Companhia Brasileira de Distribuicao SA (CBD) 2009 Q3 法說會逐字稿

(Interpreted) Good morning, and thank you for waiting. Welcome to the Grupo Pao de Acucar teleconference call to discuss the results of the Company in the third quarter of 2009. This event is also simultaneously broadcast through the Internet, and it may be accessed at www.gpari.com.br and www.globex.com.br/ri where you can find the respective presentation. The selection of slides will be controlled by you. The replay of this event will be available right after its closure. We inform that the press releases about the results of the Company is also available at the investor relations website www.gpari.com.br and www.globex.com.br/ri.

This event is now being recorded, and all participants will just be listening via teleconference. After that we will begin with the Q&A session when further instructions will be given. (Operator Instructions)

Before moving over, we would like to clarify that any remarks made during the teleconference regarding the business prospects of the Group, projections and operational and financial targets are based on beliefs and premises of the Company as well on currently available information. Future remarks are not guarantees of performance because they entail risks, uncertainties, and premises, because they regard future events, and therefore they depend on circumstances that may or may not occur.

Investors should understand that the economic situation, the industry conditions, and other operational factors may affect the performance, the future performance of the Group, and may lead to results that differ materially from those expressed in such future remarks.

Now, I'll give the floor to Daniela Sabbag, the director of Investor Relations of Grupo Pao de Acucar. Please Daniela, you have the floor.

(Interpreted) Good morning everyone. Welcome to the teleconference of Grupo Pao de Acucar together with Globex for the first time. Today with us we have Abilio Diniz, the President of the Board; Claudio Galeazzi, the CEO; and the Vice Presidents of the Group, Eneas Pestana, Jose Roberto Tambasco, Ramatis Rodrigues, Hugo Bethlem, Caio Mattar. In addition to the Ponto Frio executives Jorge Herzog and Padilha.

Today we will begin with the presentation on the results of third quarter, and then after that we will introduce the Ponto Frio results, its diagnosis, and the future prospective for Ponto Frio. At the end we will open for Q&A. I would like to turn the floor now to the President of the Board for his initial remarks.

(Interpreted) Good morning, everyone. Initially I would like to talk about our country, about Brazil, how I view the country right now in the end of 2009. Undoubtedly, our country is experiencing a very good moment. We overcame the 2008 crisis in a much better way than the other countries.

Among the BRIC countries, Brazil is the strongest country, the one that has best overcome the crisis. We are living a very good moment. Our economy is very much solid. We have resumed growth. The employment is growing. The income is growing. And this makes Brazilians happy, self-confident, and with that, we all consume.

We are a company that distributes consumer goods and of course we benefit from that. We should really be glad and satisfied with the moment that our country is now experiencing. I believe that in 2010 we will grow at least 5%. But I think that these figures can yet be reviewed upwards -- with an upwards trend.

With that perspective in mind we can expect a very good Christmas season, an excellent month in December. Consumption, as I said, should be higher than the expectations, than what we expected throughout the year. I believe that December is going to be a great month. We're going to have excellent -- an excellent yearend season. And we are prepared for that. Because there is no use having a demand from the market if we are not ready to serve and to meet that demand. And we are ready. We are quite aware that Christmas should be really good, and we are prepared for that.

As we are prepared for the 2010 year, if Brazil will grow, the income will keep on growing. The job rates will keep on growing. Brazilians will be happy and will consume. We do not lack credit. Credit will be available. And we'll have good sales.

Next year, in 2010, we will have the effect of the World Cup. This always increases consumption. We sell more durable goods in the years in which we have World Cups. We sell more TV sets. And this allows us to prepare for such future events so that we keep on selling well, selling more, and meeting the demands of our consumers.

Civil construction has been resumed. It's a great day for civil construction, for civil works. President Lula's program, My House My Life, is increasing the number of housing available for the low-income brackets. And this causes an excitement in the real estate market. It -- we do not sell houses, but we sell whatever goes inside the homes. And this represents a greater market share for us. We can sell house appliances, furniture, electronics -- especially the electronics market share from Extra and now with Ponto Frio. So the market perspective is great, looking ahead.

At Ponto Frio we are looking close to the suppliers, taking care of the supply chain. Our team is programmed to travel abroad to really prepare for the entire year of 2010.

Regarding Grupo Pao de Acucar I would like once again to address the most important aspect of this Company, that is the management team, the team that we have here that guides us. Increasingly, I feel the executives at Pao de Acucar working as a team. I am quite engaged in making all this team-building work more present so that we can act [strongerly].

In December we are going to hold an event, and I was quite involved in holding that event, on December 7th and 8th. We'll be in Boulder in Colorado holding a workshop with Jim Collins, who is perhaps the greatest guru of our current days in the business world. He is the author of many books -- "Good to Great" and "How the Mighty Fall." And we'll have this workshop with Jim Collins so that this team can play even more united, working jointly, outlining targets that we are -- targets -- ambitious targets that should be reached so that the Group can really feel united to face up against the challenges.

It was not easy to be able to promote this workshop for the end of this year because everything has the right moment. And fortunately, we are going to be able to hold it early in December, on December 7th and 8th.

A few words about Ponto Frio. Turnaround is done. It is complete. It was a company that had been plunging but it's not going to happen anymore. But there are still some missing points. And we are working on them. We intend to give to Ponto Frio a leap in quality. We want to increase productivity, sales, same-store comparison sales. We are working on that so that the expectation that we had when we decided to acquire Ponto Frio, to integrate it to the Pao de Acucar Group, so that we can really achieve expectations with consistency in a structured way promoting a really -- leap in quality.

We are preparing PontoFrio.com. And we are seeing that as a separate company, the prospects in the area are great. We are going to put that together with Extra.com. We are working on that. So everything that is from the digital world, everything is going to be under the same administration. We are also including the [PA] delivery service in that channel under the same administration.

We have many ideas, many good prospects for that area. That's where technology most advances, that's where we see modernities happen. And we are looking into that quite seriously. And we are quite sure that we'll show you great results in that area.

Regarding Pao de Acucar more specifically speaking, our results for the third quarter are in line with our expectations, are in line with the planning. I have no doubt that we are going to reach the end of the year with the expected results, or even slightly better results than what we were expecting initially. And I consider it to be an excellent performance. And I would like to congratulate Claudio Galeazzi and the whole management team, the whole structure on their work, because they have been developing a quite consistent solid work.

They start working from detail down in the structure and then they move upwards, and they make the sales results a consequence of the work that they develop, something that makes me very much reliant on this Company. And I myself as the President of the Board I see that as my role to support the management team, to support everybody working in this company.

We do place pressure in some of the points. And one of them is competitiveness, because competitiveness to me means health, it means strength, it means efficiency, and competence. And we are addressing that more carefully with more attention. Every Monday morning in the plenary we really look into competitiveness, not only addressing Sao Paulo, but many other regions in the country, the southern states in which we operate.

