Lojas Renner SA
BOVESPA:LREN3
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Lojas Renner SA
Earnings Call Analysis
Summary
Q3-2024
Lojas Renner S.A. reported a remarkable quarter with a net income of BRL 255 million, a 47.6% increase driven by a 13% rise in apparel sales, nearly double the market growth. The company completed a significant investment cycle, improving margins and operational efficiency. Guidance for positive revenue growth continues, with expectations of sustained gross margin increases. The inventory cycle has improved by 13 days, while operating expenses grew only 2%. Digital sales surged 24%, reflecting the success of their omnichannel approach. Overall, with a focus on strategic expansion, Renner is poised for continued success into the next quarters.
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Good morning, everyone. We shall start our video conference for Lojas Renner S.A. Together with me are CEO, Fabio Faccio; and our CFO, Daniel Santos.
Before I give them the floor, I'd like to inform that this video conference is being recorded and translated simultaneously into English. The presentation will be projected in Portuguese. And for those who follow us in English, the presentation will be made available here on our chat and on our Investor Relations website. Questions from journalists should be directed to our press office at [ 11-3155-9586 ].
And before proceeding, I would like to clarify that forward-looking statements related to the company's business prospects, operating and financial projections and goals are mere forecasts and assumptions based on the current scenario. It does not guarantee future performance as it depends on circumstances that may or not take place. For the Q&A, we can have them in audio or text.
With that, I hand the floor over to Fabio.
Good morning, Carla. Good morning, everyone, and Renner delivers another robust quarter with a solid transformation of our model. We are at a strong positioning as we can see with many indicators, 13% increase of apparel, nearly double of the market, also margin growth, which we also have operational leverage with the participation of the expenses with 2% and improvement of financial cycle in 10 days and 13 of improvement of inventory.
We reached BRL 255 million in net income and also of high free cash flow. We are satisfied to have chosen a path that leverage our potential. We have gone through the highest, most important investment cycle in our history that allowed us to improve in our model, and this brings us another level of competitiveness. We have positioned ourselves for growth, profitability and consistent cash growth. This quarter has proven that we're already in this journey.
The results of this quarter show a new reality that for us is the starting point to a sequential growth cycle. Our investment cycle on infrastructure is over, allowing us to have this new cycle to further on. And we have a model that is based on having us as a benchmark on apparel, on omnichannel and enchantment in terms of customer journey in a responsible way. The pillars were used based on the following leverages: improvement of productivity of the stores, better penetration in the digital organic expansion and also strengthening of the brands and lifestyles of Renner stores.
And we have worked these challenges in the following way. Currently, our operation is 100% with SKUs that allows us to have a store-to-store item-to-item and allows us to have a balance of the inventory. This increases the square meter sale and gross margin. Camicado also is working on omni and the transition of the e-commerce of Renner will be completed by 2025. Our lead time of fulfillment of store has reached high record levels. This is the fourth consequential one with the growth of sales leveraged by transactions and by pieces. And the company now is able to create and produce at greater speed, tuning up quickly the supply to the demand in a responsive way to customers wish.
The adjustments that we've had reinforced our brand positioning contributed to the customer journey as a whole. We are enchanting our customer in a more attracting value chain in an omni experience that is online and offline. And this is reflected by the NPS increase in all our business units. And also, we had a quarter of expansion of the active base of our system, reaching BRL 19.3 million. And this growth also took place in all our retail [indiscernible]. And the sales of Camicado increased 12% in the quarter and 18% by square meter, a gain of gross margin of 11.2% in a high record turnover of inventory.
Good performance of increase also of 22.7% and 1.7% increase in gross margin. And Realize shows a positive performance as well. And we also see the importance of Realize, not only in the performance of the sales, but also in terms of a loyalty tool for customers. And this has been the best results of Realize in the last quarters. And also, there was an increase in the share of our cards in 1.4% that is in the approval and reactivation of customers. And we had a drop of 32% and net losses. This shows the quality of our credit portfolio that has sequentially improved with an improvement of the NPS formation.
A big strategy just goes further if we have a strong culture with an engaged team. The engagement of our team is essential to our capacity of enchanting our customers, generating results and make our company be a one of a kind in the market. We're very happy to say that we have reached our historical record of engagement. And I should also thank our team at this point for their contribution in our journey.
