Empreendimentos Pague Menos (PGMN3) investor relations material

Executive summary

• Achieved record-breaking results across all key financial and operational metrics, with strong growth in market share, sales, and profitability driven by customer-centric strategies and operational excellence.

• Sixth consecutive quarter of growth acceleration, with same-store sales up 18.1% year-over-year, five times the period's inflation.

• National market share reached a record 6.6%, with consistent gains in all regions, especially North and Northeast, supported by an expanding active customer base and increased store traffic.

• Digital channels now represent 18.7% of sales, growing over 50% year-over-year, with omnichannel sales up 56.8% and vaccination services increasing more than 500%.

• Operational efficiency, employee engagement, and customer base expansion drove robust sales and profitability improvements.

Financial highlights

• Gross revenue grew 18% year-over-year to R$3.98 billion, with branded and generic drugs up 23.7% and 18.7%, respectively; prescription drugs now account for 54% of sales.

• Same store sales rose 18.1%, outpacing inflation by five times, with nine consecutive months above 17% growth.

• Adjusted EBITDA increased nearly 40% to R$244 million (6.1% margin), and adjusted net income rose 36% to R$60 million.

• Gross margin improved by 30 bps year-over-year to 30.7%, despite headwinds from lower drug price inflation and mix shift toward lower-margin products.

• Operating cash flow for 2Q25 was R$61.5 million, with R$310.5 million over the last twelve months.

Outlook and guidance

• Management remains optimistic about continued growth, citing strong operational levers, digital expansion, and productivity improvements, but refrains from providing formal guidance.

• Ongoing investments in store openings, renovations, and digital channels are expected to sustain growth momentum.

• Expectation of further productivity gains, especially from Extrafarma store conversions and digital channel growth.

• Anticipates positive impact from upcoming GLP-1 patent expirations, which should broaden access and drive category growth.

• Management expects continued operational evolution and financial deleveraging to support higher net profitability in the future.