Earnings Call: Q3 2020

Oct 30, 2020

Good afternoon. Thank you for waiting. Welcome to B2W's Compagnie Digital Q3 2020 Earnings Call. Mr. Raul Neil Lapajesi, IR Director of V2W Digital is here with us. Please refer to the supporting presentation atri.b2w.digital. This call is being recorded. All participants are in a listen only mode during the company's presentation. We will then have a Q and A session. Further instructions will be given then. The recording will be available right after the call is finished for a week. Before we proceed, we'd like to state that statements made about business perspectives, projections, operational and financial goals are based on beliefs and premises of the company's management as well as information available currently. These statements are not in any way assurance of future performance. They of course depend on future circumstances that may not occur. Investors should understand that economic conditions as well as the industry may affect operational results of the company that may differ from results mentioned in such statements. I'll turn over to the speaker to start his presentation. You may continue, Mr. Rapa Jesse. Good afternoon, everyone. Thank you for listening into our earnings call. In 2020, we started a 3 year strategic plan from 2020 to 2022, which aims at continuing to accelerate growth and generate cash. From the beginning of the year, we faced a challenging landscape because of the pandemic, which brought great lessons and drove us to be even quicker, finding innovative and creative solutions. This landscape also brought important behavior changes in how people consume accelerating digital solutions and e commerce. After the 1st 9 months this year, we came to the main period for sales, and we're focused on once again having the biggest Black Friday on the Brazilian Internet. With that, we hope to finish the year successfully. It was challenging, but full of important opportunities and allowed us to present results far above what we had initially foreseen. We had a private capital increase of R4 $1,000,000,000 which will allow us to continue executing our aggressive growth plan, and it includes organic expansion partnerships and some strategical acquisitions. This does not change our commitment into continuing to generate cash, but it will allow us to have an even greater execution speed. With the many opportunities presenting themselves, we are extremely driven to anticipate our strategic plan and start in 2021 a new journey with exponential growth. Now we'll begin our presentation on Slide 3, where we'll talk about the results for the quarter. In the Q3 of 2020, we reached the highest quarterly GMV in our history. It came to RMB7.3 billion and for the first time went over RMB7 1,000,000,000 in a single quarter. This result is a growth of 56.2 percent versus the Q3 of 2019. During this time, net revenues reached R2.7 billion dollars a 58.5% growth versus the Q3 of 2019. Our adjusted EBITDA was R252 $1,000,000 a growth of 65.7 percent versus the Q3 of 2019. So, our adjusted EBITDA margin So, our adjusted EBITDA margin went from 9.1% in the Q3 of 2019, reaching 9.5% this quarter, a growth of 0.4 percentage points. Net results improved by 64.1 percent from negative €102,500,000 in the Q3 of 2019 to negative €36,800,000 this quarter. We had a cash generation of €161,000,000 up 79.8 percent versus the Q3 of 2019. These results show the strength of our digital Slide 4 shows our market share gains over the year. In the Q3 of 2020, we had an increase in the growth delta versus the market, a growth of 56.2 percent or 12.7 percentage points above the market growth, which was 40 3.5%. So, in the 1st 9 months of 2020, we had a growth of 52.8% in total GMV, 7 percentage points above the market values, which according to EBIT, Nielsen grew 45.8% during this time. Moving on to slide 6, we'll talk about the highlights in our digital platform, which connects people, products, businesses and services. The company has the biggest and dearest brands in the Internet, and its marketplace operation is growing strongly. The platform was built over the last years, and it allows B2W to also offer several solutions for store owners and clients of all kinds, including technology services, logistics, distribution, customer support and payments. The B2W digital platform is accelerating our virtuous cycle that generates value, connecting more suppliers and sellers, expanding our assortment and the number of offers and attracting more and more clients. Slide 7 discusses IP and 3P and how they are developing. The results this quarter are examples of the strength of our hybrid business model, with accelerated growth in IP and 3P. In this quarter, One Piece GMV grew 59%, with accelerated growth in toys, home, books and domestic items. This operation had a positive contribution margin, generating growth and improving the company's cash generation. The marketplace was also growing fast with an increase of 55% in GMV versus the Q3 of 2019. The main categories were sports, games, supermarket and furniture. So to reinforce the strategy of offering everything the client needs, our marketplace assortment continues expanding exponentially with a growth of 2 70% versus the Q3 of 2019 and reaching 56,100,000 items. Slide 8 has some of the highlights of our digital solutions and our financial services. B2W deliveries reached 21,600,000 deliveries in the 1st 9 months of this year, a growth of 