Our model is working, is building into momentum. We're already at a new cycle of the company, and we keep directing our efforts to opportunities and growth leverages, focusing on a continuous value generation. Our intense strategic adjustments and investments in the last few years is allowing Renner stores to become more and more competitive and ready for the new cycle of growth and profitability. Our constant focus is of improvement of ROIC and also generation of free cash flow. We are also ready for important events of sales for the end of the year, Black Friday, Christmas and high summer sales.
And now, I pass the floor to Daniel, who will introduce our -- present to us our results.
Thank you. As Fabio well mentioned, the result for this year shows the strength of our business model in terms of growth and profitability that we reached. The execution of sales that is more agile and precise we're able to have us reach high goals. It brought us acceptance to another quarter of increase of transactions and pieces. Again, this shows our agility and precision of the fashion execution model and to capture this in terms of the preference of our customers.
So the omnichannel with SKU has brought this agility. So we have record number while we have now greater availability and also a good assortment of products that's more appealing to our customers, improving that to our stores and to our digital channels. And also -- we have increased the number of stores by automated checkouts, maximizing the opportunity of sales and improves efficiency at our stores. The value proposition that is increasingly attractive, aligned to a more and more fluid operation shows in the result of NPS and also our active customer base. The improvement in the customer journey can also be seen by the square meter sales, which is 11.6% for the quarter and our digital GMV that has grown 24% in the quarter.
And finally, we should highlight that we had a robust growth in all our business units, [ Youcom ] 24.7% and Camicado 12.5%. We have increased twice the double of the market, which shows clearly that our brand positioning and our competitive edge is still gaining traction. And our gross margin, we can also see an acceleration for the quarter with 1.1% compared to the third quarter in 2023 for all the businesses. The management of inventory and the cycle of products has improved because of our execution model that is agile and flexible. The agility with also the model that is in collection that is produced was able to reduce in 13 days the inventory. That way, we were able to improve inventory turnover, and we have a 2% increase on inventory compared to the third quarter of 2023.
It's important to say that our fulfillment model is still gaining traction. You'll see the benefits in the next quarters to come, bringing to greater precision, agility for execution, optimization of assortment and operational efficiency in our operations.
In terms of operating expenses, aligned with our objectives, the goal, we had another goal that the increase of revenues is higher than that of expenses. As we can see right there in the diagram, we have an increase where we have a 2% improvement in terms of cost compared to the net revenue. So we see the efficiency and how this structure is able to bring us leverage of the revenue without a need for extra expense increase.
So when we talk about the top line for improvement of our operating management, it is able to bring us an improvement in the free cash generation. Realize still carries on with a positive results. This is the fourth consecutive quarter of positive results, reaching BRL 58 million with 10.1% of the total of our EBITDA with a BRL 24 million improvement. So we see that this performance was brought with any non-current item. There was no sales of portfolio in this quarter. So 30.5% of the sales of the company were through Realize, an increase of 1.14%.
We should say that the cardholder spend 4x more and twice the frequency because they have exclusive benefits as cash back that bring loyalty and lifetime value. When it comes to the portfolio indicators, we see them healthy and positive, the credit value and the most sophisticated intelligence that we had in the end of the year shows originations. So we have a benefit of the risk profile of the portfolio. For the quarter, delinquency was reduced where we had with the Over90 here reduction of 5.5% compared to the previous year and 1.2% sequentially compared to the second quarter.
So we also have 4.4% of the portfolio. So the best rates of the last 2 years for both indicators. The short-term of 60 days also has reduced and they are stable compared to the second quarter and record when compared to the last 3 years, a clear indication of the quality of what we have and gives us the confidence to carry on with our credit concession.
Well, we closed the quarter with robust financial figures. We have 59% here of the adjusted EBITDA. We have a net income of BRL 255 million, 47.6% increase. So our increase in terms of profitability is because of our business models, increase the execution of the fashion omni fulfillment and an enchanted journey for our customers. We carry on in generating value, bringing profitability, efficiency in generating capital. And in this quarter, we increased in terms of our ROIC in the last 12 months, 12.7%. So we have precise integrated, agile and flexible operation that is important attributes. And at the same time, it allows us to have more opportunities of growth from the market in the short term as well as in the long run.
With that, I conclude my comments, and I pass the floor back to Fabio.
