Positivo Tecnologia SA

BOVESPA:POSI3

Earnings Call Transcript 2021-Q2

[Helium Rotenberg, executive]

Good morning, everyone. We are here very happy to announce the results of the second quarter, the fourth quarter of very good results. And this one, especially with a few records broken, both in terms of revenues and EBITDA. I think this is the combination of a strategy of the company in terms of reinforcing our core business and having some options.

We have been able this quarter to have BRL 1.7 billion in revenues, record revenues. In the quarter, BRL 940 million, 87% above last year. The EBITDA of BRL 102 million in the quarter, this is a record ever, so BRL 327 million in the last 12 months, BRL 163 million in the 6-month period. And in comparison to the first half of last year, these numbers are way, way above. And we are continuing to expand our margins. So adding our business with core businesses. So 26% gross margin in 2Q '21, 13% adjusted EBITDA margin. Net income of BRL 51 million, EUR 107 million in the year against net loss in the same period -- in the same periods of the previous year.

So recently, we have been publishing or disclosing the numbers in our 3 business units. In terms of Consumer, what we sold to individuals and customers, gross revenue in excess of BRL 1 billion in the first half of the year, growth of 131% year-on-year. Last year, we had a weak quarter. It was the beginning of the pandemic. Corporate business unit, we have BRL 279 million of revenues. In this revenue, it's a little bit of this new vision that we have for the corporate market with a new executive officer that we have hired with 36% growth year-on-year. And for public organizations, we have never had so many RFPs. We have 54% growth year-on-year, and we delivered BRL 425 million.

So advances in our growth avenues, the Payment Solutions is with a strong pipeline. We are soon to announce very good news with other carriers than just -- others than just Cielo for the smart home. Once again, it's the best-selling product for Amazon Prime Day. So we have had many new customers. We have grown 137% as compared to last year. We have launched an education ecosystem, and we even changed the name of this department, so Educational - Ecosystem of Technology and Innovation (sic) [ Educational - Technology and Innovation Ecosystem ]. This ecosystem aims to be the major integrator of educational solutions in Brazil.

We can see this movement in the margins of many companies and many good products, and we cannot -- we don't have enough power to sell. So we are launching -- we are going to have Math suite. So our Math products, and we sell by use. So this is a major project, and we are launching, and we are very optimistic about this project. We have grown 80% in HaaS. So there is a major demand for HaaS in schools. We have launched specific products for this sector with some demand of hardware-as-a-service.

So the growth in the sale of computers has been significant. 52% year-on-year growth added to the volume and increase in average prices because of a higher average dollar and higher price of components. Very high demand, and retail is not yet fully supplied. And so a complete brand portfolio, so the first time we have a little bit of Compaq. So today, we have Positivo, Vaio and Compaq. This is part of our strategy of reaching all different layers of society in terms of computer sales.

We are really honored to be on the Board of DMTF. We are the only ones from Latin America, among many other companies from all over the world, defining the future for hardware companies. We structured our area, we now -- we have a corporate VP in IR area. So we think that there is a great opportunity for growth because of our wide-ranging product portfolio going from server storage to desktops, notebooks going through network equipment. So we have a wide-ranging variety of products to be sold, hardware service provision, so there are many things that we needed to structure more aggressively. And that's why we have hired Rodrigo for this area. And likewise, we were not so strong in IR, so we have really reinforced IR for the interaction with the stakeholders in the market.

Now next slide. So here, you can have an idea of the evolution of gross revenue. There is a seasonality. So it's clear -- so in the first half of the year -- the second half of the year is always -- is usually stronger than the first half. There has been a major growth as compared -- so as compared to the first half last year, we have had a growth. By business, we have had more growth in Consumer, 16% in Corporate and 24% in government organizations. This is what we have won through public RFPs.

