Kepler Weber SA

BOVESPA:KEPL3

Earnings Call Transcript 2024-Q1

[Operator]

Good morning, ladies and gentlemen. Welcome to Kepler Weber's First Quarter '24 Earnings Results Video Conference. Present with us today are Bernardo Nogueira, the CEO; and Paulo Polezi, the CFO and Investor Relations Director. We would like to inform you that the presentation is being recorded and translated simultaneously. [Operator Instructions] Please bear in mind that in the statements made during this conference call regarding Kepler Weber business product, operational and financial targets are projections of the company's board and may or may not materialize. Investors should understand that political macroeconomic and other operational factors may influence the company's future and lead to results that differ materially from the expectations expressed in such forward-looking statements. To open the first quarter '24 result video conference, I turn the floor over to Bernardo Nogueira.

[Bernardo Nogueira, executive]

Good morning, everybody. It is a pleasure to be with you for Kepler's First Quarter 2024 Results Conference Call. Today is a special day for me the first conference call leading this fantastic Kepler Weber, which since 1925 has had a team recognized for excellence and with countless opportunities for growth in all segments in which we operate. Speaking of the first quarter, our performance amplified the positive trends that we had in the second half of 2023 when there was a significant upturn in business. Our operation continues to deliver excellent results despite the climatic and economic challenges facing some agribusiness gains. Starting on Slide 3, I'd like to highlight net revenue, which grew by 17.7% vis-a-vis the first quarter, '23. The positive performance reflects the company's excellent market position, which has made a certain moves to capture relevant and at the same time, profitable business. EBITDA reached a robust BRL 9.4 million with a margin of 23.8%, an increase of 16.8% compared to the first quarter '23. Here, I would like to highlight our operational efficiency, which contributed to greater dilution and absorption of costs together with good commercial and logistic management. Likewise, net profit totaled BRL 52.2 million with a margin of 13.7% and a growth of 2% compared to the first quarter of '23. I now invite Paulo to speak about the different business segments.

[Paulo Polezi, executive]

Well, thank you, Bernardo. Good morning to all of you. The Farm segment reached BRL 132 million, an increase of 22.8% vis-a-vis the same period '23. We had a portfolio that upheld our billing in the first quarter of '24. And we also showed our efficacy once again, making the most of business opportunities in the south of the country as a result of a strong harvest. In Agribusiness, we reached BRL 106 million, down 3.7% vis-a-vis the first quarter '23. This quarter, we strategically prioritized directing resources to the more profitable segment. As a result of this strategy, we managed to maintain a stable level of net revenue in absolute numbers. International business reached BRL 38.8 million, up 70.2% on first quarter '23. An excellent performance generated by sales of larger projects closed during the fourth quarter '23 contributing to a robust end-of-view year portfolio. Imports and Terminals net revenue reached BRL 46.6 million, an increase of 46.5% compared to the first quarter '23 as a result of delivery of equipment in 3 important projects, a grain handling terminal in Bahia port project in Para and the corn ethanol industry in Mato Grosso. Finally, in replacement and services. We saw an increase of 11.8%. And compared to the same period of '23, mainly due to the consolidation of Procer, which contributed with an increase of 9.5% in sales. On Slide #5, I would like to share some important projects concluded in the three demo projects. In Rio Grande do Sul, we delivered a trial with a capacity of 200 tons per hour. The main highlight of which is the automated furnace, which delivers greater yield, quality and low energy consumption. The Corentina project in Bahia involves streamlining the unit of a large trading where we this man build all equipment that had been in use for a long time and installed new equipment that brought efficiency and safety in grain receiving and storing. The Ivin Hema project in the state of Mato Grosso do Sul, a cooperative project delivered in March '24, left the client very satisfied as we met the short delivery deadline, reinforcing Kepler's reliability and leaving us well positioned to capture new investments. In Slide #6, we have the Tunas project in Bolivia. This is the first KW MAX trier to be installed in the country and will be a bench mark and will attract new customers to the region. Finally, we mentioned the Trentinies project in Uruguay. This is an expansion of the project where the client already operated a complete Kepler line and has now built a second line with a KW dryer 3,800, keeping the same equipment configuration. On Slide #7, we show you the renewal of our portfolio. We had the entry of 18 different supplies contracted, which together amount to approximately BRL 178 million in new sales. In the table, we highlight the entry of 10 new simultaneous projects in agri industries, totaling BRL 119 million followed by BRL 35 million in 5 works on the farm and BRL 23 million referring to 3 export projects for real customers, billing starting in June and run until November 2024. On Slide 8, we show you the evolution of EBITDA, where we generated BRL 90.4 billion, an increase of 1.8% vis-a-vis the first quarter '23. EBITDA generation reflects an increase in the level of activity during the period and the result of balance management, the volumes, prices and costs. the margin of 23.8% remained at a level above the average and all the expenses are under control. On Slide #9, we show you the evolution of CapEx investments. In the first quarter, '24 investments amounted to BRL 7.8 million, 34% of which was earmarked for complying with standards and legislation, 27% for the development of new products, 26% for increasing manufacturing capacity and 13% for IT systems. We will have an increase of production of 37% and also see significant advances in the economy benefiting the associates in the company. On Slide 10, you see we had BRL 319 million for net cash, the same healthy level of the first quarter '23. If we don't consider the indebtedness, our net cash position closed at BRL 173.4 million, reinforcing the robustness of Kepler. In Slide 11, we enjoy the ROIC for the first quarter '24, which was 43%, in line with the ROIC for fourth quarter '23, showing a balance between good profitability and the long-term investments made by the company. I would like to remind you that the high ROIC is one of the differentials of our business model. It allows us to add new operational capacities without making large CapEx contributions. On Slide 12, we bring you the payment of BRL 74.9 million in dividends paid out on April 15, maintaining an attractive payout of 61%. With this, I would like to conclude my part and return the floor to Bernardo.

