Raia Drogasil SA
BOVESPA:RADL3
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Raia Drogasil SA
Earnings Call Analysis
Q3-2023 Analysis
Raia Drogasil SA
Raia Drogasil's third quarter was robust, signaling a solid year marked by consistent results and strategic growth, particularly in digital and healthcare segments. With significant margin gains and a consistent strategy, the company delivered a performance that stands out for its strength and reliability.
The company’s aggressive expansion yielded 2,868 operational stores, surpassing their own annual guidance by opening 269 stores within a year. This expansion has resulted in a national market share increase of 70 basis points, reaching 15.6%. The company also maintains its planned growth, aiming to open a total of 780 new stores from 2023 to 2025, ensuring diversification across Brazil's demographics and geography.
Digital revenues reached BRL 1.3 billion, marking a 51% year-over-year growth and achieving a digital penetration of 15.7%. The company also saw its contribution margin grow to 10.7%, with a 30 basis point expansion contributing to an overall 19.4% growth in absolute terms. Adjusted EBITDA stood at BRL 658 million, corresponding to a 7.1% margin with a 30 basis point expansion and a robust 20% growth, reflecting the company's financial stability and profitability.
While store openings indicate growth, closures are a part of Raia Drogasil's strategic portfolio optimization. Closures, predominantly involving mature stores, are executed to relocate assets and operations to enhance overall EBITDA and return on invested capital. Out of the stores closed, only a small fraction were due to expansion errors, emphasizing the company's high assertiveness in expansion decisions.
The company has strengthened its supply chain with 12 distribution centers nationwide, enabling fast merchandise delivery to 90% of its stores, and is experimenting with a new distribution center model to improve logistics efficiency. Raia Drogasil’s market presence spans 562 cities across Brazil, highlighting its broad and effective market penetration.
Raia Drogasil's gross revenue grew by 16.3%, with Hygiene Personal Care as a standout category. Despite pressures on OTC due to comparison with the previous year's COVID-19 peak, the company remains confident in its diversified portfolio and the absence of structural issues in any of the revenue categories.
The company's digital space stands out with 51% growth in sales, reaching BRL 5.4 billion in annualized revenues. The successful RD Digital app, contributing 65% to digital sales, aids in capturing the market, with customers increasingly preferring this convenient shopping channel over traditional desktop websites.
Despite facing headwinds such as lower gross margins for digital and Bio segments, which have been growing at rates of 50% and 60% respectively, the company maintained a gross margin of 27.9% from the previous year. This achievement, coupled with a reduced cash cycle of 63 days and increased net margin by 40 basis points to 2.9%, signaling effective cost control and efficient operation, resulting in strong free cash flow and a net income of BRL 268 million.
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Good morning, ladies and gentlemen. At this time, we'd like to welcome everyone to RD People, Health and Well-being conference call to discuss its 3Q 2013 results. The presentation can be filed on RD's Investor Relations website. ir.rd.com.br where the audio for this conference will later be made available.
[Operator Instructions]
Before proceeding, let me mention that forward-looking statements are being made under the safe harbor of the Securities Litigation Reform Act of 1996. Forward-looking statements are based on the beliefs and assumptions of RD management and our information currently available to the company. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions because they relate to future events, and therefore, depend on circumstances that may or may not occur in the future. Investors should understand that general economic conditions, industry conditions and other operating factors could also affect the future results of RD and could cause results to differ materially from those expressed in such forward-looking statements.
Today with us are Mr. Eugênio De Zagottis, VP of IR and Business Development; and Flavio Correia, Director of IR and Corporate Affairs. Now I'll turn the conference over to Mr. Eugênio De Zagottis. Sir, you may begin your presentation.
Hello, everybody. Welcome to the Raia Drogasil third quarter conference call. And I'd like to start by saying that this was another very strong quarter in what we believe is a very strong year. I think not only our results show tremendous consistency with meaningful margin gains both on a quarterly basis and on a year-to-date basis, but also strategically, as we keep advancing a lot in digital and advancing a lot in health care as well. So we'll talk more about this as we go through the presentation.
So I'll start here with the highlights. Let's go to the highlights. So we ended the quarter with 2,868 pharmacies in operation. We have opened 64 stores and closed 3 stores so far. BRL 9.3 billion in gross revenues, a meaningful 16.3% and most importantly, 6.8% of mature store growth. So real growth ahead of inflation and ahead of the last met authorized price increase.
Big gains also in market share, 70 bps increase on a national basis to 15.6% in with strong gains in every single region where we operate. Digital reached BRL 1.3 billion. So this is a major milestone for us. 51% of growth over a strong basis that we had last year in this quarter, and we reached retail penetration of 15.7% of digital channels. Our contribution margin also increased to 10.7%, 30 bps expansion and 19.4% growth in absolute terms.
Adjusted EBITDA of BRL 658 million, 7.1% of EBITDA margin, 30 bps margin expansion, 20% EBITDA growth, very meaningful as well. Same of net income, BRL 268 million, 2.9% of net margin, 40 bps increase and 33% in absolute terms. And finally, we show a strong free cash flow and total cash generation in the quarter. And this comes after a second quarter in which due to cyclical pressures, we had a margin -- not margin, we have had a cash flow pressure had a cycle pressure. So now as we said it would happen, we are reverting this with a strong cash generation here.
Talking here about the expansion as I said in the opening, we reached 2,868 stores in operation. We have opened so far over the last 12 months, 269 stores. This is even more than the guidance of 260 stores we have provided for the year. And we have closed only 21 stores. Of these 21 only one store is still in maturation process. And why this matters? Because when we close a store in the initial years, this is because we made an expansion mistake. And expansion mistakes happen and will keep happening but they represent only 0.4% of the last 12 months opening. So it shows how strong the assertiveness of the expansion is.