And that's what's assuring the sales increase that we have been attaining and will keep on promoting. The 2010 target will be ambitious in terms of growth as well. And how about the margin? The margin should be the right margin that will pay back the shareholders, that will pay back our capital. And if we still need to increase margin we need to reduce costs to do them, general costs or merchandise acquisition costs. That's how we work.

And this shows the soundness of the Company. We have an agile company, fast to respond, a quite aggressive company in decision-making. That's the moment that we are experiencing at Pao de Acucar. Our competitiveness is excellent. Nobody sells cheaper than Assai in this country. We can assure that to you based on all the follow-ups that we make. So if you want to buy inexpensive goods you buy at Assai. There is no other wholesaler that sells at such a low price.

So -- and then in the other vendors Extra, Pao de Acucar, we have to be extremely competitive. Additionally, we should also add our differentials such as the service, the good merchandise. But that's the basis. We have to deliver for the best price the goods that we sell. And that's what we will keep on doing. Our sales will keep on growing because that's the direction that we are taking.

Very well, I would like to give the floor now to the executive, to the management team so that they further clarify any doubts that you might have. Thank you very much. Claudio?

(Interpreted) This is Claudio Galeazzi. Thank you, good morning to all of you. I'm going to try to be very straightforward. Just to complement what Abilio has already told you I'd like to tell you all that in beginning of this year when we tried to establish our [budget], it is good to remember the guidances that we used to establish this budget saying -- one of them says that our market conditions allows us to seize the opportunity to grow in our sales and in our market share based on investments that were made, the maximization of this investment.

The guidances that we used to establish our budgets reflect the market conditions, always in search for more sales and more market share.

The third quarter of this year, when compared to the third quarter from last year, we had a strong basis because of the season was heavy in comparative basis. So at a same-store concept we had a growth of 9.7% and the actual growth would be 5.1%. I'm not going to talk about all the percentage numbers because there will be a further presentation with details.

I would like to state that we are really gaining market share. Apparently the information published from the main competitors indicate that they had a growth of 4.5%, whereas we had a growth of 9.2%.

I would like to say that we cannot compare quarters only. We have to compare year against year. And the fourth quarter that we envisage as being a major -- a great fourth quarter with expressive results in terms of sales growth and market share expansion and also in terms of result.

Our [EBITDA] is coherent. It's in accordance with our expectations, and with our guidance.

I would like finally to mention that next year we should have important investments aiming at further expanding the Company. We are now in a privileged position. Throughout the year this positioning was reinforced. And the right allocation of resources at the right moment will result in a long and sound life for the Company. I may assure you that next year we will be undoubtedly very much aggressive.

As for the other issues, Eneas and the other colleagues from the management team will introduce the details to you much better than I could briefly tell you from here.

So now I would like to give the floor to Eneas so that he can talk about the general figures of the Company. Thank you very much. I wish you all a great day.

(Interpreted) Thank you, Claudio. Good morning to all of you. Thank you for participating in our teleconference. I will try to convey our results to help you in your interpretation after we open to questions and answers.

Let's start by sales. Gross sales in the quarter, we have a growth of 11.8%. In the presentation, the slides, you can see that. We are speaking of slide number four here. Growth of 11.8% in the quarter, and during the same quarter, if we consider same-store sales, a growth by 9.7% as Claudio mentioned. And calculated through the IPCA's rules correspond to 5.1% in real growth. And net sales grew by 12.9% in nominal terms. So in terms of guidance, 5.1% is above the guidance for this year, which would be -- to be -- would be above 2.5% in real terms.

In food products, we closed the quarter with a growth of 9% in same-store sales, and 11.9% in non-food products, also using the same-store concept. In year-to-date, the growth recorded was 9.2% for same-store sales. And considering the IPCA, corresponds to 3.8% in real terms, above the guidance of 2.5% full year growth figure.

In terms of food products, we have growth of 8.3%, in non-food products a growth of 12%, all using the same-store sales. So sales grew consistently along the year.

And more important here I'd like to add that this is a sustainable growth in the sense that we are calculating also the growth based on the ticket average and traffic of customers to the store. So this is sustainable growth along the year, along these three quarters that we introduced the year here.

So in terms of gross profits, and speaking about profitability here, in gross profits we have a growth of 8.2% in the quarter from BRL1.189 billion to BRL1.287 billion, and 9.5% in year-to-date calculations. As we have been showing to you here, there are some impacts here in terms of margin that is worth mentioning here.

The first one is -- has to do in the regime of the tax substitution that impacted, that is the measure of 0.8% and 0.7% in the year-to-date calculations. This can be seen in slide number five, and -- where we have a summary of the margin, re-calculation on slide six then. The other impact that we observed in terms of margins is Assai. Assai had an effect of 0.5% in the quarter and 3 -- 0.3% in the year-to-date.

Also we have an effect of promotional activities corresponding to 0.3% in the quarter and 0.1% in the year-to-date calculations. So these are the effects that we have. This can be clearly -- it is clearly exposed in slide six where we have the impact on gross margins.

And as Claudio mentioned, in '08, in the same quarter, the same quarter was positively impacted by the impact of our 60th anniversary that generated new businesses, a very dynamic campaign that considered positively -- that impacted positively our margin. So we have this comparison -- this effect on the comparison of quarter-to-quarter, but does not decrease the positive results that we have for the present quarter.

On the gross profit, and considering Globex, we are going to mention their numbers related to Globex, and -- after I'm going to pass the floor to Jorge Herzog and he is going to speak about the conclusion of this restructuring that was mentioned. So our dividend, our next step as far as guidances, the synergies that were identified, and future stock, this is what's more important.

But anyhow, I am going to mention the effects of Globex consolidation. In terms of gross profit it contributes to BRL1.5 billion gross profit. So there is a negative effect in terms of margin in the year-to-date. This effect is diluted given the fact that we have consolidated only the third quarter and not -- instead of nine months for Globex.

So why only three quarters? Because we took over the management after the acquisition, which was concluded on July 7th of this year. So this is the first quarter that we are consolidating Globex in [Pao de Acucar].

In page seven we speak a little bit of our total operating expenses. I think we can take our time here because expenses are under control, the level of 18.9% last year to 18.4% this year. And year-to-to date we've gone from 19.3% to 18.5%, so decreasing by -- decreased by 0.8% keeping a very strict control on our expenses.

And with that we go to slide number eight where we assess our EBITDA. As given, a very positive quarter in '08. The comparison quarter-to-quarter is very close, growth is recorded of 0.4%. In spite of this growth year -- our calculation year-to-date is 9.4%.

