Earnings Call: Q3 2019

Oct 31, 2019

Good afternoon, and thank you for standing by. Welcome to the BTW Compagnie Digital Conference Call to discuss the results regarding Q3 of 2019. Here today with us is Mr. Fabio Abarache, CFO and Investor Relations Officer with BTW and Mr. Carlos Padilla, CFO and Investor Relations Officer with Los Os Americanes. For a better follow-up of the conference call, we suggest using the support presentation that is available atri.btw.digital. We would like to inform you that this event is being recorded and that all participants will be in listen only mode during the company's presentation. We will then begin the question and answer session. After it is over for a period of 1 week. Before proceeding, we would like to clarify that any forward looking statements made during this conference call regarding BTW's business prospects, financial and operational projections and goals constitute the beliefs and premises of the company's management as well as information currently available. Forward looking statements are no guarantee of performance. As they refer to future events, they involve risks, uncertainties and assumptions and therefore depend on circumstances that may or may not occur. Investors should understand that general economic conditions as well as industry conditions and other operating factors may affect the future performance of BTW Digital and lead to results that differ materially from those expressed in such consideration. Now we would like to give the floor to the speaker, who will start the presentation. Please, Mr. Fabio Abraccio, you may proceed, sir. Good afternoon, ladies and gentlemen. Thank you for attending our conference call. We will comment on results and operating highlights of Q3 2019. After the presentation, we will have a Q and A session. Let me start on Slide 3. I'll talk about the highlights of the quarter. The total GMV reached $4,700,000,000 a 28.4% increase when compared to Q3 2018. Marketplace GMVs reached 2,800,000,000, dollars 50.4 percent growth and a 61.1 percent share in total GMV, a 8.9 percentage points increase when compared to the previous year. We connected 7,700 new sellers, a total assortment of 19,800,000 SKUs. B2W delivery connected 8,100 sellers in the quarter, and we already serve 94 point 3 percent of the total sellers base. Let me point out that within the BTW delivery system, the expansion of the fulfillment operation. We currently have 250,000 square meters of storage space dedicated to the B2W marketplace sellers distributed in 4 DCs located in Sao Paulo, Rio and Pernambuco. On to Slide 4, let me now comment on the cash generation evolution. We have generated BRL89 million in cash in Q3, an increase of 50 4.9 percent or $32,000,000 when compared to the $58,000,000 generated in Q3 2018. As a means to capture all these effects, cash generation is measured by the change in the net debt, always disregarding any capital increase operations. The Q3 cash generation excludes $2,459,000,000 received in September from the capital increase. The remaining $41,000,000 to complete the total transaction of 2 $500,000,000 were received in October. On to Slide 5. We now talk about the net cash position. We closed the quarter totaling BRL 465 1,000,000, an increase of BRL2.549 1,000,000 when compared to Q2. I would also like to highlight that the capital increase operation was very successful. 100% of company's shareholders adhere to that plan. That capital increase aimed at improving the capital structure, maintaining its commitment to generate cash, allowing the company to continue to invest in its digital platform and boosting its growth through a complete solution ecosystem. On to Slide 6, we'd like to point out the marketplace evolution that registered a 10,200,000,000 GMV in the last 12 months, growing by 54%. The marketplace growth is the result of V2W's work in partnership with sellers. We goal has always been to offer the best value proposition to our customers. In line with this objective, BTW continues to support sellers so that they can continue to grow their operations sustainably, encouraging entrepreneurship and also to enable new companies and formal businesses in Brazil. I'll then comment on the operating highlights of the quarter. On Slide 8, let me talk about the evolution of the sellers base in Q3 2019. We have connected more sellers to the platform, reaching a new record over 7,700 sellers connected in just 1 quarter. We connected approximately 1,000 new sellers every 12 days. At this pace, we'll exceed our target of 40,000 sellers for the end of the year. Let me point out that ever since the marketplace was put in place, we have been very strict in selecting sellers that are willing to sell on our platform. The reputation and quality of our partners are important evaluation factors and are in line with our goal of creating the best marketplace in Brazil. Along these same lines, B2W brings the top sellers in the market in a reliable platform at which customers can purchase their products knowing where they come from and knowing the quality level that they have. On Slide 4, let me highlight the evolution of the assortment. Over the past 4 years, we have seen an exponential growth in the assortment of products offered to our customers from 1,600,000 SKUs in Q3 2015 to 19,800,000 unique items in Q3 2019. We almost reached the $20,000,000 SKU target 3 months in advance, which motivates us to face greater