Thank you, Daniel. We're very satisfied to deliver another quarter of advances we were able to increase the potential of the company and our business model will allow us to leverage and broaden even more the competitive advantages of the Renner stores. In an environment of constant uncertainties of volatility, a precise, agile, flexible model is essential to the sustainable growth of the company. We will carry on growing gradually for the next quarters and all the opportunities brought by the strategic projects that we have already implemented.
So we meet our commitment to grow in terms of profitability and to also be a benchmark in fashion and lifestyle and to be able to deliver an enchanted journey in a profitable manner. So this shows not only a growth of sales, but the solid and quality growth is what shows to be the most important, a growth that comes an increment of gross margin with significant dilution of expenses with an increase of inventory turnover, reduction of the financial cycle and of delinquency.
So our expectation is very positive because of the major investments that we have already carried out and shall bring us not only a good level of growth for sales, but mainly in terms of profitability with high free cash flow and also a return on this invested capital without need of greater investment on infrastructure.
So I conclude then, and I pass the floor back to Carla for our Q&A.
[Operator Instructions] The first question comes from Ruben Couto from Santander.
And quickly here for the gross margin, finally, we go to the 2019 level, which is very positive, thinking also going forward. I want to understand how you're thinking now in terms of the fourth quarter, but also for 2025 in this whole setup in gross margin using a bit of the advances that has been shown and that you can keep the company competitive and also at higher levels. How are you thinking about that when we think about gross margin and growth for the fourth quarter and also for 2025, that would be good to learn from you.
Thank you for the question, Ruben. Well, I believe we have a positive expectation of gross margin of a gradual growth. When we planned the evolution of our model, the expectation was to be able to get close to the historical record we had in the past. And today, I can say that from the evolution that we've seen, we have an expectation to be able to tie or be superior from the best levels that we've had before.
So I can say that in the midterm, we have an expectation of a gross margin that is slightly of growth, a gradual growth. We're very competitive as we are when it comes to the price positioning. It's very competitive. There's a good balance there, but it's a dynamic play. You can have a short-term response in terms of the dollar fluctuation. So there might be also a pressure, but we want to see a continuous growth of gross margin to go above even the best levels we had in the past.
The next question comes from Joseph Giordano from JPMorgan.
I want to explore about the expenses. I see that it has been very tight and much lower from what we have with the revenue. I want to know if there is any gain there as we're talking about the distribution and improvement when it comes to the operational management. And also in terms of the recovery of square meter that it's a model that shows strength. What would you say?
Well, the second part of the question there, Joe, and then Daniel can answer the other part. I believe that's true. We do have potential. We have been saying that in 33% of the cities where we're at with the Renner brand, we see that the potential of accelerating the expansion. I believe we have 440 cities where we can be at with new stores and also some others in other cities. This is just for Renner. There are the other brands as well. So the potential of expansion is important.
We have had good performance with the new stores. And this shows that, yes, at some point, we can start to speed up our expansion. But it's still too early to say that as we're going through the whole budgeting process for the next year, we're discussing some points. And most likely, we will have some acceleration and perhaps during the year, we'll accelerate more of our time because we prefer to [ become ] to be very fast. We want to have the best point to have the best projects going forward.
So even if it takes a bit more of our time as it was the case recently, we prefer that and accelerating anyway. But the potential is there. And definitely, as we do every year for the next call, we want to have a scenario of the number of stores for the 2025. But yes, there is potential of expansion to answer your question. And Daniel, you can talk about now the expenses.
Thank you, Joe. In terms of the expenses, what do we see? First, we are very diligent in terms of the expenses. And as we've said in our presentation, we believe that we have a margin of expense that allows us to have a growth that will have a pace that will be stronger than that of expense, bringing us leverage.
When we go into the project level, specific levels for improvement of expense, there are still those expenses that we have had. And throughout the 2025, we will be eliminating them. So we will follow not only for 2025, but also this is the rationale for '26, '27, having a growth of revenue that will be higher than that of expense so that we can keep having leverage gains operating-wise for the next few years.
[Operator Instructions] The next question comes from Luiz Guanais from BTG.
A question here about the strategy of pricing. We have seen, Fabio, in the last few months, the gap of price of Renner when compared to some competitors, especially the cross-border ones where there is a reduction. So I want to understand what we can expect in terms of the evolution of pricing looking forward. I know that part of this gap has much to do with the cross-border tax, but I want to know from Renner, how do you see the pricing looking forward?
