[Foreign Language]
Welcome to WEG's teleconference for the fourth quarter of 2023. We would like to inform you that we are trying to broadcast this conference, and then the audio will be available on our IR website. To those of you who may need simultaneous interpretation, we have this tool available on the platform. To access, all you have to do is to click on the interpretation button on the lower Zoom bar and choose the language of your choice. For those listening to the teleconference in English, there is the option to mute the original audio in Portuguese by clicking on Mute Original Audio.
During the company's presentation, all participants will have their microphones muted, and we will then begin the Q&A session. To ask questions, use the Raise Hand button to join the queue, and then a request to activate your microphone will appear on the screen. If you have more than one question, we recommend that you ask them all at once. If we do not have enough time to answer all questions live, feel free to submit your questions to our email, ri@weg.net, which we will answer to after the end of the conference call.
We highlight that any forecasts in this document or any statements that may be made during the conference call about future events, the business perspective, operational and financial projections, and goals and potential for future growth of WEG are mere beliefs and expectations of WEG's management based on the information currently available to us. These statements involve risks and uncertainties and therefore depend on circumstances that may or may not occur. Investors should understand that general economic conditions, market conditions, and other operating factors may affect the future performance and lead to results that differ materially from those.
With us today in Jaraguá do Sul, we have André Luís Rodrigues, CFO, and then André Menegueti Salgueiro, Finance and Investor Relations Officer, Wilson Watzko, Comptrollership Officer, and Felipe Scopel Hoffmann, Investor Relations Manager. Please, Mr. Rodrigues, you may proceed.
[Foreign Language]
Good morning, everyone. It is a pleasure to be with you once again for WEG's teleconference results, and I start with a highlight for the first quarter, where the net operational revenue had an increase of 7.3% when compared to the fourth quarter of 2022. We have had a good result this quarter, motivated by the continued good performance of the long cycle business, in addition to the good demand for our products and services. Here in Brazil, we continued with positive sales of long-cycle equipment, especially in the businesses related to transmission and distribution, and also wind power generation.
In the foreign market, the area of power generation, transmission, and distribution stands out with a good volume of deliveries in the transmission and distribution area, especially in North America. In addition to the good demand of the generation business in India and the U.S., EBITDA reached BRL 1.8 billion, an increase of 17.3% compared to the fourth quarter of 2022. The EBITDA margin ended the quarter at 21.4%, an increase of 1.9 percentage points compared to the same period last year. Throughout the presentation, André Salgueiro will give more details about this performance. In slide four, we can see that ROIC reached 39.2%, an increase of 9.8 percentage points when compared to the fourth quarter of 2022.
A very positive result of the company's main financial indicator, due to the good operating performance, supported by the revenue growth, improved margins, and better control of the net... the need for working capital in the period. Also, ROIC was positively impacted by the recognition of tax incentives recognized in the quarter. Disregarding this non-recurring effect, the ROIC would have been 36%. I now turn over to André Salgueiro.
[Foreign Language]
Thank you, André. Good morning, everyone. In slide five, I present the evolution of the revenue of the business areas in the markets where we operate. In Brazil, industry activity remains positive for short-cycle equipment, especially in serial automation and gearbox products. We also observed to the continuity of good performance in long-cycle equipment, such as electrical panels for the mining and water and sanitation segments.
In GTD, we observed another quarter of evolution in the T&D business, driven by the deliveries of large transformers and substations for projects related to transmission auctions and distribution networks. In addition to the good performance of the wind generation business, with important deliveries in the quarter. On the other hand, distributed solar generation revenue, despite an important evolution compared to the third quarter of 2023, remained below the same period of the previous year. In commercial engines and appliances, the strong growth in sales of the quarter signals a resumption of activity in some segments, such as air conditioning, motor pumps, machinery for the sector. In paints and varnishes, we observed a continuity in the resumption of demand spread between different segments, with emphasis on the maintenance and civil construction market. In the foreign market, we had a good performance in local currencies in most markets.
For short cycle industrial electronic equipment, good results in serial automation products, with emphasis on the oil and gas segment. For long cycle segment, focus on automation system, especially in water and sanitation, and mining segments. In GTD, we continue to take advantage of the positive momentum for T&D operations, with a good performance in North America, and emphasis on sales of transformers for renewable energy generation, parks, wind and solar, and power utilities. In commercial engines and appliance, revenues grew compared to the same period of the previous year, despite the impact of exchange variation. Highlight for commercial engine operation in the U.S., reflecting market share gains. And, to wrap up, we had good results overseas, and also good volume of exports from Brazil to Latin American countries. In slide six, we can see the evolution of EBITDA.