challenges. The expansion of the assortment is a fundamental pillar on our value generation cycle to consolidate the perception that in our brands, customers can purchase almost anything. In line with the strategy, on Slide 10, we'd like to point out the development of Americana Zmundo, the cross border operation of B2W. Customers can purchase products from all over the world. Introduced back in March 2019, the operation continues to grow quickly and has over 6,700,000 asking use. The operation also allows B2W to be competitive and not having not carrying inventory in new product categories. Cross border is an opportunity to offer lower average ticket items, generating more transactions and increasing the frequency of purchase. With the ups and downs of the operation at Cross Border, on November 11, we'll have the Bachelor's Day or Single's Day, the largest shopping festival in the world with the potential in Brazil. In the world, it is 3x larger than the Black Friday event. On Slide 11, we would like to highlight the partnership with Centauro, Brazil's largest sporting goods player. The deal will allow BTW to offer a unique online shopping experience in the sports category by uniting the company's entire platform with Centauro's expertise and a wide ranging assortment. With the introduction of the platform, BTW will expand its presence in sports, one of the fastest growing categories in the Brazilian Internet with a selection of products from leading and international brands, leading national and international brands. Let me point out that Centau's assortment atamericans.com is integrated with search engines, SEO algorithms and other Internet search engines. On Slide 12, we see the connection of major fashion players in B2W marketplace such as Herring, Levi's, Auslan, Ray Ban, Reserva among others. The company thus opens a new growth front and offers an even more complete assortment in addition to boosting the frequency of purchases and attracting new customers. On Slide 14 now, we highlight Lodges Americana's and B2W's important O2O initiatives Using the concept of everything, anytime, anywhere O2O initiatives have been enhancing customers' shopping streams and growing at a rapid pace over the past 12 months. More than 2,500,000 customers have made purchases through these initiatives. Along the same lines, on Slide 15, I'd like to detail the evolution of O2O, lots of sellers as well as Americana's on B2W marketplace. By Q3 2019, we had already registered customers' orders from over 4,000 cities. The click and collect is when the customers buys online and withdraws at the physical store. It's available in 1325 American Stores in all states of Brazil. Additionally, the model is also available in 150 B2W sellers stores. The Click and Collect Now allows customers to collect up to an hour after the online purchase. It's available in all 1500 American stores. Las Entregas ship in store ship from stores when customers purchase products from the nearest Large Americanas and receive within 2 hours. It's available in 16 cities, 108 stores. The Infinite Shelf is largest Americana's assisted selling operation for products offered on the digital platform 1P and 3P. In Q3 2019, the operation had an average ticket that was approximately 15x higher than that of physical stores and a 43% sales growth when compared to Q3 2018. On Slide 16, I'll be talking about VOE, our crowd shipping platform. In order to accelerate O2O initiatives, DOE connects independent delivers motorcycle, bicycle and other modes to B2W Digital's logistics platform, enabling products to be delivered to customers within 2 hours. The app has already more than 500 registered delivery persons and already serves 40 lots of physical stores in Rio and Sao Paulo. On to Slide 18. I would like to highlight Ami's rapid expansion. Ami, the fintech and mobile business platform, Latin American and B2W, one of the first IAF initiatives continues to accelerate. The app has over 4,800,000 downloads and a little over 1 year of operation has been gaining traction in the physical and digital worlds, optimizing the offers of discounts to offers through cash back, generating greater repeat purchases and increasing spending. On Slide 19, let me highlight Ama's rapid expansions at Logistics Americana. Ama is already present in 13 37 stores and by the end of 2019 we'll be present at all physical stores of Lazar. On to Slide 20. We would like to highlight Ami's partnership with Mastercard to offer the Ami prepaid card with the Masters brand. The partnership is one of the most important initiatives in Ami's business plan to broaden its acceptance, enabling customers to pay with EME at 7,800,000 accredited merchants. The prepaid card will operate as a mirror of the AMI account. It can be recharged by direct deposit at Los Americana Stellers, bank transfers, transfer between users, credit card and also by payment of payment slips. On Slide 21, we would like to highlight 2 other important partnerships that will broaden Ami's acceptance in the of us world. Ami integrated its payment platform with Linx, which has 65,000 accredited merchants and Vtechs, a platform that manages over 2,500 e commerce sites. Moving on to Slide 22, that's the evolution of products and services available at Ami. I'd like to highlight the new features launched throughout Q3. Ami customers can now purchase road or bus tickets, games, admissions and tickets, plans for Baiki Itau and to