[Bernardo Nogueira, executive]

Thank you very much, Paulo. Before we end the call, I'm delighted to share with you 2 important initiatives in RNS, which we've been working on for months and which will enable us to get even closer to our clients and add value to them. Firstly, the launch of the grains of knowledge long distant learning. It's innovative and unprecedented in the sector. It will enable us to train customers to increase efficiency and safety in the post-harvest. Another innovative tool is the Kepler checklist, an application that carries out detailed diagnosis of equipment, resulting in a significant improvement in customers' operational efficiency. It is important to note that both projects are scalable and aim to continue generating value in customer relations. In addition, we have the Kepler checklist that will facilitate the entry of automatic order for the purchase of new equipment through the app, expanding the possibilities of sales and efficiency of court. Now before we go on to the question-and-answer session, I want to reinforce our recent achievements, and I will comment on our outlook for the rest of 2024. First of all, I need to emphasize the consistency of the Kepler team's delivery considering the adverse scenario that we are experiencing. We had profitability and turnover at healthy levels and above the historical average. In March, we also celebrated 1 year of the acquisition of Procer. If we consider the growth of the business during the year, we reached 1,450 people connected, an increase of 37%. The commercial and operational synergies are proof that we're on the right path. Finally, I would like to highlight another quarter with a very healthy ROIC. We delivered 43% maintaining consistency in this very important indicator as an outlook for the rest of 2024. We continue to be cautious and at the same time, confident in maintaining a positive demand of projects for agribusiness ports and terminals replacement and services. I would like to end by saying that although the second quarter traditionally has a lower level of billing due to the typical seasonality, we're working with a scenario of gradual evolution throughout the year. With this, I would like to end the presentation of the earnings results for the first quarter of '24. We can now proceed to questions and answers.

[Operator]

We will now go on to the questions and answers. [Operator Instructions] The first question comes from Fernanda Urbano from XP.

[Fernanda Urbano, analyst]

Well, congratulations for the results. Both questions are thinking about the dynamics of profitability. With a very healthy margin in the first quarter of 24% and the cost of raw material has been stable year-on-year, which will be the pricing dynamic going forward, will there be a price pressure as the raw material is more stable? Secondly, a question about mix. In the release, you said that in Agribusiness, your priority are more profitable profits. But you also mentioned a less favorable mix in some projects with lower margins. Could you give us greater details on the effects of mix in this first half of the year and what we can expect in coming quarters considering the portfolio that you already have?

