CVC Brasil Operadora e Agencia de Viagens SA

BOVESPA:CVCB3

Earnings Call Analysis

Earnings Call Transcript 2023-Q3

[Operator]

Good afternoon, one and all, and thank you for standing by. Welcome to the CVC Corp. conference call to comment on the third quarter '23 results.

With us today, we have Mr. Fabio Godinho, the company's CEO; and Mr. Carlos Wollenweber, the CFO and Investor Relations Officer. Please be advised that this event is being recorded. [Operator Instructions] This event is also being broadcast simultaneously over the Internet via webcast and can be accessed at www.cvccorp.com.br/ri. Where all participants will be able to control the selection of slides which are also available for download. The replay of this event will be available shortly after its conclusion.

Before proceeding, it is worth bearing in mind that today's event may contain certain forward-looking statements that will be made during this event relating to CVC Corp business prospects projections, operational and financial goals. They are current expectations and assumptions of the company. Investors and analysts should understand that general conditions, operating conditions may impact the future results of CVC Corp. Therefore in future, these forward-looking statements may differ materially from those expressed in the presentation.

Therefore, everything will depend on the environment of risks and uncertainties and assumptions. The data and information presented after this refer to the company and the economic scenario that pertains to the third quarter of 2023.

With the conclusion of this legal notice, I would like to turn the floor over to Mr. Fabio Godinho, who will begin the presentation. Mr. Godinho, you may proceed.

[Fabio Godinho, executive]

Good afternoon, everybody. Thank you for attending our call for the third quarter 2023 for CVC Corp. We see that very gradually, we begin to observe the results of our strategy to bring back the original DNA of each company.

Working with technology, we can see that the work that we have been carrying out begins to appear in the highlights, we have an increase of 11.3% in net revenue for the third quarter 2023, an increase of 160 basis points in the consolidated take rate. An improvement in B2C of 10%. And in Brazil, an increase of 10 percentage points. They take rate also much better than the same quarter last year.

And because of this, our base of franchisees will now be able to maximize the results, and we will be able to employ more people for the stores, after, of course, the opening of new stores, which, of course, is a very relevant position for us.

We identified several opportunities in our business. We had a reduction of 23% in SG&A versus the third quarter of '22 and an increase of 34% percent in adjusted EBITDA vis-a-vis the third quarter '22 totaling BRL 96 million.

And this, of course, is the immediate reflex of all of the activities that we carried out. And the adjusted net income once again reached BRL 36 million. In the last weeks, we have returned to the office a 100% in person for all of the areas. And of course, this is very important for our efficiency and also to be able to disseminate the culture of CVC.

In the next page, you can look at the new governance and shareholders, the Board of Directors that was elected at the end of August. What is more important here is that we have a board that is fully aligned with the rest of the base of shareholders that is made up of the largest shareholders in the company. And they're working well with the rest of our base of stockholders.

We have members from the [ Wells ] family that allow for enormous growth in the sector and also contribute with significant financial gains in the sector, so, we're working in a very aligned way. And we, of course, have simplified everything so that we can maintain our focus not only on governance, but also on the execution of our action plan for the year. So we have, as part of our internal committees, audit, risk, the finance commission, the people committee which of course, it's important. It's always important to highlight that our team has deep knowledge of the verticals that they act in. We did have some additions to our team throughout this quarter and we are divided into business units and support the business units.

Now the General Director is Emerson Belan, CarLa in experiment, Hugo, who works with the digital board and upscale operator. We have the consolidator Heleno, who consolidated the part of hotels and this semester we have added Diego Garcia as the General Manager for our operations in Argentina. He has more than 30 years of experience in tourism and in Argentina, he was the General Director of Copa Continental, Aerolineas and more recently, was responsible for 15 countries for Air Europa.

He is, of course, very seasoned in each of the verticals that we work with and in the support to the business areas. We have Mader in terms of product and pricing supporting all the business areas that are in yellow. Palaia, who had already begun to work with us, giving technology support to all business areas. And the novelty is the return of Ricardo Pinheiro to the area of CCO and CSC. They had been separated their shared services and the control areas. Now they are once again together under the leadership of Ricardo Pinheiro especially at CVC, which is where we have a great deal of experience in the part of operations.

And Carlos, who throughout this quarter have consolidated other areas, the legal area, the people area, finances and IR. As you can see, we have a highly qualified team to face the challenges that we have ahead of us and the results are beginning to appear.

