Guararapes Confeccoes SA

BOVESPA:GUAR3

Earnings Call Analysis

Strong Q3 Performance with Significant Growth and Debt Reduction

In Q3 2024, the company achieved BRL 2.3 billion in revenue, reflecting a robust growth, particularly in retail, which saw 11.5% revenue growth. Adjusted EBITDA reached a record BRL 350 million, nearly doubling from Q3 2023, bringing EBITDA margins up from 8.8% to 15.2%. Notably, net profit rose to BRL 45 million, continuing a positive trend. Year-to-date, EBITDA hit BRL 922 million, marking an 80% increase. The significant debt reduction of approximately 50% brought net debt down to BRL 870 million, positioning the company favorably for future growth.

Strong Financial Performance in Q3 2024

In Q3 2024, the company reported consolidated revenue of BRL 2.3 billion, marking significant growth across all business segments. The retail sector alone generated about BRL 1.7 billion, reflecting a 11.5% increase in total revenue and a 10% growth in same-store sales. Importantly, the consolidated adjusted EBITDA surged to BRL 350 million, nearly doubling from BRL 184 million in Q3 2023, and achieving an impressive EBITDA margin increase from 8.8% to 15.2%.

Year-to-Date Highlights and Profitability

Year-to-date, the company has generated nearly BRL 922 million in EBITDA, representing an 80% increase compared to the previous year, with a strong finish anticipated in Q4, traditionally the highest-performing quarter. For the second consecutive quarter, net income reached BRL 45 million, reversing a loss of BRL 70 million from a year earlier. This demonstrates a committed effort to creating a leaner and more profitable operational structure.

Retail Segment Growth and Margin Improvement

The retail segment is thriving, highlighting a 14% growth in volume, outpacing revenue growth, and contributing to the increase in margins. Gross profit from retail rose by 20%, with apparel margins growing by 4 percentage points. These positive developments reflect efficient product management and responsive supply chain processes, which have led to fewer markdowns and better inventory utilization.

Strategic Focus on Integration and Cash Generation

The company underscores a strategic focus on integrating operations between retail and their manufacturing plant to enhance overall productivity and responsiveness. Debt reduction has been a priority, with net debt halved from BRL 1.7 billion to approximately BRL 870 million. The debt-to-EBITDA ratio improved significantly, moving from 2.8x to 0.8x, which bolsters the company's financial health and future growth potential.

Optimistic Outlook for Future Growth

Management expressed optimism for sustained growth, citing future investments in store renovations, digital transformation, and enhanced customer engagement strategies. The company aims to leverage its position to achieve net cash status by the end of next year. Initiatives to streamline operations, better category management, and refine pricing strategies are perceived as robust growth levers moving forward.

Midway Financial Company Contributions

Midway, the company’s financial arm, reported a remarkable 5.6-fold increase in EBITDA, totaling BRL 112 million for the quarter. With a strong control over delinquency rates and a proactive approach to credit management, Midway is well-positioned to continue supporting retail operations and enhancing overall profitability.

Preparedness for the Holiday Season

Looking ahead to Q4 and the festive shopping season, the company is well-prepared with healthy inventory levels. Approximately 30% to 40% of inventory has been renewed compared to last year, positioning the company to meet demand effectively during peak sales periods.

Earnings Call Transcript 2024-Q3

[Operator]

Good afternoon, everyone. I would like to start by thanking you all for joining us for our Q3 2024 earnings conference call. We have Andre Faber, our CEO; Francisco Santos, who is the Executive Head of Midway Pinancera. And we are going to start with the earnings presentation, and then we'll open for questions. [Operator Instructions] I have some announcements. This conference call is being recorded and transmitted simultaneously. The presentation shared will be in Portuguese, but the materials in English are available on our IR website. Any forward-looking statements that may be made during this presentation about perspectives targets of the company are based on the beliefs of the company and are no guarantee of performance. These were my initial remarks. Now I'd like to turn the floor over to our CEO, Andre.