negotiate airline miles. Finally, I would like to take this opportunity to thank our team for their enthusiasm and dedication. I would also like to thank our suppliers for their partnership, marketplace sellers for choosing our platform, our shareholders for their trust and especially our customers for their business. These were my comments about our Q3 performance. I would now like to start the Q and A session to clarify or to answer any questions you may have. Please be brief in your comments. Thank you. Ladies and gentlemen, we can now begin the question and answer session. After the conference is over. Our first question comes from Joseph Giordano from JPMorgan. Hello. Good morning, everyone. Thank you very much for answering my question. Fabio, I would like to know if you can elaborate on the main initiatives and systems that the company has been developing in order to further accelerate the roadshow of the company, in particular, the connection of sellers, which is not present offline? And how can we bring this offline guy to the online world? Hi, Joseph. Thank you for attending the call. 020 is a platform leverage that's something that we have been building in past few years. We can therefore offer our customers several options. So that we can offer goods to meet their convenience. That's the concept of everything, anytime, anywhere. And this happens through any of these O2O initiatives. We've been using that at Lodges Americana because of our physical presence in several cities in every state of the country. And as a next step, we have been bringing sellers from the marketplace to enjoy that experience as well. We have about 40,000 sellers. We have word that over 50% of e sellers have some sort of brick and mortar stores as well. So it makes sense to begin to integrate these physical stores of our sellers to our O2O platform. There are several opportunities, therefore. So we integrate these opportunities to our sellers' physical stores. We can increase the assortment levels in a matter of hours to our end users. And to speed things up even further, we introduced the crowd shipping platform back in August, that's VOE. That will actually make a difference in the delivery world. Through technology, we can connect independent delivery people, motorcycles, bikes, scooters. They are all connected to this distribution platform. The delivery can therefore take place in a matter of hours. We have about 500 delivery people. We are now serving 40 Lodges Americanas stores in Sao Paulo and Rio. Perfect. Thank you, Fabio. Thank you, Jose. Next question comes from Thiago Macruse from Itau BBA. Good afternoon. This is Emerson in fact. Thank you very much for answering my question. I have three questions in fact. First, we saw that 1P started to grow again. We did not expect this robust growth in the Q3. To which you attribute this growth in 1P? Are those categories that were kind of forgotten in the past and then you started to look at those? Or did the economic situation change? And in relation to MiGdigital, how has this been progressing in the past few months in relation to the partnership with Linx? And lastly, we saw that in terms of margins, the SKU number per sellers have been accelerating in number. Is this due to the number of new categories? Could you provide more information related to this, please? Hi, Emerson. Thank you for your questions. Your first question about the growth of 1P, let me point out that we have had that growth for several quarters in a row. The total MV growth was about 15 percent in Q1 and then Q2 that was about 22%. And now for Q3, our growth was 28.4%. It's a 6 percentage point growth quarter on quarter. That growth is driven first by the 3P growth itself. That is almost 16 quarters in a row of over 50% growth. And mostly because of the 1P operation, it's back to the growing trend and has also contributed to the total GMV growth. In 1P, we have that specialist vision. That is to say, we have been curating the items that we're going to operate and grow at 1P. That's a natural consequence of the transition of the platform and also because of the relationship we have with our suppliers. It was somewhat expected, therefore. So we were expecting that growth in 1P for both Q3 and also Q4. We believe that 1P will be contributing to our overall growth. On to your second question, as to the AMI TPV, it's very strategic information. We cannot announce it. Yet in the office world, the TPV for both LASA and B2W, It's been growing rapidly. It has exceeded our initial expectations, which is very good. That shows that it was a correct strategy to offer more cash back. So we're doing better in the off us. And this is a very important world to us to increase the frequency of AMI use. We are now implementing a couple of strategies. Number 1, organic growth through the Ami Plus platform, that's the seller side. And inorganically, we've been growing through partnerships. One of them is with Linx. They have about 65,000 accredited POSs, which is very good. Vtechs is another partnership. They have about 2,500 e commerce sites and the latest partnership is with Mastercard. We're going to mirror the Ami balance in a prepaid card, physical or digital. And then, EMEA will be accepted at every point of sale in which a Mastercard is accepted. So it's just astounding as to what's going to happen in the off us world. On to the third question. Yes, we have increased assortment levels