You're right. Our prices since September last year, September 2023, became more competitive, but still with an improvement in gross margin with efficiency gain, a better management of inventory, tighter inventory, we're able to have a better formula to supply that to our consumers in that way, have a gain in our supply chain as well.
And on the other hand, as we became more competitive, some competitors became more expensive because they are paying the tax, not all of them, but part of it. So this became much more appealing our value equation, and we shall continue that way. And what we've been doing is that we're at a good point of competitiveness where we have a healthy positioning today, as I consider that if we think about the appealing the value proposition to our customers and the gradual margin gain. But it's a dynamic living equation with variables that come in as now with the dollar going up, that doesn't impact now, but it depends on all the other variations, how we're going to have that with also freight costs, we have competitors that might reduce. So it is a living organism.
So the current one that we have from balancing the price positioning and margin, we are very happy as we are. It varies in terms of cost and also from the positioning of other competitors. But I believe there is no abrupt shift in the market of having margin reduction to have greater sales or to increase greatly the margin. We are balancing for the gain to our suppliers, our customers and our company. We have been able to balance that in terms of efficiency when there's pressure, so we can have a better equation to all 3 stakeholders.
The next question from Vinicius Strano from UBS.
I want to explore about what are your thoughts on expansion and penetration on cards from now on. Realize, as we see, has a better result, has been showing that for some time now that gives you more confidence to actually accelerate credit concession.
I believe that when we look internally, it allows us to think about it. If we were to think just about the internal side of it, we can really broaden much. Our internal numbers are very healthy. We did our homework. Our model makes us feel more confident. So definitely, we can think about a greater credit expansion. However, we must remember that we are within a larger context and that we still see a scenario in the market that is a bit more of a concern when we see high debt levels and delinquency is still high, although it dropped and interest rate is slightly increased. It's not as we had before where the credit volume was very broad available, and there was a ramp-up of interest rates that was very accelerated from 2% to 14%. So we see this gradual, but it is a situation that we prefer to be a bit more conservative. Yes, there is room for expansion. But we have been doing this in a way that is gradual, observing the market scenario we're in.
The next question comes from Rodrigo Gastim from Itau BBA.
Anyway, I wanted to understand, Fabio, in your opinion, what are the main key operational gains, leverages that you're able already to capture at the end?
Yes, it was. So we have 100% by SKU. So we're working 100% item by item and going to our distribution center and the leverages we've seen and also what we talked about in the last quarter, we reached a stable level. That means because we have a same level of lead time of service, 100% of SKU as when we work with package. So now the leverage is higher. We have a level of service and lead time that is better that we had -- never had that before. Our track record of service level and lead time still working with 100% of SKU. That's a leverage on itself.
The other one is very clear because one thing is the growth of sales line, which we see it's visible, but the growth of sales with less growth of inventory, but -- and with growth of margin, this is the leverage of the model where we're able to work with tighter inventory. It's not only the distribution center, but it's a whole process from end-to-end, where we have the capture of trends through artificial intelligence that is faster, more assertive, a design for product development that is faster, production time is faster integration with our chain of supply and also a time of distribution that's faster and all having it in a granular base.
All of this together allows us to have a tighter inventory to increase sales with efficiency gain, less turnover of inventory with less expense growth. So this is a leverage of the model as a whole. What we see, we've been reducing expenses, but Daniel has always reinforcing this. Please, Daniel, you can add to that. But we still have a road map of continuous reduction of expenses as well as continuous gain of efficiency in terms of lead time of service and assertiveness of distribution. We're just at the start. There are gains that's a leverage on its own, but the whole process, the whole system starts to evolve that will be incremental.
We are at the starting point, the full potential of both expense and improvement of operations and service and capturing the whole potential we have, we will see by the end of 2025, not just at the end, but we have already been seeing, but gradually by the end of 2025, we'll see more and more improvement.
And also, we should remember that for the next year, we're talking about having the main digital for our Cabreuva center, where we see benefits of agility for the digital and integration also with transportation. So this is a journey, as Fabio said, and we'll gradually see gains of efficiency and both when it comes to availability of the product with greater precision and agility at the stores and also when it comes to cost to have it all operational, the whole supply chain. It's an important step.
Well said, Daniel, in terms of the conversion to online, a better use of inventory and also to have another phase of reduction of expenses. That's right.
Next question from Danny Eiger from XP.
