Earnings Call: Q2 2021

Aug 5, 2021

Good morning to all. Thank you for waiting. Welcome for the conference call for the earnings of Q2 2021 for Logias Care. My name is Flavio Abrens, Manager of Investor Relations. I have with us Mr. Peter Furukawa, Chairman and Jean Pablo Dimelo, CFO and Investor Relations Officer. This webcast is being transmitted exclusively via the Internet may be accessed at the address ri.kerokerokeroker.com.br. For the Q and A session. Questions should be asked through the webcast platform. Apart from this, this webcast is being recorded and will be placed on our website. Before proceeding, we would like to clarify that any declarations that may be made during this webcast concerning the business perspectives of the company's projections, operational financial goals are based on beliefs and assumptions of the management of L'Oreal's Care Care and also on information currently available to the company. Considerations about the future are not guarantees of performance and involve uncertainties and assumptions. They refer to future events and therefore depend on circumstances that may or may not occur. Investors should understand that general economic conditions, industry and other factors may affect the future results of the company and may lead to results that may differ materially from those expressed in these considerations about the future. To begin the presentation, let's please go to slide number 2. Our agenda today will cover updates concerning the operation during the pandemic, general results, progress of the expansion in Kerkel stores and results for the Q2 2021. Finally, we will have a Q and A session. Now Slide number 3. And now we will hear the Chairman of Loshes Carequero, Peter Fouloukawa, for Q1. Good morning. It's a great pleasure to be with you once again and to talk about Q2 for Lodges Carcara. Obviously, we're very concerned with COVID. We have told all our employees to be very careful. Some people believe it's almost over, but in reality, we don't know. So we always tell our employees and collaborators to continue using masks, alcohol distancing, etcetera. In Q2, we had very few interventions in stores. All the stores were able to operate. We had very few restrictions. You can see here the in orange, the days when there were restrictions for the operation of stores, stores that we were able to open only for construction material in yellow, we were not allowed to sell within the store Home Appliances and Furniture, but few stores had these restrictions due to the coronavirus. The next chart, please. Q2 in same store sales can be seen here, 35.2%. The revenue from retail grew 45.3% in Q2 versus Q2 2020 at almost 70% in relation to Q2 2019. So we closed the semester with 48% growth versus last year and almost 63% versus 2019 EBITDA, dollars 46,100,000 which is a significant growth versus 2020, 2019. As we had already commented during the IPO a year ago. As we grow, as we gain market share and open stores, our results are increasing as we have seen in the last 5 years, and we continue to we hope to continue this way in the next few years. The chart on the right shows here on the upper right, we continued to gain market share. You can see that the curve went up even more. So most of this is market gains. We hope to continue gaining market share as we evolve. Reminding you we have 7%, 8% market share in the cities where we are present. So there is a lot of space to grow in the next 10 years. So our profit, EUR 16,000,000, 27 point 6% higher than Q1, significant growth versus previous years. And We can see this with the curve. The next chart, please. We have 3 pillars where We're doing very well, and we must continue. And a fifth that we're learning. I always tell you that people talk a lot about opening new stores. Our focus is to gain market share with new stores and in the markets where we are present. In the markets where we're present, we have gained market share by transforming the stores. We have basic stores, then 1, 2, 3. So as we change the format of the stores, normally, we increase sales significantly in each with each one of these changes in the stores. So we continue to convert stores, as I will comment a little later, and also to open new stores. So we had a growth of 45% in retail, same store sales of 35%. I will comment on this. Obviously, we are being helped by the construction cycle. People are still in their homes, so they are improving their homes due to the pandemic, and we believe there will be a carryover in the next few months also with people still investing in their homes. And we also have the benefit of being in an area with a lot of agriculture, and agriculture is doing very well. Agro Business is doing very well. I believe it should continue to do well agro business even with some problems in the harvest, but the prices are high, compensating the problems in the harvest. So we're gaining market share, and we should continue to gain market share. Second, excellence in credit and collection. We have done this with a team that is totally focused on this. We were able to reduce the delay on the Verdi card on our credit card. We decreased from 30% the delay in default to from 13% to 9.4% at the end of Q2 'twenty one. This is something we know how to do. We should continue to do this very well. Another cost is on cost. We have to reduce costs, leverage, do more with less. Nominally, it can we can continue there. We have to always decrease costs, we know. So this shows our operating leverage. We have been successful doing this. Operational expenses have grown less than our profit. I'd like to talk about we continue focused on being better than we were in the past. We have aggressive goals and people always trying