Camil Alimentos SA
BOVESPA:CAML3
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
7.44
10.16
|
| Price Target |
|
We'll email you a reminder when the closing price reaches BRL.
Choose the stock you wish to monitor with a price alert.
This alert will be permanently deleted.
Camil Alimentos SA
You don't have any saved screeners yet
Good morning, and welcome to Camil Alimentos video conference to discuss the results for the first quarter 2022. Present here today are Mr. Luciano Quartiero, Director, President; and Mr. Flavio Vargas, CFO and IR Officer; and the company's Investor Relations team. We would like to inform you that this event is being recorded. [Operator Instructions]
We would like to emphasize that any forward-looking statement that might be made during this conference call are related to Camil's business outlook, projections and financial and operating goals that are beliefs and assumptions of the company's management as well as information currently available.
These may involve risks, uncertainties and assumptions as they refer to future events and therefore, depend on circumstances that may or may not occur. Investors may understand that such economic -- general economic conditions, industry conditions and other operating factors may lead to results that differ substantially from those expressed in such forward-looking statements. We will start the presentation with Mr. Quartiero, followed by Flavio's presentation. And at the end, we will open for a 15-minute Q&A. Thank you.
Mr. Luciano, you may proceed.
Welcome to Camil's comments on the results of the first quarter of 2022. We started fiscal year '22, showcasing our positioning as a Brazilian multinational company with one of the most comprehensive product platforms and leading brands in the Latin American food market. The results for this quarter show the strength of our brands and business model with growth supported by profitability, agility and synergies resulting from the integration of acquisitions to our portfolio.
We reached an EBITDA of BRL 245 million with a margin of 10.2%. This reinforces our growth with profitability and represents the return to the historical levels of double-digit margins for the company. We concluded the integration of the 4 M&As carried out last semester with agility and good performance entering in 3 new categories: Pasta, coffee and healthy products and also into a new country in Latin America.
In addition, the result is the first one to report the launch of União coffee brand in our entry into the category with the reactivation of a brand that was once a market leader in the coffee segment in Brazil. Our profitability is also the result of a defensive business model and brands that are highly recognized by consumers.
Even in a challenging macroeconomic scenario for some of the countries where we operate in Latin America, we continue to pass on prices and maintaining assertive commercial strategies. As a result, we managed to improve profitability and increase sales of leading brands with a price premium in the market, such as the Camil brand, which is a leading brand in grains in Brazil.
Now moving to the operating results. The highlight of the quarter was the sequential sales increase of our main categories and also the annual growth we experienced in Uruguay, in addition to the entry into new categories in Brazil. If we look at it by categories and beginning the analysis with the grains market in rice, we posted a sequential volume growth of 1.4%. And an annual comparison, we had a strong base of volumes and prices in Q1 2021 due to the second wave of COVID-19, which was down from the previous year. However, year-on-year, the highlight of the category is the growth in sales of the Camil brand, which partially offset the drop in sales of lower pricing brands.
Furthermore, regardless of the strong price base of 2021, it is worth noting that rice prices in the market remained at high levels. And today, it trades about BRL 73 recorded in the quarter.
In beans, we posted 6% sales growth year-on-year and 2% sequential growth. Annually, our net prices in the period were up 17% due to the gradual rebound in profitability and increased sales from the Camil brand.
Sugar. There was a decline in sales when compared to the strong base of Q1 '21. However, it's worth mentioning the sequential recovery after the stock out of sales in the fourth quarter leading to a 16% increase in sales volume in addition to price increases above 25% in the period.
As for fish, volumes were impacted by the lower availability of sardines in the period and difficulties in local and imported raw material origination. This result was partially compensated by additional sales efforts in the Tuna category, which posted sales growth and profitability resulting from price adjustments and a better sales mix. Net price was up 19% in the quarter.
On Slide 9, we show you the performance of the new categories in Brazil. In Pasta, we highlight the acquisition of Santa Amália, the fourth largest company in the Pasta segment in the country with leadership in the state of Minas Gerais with over 40% of the pasta market share in the region. We had a quarter with sequential growth in volumes, reaching more than 25,000 tons of sales in the quarter in a scenario where prices were passed onto the market, which yielded good results in terms of profitability in the period.
