Klabin SA
BOVESPA:KLBN4
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Good morning, and welcome to Klabin's conference call. [Operator Instructions] As a reminder, this conference is being recorded and broadcast simultaneously via webcast, and you may access it at Klabin's Investor Relations website where the presentation is also available.
Forward-looking statements that might be made during this call in relation to Klabin's business outlook, projections, operating and financial targets and potential growth should be understood as forecasts, which are based on the company's management's expectations in relation to the future of Klabin. Such expectations are highly dependent on market conditions, on Brazil's overall economic performance and on industry and international market behavior, and therefore, they are subject to change. Today with us, we have Mr. Cristiano Teixeira , CEO; Marcos Ivo, CFO and Investor Relations Officer; and the other officers of the company. Initially, Mr. Teixeira and Mr. Ivo will talk about the performance of the company in the third quarter of 2022. Afterwards, all the officers will be available to answer any questions that you might have. Now I would like to turn the call over to Mr. Teixeira, Mr. Teixeira, you may proceed.
Thank you very much. Welcome to Klabin's conference call about the third quarter of 2022 results. Seasonally, the beginning of the year represents a more moderate scenario and with a lower demand in all market, low base in the internal market, domestic market. And we started the year with a very challenging humanitarian scenario because of the Ukraine and Russia conflict and the economy that we will expecting a gradual recovery were faced with a strong inflation in commodity prices, interruption in supply productive chains and China with it's zero tolerance policy in relation to COVID. And with the scenario, Klabin, once again, used is integrated, diversified and flexible model of business and was able to quickly reallocate the product to export markets. which are more resilient and with a higher demand such as food, hygiene, beverage, packaging items and also those which try to accelerate replacement of single-use plastic packaging for sustainable packaging.
We had good results with the cash generation measured by the EBITDA at BRL 1.7 billion, 38% higher year-on-year. Net revenue 28% higher, with a gain on profitability of 3 percentage points compared to the first quarter '21. In pulp, Klabin sustained the position of being the only company in Brazil with 3 types of pulp and so flexibility among regions, the limitation of the global supply, together with a healthy demand, opened room for price increases in all regions, especially China. In papers, the demand for kraftliner continues to be high in the foreign market with the prices measured by the collector renewing its all-time high.
The new MP28 machine is under construction with 32% of project execution. And in packaging, we have already started investments in the project [Horizonte] to expand the unit for conversion of corrugated box in Ceara. Industrial bag the same deceleration of civil construction in Brazil, mega channel volumes to other markets. And we had the approval by the General Shareholders' Meeting of the expansion of the long-term incentive plant to 100% of our employees, and this tries to engage them more and more to generate value for the company. Our results show resilience and increase in revenue and [indiscernible] reduction in financial leverage, reflecting an efficient allocation of capital, cash generation and value creation for shareholders.
Now I'd like to give the floor to Marcos Ivo, who will talk about the financials about the third quarter of '22.
Thank you, Cristiano. Good morning, everybody. Thank you for participating in our call. We delivered another quarter of sound results confirming once again the strength of the Klabin's business model and predictability of results. Among the highlights of the period, I would like to mention net revenue of BRL 4.4 billion, growing by 28% year-on-year. Adjusted EBITDA 39%, 3 percentage points increase year-on-year, and ROIC measured by the ROIC, 20.1% in the last 12 months.
On Page 4, sales volume reached 900,000 tonnes in the quarter, stable vis-a-vis the same period in 2021. I would like to remind you that we had the maintenance scheduled stoppages in Puma and [indiscernible] in the fourth quarter, the Monte Alegra stoppage in Parana, occurred in April as scheduled and the plant is already operating at normal levels. In spite of the stable sales volume, net revenue grew by 28% year-on-year, increasing in all business lines because of the price adjustment that we carried out over the last quarters. Adjusted EBITDA reached BRL 1.726 billion in the first quarter of '22, a 38% increase vis-a-vis the first quarter of '21, driven by the growth in net revenue that more than offset the appreciation of the Brazilian currency vis-a-vis the dollar and also the cost increases. I would like to mention also the important increase in profitability in the paper and packaging businesses, which reached an EBITDA per tonne of BRL 1,869 in the first quarter of this year, 86% higher than the first quarter of '21, and 16% higher than the fourth quarter of '21.