Talking a little bit about the Consumer market, this major growth to BRL 1 billion. So this is because of major sales volume and also higher prices. The 2 things combined provided this growth of 130%. And yes, we are -- with everything. So you have computers, there are many people working from home. And it sounds like this movement is something very specific. So they all think that this is a secular movement. So we have a growth in the global market of computers. The peak was 365 million in 2011. So this year, we are going to beat that number, so computers are personal again. And this looks -- seems to be a sustained movement. And hybrid work is here to stay.

So the number of classes that will be taught remotely will increase permanently, and hybrid work is here to stay. So with lots of technology, so online consultations and this is all going to call for the use of computers at the level that we have today. We are at a new level. Research institutes think that this level of [ 370 ], [ 380 ] computers that we had this year is the new level that is going to sustain over the next few years. And in Brazil, we have not yet reached our peak of 2011, which was 16 million. We are going to have 8 million this year because of -- we had a very intense economic crisis. And this is very much related to the GDP. We're really excited with the computer market.

So there is -- there has been a significant growth in Vaio, the first few sales of Compaq. The small retail channel has grown 232% as compared to last year. We are always been stronger with 100 top retailers, and we weren't strong from 101 to 3,000. Now we have designed a project to go into positions 101 to 3,000. We have had a 44% increase in the average price of computers or computer tickets, both because of higher dollar prices. So we are still in smart home, 155 (sic) [ 155,000 ] users. So major components and we are more connected launching more products in this area. And once again, we were top in Amazon Prime Day.

We have had a significant growth from BRL 205 million to BRL 279 million in the Corporate sector. [ Self-service ] grew only 5% this year as compared to last year, but this is a thriving market. But overall, BRL 279 million revenues. And we had this 36% reversal from desktop to notebook. We are still selling desktops, but now we are selling more notebooks as compared to desktops. And we have more than 50% in notebooks, 50% increase in the number of contracts signed, a greater demand for HaaS, which accounts for a relevant share of the revenue of the period.

And we are going to have a boost in that area because schools will open again. That's why our area of technology didn't grow. But once schools open again, they will start -- and then they need the technology. Now for means of payment, as I said, there is a major pipeline with other players other than Cielo. Many others actually, and we are having contact with all of them now as there is no more exclusive rights for the machines, the credit card machines.

As to government organizations, we have had a growth from BRL 227 million to BRL 425 million. We have more than BRL 1 billion pipeline already contracted to be delivered this year and a little bit last year against BRL 552 million in the same period of 2020. So for this number, we had BRL 550 million in the pipeline in July last year. And this year, we have BRL 1 billion.

In addition to the amount of the ballots, the electronic ballots or the ballot boxes and we are going to deliver about 20% of the ballot boxes, about 45,000 ballot boxes this year. So the bidding market is still very, very busy with education, noneducational projects. Right now, there is a major bid in the state of Minas Gerais with 85,000 desktops, with 3 different lots with thousands and thousands of laptops and desktops.

We won 120,000 tablets in the government of Ceará. We had already won 120,000. And just to give you an idea that this market is really buying, and we have an increased demand for equipment rental model. We have a recurrence of additives attesting the market's confidence in our products and solutions offered, especially HaaS.

Caio, would you like to talk about numbers and financial performance? I think you are the best person to do that.

[Caio Moraes, executive]

Yes, thank you very much for the opportunity for the conference call. Starting with the gross margin, you can see a quite significant expansion, both in the quarter and in the first half of the year going -- and this is due to 3 main factors: a strong activity, also a better mix and a growth in notebooks instead of desktops. We are selling more tablets for the same reasons that we mentioned before, with strong presence of these products in education departments in the States, in addition to advances in HaaS and smart home revenues. We -- there has been an increase in the average ticket of products, both because of the FX variation and higher prices of parts.

In terms of adjusted EBITDA, we went from 2% to 13% in the second half of -- the second quarter of '21. And in the half year, we went from a negative number to 11.2%, and the reasons are precisely the same as for the gross margin. So a strong expansion of activities, a better mix and also appropriate control of cost and expenses that we started last year during the pandemic. We took measures to have a better control of costs and expenses, and this is providing good results in the company's performance now. We should highlight that this is the fourth quarter in a row of expansion of EBITDA. So as we said before, we have a historical record with this number for the company.