[Andre Farber, executive]

Thank you, Luiza. Thank you all for joining us today. We're very happy to share the results of Q3 with all of you. We have achieved robust results that show the strength of our integrated model, the strength of fashion, the strength of retail and the strength of Midway, our financial company. As you'll see in the numbers, we have a powerful combination of growth, increase in margins, EBITDA generation, cash generation and debt reduction. As I said in an interview I gave yesterday, these were such great results that we consider this to be a complete result. I've been at the company for about 18 months. And I would say I still have many dreams, and there is a lot to be achieved. We are midway in this process. There are many things to be improved, but we have already achieved great growth, and I'm very optimistic looking ahead into the future and seeing many opportunities. So it's about consistency and focus. And I believe that the continuity of this work is going to yield positive results throughout time. Let me remind you of the pillars of our strategy.

The four pillars are here on the slide. Ever since I got here, I've been talking about the consistency and the importance of focusing on our core business, doing our core business with quality and in detail. So our first pillar is product obsession. We are a fashion company. We create fashion products to Brazilian consumers, and we've been investing to create fashion with higher quality for Brazilians -- and we've been investing in teams, systems, processes and in our logistics model so that the fashion items can reach consumers better and better. Our second pillar is the democratization of fashion. Brazil is a large country, and we have 330 Riachuelo stores, and we need to adapt to our consumers. We want to create joy, fashion of high quality, but at affordable prices. And we've been evolving in this. We've been working on our collections better and better, working on our stores. And as you saw, we've been able to attract many more consumers, and we have had more volume growth than revenue growth. But nevertheless, both figures are quite strong. This is the only integrated chain company with plants, logistics assets, stores and a financial company, midway. So we've always been obsessed to make our assets produce more. And we're very happy to see that the plant is now being better used. We can now be more reactive, and we have achieved margin improvements because of this joint work of the plant with our retail and store teams and Midway is another highlight of this dimension.

Midway has been showing extraordinary results, and it's probably one of the best retail financial companies. We have also accelerated our digital transformation, our e-commerce. So we see here growth and actually growth with profitability. And the company already has a robust structure, but we also saw opportunity in this strategic process that we've been focusing on to dilute fixed expenses and to be very disciplined in the allocation of capital and investment, and we've been able to dilute fixed costs, have improvements in EBITDA and also improve our capital structure.

Now I'll go over some numbers with you, starting with our sales numbers. We have a same sales store growth of 10%, an increase in revenue from products of 11.5%, and this growth came along with growth in margins. Growing revenue is hard, but growing revenue with margin growth is even harder. So we're very happy about this. We are obsessed about generating cash margins. So when we see this expansion of 4 percentage points in the gross margins from apparel, we see that this is the main contributor to our EBITDA improvement in the quarter. And we had a 90% growth in EBITDA. Our EBITDA almost doubled. That's quite impressive, and we're very happy about this, and this came because of this powerful combination of growth with margins. Year-to-date, we have over BRL 900 million of EBITDA generation. Last year, we had an EBITDA that was a bit over BRL 1 billion. So in 9 months, we're only 10% below last year's EBITDA. And we still have the last quarter of the year, which is the stronger quarter of the year ahead of us. And this result has been consistent in the quarter, 90% growth in EBITDA and throughout the year, an 80% growth in EBITDA year-to-date. And we think this can improve even further.

Now looking at the next topic, product EBITDA. We had growth of over 50% an all-time record for this segment with almost BRL 215 million in Q3, which is also a record. And we have decreased our structure and had this growth in EBITDA from 9% to about 12.5%. So as I said in the beginning, impressive results. Now let's look at Midway's results. Once again, we've been able to work with our customer base better, Midway EBITDA skyrocketed. It actually increased by 5.6 fold. We don't even have a percentage here. And we see midway with solid results, and we also see opportunities for growth here. We're very optimistic about Midway's future. These are excellent results, and there is hard work being done that will get us even better results in the future. And because of that, we reverted our profit scenario. We are now profitable in Q3. We went from a loss of BRL 70 million to a profit of BRL 45 million, and that happened even before we expected. And we're also generating a lot of cash. So throughout the year, we have generated BRL 425 million in cash, almost 60% and year-to-date numbers, so quite strong numbers. And this has allowed us to reduce our debt. Our debt has been reduced by 50% last year. Our leverage is now at 0.6. So our debt was reduced from BRL 1.7 billion to around BRL 870 million. That's net debt. So a very strong reduction of net debt, which makes us very optimistic about the future. We see lots of opportunities in our business, opportunities for growth, same-store sales as well as expansion. And we now have a capital structure that will allow us to invest once again. Invest in expansion in refurbishments, which is going to create a virtuous cycle and make our business even more attractive for customers. And we believe we can sustain this growth throughout time.

