Natura & Co Holding SA
BOVESPA:NTCO3
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Natura & Co Holding SA
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Good morning, ladies and gentlemen. Thank you for waiting. At this time, we would like to welcome everyone to Natura &Co conference call and second quarter results. Today, with us, we have Mr. Roberto Marques, Executive Chairman of the Board of Natura &Co; Mr. José Filippo, CFO of Natura &Co; Mr. João Paulo Ferreira, CEO of Natura; and Ms. Viviane Behar, Investor Relations Director of Natura &Co. This event is being recorded. [Operator Instructions]
We have a simultaneous webcast that may be accessed through Natura's IR website, www.natura.net/investor. The slide presentation may be downloaded from the website. There will be a replay facility for this call on the website at the end of the event.
This presentation may contain forward-looking statements. Such statements are not statements of historical fact and reflect the beliefs and expectations of Natura &Co's management.
This presentation also includes adjusted information prepared by the company for information and reference purposes only, which have not been audited. Forward-looking statements speak only as of the date they are made, and the company does not undertake any obligation to update them in light of new information or future developments.
Now I will turn the conference over to Mr. Roberto Marques, Executive Chairman of the Board of Natura &Co. Mr. Marques, the floor is yours.
Thank you, and good morning, good afternoon to all of you, and depending on where you are dialing from. Thank you for joining us for this call to present our second quarter and first half 2019 earnings. As was said, I'm joined in here with José Filippo, CFO from Natura &Co; and João Paulo Ferreira, our CEO of Natura. Also, our Investor Relation teams of Natura &Co, headed by Viviane Behar, is also on this call.
We're actually holding this call from Mexico City, where we are actually hosting a board meeting and where we just inaugurated Natura's first distribution center in the country, underscoring our confidence in the growth potential of Mexico, which is our second biggest business in Latin America. I will start with few introduction remarks on our performance, then Filippo will detail our financials on a consolidated base and by business. And after my concluding remarks, we'll open the floor to your questions.
So let me begin on Slide 3, which are an overview of our performance. With a doubling of net income and sales growth in all 3 of our businesses, Q2 was another quarter of a very solid performance for Natura &Co, and we're very happy with that, confirming the continuing momentum of the multi-brand, multi-channel, purpose-driven beauty group that we have been building. As you know, during this quarter, we also took a decisive step in the construction of our group with the transformation acquisition of Avon Products, which will create the world's fourth largest pure-play beauty company.
As we previously announced, we aim to close the transaction in the first quarter of 2020, and we are on track for that. And we are energized and excited at the prospect of working with Avon and its team to continue building a fantastic growth platform.
Let me now go back to the results. Our consolidated net revenue was up by a robust 9.8% in the quarter, and then adjusted net revenue grew 7.7%, both in reais and in constant currency. All 3 of our brands and businesses posted solid sales growth in the quarter in spite of some challenging market conditions in some key markets, especially Brazil, Argentina and Hong Kong, demonstrating again the group's resilience and the benefit of its broad geographic footprint.
Natura grew both in Brazil and in Lat Am, which improved productivity by consultants, which we continue to build our digital platform. The Body Shop continued to show progress in its transformational plan in a strong like-for-like own store sales in the U.K., The Body Shop's largest single market, which confirms the brand's growing attractiveness. In Aesop, we delivered another quarter of growth and opened 6 more signature stores in the quarter.
Reported EBITDA was up by 27% versus Q2 '18; and on an adjusted base, up 10.6% driven by a very strong 87% growth by The Body Shop, reflecting again significant efficiency gains. And net income more than doubled to BRL 66.6 million driven by higher sales in EBITDA across all businesses.
From a financial standpoint, we improved our leverage ratio to 2.83x at the end of the quarter, that compares to 3.3x in the year-ago quarter. Again, this put us on track to achieve our guidance of returning to 2021, to a leverage ratio of 1.4x, which is equivalent to the level prior to the acquisition of The Body Shop.
Also very important was some of the advances in sustainability made in this quarter. We join 27 other companies in a pledge to hold the increase in the global average temperature to 1.5 degrees above pre-industrial level, in which net 0 emissions by 2050. This is the first commitment that we make at Natura &Co level rather than individual businesses, and it comes ahead of the next month U.N. Climate Action Summit. This, again, is a tangible evidence of Natura &Co commitment to a better way of doing business, combining positive economic, social and environmental impact.