I would like to give the floor to Carlos, our CFO, who will continue on with the presentation.

[Jose Filho, executive]

Good afternoon to all of you. It is a pleasure to present to you the operational performance for CVC Corp. We had a significant enhancement of our figures, we begin with B2C Brazil. We had an increase of 10% in the sales volume, totaling 1.3 million consumed bookings. Now we had an increase of 1% in vis-a-vis last year. For several reasons.

First of all, a greater advance in the purchase of trips of customers before the pandemic. And secondly, because of a higher share of exclusive products. During the quarter, B2B Brazil represented 10% of consumed bookings and 50% of net revenue, thanks to a substantial improvement in the take rate vis-a-vis last 3.6 percentage points. This was caused by an improvement in the operation and a better pricing strategy of course, to increase our profitability.

Net revenue for the quarter totaled BRL 208 million, a growth of 34% for the quarter. For the year, the revenue was BRL 419 million. Now if we go to the performance of B2B Brazil, we had a reduction of sales of 7.2% for the quarter total in consumed bookings of BRL 1.2 million. Now this is due the restriction of sales for -- from operators because of their credit risk and proved to be an assertive measure taken by CVC. We're working towards improving the profitability of our clients portfolio and improved take rate that went from 5.8% to 6.1% during the quarter. We're not seeking growth for growth sake. We want a profitable growth of our company.

B2B Brazil represented 37% of consumed bookings and 20% of bookings totaling BRL 238 million for the year. We go on to the performance of Argentina on Slide 9. We had a reduction of 54% in sales. This is due to the fact that the third quarter last year was an outlier because of greater flexibility and sanitary conditions for traveling. This corresponds to 90% of our revenue. Argentina continues to grow in the sales for the year with a growth of 16%.

I would like to highlight that the take rate of the year is associated to taxes for traveling. In the quarter, the consumed bookings represented 25% of the total and net revenue 17%, totaling BRL 70 million for the quarter and BRL 213 million for the year.

We present consolidated data in the next slide. The net revenue for the quarter was BRL 376 million with a growth of 11%, a take rate of 9.6% and a significant improvement of 1.6 percentage points. We continue to be obsessive so we can reduce our administrative expenses. They represented 52% of net revenue compared to 67% in the third quarter '22. As a result of the increase of take rate and reduction of expenses, adjusted EBITDA grew 34%. It totaled BRL 96 million in the quarter with a margin of 26% compared with 21% in the third quarter of '22.

At the bottom right of the slide, you can see the adjusted net income for the quarter. If we exclude past acquisitions, the write-offs. We delivered adjusted net income of BRL 36 million, representing a margin of 9.7%.

In Slide #11, we present our capital structure and cash movements or cash burn for the quarter. We carried out a tender offer and repurchased 85% of our debentures. We have a longer or extended program for debentures and pick up the debentures will be made at the end of last year. Our cash represents BRL 222 million. We're working better with the advanced account receivables of our clients.

For the quarter, we allowed accounts receivable to increase to BRL 435 million, and we had a reduction of BRL 259 million. This way, we are reducing the financial cost of CVC. It's important to highlight that on November 21, we will be issuing debentures for the follow-up. This resource will be used to reinforce the CBC cash.

I would like to return the floor to Godinho to conclude the presentation.

[Fabio Godinho, executive]

When we speak about these figures, you will see the value generation that CVC is able to generate for our base of suppliers or partners. This is an example of how CVC business can generate value for an air company. We have 4 quadrants, the digital, the physical, the B2B and B2C. And you can see the curve of how the price of an airline will increase.

Specific slides in this company, for example, in the horizontal axis of advanced purchase, which we call ADVP and the vertical axis is price. So the more in advance, you buy, the lower the price, and this is where we have B2C companies coming in. CVC Experimento when Argentina, of course, increasing this system and enabling air companies to close these lower cost ticket. And this load factor is fundamental so that as part of this quadrant, the B2B where the advanced purchases of 60 days. Of course, this is what we sell more. These are leisure companies, B2C companies and this is where we work with significant load factor.

After the 60 days, when it's close to the boarding we end up selling a great deal of quality to the air companies and the hotel through trends, through RA and through Ola, which are our B2B companies, which is where we are able to add much more company for the airline.

One thing added to the other will maximize the revenues for the air company. For example, we're adding not only quantity, but we're also adding quality in terms of the revenue of the seeds that are being sowed by our B2B companies. And this is what it means to maximize revenue and how CVC can help in this process, we seek out this client in the digital universe as well as in the physical universe.

