’ Trading tracking; (selling as - / buying as +)
R$000 Assaí
Month Treasury Controller Board Executives

ago/22 - - (180) -

set/22 - - - -

out/22 - - - -

nov/22 - (974) -
(2.675.200)
dez/22 - - - -

jan/23 - - - -

fev/23 - - - -

mar/23
- (4.064.000) - -
apr/23 - - - -

Source: CVM, XP Research. EQUITY RESEARCH 22

 Equity Research / Retail

Sector Data
Pharmacies
EQUITY RESEARCH 23
 15%
20%
25%
30%
35%
40%
-4%
-2%
10%
12%
14%
16%

-6%
0%
2%
4%
6%
8%
Jan-10
Jul-10 Jan-15
Jan-11 May-15
Jul-11 Sep-15
Jan-12 Jan-16
Sector Data

Jul-12 May-16
Pharmacies

Jan-13 Sep-16
Jul-13 Jan-17
Figure 51: Pharmacies’ sales (LTM)

Jan-14 May-17
Jul-14 Sep-17
Jan-15 Jan-18
Jul-15 May-18
Jan-16 Sep-18
Jul-16

Figure 53: Generics share (as a % of total boxes’ sell in)

Jan-19
Jan-17 May-19
Jul-17
Sep-19
Jan-18

Source: IBGE, SimilarWeb, Sindusfarma and XP Research

Jan-20
Jul-18
May-20
Jan-19
Sep-20
Jul-19
Jan-21
Jan-20
May-21
Jul-20
Sep-21
Jan-21
Jan-22
Jul-21
May-22
Jan-22
Sep-22
Jul-22
Jan-23
Jan-23
100
200
300
400
500
600

10%
15%

-5%
20%

0%
5%

Jan-10 Jan-19
Jul-10 Mar-19
Jan-11 May-19
Jul-11 Jul-19
Jan-12 Sep-19
Jul-12 Nov-19
Jan-13 Jan-20
Jul-13 Mar-20
Jan-14 May-20
Jul-14
Jul-20
Jan-15
Sep-20
Jul-15
Nov-20
Figure 52: Sales of medicines (millions of boxes)

Jan-16
Jan-21
Jul-16
Mar-21
Figure 54: Health and Personal care itens inflation (LTM)

Jan-17
May-21
Jul-17
Jul-21
Jan-18
Sep-21
Jul-18
Nov-21
Jan-19
Jan-22
Jul-19
Mar-22
Jan-20
May-22
Jul-20
Jul-22
Jan-21
Jul-21 Sep-22

Jan-22 Nov-22

Jul-22 Jan-23

Jan-23 Mar-23
EQUITY RESEARCH
Equity Research / Retail
May 31, 2023

24
Pharmacies May 31, 2023
Equity Research / Retail

Historical Multiples
Figure 55: RADL3 Historical 12M Forward P/E Figure 56: PNVL3 Historical 12M Forward P/E

70 60
60
50
50
42,7x 40 38,4x
40
36,8x
30
30 33,6x 28,1x
24,4x 20
20 17,7x
10 10 11,2x

0 0

RADL3.SA P/E RADL3.SA Avg. RADL3.SA + 1dp RADL3.SA - 1dp PNVL3.SA P/E PNVL3.SA Avg. PNVL3.SA + 1dp PNVL3.SA - 1dp

Figure 57: PGMN3 Historical 12M Forward P/E

35
30
25 25,1x
20
17,7x
15
10,2x
10
8,2x
5
0
Aug-21

Aug-22
Sep-21

Sep-22
Feb-21

Jun-21
Jul-21

Nov-21

Jul-22

Nov-22
Jan-21

Oct-21

Feb-22

Jun-22

Oct-22

Feb-23
Mar-21
Apr-21
May-21

Dec-21
Jan-22

Mar-22
Apr-22
May-22

Dec-22
Jan-23

Mar-23
Apr-23
May-23

PGMN3.SA P/E PGMN3.SA Avg. PGMN3.SA + 1dp PGMN3.SA - 1dp

Source: LSEG Refinitv and XP Research EQUITY RESEARCH 25

Pharma May 31, 2023
Equity Research / Retail

Companies’ Insiders’ Trading

Table 5: Companies’ Insiders’ Trading tracking; (selling as - / buying as +)