Besides Pasta, the quarter posted the first result of the company's coffee business. We entered the category at the end of March 2022. And reaching volumes in this first quarter, volumes close to 2,000 tons and net coffee prices of BRL 25 per kilogram. Our current operation in Varginha, in the state of Minas Gerais, one of the main coffee producing regions in the country is capable of producing close to 36,000 tons per year. We are expanding this capacity to reach 60,000 tons later this year to ensure product availability and sales volumes.
In the International segment, volume grew 44%, driven by sales growth in Uruguay, with greater availability of rice for exports in the year already reflected in Q1 '22 sales. In Peru, the sales volume of packaged rice and profitability continue to be pressured by the country's political and economic environment.
In Chile, we had a year-on-year reduction due to the political landscape and the impact of the country's inflationary hike, however, showing an improvement in the country's sequential volume growth. In Ecuador, we experienced our second quarter of consolidation for the group, still focusing on actions to improve efficiency and commercial structure.
In Uruguay, we dealt with the integration of Silcom in the domestic market. It's a company focused on sales to the local market of our portfolio continuing several healthy products. Both will allow the company to evaluate and implement efficiency and commercial actions as well as we will gain more knowledge about a new category which is there for healthy products.
The profitability of the period and agile integration of the acquisitions were among the major achievements of the period. We have made important expansionary moves in 2021 and believe that our extensive and proven experience gained over the years acquisition, integration gives us a unique position to identify acquisitions and integrate them quickly into our business model, delivering scale and efficiency gains.
Now to elaborate further on the financial performance of the quarter, I will give the floor to Flavio. Go ahead, you may proceed, Flavio.
Thank you, Luciano. Starting the analysis of the financial performance, our gross revenue reached an all-time high of BRL 2.7 billion in the quarter and a net revenue of BRL 2.4 billion. Revenue grew over 6%, driven by the entry of the company's new pasta and coffee businesses in Brazil and also the growth in market prices for beans, sugar and fish.
In International, revenue was driven by the entry of the new acquisitions, Ecuador and Silcom in Uruguay and by increased sales volume in Uruguay. COGS also grew as a result of prices and the entry into the new categories. SG&A grew 21%, representing 15% of net revenue. The growth came from the increase of SG&A Brazil attributed to the entry in the pasta category with Santa Amália in Brazil with a good performance and also the increase in freight and commission expenses in the period. It's worth noting that we achieved synergies in logistics, commercial and other SG&A fronts amounting to about BRL 25 million in synergies in the year.
In the international side, our SG&A also increased with the entry into the Ecuadorian rice market with the acquisition of Dajahu and the acquisition of Silcom in Uruguay. Additionally, we had a substantial increase in sales volume in the period in Uruguay.
Taking all of these factors into account, EBITDA for the quarter was BRL 245 million, up by 33% with a margin of 10.2%, an increase in profitability and the return to historical levels of the company's margins, as already highlighted by Luciano.
The company's total debt reached BRL 3.4 billion, up 32% due to the new funding to cope with the recently announced acquisitions. Sequentially, we also registered an increase due to the working capital seasonality. Net debt over EBITDA for the last 12 months was 2.4x at the end of the period. Even considering the 4 acquisitions made last year, the company is still leveraged with enough room to meet its commitments and proceed with its growth strategy.
CapEx for the period totaled BRL 29 million with investments in maintenance and postponement of the company's expansion projects in view of the new interest rate level in the market. We highlight that we canceled 10 million treasury stocks in the period up to the beginning of our new current buyback program, which is the seventh since the IPO.
We have 360 million shares in total and are currently repurchasing up to 10 million shares within the next 12 months. And finally, I would like to highlight that we have published our sustainability report based on the GRI guidelines, SASB and principles of the World Economic Forum and the UN Global Compact. We have aligned our ESG actions to the strategic pillars disclosed to the market during the last Camil day about purpose and people, quality and sales and efficiency and growth. Thus, we have initiatives in the report that are consistent with Camil's business plan for the coming years and in line with our commitment to carry out actions that are effective in our surroundings.
For this year, our ESG agenda included our materiality matrix, which involved consultations sent to more than 3,000 stakeholders covering all the countries in which we operate. In addition to the environmental and social indicators published in June 2022, in an assembly meeting, we voted on the new slate for the Board of Directors, which includes 67% of independent members and also new female board members. We believe that this move increases diversity and supports the effectiveness of the Board in terms of our strategic direction for the next coming years.
And to conclude, we are committed to move forward and exploit actions to increase the return to our shareholders. And at the same time, we will continue to make progress towards increased efficiencies and quick integration of the acquisitions. We continue to evaluate new opportunities to expand based on our know-how and our distributed platform in Latin America.