It grew 17.3% in the end of the quarter at 21.4%, 1.9 percentage points higher than the same period of the previous year. This is mainly a reflection of the accommodation of the costs of raw material, combined with a change in the mix of products sold. Finally, in slide seven, we show the evolution of our investments. We invested BRL 439 million this quarter, 36% in production units in Brazil and 64% abroad. In Brazil, we have advanced with investments in the expansion of factories for industrial motors, electric traction motors, and battery parks. Abroad, we continue to increase the production capacity of motor and transformer factories in Mexico, and the expansion of the low-voltage motor factory in China. I now turn over to André.
[Foreign Language]
In slide eight, before the Q&A, I would like to talk about some of our latest accomplishments and comment about our outlook for 2024. Regarding the achievements, I highlight that in December, we announced the succession process of the executive presidency as of April 2024, with the transition of Harry after 16 years leading the company, and who will be appointed by the controlling shareholder to the board of directors, and the appointment of Alberto Kuba as our new CEO. Also, in December, we disclosed investments to expand transformer production capacity in Brazil, Mexico, and Colombia in the amount of BRL 1.2 billion , expected to be concluded by December 2026. To increase our production capacity in Brazil, these investments will strengthen us in the international market, preparing us to meet the growing demand for LND solutions abroad.
This month, we were informed that we improved our grade to A-, and advanced to the leadership category in the evolution of the Carbon Disclosure Program, the main rating agency on company decarbonization management, demonstrating the consistency and evolution of WEG in its commitment to decarbonization. Finally, I would like to talk a little bit about the outlook for the rest of the year. We continue with a good order backlog for long cycle equipment, both in Brazil and abroad, both for industrial equipment and GTD products. And even so, we remain attentive to the global macroeconomic scenario and possible risks and volatilities in our operations. We continue with a healthy operating dynamic, maintaining the operational efficiency of ou r units, and together with a good mix of products sold, should continue to support healthy operating margins and a positive return on invested capital for the rest of the year.
We continue with actions related to the purchase of Regal Rexnord industrial engines and generator businesses, such as the approval of regulatory entities in the countries where the operations are located, and we maintain a positive expectation for the completion of the acquisition process and the beginning of the transition and consolidation process of the new business. I close here, and I now turn over to the operator, so we can move to the Q&A session.
[Foreign Language]
We will now start the Q&A session. Keep in mind that to ask questions, you must click on the Raise Hand button on the lower screen of your Zoom bar. When announced, a request to activate your microphone will appear on the screen. And now we move on to our first question, which is from Lucas Marquiori, from BTG. Lucas, we're going to open your audio for you to ask your question. Please, Lucas. Please proceed.
[Foreign Language]
Thank you very much. Good morning, everyone. I actually have two specific questions here. The first one, could you explain a little bit about the tax incentive gain in Switzerland? Is this going to be acknowledged in Q4, or is it a one isolated event? And I would also like to know if this will somehow compensate the changes in transfer price. So at the end of the day, I want to understand whether there is anything to decrease the impact in that line. And also, you were talking about the integration of Regal, and I would like to ask you to comment about the integration of Gefran.
It was an operation that had a low margin, and I wanted to better understand what is their level of margin, so that we can have an idea of how fast this integration was, and anything that you could tell us to help us understand how it took place. Thank you very much.
[Foreign Language]
Hello, Lucas, this is André Rodrigues. Thank you very much for your question. I will talk a little bit about this new structure in Europe involving Switzerland. Basically, this new structure was for us to optimize the operations of the trade and holding in Europe, and so we created a trading in Switzerland. We will have to constitute organizations responsible for all of the business activities in the region, stock management, logistics, market development, marketing in the region, among other responsibilities.
In addition to these optimizations and regulatory issues, the tax incentive received in Switzerland also contributed for our decision to create an organization there. The business structure is totally aligned to the Brazilian rules of prices and transfers and all of the guidelines of OECD. The expectation of impact regarding the effective, effective tax rates will not change and will be around 50% of the benefit we received in the last years. So, this was the rationale behind it. Now, regarding the question about Gefran, yes, we concluded the transaction, and it was a smaller one compared to the current scenario we have and the engines part. We have four operations, one in Italy, another in Germany, two smaller ones in China and India, which were just concluded.
