Good morning, everyone, and welcome to the earnings call for the third quarter of 2023 at Blau Farmacêutica. Today, we're live with Marcelo Hahn, our Founder and CEO, Douglas Rodrigues, CFO, and me, Bruna Gamboa , IR. At the end of the presentation, we'll begin our Q&A session. We do ask you to all submit your question all at once, so that we can facilitate the order of the answers. Our call is taking place in Portuguese with simultaneous translation to English, and the webcast is recorded on the IR website. Before we begin this call, we'd like to invite you all to come to our Blau Day, which will take place on the 28th of November from 8:30 A.M. onwards, and it's going to be in person as well as online.
Now, I want to pass the floor on to Marcelo, so that we can begin the presentation.
Good morning, everyone, and welcome to our earnings call for the third quarter of 2023. On Slide 2, I want to highlight that in this quarter, we had an all-time high in investments, as well as the amount invested. And the R&D investments and CapEx performed, even despite the macroeconomic challenges and the strong competition local market, our financial strength made it possible for us to invest in our long-term growth.
The transaction with Prothya, a European company that performs fractionation of human plasma and the production of highly complex medication and drugs, is in line with our internationalization strategy, with a search for revenues and hard currencies, verticalization of strategic product lines.
This allows us to use Prothya as a platform for the distribution of our products in Europe and in the US. On the next slide, we will be giving you more details on this transaction. In this period, we invested BRL 31 million in R&D, which represented 80% of our net revenue. Our project with Similis Bio is for the production of four monoclonal antibodies, which has been progressing according to the stipulated schedule. In this quarter, we began installing our large capacity single-use bioreactors, P400, at our API plant. In the quarter, we also began the integration of the Bergamo laboratory that we acquired at the end of June, with synergies that are going to be captured from the first quarter of 2024.
During this period, we were also able to capture BRL 121 million in benefits related to the purchase of this transaction. On Slide 4 of the presentation, we're going to provide more details of the consolidation process at Bergamo. I want to highlight the performance of our last launches. They represented 11% of our net revenue in the quarter, and they have been performing above expectations, with an increase in our market share every quarter.
About P1000 in Pernambuco, at the end of October, we performed the protocol for SUDENE for income tax benefits, and we're going to give you more details about this during Blau Day. Despite the quarter's challenges, we had important recent achievements, and I'm really confident that we're on the right track.
We know that we still have a lot to do, but we have important transformational projects underway that will generate results in the long term and that will position Blau at another level as a company. Moving on to Slide 3, we're going to present some more details on the investments in Prothya. At the end of August, we invested EUR 50 million in Prothya, one of the 10 largest plasma fractionation companies in the world, through a loan agreement that's convertible into shares at the company, equivalent to 20% of its share capital. Prothya is a Dutch company.
It has over 65 years of history, and it's focused on plasma fractionation and production of medication, including albumin and immunoglobulin coagulation factors, prothrombin complex, among others, with its own portfolio, and it's very much acknowledged throughout the European Union and other countries, including Latin America, where they're distributed by Blau. Prothya also provides CMO services to large companies in blood products, such as Takeda, Grifols, Biotest, and LFB.
They have over 1,000 employees, four plasma collection centers in Hungary, and production plants in Brussels and Amsterdam, and they have higher capacity to fraction 3 million liters of plasma per year. They also have their own R&D center with a long legacy of innovation and successful products. The company has shown growth and is going through an expansion moment.
In 2022, Prothya recorded a net revenue of EUR 244 million and expects growth of about 20% in 2023, with an increase of operational efficiency, results management, and higher productivity in plants. Now we're going to move on to Slide 4 of this presentation. For those of you who follow the company, remember at the end of June, we performed the acquisition of the Bergamo lab, and in the third quarter, we began the integration process.
We're excited with this partnership, and this consolidates with one of the more most complete portfolios, and in this medication line. From the beginning of 2024, we started to capture synergies with operational leverage, combining portfolios and the commercial model, using the productive capacity available and increasing our purchase power in both companies.
