Intelbras SA Industria de Telecomunicacao Eletronica Brasileira
BOVESPA:INTB3
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Intelbras SA Industria de Telecomunicacao Eletronica Brasileira
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Good morning, everyone, and welcome to our conference call to discuss the third quarter results in 2023. My name is Bruno Teixeira. I am the Head of IR, and it's a privilege to be here with you. With us, we have our CEO, Altair Silvestri, our CFO, Rafael Boeing as well as our heads for security, communications and energy. This call is being recorded, and it's going to be made available on our IR website. You can also find our slides on our website. You can download the slides already, and you can all download the audio and video at the end of the call.
For the Q&A session, we recommend you send your questions using the Q&A icon at the bottom of the screen. Please inform your name, your company and the language you're going to be asking the question in. And then pop up will show for you to unmute. The information contained in this presentation and any statements that may be made during the conference call about the business perspectives, projections as well as operating and financial targets for Intelbras are based on the beliefs and assumptions of the company's management and on currently available information. Forward-looking statements do not guarantee performance. They involve risks, and assumptions as they refer to future events, and therefore, depend on circumstances that may or may not occur.
Investors should understand that general economic and market conditions as well as other operating factors may well affect the future performance of Intelbras and lead to results that differ materially from those expressed in such forward-looking statements. Now, that we have clarified these items. I'd like to start the presentation. I'll try and be concise. And then we'll have the Q&A session after the slides have been presented.
So let's take a look at our first financial indicators. We see a dip in our revenue in the third quarter. Total net revenue was over BRL 900 million. We're still impacted by the new solar energy settings. This is an EBITDA, and there is a lower revenue. The EBITDA is 13.7% lower than last year at BRL 128 million. And when we have a quarter -- pardon me, a year-on-year comparison, we have an increase in the EBITDA margin as well as in the net margin for the quarter. So speaking about the net income, we have almost BRL 110 million in the quarter ROIC is just above 20%. As usual, we bring you a track record. There is a of 15% in the quarter-on-quarter revenue. That even with the solar energy context, we have about 9 months that are rather stable with the liner depth. And from an EBITDA perspective, there is a dip in the third quarter when are doing year-on-year comparison.
It's also worth mentioning that we have the EBITDA growing 10% in the past 9 months, and the net profit grew about 14%. Now some more detail on EBITDA breakdown. And this has to do with what I mentioned already. There is this increase in our margin, and it goes from 13.1% to 13.7%. And this has to do with this operational work that we have been doing from an operating expense perspective as well as in other aspects, but also the gross income had an impact.
So even in a more challenging scenario, we see that we are delivering good results. From a business perspective, talking about our main segment, which is security see that it accounted for 57% of our income with a year-on-year growth of 5% and a very good gross margin of 39%, almost 4 percentage points higher year-on-year. And even though this increase, we is smaller than what we had in the first half of the year, there is a sell-out increase year-on-year as well as quarter-on-quarter. And we can see that our field activities continue to be executed as per our plan.
In this quarter, there was a bit of a mismatch between sell-in and sell-out. And that leads to a decrease in the distribution channel inventory. We normally say that we have about 45 to 60 days for our inventory. And we see that as the replenishment scenario improves, the distributors start working close to the lower end, and that's what we see in these past 6 months. And the gross margin is more stable at a higher level and that has to do with our ability to absorb our to absorb the price adjustments that have been taking place this year.
Here, we have some more color on how I see -- how we see our sell-in and sell-out. We have these charts showing the yearly growth for sell-in and sellout. So this is sell-out from the first quarter 2022. And we compare it to sell out in 2022. And there is some stability that is around 15% of growth in sell-out. So whenever we compare it on a year-on-year basis, we see a growth in sellout and we see some stability here in our sell-out growth rate. And this is quite positive because we can see that is increasing – that is increasing.