These mature store closures, I mean, these are relocation of stores. These are portfolio optimizations. So generally, we are closing stores, which have a positive EBITDA, but we're transferring sales, we are shutting down a full cost base. We are redeploying assets. So the overall EBITDA for the company and the overall return on invested capital, it's bigger because of disclosures. So for us, this is an opportunity. We look for as many as we can find. But here, we're talking of mistakes, and we are happy to see that we have 99.6% of assertive in our program. We maintain the guidance of 260 stores years from 2023 to 2025, total of 780 new openings in this process with huge demographic and geographic diversification.
Moving forward, I mean, as you know, we have a national presence. We not only operate in every state of Brazil, but we operate a very similar performance both in terms of return on invested capital, internal rate of returns, mature store performance. Doesn't matter if you're opening a store in the Amazon or in Sao Paulo. We're looking for the same internal rate of return. And generally, we are delivering those with our expansion. So this is -- it's a very different expansion from everybody else.
I'd like to highlight that we reached the mark of 200 stores in the state of Rio de Janeiro, more than 360 stores in the South more than 400 stores in the Northeast, even the North, our recent [ Frontier ] 118 stores in the region as well, and we are gaining share in every single market. The national share increased from 14.9% to 5.6%, strong gains everywhere. And most importantly, we have reached double-digit market shares in every market in Brazil with the exception of the North, and this is so far an exception. Because the north -- the share in the North is growing very fast from 7.1% to 8.9%. If you consider the number of stores we have in maturation, maturation alone, we will allow this market to reach double-digit share maybe next year, not to mention that we still have more stores to come here in the market.
We have 12 distribution centers all over the country. to serve our stores. 90% of stores receive merchandise on 6 days a week. So very fast replenishment cycles. And we are now opening 2 DCs in the north, which is the most recent frontier of our expansion. A traditional DC in Para and a small DC in Manaus, which is a new model for the company. This DC is not a stand-alone DC. This DC will be supplied by another DC probably here in the Midwest. And this would be an inventory buffer that will allow us to seize shipping merchandise by air because we're talking here in the middle of the forest and we'll be able to deliver it by land, which takes very long to do. So the way for us not to penalize the inventories, the replenishment of the storage to have this local inventory buffer.
So this is a new model. It will be very good to test. And if this works we have opportunity for more DCs like this. In this case, this is only about logistic efficiency, but there are some markets in which because we don't have a local DC, we have tax disadvantages. And if we're able to have a more DC like that, we may be able to even improve our gross margin in those markets. So we'll start here, and then we see where this takes us, but we're looking forward to this experiment.
Moving gears here. We have 562 cities in which we operate in Brazil. So we are increasing our store count very -- not -- I'm sorry, our -- the number of new cities at a very fast pace. When we -- in terms of diversification, this is a very well diversified program. I think it's interesting to highlight that we have been able to somewhat accelerate our expansion in the state of Sao Paulo. We had reduced a lot expansion in Sao Paulo. The return on invested capital of the new stores are just amazing.
So internal rate of returns are very high, and we are seeing the opportunity to do more in Sao Paulo. We're not talking as much about A-class areas in the city, but more like areas in the metropolitan region, country side, even lower income areas in the city of Sao Paulo. And here and there, maybe a store in any area, but mostly the B and C areas in the city. So we are somehow accelerated the pace of Sao Paulo, and this is a good thing for us.
In terms of format, we see that the recent expansion is very focused on hybrid stores. We have as many popular stores being opened as we have premium stores. So a much more B and C class focus here. But obviously, when you look at the full portfolio, then there is a big participation of premium stores, which is slightly lower than the participation of hybrid, and then Popular is a smaller part. But more and more, the mix trending towards hybrid stores.
And finally, of the 319 Brazilian cities with more than 100,000 inhabitants, we already have a presence established all in the process of opening a store in 305 of them. So 95% of the larger cities in Brazil, we are present there already or we are getting to be present in the coming quarters. So this is a very unique, very unique footprint that we have established all over the country.
In terms of gross revenue growth, our revenues grew 16.3%. It's important to mention that for Bio, which is growing north of 50% in this quarter accounts for 2.1% of this growth, while retail accounts to 14.2% of the growth. When you look at the category breakdown, the main highlight is Hygiene Personal Care. We're doing really well on Hygiene Personal Care. We are gaining share over platforms over marketplaces. Today, we see much more rationality in the market, not as much free shippings before, not the crazy prices we saw before. Not the crazy payment terms you saw before. So there's a rationalization and we gain share very fast from marketplaces in skin care. That's the only meaningful category for them. But overall, our front store is flying.
On the other hand, we see pressure in OTC, mostly because of the strong comp base of last year when we had the COVID peak. To some extent, this was a milder winter also. And we see a good performance also in generics and an okay performance in brand. The brand is also affected by the COVID. So there's nothing strange here. By the time COVID moves out of our comp base, we see a more balanced growth scenario than what we're seeing here. So it's very good to see the 21% in Hygiene Personal Care but there is nothing structured -- no structural problems in any category. So this is great.
In terms of the comps, our focus here on mature stores, 6.8% of mature store growth, 1.2 percentage points ahead of inflation or ahead of the cement price increase. But we have to highlight, there is a 70 bps pressure in terms of COVID versus last year and a 10 bp calendar effect. So this number would be probably close to 2% real growth if not for this comp base effect here. So we are happy with the pace that we are here.