Once again, I want to thank you all for joining us today. Now I want to turn the floor over to Miguel, who's going to give you more details about our numbers.

[Miguel Cafruni, executive]

Thank you, Andre. Thank you all for joining us today. As Andre said, we're very excited about yet another quarter with great results, great performance. This shows our consistency and our discipline in executing a very clear strategy that we have shared with the market for some cycles now. This strengthens our value proposition and our deliveries. And we're very happy to share with you yet another quarter of good results. So let's get started with our consolidated operating performance.

Here, you can see our top line performance. This quarter, we achieved BRL 2.3 billion in consolidated revenue, considering all of our verticals. This is a healthy and positive growth that we can see in all of our business lines, products, BRL 1.7 billion, financial, mall. So a recurring growth that reinforces how attractive our business is and this integrated model with the financial company, delivering value to the mall, the plant. So we're very happy about this net revenue growth, even comparing 2023 to 2024. Here, we can see important gains in terms of leverage. We have gained 0.6 percentage points of operating leverage this quarter, achieving 36.2% of net revenue. I think that also reinforces this discipline in terms of cost and allocation of capital in what will bring us better returns. We see growth in sales expenses, which reinforces our focus on brands, operations and the business. So this gain of operational leverage is also really important and quite consistent.

Now here, you can see our consolidated adjusted EBITDA. We achieved BRL 350 million in Q3 '24. That's an all-time record for Q3. This is very strong. And once again, we had growth in retail, financial, mall. And as Andre said, in year-to-date, it's almost BRL 922 million, almost BRL 1 billion, 80% growth, very close to the numbers of last year, and we still have the whole fourth quarter to go. And this quarter, we almost doubled our EBITDA against last year. So it's BRL 350 million against BRL 184 million in Q3 '23. And we have EBITDA margins going up from 8.8% to 15.2%, over 6 points of EBITDA margin gain that shows the integration of the chain that is very consistent and is supporting the business as a whole. Now in the coming slide, you can see our net profit. We're very happy to have the second quarter in a row with profit Q3, BRL 45 million of net income. That's an important record for a historical average. In '21, we had some one-off events. that consumed the profit, but now we have yet another quarter of profit, and we're very committed to making the company leaner and always with a positive income.

Now we're going to talk about our retail performance, starting with revenue. The retail segment has had a great pace. We delivered a bit more than BRL 1.7 billion of net revenue in the segment, same stores of 10% and growth of 11.5% overall. This is the sixth quarter in a row that we perform I mean we outperformed the market by far. And this growth is supported by the performance of recent collections. The collections have been very well accepted, and we see the underlying work we've been doing to create clusterization in our stores to have smarter assortments, and this has brought volume gains to us. The volume has grown more than the revenue this quarter has had 14% growth and year-to-date, 17% growth. This shows the attractiveness and the acceptance of our business in all regions and all groups of stores with revenue growth, volume growth and margin growth overall.

Now here, -- we have another important pillar, which is net revenue per square meter. We're focused on increasing the productivity of our operations, not only revenue, but also cash margins. And we have had yet another margin of increase in net revenue per square meter. We have had growth of 11.3%. And that's important because with the same mall attractiveness, we can deliver better net revenue per square meter, and that's an important indicator for us. Here, you can see gross profit and gross margin of retail. Here in blue, you can see apparel gross margins. We have products from other categories as well. But when we look only at apparel, we have had 4% margin growth, 4 percentage points. We had important growth last quarter. And yet again here, we have had a 20% increase in gross profit from retail. This reinforces our better use in our plant. It shows the synergy and the integration of the chain. We're now more responsive. We can supply the stores in our clusters in a more agile and responsive way with fewer markdowns and having the right product in the right segment, high, medium or pop. So that shows that we are delivering an important increase in margins with better utilization of the plant and increase in productivity of our plant.

This year alone, the plant has produced 40% more volume than last year, creating over 1,300 direct jobs there. And the plant is now integrating more with the retailer, and that's what gives us this increase in margin. And our logistics model, our push and pull model also help us supply the stores in a smarter way to react faster and to prevent markdowns, thus accelerating margin expansions for yet another quarter. This quarter, we have gained 4% points of margins in retail. Now let's look at adjusted EBITDA. In retail, we also had strong expansion an all-time record here, BRL 215 million in retail EBITDA. over 50% growth against Q3 '23. EBITDA margin expansion above 3.3 percentage points, which reflects the accelerated top line, accelerated gross margins. And as a consequence, we strengthened the value proposition of our core business with good EBITDA margins and significant growth above 50% here.

