Earnings Call: Q1 2021

May 7, 2021

Good afternoon, and thank you for standing by. Welcome to Bicel Tableau Compania Digital Conference Call to discuss Q1 2021 Earnings Results. Here today with us are Mr. Marcio Cruz, V2W Digital's CEO and Mr. Rony Lapagesi, B2W Digital IRO. To better follow the conference call, we suggest that you use the support presentation available on our website, ri.bqw.digital. We'd like to inform you that today's call is being recorded. After the presentation. We will open for questions and answers when additional instructions will be provided. To reach an operator. A replay of this call will be available after it ends for a week. Before proceeding, we'd like to clarify that any forward looking statements made during this conference call regarding B2W Business Outlook. Financial and operating projections and goals are based on beliefs and assumptions of the company's management team as well as on information currently available. Forward looking statements are no guarantee of performance. They involve risks, uncertainties and assumptions. Therefore, they depend on circumstances that may or may not occur. Investors should understand that general economic conditions, the industry conditions and other operating factors may affect B2W's future performance and thus could lead to results that differ materially from those expressed in such forward look statements. Now I'd like to turn it over to our speakers. Mr. Cruz, please go ahead. Good afternoon, everyone. Thank you for attending our Q1 earnings call. I'd like to share a couple of important message to you. And then I'll turn over to Roni for the Q1 highlights. On Slide 3, I would like to remind you This is our 2nd year of our strategic plan for 3 year plan. We would like to be more and more relevant in the lives of our customers and would like to be more present in consumer journey. Moving on to the long tail offering more products and services to these customers. And the model of that plan is everything, anytime, anywhere. That clearly translates the assortment of products we offer and the different ways to consume using our platform. We've been growing quickly to keep on generating cash. On to Slide 4 now. Just last year, we introduced our growth algorithm. That's a result of opportunities we detected last year. It was a year that consumers' habits changed substantially, and therefore, several opportunities were put forward To help us grow the business. This growth algorithm has 3 important pillars. 1st, the shopping experience and then loyalty to make customers become more and more recurrent, coming back for more. And the third is to be more present in the minds of consumers, that's awareness. 7, varieties assortment customization fest delivery app, American and SMICE and AMI and again brand awareness. We've been optimizing this algorithm to grow even further. In the Q1, we focused on improving the service level. One of the initiatives we had was a new version of the marketplace platform. The number one goal is to improve service level. We've detected very interesting numbers. These are just a few highlights. Order cancellation in marketplace, we had a 50% drop in the 1st quarter Delays in shipping, a 30% decrease. That was very important because shipping is the first step that will impact delivery times. There shouldn't be any problems there. So we have moved a long way there. And that's the result of the incentives and the strategies we put in place to help sellers improve their service levels. And as And we, of course, offer several services for these sellers so that they can improve their own service levels. On top of these variables, the algorithm has 3 important drivers, People, Data and M and A. People is our number one asset. This is a very important characteristics. You have to have that ownership mentality. Executives are usually more often concerned about their own development, their own career, But if you have the mindset of the owner, you want to generate value and long term value. Our staff management is indeed a partner. Most of the equity is in the company, is invested in the company. That's a key characteristic that will reflect on execution capacity. We have delivered very much faster in this Q1. So that's why it's a very important characteristic. Another thing I would like to talk about people is that once again, we have received a great place to work certification, And we have managed to have a much better score than that we had last year. So the team is truly committed to deliver on our strategic plan. In terms of data culture, We had a pilot project last year and we implemented this year, and that's the Data Academy. The Data Academy, In a nutshell, is to promote the technology culture and using data Across the board, not only in the technology department, but throughout the company. The Data Academy Works for the technology department too. Of course, there are several knowledge levels within that academy. So the intention is to help people work with data, statistics, coding, data storytelling, many interesting things. So data is the key driving force behind the company's growth. We're going to