53% versus last year. Added to the 1P deliveries, which are done in company pilots, we have the highest private logistics operation in Brazilian e commerce. SkyHub reached 31,000 active sellers at the end of September, a GMV of RMB 8,100,000,000 in the 1st 9 months of 2020, where RMB1.5 billion off platform GMV, that is. GMV performed in other marketplace platforms. B2W ads had a growth of 3 65% in its revenue this quarter versus the Q3 of 2019. In financial services, our highlights were credit seller reaching $745,000,000 in pre approved limits for B2W marketplace sellers. Discounting of receivables reached RMB7.3 billion in the 1st 9 months of this year, a growth of 62%. And our branded credit cards came to a total of R2.7 billion in the 1st 9 months of this year. Slide 9 shows our highlights for Ami Digital, a FinTech and mobile platform in the Americana's universe. TPV reached RMB1.1 billion in the last 30 days, up 2 25 percent versus 2019. The number of downloads continues to grow quickly, 12,500,000 in September of 2020, up 168% versus September 2019. To be even more relevant in our clients' lives, Amade continues to offer new solutions. It has over 55 functions for its users, including gamerzone and mini app BR, which are new launches. Slide 10 shows the Ami credit card that was recently launched. To continue our offer of financial services, after launching the credit marketplace and our prepaid card in October, we launched the Ami credit card issued by Banco DO Brasil. This is a product with unique benefits. It has fee exemptions. And since it's digital first, it's automatically approved and issued in 9 minutes in the app or in Americana's stores. Now, we'll talk about some of the main operational highlights this quarter. Slide 12 shows our sellers and assortment. B2W Marketplace connected over 10,000 sellers in the Q3 of 2020, a total of 79,000 sellers in September of 2020. So over 2020, we connected a total 33,000 sellers. Our goal is to offer a greater assortment for our clients. So we continue increasing it, including 16,600,000 items over this quarter, a total of 56,400,000 available offers on our websites and apps. In the 1st 9 months of this year, we added a total of 26,900,000 items. Slide 13 shows our mobile highlights. In the 1st 9 months of 2020, our apps continued to be the most downloaded and shopping in Brazil. Our installed basis was 47 point 1,000,000 in September. In the Q3 of 2020, branded apps had 36 1,000,000 active users or MAU. Over this quarter, mobile traffic came to a total of 82.5 percent of our total visits, up 4.9 percentage points versus the Q3 of 2019. Slide 14 shows the Americana MICE program, a new subscription service that not only offers free shipping and fast delivery, but also provides a number of benefits in brick and mortar stores and in the Americana's website and app, including same day delivery and free shipping for groceries, besides an exclusive cashback program. They also have partnerships for digital entertainment, including Deezer, an audio streaming platform, and U Book, a digital content platform. In its 1st month, we already observed some important benefits, such as increasing spending and frequency by 3 times, a 4 fold increase in ship from store, and a 5 fold increase in page views per user. Slide 15 shows Americana's Mercado and its performance. It continues to grow, and it had a growth of 8 times versus the Q3 of 2019. So, the category is consolidated as the biggest in B2W in items sold. In the Q3 of 2020, we started expanding geographically. We are now in 43 cities in the states of Sao Paulo, Rio de Janeiro, Spiritu Santo, Rio Grande do Sul, Bahia and Pernambuco. We also started an innovative program delivering with eBites, which are 100% adapted for deliveries. This is speeding up our delivery process and also reducing CO2 emissions. Slide 16 discusses Let's. This quarter, we continue to expand our logistics with 3 new fulfillment centers in Bahia, Serra and Perrault. With the new fulfillment centers, we've reduced the distance till the end consumer, increasing to over 1,000 cities, which are eligible for deliveries in 24 hours. Let's, our multimodal logistic platform, currently operates with 20 fulfillment centers in 10 states, and it will open one new fulfillment center until the end of this year in the federal district. It operates with 2,000 hubs, 5,000 stores connected to the ship from store modality and 27,000 vehicles connected in different modes, from trucks to bicycles. With this platform, we can deliver faster and faster and at a cheaper price. 33% of our total deliveries, including 1P and 3P, are done on the same day were done on the same day in Q3 of 2020. Slide 17 talks about automating our sortation centers. Over the year, we implemented automation systems in sorting products in 7 fulfillment centers, which are responsible for 50% of the company's total shipments. That reduces shipping lead time from 20 hours to 10 hours. And by the end of the year, we will reach 5 hours. These improvements are even more important in high volume times, such as Black Friday, where hundreds of thousands of products are sorted every day. In 2021, we will automate an additional 5 fulfillment centers. Slide 18 shows improvements in our purchasing experience, which are now providing more visibility for fast delivery options and making our layout more intuitive. So we've created new delivery filters on the websites and apps, showing to clients items