R$000 Raia Drogasil d1000 Pague Menos Panvel

Month Treasury Controller Board Executives Treasury Controller Board Executives Treasury Controller Board Executives Treasury Controller Board Executives
ago/22 - - (8.244) - 1 - - - - - - - - - -
(82.820)
set/22 - - (3.020) - 2 - - - 792 235 (58) - (68) 68 -
(3.677)
out/22 - - (21.075) - 0 - - - 22 (44) - - (35) 35 -
(186.502)
nov/22 - - (5.243) - - - 5 - 453 - - - - - -
(62.265)
dez/22 - - - - - - - - - (5.032) 612 - - - - -

jan/23 - - - - - - - - - 61 25 (237) - - - -

fev/23 - - - - - - - - - - (2) (522) - - - -

mar/23
- (21.977) - (3.814) - - - - - (412) 39 - - (225) - -
apr/23
- (56.161) - - - - - - - 893 105 63 - - - -

Source: CVM, XP Research. EQUITY RESEARCH 26

Retail Calendar May 31, 2023
Equity Research / Retail
Sunday Monday Tuesday Wednesday Thursday Friday Saturday
1 2 3

• Brazil: GDP Growth Rate (Q1) • Brazil: IPC-Fipe Inflation

• Brazil: Balance of Trade • US: Unemployment Rate

4 5 6 7 8 9 10

• China: Balance of Trade • China: Inflation Rate

• Brazil: Focus Market • US: Balance of Trade Brazilian Holiday: Corpus
• Euro Area: Retail Sales
Readout • Brazil: Inflation Rate Christi

11 12 13 14 15 16 17

• Brazil: Focus Market • Brazil: Retail Sales • Euro Area: Inflation Rate
Readout • US: Inflation Rate • Brazil: Business Confidence • US: Retail Sales • Brazil: IBC-BR Economic
Commercial Holiday: • China: Retail Sales Activity
Valentine’s Day • China: Unemployment Rate

18 19 20 21 22 23 24

• Brazil: FGV Consumer

• Brazil: Focus Market
• Brazil: Interest Rate Decision Confidence
Readout
• Brazil: IGP-M Inflation

25 26 27 28 29 30
• Brazil: Unemployment Rate
• Brazil: Focus Market • Euro Area: Unemployment
• Brazil: IPCA mid-month CPI
Readout Rate
• US: Personal Spending

Source: Trading Economics and XP Research EQUITY RESEARCH 27

Retail Calendar May 31, 2023
Equity Research / Retail

Holidays and working days tracking

Table 6: Tracking of Brazilian national holidays in 2023

Date Week day Holiday

1-Jan Sunday Confraternização Universal
20-Feb Monday Carnaval
21-Feb Tuesday Carnaval
7-Apr Friday Paixão de Cristo
21-Apr Friday Tiradentes
1-May Monday Dia do Trabalho
8-Jun Thursday Corpus Christi
7-Sep Thursday Independência do Brasil
12-Oct Thursday Nossa Sr.a Aparecida - Padroeira do Brasil
2-Nov Thursday Finados
15-Nov Wednesday Proclamação da República
25-Dec Monday Natal