move forward throughout the year. But the initial groups were very Important to disseminate the data culture. M and A, another important driver in our inorganic strategy. Moving on to Slide 5 now. If or IF leads that growth engine And that is through M and A. For this 2020, 2022 strategic cycle, we've conducted 8 operations in the digital platform. We acquired Super Mercado now Back in January last year, we're very pleased with that result. It has been exponentially growing. More than half of items sold We're supermarket items at B2W, but the supermarket baskets, half of it are fresh produce. So it's a major logistic challenge there. For the digital platform, we had Ship, We just announced last month it can help us by bringing a platform to connect food sellers. That was a gap We had, so Ship is there to close that gap and we can move forward towards that fast delivery. More than 14% delivers in the Q1 were up to 3 hours, so ship brings us to another level. We go down to minutes now. So moving forward towards fast delivery by connecting their platform to our business. Just the day before yesterday, we announced a partnership with who? So that's the live commerce arm. It's live Americanas, Americanas Auvivo. Outstanding numbers in terms of engagement, customer conversion, entertainment through shopping and sellers the show they're engaged. They're very interested in taking part in those live streams and promoting their products, a very different selling experience. With the Wu, we have a technology platform that is well advanced in live commerce. It's been tested time and time again in England, outstanding results from the get go. And very soon, we'll be showing that to our customers. It's a new way to purchase with way more entertainment connected to it. So it's a combination of shopping with entertainment, providing way more engagement on the part of our customers. And I would also like to mention that the other acquisitions that were not involved in the digital platform for the other platforms, actually, FinTech, Physical all these elements help us move forward in other categories by promoting that digital experience to those customers there too. So they are major contributors too. On to Slide 6 now. I would like to talk about growth. The results of all these initiatives, among others, we have boosted our growth dramatically. In Q4 For last year, we grew by 38% in the last quarter. We had already anticipated the growth For January February, we reached 83.90. March numbers, we grew 98%. So we're picking up when compared to previous months. 90% was the average growth for the quarter. That growth is the result of our hybrid platform, 1P and 3P. 1P, we are at 69% Marketplace, 3 digits, 105%. So these achievements make us Feel even more motivated to keep driving to keep pushing through. That's because of service level improvements in the Q1 basically. That was our main focus for this period. On to Slide 7 now. I would like to Say that on 28, we announced that material fact with the proposal to combine the companies, Creating Americana's S. A. Will be giving customers way more value By combining all these platforms, the key word is to add to combine physical, digital, fintech, logistics platforms. We will then be able to improve customer experience much, much more: less friction, greater engagement, not only on for customers, but also sellers, merchants, the suppliers and the entire ecosystem. So we Envision Way More Opportunities TO Grow. From the digital point of view, we believe it's only the beginning When you compare the e commerce penetration in retail overall, we believe this is just the beginning. We have moved forward substantially last year and this year, too, but we still believe there's room to improve even more So that we can grow even further. That makes us feel very excited. We still have a lot of work to do to keep growing even further. So these were the highlights I would like to comment on, And I'll turn over to Raul Nie now. He'll be talking about the highlights for the Q1. Thank you. Thank you, Marcio. Good afternoon. Let me talk about the Q1 results. Let me start presentation on Slide 9. Our GMV amounted to $8,700,000,000 a 90 0.4% Growth. Marketplace GMV amounted to BRL5.6 billion, Up 105%. It's picking up strongly when compared to a 31% growth in Q4 2020. Net revenue reached $2,900,000,000 73 percent increase. Adjusted Gross profit was $938,000,000 up 77.9 percent adjusted EBITDA $129,000,000 and adjusted EBITDA margin of 4.4%. The EBITDA margin 4.4% are the result of the free shipping program of Americana's Mais, linked to an improvement of a service level through a co participation model of sellers And also investments and awareness, just like Marcio said, that helped us Grow dramatically in the Q1. On to Slide 10. This is our active customer base growth. March 21, we had 22,900,000 active customers, customers that had some purchases in the past 12 months Year over year, we have an additional 6,200,000 customers. When you look at the Q1 only, We have 1,500,000 customers, new customers Picking up on the gains we've had in previous months. These numbers include the digital