On the next slide, we have financial results and net income. This is important to emphasize in financial results that there has been a loss of BRL 49 million in Q2, which is explained by 2 financial expenses and which is very much in line with our growth strategy. And this is a result of the strong growth that the company is having. So we need more funding for working capital and also to fund future expenses. The second element is the FX variation. 36% Of FX variation in Q2 fully explained by the drop in the prices of dollar, which went from [ 5 50 ] to [ 5 ] in the end of June. And this is because of FX protection.

But if we look at the first half of the year numbers, this is translated to a gain of BRL 4.7 billion, which demonstrates the efficacy of our FX protection strategy in the context of high volatility. So looking from this end, this all translates in strong net income of BRL 55.5 million (sic) [ BRL 51.5 million ] in Q2 and in the first half BRL 107.3 million. And so the strong generation of EBITDA and strong net income and with a net debt of BRL 323 million under control have led our leverage net debt over EBITDA to be 1x in contrast to 1.7x in Q2 '20, which is very good.

On the second slide, on this other slide, we talk about the capital markets. So these are very important numbers for the company. There have been more corporate investors, 55% approximately of our share base in the free float. But overall, the company is making -- the market is very much interested in the company. In order to do that, as Hélio said, we have restructured the company and restructured our Investor Relations department to be more available to explain the company's strategies. And this has translated into a good performance of our stock. So you're having much more -- a much better [ preferred ] valuation of 80% almost versus 1Q '21.

And it's also important to say that we are no longer unknown. Now we have peers in our market. And we will also like to emphasize that there is a trend that our number is slightly below the comparable numbers. We think that the market is going to equalize these issues a long time. So we continue to deliver good results and good market communication, and this is going to be well balanced. I would also like to emphasize the strong liquidity of our bonds. If you get the average traded by day, about BRL 92 million. So it's a quite strong number, too.

Now we go to our final considerations and outlook, and I give the floor back to Hélio.

[Helium Rotenberg, executive]

I would just like to summarize something to try and understand -- well, yes, we have 4 very good quarters. What about the future? So on these slides, we try to show you a little bit a summary of what happened in the first half of this year and what we think is going to happen in the second half of the year in each one of our main business units.

So Consumer business unit still has strong demand. So retail is not yet fully supplied, and there's even a question about retail. No, some retailers are better supplied. But on average, retailers have about 60 days of inventory, when usually they have 90 to 120 depending on the retailer. So there is still some room to sell in regardless of sell-out. And sell-out is still very good. To give you an idea, in Google, charge of notebook procurement, it's still higher and very much strong and higher than before the pandemic. So what happened in this? This business unit accounts for about 45% of our annual revenues. So on this -- on the segment of cheaper computers that need computers for online work, they buy these cheaper computers, which is what they can afford. We have Compaq. We also have the issue of homeschooling that accelerates the sale of tablets and computers.

A higher presence at home also influence in the smart home. So I want a little bit more comfort and convenience when I'm at home. They can't go out, they can't party. So the growth of lightbulbs has grown. We had many lead strips in the market. The portfolio has expanded, and cell phones are growing again, but it's more our own growth than the market. The market is stable, but we have grown especially because LG has left the market, as everybody knows. So this provides some room and mobility for us to grow. And small retailers have grown more than 200% over the first half of 2020.

Now talking about subsequent periods. This quarter and the quarter after this one, quarters 3 and 4, they usually account for 55% of our annual revenues. There is a secularization, hybrid work and homeschooling. There is a maintenance of strong demand for computers, tablets and home automation items, as I explained before. And Positivo boosted its consumer PC penetration in cell phones. We have also explained in our portfolio trying to have a strategy as Vaio's. Average price are nearly 40% higher than -- in 2021 as compared to 2020 due to appreciation of the FX rate and higher input cost, and retail is still below pre-pandemic average supply level, as I explained to you before.