to do better, not only for the company, but they are striving to be better professionals, better people in everything they do. So we had 65 store managers that were that graduated in the training course, 115 being trained, 53 that have potential. So visiting stores, it's good to see those who have potential. These are the future managers. We have EUR 4.21, and this gives us comfort for the next 3 years. We must continue always growing this number. We still don't have one potential manager per store. This is our goal. Some stores have more than 1 person with potential to be manager, but we should strive to have people with potential to be managers in every store, especially on the stores that are further that are farther away because we need people in these stores to become future managers with expansion. So we have constant evaluations, performance evaluations and the 5th pillar, the one we're learning how to do. And I believe personally that this project can really be a success, digital retail, using our store as the sales points of more products than are present in the store. We already do this, but with a greater assortment, more SKUs and so stores can sell to the communities products that are not physically at the store. So it's good to say that in the interior, things are more healthy. They are not very frenetic. So it is a little slower than in larger cities. So it's a there is a learning curve. We will learn more and more how these communities will react to digital sales with the sale of products that are not physically in the store. A great variety of products with fast delivery, with the clients buying from a salesperson inside the store. And if they have a problem, they can solve their problem at the store and the guarantee that if it's not delivered in 2 days, then they don't have to pay for it. We will have to teach the communities where we are present, showing that they can have even more beautiful homes with this variety of sales of these products. We are doing this in 60 stores as a test until the end of the year, and we will learn in order to expand this next year. It may it's only a test. It may work. It may not work. So it's a bet that we made approved by the council, and we are now working with an excellent team implementing this, doing fantastic things during difficult times and with the support of the organization to make it a success. So that's the Fitchtel retail sales. Next, please. Slide number here, the evolution of the stores. We opened 17 new stores in Q2, and we revamped, I will show in the next chart, another 12 stores. You must also note that 80% of our stores continue to be in cities with less than 100,000 inhabitants. These are the stores we opened this year, especially in the state of Parana, state of Sant Katarina and some in the state of Rio Grande do Sul. We still have opportunities in the state of Rio Grande do Sul. Santa Catarina has medium opportunities, and the state of Parana has a lot of opportunities. Our desire is to open 70 new stores this year. Our expansion team believes that we will be able to open these 70 stores this year. We had times when we questioned this number, 70 new stores, because construction of some of these stores ran into problems. With the team having problems with the pandemic with COVID, lack of products, but reviewing things, the expansion team believes that we should be able to open the 17 new stores this year. Next chart, please. So here, we have the stores that we revamped. 12 stores were revamped in this quarter, sorry. So today, we have 67 traditional stores still basically because we didn't find a way to expand them, to transform them. As soon as we have the right opportunities, we will be transforming them to. We have 253 stores in Phase 1, 83 in Phase 2 and 15 in Phase 3. We should have 20 store new stores in Phase 3. This model is doing very well and ROIC continues well, even increasing the investments in products, in inventory. I believe we should have 100 stores in Phase 3. And eventually, as we learn, we want to implement Phase 4. We are learning little by little. We don't want to give a leap larger than we can because this compromises working capital. We're very conscious. We are firm to preserve also working capital. So this is what I said about the digital process. We are preparing the showroom where these products will be placed with the technology that will be necessary for this. We're working very hard on this. We're doing this in the distribution center of Saperanga. We have the sales team, people working specifically on this project of digital sales, also sales, tax area, everyone working to really sell these products in the stores. We would like to have the maximum number of SKUs implemented by the end of this year. We probably won't be able to have all 20,000 new SKUs by December, but we will be close to this number. We're working to get close to these numbers by December. New categories being included, there is a great learning curve during this project. We see that people in the stores are motivated for Fidgital sales. We want to implement this as soon as possible. But once again, we will begin with a test in 60 stores. We will learn, correct and then expand to the other stores next year. This is the concept that we're using. We have knowledge of our clients, about our clients. We have our relationships. We know how to sell. So this opens new possibilities for us. We have also logistics capacity. All stores receive at least 2 visits from the distribution center every week. Our dream is to get to 3 deliveries from the distribution center to each store, even the smallest stores. We have guarantees of delivery. If we don't deliver on time, the customer doesn't have to pay. So It