So now let's look at Midway's operational performance. They have a key role to play in our business. They offer credit and financial solutions, and they're very much connected with our customers. A highlight here is the reduction of the loss over the portfolio, a 1 percentage point reduction, getting to 5.3% with a balance of BRL 1 billion, a very healthy level of PDD, which shows responsible and conscious management of our credit, a great performance in all of the different income classes, supporting all regions and all categories of store, extracting more value from the portfolios. especially with the new waves, we're very confident that the management that we have at Midway is very mature, very consistent with a 1 percentage point gain on PDD.

Now let's look at the default rates or delinquency rates for cards or loans. We see sequential evolutions here. On the left, we see delinquency on cards. We see yet another quarter as a consequence of a great evolution of delinquency in over 90 days with an evolution of almost 2 percentage points of gain going from 17.3% to 15.6% for a shorter term. From 15 to 90 days, we had -- we have good control here and the long-term trend reinforces this idea, and we see a very similar behavior in delinquency of loans, reduction quarter after quarter, as you can see. If we look at Q3 '23 against Q3 '24, we have almost 6 percentage points in the percentage of delinquency. And in the short term, we also had a small reduction, reinforcing the responsible management that we have at Midway to support retail. Now -- you can see Midway's EBITDA. That is an important highlight. As Andre mentioned, this is a significant percentage. Our EBITDA is growing 5.6x against the same quarter last year. We have achieved BRL 112 million of EBITDA this quarter, which is quite positive. Midway is here to support retail. That's in their DNA. And this is an important expansion of EBITDA margins with -- from 4% to almost 20% EBITDA margin at Midway with an increase in over 16 percentage points of EBITDA margin year-on-year.

Now let's look at our financial performance conclusions. Here, you can see very strong cash generation. We continue focused on positioning our business to generate cash. We want to be at the right profit level, and this will help us in new investments. So, we have accumulated almost BRL 60 million in additional cash generation as compared to the same quarter last year, 60% growth year-over-year in the year-to-date numbers. And that's due to the operational results that have boosted this. But even considering the sales of assets we had last year, we continue growing strong. And we would have more marginal gains in terms of working capital, but we keep strongly generating cash at the company, over BRL 400 million year-to-date. This leads to a financial de-leverage. We had reductions in the pre-EBITDA in blue and post EBITDA in orange. And we see strong deleverage going from 2.8x to 0.8x in the pre-EBITDA and from 1.9x to 0.6x in the post- EBITDA, almost 50% reduction of our net debt. And we have a strong focus on reducing our gross debt as well. We have had early payments of our debt in the last 12 months. We have paid over BRL 1 billion of our debt early, especially in the debt that had longer durations and those that were more expensive, BRL 0.5 billion of those payments happened in September. So that helped us with the profit, the income this quarter, and that's going to help also in the coming quarters. And even with that decrease in the liquidity buffer, we have a very comfortable cash position, almost BRL 1.2 billion in cash, which you see on the right-hand side, which covers the debt we have in the last 2 years -- in the next 2 years and over 100%. The efforts we made to make this payment in September did not put our cash health at risk. On the contrary, we see a Q4 with strong cash generation, which can actually help us in paying our debt early in order to increase our net income.

Now let's talk about CapEx. Year-to-date numbers here, we have been investing similar amounts that we did last year, but in a more efficient way. 4.3% of our net revenue. So we can see discipline and focus on prioritizing projects with good returns, prioritizing, investing and sustaining the company, but also in the company's future. And we think that the continuous positive cash generation that the business has provided us with makes us understand that we should continue investing and maybe even accelerate our next cycles of investment to continue protecting the company and creating consistent same-store sales and capital allocation, CapEx investments and so on.

[Andre Farber, executive]

This concludes our presentation, and we're now open for questions. I would like to turn the floor over to Issa, and thank you all for your time and attention.

[Operator]

[Operator Instructions] Okay. Let's get started with our Q&A session. The first question is by Danny, XP analyst.