And now when we take a look at the sell-in, we see there's more sell-in in 2022. And again, our reference base is 2021 and investors have been with us for longer. You probably remember that in 2021, that was still during the pandemic. We had some challenges in logistics and the resources being delivered. And we have overcome the challenges in the logistics setting, and it's natural for distributors to build their inventory.
And when we merge these 2 curves, we can see this time when inventory was being replenished and reorganized. And this year, we see the distributors working with more suitable and stable logistics approach. We see a decrease in inventory. And in the second -- bottom in the third quarter, there is a good match here in -- on in the second quarter, we have a good match here between sell-in and sellout. And in the third quarter, then we see that there is a bit of a mismatch because the distributors are working close to the bare minimum of their inventory. And we're talking about growth, right? So there is a sellout growth. There is a growth in selling. And at no point not in the past and not now, do we see a surplus in inventory? We see a healthy performance here, which is very important to our operation.
Now communication that accounted for 22% of our business in the third quarter, we see a substantial dip in comparison to last year. We have about BRL 30 million report in comparison to the second quarter that was the sales of the KU-band sales, the converters. And we also saw some lower revenues when it comes to the expectations for the quarter, especially in the providers in the ISP, Internet service providers. We see here 3pp in our gross margin, and it's fluctuating at a good level due to the reasons that we have mentioned in the past calls in 2023. From an energy perspective, just to cover the 3 main segments of the company, we had energy accounting for 21% of our revenue. There is also a significant drop year-on-year, but there is a good quarter-on-quarter performance with a 10% growth quarter-on-quarter.
Revenue growth isn't representative when you think about volume, we see the volumes rising in the course of the quarter. September was greater than August, which was greater than July. So there is an increase, and we're getting to a sales average that is close to what we saw for generators at the start of last year. So we see that business is picking up. And why is revenue different from growth? That is pricing. It's because of pricing. There is lower pricing now to reflect the costs that we see in the sources in the origins and that the market is practicing. So that reduces the gross margin. We see a 9% decrease here getting to 15% in the third quarter. And that has to do with pricing adjustments and our efforts that will allow us to reduce the inventory at a slightly higher level at the end of the quarter and getting to a solar business in a very good perspective for 2024. So it was good to mention that we have our power unit, right, with UPS and chargers and so on, and that all of that is happening as per our plans.
When we look at cash generation [indiscernible] we can see that, that's quite good. Even though we see a drop from BRL 1.3 billion to BRL 1.2 billion. With our investments, we have the payment of the loans and everything is as expected. So we're in a very robust cash position and we'll continue to be in that position. From a CapEx perspective, we continue with the construction works for the new warehouse in Sao Jose, close to the plant -- this should still take place in the first half of next year. So you'll probably see another 3 quarters with investment in the warehouse and maintenance levels are quite stable, slightly lower than our historical figures. And to conclude and so that we can start our Q&A session. I just wanted to say that the fourth quarter is the best quarter of the year from a seasonal perspective. Those who have been with us for longer. You know that we always expect the first quarter to be lower the fourth quarter to be higher in the third and fourth quarter to be closer.
This year, third quarter was slightly lower than the second quarter, but they're normally in line with each other. And the fourth quarter is our best quarter in the year. And that's what we expect to see this year, too. Well, to highlight something, we announced a partnership with optic fiber asset and liability partner and working with professional networks and larger size networks, allowing us to tap into a market that we weren't able to address so efficiently until now. So we're going to be renewing our portfolio in the fourth quarter and that is going to give us more opportunities in 2024. And the company as a whole continues, of course, to try and become ever more efficient. We want to have more operating efficiency and we're getting to the end of our plan for 2024. And it's clear to us that there is room for improvement in process efficiency, and this is how we continue to do it.
Some of these improvements can be seen when we look at our SG&A of the third quarter and we compare it to the previous quarter, right? So a quarter-on-quarter comparison shows improvements and we have better operations yet expected for 2024. So this is what I had for you. Thank you very much for joining, and let's start our Q&A session.
