Lojas Renner SA

BOVESPA:LREN3

Earnings Call Transcript 2019-Q3

[Operator]

Ladies and gentlemen, good afternoon, and thank you for waiting. At this time, we would like to welcome everyone to Lojas Renner's Third Quarter of 2019 Earnings Conference Call. We would like to inform you that today's live webcast, including the slide presentation may be accessed at Lojas Renner's website, lojasrenner.com.br, Investor Relations section, at the webcast platform and also at the MZiQ platform. [Operator Instructions] This event is being recorded. [Operator Instructions]

And we would like to recommend that questions coming from journalists be taken by our press office at the number 55(11)3165-9586.

Before proceeding, I would like to mention that forward-looking statements that might be made during this call are based on the beliefs and assumptions of Lojas Renner's management and on information currently available to the company. They involve risks, uncertainties and assumptions as they relate to future events, and therefore they depend on circumstances that may or may not occur in the future. Investors should understand that general economic conditions, industry conditions and other operating factors could also affect the future results of Lojas Renner and could cause results to differ materially from those expressed in such forward-looking statements.

Now we would like to turn the floor over to Mr. Laurence Gomes, CFO and Investor Relations Officer. Mr. Gomes, you may proceed.

[Laurence Gomes, executive]

Good afternoon, everyone. We are here in order to talk about the results of the third quarter of 2019. And today with me, we have Fabio Faccio, our CEO; Paula Picinini, Investor Relations and New Business Officer; and Luciano Agliardi, Controller.

Before going to the main highlights, I would like to mention the good operating performance of the third quarter, in which we continue to deliver consistent market share gains and we also continue with the group pace of same-store sales, in which with a combination of 2 years, has an acceleration vis-à-vis the second quarter of 2019.

Regarding the gross margin, we have been able to keep stable levels vis-à-vis the third quarter of '18 and the level was the highest ever in the third quarter in spite of the FX contracts that were enforced in products. Regarding the total EBITDA margin, we had the relevant impact of non-comparable items in [ 2018 ], and this offset both the operating leverage that we delivered as well as the better results from Financial Products. And if we exclude all these items, about which I will be talking about later on, our EBITDA margin would have grown and also would have reached its highest ever level for the third quarter. And the same would happen with the net margin.

Having said that, now I would like to go to the details of our performance of the main line items. Consolidated net revenue increased by 13% and same-store sales, 8.3%. Low temperatures in July favored the sale of heavier items and because of that, the stores were well prepared for the beginning of the new collection. Additionally, the good acceptance of the spring/summer items and the added inventory mix allowed us to reach a very good sales performance in spite of milder temperatures in some regions.

And about the Other businesses, Youcom continued to deliver a good performance with a 24% increase in sales and 320 bps in the gross margin.

Camicado on the other hand, we had some delays in the arrival of imported items and also some stockouts due to the review of the process of commercial management and inventory management as well. Thus, all the sales as well as the gross margin of this business were impacted and the corrections in the process are already underway, and we expect to see gradual improvements over the next few months.

About the consolidated gross margin of 3Q '19, the correct commercial management together with the quality, the good mix and the size of our inventories, both for Renner and Youcom, offsets the negative effect of the FX and allowed us to maintain 54.3%.

At the year-to-date of the 9-month, same-store sales reached 9.9%, a percentage which is much higher than the overall sector, and the gross margin in its turn was 60 bps lower due to the FX effect mainly in the first half of the year.

In relation to operating expenses in the third quarter of '19, our SG&A net of the effect of the IFRS 16, we saw an increase of 12.5% in the period, lower than the growth of the net revenue from merchandise sales, in spite of the many investments that are being made in structures and in new projects as well.

Net of the effect of the normalization of [indiscernible] profit-sharing program of our workers and other operating results, together with the effect of the adoption of the IFRS 16, the retail EBITDA would have grown 14.5%, with an increase of point percentage -- 0 point -- percentage points in the margin.

Year-to-date, we had an operating leverage of 70 bps in the SG&A over the return -- ROL, which was offset by the effect of the IFRS 16 and the normalization of the profit-sharing program in 2019.

Now talking about the results from Financial Products. We had a result of BRL 103 million with an increase of 19% vis-a-vis the third quarter of '18, then we can see that revenue generation mainly in the Meu Cartão, whose portfolio grew by 47% was the biggest driver of this result.