[Paulo Polezi, executive]

I'll begin with the first, Bernardo will help me with the others. You spoke about profitability intact. We're quite proud of our profitability that we were able to deliver in the first quarter. A great deal of our efforts are made during the year to maintain productivity in the plant assertiveness in the certification of products, good strategies for the supply of raw material or good execution and delivery. It is that composition that drives up our profitability. You spoke about the stable price of raw material. Yes, you are right. We have followed up on the accommodation of commodities. We know that steel and other components connected to steel represent a significant part of our cost. There has been a drop in the prices during the year, and this has helped us to stabilize our cost base. We do not observe any trend for this to change. Another important factor that we should keep in mind here for you who follows up on the company is the operating volume. We are delivering a quarter of growth, almost 18% growth in revenue. But this also means there is an adjustment in raw material, especially steel compared to last year, a significant price reduction. But we do have a greater portfolio of orders, almost 30% higher in volume for this quarter. This, of course, places a great deal of pressure, but also helps us dilute prices and decrease distortion, Fernanda, I would say that these variables will remain as part of our mix of costs and raw material as well, which does not pose any concern for the time being.

[Bernardo Nogueira, executive]

Simply to complement the part of the mix and what we can expect for the year. I was thinking about your question, and this is the sixth consecutive year of profitability. Part of our strategy for this is to be present in the entire productive chain. We're working with farmers, small and larger well-structured farmers, the cooperative agri business, all of that action of the Brazilian agri business we're present in the entire chain until the ports and terminal now, yes, our strategy is to continue on with this diversification. And of course, year after year, some segments tend to be stronger than others. We have to observe how they behave. And there is a priority of other four businesses on Farm as they end up being more profitable, but always keeping in mind diversification. We do maintain a relevant presence in all segments.

[Operator]

Our next question come from Felipe Lenzer from Citi.

[Unknown Analyst]

Congratulations for the results. I have 2 questions as well. My question refers to the reduction of exposure of Kepler in farms. You said that Kepler has opted for this strategy to focus on more profitable segments. Now, the clients of agri business are much larger, and they don't need help in funding while the farmers do need to have a lower cost access. There has been a drop in demand for storage in the first months of 2024 because of the rapid depletion of the harvest plan. Now this being the case, could you give us more color in terms of that reduction that you have in terms of exposure to agri business? And what will happen in the Southern region in August? Will this accelerate what you're doing? My second question, I know it's still very early on, but if you could give us more detail on your entry into silos, the bags and which is the outlook of the company for other segments, especially replacement and services?

[Paulo Polezi, executive]

Well, okay, we have long answers, but we will try to give them or we can also hold the conversation regarding that combination of farms and agri business, what is it that we have perceived. The two segments are quite strong in terms of sales and billing depends on the timing of the execution and the delivery of the work. Sometimes, we have a faster acceleration. We have a lower base compared to last year. And in industries. Well, we had a very good result last year, but we're not observing a slowdown in agri business. We have several projects in the pipeline this week or yesterday, we have an acceleration of investments in storage from cooperatives with a very good business pipeline with trading agribusiness and cooperative, we are not observing a slowdown. Now the part of the first quarter will be very similar to the chart of the year. This is what the pipeline shows us, and this is very healthy. We like the diversification. To speak about strategy, we have a great deal of continuity in our strategy. We have attained a level of operational excellence. Plant excellence, continuous improvement that we want to maintain and strengthen and there is significant work towards strengthening our development and launch of products. I mentioned at the beginning, some of the observative that are being launched is for quarter in the Agri show that begins this week, we have the launch of a bio cave that helps in the reduction of labor, optimizing labor in the storage units. We have a feeder for the dryer. And we have a cleaning machine, a new cleaning machine that will be launched in the second half of the year. So we have a great deal coming out that will add value and increase our revenues, of course. Now to speak about the lease of units. I would say that we're at an advanced stage of discussions with some clients and the goal is to set up a pilot this year to learn more. It's important to mention here that when we speak about the lease of units, our vision is that this is very well positioned. It allows us to know where the demand lies. All of this has been mapped throughout Brazil in terms of storage. We have several clients. We understand from their units. We have a knowledge of engineering, a knowledge of the execution of the work and the maintenance of those units. Now, this knowledge is the value that we can add, and we can enter with capital and the idea is to consolidate storage units for leasing without using the Kepler CapEx. Very generally, this is what we're trying to set up. Once we have this pilot concluded doubtlessly, we will invite you to come to the office so that we can offer you more details in terms of how this will operate.