With this, let me hand over to Filippo now to go into our financials in greater details. Filippo, turn to you.
Thank you, Roberto, and hello to everyone. Before going to our financials, I thought it would be helpful to step back for a second and remind you of the various adjustments that impact our numbers. Throughout this presentation, we will refer to adjusted revenue and EBITDA. And on Slide 5, we describe the principal adjustments that we applied to our reported figures to allow better understanding in our underlying performance.
Indeed, in the past quarters, Q2 was marked by several nonoperational adjustments: IFRS 15 and 16, hyperinflation in Argentina, nonrecurring tax effects in Brazil, continued transformation costs related to The Body Shop and acquisition costs related to Avon. Beginning in Q1, we decided to present our results excluding the effects of IFRS 16, and we are doing this again this quarter as we will do until year-end.
Let's now look at our Q2 performance. I will start this overview with our P&L with our consolidated adjusted net revenue on Slide 6. As shown in the graph, the group's adjusted net revenue rose 7.7% in the quarter, both in Brazilian reais and in constant currency to BRL 3.3 billion. The solid increase in sales results from the growth in all 3 of our businesses, as we will see shortly. In the first half, adjusted net revenue grew by 7.4% and 6% at constant currency to reach BRL 6.2 billion.
On Slide 7, we'd go to consolidated adjusted EBITDA, which, as you see on the graph, grew by a solid 10.6% in Q2 to BRL 411 million notably driven by a very strong growth at The Body Shop and Natura in Brazil and a solid contribution from Aesop. Adjusted EBITDA margin was 12.3%, increasing by 30 basis points.
On a reported basis, Q2 EBITDA was up 27% to BRL 425 million, boosted by a favorable impact of BRL 96 million from tax recovered credits in Brazil. This more than offset The Body Shop's transformation costs of BRL 19.5 million and costs of BRL 55.6 million related to the Avon acquisition, mostly professional fees as well as hyperinflationary effects in Argentina. In the first half, adjusted EBITDA was BRL 758.5 million, up 9.7% with margin up 30 basis points to 12.2%, while reported EBITDA was up 16.6% to BRL 762 million.
Turning to Slide 8. We look at the Natura &Co's net income and underlying operating income. Net income was up by nearly 110% to BRL 66.6 million, supported by the increase in consolidated EBITDA, strong cost discipline and favorable tax effects in Brazil.
In the first half, net income grew by more than 92%. Underlying operating income, which excludes the acquisition-related expenses, transformation costs, financial expenses and income tax, grew by a solid 18.4% in Q2. This reflects improving gross margin, gross profit and better cost control. In the first half, underlying operating income was up 4.5%.
Let me conclude this quick summary of our key financial highlights with a look at the main aggregates of our balance sheet on Slide 9. Cash flow in the quarter was an inflow of BRL 8.5 million. This drop versus Q2 of last year reflects higher capital expenditures linked to digital investments on -- at Natura and The Body Shop and phasing of projects at Natura, such as the new distribution center in Mexico. It also reflects expenses related to the Avon acquisition.
Finally, we continue to delivering the company in line with our expectations. Our net debt-to-EBITDA ratio stood at 2.83x at the end of Q2, down from 3.3x at the year-end ago period. This put us well on track to achieve our target by returning by 2021 to our leverage ratio prior to the acquisition of The Body Shop of 1.4x.
After looking at consolidated numbers, let me now comment on the individual performance of our 3 businesses, starting on 11 -- on Slide 11, with the key highlights of Natura. Total net sales were up 6.3% to BRL 2.2 billion in Q2, with growth both in Brazil and Latin America despite challenging market conditions. In the first half, sales were up 5.4%.
In Brazil, sales rose 6.7% in Q2 despite a soft CFT market and a tough comparable basis. Growth was driven by strong Mother's Day and Valentine's Day campaigns. And in the first half, sales in Brazil were up 3.2%. Natura's solid performance reflects the success of our Relationship Selling model, which is leading to higher productivity in Brazil.
Consultant productivity increased for the 11th consecutive quarter, up by 7.9%. The average number of consultants was down by less than 1% in Q2 versus the same period of quarter of last year and increased by 2.1% versus the previous quarter. Within the consultant base, we continue to see movement towards our top silver, gold and diamond categories, attesting to the good momentum of our model.