I think we are probably maybe the only chain among the listed players in Brazil to be displaying this kind of performance. And even here in the top line despite the fact that we are expanding the store base these days, around 10% -- and obviously, smaller competitors, percentage-wise, they can do more than that. Our top line is [indiscernible] growing everybody. So here, we see we outgrow everybody. And here, we will keep on growing everybody because of the strength of the digital execution the digital is what moves this figure to this kind of pace.
Talking about the digital here, 15.7% penetration. This is an absolute record penetration steep increase over the previous quarter, and this number keeps moving up. We started already in the fourth quarter with a higher figure than this. 51% digital growth over the strong comp base of last year. And in terms of annualized revenues, we are talking here a very, very, very strong pace, BRL 5.4 billion in annual revenues. So RD Digital, if it were a stand-alone entity, we would be fighting to be the fourth chain in Brazil below [indiscernible]. Right now, we're now we are the fifth. We are ahead of Pavel. We are below [indiscernible]. But I'm comparing our digital is their full business to be clear here. But I think in the short term, RD Digital on its own, we have the size of the fourth or will be bigger than the 4 largest player in Brazil.
I think what's very unique about our digital is our execution, and we can see here in the channel mix, 65% of digital sales are done in the app. This is an amazing number. Our app has huge engagement, huge conversion. None of our competitors even report the app share in the channel mix because it's much lower than this. As our -- as we have solve the IT bottlenecks that we had in the past, our squads are producing more and more code. The frequency of new code release is increasing very fast, and this is moving our app to a new experience. We are solving bugs, introducing new functionalities. We're improving and the app keeps growing a lot because of this last year. I think it was already -- it was around 55% and now it's 65% and growing. This is the fastest growth channel in the company.
The other fast growth channel -- sorry, when we look in terms of delivery mix, we see another growth. We see Click & Collect is the main channel with 61%, but this is the fastest-growing channel. We have reduced the delivery lead time to 1 hour, 23% of total deliveries are done in an hour. The bulk of physical deliveries are done in one hour. If you compare to super apps who compete, who collaborate but also compete with our own channels, superapps are stagnant while our first deliveries are growing a lot.
It's also important to highlight here that desktop means only 10% of our digital sales. And why this matters? Because the customers who use the desktop, the website, the desktop website, is not the same customer who uses the app. This is a much more opportunistic and price-driven customers with much lower loyalty engagement and lifetime value.
So when we grow in the app, we are retaining the best customers. We're dealing with a customer that are looking not only for prices, but for the overall service convenience, et cetera. So the lifetime value of this customer is way better than the lifetime value of the desktop customer. As I mentioned, super apps are stagnant, which is good, means that we're capturing more and more of our sales in our proprietary channels.
And finally, the cost center is now below 1% of the channel mix here. For most of our competitors, cost center represents 25% of what they call digital. So 93% of digital sales are done through modern and proprietary channels, 83% mobile, 94% fulfilled biopharmacies, 91% delivered in up to 60 minutes. It's either customer collecting here or us delivering or the super reps delivery. This is a unique value proposition that we have to offer, and this explains the digital growth that we have, okay?
In terms of gross margin, we maintained the same gross margin of last year, 27.9%. But it's important to mention that we have done this in spite of the fact that for Bio, which has a structurally lower margin is growing north of 60%. So we have to give a very adverse mix effect. For bio growth is amazing. When you look at total consolidated figures, EBITDA. But in terms of gross margin, a source of pressure. In terms of EBITDA, it's a source of pressure. And we're dealing really well. And the same relates to digital.
Digital is great strategically because it increases customer lifetime value. It drives mature store growth and sales expense dilution, but we have lower gross margins with digital. So the fact that we are maintaining the same gross margin, while absorbing a huge digital for bio growth means that we're gaining a lot of efficiencies here. We're talking about pricing, better buying terms. We're talking also about private label. So all these things happen allow us to sustain the margin. And when we sustain the gross margin, gained because the sales expenses are consistently being diluted through the operating level.
Finally, cash cycle .63 days of cash cycle, huge improvement over the last quarter. We mentioned last quarter that this was a cyclical peak, and this will be going down very fast, and we have delivered on our promise here. So very good numbers, and this has supported strong cash generation in the quarter.
Selling expenses always the highlight. Mature store growth allows us to gain operating lever and dilute them. So 30 bps dilution versus last year, 30 bps contribution margin gain as a result.
G&A, we have been able to stabilize G&A over the recent quarters, but we still haven't been able to reduce G&A. We are reducing the G&A in terms of people, in terms of labor but we have still -- we still see pressure in terms of digital, in terms of cloud, in terms of software license and things like that. We are dealing with them. I believe we'll maintain a level like this in the coming quarter, but we still believe we'll be able next year to have some dilution here and to start improving here.
But regardless of what happens on the G&A, the EBITDA keeps improving, 30 bps gain. If we look last 9 months, we are talking 20 bps improvement over last year despite the fact that we had a much higher inflationary gain on inventories last year, with 11% price increase versus this year. So -- and despite the fact that for Bio is growing 60% and despite the fact that digital is growing 50%. So these 20 bps increase on the 9 months with lower -- we have higher digital, higher for bio growth and less inflationary gain on inventories. I think it's a big fit from the company, and it shows that the consistency of the execution driven by the digital transformation.
Finally, net margin, 40 bps increase. We're talking 30% increasing 33% decrease in absolute terms. And we're talking BRL 268 million in adjusted net income, but the accounting net income is higher than that to BRL 196 million. If you look almost every quarter, we are posting nonrecurring gains. So we are conservative from the tax viewpoint, but in the end of the day, we keep finding gains over previous periods that are not counted here. Nobody counts these things when they talk about our multiple but they are here. And I think this is also a very unique by our company.
