Empreendimentos Pague Menos S A : Dados Econômico-Financeiros

Quarterly Information

Empreendimentos Pague Menos S.A.

June 30, de 2023

With Independent Auditor's Report on Review of Quarterly Information

Empreendimentos Pague Menos S.A.
Quarterly information - ITR
June 30, 2023 and 2022
Table of Contents
Earnings release	3
Balance sheet	27
Income statement	29
Comprehensive income statement	30
Cash flow statement	31
Statements of chance in shareholders' equity	32
Statements of added value	33
Accompanying explanatory notes to the quarterly information	34
Comment on the behavior of business projections	72
Independent Auditor's Report on the financial statements	74
Declaration Company's Officers to the quarterly information	77
Declaration Company's Officers to the quarterly review report	79

EARNINGS

RELEASE

2Q23

Fortaleza, Ceará, August 7, 2023.

Empreendimentos Pague Menos S.A. ("Company" or "Pague Menos"), the main Health Hub for the Brazilian expanded middle class, present in every state in Brazil as well as the Federal District and in more than 390 municipalities, announces its results for the 2nd quarter of 2023.

2Q23 HIGHLIGHTS

SALES GROWTH

MARKET SHARE

35.9% growth on a consolidated basis and 11.6% for Pague Menos standalone

Organic growth above the market, with share gain in all regions

OMNICHANNEL SALES	HEALTH HUB
60.9% growth, reaching 11.4% for	Record number of Clinic Farma
consolidated sales (+0.2 p.p. vs. 1Q23)	customers, with over 1 million visits in
	the quarter (+134% vs. 2Q22)
ADJUSTED EBITDA	EXTRAFARMA SYNERGIES

28.9% growth on a consolidated basis and 10.8% for Pague Menos standalone

BRL 25 million in 2Q23 (BRL 100 million on an annual basis)

CASH CYCLE

Acceleration in inventory turnover, with 120 days of inventories (reduction of 9 days vs. 1Q23)

CAPITAL INCREASE

Strengthening the capital structure with up to BRL 533 million in new shares

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EARNINGS RELEASE 2Q23

DISCLOSURE CRITERIA

On August 1, 2022, the acquisition process of Imifarma Produtos Farmacêuticos e Cosméticos S.A. (Extrafarma) with Ultrapar Participações S.A. (Ultrapar) was completed. With the completion of the conditions precedent and incorporation of the equity balances, Extrafarma was consolidated and became part of the consolidated financial statements of Empreendimentos Pague Menos S.A. (the Company) that same month.

In order to facilitate the analysis of the results, we present in this release segregated operational data of Pague Menos and Extrafarma, while the financial information is presented as Pague Menos "standalone" (ex-Extrafarma) and Consolidated (Pague Menos plus Extrafarma).

Since 2019, our financial statements have been prepared in accordance with IFRS 16, which changed the criteria for recognizing rental contracts. In order to demonstrate the effects of implementing this standard and facilitate comparison between periods, on pages 19 and 20 of this release we present the Income Statement for the Year excluding the effects of IFRS 16.

FINANCIAL HIGHLIGHTS PAGUE MENOS STANDALONE

in BRL million and % of Gross Revenue	2Q22	2Q23	Δ	1H22	1H23	Δ
Gross Revenue	2,210.4	2,466.4	11.6%	4,321.9	4,782.3	10.7%
Gross Profit	696.3	756.3	8.6%	1,321.5	1,425.7	7.9%
% Gross Margin	31.5%	30.7%	(0.8 p.p.)	30.6%	29.8%	(0.8 p.p.)
Contribution Margin	280.9	294.9	5.0%	507.9	513.5	1.1%
Contribution Margin %	12.7%	12.0%	(0.7 p.p.)	11.8%	10.7%	(1.1 p.p.)
Adjusted EBITDA	210.5	233.4	10.8%	372.9	386.2	3.6%
Adjusted EBITDA Margin %	9.5%	9.5%	-	8.6%	8.1%	(0.5 p.p.)
Adjusted Net Income	56.7	8.9	(84.4%)	81.0	(34.4)	(142.4%)
Adjusted Net Margin %	2.6%	0.4%	(2.2 p.p.)	1.9%	(0.7%)	(2.6 p.p.)

CONSOLIDATED FINANCIAL HIGHLIGHTS

in BRL million and % of Gross Revenue	2Q22	2Q23	Δ	1H22	1H23	Δ
Gross Revenue	2,210.4	3,003.6	35.9%	4,321.9	5,816.9	34.6%
Gross Profit	696.3	930.6	33.6%	1,321.5	1,748.1	32.3%
% Gross Margin	31.5%	31.0%	(0.5 p.p.)	30.6%	30.1%	(0.5 p.p.)
Contribution Margin	280.9	353	25.7%	507.9	609.5	20.0%
Contribution Margin %	12.7%	11.8%	(0.9 p.p.)	11.8%	10.5%	(1.3 p.p.)
Adjusted EBITDA	210.5	271.5	28.9%	372.9	440	18.0%
Adjusted EBITDA Margin %	9.5%	9.0%	(0.5 p.p.)	8.6%	7.6%	(1.0 p.p.)
Adjusted Net Income	56.7	(10.0)	(117.7%)	81.0	(65.3)	(180.6%)
Adjusted Net Margin %	2.6%	(0.3%)	(2.9 p.p.)	1.9%	(1.1%)	(3.0 p.p.)

OPERATIONAL|||UNTRANSLATEDHIGHLIGHTSCONTENT_S

TART|||DESTAQUES
2Q22	2Q23	Δ	2Q23
Operation / Indicator
Store count (#)	1,193	1,284	7.6%	368
TED_CONTENT_END|||
Monthly Sales per Store (BRL thousand)	624	644	3.2%	481
Average Ticket (BRL)	75.70	80.32	6.1%	70.53
Employees (#)	19,653	19,461	(1.0%)	5,914
Employees/store (#)	16.5	15.2	0.8	16.1
Average Sales/Employee/month (BRL thousand)	37.1	41.3	11.3%	32.8
Omnichannel Share (% of retail revenue)	9.6%	12.2%	2.6p.p.	7.9%
Private Label (% of retail revenue)	6.5%	6.8%	0.3 p.p.	5.6%
Pharmaceutical Clinics (#)	915	1,000	9.3%	77

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