In the first quarter of this year the EBITDA margin was 6.8%, for the second quarter the margin was 8 -- 6.9%, and now we have in the third quarter 7%. As (inaudible) to reinforce these results are expected for the budget in this year, the fourth quarter EBITDA, we expect to meet our budget, even to exceed it a little bit. So we reinforce at this time to you our guidances, the results that we have been expecting for this year.

After the EBITDA we can also see our financial results in slide number nine. It was a quarter where we had net financial results which were very positive, showing increases in comparison to the previous year, accumulating BRL75 million considering the contribution of a reduced interest rate and also receiving the money related to the FIC contract with Itau Unibanco that after August it contributes to our financial revenues and also the capital increase that remain in our cash generating financial results.

So we have positive effect here in terms of net result. And if we consolidate Globex, the BRL47 million of negative results comes to BRL64 million of positive result, that are still below the BRL103 million that we recorded in the third quarter of '08.

In our debt profile, which is exposed in slide number 10, we closed the quarter with net debt of BRL564 million which is four times our EBITDA. We know that this is a very low level. We have room for leverage here, we have -- but we must say here that in the end of the third quarter we had investments of BRL451 million in cash that we used to pay the Globex shareholders. But in the end of the second quarter this money was still in our cash.

And after the Globex consolidation we have a very low level of leverage. But given our plan of investment acceleration, both in terms of organic expansion, and also to be prepared for a possible -- to seize possible opportunities in terms of acquisitions. We are ready to leverage this low level and to be prepared for two things, a very accelerated organic growth and possible opportunities of acquisition.

So having said that, we keep a very solid capital structure which is the basic premise that was reinforced here by Claudio Galeazzi.

In speaking about FIC, our financial institution and how it reflects in our line of business, the results are in slide number 11. And if (inaudible) figures are low here we can see a spectacular evolution in FIC results going from losses of BRL200,000 to BRL2 million positive, BRL2 million result -- of positive results from -- and recording now a growth of 9.3% in the year-to-date calculation.

In the Group, it reaches the level of 12% of our businesses and we have a portfolio of BRL1.7 billion receivables. And in page 11 we also consider results of Investcred. We are going to listen to further details about that, but one of the measures that were taken after the acquisition of Globex was the integration of the best practices where we have FIC practices prevailing over Investcred practices. So the best practices and possible synergies have already been identified, and have been implemented in the management of financial businesses of the two banks, FIC and Investcred.

The total clients -- total number of clients now are 7.855 million clients. New accounts is 2 million new accounts a year. And total revenues are virtually BRL7 [billion]. A total of BRL10 billion that are serving -- that are favorable to serve all businesses from the Group, including Ponto Frio.

Sendas Distribuidora is in slide number 12. There is not much to say. When we isolate Sendas 8%, a more -- results that are more volatile given, as we have already said in previous quarters, this is a very nervous market, aggressive market from the point of view of prices, maybe the most aggressive in this country. It generates more or less aggressive campaigns in different moments. So we need to be more aggressive in terms of prices for Rio de Janeiro market, and it's linked to operations.

But in spite of that there was a significant improvement in the EBITDA when compared to the second quarter of '09, an evolution of 1.8 percentage points in the EBITDA margin, in spite of an EBITDA margin that is smaller than year -- last year in the third quarter of '08. And in Sendas we had a very strong third quarter in '08, also profiting from this campaign of the 60th Anniversary of Pao de Acucar and Assai.

We have an EBITDA of 2.5%, still highly impacted by new stores impact, especially in Rio de Janeiro; we have six new stores of Assai in Rio, which leads to a negative EBITDA for this quarter because of a very aggressive policy for creating an image and positioning of the Assai brand in Rio de Janeiro. This will be -- this can be addressed in our questions-and-answers session in more depth.

But if we consider the older stores, the EBITDA, it is close to 4%, 3.8%. And if you consider the consolidation of Rio de Janeiro stores, which would then result to -- in a negative EBITDA, the final margin is 2.5%. This does not mean a negative prospect. We still trust Assai and what Abilio said is very important.

We know that there is an investment to be made to create this image, to position this brand in different markets. And we are absolutely confident, we are in a -- we are moving forward according to the business plan, and we are going to do it as -- according to the plan, so that we can advance in this format, especially in other states that are not (inaudible) Sao Paulo.

Participation from Assai grew from 6% last year to 9.8% this year, and we'll keep on growing those in the next few months according to the expansion plan next year.

Well, talking about profit, profit and net margin, finally net income and net margin, we have a net income reaching BRL206 million, resulting in a growth of 210% in the quarter, or 186% year-to-date, reaching BRL433.3 million. This is without the consolidation of Globex.

Here it's worth pointing out an aspect that is exposed on page 14 regarding the adjusted net income, what is being adjusted in this case for the effect of financial statement in comparable basis. As compared to '08 we made the adjustment of the return of the premium adjustment. Last year this was not done or we had the amortization of the premium rates. And this year it's no longer done according to the new legislation, 11638.

And in 2009 the adjustment is based on the positive balance of the Itau operations, BRL52 million that we are also returning for the effect of comparison. So the comparable net income rose in the quarter at a rate of 69% and in the year-to-date 57%. Once again, as is shown on the right lower corner of page 14 of your presentation.

If we take into account Globex, net income BRL171 million in the quarter, reaching BRL397 million year-to-date, nine months year-to-date.

To conclude this presentation, it's worth pointing out the renegotiation that we have with the FIC agreement that we have carried out with Itau Unibanco this quarter. This resulted in addition BRL600 million. And in accounting terms it was offset because of the realization of credit taxes -- tax credits, and also provisions for possible lawsuits because of our adhesion to REFIS that is later on explained in page 16. That's something that was brought about by Law 11941, that is [quite stable] with REFIS for the settlement of tax issues, and we took advantage of that.

And we generated an offsetting result that brings an effect in the deferred income tax. And the net accounting result resulted in a positive value of BRL52 million that is demonstrated in page 15. And it was included in the adjusted net income that I've just shown you in page 14.

On page 16, we discuss a little bit this REFIS law issue. With this new Law 11941, we have the possibility of adhering to the federal system REFIS, which is quite favorable to the taxpayers which enables us to use the fiscal credits, the discounts and paying it in 15 years, a 180-month installment plan.

So we made all the assessments, and we decided to adhere to the installment payment program. And according to the chart that you can see on page 16, it resulted in a net result -- if we take into account provisions for contingencies and tax installments, liquid effect of -- net effect of BRL76 million of liability reduction, and then consolidating the Globex liability with a provision for contingencies plus tax installments, we close at a final amount or a final effect of BRL163 million.

So it's important, it is a quite significant reduction in provision for contingencies that enables us to avoid future risks of losses or any issues related to lawsuits or tax issues. That positions us in a very favorable way. And we can use, we can take advantage of this REFIS, this new legislation.