We see there are some questions that have been sent already. So let's follow the queue. So Andre Salles, UBS sell-side analyst, has a question. Good morning, Andre.
I actually have 2 questions. The first one has to do with the sell-out charge for security. So we do see there is an increase in sellout that is greater than in sell-in. And when you look at the average, I mean if you look at the past quarters, there seem – there seems to be a slower trend. What are the main causes for the slower growth? And what would your expectations be around a factor that could boost it so that we could have growth close to what Intelbras delivered in the first half of the year. And my second question, if I may, has to do with the partnership with FiberHome. This is a market that Intelbras already operates in and FiberHome stands out in that market. So I would like to try and understand what your strategy is to tap into this market. And do you think there is any risk for income to be cannibalized because Intelbras already operates in this market, right? Thank you.
Thank you for your question, Andre. What we've noticed in these past 6 months as there has been a postponement of projects in the verticals. Some projects that had been closed some contracts that were signed already and important clients asked us to put them off a bit because there were some turbulent times recently, right? And we noticed that. And now we see that they are a bit more confident, and these projects have been unlocked. So this is the only difference that may have had an impact on sellout. Economy as a whole has its influences, but we haven't yet seen such a great impact on projects in general.
Now the FiberHome partnership and Rafael is going to clarify that further, that partnership won't cannibalize our product line. It's going to add value with new technologies and products that we didn't have address issues that we had. It is a partner that is going to transform our communication department with other partnerships that we have. It's a new communication development then with market share in products that we didn't have. And FiberHome and some products that we had together will have better costs at more competitive prices, and that is going to automatically increase our market share. And Rafael, can you please make your comments?
Of course, thank you, Andrew, for your question. As Mr. Altair mentioned, in this market, we lacked some technology so that we could deliver an integrated solution to clients. And I mean to internet service providers as well as operators and carriers. We delivered simpler products to clients, but we didn't have the core products, what is in the providers structure. And as they are growing, they are looking for world-class technology that is integrated interfaces end-to-end from the start of the process to the customer's home. And this is what we will get with this partnership. Not only electronic items but also all of the fiber cables. FiberHome is an important player in object fibers in assets and liabilities. So for the cables as well as all of the equipment necessary for the internet to get to the consumers be it at ISP or a carrier.
And just one more comment here in new FiberHome was already in Brazil with other partners. And now we're an exclusive partner of theirs. But we are adding a very important point to this partnership, which is our confidence in services and customer service in sales and customer support to all of the providers. This is a very important item. And that was not their forte, right? It was not one of their strengths. So with that, they're more comfortable, right? That was one of their strengths. So this is a very good match -- combining their technology and our confidence with our general network and services. So we are combining the best of both worlds.
Bernardo Guttmann, XP sell-side analyst.
Hi, everyone, thank you for my questions. I have got 2 questions. The first one has to do with security gross margin is 40%, right, and it's quite important still. It's always great to try and understand the details as they're something structural, something in the value-added mix and special projects? Or is it more related to the context and it should continue to grow as you start or rather continue to grow? And in the solar segment, we see that you are bouncing back. There is substantial growth. We see that systems sales rose 85% quarter-on-quarter. And when we look at the indicators, we also feel confident about this recovery with a sales funnel that is now more normalized. But I'd just like to try and understand the revenue dynamics and also the margin as you see these higher priced inventory, do you expect margins to recover in the fourth quarter already? Thank you for taking my questions
Thank you, Bernardo, for your question. First question was about security, right?
That's right, correct.
So it really depends on the product mix. So you may not continue like that. We continue to improve costs, logistics costs and procurement issues, right? But there may be a dip and maintenance but -- they were confident about. And I mean we didn't make that, we didn't have that much growth this year. So we had time to plan and reorganize ourselves, and we now have much lower expenses than we used to have. And we're very excited to forecast a growth in results and in revenue as a consequence of all of the work we've been doing and talking about for a while now. Paulo, would you like to say anything?