that can be delivered in up to 24 hours. We also created some seals for products that are delivered in the fastest times, including deliveries in up to 3 hours. In September, we developed an algorithm optimizing shipping times. And this is done through a predictive model comparing standard shipping tables and real historical data. So we were able to recalculate 8% of shipping times, reducing on average 25% of this time. Slide 19 shows our O2O, or online to offline initiatives, which had a total 1,100,000,000 GMV in the 3rd quarter, up 96% versus the Q3 of 2019. This quarter, we had 3,200,000 orders through these initiatives, including Infinite Shelf with had an average ticket 20 times higher than brick and mortar stores and sales growth of 42% versus the Q3 of 2019. Peg and Alloja had 10,171 connected points. It's the biggest pickup point network in Brazil, it reached 1,100,000,000 GMV in 2020. It's now available in 100% of Americana stores and seller stores, which are a total of 3,200 stores. We also have ship from store available in 5,000 stores, which include all Americana stores and some sellers stores. In August, we also started delivering some big items such as TV sets and microwave ovens, which increases our assortment. Slide 21 discusses our preparations for end of the year sales. We're focused on having once again the biggest Black Friday in Brazil. Getting prepared for such an event takes place, happens throughout the year. And in 2020, due to the changes caused by the pandemic, we're going to have an even more digital event, which requires doubled efforts to ensure the right levels of inventory, assertive deals and a high service level. We are highlighting some of the initiatives we've made to ensure that this event will be successful. For example, inventory reinforcements, which were BRL 655 1,000,000 higher than the Q3 of 2019, We optimized the operation to have the fastest delivery in Brazil. We reinforced the live commerce operations with several celebrities promoting our products. O2O operations for all of the Black Friday period. And we also have some marketplace operation changes, such as solutions to help sellers in defining the right assortment for the event, helping them negotiate with their suppliers. All of our intelligence and pricing services will be made available. We're also supporting them in commercial strategies and projecting the demand for products during the event. And we are also offering more ad campaigns through B2W ads. And besides that, we also have special cash back offers for payments using Ame in 1P and 3P. So these are the main comments for our performance in the Q3 of 2020. Before we begin our Q and A, I'd also like to thank our team, especially for their engagement and their enthusiasm in servicing our clients in the best way possible. And now we're open for any questions you may have. Thank you. Ladies and gentlemen, we'll now have our Q and A session. Is concluded. Luis Bonas asks the first question. Good morning, Rony. I actually have two questions. The first one is based on the last slide, Black Friday, 1P, 3P. Can you talk a little bit more about the growth in the relationship between these two channels? In Q3, you had stronger growth in 1P. What's your take on the growth between the 2 channels? Question number 2, could you give us some color about the B2W performance and its market peers? You talked about the total market, but what's your take on your peers? Thank you. Hi, Louise. Thank you for your questions. So the first point here is that we have to remember that our platform is hybrid. So in our point of view, a hybrid platform is the best combination between 1P and 3P. To our understanding, this combination is one of our biggest strengths, because 1P and today are contributing towards our results. And that goes for EBITDA and cash generation, as we can see in the Q3 results. When you look at the marketplace, it's been in operation for about 5 years. And with the growth we've had, we've reached a balance point, which is very similar to what we see in the U. S, where we have 60% of our sales from 3P and 40% from 1P. So given that combination and those strengths, we feel very comfortable in continuing to grow in both platforms. When you look at the 9 months of this year, contributions towards our total GMV were very similar between 1P and 3P. This combination at the end of the day is what is bringing more flexibility for the company. So it allows us to accelerate our 1P operation. Sometimes we accelerate our 3P marketplace, and we almost look at what's better for the client, what they're demanding, and we're focused on meeting their needs. And we also look at the contribution for each operation in the company. So the overall idea is to continue to find the best combination in the hybrid model, and what it can offer for the company and our clients. Concerning your second point on growth versus some peers, I have something to highlight, which is that our plan, our 3 year plan, which was announced, is already ongoing. So 2020 will be the first of the 3 years. Our plan was to double in size in 3 years. And for that, it would be a CIGR of at least 1% and that's always with cash over the generated over the first 3 years. When we look at the 1st 9 months, our results were far above we had forecasted. We grew by double what would be necessary to reach the kicker we had initially forecasted. So, the 1st 9 months delivered results that were over twice as high