dramatically in the marketplace. Let me point out a couple of reasons. First, the scale of our platform. It's getting easier and easier to connect new sellers and of course increase the assortment as a consequence. That's one thing. At the same time, we have been encouraging seller or existing sellers to increase their assortments. We have been helping them. As they develop their operations within the platform, it's only natural that they want to grow their businesses as well. So as a consequence, they boost their assortment levels as well. And the 3rd driver is the cross border operation. Let's say you connect a seller from China, we can connect a very substantial number of SKUs. And the speeding up of cross border operations is something we have been sharing for quite some time. We started the operation back in March with about 410,000 SKUs, and we had 6,700,000 in September. So we have been increasing or growing very quickly, connecting new sellers and boosting the a certain level as well. Okay. Thank you. It was very clear. The next question comes from Gabriel Dezeli from Santander. Good morning. I would like to understand, since your debt is already settled, how can we think about OpEx and CapEx in the in your operations? And how do you view the expansion of margins ahead of us? Good afternoon, Gabriel. Thank you for your question. Well, this is interesting when we talk about the capital structure of the company. B2W was the 1st company to identify the critical issues of this business and what the necessary investments would be to address all these issues. As of 2013, we have been investing in building a unique platform. No other player in Brazil has a similar platform. There were 13 acquisitions in tech and logistics assets. And since we were the pioneers, we had that opportunity to pick and choose top companies and top people. Let me just remind you in terms of logistics. We have a 15 CD network in over 200 hubs throughout the country. We have our own distribution unit with over 5,000 drivers connected on a daily basis. We have over 1500 brick and mortar Losas Americanas stores to operate several O2O initiatives. We are therefore the single player with this nationwide coverage. We can deliver faster, cheaper for both 1P and 3P products. That's very important. In terms of technology, we have over 1500 software engineers in our 3 digital labs. We're now developing the future of our platform with the state of the art technology. We have proprietary technology in terms of AI, machine learning, SEO, pricing. No other competitor has these assets. So this platform allows us to keep on growing in our core business, while at the same time, we develop new and relevant businesses at the same time, just like Ami, our fintech. We have over 4,800,000 downloads with over 30 features, and we've been striking important deals with partners to be present in the off us world. At this pace of development, at Ami, we introduce a new feature every 15 days. And this is just the beginning. There are many new features to come soon. So in order to put all this in place, the company has invested where it believed was necessary, especially the $2,500,000,000 capitalization operation was very successful. 100% of shareholders accepted it. We do believe we have a solid platform, a cash generating core business and a structure our capital structure that is optimized to start afresh in this new 3 year cycle. We'll be giving a little bit more color on December 6, our Investors Day, and let me take this opportunity to invite you to this Investors Day. In 30 days, we'll be ready to share these new features with the market between 2020 2022. Okay. Thank you. Our next question comes from Gustavo Oliveira with UBS. Hello. Good morning. I would like to understand the cross border operation. As we can see in the number of new SKUs, the number of SKUs cross border has been attracting. How to which degree it has been contributing to the market place growth? How much of it comes from cross border? This is my question. Hi, Gustavo. Thank you. Cross border is something very new. It's been growing very quickly. We started back in March, just like I answered in the previous question. So we now have almost 7,000,000 SKUs. We have been learning from our traditional marketplace operation. We collect national sellers. This is yet another step to expand our marketplace, especially to increase the assortment. We cannot tell you what the sales numbers because marketplace is a single unit to us. But the advantage of the cross border is the assortment. Let me give you an example. When you compare the average tickets of both operations, this is 3 times smaller. It's $35 the average ticket. So that gives cross border and the assortment. So they go hand in hand perfectly. We can offer a better assortment to our customers. And at the same time, we can now be part of events that did not happen in Brazil, just like the Singles' Day. Q4 is usually a very positive quarter for sales. But of course, we're always we always want more. Now that we have Chinese sellers connected to americans.com. We're now introducing this event on 11th and we're going to serve that international wave. The Singles' Day is 3x bigger than Black Friday. We couldn't be involved because we're here in Brazil. Whatever sellers will be offering abroad, we're going to replicate that Chinese event in Brazil. So we have high hopes with this event and with the operation as well. Still