Now on the next slide, talking about the Corporate market. Likewise, -- so the revenues are approximately BRL 45 million to BRL 55 million constantly over the last 3 years. Average prices are 25% higher than last year. There is a renewal of parks. There is a boom in small companies that we didn't believe in. So very strong small businesses. IDC maintains its forecast for significant growth of large companies, too. And HaaS is still going up, always supported by very strong funding structures. And we are really evolving a lot of that.

So in terms of Payment Solutions, the market is very interesting for us. We have very good prospects. We have been approaching -- for the smart machines, there is a major demand. We have expanded our portfolio. Today, we have smart and non-smart machines, but mainly through smart machines. And servers, they are still benefiting for the hybrid cloud and convergence. And with 5G, this is due to growth, but it won't be this year yet. But yes, next year, 5G will be an important factor for our growth.

Now explaining a little bit about our government, in closing, on Page 15. So our gross revenue was BRL 425 million with major bids, such as Ministry of Finance, Caixa, Banco do Brasil, Petrobras as well as notebooks and tablets for public schools in the states of São Paulo, Ceará, in many cities all over Brazil and many bids still open, lot slots. So this makes us have a pipeline of BRL 1 billion in contrast of BRL 550 million. To give you a more accurate number, just to emphasize, the BRL 550 million of last year have turned in BRL 290 million revenues in the second half. Not everything is billed in the second half. So proportionally, you can have an idea of how much we think we are going to bill in the second half of this year, plus another 20% of the ballot boxes we have the supply of 225 (sic) [ 225,000 ] and we are going to deliver 45,000 units in November and December, and the rest will be in the first months of next year.

So in a nutshell, the outlook is very optimistic right now for our company. We are really excited. We're still working in home office, and we're still working very intensely. We're working very hard, but we are very, very excited. Thank you all very much. Thank you.

[Helium Rotenberg, executive]

Now we are going to start our Q&A session. We have many questions here. Maybe it's a record year. So let's start with [ XP ], [ Bernardo Gucci ]. The first question from Bernardo is the following.

The EBITDA margin has caught our attention in spite of a scenario of shortage of electronic parts. So what is the speed of normalization? And how do you see the recovery of supply to the industry -- manufacturing industry? And can we expect the margin expansion, assuming everything that you have said.

[Caio Moraes, executive]

Trying to explain, I am not too optimistic in terms of increase of EBITDA margin. So we are likely to keep it, but unlikely to increase it. It might go up by 0.5% in 1 quarter and down, but I think this EBITDA margin is normalized. In the midterm, once new businesses start to have a higher share of our revenues, then we are going to see an expansion in the EBITDA margin, but not in these -- in the short future. We are having -- our EBITDA margin is very good for our history, and this is going to keep.

[Helium Rotenberg, executive]

As to the crisis, we are supplied for what we thought we were going to supply in the second half of the year. And we were conservative. I don't know whether we would be able to supply more. If we had more, we would certainly have sold more, but there was shortage for everyone. So we don't know how much more we would have sold, but we have BRL 1 billion in inventory today. And for the pipeline that we have until the end of the year, we are very well supplied.

And the crisis as a whole demonstrates that maybe we have reached the peak over the past few weeks because prices that were going up for electronic parts now stopped going up. Now the escalation of prices can now slow down. So we think we are almost at the peak of the crisis. And from now on, the trend is of improvement, but we don't know how long it's going to take to go back to normal. It depends very much on the supplier type of component. Some industries have grown more and others less. So it will depend. Some industries are only going to go back to normal at the end of 2022, beginning of 2023 or others in the beginning of 2022. But I would say we are at the peak. And from now, things are going to get better.

There's a second question is very much related to the first one. I would like to understand your vision about the level of inventory on the front end. Some players have recently said that they are well sold for the second half of the year. Do you think there will be a lower sell-out? Any concerns?

Well, I mentioned that, Bernardo. We don't see retailers stocked. So some, because they were afraid of shortage, they bought more. But on average, they have about 60 to 65 days of inventory of our products on average when they usually work with 90 to 120. So there is still some adjustment, and there is sell-out. Sell-out is not as good as it was in the first half of the year when people were still at home buying desperately computers, but it's still very good.