Mr. Altair already said it well, we had some good improvement in logistics and costs with improved efficiency in our plant. When you have resources being provided at a stable pace, we can have more stability in production as well, which leads to improvements in productivity we're a bit lower than the average that we have in the 9-month average, but we're doing really well. And for the solar market, I think [indiscernible] could also say something about it after. But we see this -- we see the market bouncing back, which is exciting. The short one in the side is finishing the inventory at older costs, which is certainly going to take place before the year is out. And we go back to the strategy of having loyalty in our channel network that they don't only think about price and keep on changing suppliers because of price, but they should value the service, the trust. This is our strategy. We want to grow with confidence without rushing as we did in the past and we're willing to not grow our share, but to have more solid growth. [indiscernible]
[indiscernible] has summarized it well, we focus on consistency, especially in the bottom line, we had tough work this year to reduce expenses and costs so that we could have more consistency in our business and be very result-oriented and to have a team that can deliver. Solar energy needs us to keep our finger on the pulse around what can market. We know there is a natural fluctuation in the market, but we have good omen for the future payback is good at average price of about 30%. So that's an impact on the revenue in the market, but we already have our planned advice for 2020 were -- we want to continue to increase our positive results. And we're working hard on loyalty. We want our sellers to really be loyal to Intelbras believe in our brand and renovation and the signs that we have been having from July are very positive.
Now we're going to have Karina from Citi Bank.
Hi, everyone. I'd like to go deeper into the solar energy discussion. These changes in volumes, are they really showing that the market is saying back? Or is that a result of the decrease in prices you had because you're a bit more reluctant to have a more aggressive pricing position, but you were this quarter, so do you really see that the market is bouncing back? Or was it a result of your strategy in pricing? And another question, can you talk a little bit about the communication products, 5G, cables, how it all stands?
Good question, Karina. What we're perceiving is that the market is improving. We see the banks having more people coming to them for loans. We see from our resellers, there have been changes, and we also see the number of quotes that are asked and the sales funnel is improving. And once the impact of the first half was over because there were some discussion around in taxes and fees last year, but now we see the payback is better than it was before. So clients who have [indiscernible] levels. they will generate an on-site. This is a very good payback. We also see that the plans during the period that should go up to the first or second quarter next year. One is also there. And we see an acceleration in the coach and that's a positive market indicator.
Yes. [indiscernible]? Can you piggyback on the comment, right? And also answer the question around 5G and cables. We have another partnership, right? That's going to be an important factor for Intelbras to tap into another market that it wasn't exploring yet.
Speaking about 5G, we had good expectations that have come true. We have 100% of market share in the [indiscernible], the little product where you will fit the 5G SIM card. So we have 100% of the market share of that type of product that is sold to the market through the operators, the carriers. So everything that carriers are selling on that front is Intelbras brand. We have new products that are going in to be launched for the new SIM cards, and they're very good costs. They will be close to the cost of the fiber point delivery. As for the Tubarao plant -- the Tubarao plant is going to be more productive. That's why we produce our fiber cables and our copper cables for networks. So until the end of the year, the Tubarao plant is going to be producing more and with raw materials more adjusted to our current scenario. So this is definitely going to be helping the company positively.
As we did the partnerships that Mr. Altair mentioned, we have ownership with a Chinese company. I can't yet tell you the name of that company. They're a market leader in switches and in Asia. And now we're going to also be tapping into market that we weren't in switches for companies and data centers. One example is that in Intelbras, we didn't have in our network department, the devices that would meet our own network needs. And now with this partnership, we can support companies like Intelbras end-to-end. And by the end of this year, we will have new products launched. We have open products that will be launched in total, and we have access to a new market that we didn't have access too. That's why we're very excited about what's to come in communications next year.
Now Christian [indiscernible] sell side analyst, please.
Thank you, Bruno and Altair everyone. I have a question around security and sell out. The sales cycles, the returns, the dates, that's one question I have, how that works. And should we expect the selling levels to be normalized soon. The results that we see now, does that suggest that the inventory levels are as they should be? Are we matching the cycle to the sellout.