Regarding delinquency. Even with a total growth of 28% in the portfolio, driven by the co-branded cart of Meu Cartão, we had a lower percentage of past dues and the weight of the net loss over the portfolio advanced 50 bps due to the higher level of provisioning for the private-label card, and since April this portfolio started to have transactions posted as the Realize CFI, our financial institution. And with that, we have the unification of the portfolio with the use of the drag method for the provisioning of losses for the nonperforming loans, and we are to bring all the outstanding balance of the clients for that bracket even if it's only a part that is past due over the total debt. The total adjusted EBITDA was higher by 4%, which is bigger than BRL 60 million in the third quarter of '19 with a drop of 160 bps in the margin. And if we exclude the effects of the noncomparable items that we have already mentioned, the total EBITDA margin would have evolved 50 bps, reflecting the operating leverage and the increase in the results from financial products.

Year-to-date, the margin was lower by 50 bps, mainly due to the normalization of the profit-sharing program by the IFRS. And net of this effect, it would have been stable, practically. And the net income of the quarter reached BRL 189 million with an increase of 150 bps in the margin. And this reduction is explained by the noncomparable items together with the normalization of the income tax rate, which had been lower in the third quarter of '18.

If we were to exclude these effects, net income would have grown 24.6% with an increase of 100 bps in the margin. Regarding the 9 months, if we exclude the noncomparable items, net income would have grown 17.9%, with an increase of 30 bps in the margin. Thus, the ROIC of the last 12 months reached 21% in the third quarter of '19 or 22.1% on a comparable base.

And before opening for questions, I would like to make a brief comment about our new distribution center in São Paulo, to be built in Cabreúva, measuring about 150,000 square meters. This venture will be built in the build-to-suit model and the total CapEx estimated for the company will be of about BRL 600 million, to be disbursed over 3 years. The distribution center, which should be opened in 2022, will have the most advanced and state-of-the-art technology and will be catering to the omnichannel operation.

So these were my initial remarks. And now, we will be available to you if you wish to ask any questions. Thank you very much.

[Operator]

[Operator Instructions] Our first question comes from Joseph Giordano from JPMorgan.

[Joseph Giordano, analyst]

Laurence, we're talking about the new distribution center, and I would like to understand the evolution of your whole omnichannel strategy for the company because you mentioned that click and collect was 30% of online operations with a very important cross-sale, and I would like to know the evolution of that over the last 6 months. And I would like to understand how much is the contribution of this area to the overall bottom line of the company. And I would like to know the evolution of the next economic environment in your view. You will probably have a performance that are different from the remainder of the sector, from the Retailing sector. Or is this a pure market share increase, and how do you see the evolution of the competitive environment, in which your competitors are suffering a little bit?

[Fabio Faccio, executive]

This is Fabio. Thank you for your question. I would like to start by your first question about omnichannel and give you some more color about some of our initiatives and some things that have already happened and some that are underway that we continue to have our omni operation part of that. A major part of our [ products ] from e-commerce, but we already have some evolution in this regard because we already have 3 stores in test, with click and collect, with the items that are available at the stores. And so in some cases, we have a few minutes or a few hours for the collection of the product, and we are working in order to have 30 stores implemented. And over 2020, we want to have 100% of these stores already implemented in omni to be stores on inventory. And regarding the digital operation of the stores, we are already selling the inventory of e-commerce, and then we will be making this available for all the inventories by means of new equipment and our employees and another part of this operation, business operation. We have 4 stores with the pilot of self-checkout, with 30% of share of our sales will be kinds of equipment and we will close the year with 12 stores with self-checkout, and the digital partner, as we call it, that is the payment by the client at the store, by means of the smartphone, by the Renner app and so far, for the payment of the pilot and the cards, they are already having a pilot in 6 stores and by geolocation in the app. And we should close the year with 30 stores already operating this way. RFID helps us in, for the implementation of omni in order for us to [ view the total transit ]. This has already been rolled out to 300 stores, and we are -- we'll be ending 2019 with 100% of Renner stores, with the apparel and footwear products this way. And another important thing about the RFID is that we had great gains in the stores where we implemented, in terms out reduction of stockouts. And this is very important for us and improvement in the services delivered to our clients as well.