We also have opportunities to export products from Bergamo to our Latam affiliates, transferring our registrations to Blau subsidiaries and also other opportunities to gain in the operational production and tax areas with the benefits we had for the very beneficial purchase at the lab of representing BRL 121 million.
I thank you all, and I'll pass the floor back to Bruna. Thank you very much.
Thank you, Marcelo. Now moving on to Slide 5, we're going to highlight the product pipeline, which is updated quarterly. It's important to reinforce that we present preliminary information and that the dates presented are estimates in the company.... Since the registration of this medication really depends on regulatory agencies, and there may be changes that could accelerate or delay the product launch.
This year, we have already achieved the registration for 11 drugs that have a total addressable market of BRL 713 million, among which 3 of these have already been launched by September. By 2026, we have 43 more products that are going to be launched, adding up to an addressable market of BRL 7.5 billion. In this quarter, we submitted a new drug, Travix, and 6 in other Latin American countries, and we were able to achieve 6 new registrations in Brazil and 7 in other Latin American countries. As you can see on the chart on the right, at each quarter, Blau has been increasing the share of new products.
Guys, this is live, and so we had some issue here in our technical aspects, but we're back now, and we'll get back to slide 5, where we show you our pipeline of products. That's updated quarterly. We always talk about how the dates for the launches can be modified due to ANVISA and other authority processes, and so we don't have total control on the product launch dates. This year, we've already registered 11 drugs with addressable market of BRL 713 million, and 3 of these have already been launched by September. By 2026, we'll have over 43 products that are going to be launched, with a total addressable market of BRL 7.5 billion.
In this quarter, we've submitted 1 new drug to ANVISA and 6 in other Latin American countries, and we were able to achieve 6 new registrations in Brazil and 7 in other Latin American countries. As we look at the graph here at the bottom, on the right side, you can see that at every quarter, Blau has been expanding its participation or share of new products in its earnings. In this quarter, it represented 11% of our net revenue. So we're really happy to mention that till the end of September, the products launched in 2021 had already achieved an average market share of 29%, and the launches in 2022 already had an average market share of 10%, and the products we launched this year already had a market share of 7%.
So now we're moving on to slide 6, where we're going to show you the main highlights of the plasma collection operation in the U.S., and they continue to have a ramp-up process with the consecutive growth ever since the beginning of the operation, in line with our strategic planning. In our center at Lauderhill, we've reached the break-even, and now we have the expansion of the volume collected. In the annual comparison and the quarterly comparison, our center in North Miami already received all of the licenses for the beginning of the launch, and it should be opening by the beginning of December. In September, we began the construction work for at our Flamingo Center. The center at Jacksonville also continues to expand the amount of collections.
This is a center we acquired 25% stake in, and we have results at the center that started to be part of our results in this quarter through the equity method. So we've also begun prospecting for the fifth and sixth centers, focusing on regions that are more populated with low presence of competitors. Usually, these are locations close to colleges, shopping centers, and subway stations. On slide 7 of the presentation, we're going to talk a little bit about ESG. This was a quarter for planning the work plan for 2024. We also donated in this quarter some donations to homeless people in Rio Grande do Sul, as they were hit by the rains at the end of September.
Our innovation work for the second consecutive year, our Botulim augmented reality received a Great Packaging Cases award from EmbalagemMarca magazine. Finally, as we move on to the best governance practices for the second year consecutively, we also released our sustainability report, presenting the main projects for the company and the different environmental initiatives performed in 2022. The report is available at CVM, and they follow the international GRI rules. Moving on to Slide 8, we are starting to talk about the earnings and results for the period.
In this quarter, we reached the same level of net revenue as we had in the previous quarters, and we've already begun the consolidation for Bergamo that already added BRL 39 million of revenue in this period, and they avoided the drop in the consolidated results that were impacted negatively by the mix of products sold in a scenario with a price retraction and high competition. And, as we've already mentioned in the last few quarters, among the important highlights, we should mention the growth of the revenue, which grows in the annual comparison as well as the quarterly comparison. And this reflects on the increase of capacity in our new production plant, P210, as well as the improvements in the São Paulo and Anápolis production plants.