In terms of CapEx, the Company invested in this quarter BRL92 million in new stores which resulted in seven new Extra Facils, two new Assai stores, one hypermarket, one new Pao de Acucar store, and also three new gas stations.

BRL84.5 million were spent in renovations, and BRL39 million in infrastructure, more specifically in IT and logistics. Which adds -- BRL215 million, but it's twice as much the investment that we made last quarter at the same period last year, adding up to BRL430 million year-to-date.

In terms of guidance we can reassert, the value invested in the year should reach BRL750 million, or between BRL700 million and BRL750 million in terms of investments in 2009.

The dividend policy adopted for this year led to an additional payment amounting to BRL15 million; that was the third advanced payment. The fourth advanced payment will happen only next year. And this will be included in the actual income of '09, which will be much higher than the basis that we used for advanced payment towards the same base that we had last year.

With that I conclude this quick reading about the Pao de Acucar result, and I pass the floor to Padilha, that is the CFO for Ponto Frio, for Globex, so that he can discuss the results of the Company of Globex.

(Interpreted) Good morning, I'll briefly talk about the third Q results, and then I'll pass the floor to Jorge.

Beginning with sales on page 20. In the third quarter the Company grew at a rate of 10.2%. According to the same-store concept we grew at 6.8%. And the highlight here is observing the first half of the year when the Company had a drop of 7.7% in the same-store concept (sic - see Press Release) and 10% negative in the third quarter (sic - see Press Release). So 16% is the total [drop] in the third quarter. The results include the month of September that was the turnaround month when the stores had a positive growth.

On page 21, briefly talking about here the drop of the gross margin, 4.8, from 27% to 22.2%. Here we have the combined effect of the ICMS tax, the new collection system. Our business in some states has all the projects under this new tax system which began in Sao Paulo in May, and Rio de Janeiro, and in the certain parts of the country in September. The impact, the percentage impact is 3.6%.

And there was another thing that benefited the margin for '08; that is the credit provided for the Company. That improved the margin in that quarter by 1.3. These two combined effects show a balanced margin in the two quarters.

As for operational expenses we also have a positive variation of 22.6% to 22.7%. I would like to mention that here we have approximately BRL11 million taken into account in terms of restructuring or integration costs, which account for 1.5 on the net sales, which actually would reduce the operational expenses to 21.65% which represents a reduction of 0.5 (inaudible).

In terms of EBITDA margins, the reduction was 4.9% against the same quarter last year. However, the -- in short term -- in a short term we are reverting that scenario. If we look at page 22, we can see that in the first quarter this year, and especially in the second quarter of this year, we operated with negative EBITDA margins. In the first quarter it was minus 5.7% and in this quarter we had just 0.5% negative.

Next page, page 24, briefly talking about that, we have the results of Investcred Bank. This result is a trend for recovery which was begun by the Company since 2008 when we had negative results. So this quarter shows a net result of BRL7 million, basically resulting from improvements prophesied in the credit system and restriction on financing.

We can see here the provisioning for doubtful investors. We have a change to BRL60.6 million this year. Last year Investcred resulted in 0 and this year BRL7 million to date.

With that we -- combined, on page 24, we can see combined results showing the results of Ponto Frio, negative by BRL40 million against BRL500,000 that we had in this quarter positive.

Another positive point that I would like to highlight on page 25, that is the improvement of the stock level and the supplier account. In the third Q of '08 we had a difference of one day in terms of working capital in these two accounts, 55 days against 54 days of stock, of days in hand, and first half of the year we reduced the stock level to 49 days, and the supplier account was reduced to 67 days. So we went from one day positive last year to 18 days positive this year.

So that's what I had to tell you. Now I'll pass the floor to Jorge.

(Interpreted) Good morning everyone. I'll discuss the [diagnosis] and our prospect for 2010 up to 2012 for four months. We have taken over the whole process at Ponto Frio. And the first point to be addressed at page 27 is the fact that during this period we have been working in six processes. The first of them is finalizing the due diligence; we have introduced that when we closed on June the 30th. The turnaround process, and the integration process; that is a combined process that we have been carrying out since we first got [there].

The re-startup of a new dotcom company; today we are working to integrate PontoFrio.com with a GPA dotcom company. The renegotiation process with Itau Unibanco; we worked in that area impacting Ponto Frio. And the integration of banks, that would be the sixth process.

So within this period we've had the opportunity of identifying the positive aspects. And these are mentioned on page 28. So we have a strong brand. Ponto Frio brand is really a brand that has a strong appeal wherever it is. The store network itself, the wholesale business which to us is a novelty, and we see a major opportunity in that area.

The credit business, the service sales for -- through the dotcom, PontoFrio.com, and all the specialized systems that we have in terms of electrical appliances and electronic sales that allows us to take advantage of the synergies. As a tension point, the Company for a long time had negative results. We were too much focused on the short term. The credit operation was limited because we were looking for profitability with the bank. And here we have a concern with the major competitors, or the major competitor in our business, and we had little [culture] in assessing the results.

With that we now decided to launch this new project with Ponto Frio, repeating what we did last year, that is the Back to Basics 2. So on page 29 we can see the points that we intend to address in our work. The focus of course is on the customer. And by doing that we'll be focusing on the stores. That's where the core business takes place.

We defined six points -- focus on the customers; to focus on people, because that's the strength at Pao de Acucar; and we do want to develop and to provide good care to our employees to sell more and better, to optimize our fixed expenses. Of course, this should be done in tune with GPA to create a management culture. And all of that is going to result in better and more sales, enabling us to provide better credit conditions to increasing investments in communications and advertising, to have a sales team that is prepared and motivated to serve our customers. And to enhance the asset profile, the profile of our stores.

On page 30, here we highlight the major synergies that will enable us to reach the expected results. The first of them is the financial synergy. We had the opportunity of a fiscal gain totaling to BRL258 million. And in the operational and commercial side we had four specific points in which we are going to be focusing efforts to promote synergies.

The first of them is the purchasing power. We should have a single and strong commercial area that will be in charge of purchasing all electronics and household appliances for all the banners.

In logistics we should pursue synergies in order to integrate the logistic network, the GPA logistic network with the current Ponto Frio logistic networks to be able to deliver to the customers and to the stores.

In marketing, we will have the opportunity to have shared campaigns along all of the brands and banners, using the Extra banner in which we also have the sale of electronic items.

And then back-office, we will be able to share the transaction-related activities. Here we have found that we will be included and we will be under the current structure that we have today at GPA.

On page 31, basically we have listed here what is already underway, things that are providing an improvement result, as Abilio said. But we still have a long way to go, the opportunity to optimize these items.