[Caio Moraes, executive]

Another question from [ Sergio Saraiva ]. He has 2 questions. The first one, are you negotiating partnerships with major smartphone brands?

[Helium Rotenberg, executive]

Yes, we are. Well, no announcements to make yet. We are negotiating and we are very optimistic.

[Caio Moraes, executive]

Second question, in corporate venture capital with the participation of Eleva, where is the start-up going to operate?

[Helium Rotenberg, executive]

Eleva?

[Caio Moraes, executive]

Yes.

[Helium Rotenberg, executive]

What is the Eleva? Please remind me of the start-up?

[Caio Moraes, executive]

I would answer like this. This is a start-up, which is not core to our portfolio. We have a 40% stake in it. We invested quite some time ago. It's a business model that we are monitoring, but this is not the same thing. It's not a company that we monitor so closely. The investment was in 2017, and we have a 40% stake.

[Helium Rotenberg, executive]

The start-up changed its name Eleva. They make drones for agricultural spraying. I was very optimistic with the start-up. There are engineers from ITA that worked for Embraer. And they wanted to make an unmanned airplane. We call it drone, but it's really an unmanned airplane. Those little airplanes that spray pesticides, what they should and what they shouldn't. But this company, the prototype, which should have flown a year ago has not flown yet. So I think this is one of the start-ups that we no longer believe that it's going to perform very well.

[Caio Moraes, executive]

So a question from [ Carlos Herrera ]. So could you talk about the performance of Hilab in the quarter?

[Helium Rotenberg, executive]

We would not disclose intermediate numbers because Hilab doesn't disclose that. We've been monitoring Hilab. They did very well last year and this year with a 2 million contract for tests signed with Butantan Institute, COVID tests. So Hilab, they have many labs all over the state of São Paulo, real-time results of the pandemic in each location in the state.

There were 2 million tests that were hired that were delivered. Part of them delivered last year, part of them this year. So they have very good performance in terms of revenue and its core, which is expansion in drug stores. They're still expanding all over Brazil and even a customer of ours that has drugstores, Bemol in north of the Brazil. They're based in Manaus. And Bemol CEO was saying that he's very excited as Hi is going to all of their drug stores, about 60 drugstores in the north region of the country. So Hi is doing very well.

[Caio Moraes, executive]

Now continuing with Carlos Herrera questions. Are you suffering from the store shortage of semiconductors in chips? Which projects are the most affected?

[Helium Rotenberg, executive]

All products affected almost equally. It's a widespread shortage. For example, one chip that we are missing is a sound chip. No one ever heard about the company, [indiscernible]. So they designed 80% of sound chips used all over the industry, computers, cell phones, smart home, cars, so this company does that. So everything bottled -- there's a bottleneck because everyone wants and they don't have their own designer because they manufacture their chips in [indiscernible] that is responsible for 90% of integrated circuits. They are in Taiwan.

No one had never paid attention of -- how important Taiwan is in terms of a house on manufacturing of computer parts. So we need to find another layout for our boards so that they could accept a different kind of chip. So I think we are at the peak of the crisis, and this is likely to improve from now on into the future. Prices have gone way up, but the trend is that slowly, it's going to go back to normal.

And for sales that we plan ourselves to do, we have been able to do. Sometimes it's a little bit late. It's not in one month. Over the last 4 weeks, there has been a major crisis of containers in China. Chinese ports were very, very busy. There were no containers to board products into ships. And once they got to Brazil, there were COVID cases in the ships, and they could not unload. So there has been a minor delay in some of our parts. So now we could have had a better performance in Q2, but now we'll be delivering those in Q3. And I think that everything that we plan, we will be able to accomplish.

[Caio Moraes, executive]

One last question from Carlos Herrera. So which consumer products have the highest margins?