Also, we have the administrative aspects in Portugal, Europe, and all of the synergisms regarding the purchase of raw materials and the volume of purchases carried out by WEG. So this topic has already been concluded. We do not to disseminate our margins, but I would like to say that they are in line with what was expected.
[Foreign Language]
Well, thank you very much, André.
[Foreign Language]
Thank you, Lucas, for your question. Our next question is from Luiz Otávio, Itaú. We're going to open your microphone, Luiz, for you to ask your questions. Please, Luiz, proceed.
[Foreign Language]
Good morning, André. Congratulations for your results. I wanted to discuss the margins in the sector. The company itself already has an expectation of retraction. You have indicated that these margin levels are not what the company expects to have in the future, and we can already see a decrease when we look at different areas in the international market, and more specifically, about the business of electric and electronic parts. So, when we compare it in Siemens and ABB, we can see that in the last two or three quarters, these margins have been decreasing. As you know, there was an expectation for this to happen in the short term, but for the time being, we haven't seen this yet. It has surprised us, and there's something I wanted to talk to you about here, the T&D revenue and profitability, and so the question is in this regard.
So are we talking about industrial engines, everything that is included in electric and electronic, indeed pulling the margins down, but that's offset, b ut improvements in the T&D operations, and here we're talking about a positive surprise. I wanted to better understand this first aspect. Another direct question, this has this segment surprised you as well, or is it in line with what you were expecting? Is it a surprise, or is it according to your budget and your estimates?
[Foreign Language]
Thank you for your question, Luiz. I wanted to make it clear that not necessarily short cycle margins had a decrease in the last quarters. Sometimes we have a stabilization, but in the current scenario, we can still see some accommodation when compared to 2023, but the performance expectation is that it will be better than 2020, 2022. The margins were good, in line with the third quarter of 2023. Oscillations can happen from one quarter to the other.
We also have the contribution of the long cycle businesses, which has helped us with that, and so we're very proud to be able to deliver another quarter with differentiated margins. And of course, our objective is to deliver margins that are above the market levels. We were not surprised by the results, as you asked. It will be an opportunity for the future. We, as companies, continue developing a long-term strategy to capture good opportunities. When I say that in the past, we had some actions, and in the case of Brazil, we made an important purchase in 2020, the former Toshiba plant in Betim. It is a very modern unit from the point of view of construction, and it still had space for expansions. We are going to make new investments in that. Baldor also concludes this process.
It has very specific machines and devices, and also, we have the demand in distribution. In North America, with the purchase of two assets from Regal Rexnord, led us to increase our capacity. We have a third plant in the U.S. We increased our capacity in Mexico, and more recently, we have the businesses we want to develop in Colombia and Mexico to support this process. So it wasn't a surprise. The company was able to understand this movement. We are prepared for it, and we can understand that this market dynamics will remain positive for a very long time, and we will be able to explain it on WEG Day.
[Foreign Language]
Thank you.
[Foreign Language]
Thank you, Luiz, for your question. Our next question is from Lucas Laghi from XP. Lucas, we're going to open your audio for you to ask your question.
[Foreign Language]
Good morning, and congratulations for the results. I wanted to explore two things with you regarding the external GTD, thinking about the T&D business in the U.S., and more specifically, regarding transformers, which seems to be the main growth or driver in the short run. Also, that's something you shared with us on Investor Day. But we have seen some comments by the industry due to problems in the chain with transformers for U.S. clients, with prolonged lead time, which has generated some discomfort. I wanted to understand if this is a generalized problem in the supply chain, prolonging or maybe delaying deliveries, or if that is an opportunity, and if the problem is effectively related to the problem itself. And then we have a distributed capacity production so that we can capture this opportunity with a prolonged lead time.
So this is the first thing I wanted to ask. And then the second thing, in the T&D market in the U.S., we've seen an acceleration in investments with new production capacity in the U.S. We have a large competitor announcing their first, U.S. plant and so I wanted to understand if this is somehow concerning in terms of the competition market, or is this something that we should be seeing in the future, but should not worry about in the short term, especially in the transformer business, which seems to be very heated in the U.S.? So these are the two things I wanted to ask you regarding the T&D market, especially in the U.S. Thank you very much.