In sales, we have begun renegotiating with the key suppliers, equalizing costs between the two companies and choosing to have the lowest cost. We seek to have a greater availability of products, in purchases of high volumes, and with increased investments. So we are trying really to put the merchandise on the shelf so that we can really meet the customer demands.

In logistics, we are studying the logistics network. We have been using distribution centers -- shared distribution centers we have got from Pao de Acucar using Ponto Frio's CDs.

In marketing we had our first cross-sectional campaign in September, celebrating the 60th anniversary of the Group; that was a success. And now, we are going to a second campaign that will be during Christmas

As for credit, as Eneas had mentioned, we began a joint operation integrating both brands, both companies. Today we have a single management already for [thinking], because they were already working under the Pao de Acucar structure. With that we've taken the first important step towards integrating the cards. Today we have an availability of 7.9 million customer cards with BRL10 billion in credit -- in pre-approved credit, and they may use those cards both at Ponto Frio and at Pao de Acucar stores.

In stores, we have been evaluating our portfolio. We have already started the process of renovating the stores that we had identified as the main problems to be solved. However, we've also identified stores that are below our expectations. We still have to do that for a proposal of store turnaround where we will substitute the low-sales-performance stores for stores that are according to our benchmark.

Also in stores we have been working in the preparation of specialized sales people -- people specialized in technology, where we have identified a weakness in our team of sales people.

In the back-office our expectation is to conclude in the first quarter of 2010 integration of processes, where we will have important gains. We've seen what we proposed for 2010-2012, our guidances, including growth in same-store sales, totaling a growth of 80% in the period. A part from that will come from electronic commerce; that will grow in a relevant way.

In organic expansion, as I mentioned before, we will have -- we will substitute stores of low profitability for other stores that are according to our internal benchmarks.

Gains, in terms of gains and synergies we identified, whereas the figures that you all saw before, that our initial number that we had informed in the occasion of the acquisition of BRL500 million of expectation will then jump to something closer to BRL1 billion for synergies identified.

And a point that we have, about which we have been very much questioned, which is our expectation for the EBITDA, we will be working with expectations from 5% to 6% of EBITDA expectation, considering trade, services, and financial operations.

So now we'll move forward to questions and answers, please.

(Operator Instructions) (Interpreted) Daniela Bretthauer from James Raymond.

(Interpreted) Good morning to all of you. I have many questions, but I will ask only two. In the first -- third quarter we have seen this trade-off between growth, sales, and EBITDA margin. And the impression (inaudible) open space for some questions, so I'd like to listen from you the strategy, from now on it will privilege growth or market share gain or a growth in margin. Can you give us some insight on that and how it is going to evolve, what's the strategy of the Company, and what will be the priority adopted by you?

(Interpreted) This is Claudio. Good morning. I'll try to answer as follows. Every quarter, in every movement that we have in the Company, we are pursuing a different goal. Our goal has been very clear because it's very lucid, which is to seize opportunities to have a growth in sales, maximizing our resources. We have a low CapEx, this has been already planned, expected, and we have an effect on EBITDA.

Next year, both in terms of CapEx and in terms of growth, we are going to pursue growth through our operations, seizing opportunities in terms of synergies, growth in sales. And we have a new element here which is Ponto Frio and we are still in the process of consolidating this acquisition in the market, becoming a very expressive player in this market.

And we have already been recording the [conference] results, our preliminary results. We have not been able to establish more detailed goals, but -- and this result will serve for us as the basis because in terms of cash, in terms of our debt profile, I think these numbers will give us indications of the best move ahead. For example in this year we recorded growth in terms of sale and of market share.

I'd like very accurate answers. But I would like to ask the question in a different way. Is there any EBITDA margin, for example, that's the magic figure? Below that there is no sense for the Company to operate or -- so below 6% for example it's not worth it, or 7% is a good margin, or can you be a little bit more specific in your answer, Claudio?

Just a moment.

This is Abilio speaking. Daniela? Are you listening to me, Daniela?

Yes.

Daniela, you told me that you like straightforward answers, so I'm going to try to answer in a very objective and clear way so that you can really understand.

There is no trade-off here. There is no such thing either in sales or in EBITDA. That may work for other companies; here no. Here what -- we deliver everything. We have always tried to deliver everything. When we do not -- when we don't do it's because we could not do it. So there is no trade-off.

And on the other hand, there is no magical number in terms of sales or EBITDA, nothing. What we try to do here is to work as best as possible with the greatest efficiency to deliver the best results. We are not going to opt between one and the other. What we are going to try and do is to deliver the most that we can in terms of sales, and I said it clearly in my speech. I don't know if you were already connected.

But we are -- what we are pursuing here is the health for this company, for a competitive edge. And in terms of competitive edge we must have at always lowest price. Assai is a benchmark in this company. Nobody sells in this country cheaper than Assai.

In terms of margin, we must also pursue efficiency. We must have competitiveness, reduce costs, be they general costs, or costs for acquired merchandise. This is a (inaudible). There is no trade-off. Was I clear?

Yes, you are very clear. Thank you. Now I'm going to ask a lighter question. In terms of Ponto Frio, we'll start where there was an [impetus] of the Company to calculate and purchase. When you -- in the last quarter, you showed to us, to go back, what were the expectations that you have for Ponto Frio. Is there an expectation to reverse those expectations? When is it going to happen? When are your expectations going to materialize?

Hi, Daniela, this is Eneas. I cannot say anything about expectations because this -- the forecast for the last quarter, they were done by the previous management of Globex. They worked in a scenario of lack resources and non-receivables, of doubtful receivables, with lot of creditors. So to make forecasts based on that it would not be reasonable. So we do not have such expectations at this moment.

The other thing that we know is that we are going to work strongly so that expectations from the last quarters do not materialize.

Next question from [Christina Vadia].

Good morning everyone. I have two questions. The first is regarding Assai. We have a good justification the Company is maturing although results have been weak. Apart from Rio we see a margin deterioration. What is there in Rio that could be impacting the margins negatively? What could be done in Rio apart from the new stores?

Hi Christina, it's Jose Roberto. Good morning. Christina, without being repetitive, but Assai up until last year or the year before the last, we had just 14 stores. We have a quite strong expansion plan to come up to in Sao Paulo, growing strongly into the countryside in Sao Paulo, and it has led us to invest as a big asset in the creation of a quite strong image for Assai in terms of pricing.

This does have an impact even here in the Sao Paulo. Although we have introduced isolated data for Rio de Janeiro to show that the EBITDA margin performance at Assai with the exception of Rio de Janeiro is in line with the guidance that we had established for Assai in terms of EBITDA. But our focus is indeed to consolidate the stores in all of the states in which we operate. For this year, yes, we will open additional six stores, both in Rio and in the northeastern region, and in Sao Paulo. That should really provide some sort of impact on the results, and should also -- and hence the share of Assai within the market which will represent a greater strength for us to have the Assai brand more present in the mind of the consumer, especially via the transformers.