[Helium Rotenberg, executive]

I think there is a trend to have a balance in margins. There's not one product that has a higher margin than the other. It depends very much on the cycle. So once you launch it, the margin is slightly higher, then it goes down as time goes by, but all consumer products that are sold in Brazil in retail, they are likely to have similar margins.

[Caio Moraes, executive]

There's a question from [ Julius Caesar Quinn ]. It's about inventory. So how much of this is price and products that were bought to form backlog?

[Helium Rotenberg, executive]

So it's a combination of price and volume for our future revenues. So it means that we are optimistic with what we are going to build in the future. There is no obsolete inventory. We are not overstocked. What we have is inventory that is going to be sold in August, September and so on and so forth. This clearly demonstrates the strength of future quarters.

[Caio Moraes, executive]

A question from [ Ron Olivier ]. What do you expect for considering that schools are reopening?

[Helium Rotenberg, executive]

It's good. It's a product that suffered a lot. So when schools were closed, they stopped buying that product. And when schools reopen, they're going to buy that product again, this drop in revenue. Because some types of products that educational technology sells so legal for education, micro [ blades ] -- so micro blades to teach programming and [indiscernible], [indiscernible] is no longer sold, and I think this is going to be resumed once schools reopen. I don't think this is going to be immediate. They are much more worried with the going back of students rather than buying technology for in-person education right now. But it's just a matter of a few months for that to go back up again.

[Caio Moraes, executive]

We have a question from [ Marcos Nascimento ]. Congratulations on your performance. The growth of sales innovation of some products, is there prospection of export market or volume measurement?

[Helium Rotenberg, executive]

We don't talk about our performance overseas. We operate through a JV in Argentina. We have a JV in Argentina, and we have 50% of a company in Argentina. And through Argentina, we operate in Argentina, Uruguay, now in Colombia and in some countries in Africa, more specifically in Kenya, Rwanda and in Ghana. So we do it through this subsidiary. So we don't think of exporting. We export a little bit of educational table, something that we have in technology -- in education technologies, but it's about $1 million a year. It's not much.

[Caio Moraes, executive]

A question from [ Philip Dick ]. Congratulations on performance. The evolution of the company's market share, how is it? How do you see small investors?

[Helium Rotenberg, executive]

Well, the market share has been keeping in retail at 16%, 17%, 18%, depending on the month. With the growth of Compaq, we are going to gain a little bit of share once Compaq starts gaining volume this quarter now. So we've been keeping our share. We are neither gaining nor losing, and everyone is very much heated up. If we had more supply, we would have gained share. But there is a limitation in supply, so the share has been limited by supply.

About investors, I can say a few things. Obviously, 45% of our basis is individuals. We hold them really dearly. They are a different audience, slightly different from the organizational, but very important, which accounts for a significant share of our basis of investors. So we want to be able to cater to the needs of both audiences, both corporate and individuals. So we want to reinforce our services to individual investors.

[Caio Moraes, executive]

Now we have a question from Henry. So congratulations. Could you talk about venture capital? BRL 40 million will be for companies in which industries?

[Helium Rotenberg, executive]

We are still defining where to invest. We have a major pipeline of products of companies to be investigated. We have reinforced, and we have spent a little bit of the companies that we have in this pipeline today is formed by ED techs, agri techs and log techs. And the most -- we are most likely to invest in these 3 industries: logistics, agriculture and education. The pipeline is doing very well. Agro is doing very well. Agrosmart and ag tech and the flagship that XP called, so Hi Technologies doing very well, too. And I think investments are evolving well. We have 11 investments, and 8 of the 11 are growing significantly.

[Caio Moraes, executive]

Another question from [ Christian ] [indiscernible]. With the peak of the crisis, will there be a slowdown in home office? And how is that going to impact you?

[Helium Rotenberg, executive]

I don't think that demand is going to go down. Hybrid work has been growing. Work is not going to be fully in person as it was before. And this has an impact in the demand for computers. So we have reached a new level, not that there will be a sharp growth next year, but we are going to keep this high level.