The launches, as we mentioned, continued to grow sequentially, and they represented 10.7% of our revenue now in this quarter. If we look at last year in the same period, they represented 5.5% of our revenue. So the operations internationally have also gained importance and share in our revenue with the expansion of our Hemarus operation for plasma, as well as our affiliates and subsidiaries in LatAm. So now I want to pass the floor on to our CFO, who's going to continue this presentation. Thank you very much.
Thank you, Bruna. Thanks, everyone. As we move on to our presentation, before we move on to all of these slides on the earnings, I want to highlight that the main events, Marcelo and Bruna already mentioned about.
So we're talking about the integration with Bergamo, Prothya, and even the issuance of debentures are the main factors that we'll see in the next few slides when it comes to earnings and the balance. So some of them have a permanent characteristic, and others just have a temporary effect in the third quarter. So now as we talk about the gross margin, we had a setback in the first quarter, in the third quarter, sorry, compared to the other quarters. So this is mainly due to a mix composition with Bergamo coming in and representing 10% of our revenue. Bergamo is still not a margin contribution in the company at this moment, but there are excellent opportunities.
If we go back to the previous slide, we can see that 20% of the revenue is already related to the new sources of revenue in the company, and each of them are at a different maturity state for gross margin. If we look at the launches, then we're saying that 30% of the revenue in the company in the quarter has a different dynamic in the margins compared to the other 70 in the portfolio. So the strategy to establish now we're gonna also search for the opportunities to leverage the margins and as we look at this. So Bergamo has a natural dynamic, and in the other operations in our portfolio, we're looking at the market and trying to define what the best commercial strategy is.
But the strength of Blau and Bergamo create new opportunities, so we want to look in-house, search for the operational excellence, and the company continues to renegotiate the material prices or adjust the structure. We'll have a quicker turnover on our older stock, and of course, these movements will make the company return to its margin levels that we already had in previous quarters. Of course, excluding these events with the Bergamo integration at this moment.
So now as we move on to the next slide with your operational expenses, we wanted to show you what is recurring business as usual and what is one time. So if we exclude these factors, and these factors are mostly related to integration processes, the closing with Bergamo, M&A expenses, then we see we have the same SG&A level that the company already operated with.
If we get into more details and we see the commercial expenses, there was really an increase compared to the previous quarters. So the commercial expenses had an increase, and this is mainly due to the integration of our sales force at Bergamo. There's another important point. Bergamo, currently, the business model doesn't have its own logistics, so they use DHL. So with this operation coming in, we'll already start capturing the synergy.
Blau has its own depot, its own logistics, so basically, you already have the leverage when it comes to the sales and distribution. Then for R&D, the dynamic is really related to investments we had in the quarter.
Considering intangibles and expenses, we had a lower volume in the quarter, but that's basically because we didn't perform the Similis Bio payments, because this depends on the dynamic and the milestones that we have.
And then when it comes to the Q &A, the same levels of expense. But here, what's important to mention is that in the quarter, we had some movements towards readjusting the structure. At this moment, we have the impact of these terminations, and then we expect for the last quarter, that will begin to capture the savings of these operations. So you can see we're already at the levels of administrative expenses, really.
When we move on to this presentation, this, besides the factors I already mentioned in the previous slide for gross margins, we also have the positive effect of this purchase, which leads to a one-time accounting effect. But it demonstrates that Bergamo's M&A, even before all of the synergies are captured, was already very positive for the company.
And then this already generated an advantage, a gain of BRL 121 million. So we already had the non-recurring effects as well, that I highlighted with the expenses, closing, et cetera, integration. We also had the expenses for the indemnification and restructuring, as well as in this quarter, the provision for losses with two customers that are really coming from that post-credit crisis in the U.S., as they were trying to reestablish themselves.
