[Foreign language]
You are highly welcome to SBF Earnings Release, Third Quarter 2024. Thank you so much for your time and attendance. I will briefly give you an overview about our earnings, and then I will hand over to Salazar, who will go into some additional details, and by the end, we are going to open for your questions. Submit your questions throughout the platform, and then we are going to be able to answer them, so some highlights. This was a quarter quite positive and consistent to our previous plan, the plan which we had disclosed five quarters ago, so we are in the middle of a 30-month strategic plan, which we had defined last year, in the middle of last year, to reaffirm the strategic objectives of expanding.
Two things: first, to generate cash, a cash generation above what the company would expect, driving deleveraging, and second, a maximization of the net profit of the company. We have been going through a significant expansion since our IPO. We had twofold the size of the company, and profits had a chance to be reflected in our net profit in terms of a greater amount. So these have been our priorities: cash generation and net profit. We are very pleased because, once again, we had reached a record-breaking. In the past, in the 12-month period, we have the highest EBITDA of the company, where we reached BRL 748 million , 35% higher versus the last 12 months, with a margin of 10.5% EBITDA, which represents 2.4 percentage points in our margin, and also, it is a record in our net profit, amounting to BRL 388 million .
In relation to the last 12 months, we have 165 versus LTM 2023, with a margin of 5.5%, with a growth of a positive 3.4 percentage points. This is a sign that we are going towards margin expansion, and that took place as expected, based on an increase in gross profit that will be the company's main focus. In the third quarter 2024, we see a 7.1% increase in gross profit versus third quarter 2023, with a margin of 50.3%, 3.9 percentage points. Comparing third quarter and fourth quarter, gross margin expansion will be mainly thanks to margin expansion. Margin expansion took place both in Centauro, with a 3.3 PP reaching 50.4 gross margin, and Fisia reaching 45.2% gross margin, an expansion of 3.4 percentage points, an excellent margin expansion, as we expected. How about just the quarter?
We see a 10.7% growth in EBITDA in the quarter versus third quarter 2023, and net profit of BRL 121 million so this is our first goal being achieved, which is net profit growth. Second, cash generation. That has also been achieved but first of all, in the quarter, we see a cash generation of BRL 272 million. To a third quarter like that, this is a great figure, almost 150% superior than the same time last year and such a cash generation growth in the quarter was due to working capital, which we had reduced from 129 days to 29 days in inventory. We are, once again, being able to follow our plans as expected and despite the gross margin, we may be able to reduce our inventories. Cash generation is thanks to a reduction of our net debt.
If we compare net debt in comparison to third quarter 2023, that goes down to BRL 1.6 billion to BRL 534 million. We see BRL 1 billion reductions in our net debt without any additional capital, just by cash generation. We see a significant reduction in this debt thanks to our working capital, where we have 2.8 to 0.78 fold. So our objectives, which we had in mind in the middle of last year and the deadline of 30 months to be able to reach that, we see and understand that we are even ahead of the curves that we had expected to reach, both in producing net revenue as well as cash generation and resulting in a leverage quite positive. Key numbers, and I don't want to repeat myself. I would rather emphasize the highlights of the table, which tells us about the last 12 months.
We have BRL 7.1 billion of net revenue, 3.9% growth, EBITDA of BRL 747.7 million, 34.5% growth, and a net profit of BRL 388.4 million, 165% growth. This is the current status of the company in the last 12 months. Let's take a look at each business unit. Centauro first, with a great performance in the quarter, very consistent throughout the whole year. The net revenue was BRL 894 million, growth of 1.3%, but this 1.3% happened simultaneously to 3.3 percentage points in the gross margin. This is a record gross margin for a third quarter, reaching 50.4%. Centauro's performance has been amazing, as our main challenge is the gross margin per square meter, and that is taking place steadily. The company's gross margin, Centauro's gross margin, has grown 8.4%. That was the expansion in gross profit in third quarter.