We are quite sure, we are quite confident that the sales growth at these new stores will bring -- will be quite positive, quite strong, especially Rio de Janeiro where we think that Assai is a model that really serves the market, meets the market demand. There, the renovated stores, they have sales that are three times higher than what we had before. So it's clear that it takes time to reach the maturity curve as such though. I will tell you that by the end of the year, the Rio de Janeiro will have the alignment of the EBITDA margin of the stores that are now celebrating 1 year of operations in line; that is in line with the other Assai stores.

Okay, great, thank you. The other question -- by the end of the presentation, my line was cut off. But I see a slide from Ponto Frio. You talk about a growth of 180% in three years for Ponto Frio. Is that right? I don't know if that's what you addressed?

Yes, yes, that's exactly the case. That's a growth of 80% in 2010, and in 2011. It's 4 years actually. So it's from '09 to 2012, 80%, yes, yes. And it's including the dotcom operation, the growth of 80% in 4 years.

Next question from Juliana Rozembaum from Itau.

Good morning. I would like to understand what is your rationale to avoid considering taxes as a debt because this provision has been renegotiated and acknowledged. Well, it is not entered as a debt.

Hi, Juliana, this is Eneas. We consider it as a tax installment. It's not a financial debt, sure. There are people who enter it as a debt, as a provision for contingency. Some other people consider the tax installment as a debt. And in the [FIS] none of them should be taken as a debt. We have been dealing with the financial debt as usual. And it's a matter of concept in that case. We do not want to impose any concept, but we consider it as a tax installment.

So we are limiting the price of a possible loss, and we have installment for 15 years. And it's a mix break, and it's not a banking issue. So it does not go into the banking credit lines because if we mix those, it gives the impression that my capability in terms of banking credit limits was reduced by such amount. And it's not necessarily or not just directly the case. That's why we've had break. Thanks.

Is there any kind of discounts that you get?

Yes, yes, yes, we had huge discounts. Both, discounts, and we are able to use the consolidated fiscal credit currently. Yes, this happened. That's why we adhered and we used that to significantly reduce all the processes that we have. And it's a hit program.

I have never seen such similar program in terms of term and possibility of obtaining discounts. Even in 15 years installment program, you have discounts. You can use fiscal credits; you can use just legal deposits, traditional deposits without losing the discount.

So it's a federal program that I have never seen before. I have never seen anything similar. Not only now in our Company, but many other companies are feeling because it's extremely favorable, and it allows us to really reduce the number of processes, and reduce the number of discussions that could result in surprises. And now, it's no longer the case. So the level of position for contingency for the Company was widely reduced as you can see in the financial statements. Okay?

The next question is about what Abilio said in his initial speech about the restructuring and segmentation in the Internet business. I would like to further understand your plans, if you are going to separate it as a separate company and to have different parts of the business, or is this just an accounting separation?

And if you could talk a little bit about the margins because we have seen fantastic numbers of growth, figures of growth. But can you talk about the margins about the Internet business?

It's Eneas again, Juliana. A great question because it gives us the opportunity to further discuss this matter. Yes, we'll promote the integration of this business. We see it as being a high potential business for creating value. There's huge room for exploring that segment. And we are already integrating that business regarding the management of the dotcom under Ponto Frio and extra.

We have made the integration of the management, of the administration. We have our partners at the dotcom companies. And right now, we are concluding the agreement to maintain the partnership for the future. We respect their expertise, and we understand that there is an excellent opportunity within our Company. So there is the total alignment of interests in that sense.

The first task is to integrate the management, the administration, and this has been done. And I am talking about commercial department, logistic department, good practices, back office. This has been done. And now, with the conclusion of the agreement, after the conclusion of the final acquisition of the Globex store, we should really promote the partnership agreement so that we can fully and formally integrate.

We may have a spin-off drop down in CBD. We may have an ideal after that according to the decision made by the shareholders, but it is a strategic focus, it is a potential for creating value, because huge potential that we have in the short run, and we will invest in that. Okay?

About the margin. Well, I cannot say much about the margins now because we would have to disclose extra.com, and I don't have that figure, that information here with me. We can give you with greater accuracy after the integration, a little bit later.

Perhaps in the fourth Q conference, perhaps we can give you more precise guidance on the margin. But we are working on that, and we are working on the integration. We want to explore that segment using a specific dotcom company.

And how about the margins of malls and properties processed? How do you stand?

We have identified all of the assets that we are going to transfer in the first stage. Not all of the assets will be transferred. Not all of the stakes will be transferred because we are giving priority for those that have an additional exploration, a potential cadastral value is at BRL1.8 billion that will be transferred initially in the first stage.

The fiscal and partnership structure has been set. We are going to use real estate fund and we are going to use a real estate administration business to explore that. The fund is about to be concluded. The Company has been established. And all the issues regarding the organizational structure, the process, the physical separation of the management, all of that has been done.

We are concluding the transfer of the stake, the structure of the assets. It will occur by early 2010, late 2009. And we will disclose the first quarter together with the disclosure of the first disclosure of the first [ITR] in 2010.

My final question now regarding Globex. I will like to understand from you what is the reason to have such low result? What do you need? Do you need better prices at the stores? I don't think it is that. Or what do you need to have a renewed confidence from the consumer on that brand? So why, why did you have such a poor result in terms of sales.

Juliana, this is Jorge. So in fact, we think that sales are not at the level that we would like to see, but the return to same-store sales growth, it's very positive. In the first quarter, we recorded minus 10%; in terms of same-store sales for certain stores, it reached the level of 17 negative point.

In this quarter, we recorded 6.8% growth in same-store sales concept. But in September -- no, I'm sorry, 6.8% of negative growth. But in September, we already recorded positive growth in some stores. So we lacked merchandise, we lacked communication, we lacked credit. And with the actions that we took in the first three months we already see a reversion in this trend, so that you think that the structural problem here that will lead to a continuation of this problem, you don't know.

We know that we have still a long way to go within the proposal of what we found in our diagnosis. And this makes us assure that we'll be able to deliver this guidance that we have of 80%.

Do you expect to close more stores?

Yes, we are going to do a turnaround in the stores. We are identifying the stores that are below our average of sales or below our guidelines. The stores will be shifted to this by other ones that will open with an internal -- according to our benchmark, our internal benchmark. Thank you.

Next is from Daniela Bretthauer from Raymond James.

A follow-up question. In slide number 6 of gross margin, of the detail and impacts of gross margin, what would be the level of gross margin from now on even in the growth of Assai? So are we going to work in -- with a margin of 25.5% from now on?