But of course, in this quarter, this was necessary. So the company continues to have all of its legal instruments for collection, but at this moment, following these accounting rules, we're working on the provision, but we're gonna try to reverse this so that it can be just a provision. And as we move on, we have the net income, and here, we're just gonna look at the financial results, and clearly, we can see the dynamic of the comparison with last year and other quarters, the debt composition and our cash.
The company had super relevant investments, as well as the composition of this cash with debentures, and then we have the currency variations. We had an international cash position that was used to perform the G payment, and now we're gonna start reestablishing this.
Basically, the financial expenses in this cash provision and net debt. So when we look at taxes, you should see that there's an actual full rate of over 34%, and this is basically the effect of the deferred income tax. We have 35%. So with this, it's very important to reinforce that Blau does not intend to incorporate Bergamo, so it's just like a reserve.
It's almost like a provision for the deferred income tax, and it shouldn't actually become recurring because we're not gonna incorporate this operation, actually. Blau's idea is that we'll leverage Bergamo's operation, generate results, as you'll also see this in the income statements, and you'll see how this was established, and this is also gonna bring in some tax opportunities.
So this effect of a higher rate in the quarter is very occasional. But the idea is that more and more, we'll be working on this tax planning process, and we'll have a low rate, so this should remain even more with Bergamo. All right. Moving on to the next slide, we're gonna talk about the CapEx and working capital. CapEx, basically, the completion of P210.
In this quarter, we had BRL 20 million, and so what the company continues to do now is the natural movements with the expansion of these productive units. And so, we're talking about a new line, adjustments, and maybe improving some machines or so. And then, of course, the maintenance CapEx. So big transformational projects. We do have some new buildings planned for 2024, but big payments, we're just gonna be looking at Pernambuco right now.
Then the intangibles, as I mentioned, which I think are really related to the dynamics we have in the quarter and developments. When we look at working capital, I think it's important to mention that even with the integration of Bergamo in this initial moment, now we remember that we're in this transition process, but we were able to keep the payment terms and receipt terms, which are stable.
So we're gonna continue to search for these improvements. Now, when it comes to inventories, yes, we had already worked on that issue with having the stock turnover and looking at the deliveries, trying to extend the terms. And so the company continues in this movement, but we should highlight that there are some strategic items.
We don't have a global supply chain, and so it is demonstrated to be very fragile sometimes when it comes to global events. And so I do think the company continues to know how to do what is strategic and what we need to do to carry on maybe a little more inventory in-house, but we'll continue with these movements, and we've at least reached the levels or the starting point that we finished off in 2024, when it comes to the revenue percentage of working capital. On the last slide, but not last but not least, because it's the cash position in the company. And so we had some cash fluctuations. We had investments in convertible loans, EUR 50 million.
We had a new cash composition, and now we have this one with BRL 350 million, 200 years of grace period. So we're talking about 118 for the CDI, and then the BRL 50 million as well, to be paid in the next few years. But even so, very low leverage, which is really important, and I think the company, at this point in time, with more turbulent market, where a lot of companies didn't really look at investments because they have to sacrifice their operation to pay for the cost of their debt due to high leverage.
But the company has the necessary strength to still look at strategic movements and make investments that are gonna bring in long-term results. So I think this is super important and in line with our strategic planning process.
So I think I maybe talked too much here, but now we're gonna open up for Q&A, and then at the end, Marcelo will come back and perform all of his final remarks. Thank you very much
. Okay, guys, first question is from Felipe Amancio at Itaú BBA. Felipe, please.
Okay. Hi, guys. Good morning, and thank you for taking my question. You talked about the results here and the effects of the gross margin and some initiatives here as we look in the future. And the non-recurring amount with the Bergamo impact, I—as you mentioned, if you could also talk about the effects you mentioned when you consider recurring. If you think this could still impact us up ahead, and if maybe this greater competition could impact us more. I wanted to get your feeling on this, please.
So yeah, I think there's a bit of this dynamic in the mix, with these new revenue sources maybe having a ramp-up process still. Even Bergamo added 10% of its revenue already. So working on this exercise and looking at this movement is a whole another level of... And so the idea is that we'll always create new sources of revenue. But when you look at the older portfolio, yes, we do have this scenario, but there are ways to reestablish the mix. So we still suffer a bit with the immunoglobulin deregulated market, so we can't really consider, like, a normalized market and what a level of prices and margins would be at a healthy level.