So we are so pleased with our results, as well as the level of consistency of Centauro's work, which would lead to a very interesting result scenario. Let me highlight two projects from Centauro. Probably this is a project of our priority, which is a multi-channel project, which is on Phase A, and we call them the Troca Tudo Omni-Channel Project, which is a customer may buy any product at Centauro's website, with inventory from ourselves or from a third quarter, someone who is using Centauro's platform to sell their product. So any product sold by Centauro and bought through the website may be returned or exchanged in the stores. That is a way to generate traffic to stores. Once they visit physical stores, they end up exchanging a product for a higher price product.
They buy more, they visit the store, and this channel exchange is key to Centauro, and another element is that we started a running circuit called Centauro Desbrava, a running circuit organized by X3M with exclusive Nike kits as a sponsor. The goal here is to foster running all over the country, and Centauro's shops are our main hub. We started this quarter, and we are going to have a number of runs by the end of the year. The first rounds, they were very successful, and we are taking skilled and qualified public to our public who will buy our goods, leading to daily sales as well as residual level of sales. A great quarter to Centauro. Now, let's get to Fisia, a quite solid quarter as well.
Fisia, first, we have direct-to-consumer channels where we see flat sales despite a stronger comparison base and leverage by a large discount margin. If you give more discount, you sell more. And that's what we did in the third quarter. That's why last quarter, last year, sales had increased. So that flat curve is a great rate of success, as it has to be understood as an expansion of gross profits, 3.4 percentage points, which is the greatest record gross margin since licensing by the Grupo SBF, 45.2% in third quarter. Expansion of 3.4, as I said. Once we increase margins, that is directly reflected on sales. Let's take a different look, not going back three or four years ago when our digits increased eightfold or when we had increased our store basis with the wholesale, X3M.
But if we go backwards two years, 2022 to 2024, two years' timeline, and if we adjust growth to an average sales, to annual average sales, Nike grows significantly. So Nike net profit grows yearly 16.7%. This is the compounded annual growth sales of 16.7% in net revenue, demonstrating the evolution of Nike in this period. And the main Fisia priority as well as for Centauro, and this is what we have been working hard, which is gross net per square meter. Fisia has reduced in 2023 its inventory days versus the third quarter 2023. One of the projects which had allowed Fisia to reduce their store inventory was thanks to storage and replenishment to stores. And we got NVS stores, and we migrate of NVS store supply to on DCs, leading to an amazing reduction in delivery time to stores, allowing more efficiency to the distribution process store by store.
So we are very pleased with the evolution and with the quarter and the performance that Fisia had in this quarter. So we have a very positive evaluation for Fisia's third quarter's performance, as well as the level of consistency to delivery for the fifth quarter consecutively. A positive performance, and we see now a great chance to gain confidence enough that we are going to meet our desired goals much before we would expect. Now, I'd like to pause and hand over to Salazar, who will go deep into some of our numbers and results. Thank you.
[Foreign language]
Thank you, Pedro. Good morning, everyone. I will try to be really straightforward and not be repetitive. Let's go over some figures that will prove the level of consistency of our work. 2024 would be a year of safe and responsible growth, where we would recover gross margin and maintain our expenses.
So in our net revenue, we see that clearly, especially in this quarter, where overall we had prioritized our margin recovery. Our gross profit shows that consistency year after year, quarter after quarter, where our gross profit is 50.3% in comparison to 49.44% in the prior year. Very consistent for both companies and fully aligned to our budgets. And we are confident about the strength of the brands to which we work with. Next slide. Operating expenses highly controlled despite all the indexes pressure due to inflation, but yet we are strongly controlling expenses to be able to allow a safe sound operating expenses. So in the future, we are going to have the normal effect of a retail company, which is to dilute operating expenses.
Our company base is solid adjusted, highly controlled, and we are constantly searching for new opportunities, which will allow us to keep on gaining productivity and to be able to cover our operating costs or expenses. And that is related into our EBITDA margins, as you can see an average of 2.5 percentage points, quite consistent to our speech to increase companies' yield. And this is a result that we have reached after 30 months. Net profit really strong, once again, and we are going to work the company's operating basis to become more profit and to work below EBITDA to reduce the debt of the company. And we are doing that year after year. Therefore, this quarter, we paid the JCP intercompany for SBF Commerce Centauro to optimize the effective debt of the company, reducing the burden and increasing net profit.