[Caio Moraes, executive]

Now a question from [ Francisco Fanini ]. Very interesting. The market understood that positive numbers are very good. Why should I continue to believe in Positivo as an independent investor? And what should you improve in Positivo?

[Helium Rotenberg, executive]

Well, it's difficult to answer this question. I still believe very much in this company. And we are at a very good time. I think that we built a winning strategy, combining core business and the avenues for growth. So we have a core business with computers, tablets and cell phones that is very good with a full ranging portfolio with computer brands, maybe more brands in cell phones, tablets doing very well, too, on one hand, and we have the avenues of growth as an option.

So we have payment machines. We have storage service. We have smart home. We have educational. We have HaaS. We have services. We have ballot boxes. And so -- and everything -- we're going to have a new process of 176,000 ballot boxes very shortly. So all these things make us believe that we have a very good future, and this is what we believe.

[Caio Moraes, executive]

Another question from Christian [indiscernible]. With a high inventory for next quarter, what should we expect from Positivo smartphones? Do you want to go to the top this year, next year?

[Helium Rotenberg, executive]

Well, we fight in the entry-level smartphones, smartphones up to BRL 1,000. There, we have a significant share. We are seeking this partnership to go to other segments. We want to have partnerships to operate in other levels.

[Caio Moraes, executive]

Now a question from [ Gabriel ] [indiscernible]. Congratulations on your performance. Thank you very much. Once leverage has gone down significantly, what are the company's prospects for new investments, CapEx and to increase leverage maybe?

[Helium Rotenberg, executive]

Well, our company in terms of production capacity, it's not very CapEx intensive. Even if we grow, we still have idle manufacturing capacity, but we might need to invest. In some regions, it might grow more than [ 100 ]. But they are low investments. So investments in new plant is BRL 10 million, BRL 15 million. They are not very high investments.

What we see in our avenues of growth in our core business, it makes sense to have some M&A. We are looking and paying close attention. Nothing has been defined. We are just studying the possibilities and trying to understand whether it would be interesting for us to have any more significant investment in M&A.

[Caio Moraes, executive]

A question from [ Flavio Bika ]. Congratulations on your performance. Thank you. Had we approved the ballot boxes? With the printing, would it impact you?

[Helium Rotenberg, executive]

It wouldn't impact for us. Our ballot boxes are prepared to have a printer. And then the election authorities would decide whether to connect the printer or not. We bid into a RFP for printers. Well, I don't know. It would depend on the terms. It isn't a delivery of our ballot boxes, no impact if we needed to print.

[Caio Moraes, executive]

A question from [ Wendel ]. The smart home market is billionaire. So is it just products and services?

[Helium Rotenberg, executive]

Well, currently, we are in a phase of do-it-yourself. So all the products that we sell are installed by the consumer. And this is a segment of the smart home that has been growing the most. Wireless and cheap sensors have made it possible to do-it-yourself. So now our first entry in smart home is in a do-it-yourself.

It doesn't mean that we are not interested or studying going to do-it-for-me having more complex equipment, that needs to be installed by a professional for the smart home and small companies, medium-sized companies and large-sized companies. We are studying. But now we want to increase the portfolio of do-it-yourself with electronic door locks, doorbell, a network of routers, a new app that is very, very nice. And this is what we've been doing for the smart home today.

[Caio Moraes, executive]

Now we have answered 100% of our questions, the record number of questions as compared to past quarters. Now I give the floor back to you, Hélio, for your closing remarks.

[Helium Rotenberg, executive]

Well, for me, this is it. I think we have said everything. We are very happy with the results that we are announcing. We had a very good timing in our company. And we are very happy because the strategy that we defined some time ago was successful. So we are very, very happy with that. Caio, would you like to say something?

[Caio Moraes, executive]

No, I think that this is it. We're having historical numbers, very good outlook. Record presence, we have had 97 people connected to our conference call and asking questions, and this is very good. And we would like to reinforce a very good time for our company, and we believe that we are going to deliver more and more. Thank you all very much.

[Helium Rotenberg, executive]

Thank you. Goodbye.

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