[Operator]

Our next question comes from Alvaro Hui from BGT. The increase of rates on Chinese still does this impact the operational results of the company.

[Paulo Polezi, executive]

Now this issue of the import of steel and much more, I think it's important to discuss it very quickly to give you an answer. We have followed up on this on the last quarter, seeing a higher volume of imported goods, especially coming from China with a highly competitive price and what impacts the operation of Brazilian plants is this. We were following up on this very closely. And last week, there was an outcome. The announcement on behalf of the government. Well, there were some announcements in truth. I'm going to put them all on the same place. The import aliquot for steel 10.8%. And in that announcement, the new ALICO would be increased to 25%, but only for a part of that steel. Now what they call the NCM do impact our operation. We would have an impact on the mix of products, especially the steel. We don't import everything, but most of the imports are included on that list as well as the players of our sector. For clarity, in terms of the rules, the average volumes considering the years 2021, '22 would perhaps impact that ALICO that could reach 30% at an average of the 3 years. We know that up to March, the volume of imports was below those 30%. But regardless of these changes and the new rule that applies for the next 12 months, it is important to explain how we work with this at Kepler. First of all, we have our operational model, we transfer price. Steel represents 50% of our product cost. It is relevant, but obviously, this is reflective in the sales price as well. So we're transferring the price of raw materials. Secondly, because of our policies and governance, we don't calculate the price of steel. You will recall that in 2021, 2022, the price of steel increased almost 100%. Nevertheless, the company continued to work very well with this variation, delivering good results, growth and profitability. We don't speculate on price. Why not? Because Kepler has a differential of knowing its order portfolio. We know what we're selling, the volume we are selling and we work with a good inventory coverage that is balanced differently from what we see in the market. Kepler at present knows the margin we will be delivering in each order, and this is very important in terms of our management and Kepler is a company that is a centennial company. It's been around for 99 years. We know how to work well with that. We make our decision based on guaranteed profitability. And all of the unfoldings of the import eleqoute. Well, we're going to have to learn how to work with those mechanisms. And we're going to follow up on what will happen with those volumes in coming quarters. We will keep you informed.

[Operator]

The next question comes from Felipe Lenzer from Citi.

[Unknown Analyst]

I have already posed my question. Simply forgot to lower my hand.

[Operator]

[Operator Instructions] Our next question comes from Mr. Berne Miller from Rigon Capital.

[Unknown Analyst]

Congratulations for your results. A challenging movement because of the lower prices. But we can see that you're contributing positively. I have 2 questions on taxation. There is a discussion for a reduction of taxes at federal level in the Congress. I don't know if you have any news in terms of what is being negotiated. What is happening among the parliamentarians? And to explain the income tax that has had an impact on EBITDA, but not on net revenue. So these are my questions, both referring to taxation.

[Bernardo Nogueira, executive]

Both are very important questions that you have just closed. First of all, you are referring to the Recilos, which is a program that is going through Congress, with incentives to reduce the tax load for the work in terms of grain storage. Something that is very important at this point in Brazil. On Monday, of course, there will be that Agrian Hiper Preto show the importance of agri business and storage. The price of commodities is somewhat better, but this is a very relevant topic for a country that deficit in storage, even with the harvest breaks that we have had this year. When we look forward, the analysts and projections point to the fact that in 2025, the climate variations will not be severe. And there is that perspective that we can go back to a level similar to what we had last year. So this will place a great deal of pressure on the system, on the grain production system and a measure like this one, like Recilos is very important for our segment now. The information we have is that this is being debated at internal sessions to be sent to the Senate and the lower chamber. We don't have any updates. The good news, of course, is that it is being debated at Congress, and it will bring us novelties for the harvest coming year. The second part of your question as of the 1st of January this year, we have low 14,709 of 23 along that has faster changes in taxation and investments granted by the states with a reduction of the gross elequote ICMS. There are two industrial operations, one in the south, the second in Mato Grosso do Sul. This is a newer plant that was built 20 years ago. And we have had that investment incentive. It was very important for our operation, for the production capacity for a streamlining of the plant. Now this alteration, this new law will maintain the benefit of the ICMS, the circulation of merchandise. It will preserve our EBITDA at its present level, but it excludes the benefit of the reduction of the income tax. Now the difference is of 6.5 percentage points of the rate, the elequote and we had already captured this in last year. All of the Kepler planning and budgeting already included that variable, and it has not impacted us. What is more important in our business is that this investment has already been made. It is paid off. And because of this incentive, Kepler nowadays has a very streamlined plan with available production and the market will grow. There will be the need for storage. We are one of the leaders, and we will have room and capacity to continue to invest and increase our production. So this law has been helpful for Kepler and we continue with the benefit of the ICMS and not benefits in terms of net revenue. That was the main effect.