To emphasize what Pedro said, we see a consistent evolution over the last two years, thanks to responsible and solid growth. We are improving EBITDA and net profits in the last two years. We are a little bit ahead of the expected curve. That's wonderful, but results very, very close to what we had expected for this year. So we are meeting our goals. Cash flow has to be highlighted here, and this is a great scenario of cash flow in comparison to third quarter 2023. Operating cash flow very strong. We should not generate so much cash throughout this quarter due to all the preparations for the last quarter of the year, which is the strongest for sales. But considering all our new measures to the distribution channels and inventory, we were able to reach this amazing operating cash flow.
We did not anticipate the receivables, and we paid our payables, and we were able to cover our payables. And still, we were able to get additional profits deleveraging the company with this very positive cash flow operations. All of that, thanks to our 30-month plan, which was really well executed in OCF. Next slide, please. In addition to improving gross margin EBITDA, we also see working capital improving considerably. Receivables decreasing thanks to last year's measures. We see payables getting back to expected levels around 100 days, and we see the inventory curve also increasing, going from 200 to 188 days. The company's financial cycle is reduced, going from 184 to 129 peak days, helping us to pay our debts, not anticipating, and also helping us to deleverage the companies and paying our dividends.
We believe we are a little bit ahead of what we would expect for the same period. So we are pretty happy with our cash achievement results. So best operating results, better effective rates, better working capital, and a deleverage of two notches between the second and the third quarter of this year. And this is an unusual deleverage from the second to the third quarter, where we had improved 2.2 notches.
Our capital structure is very solid, and we are prepared for a cycle with increased interest rates, which will not affect us so much in terms of indebtedness. And this is a result of the past 24 to 30 months' work. And this is a final snapshot of everything that we have done in the past quarters. And we are preparing the company for a future to be able to keep on growing and gaining markets. Next slide is going to be the Q&A session. I will hand over to our mediator, but both Pedro and myself will be at your disposal in case you have any additional questions. Thank you.
[Foreign language]
We'll now start the question and answer session. To ask a question, please click on raise hands. If your question is answered, you can leave the queue by clicking on put your hand down. Our first next question comes from Luiz Guanais from BTG Pactual. You may ask your question, please.
[Foreign language]
Good morning, Pedro. Good morning, Salazar. With now that Nike's wholesale became quite regular and normal for the coming quarters, how about margin dynamic and cash flow generations? And you have done a great job in the past quarters in the mixed effect, where you are capturing B2C possibilities at Fisia. Do you see more expansion in terms of margin in the B2C channel?
[Foreign language]
Thank you for your questions. Well first, let me say that we had increased our direct-to-consumer channel sales as we saw dot-com, our app, the new e-commerce platform, improvement in our distribution channel, and as well as a great opportunity for opening new stores, NVS and NPS. So this is a way of growing, but without mitigating anything else. Excluding those accounts that were excluded, wholesale is increasing. Of course, that we had to prioritize a few things in the beginning and now, we have reached a balance, and Fisia's growth has to take place at all channels, including wholesale. What are we going to do from now on to keep on growing in all channels, including wholesale? In the recent past, due to excess of inventory, we had a not-so-usual sales remarking prices, which may affect our relationship with the wholesale partners.
Once that is adjusted, naturally, we'll be able to reach a better balance. I do not expect that such a mixed effect will lead to relevant effects to the company's margin structure. I believe that we are going to have all lines of products going through a more regular growth, and with this type of mix, we might see a slightly margin expansion, but not as significant as we saw in the previous journey, and answering your second part of the question, if in each one of the channels we see opportunity for expansion, yes, we do. The main margin expansion leverage takes place to the comparison base between third and fourth quarter, and to take Fisia back to a healthy profitability level, it's a matter of going back to gross profit or the gross profits we had before, and we are able to do it.