We are a 100% adjusted to this model of sale of tickets, which is the physical plus the digital, and we generate for our stores more than BRL 1 million of sales in the digital online part. From the sale of our stores where the client doesn't walk into the door of a store, does everything through a salesperson computer, but is still serviced with a great deal of confidence and receive the recommendation of a travel agent. Of course, to have the best possible traveling experience. And this is how we add value in our business.

And it has been a very positive step for our partners who were impacted by our marketing campaigns. We have included this channel for marketing strategy, both offline and online. We have worked with a yellow alert.

We're now getting ready for Black Friday, we had BRL 300 million of impact only on online by working with open and close TV, media out of home, MOOH. So we're taking that 60% of clients who have still come through the door of a store.

And in offline, of course, we're working with other digital panels that are working with 1 million people that have not been serviced at our stores and represent 40% of our stores. In the digital channel, and in the next channel, all of this has been sold through our technological innovations. Chat CVC is our first tool.

So we're launching the 4.0 -- 2.0, I'm sorry, we will have a third release 3.0. We have already launched artificial intelligence as a salesman sets up a package with a destination. This opens up a tab on our sales system that includes all the details, the characteristics of the destination that this consultant is offering. And that way, each of our salesperson can immediately become a specialist in each and every destination that we're selling.

And of course, this is thanks to the innovation of our IT team, many clients come to the CVC stores and ask for hints of where to go. Many people don't know where to spend vacations. And we're doing this allied to the salesperson experience along with this Chat CVC 2.0, where we will have significant action for any package we offer whether if it's a land package, air package, hotel or special tours at the destination. So this is the purpose and the [indiscernible] for CVC to offer the best attention to the travelers.

Another innovation and that continues the process of purchases for vacations. This is another implementation called a Fastzap. We're speaking 1 million of digital leads in the stores. Now the management of these digital leads is done through this tool Fastzap. Formerly, this was separated in different systems. Each salesperson would do things differently. Throughout this quarter, we were able to harmonize the 100% of the stores by using this tool where we have franchises, and we have been able to have a very clear vision of how many leads we are generating, the time of response for each store per each lead, which was the level of conversion. And that means we are able to have greater details and a more assertive management. Of course, this integrate with sales and integrate fully with our CRM.

Now to speak about our flight plan for the last quarter of this year. we're quite satisfied to be here rendering accounts for the year where we -- this is something we presented to our investors, and we are literally rendering accounts of what we did in the third quarter and what we're going to be doing in the fourth quarter and throughout 2024. The tripod of our strategy, our exclusive products, alternative forms of financing and the expansion of physical sales, especially in the hinterlands of Brazil where we have a more striking growth. In the first bullet where we have exclusive products. We're going to work with charters and exclusive negotiations with our partners.

Of course, this is the soul of a tourism operator. And this will be the focus when it comes to the product and the company. This will give us a competitive edge that is much greater. We need less working capital when we work with charters and you pay the air trip only after the client has left and not before, which, of course, will offer us a more positive working capital dynamic for the company, and we will see a much higher take rate for our base of franchisees as well as for the company with the advantage for our consumer that these are CVC exclusive products that we have built within the company.

This is part of the DNA that we are recovering once again. With the incredible take rates we have had with B2B and B2C. And in the fourth quarter, you will be observing this in a very positive fashion. The second point is to take our clients away from credit. Nobody wants to travel with debt. And we want to work with alternative forms of financing. We're working with the FGTS, which is the guarantee fund for time of service, something disruptive in traveling, people will be able to withdraw their anniversary bonus installment of a bank slip. We have had extremely low default levels. We have a more cautious management, especially after the boarding and this is the secret of this form of financing.

We also have travel financing from Banco do Brazil where you can pay in different installment and Bank of Brazil will make this type of financing possible and then the expansion of sales and same-store sales, an increase in them. And we had a very sudden increase in same-store sales after we presented this, and we have to guarantee the increase of margins and sales for our franchisees which will, of course, generate a very interesting position in our base of franchisees.

We're focusing on products, on the right marketing, focusing on marketing and after-sales experience that is very positive, leading to a very important interest and the opening of stores with a focus outside of the main capitals and in the hinterlands.