We see a lot of companies they take nonrecurring games mixed with existing gains, and they adjust all nonrecurring losses. We are not like that. We are very correct in the way we go about this. Finally, very good free and total cash flow in the quarter driven at the cash cycle improvement and also reducing in normalizing of the leverage ratio from 1.2 to 1x net debt to EBITDA, which is our comfort zone here.
And before I pass to Flavio, our stock has done really well this year, 16% appreciation, 10% alpha [indiscernible] very good daily liquidity and amazing compounded returns since the company started. So I'll pass now to Flavio who will provide some more details on the strategy and execution and wrap up some of these messages.
Thank you, Eugênio. So just final remarks here on our results for this quarter. So we really post good results on the quarter. [indiscernible] really decoupled from the retail industry in general, okay? So we had a very strong expansion, growing store count in 10% year-on-year which is amazing for considering the size of the company already. So our gross revenues grew 16% year-on-year with mature stores growing at 6.8% year-on-year. This is -- so we have been growing mature stores above inflation since 2021, just after COVID period. So it is really quite long period of same-store sales growth above inflation.
On market share, we are now reaching 15.6% and gaining market share in every region, we are present. Okay? Digital keeps growing very fast and really decoupled from the rest of the e-commerce activity here in Brazil with our digital activity already accounting for 15.7% of our total sales on the company and growing at a ratio of 51% year-on-year.
So adjusted EBITDA reached this 7.1% index and growing faster than inflation. So we keep growing and we keep growing even more our profitability and financial leverage is totally under control with onetime EBITDA.
So all these good results are based on our customer-centric strategy. So our customer-centric strategy fosters the engagement and bonds with consumers, so to optimize the user experience. Okay? We consistently track -- all this strategy is based on consistently track the customer reviews and customer experience in the different channels we are in. We engage with the customer, so on pharmacies, but also on our digital activity both on the e-commerce apps and websites, but also on the logistics and less mile we deliver.
So understanding all the comments and all the reviews customers do while evaluating our operations really helps us to understand customers' needs and improve those opportunities. So this creates a totally different level the company to grow. So considering our average -- the average for the -- for our customers here in the company. So frequency of purchases per year is 8x per year. But considering the different kind of customers we have here, frequent customers are purchasing with us are engaging with us 24x a year, which is once every the week of the year, which is highly frequent.
But customers that are digitally engaged with us improve this already big frequency 24% in the year. So they reached this frequency level of 29x a year. So this is quite relevant.
Moving on here. So we are also very proud this quarter to announce that we reached this A rating at MSCI, ESG index, okay? So that -- so this index is very relevant in -- for -- mostly for international investors. But this index, coupled or together with all the index, we are already part on like the easy at D3, like the CDP and also like [ ediversa], which is a new index that was just launched here in Brazil. So that together shows that we are in the right track into addressing and improving our ESG activities.
And finally, here, we will run our RD Day on November 9 physically here in our new red quarter, which was just revamped our -- after the COVID season. We know it's a long trip for international investors to be here with us. if you come, it will be very nice. Thank you.
Thank you, Flavio. Thank you, Eugenio. And now we'll start the Q&A session. The first question is from Igor Spricigo from UBS.
Hello, Eugênio. The first one is regarding the 25% IRR you have been seeing on new openings. Could you describe what are the main reasons why these new stores have higher returns? Is it lower CapEx or higher margins, for example? And also, given that returns are higher right now, do you consider accelerating expansion even if slightly -- like is it a possibility? Or are you comfortable with the current base of 260 openings?
Good. Thank you for the questions. I mean you're correct in the sense that we are seeing this year a stronger internal rate of return than normal. If you look last 12 months openings, we are now at 25% internal rate of return. This is a real figure, net of cannibalization, meaning if a store sells BRL 1 million but 200,000 in cannibalization. We only count BRL 800,000 in sales towards the internal rate of return.
I think this is a reflect of several combined factors. First, today, with less expansion and a more diversified expansion, cannibalization is lower than in the past. So if I have same sales per store, but lower cannibalization, this by itself means that the internal rate of return will be better. And also the fact that the comps are growing so much is a factor of the -- of digital, but it's also a factor of less cannibalization than we had in the past.
In terms of capital efficiency, I think we have also optimized the stores, the investment, we have been able to get efficiencies, cheaper materials, things like that simplify some things. And finally, I think there's a performance factor. Our brand today is a national brand. I think the brand is more -- is mature in almost every market. In the past, there were some markets that we had a catch-up to do.
Today, whenever we open, we see very strong stores. So I think it's a combination of factors. I don't know if the 25% will persist or not. Previous years, we were already ahead of 20%. Probably 22%, 23%, 24%. I think this 25% we're seeing right now is a record figure. Let's see where we go from here. In terms of new store openings, we have -- I mean, right now, we commit to the guidance we have -- but if you look this year, we have, in the initial 9 months, have done more stores than we guided for. So we have to see what will happen in the fourth quarter.
And obviously, if we think we can do more than guided at some point, we update the guidance. So otherwise, we keep the guidance.
Just to add on your answer here, Eugênio. It's important to consider that considering the different clusters of stores we have here, so the popular stores, the premium stores and the hybrid. There is no cluster with IRR below 20%. So all clusters are super profitable. And more important that this we count now a little bit more than 2,800 stores on the company and none of these stores are not profitable. So this is an amazing meeting a record track.
Our next question is from Bob Ford from Bank of America.