I have been keeping my eye on our inventories or rather the distributors' inventories for a long, long time. And their inventory them having it or not will really amount to 15% of our yearly revenue. So whatever changes they make, having 40 to 60 days, that will lead to an important difference substantial difference. So that section is that their inventory is at a level that wherever there is an sell out, that has to be replenished. And they did that with this increase in interest rates and so on, they learn the lesson, right? We train them. We teach them how to look after the cash flow. And then we have or they have their inventory levels as low as they can to meet customer needs. But now they have reached the minimum levels and now it has to be at the same level of sell out. And Paulo, could you please complement and answer the second part of the question?
I think Mr. Altair answered that well, we understand that the -- but there was another question, it escapes me now. I think it was around the same question understanding the distribution cycle for shorter. But I think you can talk about [indiscernible].
Yes. I think Mr. Altair said it well, sell-in and set out, they were well matched. We have a short cycle that is the turnover. That's why we have the 45 to 60-day turnover in the inventory. And as we understand, we got to the lowest healthy level, then sell-in should start being in line with sell-out, so that you don't have the mismatch that Bruno showed in the chart in the past quarter.
I have another question or a different subject, if I may. Looking at communication and the partnership with FiberHome, do you have any CapEx investment that will be necessary for the new products? Or how is that going to come into your production line?
Our greatest investment, Christian has already been made. It has to be operating as of the end of the year. And this is basically personnel. It's in engineers, people in Asia working with product adjustments. So the main investment is already part of our expenses, even though our expenses are going down. So this is something that really makes us very comfortable. We're really ready to take this next step with very little investment in me with investment in infrastructure or expenses. Is that it said, [indiscernible]? Yes, absolutely.
Having reached what we expect to in sales, CapEx might be necessary for you to expand our plans. But we have our plants built. There is room for expansion in the existing -- so this wouldn't be any [indiscernible] investments.
Now Marcelo Dos Santos, JPMorgan sell-side analyst.
I've got 2 questions. The first one has to do with the security inventory. Just to try and understand the historical aspect, selling in 2022 was really strong in comparison to the sell-out. You mentioned that in 2021, there were some supply issues. So were the suppliers running at the maximum level and then in 2022, they went up to very high figures and then they are getting back to lower figures. That's my first question. And you had a $45 million revenue going from the third to fourth quarter in the lease. Does that have to do with the inventory I had understood you wouldn't have to do with that. So where is it? Bruno, can you answer that question, please? Bruno, please?
Yes. So the inventory in 2021, they weren't at minimum levels. We had some supply issues, so they were below minimum levels in some business lines. It was really rather chaotic from a raw material input perspective. So it really is a complicated base. So as the supply issues were solved, then distributors were able to re-establish their inventory levels. 2021 lower so the pandemic, so it was still challenging. But I think the main message now is that there are moments where distributors will have higher inventory levels, sometimes lower. Is the message and we see that sell-out continues to grow, it's quite stable -- That's the main point. And what was your second question again, I forget, sir.
The cut-off, right, the transfer of sales. To try and simplify the cut-off exists in every quarter. I mean, every quarter, you have sales that were performed in the previous quarter but weren't written as sales for that quarter because they haven't been delivered yet. And what happened in the third quarter is that this amount, which is normally that much. It was more substantial this year, BRL 45 million, as we mentioned in the round, the release. We can look at this BRL 45 million in the same level as the revenue reported in the third quarter. So about 50% of security and 50% is communication and Energy and Power.
Let's continue with the sell-side analysts, and then we go to buy side. So Fred from BofA can we unmute Fred, please.