65% of the stores of CVC is already outside of the main capitals of Brazil with that proximity, which I think is the word that we would like to use here, where we have great confidence in our franchises and our partners that control all of these accounts. And of course, we work with our base investors and shareholders. So this is the strategy of the company, allied as we mentioned to something that will evolve gradually in the coming quarters. An improvement in the mix and an increase in the take rate in all segments.

And in the next slide, we would like to show you a survey carried out by Sebrae and the main consumption centers. First, the dream, the consumption is to travel throughout Brazil and then to travel abroad. After the pandemic, this has had a very strong and positive recovery for home flights, domestic flights, domestic hotels and now this desire to travel abroad will exist throughout the coming year, and we're making strong investments in this. We're extremely prepared to service this continued demand for the coming years in the future.

And what is more important when you ask this consumer who it is they remember when they're about to go out on vacation, when they're thinking of tourism, 52% of Brazilian will come up with CVC. So thank you very much for this. Let us now go on to the questions and answers.

[Operator]

[Operator Instructions] Our first question is from Ruben Couto from Santander.

[Ruben Couto, analyst]

Good afternoon, my question. I would like to hear more about your working capital the strategy that you have implemented in the last month has had a reflex with profitability in the company. If you could explain to us how this will work perhaps not a significant enhancement in the short term. But what is it that we can imagine for 2024, which will be the working capital profile because of these 2 pillars that you mentioned in your flight plan.

[Jose Filho, executive]

This is Carlos speaking. First of all, thank you for your question. That is very pertinent. An important thing that we did was to work better with anticipation of credit cards. Within this quarter, you will see that the accounts receivable from clients increased more than BRL 425 million. And if the company needs to work with this advanced to comply with these obligations, we can bring this money within the company and work. Well, the following day after the advance this money is in the company cash with the IPO, we work with less advances. We reduced our financial cost in the quarter, which helped us increase the net revenue and cash and we're now going to work in a more rational way with the anticipation or advanced acquired.

When we launched the campaign and worked with marketing with expressive results our same-store sales and sales volume in B2C increased significantly. We enhanced the 10 payments in the credit card and bills for self-installments. What is important, however, is that we offered a greater time per payment with better conditions for clients that pay 6 time. In fact, they will continue to pay without interest rates, and they will have specific products for those who pay during more than 6 months, they will lose this discount. And so we have interest rates for longer payment terms.

Now when we look at the mix, the payment terms was concentrated on 10 installments. There were no interest rates. We have made adjustments and 25% of our sales come from the 6 installments through a credit card. So we have increased or enhanced the payment terms.

Now in payments that are longer, we don't offer this discount when we're applying a reduced rate. We work with full rate. This means that when we offer longer terms, we become more profitable. On the average, the average term to receive has changed. Considering that part of the clients have decided to pay in fixed installments in the credit card and has a more profitability. And we can see this as a result of the quarter where we have better profitability in B2C.

This is how we have been working. This is our working capital dynamic accounts payable to suppliers has decreased because of a higher number of boardings that we had, greater payments, a reduction in the account of suppliers. And we have been balancing out the capital -- the working capital in the company. And the cash reduction is thanks to greater rationalization, more intelligence and accounts receivable, especially in acquirers of credit cards.

[Operator]

Our next question comes from Joao Soares from Citibank.

[Joao Pedro Soares, analyst]

We have 2 questions at our end. I would like to -- well, take advantage of the car. The competitive environment has changed significantly. We have 2 rather problematic players. The sector is recovering, which is your outlook for the coming year. Perhaps it will be more inviting in terms of competition. And I would like to hear more about the take rate of B2C. You spoke about exclusive products now, which is your alignment with franchises, master franchises take rate going forward.

[Fabio Godinho, executive]

Hello, Joao. This is Godinho. Thank you for your question. Well, we have 2 points here, the competitive environment and take rate, where regarding those 2 players that are no longer operating in the market, one for air travel, the other for land travel, well, the trend obviously will be positive. There's BRL 8 million in GMV that were being generated by these players who will now no longer be available in the market.

Now most of these clients were demanding products that do not exist for prices that are unreal. And that type of client will stop existing, and for the other part of the clients, we already have a significant flow in the stores in the last 2 months. But these clients are extremely, extremely sensitive to price. We had an enormous volume of quotes, but not a large volume of conversions.