Now we will initiate the Q&A session in case you have comments or questions.
[Operator Instructions]
Our first question comes from Mr. Gustavo Troyano.
In fact, I have 3 questions. The first thing -- the first question is on coffee, considering that the ramp-up of the monthly volumes were down from April to May. So I would like your view about sales in the second quarter? And what could be expected in terms of sales volumes going forward, considering that you will expand further to 5,000 tons a month? You said something about until -- by the end of the year. But I just want to understand whether this quarter things will pick up or not? Or whether you will accelerate the company's plans.
And my second question is about profitability going forward. I mean, you already posted a double-digit even with issues related to sardines and [indiscernible] issues. Would it be reasonable to assume that the margin would be higher than what we saw in the first quarter, even considering the fact that the ramp-up of new business could be an increment in margin vis-a-vis the average margin of the company or you think that this improvement in profitability would be passed on over to prices so that the company can continue to grow?
And the second question relates to new M&As.
And considering the recent drop in wheat. What are your current negotiations with the Wheat segment of the market? Or maybe this may decelerate that process a little bit.
Well, Gustavo, thank you for all of your questions. Regarding coffee, the company was very cautious in the initial months in terms of the opening of sales. We started with 2 states, state of Sao Paulo and Rio. We were just trying to fuel the pace of the market and how is acceptance. And as I mentioned during our last call, we said that customers were quite pleased with the product, acceptance was really good. We were having very successful sales and sales are growing as expected.
I think the major concern was, I mean, start taking capacity and then we wouldn't be able to supply the market as expected. But we are moving very carefully and gradually. And now we are just beginning to enter into a new state. So things are according to plan, excellent acceptance. There has been a repurchase of the product. So everything is according to what was expected and in line with the growth sales of Coffee.
The expansion plan should be concluded by November or December and the idea is once we get there, our sales will increase month after month. I just -- I'm trying to refrain from giving you any further guidance on sales. So your question on profitability, I would just give you a more generic answer because, again, we don't give any guidance. But the company was very much focused on resuming our profitability levels of the past.
I mean -- and then we reached that goal this quarter. In the mid and long run, we want to achieve a profitability level that is beyond our historical levels in view of the new categories and other operations outside Brazil. Therefore, the company is on the right track. I think that, as you all know, this is another challenging year. It is just like the 2 previous years. I mean we have sales coming in the next few months, and I think this will help retail, and this will certainly be very favorable to our industry.
Now in terms of the M&As, this drop in wheat, we haven't felt that yet in the physical market. The company adopts a very good position for the next coming months. I mean, the season starts in the second week of September.
And then we believe there might be some price impact. I mean, the futures market is changing, but at least for us, in the physical market, these drops are not occurring. I mean, supply is still small. So we don't see any short-term impact. Our interest in terms of wheat still remains valid regardless of the price levels.
Well, we are already operating in the Pasta segment, and Camil remains interested in entering into the other aspects of this chain. So flour is something that we are looking at. Biscuits, we are looking at as well. Therefore, the price of wheat is not an issue.
Now in terms of M&A, we are also looking at new countries. We are looking at new segments in the countries where we already operate. Therefore, we are -- we still remain in the same path.
[Operator Instructions] Our next question comes from Mr. Rodrigo Almeida.
I have 2 questions on my side. I think, first of all, I think it's something that Luciano already talked about, but I would like to understand a little bit more about the consumer side.
You talked about 2 categories. I mean, the transfer price that you're able to do in the last quarter when volumes are reacting positively as well. I just want to understand whether you felt any impact in terms of the aid from the government. I just want to understand how you see the landscape in the next quarters, considering the additional BRL 8 million coming from the government in the coming months.
Also, in regards to Pasta. Where do we find ourselves in terms of synergies? So you said something about 25 million on an annual basis in the last quarter. So I just want to understand how this is already reflecting in your results?
Well, in terms of the consumption environment -- consumer environment, Rodrigo, we are able to grow in terms of our main brands. We refer to Camil's growth. We are very much committed to the execution. We have the opportunity to exploit distribution of Santa Amália in Minas Gerais. This is something that we've done. Therefore, I think that we have many opportunities. We have managed to capture them despite the current landscape. And I believe that if we get into a more extreme scenario, that could eventually impact consumption. And if there is such an impact, it won't be very significant. But in a more extreme scenario, I think Camil was able to grow due to the new areas that are yet to be exploited.