[Foreign Language]
Well, Lucas, good morning, and thank you for your question. Actually, the first thing I wanted to say is that we see it more as an opportunity.
The fact is that the T&D dynamic is very positive in North America as a whole, especially in the U.S., because of the whole context that I shared with you: renewable investments, investments in electrification, electric mobility. Then on top of that, we have the incentives for investments in grid renewables, and so on and so forth. And with that, the demand for transformers has significantly increased in the past few years, and it is only natural that you have a very robust demand. And an offer, going into the second part of your question, we have investments made in the region, and it's natural that part of this demand is supplied by equipment coming from outside the region, and that affects the lead time for deliveries. But we do not see it as a risk in the supply chain.
The problem is not a lack of components or freight, as we saw during the pandemic. I would say that it's more a lack of local capacity. It's important to keep in mind that WEG is established in the region, as André mentioned before, with plants in Mexico and three plants in the U.S. We have a verticalized productive process, which brings some operational advantages, and we've announced relevant investments with a new plant in a new area for us to increase our productive capacity and continue growing to meet this demand. It is not a trend that will last a long time. It will be maintained, robust, and constant for a longer period of time. So this is more or less the rationale.
In going into the second question, with clients competing in the region, it's only natural for us to see this happen, but because the demand is very high, we don't see it as a risk. We have an opportunity to continue investing, working, and growing our business in the future.
[Foreign Language]
Well, thank you, André, thank you very much, and I wish you have a good day.
[Foreign Language]
Thank you, Lucas, for your question. Our next question is from André Mazini, analyst from Citi. We're going to open your audio, André, so you can ask your question. Please move on.
[Foreign Language]
Hello, Rodrigues. Thank you for the call, and congratulations for your results. The question on margins, would it be fair to say that the margins are higher than in the past because of the mix, which is a little bit higher?
Our impression is that the long cycle was perhaps 30% and is now 40%, and so is this mix, this long cycle mix, continuing in the future? And another quick question on the new taxes on the imports of assembled solar panels, does that change your strategy, or perhaps we can localize production more? We know. A ctually, I wanted to know if it's worthwhile to bring it from China, because it's still less expensive to import from China.
[Foreign Language]
Well, André, thank you for your question. Let's talk about the margins first.
I would say that the main factors that justify the behavior of this margin and this level is that, first of all, we can say that the stability of the cost of our raw materials, as we've seen, that there has been an accommodation in the past quarters. The changes in the product mix with different profiles, we mentioned solar energy, whose margin is lower, but it's still a good return on invested capital. We also have a better representativeness of the long cycles and improved margins in the past, markets. This is a very positive T&D moment, and we've working for a while with improved margins and operations abroad, which have contributed with this positive impact. It's very important to highlight that we continue with cost reduction investments, and all of this has justified this excellent behavior of this margin.
Regarding the second question on the import of solar panels, this brings in new dynamics from the market. From a practical point of view, the industry as a whole has a local production of panels, but the volume is relatively low in terms of solar panels here in Brazil. Even if it were more competitive, today, we do not have a capacity to meet the demand of the internal capital. And, because of, the costs in China, we do not see any significant changes in the market. Prices went down significantly, but a good part of the industry, uses imported materials. This is a market condition, and therefore, we do not see a significant interference in the short term. But we have to think about the capacity of production of panels here in Brazil.
We know that China is very competitive in this regard, and so we think that imported panels is something that will remain significant in Brazil in the upcoming years.
[Foreign Language]
Well, thank you very much, and have a good day.
[Foreign Language]
Thank you, André, for your question. Our next question is from Rogério Araújo from Bank of America. Rogério, we're going to open your audio for you to ask your question. Please proceed.
[Foreign Language]
Hello, good morning, André Salgueiro. Thank you for the opportunity. I have two questions. First, a T&D follow-up. Could you share with us a little bit about this relevant gain in revenue and whether there is a high component aspect? Can you give us any guidelines? And looking ahead, with all of the expansion in capacity, especially on WEG Day, I want the...
What you shared on WEG Day, I would like to know what is your expectation of volume for the upcoming years and the potential. Let's suppose the demand, the demand is very strong, and you can reach your maximum capacity, what is the volume expansion you expect per year?