[Paulo Polezi, executive]

If you allow me a comment we have La Nina in the Northern Hemisphere, and it's already pointing towards a problem. We may have a problem with prices. We'll see that better in the second half of the year because there has been a break in soybeans in the United States, simply an additional comment.

[Bernardo Nogueira, executive]

Thank you for that comment about La Nina Veneta. We are following up very closely on the evolutions in the American harvest and in the Brazilian harvest as well. There are 2 interesting elements that we can remark on. First, the climate, our geographic positioning, present day Kepler part of our resilience is to be present throughout the business and to be present throughout Brazil. Now Kepler, 30 years ago, was concentrated in the South. When there was a drag in the south, the company would suffer. Last year, we executed work in more than 300 units of peletis throughout Brazil and events such as La Nina. La Nina will impact the region but will benefit other regions, which was the case here with a bundle rainfall in the South and the truck in the north. Well, regarding La Nina for the coming year, it's a bit early to speak about the Brazilian production, but La Nina in the 2024, '25 harvest would bring about good rainfall and good production and in the south of Brazil, in Argentina and Paraguay, Uruguay at trust. And that would be welcome for our clients and will end up having a positive impact for us.

[Operator]

Our next question comes from Ricardo Rubino from Cuattro Investments. [Operator Instructions] Our next question come from Christian Mathias from Levante Corp.

[Unknown Analyst]

Congratulations for the results. We have 2 points of discussion. So, you mentioned that you have focused on more profitable segments. But this did have an impact. You're working with larger, more complex businesses. If you could refer to these more profitable products and which is the outlook for the farm segment for the second half of the year. And secondly, the reduction of commissions, how could this impact your sales team?

[Paulo Polezi, executive]

Christian, we're here getting organized to answer your questions. We had a bit of noise in the first question. It was somewhat difficult to understand what you were saying. You were speaking about a more profitable mix. Could you please repeat the first part of your question?

[Unknown Analyst]

Of course, I'm sorry. I said that despite the more profitable mix, you mentioned unfavorable impact on the more complex projects. If I could understand that ratio of mix and the positive impact you had on cost.

[Paulo Polezi, executive]

Okay. Very well. That has clarified the question. In fact, we do have a different mix vis-a-vis what we had last year, but it is not just present in 2023. If you allow me to go back a bit. We had a greater concentration on the farms and lower size projects, and we had a change of mix, as you have observed. That takes us to larger volumes, imports and terminals, a sector that has an enormous project pipeline that is underway as part of the agro chain. We also have agribusiness and the cooperatives Bernardo mentioned that there was an article in Valore economical, referring to Agribusiness and some of those opportunities that allow Kepler to better gear its mix without losing its focus on the opportunities, of course. And Farms was a significant answer for our model. Despite what Bernardo will comment on the commodities losing price in international business, the same holds true. A greater growth among our segments where we have a footprint in international business, we have had a higher billing in this quarter. So we end up having an accommodation. Now this different billing brings us greater volumes into the plant, a longer delivery term and an increase in the cost, the average cost, weighted cost of the company. This is the result. Despite this, Kepler continues to work and has been able to preserve its profitability with a different mix compared to what we had in the past, but we have been able to maintain our sales margins and the important dilution. This is what we attempted to explain in the results. We see that this will continue on in the coming quarters, but we're making efforts towards a greater diversification, not only when we're servicing clients, but also in the internal part of the plant in our portfolio, enormous effort from the teams. And we have been able to deliver this differentiated mix. Once again, it's a different mix with a somewhat higher cost that will not impact as it has not impacted our profitability. I give the floor to Bernardo to answer the rest of the question.