Source: ANBIMA and XP Research EQUITY RESEARCH 28

Valuation Comps May 31, 2023
Equity Research / Retail

XP’s Retail Coverage

EV/Sales EV/EBITDA P/E EBITDA Margin ROIC ADTV
Company Ticker Rating Price Target Price Upside
2023e 2024e 2023e 2024e 2023e 2024e 2023e 2024e 2023e 2024e R$mn
E-commerce 0,1x 0,2x 3,9x 4,8x 29,6x 16,3x 6% 8% 23% 22% 119
Enjoei ENJU3 Neutral 1,2 1,2 -1,6% -0,1x 0,1x 0,6x n.m. n.m. n.m. n.a. n.a. n.m n.m 1
Magazine Luiza MGLU3 Neutral 3,7 5,0 34,0% 0,7x 0,6x 8,9x 7,3x n.m. 29,0x 7% 8% 16% 19% 457
Via VIIA3 Neutral 2,3 3,0 29,3% 0,2x 0,2x 2,1x 2,4x n.m. 16,5x 9% 9% 29% 24% 117
Americanas S.A. AMER3 Under Review 1,1 n.a. - - - - - - - - - - - 18
Discretionary 1,1x 1,0x 6,4x 5,1x 13,2x 14,3x 16% 18% 20% 21% 84
Arezzo & Co. ARZZ3 Buy 73,8 100,0 35,5% 1,5x 1,2x 9,4x 7,2x 14,6x 11,4x 16% 17% 50% 58% 133
Alpargatas ALPA4 Neutral 10,5 15,0 43,4% 1,2x 1,0x 6,1x 4,7x 14,8x 10,2x 19% 21% 19% 27% 98
Grupo Soma SOMA3 Buy 10,3 14,0 35,8% 1,4x 1,2x 8,7x 6,0x 16,2x 10,0x 16% 19% 7% 11% 116
C&A CEAB3 Neutral 4,4 3,5 -19,7% 0,4x 0,4x 2,8x 2,4x n.m. 51,6x 14% 15% 3% 15% 19
Guararapes GUAR3 Neutral 4,8 6,5 34,3% 0,5x 0,5x 3,8x 3,6x 14,3x 9,5x 14% 14% 19% 17% 8
Lojas Renner LREN3 Buy 19,3 27,0 39,8% 1,1x 0,9x 5,5x 4,1x 13,8x 10,2x 20% 22% 16% 21% 423
Grupo SBF SBFG3 Buy 9,9 16,0 61,9% 0,5x 0,4x 3,4x 2,8x 11,2x 6,3x 14% 16% 14% 16% 19
Track & Field TFCO4 Neutral 10,8 11,0 1,9% 2,4x 2,0x 9,0x 7,5x 16,0x 13,5x 26% 27% 36% 37% 2
Vulcabras VULC3 Buy 15,8 19,0 20,3% 1,3x 1,1x 6,4x 5,2x 8,5x 6,9x 20% 21% 21% 24% 10
Petz PETZ3 Buy 7,2 10,0 38,1% 0,8x 0,6x 9,4x 7,1x 24,8x 14,3x 8% 9% 7% 10% 80
Vivara VIVA3 Buy 24,9 28,0 12,3% 2,7x 2,4x 10,4x 8,9x 15,1x 14,6x 26% 27% 29% 26% 54
Multilaser MLAS3 Buy 2,4 6,0 154,2% 0,3x 0,3x 3,4x 2,2x 7,1x 3,6x 9% 13% 10% 19% 8
Natura&Co. NTCO3 Buy 13,8 18,0 30,2% 0,5x 0,5x 5,2x 4,4x 2,5x 23,8x 10% 11% 27% 0% 199
Food Retail 0,3x 0,3x 5,2x 4,0x 11,5x 7,8x 7% 7% 9% 12% 112
Assaí ASAI3 Buy 11,6 19,0 64,4% 0,3x 0,3x 5,0x 4,0x 15,1x 9,2x 7% 7% 10% 15% 227
Carrefour Brasil CRFB3 Neutral 9,6 20,0 108,3% 0,2x 0,2x 3,5x 3,0x 11,1x 7,1x 6% 6% 7% 10% 128
Grupo Mateus GMAT3 Buy 7,2 10,0 39,9% 0,6x 0,5x 10,0x 7,0x 12,5x 8,5x 6% 7% 18% 21% 44
GPA PCAR3 Neutral 16,1 19,0 17,7% 0,2x 0,2x 2,3x 2,1x 7,3x 6,3x 8% 8% 1% 2% 49
Pharmacies 0,5x 0,4x 7,8x 6,4x 20,4x 14,9x 6% 6% 14% 14% 41
d1000 DMVF3 Neutral 4,3 5,0 16,3% 0,1x 0,1x 1,4x 1,2x 7,7x 6,1x 7% 7% 12% 10% 0
Pague Menos PGMN3 Buy 3,3 7,0 112,1% 0,2x 0,2x 4,5x 4,2x 11,9x 8,7x 4% 5% 15% 12% 4
Panvel PNVL3 Buy 11,6 15,0 29,1% 0,3x 0,3x 6,9x 5,7x 13,6x 9,5x 5% 6% 12% 14% 4
Raia Drogasil RADL3 Sell 28,5 22,0 -22,7% 1,3x 1,1x 18,2x 14,7x 48,5x 35,4x 7% 8% 17% 21% 155

Source: XP Research
EQUITY RESEARCH 29
Disclaimer May 31, 2023
Equity Research / Retail
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EQUITY RESEARCH 30
Equity Research / Retail

EQUITY RESEARCH 31