platform only. When you add the other platforms, you have 48,000,000 active customers. Our total base is over 90,000,000 registered customers. That's one of our most important assets in the Americana's universe. On to Slide 11. That's the acceleration of purchase frequency. An increase in frequency. Customers with 2 or more orders, we have an increase of 55% when compared to Q1 2020. On Slide 12, This is the sellers and assortment evolution. In the past 12 months, we connected 40,000 new sellers, 96,000 total. And in April, we have surpassed the important mark of 100,000 sellers connected to the marketplace. So the assortment is even more complete And we keep on offering more and more products, 77 new items year over year, 99,000,000 different offers. When you look at April, we have surpassed the 100,000,000 items offered in our platforms. The total is $102,000,000 items. On to Slide 13, that's Americanas Mercado. It accounts for 52% of total items sold in the Q1. The largest growth, 8x growth when compared to Q1 2021. This operation keeps on growing and expanding. We keep on adding new partners. We had connected Carrefour, PIC and other partners, in early 2021, we signed in a partnership agreement with Pao de Acucar. We have over 1500 partner stores connected so that we can expand our operations throughout the country. Americana's Mercado is the largest supermarket marketplace in the country. It's a complete end to end platform to partners, including software as a service, payment solutions, logistics, picking, delivery and customer service. We can digitalize the supermarkets and connect them quickly to online selling. On to Slide 14. This is the Ship acquisition, the delivery on demand start up. Over 20,000 delivery people connected high service level. Deliveries are on average Our take on average is 36 minutes. The app is usually used. Customers usually purchase 3 times a month on average. By acquiring Ship, we can provide a better customer experience in the category of food delivery, we started in 2020. And we can expand the grocery category to other markets. So we can offer O2O solutions, offline to online. On to Slide 15 now. This is the fast delivery Front, that's up to Let's, our logistics platform. We have 22 fulfillment centers, 200 hubs Type. It's 24 hours. It's over it's in over 1,000 cities in the Q1 of 2021. They amounted to 44% of the total volume of orders, including 1P and 3P. Another important delivery modality is the superfast delivery. We are going to be the fastest delivery system in Brazil. 14% of deliveries were conducted in up to 3 hours. For 2021, the superfastdelivery is one of our top priorities. On to Slide 16 now. These are the O2O initiatives. The GMV amounted to BRL 1,000,000,000, a 90% growth. The Infinite Shelf 12,279 points over 5,000 cities in the country. Pickup on store today, available in 6,700 stores and the ship from store, over 6,000 stores now, including Americana's and marketplace sellers stores as well. Ship from store is operated by m Flash, our crowdshipping proprietary platform with over 25,000 delivery people registered there. On to Slide 17, let me talk about the new partnership with OO, a mobile social commerce platform. This is an innovative live commerce platform. O Was introduced by Sam Jones, by Enki Cinque, the TikTok Technology Director, this is a concept of live streaming and shopping. It was a hit in UK, especially younger generation, the Z generation consumer. The most downloaded app in the shopping category. It combines live commerce with gamification, increasing engagement even more. Several games are available during the live stream. Customers can get or compete for coupons and even get products for free. So customers are Way more entertained, so they come back for more. The platform we'll be introduced in Brazil will be integrated with our complete system and a social commerce app that will be introduced now in May. This agreement encompasses the exclusivity use of their technology in Brazil by B2W, And we can even have a joint venture established. That partnership helps us to Speed up advertising and entertainment verticals, including Americana's Alvivo and the B2W advertising platform. On Slide 12, the mobile highlights. As the result of the investments we made in that platform, 63,000,000 downloads And the Americanas app was the most downloaded app in the shopping category in Brazil. In Q1 for 2021, We have a monthly active users that are 40,000,000 in total now. Slide 19. This is the rapid evolution of AME, our fintech and mobile shopping platform. The number of downloads keep on picking up over 19,000,000 downloads now. And Ami keeps on expanding on accepting of us. Almost 3,000,000 stores are connected. The total payment volume is BRL 5,100,000,000 in Q1, a 3 50% growth and picking up substantially from last quarter, In which we grew by 200%. On top of being a payment platform and a loyalty platform, we keep on expanding on our banking solutions, offering more financial services. On Slide 20, We can see recent strategic acquisitions by Ami. After acquiring BIT Capital, Core Banking Solutions and Paraty, operating as a Bank as a