Cash generation by these segments measured by the EBITDA doubled on a year-on-year comparison, showing the capacity of Klabin of delivering sound results in challenging scenarios such as the one that we have today of high inflation and stable demand in Brazil. And we can expect that the profitability of these businesses over 2022 will be maintained at higher levels than last year.
On Slide #5, benefiting from the price recovery on an annual comparison as well as the flexible sales mix amongst the geographies and the portfolio with the 3 types of fiber short, long and plus. Net revenue from pulp was BRL 1.4 billion in the quarter, a 14% increase in spite of the reduction in sales because of the scheduled maintenance stoppage. The pulp cash production cost was BRL 1,291 per tonne, an increase of 66% year-on-year net of the impact of the stoppage carried out in the period. And this increase is explained by the high price of chemicals and fuels and the inflation in the period and, additionally, as planned and also mentioned in our market -- notices to the market, the participation of wood from third parties increasing because of the Puma II, that will have the first cycle of supply with third-party wood.
Now let's go to Page #6. At the end of March, the net debt of Klabin was BRL 17.9 billion, dropping by BRL 3 billion when compared to December '21. And this is explained substantially by the positive impact of the variation on the dollar debt dropped from 2 to 9 months to 2.7x in March 2022, close to the lower level of the financial debt policy of the company.
Let's now turning to the next slide. Club's liquidity remains robust and ended the quarter at BRL 8.6 billion as liquidity is made up of BRL 6.2 billion in cash and the remaining amount in the revolving credit line. The average debt maturity between the years 2022 up to 2023 is still the construction period for the Puma II project is approximately BRL 1.1 billion per year, a comfortable level for the company. The average debt maturity at the end of the quarter was 102 months, equivalent to approximately 8.5 years, the same level as the previous quarter.
Let's not forget that Klabin has contracted financing that have not yet been drawn down in an amount higher than the CapEx that will be still disbursed up to the conclusion of Puma II project as detailed in our release.
Now turning to Page 8. The adjusted free cash flow, which disregards discreationary factors and expansion projects was positive in BRL 393 million in the quarter, 40% above the same period of last year, driven by the EBITDA growth. In the last 12 months, the adjusted free cash flow was BRL 3.9 billion, representing a free cash flow yield of 14.1%.
Now on Page 9. According to our notice to shareholders published yesterday, the company approved the payment of dividends in the amount of BRL 346 million to be paid on May 18. In the accrual method, the proceeds distributed to shareholders in the last 12 months totaled BRL 1.125 billion, a clear sign of Klabin's capacity to combine growth and dividends payment while maintaining its capital structure, financial discipline. I remind you that Klabin has a dividend and IOC policy that can be accessed in full on our Investor Relations website.
On Slide 10, a the first stage of Puma II project, which started production on August 30 of last year, is ramping up as planned. The second phase of the project, which will include a coated board machine, is under construction, on schedule, having reached 32% of physical implementation and a measurement taken last April 17. And it has its startup planned for the second quarter of 2023. Since the beginning of the project, BRL 8.5 billion have been disbursed, of which BRL 594 million in the first quarter of 2022.
Finally, here are some initiatives and recognitions under ESG for the last few months, when Klabin completed 123 years of history. For the second year in a row, Klabin was recognized for its performance in sustainability by being listed in the gold category of the containers and packaging sector in the sustainability yearbook 2021 index organized by the international consulting firm, S&P Global. We also achieved the highest score in Ecovadis evaluation, which analyzes aspects of environment, labor practices and human rights, ethics and sustainable procurement. And this quarter, we launched the Sustainable Finance Page, another development in our ESG panel, where we concentrate all reports on financial instruments linked to sustainability. Thus, with the construction of a sustainable future in mind, Klabin will continue its trajectory of growth, generating shared value, stressing its aspiration to be a world reference in responsible solutions with multi-purpose renewable, recyclable and biodegradable forest-based products. Now Cristiano and all of us, our officers will be available to take your questions in the Q&A session.
[Operator Instructions] Our first question is from Caio Greiner from BTG Pactual.
I have 2 questions. The first 1 is to Nicolini about the recent price increases. We read that -- in the press that clubbing led the increases or the last 2 increases and not as it was happening recently. This is what we read in the media. But if this is the case, what would be an interpretation of this move on Klabin side? Should we see a higher degree of caution on your side? Maybe Klabin being more aggressive? And what would be the reason behind this aggressiveness?