Daniela, this is Eneas. It's good because I wanted to return to that point exactly, so that we can speak further about that. So this effect on the margin, it's important within what we have been trying to communicate here. We have been trying to talk in depth about that in the review.

The Company is undergoing a transformation related to its business portfolio. When we start investing in our business such as the atacarejo with the wholesale plus retail. It works with margins of 15%, which is below the historic margin, average margin of the Company.

And then at the gas stations, that also work with some margin that is below our average, or drug stores, or even eletro. What it means is that we do not take care, and if we are limited to the historical horizontal assessment, we'll start saying that the Company is losing margin, it's losing efficiency. And in fact, this is a natural consequence of a Company that's undergoing a portfolio business transformation. Our business mix changing levels of margin that are different among ourselves.

And of course, that the consolidated margin reflects those effects, which does not mean -- at least does not mean automatically that this is due to a loss of efficiency or a problem. Much to the contrary, the fact that Assai works with a margin of 15% of cost of around 10% to 11% and produce an EBITDA of around 4, for the segment, it seems to us that it's very good.

Today it's not good. It's in a ramp-up, it's in a process of acceleration in it's extension. So it's recorded for (inaudible). But we are absolutely convinced that we will do it. These or that and other issues that also contribute to this impact, each business per se according to their specificities or characteristics, I think.

And that's why we invested in them. They look like good business to us. And that will bring an important increase in terms of cash margin or the employed capital, and so on and so forth.

So I ask you, and I'm sorry, but I'm using here the opportunity, I'm using your question to speak about it in detail. But I would like you all to consider that in your analysis. That's what's going on. So otherwise, we were saying the margin last year was 27% and you fell to 24 --25.4%.

Of course, there is an effect of tax substitution that will be consolidated in the near future. And then we will stop speaking about that. It will vanish. So again, the tax substitution is something that the formal businesses in the Brazilian retail. It's a gift. It's good attitude from the Brazilian tax department. A formalization of the economy. So we are in favor of this movement.

But it causes this temporary impact that then when the bases are comparable, it will disappear. In terms of our margins, we can study that it's around 25.5%, that recompose would be something around 27%. Does that help in their historic analysis, but it then reinforces the need to consider the change, the evolution in the business portfolio.

Of course, now we're living a strong period of seasonable businesses. We are not conducting great -- major movements in terms of prices. And the promotion of DVDs are minor, it is reduced in terms of the greater (inaudible) Assai, and considering also the effect of a tax substitution, we are not going to make major movement here.

So the level of margin we withhold really nearly does still impact us, an the evolution of this business that present the fresh EBIT margins. Okay.

Okay. I'd like to also to clarify that in fact the question was in the sense of provoking from you an explanation. Just like that is in terms of a -- so that we do not -- we are not shortsighted in terms of the business because current EBITDA, the margin fell. So it's bad.

So I agree with you that the company is undergoing a moment of transformational changes, and therefore the analysis should change also.

Thank you, Eneas.

Thank you, Daniela. Thank you for your question.

Our next question is from [Alan Cardozo] from Agura Brokers.

Good afternoon. The dotcom businesses, I was looking to listen more about the electronic commerce business?

Hello, this is Caio Mattar, good morning. The dotcom market is very accelerated in that we have an explosive growth rate for extra.com. And the fourth quarter will -- should record a growth that is above fourth quarter of last year. And the first dotcom results is also very heated.

At this moment, we're integrating the two companies, and at this moment, Ponto -- Pao de Acucar and Ponto Frio, we are focusing on the seasonal on the -- on Christmas.

An integration will be held in the beginning of 2010. Christmas is only once a year and it is a very important time for us. So we are working in negotiations with the (inaudible), so that this Christmas operations are successful. This structural changes for logistics are (inaudible) apart of this business plan, and it would come in as of next year.

And then we will have a full results, but not at this time exactly because we're working for Christmas now. The integration of operations in the Internet, my question in terms of the commercial departments, what are you doing in terms of marketing --

In fact, the growth of the Ponto Frio dotcom has been happening very constantly at the first quarter. There were no -- mainly additional measures in terms of marketing or more communication and the spirit.

What's happening is that as we in the physical world are more present in the media it brings more impact to the dotcom businesses as well. But these were not measures taken specifically to the dotcom business. We took the opportunity of the greater communication that we have for in the physical world.

So thank you for the answer.

Now, a question from Irma from Goldman Sachs.

Good morning, thank you for answering my question about the business portfolios. Could you talk a little bit about your vision on return on capital invested? In my conception you're focusing on the top line, even if it is with a lower margin.

I would like to know further your perspective on the return on the capital invested, even if you have a low margin, for instance, with Assai, are you investing in a larger cash margin? What is your prospect considering the whole business portfolio?

And what are the opportunities for the operational leverage, because you're focusing on the growth of the top line?

This is Eneas. Actually, we have to be a little bit careful with the statement that we are focused on the growth of the top line. Actually, we are focused on that with profitability, and with the right return. So it's not just top line per se, (inaudible) very well, we are looking for the scalability of the business, which would gain in market share, with profitability and with a return on the capital employed. That's our assumption in terms of management; we are guided by that.

As for return, we worked a lot in the last two years on that back-to-basics approach that is analyzing the results, analyzing the return to hope that the investments to reorganize internally, and to go back to growth with profitability. So this brought us to a level of return on invested capital, which is quite different from what we saw in the past.

I don't know, sometimes we talk about the indicator itself, but we use different concepts. The -- both parties use different concepts, but regardless of that in our accounting we went from a return of a 9% on invested capital per year, to a return of approximately [15]%.

So I would say that regardless of the concept that is used, the difference -- the delta that we had on return was positive and quite significant. And I think that's what you all should be assessing or diagnosing.

Did this happen because of the reduction in CapEx, yes, partially, yes, because of that. But it also happened because of the evolution and the leverage of results that took place in 2008. And that is once again happening in 2009. So it's -- adding both factors undoubtedly provided this good result.

As for Assai, it is true. We work with lower EBITDA margins. But let's keep in mind that the setup cost for Assai is much lower, as well. It is a banner that does not work with purchased real-estate, we work with leased real-estate, at 1%-1.5% of the sale, for this lease at most. So the return is maximized because of the lower investment made.

And the cash generation is good, and the margin is approximately 4. So it's -- yes, one of the banners that leverages the consolidated return because of the much lower setup costs, much lower than the other banners.

So once again, we are not looking into top line only, we are looking into the sales increase, yes, with profitability, with competitiveness, so that by the end of the day we'll have an increase on the return on the capital invested, and we can also create value for the shareholders.

We see all of that in an ample fashion, in an integrated fashion. And today our budget is a result of a strategy that looks into all of those indicators in a combined fashion. I don't know if you would like to say anything about Assai.