Service and RegTag, both in December. In May, we announced we acquired NEXUS, a fintech connecting small and medium sized company with investors. NEXUS Has been accredited by the Central Bank to be used as a society to loan money. It's a hybrid funding solutions, institutional investors an individual, it's P2P model. So we have a digital platform For a complete credit solution, including loans and also credit as a service, NEXO's platform uses a proprietary technology, including a credit score system. And when it's integrated to the hybrid funding model, you can offer differentiated credit services with more competitive rates and no risks for Nexus. So we democratize credit access So entrepreneurs can be more competitive in investing in their businesses. Once you integrate Nexus to ME platform and our businesses, Nexus can help us speed up the credit system, including over 100,000 sellers in the marketplace and over the 3,000,000 merchants we have in Ami. These were the highlights for the Q1 of 2021. I think we can on our webcast platform will be answered by the IR team after the end of this call. Our first question comes from Mr. Luis Felipe, BTG. Good afternoon, Harne. I actually have two questions. First, with regard to GMV. You discussed assortment and number of sellers in April. Can you please talk a little bit more about the trends you see and also the conversion rate you see, particularly going back to February and the shipping activities you mentioned? And now with the acquisition of Nexus, what other functionalities can we consider in having added to your platform? How can that add to AME? Thank you very much. Hi, Luis. Thank you for your questions. Let me address your first point, the GMV in April. Well, first, we have to remind you That's the result of the measures we have been taking. It's not a silver bullet business. We have several fronts, improving the algorithm, we have been improving the platform, free shipping in Americana's maize, fast deliveries And that drives more business when you combine all of these elements together. And then growth comes with quality. We believe it's sustainable. It can stand on its own. We've been able to adjust these variables to help us improve and increase that growth as we have seen. When you look at the conversion rate, There are some elements that help us improve that rate. We had a 30% increase in the quarter, a very important result, therefore, and mainly because of 2 components: higher use of the app, just to give you a reference, the app importance grew 11% year on year in the Q1 of 2021 And also the delivery, free shipping in American Airlines and faster deliveries. When you look at these algorithms and the variables and all of them have the same goal at the end of the day to have a better consumer experience. Of course, you have that growth. Let me address the second part of your question about the growth in April. We started the month of April with very solid growth. It's a very positive outlook. Of course, in April, we have that comparison base of the pandemic of last year. However, we have managed to keep on growing very fast. When you look at the compounded growth, Including 2021 to 2019 to neutralize that effects of last year, April Was the month that we've had the highest growth when you have that compounded or compound basis for comparison. So we are very pleased with the growth and its quality, how it was generated and what we have to deliver for the rest of the year. Now on to the second question about AMI. AMI has been evolving. It started out To provide discounts more intelligently, it was a loyalty system for both physical and digital platform to giving yet another dimension to the relationship with customers, moving away from consumption only in digital platforms to have a different interaction with customers, so aligned with the objective of being more relevant to customers. And it has been evolving very quickly. It's been in operation for a little over 2 years, but has quickly become a means of payment Off us, what we call it, payments outside of our universe, which will enable us to bring more customers to our universe. And late last from late last year up to now, we've been focusing on building our financial solution platform. First, we introduced the credit marketplace connecting fintech offering credit within Ami platform. Then we introduced our prepaid credit card through partnerships. And now We have acquired 3 companies focusing on developing our banking solution. We acquired BIT Capital, it's a core banking and then Paraty, that gives us Central Bank licenses to operate in the banking arena and Nexus back in May, another license To help us speed up in these credit initiatives. So our business view For Amis to keep on growing substantially both on us and off us and building our banking platform. This is a route we've been indicating we're going to focus on based on these recent acquisitions. And we are considering any other acquisitions, both for Ami or in any other platform that we deem will Contribute to our objectives. We'll keep on doing that. It's a very robust M and A agenda, just like you saw, 8 acquisitions up