Just after that, we have some efficiency projects and gross margin efficiency in pricing, efficiency in inventory controls and procurement. There are a number of initiatives, but we wouldn't like to set a relevant margin expansion expectation. There are many people working here towards that direction, but I don't see that it's something for a short run. Fisia, by the end of the 30-month cycle, we guess to have a gross margin at the levels that we had before, and for the sake of setting new prices.
[Foreign language]
Pedro, would you elaborate a little bit more about the cash effect? And if you would allow me to make a comment, gross margin in Fisia going to a historic level, but with an EBITDA margin, which is greater in terms of efficiency gain.
[Foreign language]
Exactly. The expansion of EBITDA margin was due to the growth of gross margin superior to the net. And we guess that from now on, we'll be able to see Fisia delivering EBITDA margin as a potential to this phase, which is perfect. As a cash cycle, wholesale has a cycle, and wholesale sales, they take place nine months ahead. So we had to follow all this journey. We have to be slow. We have to be careful, talk to our customer, show all the plans to let them know that the discount period is over. So we have to be able to talk and design all the maps region by region to be able to understand who are the partners that will leverage more brands, what are the sports, who will support each one of the channels.
I mean, this is a gradual work, and in that sense, I do not foresee a relevant impact in cash flow. I see a normal growth between channels should not shake Fisia's margins structure. We are very optimistic that we will be able to expand a bit of the margins to the levels that we had expected or estimated.
[Foreign language]
Thank you, Pedro. Thank you so much.
[Foreign language]
Thank you, Guanais.
[Foreign language]
Our next question is from Victor Rogatis, Itaú BBA. You may proceed. Thank you. Your mic is open, and you may ask your question now. Mr. Victor, you may go on. Our next question is from Danny Eiger from XP. You may ask your question.
[Foreign language]
Hello, everyone, and thank you for taking my question, and congratulations for your results. In your opening remarks, Pedro, you said that you are ahead in the gross margin. How will that imply in your strategic plan? What do you have in mind for the next quarters for 2025? What can we consider in terms of new projects that you might have in mind?
Secondly, we see a great concern of a spillover effect as we see abroad in terms of Nike coming to Brazil from a bold innovation perspective or a competitive scenario to new brands. As you have Centauro and you have Nike, probably you have a better view, a better perspective of these newcomers. What is your take on that? And how about Nike promotions, which are somehow polluting this dynamic of pricing? What is supposed to be baseline and what is supposed to be understood as a risk from a Nike perspective? Thank you.
[Foreign language]
Thank you, Danny, for your questions. Nike dynamics was your first question can you recall for me please? You have been ahead i am sorry. Well, we have the following understanding. How come we had that plan? The company reached approximately nine months of revenue, coming from the IPO of three. We had nine months of revenue, and the net profit has not followed growth in the same level, and in our opinion, the net profit was not in the level where it should be, and at the same level, leverage was quite high.
All of that somehow ties up the company, which is not able to grow in terms of its balance, neither organically nor maybe fix the net profits, which should reflect the value of the company or to use the stocks for something to deleverage the growth. We understood that would be essential to tie up the house, if you know what I mean. This company has a modern DNA, a vanguard DNA, which will have several different movements throughout its history, so we understood that the company was going through expansion, and as an expansion phase, we have some kind of untidiness, and we had to arrange something such as inventory during the operations, and the financial result is an advantage in the net profit. In our understanding, the company needs to go through this phase, which we understand we have to live it fully.
We are not willing to set any change in our strategies. There are some small CapEx volumes that we might be able to do something, but we are not going to change our route. We are going to stay in the same way. We are steering our company into that direction. It's great that you are asking me that sort of question because that shows that there was some sort of progress in our strategic plan. But internally, we are committed to keep on that journey. We are not even close to be at the level of net profit that we would like to have in terms of revenue. Centauro may open other stores, several, actually. Fisia may have 100 stores. Opportunities are several. We have mapped opportunities in casual, fitness, football, you name it.