But then, of course, we also have other products in our portfolio. But now when we join Bergamo, we'll have this strategic-commercial strategy, and we can really define the best strategy to reposition our prices. The market continues to be competitive, but the company also has new sources of revenue, and we can explore new opportunities. So that's the main idea.
Well, I wanted to add on that the costs of some of the inputs have been dropping month-over-month, and the speed has been working on... We're still on the wrong side, right? So today we're performing via an acquisition, but we don't know if this is a good deal or a bad deal, because in the next purchase, we won't know if we'll buy it for cheaper or not.
So we're still experiencing, for certain products, this kind of situation, and this makes it more difficult for us to mark up the margins. But of course, the company is really in tune when it comes to these different movements, and we've been monitoring all of these processes to bring in the best opportunities for the business.
And so despite this reduction in the acquisition values, we can't immediately take advantage of this because we have a stock of three months of inputs, and we're reducing these stocks. But the situation is apparently, a spot purchase seems to be better than a planned purchase. So we are keeping our eyes open, and we've been reacting to all of this and working on the best negotiations with our current suppliers that will contribute to the best margins in the future.
We have a stock turnover that will take two to three quarters. So even if we renegotiate today, first you have the stock turnover, so everything you have in-house, so that later you can start reaping the benefits when it comes to margins. Then, of course, some quicker revenues and bigger sales make the stock turnover a little quicker.
Perfect, guys. Thanks for the answers, and good morning. Emerson Vieira, can you hear us?
Yeah. Okay, guys. Good morning, everyone. Marcelo, Douglas, and Bruna, thanks for the opportunity. For two questions. One is about the top line. So excluding Bergamo and the revenue for the launches within the historical series, we've noticed that there is a sequential drop in the top line of about 14% quarter-over-quarter. And so we'd say this represents the company's legacy portfolio.
I'd like to know if this competitive scenario got worse in the third quarter, and if you guys could maybe talk about what the dynamic has been in biologicals and oncologicals, which have really suffered a bit more with the price and volume. This is the first question, and then the second one is about capital allocation and levels of leverage in the company. This quarter, we reached a level of the net debt versus net cash in the past, and I want to understand what the level of leverage is that you feel comfortable with, and if this would require some revision in the company's strategy when it comes to reinvestments in new projects. That's it, guys.
Well, thanks for the question. We'll separate this into two questions, two answers.
The leverage part, I'll leave up to Douglas. And the market continues to be very difficult. The payers have been pressuring the channel a lot. The payers have been also delaying payments, and so the big chains of hospitals and even the government has been buying less and has been making less stocks, the distribution channels, chain as well. And so we've suffered as well, and that's where you can see our earnings have been doing our best and our market share has been growing.
The problem is price. So although we are producing more and delivering more, so many of the processes have been contributing to our operation. But the challenge, the market is very challenging. And so as we mentioned, the prices of the have been dropping, but we've been kind of stepping behind in the situation still.
So, we've seen that it's almost better to do spot businesses than planning our purchases, right? So this is the situation. First, for some products, we've already hit the bottom line, but for others, we see that it's still very, competitive. So we've been trying to find the best performance, and this is what we've been doing.
Well, moving on to our leverage, the company went from a net cash position. Now we have a net debt position, but leverage is still very low. So if you, if you consider the advantage of purchase or acquisition, you adjust the EBITDA, we're talking about 0.2% or 0.3%, which is a really good level and very healthy.
This would make the company maybe leverage more and with a strategic investment, but we'll always look at these different levels of leverage, and there's still ways to deleverage.
Perfect, guys. Super clear.
Thanks. Well, the next question is from Paula Melo at GTI. Good morning, Paula.