And the second question, now talking about the recent increase for China. What about the implementation? Are you being successful in implementing this in practice? And is it sustainable for the next few months because we see that eucalyptus is going a little bit down in prices and this price value that we see now is being motivated by a lower supply. So how do you see the supply and demand situation in China? More on the demand side because there is still some challenge in China because of the lockdown. So what do you see in terms of demand in the short run? And what will happen when the lockdown is less stringent? Will we see the government stimulating the economy? And do you believe that this could offset the possible normalization of the supply for the next 2 quarters and help sustain prices close to the levels that we see today?
Thank you. Nicolini is here, and he is going to answer.
Good morning. Thank you for the question. With relation to the first part about the implementation of price increases in China, this is Klabin's view. There was a very big difference between the reselling price in China and the market price. So this is the reason why we increased prices. With relation of price increases already announced for China and the United States, both prices have already been implemented for me. And in the case of China, the announcement was before the [indiscernible]. And the objective was to announce the price increases before at 810. I can confirm to you that it has been implemented. EU $50 increase as we had announced in April and to be implemented in May. This has already been implemented. A new increase of $50 to be announced to be implemented in June. Given that in Europe, you have a 1-month delay in this implementation on the demand side, the market is very resilient and highlighting the more mature regions such as Europe and the U.S. And at the spot market and the situation of China is more delicate because of the lockdown. And in spite of that, we do not see a slowdown. We see demand for Klabin's products. So although our exposure to China has been decreased from 2021 to '22, and the volumes continue normally.
.
Our next question is from Rafael Barcellos Santander.
I have 2. The first 1 is about cost. On your point of view, could we consider that the first quarter was the worst 1 in terms of cost pressure. And even considering the current situation? And second, how do you see the cost progression for the next quarters? And which are the items that are your main concern now?
And my second question is about the corrugated box market. I know that you'd rather not comment on this market share dynamics, but this is the second time that you're reporting a growth that is lower than the market and also the price for OCCs has come down significantly in the last month. So I would like to hear from you what is the competitive environment for corrugated boxes and which are your expectations for price and demand in the next quarters?
Thank you, Rafael. Marcus is with me here and right after him, Douglas Dalmasi.
Rafael, the world has an inflation process that is established right now. You follow that, you know how that is. And we have items in our input matrix, fuels and chemicals and the special that are commodities that follow a global price. These prices have gone up, and they do reflect in our results. Klabin is following with its focus with efficiency gains within the plan, optimizing specific consumption, and our history is of incremental improvements over time. So the definition of these prices that are globalized will depend on the world environment, and we are still focused on what we can control in the plans.
Rafael, this is Douglas. We are not looking at the market share in a focused fashion. As you well know, we have a medium-term picture here. But yes, we did have a lower performance when compared to the market and also in terms of volume, but we are better in prices. Of course, that we have a greater geographic distribution. And when we come down, we suffer a little bit more, but we did have a better performance than the average of the sector. So we privileged our income profitability at this moment as well.
[indiscernible] from Credit Suisse.
I would like to know about your growth plans after the delivery of the second machine of Puma II. Could you give us some more color what do you intend to do after the post delivery of this machine? And secondly, about kraftliner. Have you been seeing signs of a development coming from the United States?
Regarding growth, we are in the series of total focus, all the executive committee and be giving support to our engineering department so that Machine 28 may happen exactly on time, on schedule, and we are very pleased with the development of the final phase of the machine, or the second machine. Regarding the others, I always say that pulp and paper, you have to extend your view to 10 years or even more years in the future. So basically, focus on efficiency -- on the operating efficiency and conversion and the evaluation of the plants. And this is something that we do all the time. We are constantly evaluating it. The competitiveness of our fibers with studies for new types, but still being studied that is to say if we have anything to. Of course, if there are new developments, we are going to talk with the board about that, and we will bring any news to you.
Hi, [indiscernible]. We see the first signs of increase in U.S. exports and recent announcements in kraftliner -- on the part of kraftliner producers. We do not see any big move like what happened in 2018 over 2022. We also have Brazil. Brazil this year, at the end of 2021 and this year, with our capacity, more than doubled exports, and we continue with that over the next quarter.
Eukaliner occupies its space. It brings some advantages in the market that we operate, such as fruits and vegetables and proteins.
Our next question is from Daniel Sasson, Itaú BBA.