in relation to cross border initiative, but also connecting it to service level. When we discuss 1P and 3P, we can see that the service level has improved a lot. And therefore, the 3P service level tends to be lower. However, your indicators were maintained at a very strong pace. This was very impressive. How do you actually see the evolution in terms of service level in Brazil marketplace where the competition is much fiercer in relation of some entrants and new companies which are capitalized? And how do you see the evolution of cross border? What kind of China sellers are you bringing in? And how do you see the service considering the whole operation? Thank you, Gustavo, for your question. Service level is extremely important to us. Customers are part and parcel of our DNA. Everything we've done so far for the platform of our 1P business is also available to our marketplace seller because we believe at the end of the day, our sellers are mini B2W. So they suffer the same pains that we have suffered in our 1P business. From the start of marketplace at B2W, we had an excellent service level, and we have been improving. We offer basically the same service level in 3P when compared to 1P. 1 of the top services we have to sellers is the logistics and distribution service. We have B2W Interega, the ship from store. Within the service, we offer several types because every seller has a different assortment level and different sizes. And we're now expanding the fulfillment service, too, that is within the B2W umbrella. It's about 750,000 square meters worth of distribution centers in 4 different units in Rio, Sao Paulo, Pernambuco, everything that we can do for our marketplace service because at the end of the day, they are partners and that's because of the investments we have been making in our platform, technology, logistics, distribution, etcetera. If we hadn't made all this investment, this wouldn't be possible. When you look at the marketplace, it's a 4 year business standalone. It's over BRL10 1,000,000,000 in GMV. This is huge, especially when you compare to the other online operations we have in Brazil. This did not come from nothing. This is a natural consequence of everything we've built on the platform and that relationship with, we have established with our sellers so that we can give our end users a better business proposition with a win win relationship. Okay. Thank you. Our next question comes from Thiago Bertolucci from Goldman Sachs. Good morning. My question we'll have 2 questions, in fact. One is related to logistics. Still talking about you have been previously mentioning. So what is necessary to continue growing and to provide leverage to the sellers in the future? What are the investments you still need to make? And are you going to allocate them on automation or other incentives to bring sellers onto the platform? I would like to understand from the conceptual viewpoint how investments are going to be made on logistics. And the other question is about the cash back promotions. Those clients that you have captured in the first promotions you made, the clients that have some history on the platform, how do you see their behavior? Do you believe that they're also going to be using other services and not only the cashback app? Irma, thank you for your question. As to first part of your question, first, we had a transition period from 1P to 3P that expanded our capacity to bring in the marketplace sellers. This actually happened in the past 2 years. And we made those structural investments between 2013 'fifteen. We got closer to customers. We had 3 CDs or DCs in Sao Paulo. Now we have 15 DCs and over 200 hubs across the country. The last mile was something important that we did. We acquired top carriers in the country with different characteristics. We have our own distribution unit today. In other words, all these logistics assets combined within Leads. Everything we had for 1P is now made available to our marketplace sellers. The B2W Entrego, which is shipped from store, depending on the size of the seller, the number of SKUs they offer and we have been expanding our fulfillment operation. We offer a full service. We store their goods, and we're also in charge for the last mile. We had 100,000 square meters of storage space. We have 250,000 now. That's unique. No other player. Air Brazil can offer this kind of service to sellers. And again, all results we've had in marketplace are a consequence of that level of support we give our sellers, not only in logistics and distribution and especially technology, pricing, our sales department operates with sellers in sales planning too. There's no single cause that is behind this sustainable growth of our marketplace. When we talk about logistics and distribution and marketplace, the next step is to expand in our O2O initiatives also to marketplace sellers. Over 50% of sellers today do have a brick and mortar store. So it makes sense to all of us to connect these stores to our platform and from that point on, offer an even better service level. Our crowd shipping platform will help boost this business. We can connect independent delivery personnel that will be in charge of the last mile in a short period of time. We have been very optimistic about the results we've had so far, but above all, about the prospects when we talk about sellers, logistics and distribution. As to the second question you asked me about cash back, Ami is