In terms of the government aid, I believe that not only, I mean, ourselves, but our segment as a whole, I mean, the retail should have a positive impact on sales. The topic of the purchasing power is something that has been constantly mentioned, and we've been focused on increasing competitiveness, having more efficiency. And I think that we are making important progress. Well, it's a challenging period. but the company is prepared to face any scenario.
In terms of synergies and the way we are capturing the synergies, we already captured that BRL 25 million. We have some additional things to be captured, especially in terms of industrial efficiency, but this still takes some additional months until everything is totally captured due to necessary investment. Therefore, in terms of pasta, the Pasta segment, I mean, we started off in a very challenging scenario with the high prices of wheat, but the company is very pleased with the results posted so far.
Integration was conducted in a very short period of time. We were able to integrate the systems and everything else. I mean, the speed by which we were able to capture all the synergies, it was really amazing and how much we are able to exploit from that commercial synergy and the growth we experienced in this past quarter.
And I think this is a very unique landscape with the war in Ukraine and issues with wheat. But despite the challenging scenario, the company had a very good performance, and we posted margins above what we expected. So this is a company that operates in multi-categories, and the company overall is very pleased with the results.
[Operator Instructions]
Our next question comes from Mr. Guilherme Palhares.
In fact, I have 2 questions. The first refers to CapEx because it was quite low this quarter. So I just want to understand what would be the run rate. What would be your maintenance CapEx from now on with all of the business already integrated in the company?
And within this CapEx, looking into the expansion, just to recap in terms of what we have in the pipeline for this year, also including the thermoelectric project, whether this will happen this year or next year and whether there has been any changes in the pace CapEx level in view of the current inflationary scenario.
My second question is about fish. Well, about sardines, we've been talking about that for quite some time. So if you can tell us a little bit more about the sardine business, I would appreciate it.
Well, I will start with the Sardine part and then Flavio will talk about CapEx.
In terms of supply, I mean we faced a very challenging landscape in that regard. But in the past few weeks, it was significantly improved, and this has allowed us to increase our production. The company has been very cautious, especially when we talk about supply because, in fact, it's very unpredictable.
But in the past weeks, there has been an increase in domestic fishing. And also, there was a significant improvement in the fishing market coming from [ Morocco ]. And so if things go on like they are now, we will be able to recover in the next coming quarters. But again, there are lots of uncertainties in the market, but we had many good news in recent weeks.
So CapEx. I think in terms of CapEx, in this new scenario of higher interest rates, this has chewed up a lot of debate about which investments we will focus our attention to. So when it comes to maintenance CapEx, it's around BRL 100 million to BRL 120 million. So this is the pace. And obviously, there is sometimes some discretionary choices. You do a little bit more of this or that, depending on the scenario and the return you expect.
So then in terms of the expansion and in relation to that thermal plant, this is one of the projects that we did not stop or halted or anything. It's a long-term project. I mean you have to commit your funding way in advance. So this, in total, would add up to BRL 150 million. This is maintained. And I think it should be operational around July of 2023.
And then what we've been looking at, and this is more like a discretionary CapEx. In terms of pasta, CapEx would be about BRL 70 million, and this is an investment that will help us make improvements in the plant's efficiency. This would also allow us to gain additional capacity with minor improvements to the current plant, but we are also looking at adding a new line so that we could increase our production further.
And this coffee CapEx that will allow us to reach that 5,000 to 6,000 tons a month of capacity, this will total an additional BRL 20 million. And the bulk of the CapEx that we've been looking at, but in this kind of scenario, we decided to postpone. And this would be the CapEx to transfer our plant from Itaqui to Tambai, which is in a nearby area. And this is the larger CapEx of around BRL 250 million. Well, it will bring lots of benefits in terms of industrial efficiency. But in view of the current scenario, this investment is now on hold.
Our next question comes from Mr. Pedro Fonseca.
Congrats on your results. I have 2 questions. The first is about this SG&A growth in the International segment, which was significant. My question is, I mean, you said that, that refers to entry into new markets and et cetera. Could you please throw some more light there so that I will know what is a one-off situation or the new level of SG&A? And what do you see in terms of EBITDA recovery margin for the rest of the year?
And my other question refers to Uruguay. I think that we already noticed that it was coming strong. But with the recovery in Uruguay, do you think we could expect some positive surprises? Or you're still sticking to the budget of around 15% for Uruguay.