The company will be able to go for it, but we are still tidying up the house, so we are not going to change our strategy at all. Second question about Nike discounts. Experienced in the industry for the past 12 years, I have the feeling that cycles like that, they take place. Different brands from different categories. They have that time when they stand out more than other times. And I would like to highlight the fact that we have Centauro, which allows clients not only to see this transformation, but also, we from Centauro, we are able to navigate.
If there is any brand doing better, Centauro is a reflex of what the c`onsumer is looking for. If i sport consumer A is after brand A or B, Centauro has this ability. So at Centauro, we are taking the best of this time, being a representative of our consumers, choosing what we believe is the most interesting brand for our customers at that specific time. In addition w e understand the market sometimes a little bit after what happened. We have a sample of goods to be sold nine months ahead.
And Nike brand is designing a product maybe two to three years before ahead. And all the movement that Nike is doing publicly to react to the market is a time which has passed and which will be reflected in the consumer's market in those regions where Nike understands they will need to invest a bit more. And last but not least, big brands, and we all believe that Nike is a huge brand, they have a less risk to be a model, to be fashionable only. We are not just surfing brands that will no longer have a trend. We are talking about one of the largest brands in the world.
Many Nike competitors may have better or worse times, but I'm quite sure that all brands, they are resilient, and if they go through bad times, they will find a way to restructure themselves again. So I believe that eventual gaps will be overcome. And here we are surfing that wave. There will be times that we are going to sell more than others, and as a company, we have to be ready to navigate, and that's what we are doing. Have I answered your question? Is there anything left which you'd like me to elaborate a bit more?
[Foreign language]
No, that's great. It's perfect. Thank you.
[Foreign language]
Our next question is from Victor Rogatis, Itaú BBA. You may ask your question now.
[Foreign language]
Can you hear me now?
[Foreign language]
Yes, we can.
[Foreign language]
So good morning, Pedro, Salazar. This is Victor from BBA. Thinking about Centauro and expenses, how do you see opportunities, or where do you see opportunities to regain the same levels of a bit of margins of 2019? And how close are you to those numbers? And a second question. Now, thinking about Fisia, what are your expectations in terms of gross margin for 2025? And how do you weigh, or how do you see the negative effect of mixed channels? I mean, growth in the wholesales and the potential of royalties to Nike. So these are my questions. And also the currency potential as well.
[Foreign language]
So I will answer the first question about Centauro, and then we go for Fisia and Nike. Well, at Centauro, Centauro had a profitability in 2019. Then the pandemic on the way and expenses increased much faster than LTM per square meter. Inflation, GPM, and so on and so forth. The company had a number of efficiency measures thanks to technology and some other efficiency components. But the main gain of Centauro throughout time, it's not on a significant reduction of SG&A, but a growth above SG&A per square meter.
That has been Centauro's main focus. We believe that's exactly where we have to extend value. Net profit per square meter has to keep growing more than SG&A. For that purpose, we have two elements: gross margin and sales per square meter. That has been Centauro's priority so far. Now we see some signs of growth again. Stores have that opportunity from categories' perspective, as well as from executions at the point of sales, exposition, as well as retail elements, product allocations, I mean, the whole retail efficiencies. Centauro's growth will take place throughout gross profit per square meter.
[Foreign language]
How about Nike and Fisia?
[Foreign language]
We are already able to reach margins that we have in mind. It's just a matter of believing that we are able to reframe gross margin with lower prices, which takes us to a very healthy level. Margin expansions, first of all, is not required. It's not in our radar, not in our estimates, but it will take place based on a number of elements, such as diluting expenses. The growth of the brand should dilute expenses. Once that we open more stores, we increase wholesales, sales, and it dilutes SG&A.
We have much more to place in our radar, but also thanks to growth. We have some ups and some downs and by next year, we have arranged internally a solution to balance and equalize a possible currency impact by 25%. At Fisia, we already have projects and opportunities that we see that we'll be able to mitigate currency issues completely, and our life is like that. I mean, we have to do things that it goes, and we have to fluctuate with economic reality. But last year is not a next year. I mean, it's not a year which we believe we are going to have relevant price increases or markup. So currency, it's an element to watch out. Anything to add, Salazar?