And another important point with omni, we already have a low inventory in the stores in which we are using the inventory of the store itself. And I have already said that we are testing in 3 stores, and it will be 30 by the end of this year, and we already have same-day delivery in Rio and for São Paulo.

Using the total inventory over the next year, we'll be reducing the inventories for the other areas or locations as well. We also -- our mobile service, is the object of a lot of praise by our clients and we have been having records in terms of indicators of client service and clients saying that they are extremely satisfied and also lower levels of dissatisfaction since the implementation of that in terms of our mobile payments.

And regarding omni, in relation to your second question, regarding the macro channel, we believe that what we see is that our growth is coming from growth of market share, and we look at the market and there are many dates available by many different institutions. And we can see based on all that, that we are achieving growth higher than the market and other players, maybe are gaining as well, but we do not see relevant [ growth in this ] market overall. It has been improving slightly, but this is not what justifies our own growth and business.

We believe that in the medium run, there should be an improvement in the market, and we will be able to tap into this improvement as well. But we continue to work in order to improve everything internally so that we can increase more and more our market share.

[Operator]

Ruben Couto from Santander.

[Ruben Couto, analyst]

Could you talk about the same-store sales and it was a timid growth and the personnel line in your SG&A continues to go up. So could you explain this and could you give us an update? And really, we want to know what to expect in the next few quarters? And then the second topic, when we talk about the PIS and COFINS taxes, how do you intend to use the credits that you have on waiting for precatorios or some other ways to offset this? And do you have an estimate or an expectation regarding going back up down to '21 and not 2012, as it is today.

[Laurence Gomes, executive]

Ruben, it is Laurence, and thank you for your questions. In terms of our personnel expenses, we have been communicating over the last few years of the restructuring and the enforcement of the areas because of greater specialization of the businesses, then we had specialization in stores first and then specialization in the stock area and the procurement areas. So all these areas of the company are being reinforced and restructured and this is the first year of a digital cycle. This is the first year of a cycle of investments and with the new reality. And that means other skills, there are the competencies and in relation to that, Renner always has its [ outlook ] to the long run, and we are bringing forward some investments that maybe could be made in the future. But in spite of that, we believe that our culture of austerity is always in place, and we are always looking for opportunities and the older projects should pay for the new projects, the new structures that can tap into improvements that we made in the past. So we've had some dilution in this quarter, and we believe there will be a dilution of extensions over this year as well.

And this is all I can say about the situation so far. And we believe that we are very well prepared to face the next quarter, which is a very important quarter for retail, the most important one. And I believe that we will reach the end of the year with excess dilution in part of -- in spite of all the investments that we are making, even in OpEx. Regarding the process of credit of VIP and management, the PIS and COFINS taxes, we are following the procedure, the legal procedure. And in case we are successful with all the levels. And up to the internal revenue, we are going to offset several taxes over 18 months, and we believe that this is the way this will be used, that is to say offsetting several taxes.

[Operator]

Thiago Macruz from Itau BBA.

[Unknown Analyst]

This is [ Helena ],and I would like to ask 2 questions. The first one, inventory levels. Based on the level that they were, I think your inventory levels are very good and how aging could impact the next quarter? And the second question has to do with Financial Products. We would like to better understand the growth of digital banks in -- what kind of impact these banks will have and are having and what kind of competition do you have from them? And what about digital operations also in your financial operations?

[Laurence Gomes, executive]

[ Helena ], thank you for your participation, your questions. This is Laurence. And in relation to inventory levels, this has been a very big highlight, a very important highlight in the last few quarters. And our inventory management, and we had very good planning in our procurement activities, distribution and in our collections, we had a very good result. We had a very good result going from 1 season to the other, 1 collection to the other and this is very important for gross margin levels that we have been delivering. So we had a very good transition in this regard, and we believe that we are very well prepared to face the fourth quarter of 2019.

I believe that maybe this has been one of the best transitions ever made by our company, and I believe one of the best levels of quality as well in our inventories in the company. Regarding our financial products, we have not been seeing this kind of movement or this proliferation of new businesses through the channel that you have mentioned when we are not seeing an impact in -- on our operations. We have a very strong brand and a very meaningful brand, and we have the big traffic in our stores, almost 6 million active clients. And we are looking at everything that is going in the market and the regulation about the instant banking, for instance, instant payment, and we are restructuring also these operations and we are preparing a study to -- recognition, the Realize plan. But our purpose is to continue to make our current products digital and also to find a way to have more agility in the development and the renewal of our products. So I believe we are on the right track, and we are also waiting for important definitions in order for us to give you more information about the evolution of this operation.