Adoption of our digital platform by our consultants continue to increase as did the range of available digital solutions and services. We started the rollout of Natura digital accounts. This is an additional exclusive feature embedded in the consultants' mobile platform, which promotes banking and financial inclusion for -- of our network of consultants.
Rede Natura, our online platform which is operating under a new pricing alignment policy, started to show signs of recovery and posted the strongest June in its history. We ended Q2 with approximately 570,000 virtual stores in Brazil. And the quarter saw an increase in the number of visits and the average ticket. We also continue our multi-channel expansion, with 7 new stores opened in the quarter, while the total number of our consultant franchise stores exceeded 250.
Latin America is also performing strongly. Q2 sales grew 5.3% and an even stronger 17.3% at constant currency. Sales in the first half were up 7.4% in the region. The number of consultants grew 4.9% versus Q2 2018 to more than 659,000 and volumes were up in the region by 8%. Highlights include Colombia, Mexico and especially Argentina, where, despite the challenging economic environment, we are posting strong growth.
We'll conclude on Natura with its adjustment -- adjusted EBITDA on Slide 12. Overall, adjusted EBITDA was up 6.5% to BRL 366 million in Q2 and up 3.1% in the first half. In Brazil, adjusted EBITDA was up 10.9% in Q2 with EBITDA margin of 18.5%, up 70 basis points. This reflects higher gross margin from favorable category mix and a negative effect from foreign exchange. G&A improved by 90 basis points to 13.9% of adjusted net revenue as a result of continued operational efficiency.
In the first half, adjusted EBITDA in Brazil rose 4.1% with margin of 17.1%, up 10 basis points. In Latin America, adjusted EBITDA was down 5.1% in Q2 due to foreign exchange effects and phasing of marketing expenses in Argentina, partially offset by lower G&A expenses. EBITDA margin was 14%, down 150 basis points. In the first half, adjusted EBITDA was up 1.3% and margin dropped 80 basis points to 13.8%.
Let's now move to The Body Shop on Slide 14. Net revenue in reais increased on a reported basis by 7.5% in Q2. At constant currency -- foreign exchange, sales were up 2.6%. This growth was driven by solid sales in the U.K., Asia Pacific and Latin America as well as higher sales in the at-home direct selling and head franchise channels. This more than offset the unfavorable effect of 37 net store closures over the last 12 months as The Body Shop continued to optimize its network as well as lower sales in Hong Kong.
In the U.K., The Body Shop's home market and its biggest one, own store like-for-like sales were up by a strong 6.7% in the quarter, helped by an Easter phasing effect and 4.6% in the first half. This is a very encouraging performance that demonstrates the successful first effect of the brand's rejuvenation. At the end of the quarter, The Body Shop had 2,868 stores, being 1,013 owned stores and 1,855 franchise ones. In the first half, The Body Shop's net revenue was up 8.8% in reais.
On Slide 15, you'll see that The Body Shop's adjusted EBITDA in the quarter, which includes transformation costs, grew by 87.1% in reais to BRL 46.2 million. This results in an adjusted margin of 5.3%, up by 230 basis points. The key drivers of EBITDA growth included reduced discounts, closing of underperforming stores and organizational redesign. In the first half, adjusted EBITDA rose 63.5% with a margin by 7.6%, up 250 basis points.
The Body Shop's transformation program is advancing well, with costs and benefits in line with the plan. Transformation costs of BRL 19.5 million or GBP 4.2 million included in the quarter are related to initiatives such as organization redesign, store footprint optimization and reduction of discounts, among others. As a reminder, we expect to incur circa GBP 10 million in transformation costs in 2019, of which GBP 5.7 million have already been occurred in the first half.
On Slide '17, we round off this look at the performance of the business with Aesop, which posted solid growth in Q2. Net revenue grew by -- in reais by 20.7%. At constant currency, growth was 9.2%. Like-for-like growth in signature stores increased 5% in Q2. And with 23 net openings in the last 12 months, of which 6 in the past quarter, Aesop now has 236 signature stores. Profitability also grew in double digits in reais, with EBITDA up 27.4% in Q2, resulting in an EBITDA margin of 11.3%, up 60 basis points. In the first half, Aesop's revenue increased 26.9% in reais, and EBITDA was up 28.5% also in reais. Margin rose 20 basis points to 12.1%.