[Foreign Language]
Thank you for your question, Rogério. This is André Rodrigues. We may have the two components: volume and price. Whenever we have an opportunity, we always share the dynamics and the long cycle. When the demand is high, the cost goes up. This has happened in the recent past. We have WEG's expansion in terms of revenue. We have the price component and the volume component, and this is why we are trying to reach our maximum capacity. Regarding the future, the answer is very simple. If we have a demand, WEG is ready to increase its capacity.
We announced some investments on WEG Day, but we still have an opportunity, or we still have enough space to increase our capacity in Brazil. After we purchase a plot of 640,000 sq m in Mexico, we have a huge availability of area to continue expanding. The modular module allows us to adjust our capacity according to the demand. So if the demand is there, we will be ready for expansion in the next few years.
[Foreign Language]
Thank you very much, André. The second question is regarding the short cycle. Do you see a decrease in your backlog in terms of volume, price, or both, and how relevant is it? Also, in this segment, you talked about expanding your revenue in automation in Brazil and abroad. Could you give us more details? Have you had an expansion of market share and the potential looking ahead? Thank you very much.
[Foreign Language]
Well, Rogério, this is Salgueiro. The short cycle, actually, this is a comment that we've been making. We have a scenario of stability and volatility. We need to qualify them a little bit better. So in our release, we included more positive signs for automation businesses, and also, the gearboxes, which have been more efficient here and in the external market. We've seen a good evolution, also because of our market share evolution here in Brazil. So according to the motion drive strategy, that gives us some opportunities, and when we look according to the different geographies, the demand is a bit different. The demand is robust. In Europe, there is some volatility. We go to Asia, the demand is a little bit lower. I think that this is the general thing.
In terms of motors and short cycle, we have a scenario of stability. Outside Brazil, I would say that the dynamics is very similar to automation and gearboxes. In the U.S. and Europe, we still see some volatility. In Asia Pacific, it's a little bit lower. As you well know, we usually have two or three months of visibility, whose evolution we will have to monitor. Good news for the quarter is that when we look at short cycle businesses and appliances, we can see that it has restarted and eventually things can improve when looking ahead, but we will have to look at it for the next quarters.
[Foreign Language]
Perfect! It's very clear. Thank you very much.
[Foreign Language]
Well, thank you for your question, Rogério. Our next question is from Gabriel, from Bradesco BBI. We're going to open your microphone. Please proceed.
[Foreign Language]
Gabriel, please proceed. We will m ove on to the next question, and then return to Gabriel. The next question is from Marcelo Motta, from JP Morgan. We're going to open your audio for you to ask your question. Marcelo, please proceed. Please proceed, Marcelo.
[Foreign Language]
Good morning, everyone. I have two questions. Could you comment a little bit about tax benefits? We're talking about 7.4, and we would like to know what you consider to be the impact in terms of margins, and to what extent that would help expand your business. And what happens with the Antrust, and if you start with integration, I would like to hear your feedback about it.
[Foreign Language]
Well, this is very recent news, and it has, in fact, been in the media, but it's too early to issue an opinion, and we will have to see what will happen. The fact is that it can be positive for us. It has to do with exports. We used this benefit in the past, which has decreased, and it's now 0.1%, but, well o r it tends to increase to 2%-3%. This is a benefit that will be seen for exports here in Brazil, but it's too early for me to give you exact figures. When we have a better position, I think that we can go back to you with better estimates. Regarding the purchase process, with the approval process is taking place as expected.
We're working hard with that, and we are prepared with all of the teams, so we're ready to go to start the integration. We're moving according to our schedule. So I, we think that it's going to be something, between three and six months. We do not foresee that it will take a long time, and then we will start our integration process.
[Foreign Language]
Perfect. Thank you very much.
[Foreign Language]
Thank you, Marcelo, for your question. Our next question is from Victor, Bradesco BBI. We're going to open your microphone, Victor. Please, Victor, proceed.
[Foreign Language]
Hello, good morning. I have two questions. The first one regarding CapEx for 2024. We can see an approval for this year, and my first question is: What changes can be expected with Regal approval in the second quarter or in the first half? Will we have any significant changes? The second question has to do with the operation in Switzerland. You are transferring the trading operation from Austria to Switzerland, right?
[Foreign Language]
Well, hello, Victor. Thank you for your question. Regarding CapEx, we have an approval for, in our capital, the amount is significantly higher than it was in recent years. Everything we do, looking at the long term, is meant to support the company, and we will have over half of the investments made in Brazil and the rest overseas. We have to take into account electric mobility. We have increased production capacity, automation. We had already announced the increased capacity of commercial engines and appliances on our WEG Day. We talked about the T&D expansion. But today focuses more on the domestic market. We basically double our capacity.