[Danniela Eiger, analyst]

Congratulations on the results. I have two questions here on my side. The first question is about all of the initiatives that you have implemented in store improvements, profitability and so on. Can you help us understand how much is yet to come? And what are the main levers you've been focusing on in this value generation dynamic. Now my second question is about Midway. Congratulations on the results. They were great. And I want to understand what you're thinking, what your rationale is for this gradual acceleration of the co-branded product. What made you feel comfortable to go back to this type of credit and especially considering higher interest rates, FX rates, I don't know how concerned you are with all of that in this more macro context and that having a worse credit profile. I just want to understand your rationale when it comes to this because you've been very accurate in your decisions.

[Unknown Executive]

Denis, thank you for your question. I will start, and then I'll turn the floor over to Andre and Miguel. When we look at the future, we continue optimistic because our model can predict any hiccups along the way in advance. We saw short delinquency and long delinquency dropping, and we actually changed the profile of customers we've been working with in the last years. When we look at the mix of our portfolio, the long-term delinquency is no longer that significant. So with this adjusted profitability level, we've been able to make this portfolio grow little by little. In recent calls, we said that this scenario was still a scenario that require attention, and that's what we believe. I think that we can anticipate things better. We're still optimistic about the future. And we think that next year, we can continue this gradual recovery of the portfolio. We found a customer with the right profitability for our risk appetite. So we're optimistic. Of course, if there is any shorter-term delinquency movement or longer interest rates that have a correlation with delinquency, we'll make the necessary adjustments. But I believe that Midway is now more prepared to operate in these scenarios without many hiccups. So we continue optimistic to continue in this process of recovering our portfolios.

[Andre Farber, executive]

Okay. Danny, about your question about the levers. We are also optimistic. Our work is at full steam. And if you want me to break down things a bit here, I think that fashion can grow. There's a lot of room for improvement. And we're going to work to manage categories better, improving products, filling the gaps of products that we don't deliver. So just an example, we see many opportunities to grow in jeans, and we see an amazing opportunity like hundreds of millions or even billions. But that's just an example. This is product management or category management. Sometimes that also helps us grow the categories is to improve our reactiveness, -- shortening planning cycles and being more aware of consumer demands. So we've been integrating better with our plant, with our suppliers, and we see great room for improvement in reactivity to serve them even better, and this can lead to revenue increase. And we also see possibilities to improve margins even further.

How can we do that? By offering higher added value products, which will enable us to increase prices. We tested that this year, but we still see a lot of room for improvement. And the more reactive chain helps us have fewer markdowns and that improves margins, better integration between retail and plant can also generate more margins. So I see powerful opportunities here of revenue growth and margin increase in the coming years. And since we see great expansion of retail EBITDA and with better margins now that can even be improved, we can also see opportunities of network effects starting in 2025, we expect to see that. After COVID, we stood still for a while, did our homework, improved the business indicators. We put things in order here. But now with these results and after we solve the issue of the capital structure, this also helps us in expansion. So we're very optimistic.

[Operator]

Our next question is by Eric Huang, an analyst at Santander.

[Eric Huang, analyst]

My first question is about gross margins. We saw an important evolution this quarter. Can you tell us a bit more about this about what you see in terms of opportunities in the future, more integration with the plant and with other suppliers? And what can be a potential for gross margins for you because your levels now are closer to those of 2019. So I want to understand your gain potential in the future. And now thinking about sales, you talked about expansion potential, opening new stores. But can you also talk about store productivity? What do you see of potential productivity gains in the stores and also closing the gap when you think about your main peer, what do you see here when it comes to store improvement, layout so that we know what to expect in terms of growth from now on?

[Andre Farber, executive]

Thank you for your question, Eric. I think I have already mentioned a few things when I answered Danny's question, but a better category management will help our stores grow and that will give us greater productivity per square meter. That's from the perspective of products and also reacting fast, having the right product at the right time will also help us grow. I think that a better experience also plays an important role in improving our revenue per square meter. We see a need to renovate our park of stores. We've been studying this topic. We still need some time to make this happen, but better experiences, either through renovations or through review of store processes or a better integration between online and offline channels, which is already happening, but that can be improved or either through a better dialogue with customers, investing in communication. So we believe there are many levers. It's all about the time it takes for us to structure this and implement them. But I see levers that can bring us years of growth and better productivity. When it comes to margins, we also see opportunities. We've been working really hard in a better integration of our plant and retail. This has brought us good results, but it's not over yet. There are other results to come. As I said, being responsive can also help us improve margins. That's the second topic.