I've got 2 questions. And I apologize for stressing this subject around the distributors. But I wouldn't understand that you have several distributors. And the impact seems to have been substantial in this quarter. So all distributors are moving in the same direction with inventory, right? I mean, there isn't one major distributor that is going to lead to a major disruption. I mean the whole of the distribution chain reduced their inventory. Is that something that's happening across the board? That's my first question. And the second point has to do with communication. Our understanding here is that you had been doing well in the quarter, but there was a substantial worsening in the last month of the quarter. Was that correct? Are we reading the data right? So you have an expectation that the fourth quarter is going to be better and still within the same point. How long does it take for you to have the sell-out information? Is it 15, 30, 60 days because what our attention here was the expectation because assuming there have been changes in the course of the quarter.
Fred sell out is informed to us on a daily basis, and there's a 2-day delay in how updated the data is right. When we look at our sell-out information, well, with the sell-out taking place, it expected there will be a sell-in. I think this is a natural way for the operations to run. And we see a growth in revenue, and we get to the end of the quarter, and we see that the distributors have -- well, they're selling figures. And in the third quarter, this year, it was a bit different to our history. We don't really see a generalized move for everyone agreeing to reduce inventory levels, not really.
When we look at the sell-in and the sell-out charts that we showed in the presentation, we can see that since the first quarter, that has been happening. That was voice more clearly in the second quarter that there should be an interest in reducing inventory levels, and we can see that in the chart, the trends are similar, so it's really in line with sell-out. And now we see that the sell-in levels are different to growth in comparison to what we had seen in the past. So that may be where the expectation is different, right? I think this is the main point worth mentioning when it comes to each period behaved.
And about communications?
Yes, you mentioned the pro [indiscernible] the suppliers. The general scenario for communication in the whole market is that a year has been very difficult. In broadband and the backbone reconstruction for carriers and for providers. So this really is an effect caused by what is happening in the market. And when we look forward though, this business, especially the communication business, considering the new technologies that we're bringing in and the new partnerships we have forged there is a trend for improvement, we expect improvement. We're tapping into markets that we weren't a part of before. So we expect growth. But just -- let me see if I understand correctly. There hasn't been any changes in the quarter. It was more just -- it's a difficult year, and there was no like specific thing the let worse month correct. There's nothing specific. They like to a worse month.
All right now, Cesar, the Santander analyst, please.
Still talking about the sell-in, sell-out mismatch considering distributors are running close to the lowest level possible. And the fourth quarter is a stronger better sales month. Is there a chance for a positive mismatch, so to speak? Cesar? Distributors are unlikely to increase their inventory levels in this last quarter. Considering the cash need they have, they have to pay Christmas bonuses. They have to pay vacations and -- I mean so there should be a balance, but not a reduction. So there is a logical trend, and we see it this month already expecting to have a better quarter. And as I said, the only fund in the site for our results is getting to sell everything in the solar items that we had with the old pricing.
Now another question I have about communication. How much was the performance impacted because of selling sell-out? And how much was actually just a lower sell-out? Communication is very much focused on the providers. Our team is working closely with the providers there. So it's basically sales to the business specifically. You don't have high inventory levels at the end of the process, right? And we see the exact same movement as we see in security. There is a minor reduction because of a lower sell-out and we understand that they got to the right levels in their inventories. All right, perfect. Just to make sure that I understand, sorry. I would expect the team to be slightly different than security and sell-out, but this is because of this mismatch it. Yes, that's right.
So sorry, one last comment. The LNB devices, they were expected to be sold this quarter? That's the key event, EAF is going to have good revenues in the fourth quarter and some of it next year. All right.
So let's move on to another question. We can try to go back to Julia after.
[indiscernible]. It's an alpha key [indiscernible]. Good morning, [indiscernible] Are people are unable to unmute? Victor actually sent us question in writing. So let me read it. So just asking about the reduction in the distributors and inventory levels and the impact that has on our inventory levels We understand that we should keep the current levels or if we should reduce our inventory levels in days for the coming quarters, too. We're not changing our inventory policies. We have some fluctuations. Sometimes there's more today unless tomorrow, they may increase their inventory levels beyond sell-out. So our inventory policies stay the same. We continue to aim to reduce our inventory in the number of days. Correct. Yes. But we stick to our policy, which is the ideal level that we deem to be ideal.