Let me now hand over to Roberto for his concluding remarks.
Thank you very much, Filippo. So in conclusion, let me highlight 3 key takeaways. First of all, again, Natura &Co posted a very solid performance in Q2, with a doubling of net income and a revenue growth across the 3 businesses and the 3 companies, which, again, underscore very healthy performance across each individual business.
There's good momentum of Natura &Co, and each of its constituent business showed the strength of the global multi-brand, multi-channel group that we've been building. Second, the group demonstrated its commitment to making a positive social and environmental impact by making a strong pledge to act to fight climate change. And third, we are working diligently on all fronts to close the acquisition of Avon in the first quarter of 2020, a transaction, again, driven by a powerful industrial logic that will help accelerate growth for the group.
Thank you very much for your attention. And now Filippo, JP and I are happy to take your questions. But before opening the floor, I would just like to tell you that we know how curious you are about Avon transaction. But as you can appreciate, we cannot comment much further at this stage, that we are in the closing process, so please hold your fire on that. We will, of course, update you in due course. The floor is now yours. Thank you.
[Operator Instructions] Our first question comes from Thiago Macruz from Itaú.
It's actually Marco. My question is on the performance of the gross margin in Brazil. We saw an increase of 90 bps year-over-year this quarter. That said, that came in from a weaker basis. Last year, we had second quarter that's separate from the combination of FX devaluation, truckers' strike event and also a more promotional environment. Given this scenario and assuming a neutral effect on the FX variable, what can we expect in terms of gross margin evolution going forward? Is it fair to assume an increase sequentially in this line in the following quarters?
Hi, Michael, JP speaking. Your analysis is correct. As regards to the comparison between 1 quarter and the other, Q2 last year was negatively affected by the truck drivers' strike and the spike in exchange rate we faced that time, which has been more stable since that moment. So going forward, what you should expect is a gross margin relatively stable in comparison to Q2.
Our next question comes from Richard Cathcart from Bradesco.
I just wanted to ask about The Body Shop. Strong same-store sales growth numbers there from the U.K. stores, so I was just interested to hear, kind of, what are the main drivers of that? Is it traffic? Is it conversion, lower discounts, new products, et cetera? And then, secondly, on Natura Brazil, you mentioned strong sales growth on -- for the Mother's Day and Valentine's Day campaigns. Have you got any reading of how sell-out was during those events?
Hey, Richard, Roberto here. I'll start with The Body Shop, and then I'll turn to JP on Brazil. So I think you're right, it's not traffic. What's driving the performance is more conversion, higher ticket, which is associated with some of the campaigns that are being successful in lower discount. As you know, we are using U.K. as a pilot for us to stack some of the new brand positioning, some of the new message in terms of activism with The Body Shop. And we are very pleased to see it's kind of resonating and it's becoming potentially a platform to expand to some other markets. So primarily, again, conversion and ticket price driven by products, campaigns and lower discount.
Hi, Richard, JP speaking. Our readings indicates sell-out in line with sell-in for this period so we don't expect any inventories to be building at this moment.
Our following question comes from Bob Ford from Merrill Lynch.
Congratulations, it's a very impressive quarter. In the press release, promotion and innovation was cited as a source of growth in Brazil. But there also seems to be some strong evidence that the social selling tools are beginning to adopt some traction, JP, and I was wondering if you could comment on that. And of the 680,000 consultants that are now digital, how many are taking you up on the working capital loans? And how is that impacting their sales performance? And I just had a couple other questions if I could after that, please?
Hi, Bob. So indeed, we continue to see productivity gains throughout our consultant base. And that is coming from the adoption of the digital platform and the new services. So that is the primary drive, no doubt. So we also have other indicators showing how that network is being used to generate and distribute content very effectively, or the adoption of the e-wallet we just launched is penetrating very quickly throughout that network. So all in all, that increases the rate of contact amongst our consultants and their customers. And that is no doubt helping the productivity that, once again, for the 11th quarter in a row, showed positive results.
Good for you. And then Hong Kong is a fairly important market for Natura &Co. And Roberto, can you comment a little bit in terms of what it represents for the company as a whole and how it's trending so far in the third quarter?