My question in terms of working capital, although there was a cash increase. When we look at last year, it reduced because of the increase of working capital when we talk about suppliers. I just want to understand, I know that this is most likely because you need to support sales with that. But I want to understand the drivers and how we can look forward.
Well, when we see the medium time for suppliers, we don't have any worsening. What we see compared to last year, although there is a slight drop of cash generation compared to last year, it's still a very robust cash generation. And part of this difference is more related to the Realize portfolio. Last year, we had much from the late portfolios when we went through rounds of negotiation for the collection of part of the portfolio that was delinquent, and this was able to increase cash.
But when we look at the generation of cash in retail this year is more than what we have last year. That's why we talk about a gain in the financial cycle. When we look specifically to retail 10 days where 13 days is of inventory days.
The next question comes from Felipe Reboredo from Citi.
So from Citi side, we want to understand a bit more how you see the optimal capital structure. Does it make sense to leverage a bit more because of the credit scenario and that the structure investment has already been done in the last few years?
Well, Felipe, I will allow Daniel to answer more on that. But I would say that in a scenario that is more stable with high interest and the retail sector is well pressured for -- and when we look at the other players here, we rather with a moment like this to work in a scenario that we have a bit more cash and that has been positive for us. But I believe Daniel can explain more.
There are opportunities definitely. Well, first of all, it's interesting to take this opportunity to talk about what are our priorities of cash allocation because it relates to what you said about capital structure. First of all, our priority is to invest on expansion and refurbishing of stores and in a selective way, our digital platform. We know that digital platforms are always evolving. So you always need to have some investment to keep evolving in what we call the journey of the customer in the digital.
And right after that, we have the investment, for instance, in our brand, Youcom, where we have a growth of 27% for the quarter. It's growing 20% year-to-year and we have a strong expansion of stores with Youcom, which is a priority. So we also carry on observing and seeing brands in the market where we see that there can be opportunities to bring new brands that can have adherence with our strategy of lifestyle and fashion and then can be an accelerator of our growth.
And as Fabio well mentioned, we believe that nowadays, we can have a level of cash and leverage less than what we had before. And we believe this is healthy and suitable to the moment we're in. It's something that we are always discussing internally, even with our Board and we will see the right moment when it makes sense to operate differently.
Our next question is Irma Sgarz from Goldman Sachs.
I want to know a bit more about the Realize operation and how you think about the trajectory for next year. I know you explained well from the risk standpoint and the moment of consumers, but I would like to explore a bit more the revenue of services, if it grew well, if you could explore a bit more about that, if you see space to grow there. When it comes to interest and also the increase of the portfolio, maybe it won't be very accelerated at first.
And the other question is about the line of operating expenses in Realize. I understand also that there is an expect related to payroll to compensation that was provisioned for the third quarter due to better results. But other than that, within what you can say about processes and automation and making this operation even tighter, I want to understand if there's room to reduce more these expenses or is it a matter of growing the expenses less than growing the revenues?
Thank you, Irma, for the question. In terms of Realize, the expectations we have. Well, we are fully confident that Realize is very important for our retail growth. Realize has been consolidated more and more as a financial agent and has, as a goal, be able to reach and increase its customer base, but aligned with the concept of adding value to the operation. How can we bring differentiation so that we can align the growth of the base with the growth of retail. That is one of the goals at Realize.
For the next year, obviously, we need to see how the variables of credit will work. But we believe that our model of credit today advanced and has evolved will allow us to carry on with the growth of origination and the rescue of those customers that we lost in the past to help the growth of retail.
When it comes to expenses, one of the points that we've been saying is the change of the processing where we will have already this change next year. So when we talk about the processor, we will change the offer of the service. It will also allow us to be more efficient. So as Renner, which we believe the growth of revenue will be over expenses, we have the same belief for Realize. And the growth of the Renner Card is still the driving force for the expansion of Realize.
Next question comes from Ruben Couto from Santander.
Just to take this time here, could you talk about how was the sales evolution over the quarter? How was September? How has October been? I know it's a picky question, but I just want to understand the full dynamics, if you could share, please.
Okay. Ruben, thank you for the question. We don't disclose our sales per month. We talk about the year that we believe it will be quite normal, where we had an imbalance in the second quarter for external reasons, [ decline ] that changes with the flood, but we believe there will be a normalization for the year. And that's what we've been seeing where the sales for the third quarter were slightly over our expectation and the expectation for the fourth quarter as well that will carry on within our expectation, maybe slightly over, but it's too early to affirm anything for the end of the year as we must recall that most of the quarter is highly concentrated at the end of November all the way to end of December.