[Bernardo Nogueira, executive]

So question about Farms. Very quickly, I think it is worthwhile mentioning two points here. This year, we saw the price of soybean dropping 20% or 30% vis-a-vis last year. So we were cautious about working with farms. In our portfolio and sales and procurement, we have observed a need to invest with our clients. There are several segments in agri business that have felt that retraction of farmers. But we haven't felt that in terms of storage. And in the conversations we hold with our clients, we see that the priority is storage, among other investments, of course, the greater bottleneck and the greatest profitability lies in storage. And an interesting site comment. I was working with a pareto map here. If we look at sales and billings of farms, 50% of our clients from farms invoice BRL 50 million. And this extends due to BRL billion in the case of the agricultural groups and other groups in Mato Grosso. When we speak about farms, therefore, we should keep in mind our farmer, but these are very well-structured groups that work with hedging. They work with enormous professionalism in terms of their cash, and they're better able to deal with these market fluctuations compared to the smaller farmers or the farmers we had 20 or 30 years ago.

[Operator]

[Operator Instructions] Our next question comes from Ricardo Rubino from Cuattro Investments. Last year, you made a last investment in painting at the plant. I would like to know if this has been concluded. And if you have other large investments in projects, which is the CapEx level that we should expect as being a recurrent level for coming periods.

[Paulo Polezi, executive]

Now to begin with the painting line. There was the inauguration in September last year, and that is a good example, Ricardo, of the streamlining that Kepler is carrying out in its plan. It's a company that in the last few years, has set itself aside. We have been able to take Kepler to another level. And as far as we can observe, Kepler has had a significant evolution. And it's not different in terms of investments to streamline plants. The painting line is a state-of-the-art technology. It reduces the cost of the product. It enhances the quality and brings about other benefits. It's a part that is sensorial. It has the programming part, it's a highly modern plant that is already under operation. Now we have created a plan so that it will absorb growth in the coming 5 years. We do have good capacity for the coming 5 years, and we're very satisfied with the results obtained so far. In Brazil, only 2 companies have that technology, Kepler and a company from another sector. Now referring to the investments, the volume of investments, you will have observed that the company has invested 5% of net revenue. If we compare this with the depreciation of around 3% or 3.5% we're investing somewhat more than the depreciation. This is very important for us to update our plans to ensure that the level of productivity goes up and to address the increase in volumes that we have. Now this quarter, the volume that our plants have been working with is 30% greater vis-a-vis the first quarter last year. And we have had a good response, thanks to our investments. And to conclude here, we do have a strategic plan for 5 years and 10 years. We are aware of the bottlenecks and the investments we need to make. So in the short term, this level will continue of around 5%. And every 3 to 5 years, depending on the demand, we will have to make investments similar to those of the painting line, something like investing in silos or capital goods for agribusiness perhaps because we are able to grow significantly with the investments of CapEx at lower levels. The result of this is a high ROIC. And this is the model that we will continue within our business.

[Operator]

[Operator Instructions] Our next question come from Calio from Rich Capital. Congratulations for the results. With our -- the outlook for the KWN which is the position of dryers in the international market? Was this one of the drivers for the growth in this segment this quarter?

[Paulo Polezi, executive]

Calio, we're very enthusiastic with this Bocar. It's part of the Kepler strategy of investing in equipment that optimize labor, bringing about efficiency for clients and greater security in the operation. There is a huge demand. I went to speak to 200 clients. The 200 have difficulties in labor, and so Kepler can develop this equipment to help them optimize the labor on the field. Biocarb basically is a feeder that goes to the furnace for the dry grains and the alternative, which is used now is to feed that furnace with logs, with pizzas of locks. And there's nobody else who's going to work feeding logs in our furnace. So Biocarb will be an equipment that will pace up the very large demand that we have from clients to optimize their labor. And Procer brings about optimization, automation, with artificial intelligence. And the IT, and this is a spoiler for you. We're going to bring about the Kepler portfolio referring to labor optimization. And basically, Calio, what is very interesting is that the same unit, the capacity of 500,000 bags can cause X or Y in construction and can have a support that will cost X or Y. The intention is to add value in the construction of the unit. So it comes out with better technology and will limit the number of people working there, enhancing the labor of people through 20 or 30 years of future operation. So we do have an enormous opportunity as the company to be protagonist in this transformation in terms of technology and labor in storage.