may be a great opportunity for us, but also it may not work. We're doing our best to make it work. Next, please. Here, showing to you in Q1, we had already changed moved our distribution center from Santo Cristo to a new facility. And now we changed we also moved to Saperanga and the inauguration, and we're inaugurating another distribution center in Corbelia in the west of the state of Parana. With this, we will be able to work very well until the middle of next tier, and we will be talking probably at the end of next year a new distribution center in the Southeast of the state of Sao Paulo for the stores in Sao Paulo and South of the state of Mato Grosso. So we're very efficient in logistics with a fantastic team working so we can cover with our project. To everyone knows that if we don't deliver on time, they don't have to pay. On my side, this is what I had to say. Now Jean will go into detail about the numbers, and then we come back to answer the questions during the Q and A session. Thank you. Good morning to all. It's a great Pleasure to be here once again talking about the details of the results for Loshes Care Care. Peter gave us a summary of Q2 and this year. So I'd like to go into detail the details of the results, the strong results we had, the positive results we had. So we begin our discussion with Slide number 10 with revenue. Revenue has 3 business activities: retail, credit card and services. We had a very positive we in retail, we grew 35% of same store sales. Even last year, we had a positive growth during Q2 in same store sales. And in 2019 also, we had growth of 4%. So consistent growth in comparison with last year, but also in terms of 2019. When we consider the total sales with the opening of new stores with expansion, This year in Q2, we grew 45.3 percent retail revenue, which represents a growth of practically 70% versus Q2 2019. So we see a strong growth, gaining market share in same store sales and also expansion. So in the semester, here we have 48% 1st semester of last year in comparison, so 63% versus 2019. So growth, Of course, we had the pandemic, but growth also versus the period before the pandemic. So this has a positive impact on financial services. Financial services have are showing a covering gradually. During the pandemic, we were more conservative in credit concession, so there was a small drop. But the portfolio is growing and it's a healthy portfolio of credit cards. Today, We have in Q2 a growth of 30.3% on revenue financial services. And here, we have $230,000,000 of revenue from Financial Service, a growth of 21.9% versus the previous year. And our 3rd activity, credit cards, which is the vehicle the means by which we offer credits to increase sales in retail. We had a relevant growth in the usage both inside and outside the stores of the credit card, 30.3% growth outside the stores and within the stores, 43.9% growth versus the same quarters in 2020. So more revenue, 9.7 percent and 5 So we have growth, accelerated growth. So now going to the next slide, we will show on Slide 11 the accumulated growth. With this strong performance in retail and financial services growing, we had a growth of 41.5 percent in Q2 2021 in relation to the previous year. I reinforce that it represents a growth of almost 63% in relation to Q2 2019 and in the semester also great growth, 40.3 percent, getting to a total revenue of BRL 1,154,000,000 and net operational revenue net operating revenue, same trend in growth. So 40% and the semester until now. Going on to the next slide, I would like to comment on gross profit and gross margin. You can see that we grew, yes, revenue 42% and the profit also with the same trend, gross profit with the same trend. So we had growth of gross profit in the quarter of 41.8%. You can see that our margins 39.6%, the same margin that we had in Q2 of the previous year. This also represents a growth of 63% versus Q2 2019. It's important to comment that we had improvements when we look at retail margin, financial services margin, they grew versus the previous year. Financial Services grew a little less than retail, and the consolidated margin is the same as last year. So we got to the end of the semester of 40% growth in gross profit, a margin here that you can see and a margin that is higher than in the 1st semester of 2019. So it's important to see that we continue to grow, gaining market share but maintaining the profitability of the margin in the company. Now the next slide. We maintained this margin, this growth, and also we have operational leverage. So we can do more with less and thus we see the adjusted EBITDA. We got to an EBITDA of €60,900,000 in 2nd Q2. When we look at adjusted EBITDA, excluding the effects of IFRS and also the stock option plan, we get to a growth of 78.8 percent in the quarter, BRL46 million and a margin of 9 0.3%. You can see that comparing with Q2 twenty twenty, twenty nineteen, there is a nominal growth, also an expansion in the margin. And in the full accumulated year to date, we can see here we had this EBITDA margin of 9.3%. So truly, it's a growth that is very healthy, and this shows the operational leverage. The same operational leverage will be seen in the next slide where we will comment, Slide 14. Net profit. The same way we leveraged EBITDA, we also leveraged the net profit. So we have a net profit of €16,000,000 in Q2 2021 with a net margin here and expressive growth of 3.2% versus the same period in 2020 year to date, dollars 27,700,000, nine times the results of 2020, and it's truly this operational leverage that can be seen and also in net profit. So we got to $27,600,000 with a margin of 3%, reminding you that since the IPO, we adopted the stock options plan, which had a