[Operator]

Gustavo Oliveira from UBS.

[Gustavo Oliveira, analyst]

You talked very quickly about RFID, and you said that you already see an improvement in terms reduction of stockouts in the stores. Do you have a comparison in terms of same-store sales and between the stores that already have RFID and the others? Can you already see that if the sales are getting better? Because it seems to me that there is a very material change in your operations because of RFID. So can you already measure something with a certain degree of certainty?

[Fabio Faccio, executive]

This is Fabio. Gustavo, thank you for the question. In fact, we already have some gains from the implementation of RFID. We see that we have more accurate inventory levels. We are able to do this anytime we want. And we have been doing this every 2 weeks and if we need to do this, more often we can do it at any time, any moment in time, because in the previous system, we only had a few yearly inventory takings and we are still on Phase I regarding the gains from RFID, and these gains are mainly from the accuracy of our inventory levels and our certainty, increased certainty, and to know exactly where each item is and when. And also in the operation of our brick-and-mortar stores because we can see what we have in terms of inventory in the back and what is already in the stores and in order to avoid any kind of shrinkage or stockout and its dropped drastically. We don't want to talk about figures in this regard, but we already see a very big part of this impact in our stores that are more mature in the process as well. And this is the first impact. And we can have many of the things coming, such as our improvement of our efficiency in our DCs, and the involvement in prevention of shrinkage and also an improvement into the client experience by means of the IoT tools. So first it should be accuracy in our inventories and also a drop in stockouts. We don't want to talk about figures, but we already see a big improvement.

[Gustavo Oliveira, analyst]

Very clear. And one last question about CapEx, you said BRL 600 million for the new DC. How much has already been invested in 2019 of the [ BRL 600,000 ]?

[Laurence Gomes, executive]

This is Laurence, Gustavo. In 2019, approximately BRL 100 million of the total investment, it's BRL 600 million over 3 years' time in 2019. So far, we have already spent BRL 109 million.

[Gustavo Oliveira, analyst]

And what about the fourth quarter of 2019? How much will you be spending?

[Unknown Executive]

Well, not much. It's is not going to be relevant, in the fourth quarter, this is not going to be relevant.

[Operator]

Tobias Stingelin from Citi.

[Tobias Stingelin, analyst]

You're doing something very revolutionary in terms of technology. Could you talk about your DC and what would be the CapEx trend for the next 3 years regarding your financial operations? Do you intend to reduce interest? Are you going to reduce interest because of the sin tax and low interest rates? And I would like to know the situation of Camicado. Can you give us an update, please?

[Unknown Executive]

Well, the sample is not so good as the company. I think I can do a little bit of guesswork here. But if I understand correctly, you want to know about the DC, the new DC, and the new DC when it has started up, it will have a higher capacity than everything that we have in logistics so far. So one of the big advantages is that it will be supporting the growth of the company, also the location of the new DC will be better in order for us to act with the main market, and it optimizes our operations. And it already has the technology that is prepared and thought for the co-integration of all our channels. So one of the biggest benefits that we will have is the increased fees in our service and the increased operational capacity. And I don't know whether I have answered your first question because it was not clear. And it is a very relevant investment, we will have 150,000 square meters.

[Tobias Stingelin, analyst]

And I understand this will be more than you already have overall. As the investment is quite high and it is revolutionary, is it only for e-commerce, or...

[Unknown Executive]

No, no it's going to be for the whole company. It's going to be our main DC. In the 20 stores, more and more omni. And when we talk about omni, it's not only from the viewpoint of the client but also from the viewpoint of the company and the integration of the company. So the DC will be for online, offline, brick-and-mortar stores and everything end to end. So it's going to support all the operations of the company. And I think you asked about CapEx for the next 3 years. We believe that we will be keeping our level of investments a little bit higher because of this digital cycle and the investments on the new DC. So it should be 8% to 9% of the overall net revenue.