When we talk about investing in Assai, and we compare that with the investment that we make in hypermarkets, for instance, we are talking about 50%-60% of the investment, if we consider the store without the tracts of land. And the sales performance, or the sales productivity per square meter is significantly higher.

This is what led Pao de Acucar to assess amongst different models the possibility of converting stores from the supermarket model; for instance, turning it into the Assai model, so that we can have a higher sales productivity. Because even with a lower EBITDA margin, in terms of cash margins, we have more significant values, more significant amounts.

Thank you very much.

Next question from (inaudible) [Quest Investment Banking].

Good morning. The question is in line with the margin discussion. It's clear about the gross margin, how about the EBITDA margin; should we expect the same that we had with the gross margins, perhaps not fully, but what are the dangers that we have in the EBITDA margin, and I do have questions about that?

Well, of course you want us to be more assertive in terms of margins. But first we should decide if we are talking about 2009-2010, or the next three years, because the influence of our transformation in terms of business portfolio may have a higher or a lower impact in such discussions.

So first we have to decide on which firms we are discussing.

No, I'm talking about the future, in three years time, when the company is already stable. I'm not talking quarter against quarter. I'm talking about the sustainable margin.

What I may tell you, and just to give you an answer on that, because we have an issue about the future disclosure, but as we are going to have business growing we are going to have the basis with the network of stores, network of supermarkets growing as well.

I would say that what we are undergoing today will become the greatest impact in the end of the day. And the current -- picking this up next year, we'll start stabilizing -- we start going to a stabilizing process, because the growth of the -- market, supermarket basis will also stabilize.

So let's imagine the EBITDA margin lower than 5%, I would say no way, no way that's going to happen. I don't see it lower than 6.5% or 7%. I don't see it any lower than that, but it all depends, because I think for next year we have quite a strong expansion process planned as well as for the next year. And in general, we may perform acquisitions. Perhaps, the acquisitions will change this scenario, but we will have to deal with it if that happened, if and when that happened. Thank you.

Okay, you gave me a good idea. Thank you very much.

Mr. Bob Ford, please ask all your questions at once. Our next question from Mr. Bob Ford from Merrill Lynch.

Mr. Ford, please ask all your questions at once, please. Mr. Bob, please, you can ask your questions now.

Thank you. Good day everybody. On Globex, I was curious as to what actually happened with same stores sales. The comments suggested that same store sales were down 6.8%, but on the front page of the press release, it suggested they were actually up.

And I wanted to get some clarification on the Globex same store sales comp. And then more broadly, I was very impressed with the same store sales performance for the Company as a whole particularly for the -- for CBD excluding Globex as an incentive.

And I was wondering if you're happy with the value proposition as it is right now. How do you see the competitive environment evolving into the holiday selling season? And as you look at operating leverage or the lack of operating leverage in those businesses, excluding these non-recurring events, you're still not getting the kind of operating leverage that I think you're striving for.

And I want to know, as you look at the business today, do you think it's -- is it a top line answer, or is it -- do you still have substantial opportunities within the cost structure to continue to expand the returns on the existing store base, please?

Bob, hold on a second, please.

Okay.

I'm going to explain -- go ahead and try to answer the first part of the question in terms of same-store sales for post -- Ponto Frio. In the press release, we announced the results for merchandise and services.

There we included sales of services such as insurance and extended warranty. We recorded a growth of 26.9%. So this store -- this is a distortion when we conveyed the total growth. So for merchandise alone and of course, the first quarter we had decrease of 17% of merchandise alone in the third quarter for 5.8% was the decrease.

For this quarter, with third quarter, in July and August, we still had a decrease, but in September we recorded an increase of 2% in merchandise only. I think that that is the clarification of the figures of Ponto Frio. About Christmas, Jorge would like to add the prospects for Christmas.

For Christmas, we have a very positive prospect especially due to the whole preparation that we are undergoing with our suppliers, our expectations is two-digit growth for same-store sales, for December.

And November and December -- November, we have -- we are also with a -- a very positive trend, which lead us to believe that the figures that we are considering for 2010-2012 are aligned with what we have been working for the last two months.

Thank you.

And with this, we close our Q&A session. I like to return the floor to the Company for the final comments.

This is Eneas. I'd like to conclude the teleconference now, with some important highlights. In fact, what we said here as far as highlighting that we are further committed for the holiday season; we are closing this year in a very different way than we started.

The effects of the (inaudible) were not as deep as we could have imagined. It was -- it did not affect Grupo Pao de Acucar in that because we strengthened, consolidating our internal culture that is directed to results, focus on, consolidating a process that was started in the previous year of search of efficiency, the Company thinks this is significantly in the -- along this period and we are very much motivated and totally aligned in the search of results.

For next year, we'll think it's a year of continuity of this growth process; a year in which the Company expects positive results, a year of worse -- a year of elections, which means a year of liquidity, of money in the hands of the consumer, the real estate sector rating (inaudible) in terms of the speed and renewed growth; has been growing very significantly also, and also driven by this program promoted by the Grupo Pao de Acucar, in our opinion is correct, which will leverage the growth rate for next year.

Again, as we are starting the year with a very strong capital structure which allows us to accelerate our organic growth plans in a relevant way and also to be open and to seize any opportunity of acquisitions that may happen, that makes strategic sense to us, and they may leverage our return. We started the year with a growth in terms sales with very positive fundamentals in terms of same-store sales concept in real terms with the increase of the average ticket and the traffic of customers. Our expansion will be accelerated especially for the banner Extra Facil and Assai, and Extra supermarket as we have told you.

Also, as I mentioned, the dotcom businesses are a focus for us for the closure of the year. In the beginning of '10, we really believe in that segment, and we think that it's possible to invest strongly with -- especially after the integration of Ponto Frio and GPA.

After -- in 2010, we will have in -- the beginning of the GPA months, we will inform you in the upcoming months of sustained (inaudible) investment. And Ponto Frio, as I told you, we are nearly concluding the turnaround process, consolidation between the two businesses and the good news is that at present -- at this present moment, we have synergies above one BRL1 billion, when we initially, first -- as we have seen only BRL500 million.

So after this restructuring, we have a very motivated team in order to materialize this [tendency], and also to leverage the 2010. We've been worst off, it will certainly then contribute to the sales of electronic media process. And also in the real estate sector, we know that when people buy their homes, they want to buy Eletro electronic products, branded furniture.

And so with explosion of the real estate sector, it will certainly leave a positive effect for Ponto Frio in our electronic business.

So with this optimism and with the certainties, the trust that we have in our country, we conclude this teleconference and we would like to thank you all for participating.

Teleconference on GPA results is closed. The department of Investor Relationship with the investors is available to answer to any other question. We thank you all for being -- for participating.

Statements in English on this transcript were spoken by an interpreter present on the live call. The interpreter was provided by the Company sponsoring this Event.