net effect of $3,100,000 in the quarter. If we exclude this effect, the net profit would have an even greater growth, dollars 19,100,000 and in the semester is a little larger so excluding the stock option plan, dollars 33,300,000 for the semester. So this is the result that we present in the quarter and in the semester, strong growth and operational leverage. I'd like to comment a little about the components that led us to have this strong and positive results. Next slide, we will talk a little about the growth of the credit card portfolio. As we mentioned previously, it has been growing since the beginning of the pandemic when we were more conservative in giving credit. You can see that between Q1 2020 and Q2, we made restrictions, but after that, we had a constant growth. We closed Q2 this year with €552,000,000 in the credit card with interest. You can see here a growth of 22.6 percent in comparison with the same quarter last year, a growth of 35% in relation to Q2 2019. So continuous recovery of growth but in a very healthy way. You can see that in the graph below, which is the delay, the above 90 days default amount, above 90 days, the index was 9.4%. And this is due to seasonality. It's also inferior to 13% last year and inferior to 11.6% that we had in Q2 2019. So this growth of the credit card is happening in a healthy way, and this is the effect of our credit operation, but also our collection operation and also the economic situation of the clients is improving better than we imagined in the beginning of the pandemic, and this brought the growth of revenue from financial services. Next slide. This is to show the usage of the credit card because this will really generate the receivables from credit cards. And the card suffered a little more during the pandemic, specialty purchases outside the store. But in Q2, we had a growth of 36.5% in relation to the previous year, 36.5 percent in relation to 2020 and a growth of the usage of the card within the stores and outside the stores. So this recovery is important within and outside the stores. Year to date, €903,000,000 with our card, €475,000,000 outside the stores and €429,000,000 within our stores. Especially it's a recovery in the usage of the credit card outside our stores. The next slide, we already mentioned credit. Let's talk about cash management. In this quarter, we took out additional loans at a lengthening of the maturity of these debts that were that would be payable in the second quarter. We have a gross debt of BRL373 million. Apart from this, we had a new issuance of shares. We had this FIDI Corporation to finance the growth of the credit card for this issuance was made through with a BRAAA rating and for the amount of $300,000,000 So you can see that the cash of the FIDIG. In adjusted net debt, where we did not consider FIDIG, we ended the quarter with 11.6 a net debt. So we're growing without financial leverage, reminding you that in Q2, we had the payment of $16,000,000 to shareholders. Distribution of $16,000,000 in earnings to shareholders. The next slide, the investments we are making. Peter mentioned the inauguration of the distribution centers. We inaugurated a new structure in Saperanga. We also inaugurated a 3rd distribution center, the first beside the state of Rio Grande do Sul in the city of Corbella Parana, an investment of €20,900,000 in Q2 in this investment, also the inauguration of 17 new stores. This is an acceleration versus the 9 stores that we opened in 2020 and 13 in 2019. And also we made the transformation of 12 stores from Phase 1 to Phase 2 and some to Phase 3. So year to date, we have been investing in order to grow to be ready for this growth, but you can see that we have maintained the net debt controlled. We had total investment of $36,100,000 in year to date. So this was the last slide that I had to present to comment on the details of how we got to this result. And now I will pass the floor to Flavio, and we will begin the Q and A session. Thank you, Jean. We'd like to begin the Q and A session. The first is from Bafoor Bank of America and will be answered by Peter. The question is, Peter, the growth in same store sales was impressive. So but we see great changes in terms of mix. Can you discuss talk about the change in mix and also the Fidgital sales. It seems to be a great part of the sales, although we have a small number of SKUs. How is the consumer accepting these digital sales? How is this being done in the stores? And how do you plan to deal with bottlenecks when you offer the digital offers, when you increase digital offers. Bob, great pleasure to talk to you. Well, I would like to be able to say to you that most of this growth comes from Fingtol sales, but it's not true. It would not be true. First, I'll talk in terms of category of product. What is growing a little more is construction material. Construction material has grown more than home appliances and more than furniture. And our fixed sale is still based on home appliances, fixed sale sales. So our growth is coming from construction material, which is a category that is the normal type of sale in the stores. Our sale of products that are not in the stores that we call Fichtos sales represented 12%, 13%, continues to represent 12%, 13%. Of course, sales have grown 12%, 13%. Today is more than 12%, 13% in the past. How the clients are absorbing this. Bob, it's very early to talk about this. We're not making great investments. We're not placing a lot of information on digital platforms in these cities, our salesperson using WhatsApp with their clients, so it's difficult to measure this now. What makes me happy is that it's growing at the same pace of the company, so it's a good sign. I don't know if I