as we had projected. And we also grew above the market value, 53 versus 46 in the market as a whole. So that gives us a market share gain throughout this period. That 53% growth in the 1st 9 months was focused on becoming more relevant in our clients' daily lives. Going into new segments such as groceries, these are segments that are more frequent and they've been a highlight over the last quarters. So this growth is in line with how we see things. We're always focusing on the long term. Besides this growth, in 2020, we saw a number of initiatives being completed, such as O2O, virtual marketplace and others that we've mentioned. So we feel very comfortable and ready to accelerate our growth and to show a future growth that is even higher than what we've been seeing so far. Especially when we look at all of the opportunities we have in our business, When we look at digitalization ramping up so fast because of the pandemic, the company is capitalized. We've just concluded a capitalization of R4 1,000,000. So all of these components make us very optimistic, and we're pursuing even higher growth levels than what we saw so far. Our next question comes from Gustavo Oliveira, UBS. Let me talk about you had major growth in 3P in the number of SKUs, but there's a major gap in the GMV, right? What other levers Still talking about your peers, We'll see the reports of major competitors in the near future. They may be stronger despite the growth you've had, which is very solid. What do you believe you should do to speed up your growth in Q4, if that's at all possible? Can you give us some color on the October numbers as well? Hi, Gustavo. Good afternoon and thank you. Your first point on assortment, you actually have a great point because when we look at our highlights, our growth in items sold is basically doubling, versus our GMV, meaning that we are going into items that have a lower ticket, but that are repeated sales products. So of course, on the short term, this growth in assortment, which basically doubled versus last year, the growth in units sold is not translated directly into a GMV at the same proportions. But on the long term, this means that we are selling repeatedly. So this is one of our focuses for this for 2 years, to have more repeated sales. As we advance in these categories, we become more present in clients' lives. And at the end of the day, that's going to bring more relevance, more awareness, which will bring us an accelerated GMV growth in the future. So this is our line of thinking. Adding assortment alone is not everything you need to do. You have to create awareness for the new categories, you have to have, better shipping dates, a better shopping experience, and this is what we're building. As I said in my previous answer, we're always focusing on the long term and on servicing our clients well. So there's that trade off between the short term and the long term. So we have to look at what the clients want and what are the company's long term plans so that we can deliver it with excellence. So regarding assortment, that's the main point. How do you really look at GMV growth in 3P and the growth in units sold? So that shows that there's a great opportunity for future growth. Regarding our peers on Black Friday, it's like you said, we are getting to the area in which we sell the most in the year. So we want to finish the year very successfully reaching our goals. Like I said, in the 1st 9 months, we grew twice as much as we have forecasted. The Q4 is all about volume. B2W has a strong brand awareness with our clients, especially with these end of the year events. So our goal is to have the biggest Black Friday on the Brazilian Internet, and we know exactly what we need to do to continue growing. So it's all a big process. We were building awareness and relevance in our segments. We've been increasing our awareness with clients and delivery dates. And in the next months, we will definitely see accelerated growth. Also, our capital increase was performed with that intention. So we're in the right path, and we know exactly what we need to do to speed up ahead. Let me just clarify one thing. When you talk about speeding up growth, are you comparing that to your 3 year plan? Or are you considering in the next quarter or based on what you reported in Q3? High expectations are there for Q4. But Q4 last year, you had very strong results, right? So your comparison is even tougher. When you talk about speeding up growth, you're talking about Q3 or long term? Well, about our growth, in the 1st 9 months, we already delivered growth rates far above what we had planned. We had twice as much as we expected. So what I'm seeing here is that we see a number of opportunities to continue our plan. So 2021 2022, we hope to grow even more than what we've been doing so far. So that's the focus point. Great. Thank you. Thank you. Gabriel Simons from Itau BBA asks the next question. Good afternoon, Roni. Thank you for taking my question. There are 2 actually. You've had 33% of deliveries in less than 24 hours. With these new fulfillment centers and all the automation, you believe that you're going to improve these numbers even further despite all the growth you've had. Let me understand the magnitude of the contribution of these new centers in these KPIs. And the second question is about M and As. Can you give us some color about the segments you're considering, maybe the size and the timing as well? Thank