Grupo Pão de Açúcar - GPA, formally named Companhia Brasileira de Distribuição, is one of the most traditional food retail groups in Brazil and traces its origins back to 1948, when Valentim dos Santos Diniz opened a confectionery shop called Pão de Açúcar in the city of São Paulo. In 1959, this first point of sale was converted into a supermarket, marking the beginning of its expansion in food retail and remaining both a historical reference and the company’s headquarters. Throughout the 1970s and 1980s, the group accelerated its expansion by opening new stores and acquiring major chains such as Eletroradiobraz, Superbom, Peg-Pag and Mercantil, in addition to commercial points from Bazar 13 and Morita. In 1971, it opened the country’s first hypermarket and, in the 1980s, created the Extra banner, strengthening its presence in large-format stores with a wide variety of products. The formal incorporation of Companhia Brasileira de Distribuição under its current name took place in 1981, after the merger of the then-existing retail operations.

In the 1990s, GPA took an important step in its publicly traded trajectory by carrying out, in 1995, an initial public offering, becoming the first food retailer with preferred shares traded on the then São Paulo Stock Exchange, now B3 S.A. – Brasil, Bolsa, Balcão. In 1997, it began trading American Depositary Shares (ADS) on the New York Stock Exchange (NYSE), expanding its international investor base. Later, in 1999, it entered into a strategic alliance with Groupe Casino, which became a major shareholder and, in 2012, took sole control of the company. The corporate structure underwent several reorganizations and divestments throughout the 2000s and 2010s, including the association and subsequent separation of businesses with Via Varejo (now Grupo Casas Bahia) and Cnova in the electronics retail and e-commerce segments. GPA’s common shares remain listed and traded on B3 under the ticker PCAR3, while the group chose to discontinue its ADS listing on the NYSE, concentrating its liquidity in the Brazilian market.

Grupo Pão de Açúcar - GPA’s business model is centered on food retail, which accounts for 99.4% of revenue, with predominant operations in supermarkets and proximity stores. The company operates a multi-format network of 726 stores under the Pão de Açúcar, Minuto Pão de Açúcar, Extra Mercado and Mini brands, targeting different consumption profiles, especially in the premium and urban convenience segments. Its product offering is mostly composed of food items, including non-perishables, beverages, fruits, vegetables, greens, meats, breads, dairy products, cleaning products, disposables and personal hygiene items, in addition to a smaller share of non-food products such as clothing, household goods and electronics. A significant portion of sales comes from private-label brands, especially Taeq and Qualitá, which have a meaningful share of revenue and reinforce the company’s differentiation strategy in food retail. PCAR3 shares economically reflect this predominantly retail business, based on high inventory turnover and a wide store footprint.

The company structures its operations around a main segment of food and proximity retail, complemented by ancillary activities that strengthen its consumer ecosystem. In addition to physical stores, GPA maintains an integrated digital operation, with food e-commerce under the Pão de Açúcar and Extra banners, sales via its own app, and partnerships with marketplace and delivery platforms such as iFood, Rappi, Mercado Livre and Magalu. The digital strategy is mainly based on the 1P model, in which GPA sells directly to the consumer, using stores as logistics hubs in a 100% ship-from-store model. The company also generates revenue by leasing commercial areas in its stores and centers, from its stake in Financeira Itaú CBD (FIC), which issues co-branded credit cards for the Pão de Açúcar and Extra Mercado banners, and from Stix Fidelidade e Inteligência S.A., which runs a coalition loyalty program with large national retailers. These adjacent businesses complement the core supermarket and proximity activities but do not change the company’s predominantly food retail profile.

In terms of markets served, GPA operates in a highly fragmented and competitive food retail sector in Brazil, where, according to ABRAS data, the five largest chains – including the group itself – accounted for 26.1% of the industry in 2024. The company’s main market is the State of São Paulo, which is responsible for approximately 74.8% of revenue, in line with a strategy of geographic concentration in higher-income regions with greater consumption density. In other markets, such as Rio de Janeiro, the Federal District and states in the Northeast, the group competes with national and regional chains, as well as mid-sized supermarkets and family-run operations. In food e-commerce, GPA ranks among the main players, competing for share with Carrefour and regional chains focused on premium and proximity formats. The company also operates the Aliados platform, aimed at direct sales to small businesses, extending its presence among smaller corporate customers, although its main focus remains on the end consumer.

Grupo Pão de Açúcar - GPA’s geographic presence is supported by its own logistics infrastructure, composed of 10 distribution centers and warehouses located in states such as São Paulo, Rio de Janeiro, Ceará, Pernambuco and the Federal District. These assets total more than three hundred thousand square meters of storage area, including owned and leased facilities, and are integrated into automated replenishment systems that connect suppliers, distribution centers and stores, reducing stockouts and unproductive inventories. Store supply is carried out mainly via distribution centers, with a centralization rate above 80%, while a share of sales corresponds to “Direct Delivery” products, such as cigarettes, ice cream, yogurts, magazines and ornamental plants, supplied directly to stores by manufacturers. In digital operations, the delivery of online orders migrated to a model based on physical stores, which now serve as bases for home deliveries, express services and ultra-convenience, in addition to click-and-collect.

From a regulatory standpoint, GPA’s activities are subject to a broad set of licenses and permits issued by federal, state and municipal authorities. The opening, renovation and operation of each store or distribution center require operating permits, health licenses, safety authorizations, inspections by the Fire Department, real estate permits and, when applicable, environmental permits under the National Environmental Policy and related legislation. Depending on the type of project and its potential impact, prior, installation and operating licenses may be required, in addition to periodic renewals. Activities related to the sale of food, hygiene and personal care products are also subject to sanitary oversight, including the role of the National Health Surveillance Agency (Anvisa) at the federal level and local sanitary surveillance authorities. The need for ongoing management of these regulatory requirements is part of the company’s day-to-day operations and directly affects the opening of new stores and the maintenance of the existing base.

In the environmental, social and governance (ESG) field, GPA incorporates topics such as waste management, logistics efficiency and organizational culture into its strategy, even though specific details of targets and indicators are not set out in the excerpts presented. The company emphasizes the importance of ESG and culture as one of the pillars of its transformation, tying this pillar to attracting and retaining talent, aligning leadership and sustaining growth. The relevance of environmental aspects is reflected, for example, in the need for permitting and compliance with environmental conditions in its stores and distribution centers, while the social and governance dimensions appear in the management of relationships with millions of customers registered in loyalty programs, data handling and joint initiatives with retail partners through Stix. As an issuer of shares traded on B3 under the ticker PCAR3, Grupo Pão de Açúcar - GPA is also subject to the governance, transparency and disclosure rules required by the Brazilian capital markets.

From an economic and financial perspective, GPA’s revenue is heavily concentrated in food retail, which includes both brick-and-mortar operations and the digital channel, as well as revenue from leasing commercial areas and equity income from associated financial businesses. In 2024, the group posted gross revenue of approximately R$ 20 billion and remained highly exposed to typical retail seasonality, with stronger performance in the fourth quarter due to year-end holidays and Black Friday, as well as additional peaks in periods such as Easter and World Cup years, when demand for certain food and beverage items rises. The combination of traditional-format supermarkets, proximity stores and e-commerce, together with loyalty programs such as Pão de Açúcar Mais and Clube Extra, defines the core business, whose performance dynamics are directly reflected in PCAR3 shares traded on B3.