Eugênio, Flavio, congratulations on the results. Could you do me a favor and address any misinformation in the press when it comes to your use of consumer data? Particularly the characterization of the incentives to opt in and the ease at which consumers can also opt out. And could you also give an update on where you are in terms of in-store and other forms of digital advertising plays?
And then when it comes to the addressable market 4Bio. How should we think about that? And how should we think about the longer-term trajectory of the growth in that business? And then lastly, could you comment on the lift that you're getting from [ Ozempic]? And not only that, but the pipeline of coming approvals for other blockbusters in the weight loss category, the Alzheimer's category and other very highly relevant drug therapies.
Bob, thanks for the questions. I mean in terms of data usage, I'd like to start by saying that we're very compliant. I think Brazil has a data security law that is very similar to the European law. I think we were very diligent in terms of how we prepared ourselves for the entry of the law. We give the customers the right to open to opt out. We don't sell or share data outside of the company. So I mean obviously, data -- health data is always a sensitive subject. But we are very, very confident with what we're doing. And any questions that may arise, we will deal with them, but there's nothing here. There's -- we do nothing wrong and we're very straightforward about that.
I think we are evolving well with the advertising business. We have several contracts. We are doing a good billing this year. We still don't disclose those figures, but we're happy with how we're evolving. RD is a separate company. We have several very interesting use cases and I can tell about, for example, private label. Private label is something that I run.
So I am an internal client of RGS. We have done a lot of amazing work in terms of conversion in categories like diapers, for example, with tremendous results. So I think we have a very powerful platform. The -- we have still to have more people. We have still to improving the measurement of the initiatives, how fast we report them to the brands who invest in us. There are new tools that we are starting to adopt.
So there's an evolution curve. In terms of total addressable market, the last time I saw a number -- our -- if you look within the categories where we compete, health, beauty, personal care, et cetera, I think the total digital budget of our suppliers is something north of BRL 2 billion per year. Obviously, this is a number that will keep moving up and we want to grab at least our fair share of this over a certain time. So we'll see where it takes us.
But obviously, it's a big pie. It's a very -- it's a growing pie, and I think we have solutions to offer to our -- to the brands, to our suppliers that are much more assertive than fishing on the ocean. We have an aquarium. We know where the fish are, who the fish are. And we go for the right fish. It's not an open ocean. Fishing that you don't know you throw the stuff in the water, but you don't know what you get and if you get.
So the data. We have data not on behavioral things of what you like, what you like on Facebook, Instagram. And so we have data on what we're actually buying. An amazing example is, I think it's -- Flavio's interested in Ferrari. You may love Ferrari as a brand, you may look for every post on Instagram or go to the website. I mean it doesn't mean that you are a customer for Ferrari. But if you look at the traditional customer segmentation, from the social networks, they would flag us as interested in Ferrari and maybe Ferrari would spend money on us, and we are not buyers of Ferrari. We're just admirers of the brand here. We know what people are buying, not what they are liking. So the assertiveness is very high.
And finally, I mean, obviously, [ Ozempic ] is a huge success in Brazil. It accounts for a meaningful part of our sales. OP growth over the years has helped our mature store sales growth. And we're very encouraged by the fact that we have new products coming like [ Riga], like [ Mujaro], that may be launched next year and may sustain this wave of innovation.
And maybe to add here, Bob, on your question about Ozempic. So new launches are important for us, of course, and this is part of the macro leverage that this company has. But there are also other important levers like non-branded items, like the generics we have. So every time a patent is going down, we have the opportunity to fulfill customers that are not attended at the price point of a branded item and now that can be attended by price point of generic items.
So the more new branded items, launch, we have, the better for the company, but the more generics are patents going down. is also very good for us. Another important macro indicator for us is drug consumption here in Brazil, which is low compared to other markets globally. We have an opportunity here to grow this participation on drug consumption here in Brazil.
And finally, purchase power in Brazil is expected to improve little during the next -- during the long term, medium term, long term. So all these 4 levers here. So new launchings, patents and generics, drug consumption and purchase power can improve our macro opportunities.
No, that's super helpful, Flavio. And I did ask one question about the addressable market 4Bio and how you're thinking about the growth trajectory. But as you talk about low per capita drug consumption, it reminds me of the point you made on the earlier call and that is your private label efforts with vitamins. So I apologize, but I'd like to ask both questions. Can you talk -- the per capita consumption rates vitamins in Brazil relative to some of the international benchmarks very low? Can you expand a little bit on what you're doing with the private label in the vitamin category and the TAM and the growth there? As well as maybe talk a little bit about the addressable market and how we should think about the trajectory in 4Bio as well, please?
Thank you. So I'll start with 4Bio, then talk about private label. I mean, we are really, really encouraged by the growth of 4Bio and sometimes when you talk -- it's funny that the market is obsessed about margins, 0.1 plus point less. And nobody really asked me if the top line grows 16, 17, 14 or 15. And in the end of the day, we spent a lot of time talking about 4Bio in terms of the margin effect which is obviously a negative margin effect because 4Bio structurally has lower margin than the pharmacies.
4Bio is a managed care business, a very expensive product and specialty in the U.S. has lower margin than primary care. And the same is true here in Brazil. But in the end of the day, 4Bio is very important for us. 4Bio is accelerating a lot our top line growth. And 4Bio's a great business, it's a business that has 3% slightly more than that of EBITDA right now. But it's much more capital efficient than [ hydro ] as you because we don't need to open stores 4Bio. We don't need to deploy working capital across 3,000 different locations 4Bio.