My first question is a follow-up of a prior question about price, your price. You have been able to have implementation on these price adjustments that is higher than your main competitors. Can you explain us a little bit why? What are the reasons for that? Have you been able to place more volume in Europe where prices were higher? Do you have greater freight flexibility? Can you give us a little bit more color about that? How much flexibility you have in terms of maritime freight for 2022? That would be nice to know as well.
And second question about working capital. there was a significant increase in the first quarter of inventory increase, and you mentioned logistics bottlenecks in the release. What can we expect in terms of working capital for the next quarters, maybe new increases or greater need of working capital, taking up a little bit of your cash flow, that would be a great help for us?
I understand that what you're asking about the complement for the first question, I would say that is about pulp, right? So Marco is going to talk about working capital after we address that.
Sasson, thank you for your question. As we already mentioned before, Klabin has a flexible business model. and that undergoes market reading and like starting mid of last year when we were working on the budget, we knew that the impact coming from China could be higher in terms of prices when compared to other regions such as Europe and the U.S. We usually work with long-term contracts. The strategy was based in increasing volumes to mature regions such as Europe and the U.S., to increase our stake in the Brazilian market, which is greatly relevant in terms of supply and the strategy has proven to be the right one. But I should say it again that considering our annual volume of production, we do have a flexible business model. Sasson, about the working capital, first, I would like to remind you that in 2020, 2021, Klabin realized a structural reduction of its working capital vis-a-vis the net revenue, and this reduction is sustainable and will remain as it is. About the first quarter, we have seasonal effect. If you look at the first quarter of last year, we also had an increase in the working capital. And this seasonality is related to some supplier and provisions issues and also to the planning of the maintenance stoppages, specifically about inventories. You will always see Klabin selling what it has produced, and this is an important character of our company. But eventually, you will find a small variation in the quarters whether because of a plant planning or because of logistics, but in the mid-term, over the year in the 12 months horizon, you will see Klabin selling what it has produced. In this quarter specifically, we will leave the general maintenance stoppage from Puma, but we will have the stoppages for Monte Alegre.
And finally, we do not expect to have increases in the working capital of the company in the next quarters.
Thiago Lofiego, Bradesco BBI.
I have 2 questions, more specific questions about demand in the domestic market in the short run. What you see for the second quarter regarding quarter board and corrugated boxes? What about the volume? Is it as you expected? I would like to understand the short-term dynamics.
The second question is about margins, domestic market vis-a-vis exports. I would like to understand what we could expect in the next few quarters? You reported more in the first quarter. Should we expect you to continue this strategy? And also you have the cheaper OCC in the domestic market. So this is positive for exports. So could you talk about the dynamics, thinking about the margins and the costs for corrugated boxes?
Thank you, Thiago. I will start by the second question, and then I will give the microphone to Douglas and to Flavio and they will talk about the dynamics of the domestic market, okay? So I will start and tell you how it works from the operating viewpoint. We have an officer, Thiago, and is justified getting into details. We have Santiago, and he looks after the logistics of the company. And we have an [indiscernible] dynamic. The operation of our plants and he organizes meetings with business officers, and this happens on weekly basis, year, weeks and half years and quarters and coordinated talks with the participation of the financial area. And week-on-week, the allocation for the domestic market, for the export market, margins, et cetera. So this -- overall, all the business officers, with the Operating Officer, look on a weekly basis. And at this week from 1 week to the other, we can see the dynamics of shipping with all the options of loads and container and bulk, except when you have a contract that specifies something different, those that signed the contract in the long run, they will always be preferred.
And secondly, the margins, the margins in the company are always the priority in terms of the weekly shipments and Douglas will answer about the domestic market and then Flavio.
If you remember well, in the past, we had record volumes in boxes in the domestic market. They were very high figures for corrugated boxes. And now the market is more leveled off. So we cannot complain. These are very good levels still, but they are more flat. And the second quarter shows better figures than the first. What we saw in April, what we see in May, so it is better. But if you compare to the second quarter of last year, we are still seeing a 2 digit -- or close to 2-digit drop, but we cannot complain about the level of consumption. So consumption levels are normal. But vis-a-vis last year, that was very high. We see this drop that you can see. And now Flavio is going to talk about the coated board market.