While starting with Uruguay, well, the same thing applies, 15%. Because of the crop season, and it's a product that will be sold throughout the year. So this is the outlook for growth. So for Uruguay, this has been maintained.
In terms of SG&A, in the International segment, there are 3 major effects. We have the entry of Ecuador that in an year-on-year comparison, that wasn't there before. We have the addition of Silcom in Uruguay because now they entered our numbers as of March 1. So this was the first quarter that recorded that operation. And this volume coming from Uruguay also represents higher freight costs, and that is part of the calculation. And that's why we arrived at that level.
So Ecuador and Silcom, they take us to a different level, and that's why we have the impact of increased sales volume. And so this may have an impact going forward. So these are probably the main explanations related to the international operation.
[Operator Instructions]
Next question came in writing from Mr. [ Jefferson Triage ].
Could you please tell me what are the -- what are your expansion plans in Latin America?
Jefferson, thank you very much for your question. Our -- the company's expansion plan -- I mean, we are pursuing the same strategy. The company usually puts it very clearly that in Brazil, we want to work in categories of high turnover because the company learned how to operate well with sugar, fish -- pasta, we're still learning and the same thing goes for coffee. So we are interested in operating in these categories in the countries where we are already present, Uruguay, Chile and Ecuador, I mean, different timings, but we also want to be multicategories in these countries.
I also said that the company has this very old desire to get into Colombia. We see a lot of sense to operate in Colombia because they have an interesting consumption of rice. So whenever we get into a new country, we start with rice and then we gradually introduce new categories.
And more recently, the company has put some efforts towards getting to learn more about countries in Central America. There is a new front that we are looking at. And so this is what the company is looking at when we look outside Brazil.
[Operator Instructions] Our next question in writing came from Mr. [indiscernible].
What is your current production capacity in the Pasta segment, Santa Amália and other expansion projects?
Our current capacity is close to 100,000 tons of pasta. Speaking about pasta, there are other products, the company is also looking at growing that capacity. And we intend to grow that to reach more than 150,000 tons. So this is the CapEx that was mentioned by Flavio. So briefly speaking, that's it.
[Operator Instructions] Our next question came from Mr. Mauro Santos.
Expansion could come from other retailing partners that could also probably generate partnerships and SG&A reduction. If you could talk about freight and logistics, I would appreciate it.
I don't know if I understood your question, but the company has exploited partnerships in distribution. We look at all of the digital channels of our clients. We have partnerships with Rappi, with BEES, from Ambev. So I don't know whether I'm answering your question or not, but we are certainly looking at other sales channels. We are looking at possible partnerships. Therefore, we try to operate in different channels. So Mauro, I'm sorry if I did not answer your question, but you can ask it again.
[Operator Instructions] Our next question for Mr. Sebastian Richman.
Could you please share your views about your ESG targets going forward?
Sebastian, thank you so much for your question. ESG topic is something that is not only a very important part of the company, but this has been adopted across the board by many industry sectors. And we made an important progress throughout the years because we managed to engage the entire company.
There are more than 100 people today directly working with ESG in their different areas of expertise. This is a project that allowed us to turned the company around, that was a global project that involve not only the people from Brazil, but we were also able to engage people from all of the other geographies where we operate. We just published our new sustainability report. I mean, last year, we had already given the initial steps. That was our report based on GRI. But this year, we even increased and improved our transparency level.
With all of these new methodology, SaaS, GRI and all of the principles of the World Economic Forum, the UN Global Compact, allowed us to produce a very complete report and we report all of our initiatives. And even going beyond that, we were able to relate how these initiatives relate to all of our stakeholders and how important they are for the company. Just to give you a highlight, in regards to governance, we made an important progress despite publishing our new report because we were able to build or to put together a committee of ESG and ethics. It's made out of some Board members of the company because they help us with some strategic guidelines. We made important advances in terms of the independence of our Board. In our last general assembly in June, we have 67% of our Board members are independent members. Now we also have 2 women as part of our Board of Directors.
And for this new cycle in our last meeting, I mean, when we introduce our fiscal [indiscernible], we also elected Maria Elena, a women that is now presiding over our fiscal committee and all of that to say that we are making important progress towards strengthening the company's governance.
In terms of the environmental aspect of ESG, what we have embraced is the topic of energy. Energy considering energy efficiency and the energy that we utilize in all of our operations because we focus on reducing energy consumption, and we have a major concern about using sustainable energy sources.