answered your question, but it's very difficult to really say more. In December, we should have the 60 stores with the implementation complete and then we will be able to talk more about what we learned. What we're seeing is that what the client likes in the platform is the variety, greater variety of products through digital sales. So we made a survey. The variety of products increases the possibility of receiving them quickly with a guarantee that if you don't if we don't deliver in 2 days, it's free of charge. And they attach a lot of value in buying from the salesperson because they know the salesperson in their city. And this is even more important than the guarantee of nonpayment if we don't deliver in 2 days. So the important thing for them is greater variety of products, speed, speed to 3 to 5 days and buying from the salesperson, someone they know already. And also if it's not delivered on time, it's free of charge. For me, the clients we surveyed said that the fact that they're buying from someone they know is very important. So we will for this in the implementation of the project. Let's see what will happen. For the time being, This is the information that I have that I can share with you. Thank you, Peter. The next question is from Richard Pette, Bradesco BBI and will be answered by Jean. The question is, can you comment on the competition? Do you have and competitors leaving the market. Do you see a reaction from competitors who are losing market share to you? First of all, good morning, Richard. Thank you for the question. In relation to what we have seen in the market, as we mentioned. The market is being very positive for us. It's construction material that became popular. People are staying at home because of the pandemic and are revamping their homes. Also, people have more income because they're not spending their money outside the home, so they have more income available. But right now, we're also having a benefit. The market as a whole is having a benefit because of a better macro environment due to the good performance of agro business, cattle raising, and these are important in these cities. It is a market that is growing. When we look at the market data and from populational growth and so forth, it's a market that is growing, especially for construction material in retail. These 35% of same store sales that we delivered and 45% growth since the market is growing. So the pie is larger, and we have a larger piece of the pie. This doesn't mean that local competitors are having less billing in relation to past year. They are also benefiting. They have a little growth, but they don't all have the same growth as we do. We're not seeing stores being closed because the market is still positive. They are having a benefit right now, but With our strategies, we have been able to take advantage and increase our market share even more. This is what we have seen and also this is what we expect in the next quarters, more positive scenarios than we had imagined at the end of last year. Thank you, Jean. The next question is from Bradesco BBI. Will be answered by Jean. The assortments, the strategy on assortments, When will we see the perception of consumers concerning this? Truly, what Peter as Peter mentioned, we're investing the digital sales. We are implementing this, investing in a showroom, and it will take some time. As Peter mentioned, if Peter wants to supplement, we we'll have to make this pilot test in the 60 stores to see what we have to improve with new products maybe, but our initial perception is that, yes, this additional assortment SKUs will be well received. This is what we believe. We have to wait a little more to have a better vision, a better idea of the potential and how we will do this implementation in all the stores next year. If Peter wants to comment? Well, As I said previously, Richard, thank you for the question. It's very difficult to talk about this now. We believe that it can be a success, but I may be here next year saying, look, it didn't work. It's a possibility. Clients don't want as much as we thought they would want. My expectation is that it will be slow, gradual. It will grow gradually slowly. We will begin with 60 stores, and these stores will begin to sell more and more. We're not going to double, triple sales in stores. We will grow slowly and during the whole year, during all of next year, and I will explain to you the evolution, but I'm not expecting a great growth immediately. Even in these 60 stores. It's going to be gradual. It's going to be slow. I've been in the company for 12 years, and we've seen continuous growth. We have grown continuously. It's constant growth during the years. It's not we haven't seen a growth in leaps then another idea leaps. No, it's continuous growth. So we have growth that will come with the stores we have opened. We have continuous growth of these stores that we transformed to Phase 1, Phase 2, Phase 3. So this is the growth we should expect for the time being, Richard. It's difficult to say how much we will grow based on this initiative. So when I presented the plan during the IPO, we didn't have it yet, and we had a growth we showed a growth that would be attractive to investors. So if we can deliver more than this, we're going to be very happy. But for the time being, it's risky to say this. And I tell you, it may happen that it may not work. I believe it will work, but I don't want to come here next year and say if it doesn't grow very much. I don't want you to be disappointed with this. Once again, there is a learning curve, and we will grow gradually with everything we did. So we had more construction in construction Phase 1. Then we learned then Phase 2. We learned Phase 3. It's