So at the end of the day, 4Bio has high teens return on invested capital. We're not that far from our own consolidated return on invested capital. But 4Bio, it's allowing us to tackle a market that is growing a lot, will keep growing a lot because the aging effect is more intense in oncology, for example, than it is for general primary care drugs. 4Bio helps us extend our service to the customer across all their needs. So customer needs a normal medication, they can count on [ Hydrus]. The customer needs a specialty medication, they can count 4Bio. If the customer needs an potato medicine, we now have a potency business as well. At the end of the day, we're also servicing our manufacturing partners across the whole portfolio, which wasn't true before.
And the main focus of innovation, the main focus of marketing execution for the leading pharma companies is no longer in primary care. For America has exhausted innovation. It's been dominated by local players. There -- the global players, they are very focused on specialty. And we are a key partner in specialty through for buy. So we're very happy 4Bio. 4Bio Is very accretive to us. It helps us create a lot of value. But yes, it has a negative margin pressure, but we are dealing with the negative margin pressure with a lot of efficiency gains.
And one of the efficiency and gain sources is private label. We reached a private label penetration of 9% of the front store sales. This is similar to last year, but the difference is that last year, because of the penamic, we had a huge peak of COVID tests, which were private label and we were selling a lot. So if you see the -- how did the private label penetration outside of the COVID category. COVID categories are self-test, masks and gloves. You take that out, our share is growing very steadily and very well.
We are leaders already in categories like for example, solar protection. We have the 1 -- the #1 brand in solar protection is our private label brand. We are #2 in skin care. We are we're #1 in tissues. We're #3 in diapers. So we are evolving a lot in terms of private label. IQVIA just released recently some figures and RG brands is the 18th largest corporation in the Brazilian consumer health industry.
So even though RG brands only serve Hydrogel, RD brands is the 18th player. And we're counting all the OTC players, we are counting the [indiscernible] L'Oreal, et cetera. And if you look the needs as a brand, needs is the #4 or 5 brands in the Brazilian consumer health industry only behind Pampers and 2, 3 other brands. This is amazing what we have accomplished. We're very happy. We're investing a lot and are trying to expand a lot the category mix that we offer.
Super helpful. And again, congratulations on the quarter.
Irma Sgarz from Goldman Sachs. You may now ask your question.
I just wanted to follow up briefly on the Ozempic question that Bob just asked and where you provided some very helpful commentary already. But could you somehow try and quantify it a little bit for us? Just how relevant and how maybe sort of across what time frame this has become more relevant in your sales because you made the comment earlier that it's quite sort of significant for your sales. Just trying to sort of quantify that or size it in broad strokes. And then the second question relates to ultimately -- sorry, I just forgot the second question, sorry, just let's keep it with for the first question.
Okay. Thank you. If you remember the second question, you can throw it after my answer. We don't disclose figures on Ozempic, but it's the #1 drug we sell. Because we have a very disproportionate market share on Ozempic. For us, it means more than for the market because of the fact that we have so many in-class stores in our store portfolio. But even Ozempic, I mean, what we're selling. Ozempic obviously helps the market growth, helps the category growth. But even before Ozempic, there were products like [ Victoza], like [ Trulicity].
So Ozempic in the end of the day is an expansion that comes on top of things that were already there. And likewise, [ Monaro and Viavi], when we get them, they may be further upgrades, further expansions for this category over what we already have today with Ozempic. So innovation is an important driver for us. Innovation doesn't happen across many categories.
Certainly, diabetes, weight loss and sometimes central nervous products. These are where we still see innovation. Most of the categories like cholesterol, blood pressure, et cetera, they're already dominated by [indiscernible]. So the growth in those categories, as Flavio mentioned, look mostly from the aging of the population, in terms of the market. But we still see innovation in these specific categories and Ozempic is the main evidence of that.
Another important thing here for you to understand, you might think of this company as a 30-plus billion of revenues company. And if you are a supplier for drugs or for any kind of product, we are the #1 company to be called for you to enter the market with a new drug or a new product. So we are able to create an additional market of BRL 0.5 billion, BRL 1 billion on top of an already existent very solid footprint portfolio we have here. So this is a very enduring competitive advantage we have here.
But -- and just to finalize here, obviously, it's a very meaningful sales figure, but the margin of Ozempic is way, way, way, way, way lower than the average gross margin. So economically, the effect of Ozempic is not as much as it looks like, if you look only at the sales figure. But obviously, it's an expensive product. It's an accretive product. It's a product that help us engage this patient in the overall journey.
That's really helpful, and thank you for being patient with my inquiries. The second question, if I may, was related to G&A. I think you made already quite a few helpful comments and from what I understand from the earlier call, you mentioned that maybe G&A dilution wasn't quite on the cards for the fourth quarter, but potentially is still something that you think is feasible for 2024. Can I just maybe ask was there anything that surprised you ultimately in the journey of G&A? Or is this always in like sort of upgrades and technology investments that you ultimately had to make and that were already on the cards?
I think you answered yourself. I mean, obviously, the controlling head count is not something new. It's something we're doing really well. So our labor expenses in G&A, they are being diluted but there's a lot of new factors affecting G&A this day, especially technology.
So for example, the cost of cloud what we call to the AWSs of the world, I mean it's a small fortune, what we call the defend name Software as a Service. Today, a lot of platforms like Salesforce, like SAP, et cetera, they used to be CapEx, they all became OpEx. So these are elements we have to do. There are other things, for example.
We have a big efficiency project with a leading consulting company in terms of indirect buying. We are finding a lot of cost optimization but the problem is the success fee that we pay is on G&A. Most of the gains is in the sales expenses, like consumer materials and other expenses like that. So obviously, we focus a lot on G&A. Stabilizing G&A is not a small feat. We have been increasing G&A very meaningfully for 3 years. So we're still with the -- with the huge focus on investing on improving and gaining efficiency, but we cease to expand the G&A. Now we want the G&A to go down.