Today, our consumption or more than 90% of all of the energy we consume comes from renewable energy sources. We have projects, both in Brazil and abroad to use the husk of the rice as a source of renewable energy. And with that we will give another step with the startup of the new plant. This will allow us to be self-sufficient in that regard in terms of production. All in all, to say that this also helps us to take care of the waste coming from rice. This also allows us to have more predictable cost because our energy cost is no longer depending on the local energy coming from the local market.
This is not only important to the world, but it's also important to our business. Now focusing on the S of [ social ] from ESG, we are very much concerned with safety. In the past years, we set up the goal of having 0 incidents. And in Brazil, we managed to achieve a significant reduction in terms of lost time accidents, more than 23% in Latin America. And that drop in Brazil was even more significant. We are also trying to work in projects that are in tune with our business. We have a project called Dose Futuro or sweet future. We have online classes where we teach people to bake cakes and most of the participants are women. So we are trying to empower women from the lower brackets of society. We are trying to help them to be more independent.
This is good for society and also good for the company. We create more loyal consumers, people that can be ambassadors of our brand. They will advocate in favor of our products. Therefore, I'm very happy with your question because in fact, ESG is a very serious topic for us and very dear to us as well. We are constantly looking for projects that can add more value to our company.
Luciano is just saying something important about ESG. Just to reinstate our commitment, nowadays, all of the officers of the company have to have a goal related to ESG. So some people have to achieve goals related to governance. Some people have goals related to safety, energy efficiency, all of the goals have to be consistent with their day-to-day activities, but we understood that this, in fact, could be a way to reinstate these values within the company.
[Operator Instructions] Next question is from Rodrigo Almeida.
I just have a follow-up question about your working capital.
What could we think in terms of working capital going forward? In the first quarter, the results always had impact of the rebound of sugar that was the issue in Uruguay, everything was pretty much expected. But I just want to understand the trend going forward when we look at the business that is ramping up right now in coffee and pasta, if you need to have any additional investment in terms of working capital. How does that work? I just want to understand the trend going forward for working capital.
As you noted well, we have working capital seasonality. So the first quarter has a demand very much related to the crop season, not only the sugar season, but rice in Uruguay, rice in Chile and a little bit in Brazil as well. And that peak comes in June and July, and then things go back to normal.
Therefore, we are moving along an expected curve. I think in the first quarter of last year, working capital was around 35 days, and today is -- now at the end of the quarter is 39. Therefore, it's pretty much in line with the previous years.
Well, when we calculate the number of days and we look at our sales from the past 12 months, we are not contemplating a full year with all of the acquired companies. So maybe that's why we see this minor difference in terms of days. We do not expect any additional need or for additional working capital in terms of pasta. And coffee, maybe we will need some additional working capital with the expected sales growth coming from that segment. But all in all, everything is business as usual. It's as expected. We are reaching a peak and it will start to go down.
Next question from Mr. Andre Sanson.
The company has focused on decreasing working capital. Is there any number of days as a target? And if yes, can you tell us what are you doing to improve these metrics?
Thank you for your question. Obviously, I mean, as a company, we try to address all of the financial aspects. And as Luciano said, our working capital has a significant seasonality in the first quarter. We have to follow a business cycle. And in the second half of the year, we release more. So we are constantly looking for further efficiencies, but we do not disclose our internal targets. We try to be very disciplined. And in fact, we only materialize actions that can reduce working capital because this impacts price and cost because sometimes people improve their working capital. But on the other hand, you pay a price on the cost side.
So we are constantly looking at all of the initiatives that we can implement to improve our management without having any impact on our bottom line.
[Operator Instructions] Our next question is from Luis Eduardo Marci.
The expansion for Latin America in terms of M&A, would it be more in terms of rice or wheat, like biscuits or pasta.
Luis, thanks for your question. Usually, at least up to now, in other countries we entered, we usually entered with rice because we have a lot of knowledge about that segment. And then in a second moment, we look at new categories like we're doing in Brazil. I think that to answer your question, are we looking for opportunities in the wheat chain in the countries where we operate, yes.
As we are also trying to get more knowledge about coffee, but we are also always looking at fish. So we are interested in introducing new categories in the countries where we are already in.
[Operator Instructions] As there are no further questions, the Q&A session and this video conference is now concluded. Thank you very much for joining us, and have a great day.
[Statements in English on this transcript were spoken by an interpreter present on the live call.]