Good morning, everyone, and thank you for the opportunity to submit a question. I would like to know if you could give us some more granularity on how amount is added or to costs without revenue exchanges. So if we look at if we eliminate Bergamo, the loss in margins was really significant.
So if you consider that you're operating at a margin of about 40%, we could say that maybe half of the revenue, the net revenue, came from the gross margin that was almost zero, or maybe a smaller percentage of the revenue or a negative margin. So for us, it's really difficult, so to assess this without greater granularity. And so I don't know if there's any product line you'd have to sell with a negative margin, if this is like a one-off effect or if it's something that permeates all of the different levels of products. If you could talk about this, this would help us a lot on our side.
So, all of the machines, and today, there's a link with this trading system, and...
These other sources, and then the company will have this dynamic with the leverage of the gross margin. So when it comes to the price and the market, or also in the internal aspects, when we consider the operational leverage.
I didn't hear the beginning of the answer. It was mute for everyone, apparently.
All right, you had asked about Hemarus, which currently has a revenue share, but in the break-even. And so this operation internationally, we're at the first center, we have the break-even, then we operate other centers, and so it's natural that we'll always consider the effect in the consolidated margins a lot smaller and unfavorable to the company's margins. So Bergamo has 10% of the revenue with no margin contribution.
So we're starting off with this process to capture synergies, leverage both portfolios, a commercial strategy, repositioning them, us, ourselves in the market and many other things. If you talk about the new sources of revenue, these are different dynamics for consolidated margin. So it's important for the company to always have revenue sources and look at the best possible mix.
But there's also these different effects in the consolidated margin composition and the rest of the portfolio. As Marcelo mentioned, the market is still competitive. So we have this movement with trying to capture some renegotiations, but we have to have the stock turnover, which is also something gradual. And so all of these movements together will take the company naturally to reestablishing the margin levels that we've already performed in other quarters.
Okay, perfect. Very clear. Thank you.
Our next question is from Wagner at Quantitas. Wagner,
Thank you. Good morning. Good morning, everyone. I have two questions here, and I would like to understand what the margin impact is, especially the gross margin. So I know you guys had some public information. There was a third tranche of the Alpha contract that the government called on, and I wanna understand how much of this was delivered in the third quarter. And so from this third tranche, what's the percentage that was actually billed in the third quarter? And so we can understand how much of this could have contributed to the drop in margins.
The second question is, you had already mentioned that Bergamo had, since it was a unit here in Brazil, of a multinational, they had an accounting process that was really different than the local standards, and it was seen as like a cost center with a factory. But could you maybe mention, if you eliminate all of the Bergamo operations, and you had nothing else done with Bergamo this quarter, what would be the gross margin ex Bergamo? In our interpretation, this gross margin could maybe even be negative, possibly, according to our interpretation. So I want to understand what the gross margin is, and how much of that threshold you guys were able to deliver in the third quarter.
Well, I'm going to split this answer between me and Douglas. Thanks for the question.
And we signed an agreement with the Ministry of Health to deliver in three tranches, basically. So one part is in the previous quarter, another part in this quarter, and then on the next one. And recently, we also were communicated about possibility with another additional agreement.
So we consider the consumption of this drug is growing, and the public health system in Brazil continues to supply this entire supply chain. So I think that it's a mistake to imagine that the company's profitability comes from a single product. So the company has been talking about this and how we've been suffering with the prices a lot, but we've been selling more quantities to be able to keep our volumes of revenues.
So we've been gaining market share, but on the other hand, we have been suffering with prices. So we're also a little bit behind when it comes to the utilization of these inputs that we bought that were cheaper. So to give you an idea, there are some inputs that I maybe sold, like, in 1 kilo, 1 input, $90,000 in the beginning of the year, and I can buy at $45,000. So in between, I maybe bought it at $70,000, $60,000, but as I mentioned, I'm always a little bit beh
ind, so it's really incredible. So as I mentioned, the idea today is that you'll buy the input at, almost at spot levels, because I don't know if I'm at the bottom. Not with all of them, but with some of them.