And the next question is from Julides also in writing.
There are signs that the imported pieces are going to increase in pricing, right? Because of the fees and taxes improved by the government. Does that impact us? Well, benefits out there, probably talking about something done last year where the percentage is the fees to be paid in IT and telecommunication taxes were note, but that didn't have an impact on other product lines. And the $50 point doesn't really make a difference, right? Most of our channels are through distribution and professional channels. It's not a concern, right?
Renato has 2 questions different -- that are different to what we had and we can continue with Rafael Boeing for that was our hedge strategy -- they are see here around the uncertainty around the currencies, right, the currency exchange real dollar. Hi, Renato. Our policy is the items that have gotten to our inventory physically. They have the right physically in the company. We did a 70% hedged which means that the next 60 days always locked and protected in this lock aims to have a position that is close to the average cost that we have in our inventory. So we always try to match what we have in inventory with a liability for the coming 6 days to be protected. So on a daily basis, we look what we have in the coming 6 days, and we'll make the adjustments as per the foreign exchange and taking into account what is already in our inventory, so there is no mismatch in cash levels in the coming 60 days really.
And the very last question is from [indiscernible], can we talk a little bit more about the acquisition of the Colombian company called Alme. [indiscernible] Enrique can talk a little bit about that after. But -- and Enrique is the coordinator of this project. We're always thinking about this strategy to acquire a company that has similar products in the country so that we can be signing out in our international approach, right, in to the started operations from scratch and in other countries in the past, and that's more difficult. So -- but in Colombia, we have a very similar market to Brazil. And it's also an important market. It's 20% of the Brazilian economy. It's got good standards in the Brazil well recognized in the market, and we're going to operate with our partners there, beginning to continue with us for some time, begin to expand the market. We're going to garner experience and consolidate the model so that we can take other steps in other countries. This is our strategy. And Ricky you can comment on that, please.
The company is at the same level of competitiveness as Intelbras and they have over 120 distributors. They're in [indiscernible] in Barranquilla. So that's very important for our international development. The current business partners will continue to be in the business. We have some experts already when focusing on logistics and when focusing more on finance -- and everything that we can do there that we do in Brazil and works, we want to replicate there. It's a very open market and will be prepared to a doubter model? Should we have to operate differently there than we do here?
All right. We have no more questions. And I'd like to give Rafael the floor for him to make his final remarks for our third quarter 2023 conference call.
All right, everyone. Myself and the team, we see a such clearer future for Intelbras now than we did this year that will impact in the solar industry, the partnerships there were adjustments in the infrastructure and expenses. And now we see clearly what is coming. Of course, whether the economy is going to be different or not, if it's going to be better or worse, we're not too concerned about that because Intelbras is going to be different. We have a new communications environment with more competitive products was a market that we didn't operate in because of technological issues. Our expenses and costs better adjusted so that we can be more competitive, the solar segment. And it's now doing better when it comes to all of the pressure around share and so on. And we're going to address the old costs by the end of this year because they will have an impact on our profitability and our income and access control.
We are very well in line with what the market needs in security. Even though we already have a very good market share, we can still grow, there's still room for growth with new technologies, with new services verticals, projects, partnerships, [indiscernible] we're investing in new verticals and that is leading to an even better market. So we are quite confident that we weathered the storm and everything points towards a battery in 2024, where we're going to go up. We weren't making much progress this year where we're growing much rather this year, but now we're going to go back to growing next year, completing many processes that we had been working on. Adjusting strategies for the solar business, and we're very, very confident. So that's it. That's it. Thank you, everyone, and we'll see you in the next quarter. Thank you Mr. Altair , and this is the end of our third quarter 2023 conference call. Thank you, everyone.
Have a good afternoon. Thank you, everyone. Bye-bye.