[Laurence Gomes, executive]

This is Laurence. You talked about -- you asked about the level of interest rates. And what we see is a trend towards a reduction in spreads and in the long run and what we are doing in the process of reinvention, so to say, of the Realize products. We contemplate more competitive interest rates, but with new products, different products. And also with the reduction or another direction that we have, or desire on our part is to further reduce the interest rate component in our overall revenues and having more service income in Realize, and this is all based on the restructuring of our products and services that are delivered by Realize and that we have already talked about.

And you asked a question about Camicado, I think it's your last question. What we informed you was that we made some -- we had some actions to optimize our inventory for Camicado and for internal reasons of our company, and not because well, the market is not easy, but there were some operating things that led us right now to have an inventory level that is, was not so good because we lacked a few items that could bring a very good margin to the company, and we wasted a good opportunity to sell more and to bring more margin. We have already addressed many actions in order to improve our efficiency in Camicado, and we expect gradually to recover results over the next few months, coming from Camicado.

[Tobias Stingelin, analyst]

Going back to the spread. So far, nothing changes, and the idea has actually been changed -- which will be production of new products?

[Unknown Executive]

No, it's no -- follow the evolution of the portfolio. We are revitalizing our financial products and these things are related.

[Tobias Stingelin, analyst]

Will this be next year?

[Unknown Executive]

I believe we will start seeing the change or this evolution already in 2020.

[Operator]

Richard Cathcart, Bradesco.

[Richard Cathcart, analyst]

B

A quick question about same-store sales. Laurence, you said that the quarter started well. But I know that you have a more difficult comparison base. I would like to understand how we should analyze this dynamic because of this more difficult comparison base.

[Laurence Gomes, executive]

Richard, thank you for the question. This is Laurence. I think the fourth quarter of '19, yes, we started it quite well, although we still have some milder temperatures in some regions. But the collection is very consistent, and this has been quite well accepted, and we are preparing our operation and achieving important efficiency levels in terms of logistics, basic execution in the stores and a higher level of maturity of this technology that was placed in the stores with mobile sales, more information. And as this becomes more and more mature, we are able to extract more sales per square meter in these operations. So I would say that we are very well prepared, and we are confident that we will have a good fourth quarter in 2019.

[Richard Cathcart, analyst]

One last question. Gross margin in the fourth quarter. FX is more or less stable, right?

[Unknown Executive]

In terms of hedge?

[Richard Cathcart, analyst]

Yes.

[Unknown Executive]

Practically stable.

[Richard Cathcart, analyst]

And?

[Unknown Executive]

Well, I would say it like this. I think we could see a very good performance of our gross margin in the fourth quarter. And we are seeking a stable margin and I believe that we have the right conditions to have this -- to deliver this.

[Operator]

Robert Ford, Bank of America.

[Robert Ford, analyst]

Congratulations for the results. What about Ashua? What about the market?

[Unknown Executive]

Thank you for the question. About Ashua. We started the brand online, and it's a different market. We have already learned quite a lot online and how we could incent our customers more and more. We do a very good job there. We have already started to get brick-and-mortar stores and differently from the other brands. We started this on online, and we're already making some adjustments and going to new markets in order to better understand these consumers that have major need in this area, so that we may have the best possible product to deliver to our clients. So we are now adapting our stores, making this integration and understanding their operations. Very recently, we opened 2 stores. One in Porto Alegre, [ Grande do Sul ]yesterday, one in Barra Shopping Rio, and they were very well received by the clients. And we have been very happy with the results brought about by Ashua. And now we are trying to bring the best [ proposal ], the best products, the best service before we start opening many other stores very quickly. This is an important branch for the group. It has a good potential. But we want to better understand it, and we want to understand the size of this potential. But we will see some expansion over this year, and then afterwards, we will be accelerating this further as it brings us good results. Regarding other segments, we do understand that in the future, we could have operations in some other segments, but I think we already have quite a lot of initiatives in our hand for the short run, and we have all of these digital initiatives. We have Ashua, and we have Youcom growing, we have Camicado starting with our marketplace, we have Realize. We -- a lot for us to share with you very soon. And we also have Uruguay, Argentina and I believe right now, we have our hands full. But later on, there will be some other segments, yes.

[Robert Ford, analyst]

And what about Argentina? How are things in Argentina?