And B2C for short-term boardings. Now thanks to all of the promotional efforts without, of course, leaving our margins aside. We do have Black Friday that promises to be very strong with a significant take rate. Now we have a strong partnership with our suppliers, with our partners in terms of promotions and November will be a very strong point in time for conversion for those clients who were asking for quotes and will finally end up buying all of the products and promotions that we're offering throughout the month of November.

I believe that the information here will be important. There's a bit of that macro dynamic that, of course, helps us aides and abets us. Now the tailwinds are always positive. We don't think they're bad. The market is growing, and the competitors are basically disappearing from the market. This is a positive macro dynamic for us. But what is more important is the dynamic of the company itself in the coming quarters. In the coming years, we're going to be working strongly with CVC with the right governance, with the right strategy with this strategy with a deep knowledge of each vertical and with adjusted costs, this dynamic is in our hands.

We have exclusive products that did not exist in our portfolio previously. This, of course, is one of our strengths. And Carlos mentioned this when he spoke about working capital the more we gain in terms of share when it comes to exclusive products, the better our take rate because these exclusive products will only be paid for in the execution and not when we're issuing the tickets.

And this is what we are doing at present through this concentration of volume in our air products, a concentration of volume in this partner with more competitiveness and, of course, working with better partnerships. And we also have the offline sales which is how most of the operators are working with quite a bit of success.

We've put aside the credit card, we created alternative, and this is part of the help that we will offer to the passengers. And this financing has nothing to do with the company's working capital. We have that FGTS withdrawal for anniversaries that only CVC has in the company, and this will have a 0 impact on our working capital, and it goes hand in hand with other alternatives that will take away our passengers on that burden, some credit.

If -- and this is a new opening, it's a return of our base of brick-and-mortar stores. Of course, in the capitals were quite saturated in terms of brick-and-mortar stores, but we are going to grow in the hinterlands of Brazil, where this dynamic is in our favor. We have the macro and micro dynamics, which are in our favor. And this, of course, will be a significant boost for the coming years. This is for the first question.

Secondly, when we speak about the take rate where we have had significant growth once again, and this is nothing but the beginning of our work. We're reporting the third quarter more than 1/3 of the sales, the consumed bookings were already obvious in the third quarter.

Now in B2C, we lost share, but we gained margin through renegotiating with suppliers through these exclusive products which very gradually will be implemented. And of course, this will increase the same-store sales beginning in the fourth year of the coming year, we see a net positive dynamic of significant new stores. So this is the dynamic that we would like to see for B2C.

And B2B that has the highest take rate, has strong growth, we have franchises who are once again signing contracts with us, and they have no working capital. And we look upon the dynamic of B2C in a very positive way.

Now in B2B, we want to increase the margins. The sales are dropping because we stopped issuing tickets. And of course, this had an impact because of the bankruptcy of these companies, along with other companies in the tourism sector, the impact was quite negative from the viewpoint of credit, we did not feel that impact. And we're going to increase the take rate of clients that were in a situation of deficit.

Of course, there were in a situation of loss. We have renegotiated the credit or we have simply eliminated them from our base with positive results, we will see in the coming quarters.

Now the trend is for this line, this curve to grow. We already have a positive take rate, and now we want to increase our share and grow the margins not to gain share at any cost, of course, we have changed that strategy. And we want to grow our share in B2C in the land part, in the air travel, and this is already happening. And of course, this will have a significant impact on our growth dynamic.

[Operator]

The next question is from Vinicius [indiscernible] from Bank of America.

[Unknown Analyst]

Good afternoon, Godinho, Carlos, congratulations for your results, while you said that the franchises are one of the main elements for the increase of your take rate. Could you give us more color on this? The second question is given your greater focus on working capital. What is it that you expect going forward in terms of default rates, I believe.

[Jose Filho, executive]

Well, thank you, Vinicius for your question. The first question refers to the take rate increase and negotiations with master franchisee. If we focus on the state of Sao Paulo, we don't have master franchisee. Now the gain in B2C, we worked with that negotiation, which is temporary during 12 months with some franchises. We give them the option that if they overcome the sales goal, we will offset that reduction with their commission.

But this is only in the states where the company, of course, has master franchisees. So this increase in take rate is marginal compared to the negotiation of master franchisees but everything came for better exclusive products, the renegotiation of products, the gain of renegotiation of products within CVC and an improvement in mix. That's the first part of the question. If you could repeat the second part of the question.

[Unknown Analyst]

You spoke about 12 months of payment. After the 12 months, do you have any type of deferment?

[Jose Filho, executive]

Well, not 100% of the negotiation. And I remind you once again -- you may continue, please.