So you could say, what kind of reputation did this manufacturer have, right? So there's this situation of adjustments in the Brazilian market worldwide. And so the company really depends on these. The company always had margins in all of the products commercialized. So the company has the principal, who actually heard this question about the negative margin.
It doesn't make sense for the company to do this. So I wanted to mention that we're always gonna be defending the interests of the shareholder, which are-- which is myself and you, as minority shareholders, and we'll always try to bring profitability into the business. We're not satisfied with the situation, but it's a market situation and not the situation in the company. So we've been producing a lot operationally, delivering the demands, and we're in a very occasional situation.
So maybe in the past, I paid with a dollar that was higher than it—what it is now. So the market's a little bit confused. So it's a very atypical situation that we've been experiencing with high interest rates, and so this is what's going on. And Douglas, please.
We always highlight the effect of all of these sales, where you have to look at the effect, because you could have the LTM with bigger volumes. You always have to compare the eyes—comparing an isolated quarter is not a good view. And then Wagner, to add on, I think that the dynamic and the way that Bergamo is compared, maybe, could maybe simplify your guys' assessment.
If you look at this, and this is at our income statement about what Bergamo's results would be in, assuming that this comes from the gross margin. And I want to remind you all that we have many different effects that are non-recurring. We had expenses that took place that operated through the, earnings with a closing characteristic that became an adjustment to the price paid.
And so after, we're gonna have to, give you guys all some more color on this. We tried adding this in the release and the presentation with the amounts that are, like, one-time amounts in this quarter and what's more recurring. But there is a different dynamic, even with the expenses, with cancellations of contracts, et cetera. So we also had some indemnification and other, aspects as well.
But I think that maybe to simplify things, you could adjust all of this result in the gross margin.
Well, I confess that I understand you guys' answers, but that is not what I had asked, but it's all right. Another question is the NPL.
Well, Wagner, let's clarify this, please. It's important for us. Well, we performed a calculation. I understand all of the market aspects you guys mentioned, but what I wanted to understand is, within the different business lines you guys have, we understood before that biologicals had a margin that was above average in the company. So we wanted to understand that since you guys are not going over the lines of revenue per type of medication, we'd like to know how much a lower revenue in Alpha could contribute to a lower consolidated margin.
But we never said Alpha has more margins than other products. Yeah, it's my own interpretation based on the numbers we consider with the information published, so I can't answer, an interpretation you have, because, we have products here, for example, that have margins that are even higher than Alpha's margins. So, the business and the company's business involves multiple products. We are involved in over a hundred different molecules that we're trading, and so I can't, say that the company is gonna survive with a single medication or drug. We don't have this kind of approach in the company, which is why we never stop investing in new products. We have feasibility studies for each drug we launch, and each of these has its own profitability.
So there's no point in having a situation with a company where you have, like, 100 products with the structure we have with a single product.
Okay, thank you very much,
Marcelo. Well, now we do not have any other questions. So, Marcelo, do you wanna move on to any final remarks?
Well, I just wanna highlight that it's very gratifying to see the ongoing transformation at Blau in the last few years, despite the huge economic and political difficulties. But we continue to invest. Even in this very challenging quarter, we had an all-time high in investments.
Another point to highlight is the ramp-up of these new operations, which still contributes relatively little to the current results, but there's a great potential for growth, demonstrating that the investments we're performing have already been materializing in our results, and this also demonstrates that we're on the right path. In December, Blau will complete 36 years of existence, and I'm really proud of the history we've built so far. I know we have a long path of success up ahead, but I'm not satisfied with the financial results in this quarter, but I'm sure that everything Blau can deliver on where we're headed. So we know that 2023 has had additional challenges that were mapped out, but our pillars are solid, and we are confident that we're addressing this long-term growth.
So throughout this quarter, we also considered different initiatives to have the gradual recovery of the historical margins in the company. Renegotiations with the main suppliers, gains in operational efficiency, restructuring our teams, and the rational use of our cash position. Our path is clear, and we know where we're headed. We're only starting. So thank you all very much, and have an excellent day. Thank you very much. Bye-bye.
Thanks, guys.