Thank you, Douglas. Thank you, Thaigo. The 2 markets talk to each other so there is a slight delay. It is faster in corrugated boxes than in coated board, but there is a very slight delay between one and the other. And this is a typical first quarter, the first quarter that naturally has a lower volume. If you look at the 10 years history, you can see that, always, in the third quarter, you have a lower volume, and it starts to accelerate in the second quarter and it goes up. It was the case in 2021 with very strong comparison basis and with the demand very high in the [ third ] quarter. But in spite of that, we already see very interesting moves. Now in May, we make multi-packaging for beer and milk and juices, and we see the recovery that is already happening in these areas.
Thank you, Flavio, Douglas. Cristiano, could you go back to the first question?
I understand that you have a very fast dynamic of going very fast from one market to the other from domestic to international. And this is one of the big advantages of your company. But in order to understand the difference in margins, I know that each product has a different situation. I know that you do not have the overall figure, but exports are as profitable in some products in the domestic market. Today, the international market is undergoing the effect -- I'm going to illustrate this with the practical example. Gas in Poland for production of products that compete here in Brazil, and the product made by Russia are not being shipped to other countries in the world. So you can see that there is a very big influence of the Russia, Ukraine conflict and further increased by logistics and prices go up, but not necessarily margins because of logistic problem. Never have we seen such a complicated situation here at Klabin in terms of flexibility and this dynamic and all the situations that I have just described. So not necessarily higher prices bring higher margins. What I can tell you is that in spite of this complexity, we have been able to operate in the best way possible for the company. International margins are good very much because of the weekly dynamics. I know that it sounds a little bit vague, but the faster and the more agile we are on a weekly basis, the better we have in terms of deliveries, the better services we can deliver to our clients. And we have been able, in a view to do the best possible. In fact of all this situation regarding logistics that we have today, the domestic market, as you know very well, we have been suffering because of the inflation, the cost inflation, not only in our sector, but all over the other sectors as well.
But in the short run, we can transfer this. So the margins are relatively balanced with some trend in the short run of being a little bit better for the international market.
Next question from that question is in English from Mr. Carlos De Alba Morgan Stanley.
Just a couple of further discussions on topics that we talk about. One is on working capital. To us, what current attention was the year? Material decrease in accounts receivables from the December quarter, was there any -- yes, was there any particular reason that led to this change, which actually helped your working capital in -- sort of consumption of working capital in the quarter?
And then the other is coming back to the discussion about the cost inflation. We understand all the dynamics that you are facing is an industry phenomenon. But is it then fair to expect further increases in the coming quarters on a sequential basis given what we have seen with oil fuel and other chemicals and the continuous pressures? So the trend of increase in costs should continue in the coming quarters?
Thank you, Carlos. Marcos is here with us, and he's going to take your questions.
Carlos. About working capital, I have already commented on that and specifically on receivables that, in fact, it was reduced. It's also a onetime off situation. Sometimes the sales profile changes a little bit. and your receivables term is a little bit shorter in that quarter. And also, it has to do with the working days. At the end of the year, we have the holidays and some of our clients' payments won't come in because of the holidays and everything gets back to normal now in this quarter that we ended in March. But I would like to stress what I said. The structural reduction of the working capital that we realized in 2021 and 2020 in regards our net revenue is sustainable, and we do not expect any increases in the working capital in the next quarters.
Now about costs, it is difficult to guess interest rates and how the oil barrel will be, how much it will cost with this world dynamic with war and everything and the same applies to chemicals. So we rather allow you to make the rating and also place these ratings on Klabin's figures. Klabin will be focusing on productivity in its plants.
Understood. Then just another question, if I may, on demand. So did I hear correctly that you are seeing already a recovery in domestic demand and in coated board? And does it apply to other products that the company produces, or it's just exclusively in the coated board market?
Thank you, Carlos, for your question about the demand. What happens is that we also have a seasonal effect. And yes, we are seeing because of seasonality and that works for corrugated box and coated boards, but very moderate, very subtle, very much in line with this seasonal issue. We do not see any significant improvement, anything that is really drawing our attention. So this improvement is under this year's sustainability that it improves in the second. Usually the best quarter in the year is the third one, and then we go like that. This is a curve that we have seen throughout the years. The dynamic was changed because of the pandemic in the past years, but we are seeing the seasonal recovery of the second quarter, but nothing too special, too significant.
Marcio Farid from Goldman Sachs.