[Unknown Executive]

In Argentina, in December, we will be opening 3 or 4 stores and will be starting markets and understanding the market that is going through some rough times right now. And the operating model in Argentina is different from Uruguay, so it's a very good test for our operation, for our brand, for the consumers because the country is different, and we are doing a good job there. And I believe that in the future, we will be able to go to other markets. But first, we have to understand Argentina in depth and deliver a very good job in Argentina. So for some time, we will stay with 3 to 4 stores there so that we may have a good operation and a good service level for our Argentinian clients, so that we may then think about how we can progress to other areas.

[Operator]

Irma Sgarz, Goldman Sachs.

[Irma Sgarz, analyst]

About the -- question about Financial Services, Realize. How do you see the breach?

[Unknown Executive]

The interpreter apologizes that the sound is very bad here.

[Irma Sgarz, analyst]

What you see in terms of imports for the future?

[Laurence Gomes, executive]

Irma, this is Laurence. Thank you for the question. We already have some products, such as personal loans. We have already -- charged a different rate based on the risk levels. And what we still see, some opportunity to make it more personal, is why can't you do with the new restructuring or revitalization of our product portfolio, together with this more and more digital operations that the changes that are coming.

Everything is together, this is a whole. Everything is together, and it is -- they are all part of a context of a better service level, more personalization. This is also contemplated in the initiative that we are already working on and we expect to be able to share this with you in 2020. In relation to the drop in the import rates, well, first of all, this is part of the broader concept, of opening up of our economy, our economy is very closed, and we need to open it in order to increase competitiveness, and specifically in our segments, the import. Which is not the biggest factor as the barrier to entry. It is one of the causes, it's one of the items. It is one of the items included in the competitive niche of imported goods. There are other issues involved, there are some structural issues such as the tax system that we have, a very complex one, as well as the infrastructure issue. All of this is -- well, they are all important bottlenecks, I would say. And we already have an operation in China and a more and more mature operation in that market. And we develop suppliers in Asia. And in a scenario such as this one, let's say there is a drop in the rate, Renner has a flexible model, and that will be preserving this, because we intend to preserve our competitiveness of course, in the Brazilian market.

[Irma Sgarz, analyst]

In order to have more imports from China or from Asia, but the process of importing and these bottlenecks of course, they are the problem. So it seems to me that in the short run, this is not going to change a lot.

[Laurence Gomes, executive]

No, I believe that these nontax barriers or non-customs barriers are, of course, part of that. As I said before, I think all the projects that we implemented, all the initiatives that we have been implementing at Renner since 2012 when we started the strong cycle of investment and with all the renovation and the implementation of a new logistics platform and shared service center, and I think based on all that, I think it's important to say that even in a more open environment, a more competitive environment with a higher level of competition in Brazil, I believe that everything that we are doing, combined with our organic expansion, we believe it is possible to preserve a high level of competitiveness in Brazil.

[Unknown Executive]

And adding to what Laurence said, and when we see a high degree of opening in the economy, as I think it's very good for everybody involved because the cost will be lower, and consumption will go up. And even if we produce goods here in Brazil, most of the raw material comes from abroad so the cost goes up, and this could be mitigated in the long run with a change in, or an increase in the opening of Brazil. If we have less barriers, either tax barriers or customs barriers, we optimize the country overall. And it benefits all the players in the market, and we are very motivated by that.

[Operator]

[Operator Instructions] The Q&A session has come to an end, and I would like to give the floor -- turn the floor over to the Renner officials in order for them to make their final remarks, closing remarks.

[Unknown Executive]

Well, we started the first question talking about omni, and there are more things happening. And another thing, besides omni, are other initiatives that have been bringing a great joy to us, RFID, for instance, and some others and one recently that has been very successful is the use of artificial intelligence and algorithms in our processing, and one of them it maybe the introduction of products, and we are already reaping very important results in parts of our products for -- also make a distribution with the use of intelligence, artificial intelligence and algorithms and predictive models. And we have been achieving good results, and we believe that later on, we will have more and more benefits coming from these initiatives. Besides omni and RFID, these larger initiatives are very important and we are increasing sales with inventory reduction. So this should improve our sales, improve our margins and optimize our inventories as well. And this is more sustainable and this eliminates waste.

Okay. So now, I would like to thank you very much for participating in our call and say that we will continue to be available should you need any additional clarification. Good afternoon, and thank you very much.

[Operator]

The conference call is closed, and we thank you for your participation and wish you all a very good afternoon.

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