We start looking for some countries in the region, and we know that there is a lot of opportunity. Overseas, always looking at increased capacity, low-voltage motors, and the need of expansion of the plants in Mexico, for example, that can generate an opportunity. In India, we also announced an expansion of our unit of in generators, and in the U.S., we also have expansion opportunities in T&D. In the short term, since today we have a capacity which is not totally optimized in the engines, so we will not have to make relevant investments. But of course, there's always something in terms of modernization and capacity, components to bring in a WEG's model in the countries where we are purchasing these assets. But we do not see any significant investments for 2024. What you said is right.
Over time, the idea is to migrate our trading activities from Austria to the new operations in Switzerland.
[Foreign Language]
Thank you very much.
[Foreign Language]
Thank you for your question, Victor. Our next question is from Alberto Valerio from UBS. We're going to open your audio for you to ask your question. Please proceed.
[Foreign Language]
Thank you for taking my question, and congratulations for the strong results when compared to your peers. Could you give us some details on what improved in the North America operations? Because there was a gain when we compare quarter-over-quarter. So is this something that will remain in the future?
[Foreign Language]
Hello, Alberto. Actually, when we look at the North America performance, and in one of the previous answers, and within... Or when we take into account the different locations, we will see it for all businesses, especially in the long cycle.
In general, we see good perspectives in geography. In T&D, we also have some important results in Mexico and U.S., which have been doing well in the past few years. In the fourth quarter, we have had a positive response. We have generation, high and medium voltage. We also have the commercial engines and appliance segment, which had robust results in the past quarters and was even stronger in the fourth quarter. In general, this area has been responding well. And there are some segments that are pulling this.
[Foreign Language]
Perfect. Thank you very much.
[Foreign Language]
Well, thank you, Alberto, for your question. Our next question is from Lucas Barbosa from Santander. Lucas, we're going to open your audio for you to ask your question. Please proceed.
[Foreign Language]
Good morning, André and Felipe, and thank you for the opportunity. I would like to talk about maritime freight. We've seen prices triple or even more than that in some specific areas, and so my question is: could you tell us what is this, or how important it is, and whether you are feeling the impact for the... Also, does it affect your logistics or outsourcing, or where you're going to manufacture?
[Foreign Language]
Well, hello, Lucas. Good morning. Thank you for your question. Actually, in fact, freight is something that has changed in the past few months, and I would say that it has to do with the conflict in the Middle East. And we can see the impact in operations, but I would say that today it is more concentrated in freights from Asia to Europe, and it's not generalized as we saw during the pandemic. And so we have to monitor the evolution, but I would say that today it is more localized for part of the operation, and we do not have an expectation of having a very high impact.
[Foreign Language]
Perfect. Thank you very much, and good morning.
[Foreign Language]
Good morning, Lucas, for your question. Our next question is from Igor Araújo. Igor, we're going to open your audio for you to ask your question. Please proceed.
[Foreign Language]
André, congratulations for the results. So we had two questions. One of them was asked just now about investments and production. And now talking a little bit about what is ongoing regarding the accelerated depreciation, have you analyzed, the impact in terms of tax shield, and how would that offset other effects in terms of transfer, and all of, the things that have to be approved by the Congress? I just wanted to understand the big picture. Thank you very much.
[Foreign Language]
Hello, Igor. Good morning. Well, in terms of accelerated depreciation, there is a lot being discussed, but we have to wait for the final results. That could in fact be very positive. We have to wait for the results, and eventually, later on, with more information in hand, we will have better accessibility. In case this happens, this will be very positive for the industrial segment as a whole, and not only for the company.
[Foreign Language]
Thank you very much, everyone.
[Foreign Language]
Thank you for your question, Igor. Our next question is from Luan from the Brazil Bank. Please ask your question once we open your microphone. Please proceed. Luan, please proceed with your question. We think that Mr. Luan is having problems with the microphone, and since we no longer have questions in line, we are going to close our Q&A session. And now I turn over to André Rodrigues for his final considerations. Please, Mr. André, proceed.
[Foreign Language]
Well, I would like to thank everyone for their participation, and wish you all a good day. WEG's teleconference is now over, and we thank you all for your participation. Have a good day.