Yes, I'm afraid our mainline dropped. So Vinicius, if you could please repeat the second part of your question.

[Unknown Analyst]

Which has been the evolution of credit and which is your outlook going forward?

[Jose Filho, executive]

In our marketplace, which basically refers to the sales that we divide in installments in price, they represented 5% of the company's sales, and this was 100% transfer to the bank that issued the ticket at the cost of 20% a year, which is a very high cost because of the risk and capital of CVC. What did we do, therefore, we increased the volume of financing through banks. They represent 10% of the volume we work with. We also have a credit engine to assess this score of each client, where we grant financing, and we have implemented a credit and collection area, which had been taken away from CVC 2 years ago. So we're back with this collection area.

We have installed this credit engine and increase the percentage of financing from 5% to 10%, there is still room to grow our credit table. Nowadays, the default is controlled by focusing on details, we have a low default rate. We have provisions allowance after 30 days of nonpayment and all the rest is left to the bank. That gain of 20% is in accordance with our results. And we don't transfer this cost to the bank that is issuing the ticket. As Godinho said, we are allowing our clients to have payment options, beyond the credit offered by CBC, we have the FGTS, the partnership with Banco do Brazil for payment in 6 installments were traveling, and we're working with other operators to offer a payment portfolio for client, something that goes beyond their credit card. And this enables our clients to travel.

Now simply to conclude this Vinicius. This is not a reduction or a cut for everybody that complies with the call above an X percentage, they will have a specific percentage. So they're not losing their percentages. This was agreed upon what changes are the 12 months. And this is everybody working together to give that boost so that CVC can gain speed and kick off once again, and we're all contributing the franchises, the suppliers, we all have been able to capture these gains, and we're trying to gain speed to take off.

We do have that credit table where we can reach a limit of 15%. But compared to the 35% practice last year we now have a more accurate credit engine, which leads to having a practically nil, default level. And we gauge this every day being very cautious.

[Operator]

Our next question is from Nicolas Larrain from JPMorgan.

[Nicolas Larrain, analyst]

I would like to speak with you about your expenses. You have carried out a very good management of SG&A and you have obtained a reduction of OpEx going forward. How much more room do you have in terms of reducing your SG&A and which is a recurring value that you could sustain going forward?

[Unknown Executive]

Well, thank you for the question. An initial survey that we did was to remove BRL 100 million from the company, OpEx, reducing the higher levels and consolidating the area within CVC. And some areas, while we demobilize them, especially areas that did not contribute to products and sales in the company. Our next stage is more surgical, more careful. We still have a significant head count reduction. And this will be done at a second stage. All of the employees of the company, all of the executives are working at the office. This gives us efficiency gains. The average ticket is lower. We remind you of this but the volumes are higher because our operation is now in our hands.

We have a gradual improvement of productivity because of the synergy in the area, because of our internal controls and investments in IT, it's difficult to speak about the gains going forward. What we can state is that we will continue to have this material reduction throughout the coming quarters. It will be something more gradual, but there is still a significant part to reduce our SG&A.

In the third quarter of '22, SG&A represented 2/3 of our revenue. It is presently at around 50% of the revenues, but there is more room for evolution here so that we can continue to gain EBITDA margin. And we're going to sustain and enhance profitability through our sales and reduce, of course, our administrative costs. So there's still a significant part to do that will be diluted throughout 2024.

[Operator]

[Operator Instructions] At this moment, we would like to end the question-and-answer session. I will return the floor to Mr. Fabio Godinho for his closing remarks. You may proceed, Mr. Godinho.

Mr. Godinho, you may proceed with your closing remarks.

[Fabio Godinho, executive]

I can hear you now. I do apologize. I was on mute. Thank you so much for your attendance. We're very happily rendering accounts in terms of what we promised to do during the follow-on, and we're showing you what we're doing in terms of adjusting governance for our financial partners and partners who have deep knowledge of our business. We have our family and others. We have our shareholders and the company Board. We have a strategy that is aligned in terms of offline, online the growth of brick-and-mortar stores in the hinterlands of Brazil, the right team.

We have just concluded these adjustments and we now have a completely new size. This is the business model that will allow us to turn the key for CVC. It has just begun, and we will be able to harvest much more in the coming quarters -- a results conference for CVC Corp, and here, we would like to thank all of you for your attendance. Have a good afternoon, and thank you for using Chorus Call.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]