a way more intelligent system to offer discounts. In the past, customers would pay $900 for a $1,000 product and those BRL100 wouldn't come back to the company. Let me give you an example. The same product, they pay $1,000 and you give them a cash back of $100 So that money goes back to the e wallet. We maintain that money within the system and this customer will come back. They'll come back to use their cash back. And when they do come back, they end up spending more. It's a very large upsell. So 2 good or positive effects, a recurrence effect and they end up spending more, to sell more. The LTV for that customer ends up being much larger. Initial results indicate that the prospects are very positive. We were limited to the Lozius Americana's MB2W system, and now what we're expanding to the world and partnerships can speed up the process. We've had 3 important partnerships with LYNX, 65,000 accredited stores and then VTechs. They have about 2,500 e commerce sites and finally, the partnership with Mastercard. Overnight, we're now accepted at every store that accepts a Mastercard. 1st, recurrency on us, about 5,000,000 downloads. And the next big step is to dive deep into the off us world. And the show results are very promising in every aspect. Thank you. Next question comes from Richard Cathcart with Bradesco. Good afternoon, Fabio. I would like to ask a question about specifically click and collect and click and collect now. Could you share with us to the share of each operation? I would like to understand the level of demand of clients at the shop at the site. Richard, Thank you for your question. We cannot announce these numbers because they are strategic. I can assure you, however, that these initiatives have been gaining a lot of traction To customers, it's very transparent at the end of the day. What we deliver to them is convenience, anything, anytime, anywhere. The numbers of Click and Collect, it's available at every store, 1582 Los Americanas. Customers can buy online and they can collect in up to 1 hour and ship from store. This is something we've been testing for some time. It's available in 108 stores in 16 cities. Customers can buy online a large American Express product and they get that product in up to 2 hours. Our competitors are talking about in days and we're moving towards another order of magnitude in a matter of hours. This can only be made possible due to that coverage through LAHSA. And now when you add the sellers, that coverage will be even more granular. And VOI, our crowd shipping platform connecting everything, being in charge of the last mile deliveries, This business will grow even faster and will become even more important in our overall performance. Our next question is by Tobias Stingali from Citibank. Just a follow-up question. How can we optimize the O2O operation? As you have just mentioned, when you said you can deliver a product in a matter of hours, you said that you said that about 150 sellers are already using the O2O solutions. I'm not sure if I got the figures right. So could you provide more light in relation to the expansion of this operation outside your shops? Thank you for your question, Tobias. We've been testing several initiatives Throughout the year, with Losos Americanas, most of them have been gaining traction. It's only natural that we expand using this knowledge, this expertise to the sellers' physical store. We have about 40,000 connected sellers. We have word that over 50% of those sellers do own a physical store, too. We can optimize that channel. Customers get more convenience, sellers sell more and we can, of course, capture that GMV. The click and collect, we are available. We offer that system in 150 physical store B2W marketplace. First, we have to increase that number, $150,000,000 is a small number when compared to the potential of this business. And then we would move on to ship from store to deliver from that physical store of that seller to the end user losing VOE. When we talk about O2O overall, LASA or marketplace sellers, this is something we'll be discussing in-depth on December 6, our Investors Day. We'll be giving a lot of color about our 3 year plan. You said 150 stores, but how many sellers? Just to have a perspective on this. Mostly 1 to 1, Tobias. 1 seller, 1 store. And in terms of feedback, do you think this base has been impacted on the use of this tool? Yes, absolutely. First, you have the sale and we bring traffic to their physical store. The same thing we see with largest Americanas, customers that come to the store to pick up something, on average, 50% of customers end up buying something else. So it's very interesting to sellers as well because they have some merchandise, they have a physical asset store and we bring traffic to that store. The initial results have been very positive, and we are, of course, optimistic to expand and capture this potential. We now end the Q and A session. I would like to turn the call over to Mr. Fabio Abratis for his final considerations. You may proceed, sir. Thank you for attending our conference call and webcast. Let me take this opportunity to invite you to our Investor Day on December 6th at the Museum of Tomorrow in Rio de Janeiro. If you have any further questions, our Investor Relations team is available. Thank you, and good afternoon. BTW conference call is over. We would like to thank everyone for having attended it. Thank you very much for using Chorus Call.