you. Hi, Gabriel. Thank you for your question. About your first point, we opened 3 new distribution centers, 2 of which were in the Northeast of Brazil. And this is a strategic region for us. When you look at the first half of the year, e commerce in Brazil grew by 47% and in the Northeast, it was a growth of 115%, meaning that the Northeast is already the 2nd biggest in Brazilian e commerce. It's even higher than the South. So, it became a very important region. And that's why we are going from 1 to 3 distribution centers there. When we look at our fulfillment centers, we can deliver in 24 hours in a radius of excuse me, 4.40 kilometers. With the fulfillment centers we have now, we have 1 in Serra, 1 in Pernambuco and 1 in Bahia. That means that we are covering basically all of the Northeast in shipment in 24 hours. So that gives us a potential to deliver faster, which is very relevant. We mentioned that 80 3% of people are having same day deliveries, and we hope to increase that to 53% in the Northeast next year. We also opened a new distribution center in just a few weeks ago, which will be concluded until the end of this year. So we have a multimodal distribution network. So we have hubs, O2O using our stores. When we talk about ship from store, that is definitely a strength that we have because of how distributed our Americana's stores are. So we have shipped from store in all of our stores and more in our additional sellers. We have 7 automated DCs, and we're going to automate 5 more. So, we'll conclude 2020 with 12 automated distributed centers, which reduce sorting from 20 to 5 hours. So we are having a number of initiatives to improve shipping times and also to improve the clients' experience. We mentioned the number of improvements in our presentation, which will make this more feasible for clients. You can't just have the best shipment speeds, but you also need to be seen by the client as such. So, we've been working on several fronts, and we are now collecting the results, which we're sharing with you. To answer your second point about M and A, we, during our capital offer, which we just finished in September, we mentioned that the RMB4 1,000,000,000 are aiming to accelerate our growth plan. So when you look at last year, we finished the year with about $1,000,000,000 in our net cash position. So the company is generating cash and we'll finish this year with about 5,000,000,000 in our net cash position. So the company is focused on accelerating growth and a part of it is for some M and As. We've been looking at a number of opportunities, especially in new categories, categories with a high purchase frequency. And this is something that we saw and how successful we were in acquiring Supermercados now. We are already seeing the results from that. And we see a number of other categories where we can replicate this model, integrations with M and A and accelerate our business. With regards to new profiles, the company is accelerating its entrance into other categories. We're also looking at eventual and neighbors, which can complement our digital strategy. And there are some different opportunities in different moments. So, some of them are more advanced in negotiations and others are not. So, as we have more information, we'll keep you informed. Thank you. Thank you very much for your answers. Thank you. Joseph Giordano from JPMorgan asks the next question. Good afternoon, Roni. Thank you for taking my question. Actually, I have 3 questions. The first question is about the shape of this growth. How do you capture new customers? Are these new DCs bringing in more customers to your base? My second question is about the AMI deployment. You introduced the AMI card. How are you handling the PIX portion? What's your take on the active customer base? And finally, going back to the initial questions, where do you believe you're getting market share from? What kind of player, what kind of competitor is losing that market share? Thank you. Hi, Joseph. Good afternoon and thank you for your question. So to answer your first question on growth, growth has been coming basically from 2 fronts, connecting new clients and increasing frequency. So on the first point, we closed this quarter with an active base of buyers in the last 12 months of 21,000,000 clients. So, basically, we have 6,000,000 additional clients in the last 6 months. So from 15,000,000 to 21,000,000 clients in the last 12 months. It really is an expressive growth level. It's the biggest growth we've had in the last years by far. And the second point, as I said, is a higher frequency. And I can And I can explain this with the gap between GMV growth and the growth in units sold. Units sold have been growing twice as much as GMV in the last 12 months. So there is a lower average ticket there, of course, but you have a higher purchase frequency, showing that our strategy, especially during the pandemic, was to offer clients what they needed, in new categories and creating awareness. And it was very successful. So, this is setting the stage for the company to become more relevant for clients in the future. So, these are 2 very important points. A third point is definitely O2O. O2O has been evolving very much over the last year. So I'd highlight these two points. Basically, the client's base, frequency, just to give you some color on frequency. If you look at this quarter, the 10 items that with highest sales were in the groceries categories. I think