to now, and we have been Looking at very good opportunities down the road. Thank you. Thank you very much for your answers. Thank you. Our next question comes from Thiago Macruz from Itau. Hello, everyone. Good afternoon. I'd like to ask you about AMES PPV. I think you mentioned that outside the platform, there was a specific trend. And how do you see that evolving? Can you please tell us what you find reasonable so that the PPV outside the why the platform surpasses what you have within Americana's. So if you can please add some color on that? Thank you. Hi, Thiago. Thank you. Yes, we've been giving more color on Ami. Now you see the TPV. That was one of the highlights for the quarter, BRL5.1 billion, Real's a 3 50 percent growth, quite substantial. Last year, we have expanded the AMI business plan by adopting digital means of payment and Ami is just at its start Despite that very expressive or that important number of R5.1 billion dollars again, it's been In operation for 2 years, a little over 2 years only. It's So Central Bank aims at democratizing the banking system. So we are It was born in the PIX native environment. We're very excited. We see Ami something that can be even more valuable than B2W when you compare the 2 companies separately. When you look at market operations today, that indicates the value that Ami may have in the future of the business. The TPV offers, we're not going to break that down. It's still premature to do that. The market is paying close attention to FinTech initiatives. We are not going to announce that number because it's strategic Still, we've been conducting several partnerships. We're very pleased with the BR partnership. Drugstores, grocery stores, high frequency outlets. So We expect very robust growth for Ami in months to come. Thank you very much, Roni. Let me just let me give you our TPV reached 40%, Over 40% actually, and it keeps on growing. Our next question comes from Ms. Irma Sklar from Goldman Sachs. Hello, good afternoon. My question is about expenses. Obviously, your growth is very impressive, but we know that there was a cost for that. Americana's maize and free shipping. But if we think about the snapshot of the climate and what to expect for the next quarters, especially considering expenses with sales. Do you think that for the next quarters, you will have operating leverage considering the growth that you are going through. Also the high conversion rate and satisfying your customers? Or do you think that you are still going to invest in the coming quarters? Do you think that this will be mature enough? So this is my question, sales costs. Thank you, Irma, for your question. As to expenses, we've been talking about it for quite some time now. We have been looking for somewhat different balance between growth and profitability so that we can speed things up. Investing Initially, in some areas, just like I said, in the algorithm and the free shipping investments, Joe, like I said. But this kind of investment in free shipping is based on the sellers' co participation pegged to their service level. You've seen the highlights, but it's always linked to the improvement of Sela's operation So that we can provide a better experience overall to customers. But this model takes time to mature. It's more cumbersome initially. And once you get to gains of scale, You end up diluting it. But when you look at the investments we made now initially, it's a full investment Not having benefiting from the counterparts, we believe that the investment was way smaller then what we saw the competition do in the past. The marching level we had to This disregard was not that bad. So a smaller somewhat smaller margins, But growth almost tripling. And down the road, as we optimize the balance of these variables, We can have better profitability. At the end of the day, We're always committed to cash generation. Despite this major investment, the nominal EBITDA was flat, slightly growth year over year. And for the year, we'll keep on generating cash. So we feel very comfortable at this investment level. In a nutshell, Expenses, investments are focused in our Americanas MICE, the free shipping and brand awareness. As we speed up, we grow more, we bring more returns, more recurring customers, active customer base growing too that will reduce other investment levels. Of course, profitability will be better When compared to that we had at the start. That's the balance we're looking for. Perfect. Thank you. Our next question comes from Ms. Olivia Petrolini from JPMorgan. Hello, everyone. Thank you for taking my question. I actually have two questions. First, you commented on supermarket, both in the release and now during the call. Do you see any cross sell between this category and the legacy assortment of your company? Do you believe you can leverage on other categories? Or are these 2 separate? And as for Ami, we also see you are investing heavily on that. So first, how much of this TPV do you see generated with regards to cash back? And what are your expectations for the future regarding this specific initiative. Hi, Divya. Thank you for your question. As to the first