Another topic related to margin management is managing discounts and prices. And we have now a better management of markdowns. We are midway through this process, I'd say, and we have a better pricing management that we can do in a more individualized way by store and by category because today, we're still doing this in a more high-level way, but I think we can go into further detail of this work. These are just some of the examples. I think that the success of our business, the growth of our business and increase in margins is very much related to our execution capacity and prioritization because there are many opportunities. I listed 7-8 topics, but I could list 20.

[Eric Huang, analyst]

Last question here on my side about the performance that you've been seeing in the beginning of Q4. I know that from a seasonal perspective, the last weeks of the quarter are even more important. But can you tell us what your feelings are for the beginning of Q4?

[Andre Farber, executive]

We feel some continuity. There's not a major difference from the performance we've been reporting.

[Operator]

Our next question is by João Andrade from Bradesco.

[João Paulo Andrade, analyst]

Congratulations on your results. Just a quick follow-up on Dennis's question. I think it's clear that you still have this more conservative posture or maybe cautious posture in granting credit. But thinking about yield, have had great yield movement since the beginning of the year. How can we think about that yield when we have possible interest rate increases from now on? And another question, can you give us some color about the health of your inventory, thinking about Q4 and the holiday season, Christmas and so on?

[Andre Farber, executive]

Hi João. So yes, we see continuity. There is an important detail here that I would like to highlight. We changed Midway's risk level in the last two years. That is something that takes a long time. We have reduced the risk level by about 30%. So yes, we are more controlled, and this is going to bring results as time goes by. And this makes us stronger for possible times of stricter credit, and we can manage the company without hiccups. So when we look at the portfolio today that is no longer reducing and it's actually growing. Our portfolio of on-day payments is 50% higher than we had in the past. So we just expect these results to continue. We are optimistic. And if we look at the year-over-year numbers, we will continue to see these results. Of course, if something else happens, we'll be able to anticipate those movements, and we'll be able to navigate them smoothly.

About inventory, João, we feel prepared this year. We're much better prepared this year. We have reinforced our inventory positions. And you can see that, especially when it comes to raw materials. We've been accelerating the integration of our plant. This requires us to get prepared in terms of raw material earlier on. So we are prepared. We have healthy inventory. We have 30% to 40% of our inventory renewed as compared to last year. It's more model, it's more constant and basic, and we are with our plant at full steam, producing to supply our stores for the holiday season. So we feel very well prepared for these inventory levels. Of course, in the end of Q3 and beginning of Q4, there is a small price here, but there's -- we're definitely prepared.

[Operator]

Now Vinita from Itaú BBA.

[Unknown Analyst]

Congratulations on your results. I'd like to hear a bit more about the deleveraging process. You've been paying off your debt. We see yet another quarter of great cash generation. So what would be the ideal leverage level for you? And now about sales dynamics, we do monitor some market data, and we saw a slowdown in sales in this industry in September. Have you felt that? And you had the same-store sales of 10% increase of 10% throughout the quarter. Can you tell us a bit more about that?

[Miguel Cafruni, executive]

Thank you for your question. So about debt, we believe that a healthy level is about being able to choose. We had a leverage level that was relatively high, I'd say, well above what it is today. And in recent cycles, we've been working to generate cash and deleverage the company, unlock value and decrease our financial expenses over EBIT. And we saw a 50% reduction this quarter against last quarter. So we're focused on having the possibility to choose either to resume investments like Andre said, in terms of store renovation, investing in the brand, investing in expansion. So we believe that with this cash generation, we'll be able to continue deleveraging next year, we think that we can even get to a net cash position. But what matters the most here is that now we can choose, and that's what is healthy for the business, for the management. And we see a potential net cash position by the end of next year.

About September, Vinita, we didn't see anything relevant. I would like to hear from you actually to understand where you got this data from. But September, had fewer weekends. So I think that having fewer weekends can impact the numbers a bit. But looking at the macro numbers, we did not see any significant change.

[Operator]

Okay. That concludes our Q&A session. I would like to thank you all for joining us once again. And I want to say that our IR team is available should you have any other questions. Have a great afternoon.