But in the end of the day, let's not lose the fact -- the focus on the fact that G&A is 3.5%, 3.6% of our sales. Sales expenses is 17 point-something percent. So in the end of the day, we're talking about an expense base of 20%. What matters is how fast the 20% get, if we get more on the -- more gain on the sales expenses or in the G&A, of course, there will be more gain on the sales expense because it's a bigger cost check. 0.3 of the G&A is 10% of the G&A, 0.3 of the sales expenses. This is a more portion of the sales expenses.
So obviously, the sales expense dilution is always more meaningful and more sensitive than the G&A dilution. But everybody is now obsessed about the G&A, 0.1 plus, 0.1 less. I mean, at the end of the day, we believe -- I believe next quarter G&A will be similar. I believe there is the opportunity to have a somehow smaller G&A -- somewhat smaller G&A next year, but that's not what to make the difference.
The difference would be operating leverage gains, driving sales expense. This is what moves the numbers in a sharper way. And we are not -- obviously, any management team of listed companies has its temptations, and we're not falling to cheap temptations in terms of holding costs, holding investments and any costs just to show the market how good we are diluting overhead. In the end of the day, we are still focused on the long term, and we're still focused on the full picture and the full picture includes gross margin, sales expenses, and G&A is the smallest line there.
Next question, Joseph Giordano from JPMorgan.
My question goes back into the expansion [indiscernible]. So you mentioned that the returns remain highly elevated to above the 25% threshold. The trend here is actually above guidance. And when you look at the competitive landscape, it appears to be a little bit weaker than it used to be given the high rates, and we actually see some smaller players going out of the market.
So my first question to you is when you look at the competitive landscape, do you see any specific regions where you see space to accelerate a little bit more? So that's the first thing. So the competition a little bit quicker. The second is like, okay, looking historically higher [indiscernible] a company that grew its area in the 10% range. And if we take the guidance at this point, it's going to go like the single-digit territory and slightly going down as we move on with the day.
So to the question is if we should expect given the current market context, the market share gains and an acceleration or a potential acceleration til this store opens. Last but not least, going back to the expenses, the company has been very, very strict with its expenses, right? So we look on the selling side, the material dilution on the store expenses. So even with the digital [indiscernible] even when you look at the overall SG&A, things that are really under control. So my question is like how fast we should be seeing dilution going forward, particularly in the context that you do have some 1, 2 percentage points above inflation in terms of growth and disinflation is coming down. So these 12 percentage points becomes even more material for operating leverage going forward.
Joe, thanks for the question. We mentioned several items answering what I remember here, if I miss something, you remember me. In terms of expansion, I mean, right now, we are ahead of the -- if you look the last 12 months, the number of openings is ahead of the guidance. But we haven't issued a new guidance. So right now, the number you guys should consider is the guide number. I mean we always try to understand what will happen as we get -- as we move closer to year-end, we have a better figure of what will happen. And it's very sensitive. I mean, we are, I think, 10 stores ahead of guidance. I mean we probably have 10 stores to open in the last week of the year. If these openings get derailed or open this means making the guidance or making ahead of the guys.
We are surely not below the guidance. If we do the guidance or slightly above the guidance, we have to see. So -- but for the time being, we maintain the same guidance that we have issued.
In terms of competitive landscape, I mean, I think we have some recent -- recently, we have seen data from IQVIA close up and these guys. And it's clear that when you look at the market, there are -- a new breakdown the market in different segments. They are 2 clear winners, winner one radr. So we are -- we have 15% of market share. Our market share is expanding faster than anyone else. And obviously, you track the numbers, you can see that.
Then the next bracket is the other [ Abra Pharma ] chains. The other [ Abra Pharma ] chains are solid, but they're not growing as much as we are growing. And with [ Abra Pharma], I mean, it's a mixed bag. There are players who are doing well, generally smaller players and then larger players who are not gaining share or gaining less share or sometimes even losing share. So there is a mixture of specific players doing well with several other places showing some kind of weakness.
But when you go the next bracket is other chains that are not part of [ Abrafarma], this looks like a war zone. I mean you have a lot of huge share loss, several players going out of the market other players closing stores. So this is the main pain point in the market, in my view, is in these small chains that are not even part of [ Abrafarma].
Then when you move to the more independent space, independents are also suffering. They are closing these days as many stores as they are opening, and then associations, they are better off, and they are also winners in this market. Obviously, you have to put all associations together to be remotely close to Raia Drogasil. But still, in these see areas, small markets where we don't enter, they are doing well.
So we see a lot of weakness in the market, especially our addressable market with the guys that we compete and I think our [ Matua ] performance, our share gain reflects that trend. Then I remember you had other questions, but then I got lost here. Can you repeat them, please?
Just let me add the information here, which is quite relevant. So Joe, you focused on the expansion, but let's not forget that our growth is also based on our e-commerce business, okay? So the e-commerce business, if you take all the big levers of growth from year-on-year for Raia Drogasil, you see expansion as a big lever see digitalization as a big lever and 4Bio as well.
So think of regions that are highly densely populated and are already quite relevant considering our existing footprint, we don't need to open additional stores in areas like this, but we can tackle, we can address the consumers in the area with the digital activity. So remember that our market share as a whole in Brazil is around 15%. But our digital market share or our market share is close to 40%. So this is a very important lever for us to grow. The other question was about expenses and dilutions.