We do not disclose the representation or the participation by individual country. But I think it's fair to say, in Hong Kong, it is an important market for both Body Shop and Aesop. And as you've been tracking, it's been actually impacted. The way we are thinking and the way we're acting to mitigate that are actually twofold. On Aesop, we are doubling down our presence in markets like Korea and Japan, where we saw in the quarter growth over 20% in those markets, and those are important markets. And as you know, we also now have a presence to Tmall Global to actually achieve mainland China. And we believe that there might be opportunity for us to expand to other platforms. So that's how we are thinking from Aesop. On The Body Shop, we are also seeing very strong performance in Southeast Asia in some of our head franchisees' market. And we are also committed to continue to support Hong Kong. That is an important market, where, at the same time, we try to mitigate and some other markets where we see our opportunity to continue to grow.
All right. That's very helpful. And then I know you said you don't want to take any questions on Avon. But on the Avon conference call, they made a reference to unsustainable business practices. And my only question is if those were known to you prior to coming to agreement on the price of the transaction. If you can't answer, I understand.
Yes, I prefer not to comment on that at this point, Bob.
Okay. And then can you comment a little bit about where you are in terms of The Body shop and maybe renegotiating occupancy costs, relocating stores. And when do you anticipate remodeling the store network? Because these gains are -- you're achieving these without any meaningful change in the look and feel of the environment. Is my understanding correct?
Correct. So as the same Filippo mentioned, a very important part of the transformation cost is going to accelerate closure of nonprofitable, nonsustainable stores. And at the same time, David Boynton and the team is working on the new look and feel, new design of the stores based on how the new positioning, the new brand purpose. And we are expecting actually to try a new design by Q4 of this year in our location in the U.K. market.
And next question comes from Gustavo Oliveira from UBS.
I just would like to understand a little bit the trend in average ticket grow in Brazil, which was surprisingly very, very strong. And obviously, it came with some declining volumes in the quarter. Was this -- it seems that this was specifically driven by the very successful campaigns you guys ran in the Mother's Day and the Valentine's Day. But looking forward, how we should think about these 2 drivers, volumes and average ticket, grow in Brazil in the context perhaps of the digital strategy but also in the context of the product portfolio?
Hi, Gustavo, JP speaking. So the average ticket is a side effect of the increase in productivity, right, which is driven by not only the digital solutions but also more relevant and better innovation. And I do highlight that we have a strong innovation pipeline going forward in the second half of this year. Now the effect that you saw in volume has to do with 2 things. One is a category mix in this quarter against last year's quarter, which is more skewed towards fragrances. The second one is the successful impact of the campaigns because sometimes, we count a gift which has 3 items as one single item, and that creates a little bit of a distortion in the reported numbers.
And how we think this would evolve, JP, looking forward? You think we should still work with slightly higher average ticket grow as the innovation pipeline is implemented? Just to understand that a little bit better. And I know, in the previous question, you also answered that your gross margin should be more stable. But I would imagine that perhaps with a higher average ticket grow, you could actually see some expansion in your gross margins.
So on gross margin, I'll reinforce what I previously said. We expect it to be relatively stable and look at consultant's productivity, and we are driving it to continue to increase going forward.
Our next question comes from Joseph Giordano from JP Morgan.
So a couple ones here. So for the first one, like we see a continued evolution in the number of stores, either franchised and owned stores. So I'd like to understand here if you have like any midterm goals here that you can share with us? The second question goes into like this channel diversification strategy and also the recent change in digitalization of pretty much 100% of the sales reps. So here, like I would like to [ know ] if you can share as well the contribution of sales of those new channels to the performance, particularly in Brazil? And lastly, like, JP, as you're mentioning a lot on innovation and the spend, the bulk of it should come now in the second half of the year, but if you can share like how the Innovation Index evolved throughout the quarter would be great.
Hi, Joseph, JP speaking. Starting with your last question, the Innovation Index. We decided there is no point in reporting it every quarter so we are reporting it on an annual basis. And so we do expect a significant impact in the second half of the year. I mean actually, if you look at our recent launch of the Lumina hair treatment line, that is already one of the key drivers for us to see that index improving going forward. But there's a strong pipeline in the second half of the year. Then with -- then on multiple channels, well, a couple of things. We are not disclosing revenues by channels in Brazil. And actually, it's not new channel. And we merged on and offline activities into one single integrated model, right, but which is helping productivity. Then finally, you refer to the number of stores, both consultants, franchised stores and our own stores. I mean as you probably noticed, they grew a lot from the beginning of the year. The franchised stores grew only this year, so far more than 25% in comparison to December last year. And our own stores, again, almost 30% just in half year, so we want to keep that base going forward.