[Foreign language]
A piece of information: most of our royalties increases. They already took place. The next royalty increase will be just by 2028. So in a short to middle run, we have been through this royalties increase.
[Foreign language]
Thank you. Thank you, both of you.
[Foreign language]
Our next question is from Irma Sgarz from Goldman Sachs. You may ask your question. Thank you.
[Foreign language]
Could you please elaborate a little bit more about future perspectives, future plans for 2025, considering that we are almost by the end of those 30 months period? How about maybe 2026? What do you have in mind in terms of opening new Centauro stores or Nike stores as they are going to have a less-off-price concept and more a full price concept instead? And eventually, new concepts, if you could share any sort of learning of casual concepts and the lifestyle which you are testing right now with one of the stores, that is quite welcome, in my opinion, I would say.
I have another question about short-term plans. I know that you are working on price markups for Fisia's products in Brazil and the Brazilian demographic reality. Are you working, and I guess you are working with some enterprises which are more interesting? And what do you have in mind for 2025, and how is the wholesale channel reacting to those markups? But in my opinion, this is a quite interesting project.
[Foreign language]
Thank you. Thank you, Irma. So two important elements here. First, we are indeed concentrated into that for 2025. But talking about growth perspectives for 2025, and if we migrate to this curve, we have a lot to gain. We did not open all the stores that we would like since our IPO because we had other priority projects, and we end up deviating our investments to different stuff. So we have a long journey for additional stores opening. So that is crucial, as well as for Nike, where we wanted to promote a full price market for Nike. And we have an array of options that Nike offers, but within the full price concept and the NBS projects, as they call. We are doing our best to open more stores and we have something else to explore.
And you are right when you say, by thinking about categories, there is much more to think about. This is a cut-off by channels, but we can have a cut-off by categories. How can the company grow in running, football, fitness, and casual? And try to understand what are the most relevant drivers in each one of the categories and how can we compete with the assets that we have or maybe exploring new assets. I don't have new elements for innovation tests to understand if they are according to the scale. But we test several things in all areas. Once we grow our tests, and that's exactly what we are doing this year and next year, whatever is proved to give us a good return on investment, we are going to accelerate. We are on a very healthy, increasing market.
So let's see which projects will be available and when. Innovation projects, they are a second phase of growing, but we have really to understand where they are coming from and how will they work. Your second question about prices, prices parameters, there are some elements behind that. Nike is a brand, a relevant brand, and they position themselves according to a certain market share. This is Nike, Inc. decisions, and we work respecting the owner of the brand, I mean, whatever they offer to us. So first, we have to understand that this is a fact, and this is what we have to do. There are some layers which will not be increased throughout Nike, and that's fine. We have other tools, we have other partners, we may consider different elements to help us to get there.
There are several opportunities for Nike to go down and to dispute markets within that positioning. I will give an example for that. There is an entry price model which was released and sold for summer 2025, which is an entry price and which is the same for wholesale. Those things will help to somehow organize the market. In addition, we have some punctual opportunities, and we have to really understand what is the right market and channel that will be of Nike's interest to start with this entry price to have the right product with the right price at the right channel. But we haven't got anything ready in a short run. We are not expecting to have that ready in our planning because this is an idea we see as an opportunity, but we have not quantified that yet on a short run. Thank you.
[Foreign language]
Our next question is from Isabela Lamas, UBS BB. You may go on.
[Foreign language]
Good morning, and thank you for taking my question. I have two questions. The first one about Centauro's gross margin. You mentioned price dynamics, combo sales. Could you elaborate a little bit more on the initiatives? Have you applied them in all stores of the group, or they are still rolling out the strategies? Do you see any additional room for additional contributions in each one of the programs? And second question about Black Friday. Once we are getting closer to the date and once there are several initiatives in the retail market in the middle of Black Friday, could you detail a little bit more if you have anything specific for that, your strategy for channel, what to expect?