I have a few questions. The first 1 about pulp. [indiscernible], could you talk about logistics and the impact on your daily operations? I remember that in the fourth quarter, we had a carryover of 400,000 tonnes because of the delays. How delayed are your shipping and in the perception of the buyers, what is it causing when they place an order and also impact on the volume of sales? What could we expect for the future, and could you give us more details about how this complexity that Cristiano mentioned, has been affecting your daily routine or daily routine?
And my second question is about Puma II. Considering the strong moment of the market for coated board, not only in Brazil, but all over Brazil, is there a possibility of seeing the start-up being brought forward? Could we have an early start-up of the machine? Are you considering this? And could you give us an update about the volumes contracted for the second machine? I remember that, at the beginning of the project, you were talking about 4 to 7 years in order to use the full capacity of coated board. So -- and that you could do kraftliner campaign before that. So would it be possible to bring this down to less years?
The officers will be answering about Puma II.
Marcio, thank you for the question. As I said before, given the fact that our exposure is higher to a true market, we do not have any big problems regarding shipments because a lot of our operation is focused on this kind of -- and one way or another, this is okay. And the bigger complexity is in terms of container because all the fluff is shipped in containers, and this is a more chronic problem. This is not a problem of Klabin, it's a worldwide problem. You have 20% of the capacity of containers just there idle in China. You cannot solve this in the short run. We see this problem still being chronic at least until the mid- to the end of the year. And ultimately, we'll have some carryovers and these carryovers are bigger in fluff and in other fibers. And this could have an impact on prices from 1 quarter to the other, but more specifically regarding this product.
Good morning, Marcio. Let's talk about the implementation of the second phase of Puma II. It is going very well. We have already reported the progress. All the questions are being tackled and solved and the civil construction is very well advanced. Engineering and purchase and the manufacturing of equipment as scheduled, as expected. There is always the concern regarding international transportation of equipment because some of the equipment is imported. But so far, we have no big problems in this regard.
The -- in the planning, we do not have a very big possibility to bring this forward, and we are working very hard to -- at the beginning of the second quarter of 2023 to have this on schedule. But we don't have very big hopes of bringing this forward because of contract issues and the normal development of the project. Of course, we work all the time to have a curve, the best possible curve in terms of the startup of the machine. We know that the pandemic -- with the epidemic, there was an acceleration of trends in e-commerce and replacement of single-use plastic packaging of at least 2 years. what we had scheduled for 2 years ahead is already happening today and still resilient. With the whole context of macroeconomics and the conflict, structurally, we see a very soft demand because of that.
Today, we already have a contract volume or about to be contract of over 50% of the machine. And what we saw from 4 to 7 years, as you said yourself, the scenario would be to fill this machine with coated board up to 4 years. And despite of everything that is happening in the world and in China, we see this high consumption for food stuff or food service like trays and cups and...
Next question Cadu Schmidt from UBS. Please, Cadu, the floor is yours.
We'll now turn to the next question from Caio Ribeiro, Bank of America.
Thank you for this opportunity and the follow-up and also adjusting the name to Bank of America. I would like to ask you about the fluff market where prices are going up. I would like to know if you can comment on the supply and demand dynamics of this market today? It seems to be very tight. And if you consider any expansion in the future considering there is not much capacity going into this market right now?
Thank you, Caio. Yes, fluff is in our options portfolio. We are very confident, and we have a comfortable position in the market. And we have been approved by all first-line clients in the world. This is a high-end product in the sector. And so yes, we do analyze that -- analyze growing our capacity in fluff in our portfolio.
If there are no further questions, I would like to turn the floor to Mr. Cristiano Teixeira for his final remarks.
Well, now I will comment on our perception for the second quarter of 2022. The second quarter is seasonably better, as I mentioned before. It's better than the first one. The domestic market should still move slowly due to the inflationary issue and the global trade, in today's light, should remain firm. In April, Klabin celebrated 3 years of history, and we remain persistent in our vision of growth and generation of shared value in the long term. We believe in our integrated, diversified and flexible business model that has allowed us to deliver results that are sound under different market situations. Paying attention to people and renewing our belief in the sector, we will seek results as consistent as those achieved in previous quarters. With regard to sustainability, I reaffirm our full commitment to the best practices of the private sector in the world. And I would like to highlight the engagement of an entire team of Klabin experts supporting organizations in Brazil and around the world with the global climate change agenda. I would like to thank you all for your participation, and I look forward to seeing you at Klabin's earnings call. Thank you.
Klabin's earnings call has ended. Thank you very much for your participation, and have a nice day. Thank you.