question, yes, we've seen a lot of cross sell on both ends. Americana's Mercado bringing more sales to the entire platform because once it's integrated, since it's a high frequency category, The average frequency is twice a month. Our average for the online segment, e commerce, It's 2 to 3 times a year, so we have a much higher frequency in grocery shopping. So that allows us for customers to come to the app and our platform many times. Once they come back To shop more, you have an opportunity to have cross selling, so that they can purchase more. And Americana's Mercado uses our platform strength. We have a very robust active customer base. We increased that base by almost a 1,000,000. So that cross selling is happening on both ends, one helping the other. And that's in line with what believe that we can generate more frequency. Grocery store accounts for 53 percent of items sold. The partnership with UU Entertainment, live streaming, At the end of the day, you have that customer spending more time and coming to the platform more regularly to monetize our assets. So that's our intention when we integrate these areas. As to the second question about AMI, I cannot give you any further detail As to what incentive is, and I'm referring to cash back, cash back plays 2 different roles. One thing Is the cash back in our platforms and cash back operates As if it were a loyalty program, it leverages sales. The way we see it, investments in cash back at AMI, It's in our balance sheet for B2W. It's a sales leverage. Every real, We have 11 times additional sales for every real given in the form of cash back. It's a very Powerful cashback program. It replaces other discount models more intelligently. They did not yield the same benefits. You can have the lock in of customers within the platform. The cashback can yield several benefits. And outside the platform, cashback is just another means to bring more customer at the end of the day. It's a customer acquisition cost, not only for Ami, but for the entire universe because Ami brings in new customers that didn't purchase from our universe, but they go to a gas station, they go to a grocery store, they purchase At a drugstore, you can bring these customers to our platforms as well, so that can Use our network effect there. Looking down the road, looking forward, these investments are according to plan. We do have a business plan for AME And that, of course, foresees investments. At the same time, we keep on managing the TPV so that it can become more effective. It's 100% in our hands to give the cash back. That's the beauty of that business. We have the business plan. We trust it. And Amit will become profitable. That has to go through the entire development of the platform, not only payments or loyalty, But at the same time, to move towards the direction of banking that help us in the monetization too. That's how far I can go today. Perfect. Thank you very much, Roni. Thank you, Olivia. Our next question comes from Mr. Ruben Couture from Santander. Good morning, everyone. You just touched on sales expenses, and you mentioned the 3 factors. Can you please share how much growth and how much each factor contributed to that, more specifically, marketing. I understand that there was a growth, but I want to know how much marketing contributed to that increase. We know that right now, everybody is looking for more customers. It's been more challenging than last year. And you mentioned 50% of deliveries that were carried out very quickly. And I want to understand whether you consider that, that will stay on the same level. Can you please elaborate a little bit on that between the relationship between you and the sellers? Hi, Ruben. Good afternoon. Thank you for your questions. As to the expenses, Let me point out that this investment falls within our vision of a balance of variables, just like I answered in the previous question. When you look at investments made in the past In our competition, they had investments and way bigger than the investments we're making. It's a different balance, but at the end of the day, we'll be able to be focused in generating cash. We pay very close attention to it. When you look at the cash consumption in the Q1, it's usually it is basically linked to seasonality, but we had major efficiency gains there. When you look at cash consumption in Q1, It's 10.3% of our GMV. When you look at the same or indicator in 1st Quarter of 2020, we've improved almost 400 bps. So we're making this investment. We believe it makes sense and it's always linked to improving service level, increased shopping frequency and greater engagement. Once you generate these benefits to the company, this financial model becomes even more optimized. We can even cover more spaces with free shipping. We can Even expand that. It's a living entity, so we keep we have to adjust it as we go. When you look at last year's numbers, That was the investment in Americana's MICE, free shipping. Just like you said, 52% Our sales use free shipping. Last year, it was about half. With the new packaging of the Americanized mice, we doubled free shipping, which is very good to customers