soon we had 3 stores, now 6 this year, another 20 stores, but it takes years. We do this 1 year, we learn, we improve, and then we take off. But it's not going to be a quick change or rapid change. Thank you, Peter. The next question is from Elena Villanes from Itau BBA and will be answered by Peter. The question is, in relation to the pilots of the new projects plus construction, Can you share with us more details? What were the main things you learned? So what are the next steps for the initiatives, new initiatives? Okay, Lena. Okay, Lena. Thank you for the questions. Well, I mentioned to you, I'll talk about Moore Construction 3, Phase 3. We invested a lot in Phase 3. We have a greater variety of products of floor tiles, metals, wall tiles and paints. We had a significant growth in these categories. So once again, 6 months learning, then adjusting, and now we're transforming 20 stores. What are what did we learn? One of them is that in paints. We need professionals that are already working with paints in these cities. So bringing some of these sales people that work in other companies and have more experience or curtains in the stores. The client wants to touch even if it's a small piece and talking to vendors about this, to suppliers, ceramic tiles or vinyl, we need to have small samples so clients can touch. So this, we will have to improve. We will have to do more. This is one of the learning points. So I can share with you this. And concerning the expansion of more Phase 3 stores, I believe we have 20 stores, and we have another 100 that we can transform from more construction 2 to 3. So we will transform 20 stores. We have to remember that we need space. Sometimes our store doesn't have space to expand. Some we can expand, others, we have to wait and find another location or a piece of land where we can build a new store. This is a limiting factor also for these transformations. I believe that in the next 3 years, we should have 100 stores in 3, 4 years, 100 floors from 2% to 3%. And we will test this. Maybe we will start a new phase, Phase 4. So there is a lot of space to grow in these cities where we are present. Thank you, Peter. The next question is also from Elena Villarritz Itau BBA and will be answered by Peter. An important point that you raised concerning expansion is recruiting and training managers. Now going into new regions. How are you evolving in terms of training in the new regions? Elena, thank you for the question. I remember at the time of IPO, I said that the variable that I was concerned with would be the quality of the new managers. The results, come from managers, a good manager that has a good team that knows how to form a good team will grow. So this is my concern: leadership capacity of having a good team in each store. I can tell you I'm very happy. So we don't have this problem. One expense that is above our budget is training and preparation of managers. And I believe that this investment has been very good. Today, we have 4.21 people with potential to be managers. At the time of the IPO was 240. So in a year, we have 431 people with potential. So in the next for the next 3 years, I'm happy. If we continue this way, we will always be able to open the number of stores that we have in our plan. Now what I can share with you, which is very good, is that more and more, these new managers, the new stores are giving us better and better results than they had in the past. So when I tell people that the 50 stores we opened, we analyze the payback and payback in 28 months. There is so much competition between the regions to see which store will be better after 1 month of opening. I'm even concerned they're selling really too much these new stores. In Parana, it has been a fantastic success. Cities with 20,000 inhabitants, even 15,000 inhabitants, sales are very good in these new stores, and this should guarantee sustainability in terms of the payback and ROIC of almost 40%. So we're okay. It's been very well. The quality of our managers is very good. The whole team that prepares these managers from our human resources area and the areas involved in training. They're doing very well. Don't know if I answered your question. Thank you, Peter. We'd like to close the Q and A session. Thank you for questions. And now I'd like to pass the floor to Peter and then Dujuan for their final comments. Well, so I can tell you that we had a good quarter. We continue to grow. We are striving to grow. The whole market is growing. It's not only us that are growing. We're gaining market share. We have a very committed team, a team that is very committed, and suppliers are also impressed with our teams, their motivation. I believe this was shown in this and the exercise we made, Great Place to Work. We had an excellent result for the first time and this said by the people in Great Place to work. The team is very motivated, a very confident team. I can tell you that In spite of Peter, the company is having excellent results. I'm very, very happy with the team I have, the quality of the people in Loshes Kerkers. I'm very happy to be a member of this group. So this is what I had to say. I thank you for the support, our counsel and the investors. Thank you. Well, I'd like to thank all the participants and reinforce, as Peter said, we had very positive results in Q1, Q2 above our expectations. Even now. The market is positive, but we see results in growth very similar to previous semesters and quarters, so and now even more positive, and we're available. All our team, Investor Relations team is available. We'd like to say that the results are on our website. Also, this webcast will be made available on the website, and we wish you a good week and good health. Thank you.