[Foreign language]
Thank you. Thank you, Isabela. Elements that will push gross margin for square meter at Centauro's. They are continuous and without huge leaps. You had mentioned two, which are important, and they have to do with margins. But I don't want to give you the idea that there is a silver bullet that's all. No, we have several channels. Square meter growth has to be understood step by step. We have another project, Brigantry 65. We have been investing in stores' infrastructures. I mean, a sum of factors.
As to margins, the possibility to markup combos and the possibility to markup per store that has been carried out as a commercial strategy, even. Combos, they have been a relevant element of our offer, and during the third quarter, we had a record sales during Father's Day, so the second top day sales, just losing to Christmas. And all of that, thanks to the combo. And we have lots of homework to be done yet, and we have to do them little by little. Your second question, what was it again?
[Foreign language]
Black Friday.
[Foreign language]
Black Friday, okay. Third quarter, we are here talking about third quarter, right? But retail's, a significant share of retail is seen during the fourth quarter. So we are going through an execution phase. Just on the fourth quarter is when we see the results of Black Friday and then Christmas. I don't usually like to give a temperature of how things are doing. We are selling the event, and I don't want to give any thermometer. As to level of delivery, I'm very optimistic and proud. For Fisia, November is more important than December. Centauro, December is more important than November.
And I think we have been able to execute plans as we have executed or prepared ourselves for the beginning of the year. And everyone who works with retail, we have that level of concern. So it's time that we look ahead to guarantee that we are going to have a great Black Friday and Christmas season. We are ready to go.
[Foreign language]
That's perfect. Thank you.
[Foreign language]
Our next question is from Eric Huang, Santander. You may proceed.
[Foreign language]
Good morning, Salazar and Pedro. Uma primeira só, voltando pouco no ponto de crescimento. Going back to opportunities, it's quite clear where you are right now, and those 30 months plan. But if we take a look at the market as a whole, a market which is behaving quite well, especially with this retail recovery, what could be a trigger that would make you accelerate any expansion plan from a macro perspective? Would that be possible, or we have to wait for next actions according to your pre-planned? And how about the interest rates? What to expect? Thank you.
[Foreign language]
Thank you, Eric. I will answer your first question, Salazar, the second one. Refurbishment, reconstructions, we adapt the budget available. Even if we are not refurbishing completely the stores, at least we do something, some sort of renovation or restoration, better saying. What would make us accelerate? When are we going to be ready? First, our net profit and leverage to reach that. And second, in turn, our organization. Everyone who is here knows that a company is not a video game. It's not a matter of just pressing a button and generating more cash. You have to manage a company with a thousand people to set the path. So generating more cash, that is important.
So we may get organized internally, and only then we'll be able to leave an expansion phase. We had been there. We had tripled our company, and now we are going through this organizational phase. We are not sticking just to data, but we estimated that that was the time that we needed to conclude from a delivery perspective or internal organizations. So far, we are concentrated to work on stuff that will help us to reach our expected results, and I guess next year will be like that as well. Salazar, can you go for the second question? Thank you.
[Foreign language]
Yes, JCP is one of the tools that we have to improve the effective company's share. While it is available, we may use it, but that's not all. Refer to JCP all the time? No. We are here working the whole time looking for opportunities, I guess. All in Texas. So JCP, while it is available, yes, indeed, it is a tool, but we are always after new alternatives to be able to reduce the effective share of SBF Group. Thank you for your question. We are always trying to reduce the tax rate, yes. Thank you.
[Foreign language]
The question and answer session is now closed. We'd like to give the floor to Mr. Pedro to make the company's final considerations.
[Foreign language]
Thank you. First of all, thank you all for your interest in participating in our SBF earnings release. I would like to thank our shareholders, our board of directors, and our team for the whole support, and we keep on strongly striving ahead to close the last quarter of the year strongly and solid. And I hope to get back here in the next earnings release call with great novelties. Have a wonderful day and goodbye.
[Foreign language]
The SBF Group video conference is now closed. Thank you for your participation and have a good day.