after all, And we can, of course, benefit from it. As far as marketing goes, no major highlights. We've been sponsoring Big Brother products in that Big Brother category. The highlights in expenses we didn't have last year is exactly the Americana's MICE program, Always striving for that balance. With a co partnership, you have to have a minimum ticket price. Sellers can only have free shipping depending on their service level. The higher the service level, Thank you, Ruben. Our next question comes from Mr. Guilherme Assis, Banco Safra. Hello. Good afternoon, everyone. Thank you for taking my question. I actually have two questions. First, I know that the math is not 100 percent correct, but when we try to estimate, it's around 10%. And I think that you changed your strategy in order also to be competitive. So with regard to the uptake. And also try to I would like to ask if the take rate rather is really around 10%. And it seems to me that it's flat right now. So I want to understand first if my math is right and how do you see that? And my second question, you announced this program to expedite growth. I don't think that is a formal guidance, but rather company's expectations in growing 50% or a little bit more than that in a year. But considering Q1 performance and what you also saw in April and now beginning of May. Do you believe that 50% is a feasible target? Do you keep that expectation of growing 50%? And do you think that you're going to be at a level that's above competition? Hi, Guilherme. Thank you for your questions. About the take rate, yes, it's right, about 10%. There were no take rate reductions. There are no incentives there. We changed the marketplace platform, but we didn't take the average take rate we had before. It was just a change to give us more predictability to improve the service level, but it didn't change the marketplace economics. The major change was the co sharing model for free shipping, just like I said in previous answers. As to the growth, we've been informing the market. Our goal is to grow more than our top players. In the Q1, we grew more than we expected. Our expectation was about 80%. We grew 90% in the Q1 when we look at April numbers, just like I said in previous answers. When you have a 2 year calculation, what's the best monthly growth for the company so far? So we're very excited about keeping on growing above internal expectations, But the focus is to grow more than our top competitors gaining market share, but maintain the firm goal of Generating cash. Okay. Thank you very much, Roni. Thank you, Guilherme. Our next question comes from Ms. Daniela from XP. Good afternoon, everyone. Thank you. Very quick question about growth. Can you please add some color on how do you see that for 1P and 3P? Or do you see any of these 2 growing more? And also, which categories do you think that will be that you present a higher potential? Also restaurants with the ship? And which categories do you foresee a growth, stronger growth, for example, fashion. So if you can please split up into categories. Thank you. Hi, Daniela. Thank you for your questions. As to the breakdown between 1P and 3P, We have a hybrid platform. The balance there, we believe it's good for the business, it's healthy, a little over 60% of on 3P, a little less than 40% in 1P. Throughout the quarters, We've been trying to optimize to the scenario. When you look at the Q4, 1P grew more than 3P. And as we promoted changes in the marketplace platform, that curve Reverted. 3P grew more than 1P. Again, we're always looking at opportunities trying to grow in both. There were opportunities for growth in both of them, 1P and 3P. In the long run, of course, given the characteristics of 3P, It's a long tail business model. We believe that 3P may grow more than 1P in the long run, But we are at a level of balance we feel comfortable with, and we'll keep on looking at opportunities to grow more in 1 or the other depending on the quarter. As to the categories, question. The grocery It's the highlight, 53 percent of items sold in the quarter. It grows 8 times year over year, and we believe that there's room To keep growing even further, we're just expanding geographically. We started last year with 2 states. Now we are operating 8 states. We signed partnership with the top 3 grocery store networks. We can have a national coverage now, 1500 stores throughout the country. So undoubtedly, it's a category that will grow substantially. For other categories, You have the same dynamics of categories that are huge in physical retail, but they're not as relevant in online, Garment Industry, Health Pet Shops, these are categories That there we see several opportunities to grow both organically or through strategic acquisitions as well. You went very clear. Thank you. Thank you, Daniela. We now close the Q and A session. I'd like to turn it over to Mr. Roni Lapadresi for his final remarks. Mr. Rony, please go ahead. Thank you for attending our earnings call. I would like to wish Happy Mother's Day for all of you next Sunday. B2W Digital earnings release call has now ended. Thank you very much. Have a great afternoon.