Our following question comes from Ruben Couto from Santander.
Actually, 2 follow-ups. First, on The Body Shop. The performance in the U.K. was quite good, as you guys already pointed out. Can you give us an update on the order performance throughout the globe, which ones are still a drag in the consolidated numbers? And also an update on the U.S. operation would also be helpful. And second one, on Natura Brazil. You guys -- I know it's too early to talk a little bit about the new concept stores that you're opening here in Brazil. But can you share us the key changes, key differences that you guys are already seeing comparing these new concepts to the older store formats, please?
Okay, Ruben, Roberto here. Can you repeat the first part of your question related to Body Shop? I apologize we couldn't completely understand. Would you mind [ repeating ]?
Yes, sure. The performance in the U.K. in terms of like-for-like was quite good, as you guys already explained in a question prior to this one. Can you just give us an update in the other regions' performance besides Hong Kong? For instance, which regions or countries that are like dragging results? And also an update on the turnaround in the United States operation would also be helpful.
Okay. So in terms of The Body Shop, Asia, excluding Hong Kong, had a very strong performance as well. U.K. and Europe are also pretty much according to expectations, and U.K. outperforming the market, as we already highlighted. North America, we saw a slightly decrease in the quarter. It's part of the transformation. We are redoing a lot of the online business and offering, also reducing levels of discounts in the North America. So this is part of the transformational plan. It is ongoing. So -- but North America saw -- it slightly decreased as a region.
So as regards to your question on the new store concept, it's too early days. And by the way, we are opening 2 today, right? But I can already tell you that they're more productive and they reinforce the attributes of our brand in a much clearer way in the hearts and minds of our consumers.
Our next question comes from John Ferreira from Nau Securities.
Just a couple of questions. Firstly, with regard to Natura Latin America. You've had quite a significant narrowing in EBITDA margin by 300 bps, which had largely been driven by selling, marketing and logistics expenses, and you've mentioned Argentina. So wondering if you could shed a little bit more light on the driver behind that. And on the subject of Argentina, whether you have any -- have had any contingency plans in place with regard to the current dislocation in the currency?
Hi, John, JP here. Before I get to the specifics of your question, I'd like to once again say that we are extremely, extremely happy with our business in Argentina. So over the years, the preference from our consumers, the loyalty from our consultants and the talent from our local team has built a successful and very resilient business. So starting with the eventual -- potential contingencies. So we have in mind that this period of the year would probably be very volatile. So we took measures to try and protect the business at least for the short term, both in terms of costs with inventories as well as with anticipating marketing expenses. By the way, this anticipation of marketing expenses is one of the causes of the lower margin in Q2. The second cause for lower margins in Q2, and they all came from Argentina, by the way, from the Argentinian business. So the second cause has to do with exchange rates and the way and -- it's translated into the balance sheet.
Yes. Just adding to that, John. As you know, and we've been saying that in our report, there had been -- Argentina has done -- is already under the hyperinflationary mode so we've been recording all those impacts. So this is something that's already being recorded. And as we report, we separate that for better understanding. That's also something that we'll be following.
Yes. Now to complete, right, so we are seeing volume growth in Argentina, market share growth. And as for the medium term, all the resilience that has been built, I mean, give us the confidence that we will get through that period successfully, as we did 4 years ago in the last crisis where even the borders were [ shut ] for a period. So we are well prepared for whatever the outcome of this period is going to be. But the element we cannot foresee at this moment are the impacts on consumption. But we are confident we will continue to gain share under whatever market conditions we face in the near future.
This concludes today's question-and-answer session. I would like to invite Mr. Roberto Marques to proceed with closing remarks. Please go ahead, sir.
Thank you, everybody, for joining the call. I would just finish in highlighting again the strong momentum that we are seeing for Natura &Co in each individual business and brands that we have, making progress toward delivering our targets. And again, the progress that we are making towards the acquisition of Avon, which we're also very excited about the prospects. Again, thank you. We look forward to talking to you again soon. If there is any follow-up, please reach out to Viviane and our team. Thank you very much for your attention, and have a good day. Thank you.
That concludes the Natura audio conference for today. Thank you very much for your participation. Have a good day.