the 10th product was a bakery product and the rest were groceries. So that shows how we are becoming more relevant and clients are more aware of us in this new segment. And O2O initiatives are, now connected to 100 percent of Americana's brick and mortar stores. And over the last year, we also started integrating with seller stores using them as urban hubs so that we can, at the end of the day, deliver faster with more convenience for the client. About Ame, for the first time, we mentioned Ame's TPV in a monthly base. This is a new business with impressive results. As a reminder, Ame has only existed for 2 years. When you look at the last 30 days, we've already reached a TPV of 1,100,000,000 BRL with a growth of 2 25%. In November, we have Black Friday. In December, we have Christmas. So monthly TPV will grow exponentially with no doubt. Umming is a business that has double digit shares of the online and the brick and mortar worlds. So they continue to become more and more relevant. 2020 in our strategic plan is focused on that. So we have Cielo, Stony and GetNet having partnerships with us. We're also having partnerships with technology platforms. And our first companies such as fuel stations. So this has been a strong experience in AME. And they've really delivered on the results as we saw on the TPV figures. Regarding PIX, AME was born 100% digital. It was born in a QR code world. So this does not come as something new for us. And it's also 100% modal, which is something that we need to keep in mind. So Ami is not a incumbent player. You know, whatever is positive to make payment methods more digital is good for Ame. And more than that, all the business plan in Ame was built aimed towards that. So we are excited about Pyx. Pyx has not gone into operations yet, but our long term vision is that PIX will change how relevant platforms are. So before, the most relevant players were the one who had a good number of stores. But now with PIX, what's more relevant is whoever has a large number of clients, which is where Ami is. When you look at the Americana's universe, we have over 40,000,000 clients. And we've been able to convert them quickly into Ami clients. So we're very excited about what's going to happen for Ami. With market share gains, which was your third question, market share gains are concentrated on smaller players. So when you look at the last month, we see a higher consolidation in the main platforms. This is what we've been seeing over the last years, and it's become higher during the pandemic. We did grow above the market average, but we do believe we can do much more in the future. So on the short term, it was important to get awareness to become more relevant in new segments. But on the long term, our vision is to grow more than our competitors as well. Wonderful. Thank you. Thank you. Ruben Scotto from Santander asks the next question. Good morning, Roni. I have two questions. Let me understand the growth dynamics. Can you talk about the competitive scenario between Q2 and Q3? That was a strong growth, but what changed from the second to the third quarter that would justify that growth? Maybe can you determine the top 2, 3 drivers were? And the other question is about AMI. You talked about the volume outside the platform. Can you give us a breakdown of those numbers in the past 30 days? Thank you. Hi, Ruben. Thank you for your question. So to answer your first one, we still don't have results from other players. What we have is what is on the market. And what we saw in the market is that it went from 70% in the 2nd quarter to 43% in the 3rd quarter in growth. So this is clearly because of how stores This has happened recently. So naturally, e commerce will slow down as a whole. So it went from 70% to 43%. When you look at B2W, we went from 72% to 53%. So we actually gained on that gap versus the market. Excuse me, it was 56%. So when you compare quarter to quarter, we did have a slowdown, but the slowdown in the overall market was higher, which is natural as stores reopen. But when you look at the comparison with the Q1, we're growing twice as fast, even with stores reopened. So it shows that digitalization, which is what happened during these 6 months is here to stay. And it will boost e commerce for the next years. So this is what I can tell you on the growth. The competition didn't change much between the second and the third quarters. And it didn't change our focus much. Our focus was on high frequency categories with a lower average ticket, which means that our volumes are higher, but it doesn't necessarily mean a higher GMV on the short term. So that's what I can tell you. And again, we have a different sort of growth now, as I mentioned in my previous answers. So to answer your next question, I can tell you that we are continuing to grow in digital. So Ami, again, is only a 2 year operation. And there's some data that are still strategical that we can't share right now. That was very clear. Thank you. Thanks. Daniele, Aegir's XP Investments asks the next question. Thank you for taking my question. Actually, there are 2, Roni. One is about competition. GPA is introducing their marketplace now in November. What's your take on that competition, especially in a segment you are very strong at, which is Americana's Mercado can be even stronger when compared to other players. So what's your take on that possible risk? What is the potential of that live commerce initiative? I know