That's clear.
As we explained, we are very well prepared for the events at the end of the year.
What about the e-commerce that in this quarter had a highlight of increase? Do you believe there will keep being a growth there within the sales?
Our expectation is that the customer will -- I mean, they always choose where they want to buy, but we increasingly more have an integrated operation. It's one of the only ones in the market that has not only in the front office, but in the back office as well, where we have the inventory fully integrated of Camicado. You count Renner by the beginning of the year, we'll have that. And this make us increasingly more be prepared for a customer to choose if they'll buy on, off or a mix of both, if it's omni, it doesn't matter. We have a flexible model now that if we grow one channel more than the other, it's fine for us, both bring growth and profitability to the model of our system.
So yes, I believe there is expectation. If we were to separate that the brick-and-mortar has a big growth potential, but the digital can have even more. It has been showing that. But it will depend how customers choose. We need to be ready to be there for the customers as they choose and to have return on capital both in an integrated manner.
And also to add to that, it's important when we see that although there was a strong growth in the digital with gross margin and leverage, they were still strongly present. And much of what we said that today, our digital model has already an operation cost similar to that of the brick-and-mortar stores. So the digital is one that brings an impact to the profitability in the period.
The next question comes from Andrew Ruben from Morgan Stanley.
I was hoping to understand even a bit more about the street versus mall store, how you saw the performance in terms of sales and margin for street versus mall? And as we think ahead to 2025, any color on the opening plans and again, with your view of dividing between the 2 sets.
The question of Andrew is to know the difference between the performance of street stores and mall stores and how we see the expansion going forward considering the 2 formats.
Well, Andrew, thank you very much for the question. I would say that the profile, as we've been saying, of the street stores and mall stores are different in terms of the time of execution for the plan of each. The CapEx per square meter and the cost of the street stores is much less in general. We shall remember that in streets, when we talk about street stores, they are in small cities. We don't have street stores in main cities. They are smaller cities when sometimes they don't have a main mall. So for us, the street stores and mall stores, we're talking about small cities and bigger cities.
And we have had great performance on both for the smaller cities and larger cities. But if we were to talk about a difference in growth, it's more about the profile of the target. So one that is not very relevant to us. which is a purchasing power that is lower, you end up having a performance that is a bit less, but that's not the type of information we can disclose. But I can tell you, we are having a quite similar performance in both markets, and we're very happy with the expansion plan that we've been carrying out.
And as I mentioned before, we're still in the process of budgeting for 2025. So most likely for the next call, we can give you an idea of number of stores to open and in new cities and existing ones. But at this point, we can as we are now at the discussion level. If I were to give you any information now, it would be subject to variation. I believe there will be a slight growth of stores to be opened and also a reduction of those that closed. We made many adjustments in the last few years.
So we believe in retail, you'll have one or another closing, but the number of stores closed in the last 2 years was over what we had before because we did not close on the previous ones. So we adjusted accordingly, specifically for Camicado. And from now on, from 2025 on, it would be a more insignificant number, so less stores and on its own already brings us a net expansion that increases, but we also expect to have a bit more opening stores.
And also, Andrew, when we talk about our expansion plan, those components that we always have here that we like to talk about, for instance, a gross margin of these stores that we open in cities where there's just one Renner store, the cost of operation by square meter is lower and the ramp-up of these stores when it comes to speed of reaching a higher revenue. We see that the model is aligned with the expectation that we have. So we are happy with what we see. And as Fabio mentioned, our goal is to speed up the growth. We will complete our budgeting for the number of stores that we will be committed to opening, but definitely, it is a priority to us.
That was our last question. With that, I close our Q&A, and I pass the floor back to Fabio for his closing remarks.
Thank you, Carla. Thank you, everyone. I'd like to thank our team for their engagement, thank our partner for the results. And this is because of our greater proposal of enchanting and honor, and I'm very proud to lead and take part of this team. And I should also take this time to thank you all and especially the trust of our shareholders and the collaborations and the provocations of our Board. So we are confident in our strategy, not only for the next quarter and year, but for a long cycle of consistent growth.
Thank you very much, everyone.