[Operator]

The next question from Antonio Lopez investor about grains of knowledge. Will the company investors have access to this remote educational system to know more about the operation?

[Bernardo Nogueira, executive]

Yes, Antonio, of course. Once again, to go back to labor, there is a constant demand from our clients for training. We know that a well-trained, well qualified employee and operator dryer, a cleaning machine and preserve the grain better than one that is not well trained. And we see that grains of knowledge will be an opportunity to offer that training in a very modern way through a smartphone using short videos where the operator can regulate a machine, for example, or ensure that the operation is running properly. And our intention with the remote distance is to initially offer this training so that when the client decides which investment they're going to make, they will work with Kepler thinking of the team that we have for this. Now, this is the first way of monetizing grains of knowledge and eventually a version 2.0, perhaps not this year, but for the coming year, this remote education will become a portfolio of certification. If you're going to operate a dryer that cost a fortune that could catch fire during the operation for bad labor. The operator can say that they know how to work with that operation. So we can evolve from distance learning to a type of certification to operate different equipment within a unit or to work within the entire unit. This is another way of monetizing that education platform for labor and for the training of operators.

[Operator]

The question-and-answer session ends here. We would like to return the floor to Bernardo for the closing remarks.

[Bernardo Nogueira, executive]

We're coming to the end of our call. I would like to begin by thanking our person here, Piero Abbondi. I thank you for having led these results. Presently, Piero is supporting us and working with us at the Kepler Board. So first of all, my thanks goes towards Piero. And I begin this closing by saying that we began 2024 on the right foot. We had an excellent performance in terms of billing with the growth in revenue. Our sales have been very successful this quarter. And this allows us to have a very good portfolio for the first half of the year. Execution in engineering in the plants and logistics, they all deserve congratulations. I would also like to underscore the power of our implementation team. They set up these works in the field. What we've sent to the field is a leg that needs to be assembled in the different units, and we had 72 works delivered now in this first quarter. with an exemplary NPS of AT1. For those who know the NPS methodology, you know that AT1 is comparable to Apple, Netflix. It's in the zone of excellence, and we're highly satisfied with this. It means that the purchases were done with healthy margins. We had 1,700-and-some client service, 4% higher than last year, thanks to that effort of coming closer to clients with distribution centers with digital margin. It's a company that is celebrating 99 years now in May. The portfolio has continued to grow, which is very healthy. This semester, we also celebrate the year of investment in Procer that has been a milestone. It is a company from the steel industry, working with steel transformation, and it is now working in digitation. And the process of dedication post-harvest, we had a growth of 3% in revenue and 100% in terms of software and recurrence at Procer. We're highly enthusiastic with this opportunity of doing in storage, what was done in the rest of agriculture with the tractors, the harvester working with digitization and streamlining and we're going to hear all of this to storage through Procer. So with this, we end the first quarter, we're going to continue the year focus on operational excellence, continuous improvement. This is part of our DNA. And looking forward, what can we expect from 2024. We spoke about our line the consent of consultants of specialized technicians is that we're already speaking about the harvest of 2024. 2024, all of the inputs have been purchased for the sowing that begins in October and September. And the consensus is that our harvest will be between 320 million, 340 million tons. This, of course, will bring about pressure in storage. And that is why nowadays, we're working very ardently so that 2024 can surpass 2023 and be the second best year in the company. We're sharing this with you transparently. We will bring updates during the quarter. We would like to end this first quarter highly satisfied with our results and very confident with the year 2024 and the work that is being carried out by our technical team. Thank you very much, everybody.

[Operator]

The earning results video conference for Kepler Weber has ended here. Should you have any additional questions, please send your questions to the IR team. We thank you for your attendance and wish you a very good day.