you're just starting out 200,000,000 views already. Have you measured the impact in conversion, ROI? How much value can you extract from it as it picks up? Thank you. Good afternoon and thank you for your question. So to answer your first question, on the groceries category and the competition there, I think it's a kind of market that is still taking its first steps, not only in Brazil, but also abroad. That's what's driving us to go into that category. When you look at the category, it's the biggest one in brick and mortar retail. But when you look at the online share, it's less than 1%. If you look at electronics online, that's over 20%. So it really shows the size of the opportunity there. So competition here is not so relevant for us, because this is a segment that's still taking its first steps and which has a great potential. We have a marketplace model. Super Mercado now is a marketplace model, and it's scalable. So we have a number of competitive edges there. We can add value for sellers, we can help supermarkets to become more digital in their operations. So in our understanding, it has great growth potential. And we have very strong assets, whether by the acquisition of NOW or by integrating it with our logistics and our technology, making into a robust and scalable platform. So much so that we've been replicating this in other states. So when we acquired Spinnaker Acatos now, it was basically present in 2 states, Rio de Janeiro and Sao Paulo. And now we are present in 43 cities, including the states of Bahia and Bernabeuco. And we have partnerships with many supermarket chains. So we are optimistic about this operation for the future. Regarding the live commerce operation, as you said, it's very recent. We were the 1st company in Brazil to bring live commerce to Brazil. It's a very strong model in China already. It has great results there. So, in Brazil, we really believe in it because customers in Brazil are very engaged with social media and with the Internet. So we really believe in the live e commerce model for the future of Brazilian e commerce. And the fact is that our experience has been very positive. When you look at the conversion average in e commerce in Brazil, it's around 2%. But with our live e commerce, it's a clear growth on the sales of products that we can show. And our conversion is double digits even. So the normal average is 2%, but our average is sometimes even double digit. So we are on the right track. We have a great potential with our customers, and we're expanding into different segments. We have live commerce for many segments. We're going to have a great program for Black Friday. And this is a business model we really believe in. Irma Skars from Goldman Sachs asks the next question. As far as expenses go? Are these expenses one off in the other line? What would be the most important items, expenses that may grow dramatically? Would that be connected to your strategy to focus on more frequent categories with smaller average ticket prices? What's your frequency use on a monthly basis and what are the top 2 services used within the digital wallet? Hi, thank you for your question. So to answer the first one on expenses, when we look at the 1st 9 months of this year, our nominal EBITDA grew 63% with an EBITDA margin going up 50 bps. So looking at the 3rd quarter of 2020, specifically, our operational leverage was quite relevant. When you look at our SG and A, we reduced nearly 200 bps. So when you look at gross margins and EBITDA, you'll see that our expenses had an operational leverage of nearly 200 bps. So we have been able to generate leverage. Of course, last quarter, we had a sudden growth. So, you need some time to adjust your expense structures. This is what we've done. So, we've been optimizing our operation. And when you look at this optimization with the positive contribution we have today from 1P and 3P, we can deliver nominal EBITDA at a higher rate. And at the end of the day, this is all in our growth plan, and we want to have balance. We want to grow with profitability and cash generation. So our focus is on that. We've been addressing operational leveraging, although we understand that on the short term, there are some opportunities of leveraging awareness, improving our share of mind in some categories. So we've been making efforts there. And optimization is giving us the best situation to continue to generate cash, which was one of the positive highlights this quarter. We managed to deliver $161,000,000 cash and cash generation. So, this is the balance that we've been trying to meet. Now about, AMI users, usage frequency is strategical right now. So no competitor really discloses this piece of data. But as we add new functions, we have over 55 functions in the app, we see a high level of cross selling between clients. So I can tell you that usage frequency has more than doubled on a yearly basis. So I can't tell you exactly how much, but due to cross selling and these new functions, the frequency rate has more than doubled on a yearly basis. Thank you. Thank you. This concludes the Q and A session. I'll turn over back to Mr. Roni Lappajesi for his final remarks. You may proceed now, sir. Thank you for listening to our earnings call. If you have any more questions, our Investor Relations team is available. Thank you and have a good afternoon. This concludes B2W's earnings call. Thank you for attending. Have a good day. Thank you for using Chorus Call.