Okay. So I think you already mentioned that before, but I mean I think we are diluting expenses really well based on efficiency gains, based on operating leverage at mature stores. What happens over 17% of our sales means way more than what happens over 3.5% of our sales, although I think the space also to gain on the 3.5%, 3.6% of our sales that are made off of G&A. And I think you have a fair point. Also as inflation gets lower, the real growth, the 1%, 2%, whatever that is real growth that we deliver is way more meaningful than it is over a higher -- high inflation base.
The next question is from [ Enzo Han ] from Aster Capital.
Eugênio, Flavio. First of all, congratulations on the results. Could you please give us more detail on 4Bio's strategy for the next 3 years? Can you maintain these growth rates?
Thanks for the question. I mean, the answer is no. We cannot maintain this growth. If you look at the first semester, 4Bio is growing 9%. Now 4Bio is already looking at a much higher comp base, and that growth is decelerating. So year-to-date, I think it's 60%, in the quarter was close to 50%. And fourth quarter will be slightly lower than that. So I don't think it's feasible to maintain that growth.
But for sure, 4Bio should grow a lot. 4Bio should grow ahead of [ hydroacou ] for sure because it's a market that is growing faster specialty because of age of the modulation. The age effect is more relevant in a category like oncology that is the main category for Biocell than it is for most categories we sell on retail. The other thing is that the innovation is much more meaningful 4Bio than it is for [indiscernible]. When you talk about innovation for [indiscernible], I think Ozempic and a couple of the drugs, they are kind of outliers in a more commoditized mix that goes more and more toward generics.
When you talk about specialty, there's a lot of new drugs coming targeted therapies or the oncology therapies. So 4Bio for sure will grow ahead of [indiscernible], but no way, I believe, 4Bio can grow what's growing today. And by the way, we never expected 4Bio to grow what is growing today. 4Bio is way, way, way over budget, for example.
So we never predicted this growth. And for sure, we don't predict that for the future. But that grow meaningful. What 4Bio does, what's the strategy of the company is basically serving health operators. Players like -- so America, [ Bradesco, Ami, Unimed], et cetera. This guy by law, even though they don't pay general pharmaceuticals, they have to pay for oncology treatments and for some other like immunotherapy treatments that this is defined by law.
So this is a managed care market just like in the U.S., while our normal retail market is 100% out of pocket is not managed care at all. So our aim is to provide the best solution for the payer and the best solution for the patient and the best solution for the manufacturer. So we are very efficient in terms of our last mile logistics our competitors 4Bio are all wholesalers who are trying to do some retailing, but they don't have the retail DNA. They don't have the service [indiscernible].
They are amazing to inbound logistics, but we are way better in terms of last mile logistics. Getting a product that is stable to control, delivered in this exact day in an house at an efficient cost. This is what we do 4Bio, that nobody else has the experience to do. And 4Bio some of the experience of [ hydrodesuland ] some other things they developed on themselves. The other things that we do is overlooking and it's taking care of the patients.
In a classical oncology treatment, which is infusional, the patient is monitored by the physician almost 100% of the time. The physician knows when the patient do the drug, what was the fact, what was the side effect if they have to adjust the physician is there, the nurse is there, et cetera.
All of a sudden, we have now oral oncology treatments that are very different. The patient takes a box of pulse to their home and take their on their own without the physician, without their nurse. So we are the missing link here. We are the guys who make sure that the customer is being monitored. We call the customers every week to make sure the customer is taking the drug to understand if the effects are happening, to see if there is any undesired side effect. Sometimes customer because they don't feel symptoms, they stop taking the drug or sometimes they lose weight and the dosage must be adjusted. And sometimes, the drug has a side effect that is not expected, and the physician has to change the drug.
We are -- the guys who are there for the patient to understand what's happening and promptly notifying the physician to adjust whatever that is to be adjusted or the or only to inform the patient as needed. And this is what we'll keep doing.
Thank our final question is from Alex Wright from Jefferies.
Yes. So a couple of questions for me, please. First of all, just on the share gains this quarter. Obviously, there's nothing new in that in itself. You've been gaining share consistently for a long time, but it looks like there was an acceleration in the rate of market share gain this quarter. And I wondered if there's anything that you would point to specifically either for yourselves or for the market as a whole that contributed to that faster rate of market share gain?
Or do you think there's any reason to believe that there's some structural acceleration or change going on there relative to the rest of the market? And then secondly, please, one thing I'll discuss a little bit with the team, but just be interested in getting more color on.
As you pointed out, you're opening many more hybrid and popular stores than premium, but the premium stores as a percentage of the base that you report have actually increased despite that over the last year or so. And I believe that what is happening is that many of the younger stores you're initially opening as popular or hybrid, but then subsequently upgrading, if you like, or reclassifying to premium. So if you could just talk a little bit about what is happening there, please? And the color behind that, that would be great.
Alex. In terms of the share gain, I mean, if you look, the structural answer is as the digital becomes more and more important, we are accelerating our comps and the faster comps means faster share gains as well. When you look specifically in the quarter, I think there are 2 things to mention.
One is we have to be careful when we compare these figures on a sequential basis because there's a lot of methodological limitations in how the market shares are calculated by IQVIA and close up, things like selling by smaller pharmacies, they affect a lot these figures, for example. So I think these figures are really useful when you look on a longer range but less useful when you look quarter-by-quarter basis.
Having said that, I think there is something happening in this quarter, which is we see a market deceleration that is clear -- clearly shown by IQVIA by close up and even, I mean, one of manufacturers we have a supplier who's listed that also reported recently also slower figures and talking about the market deceleration. I think the market deceleration, to some extent, happened, but we see way less of that.
So in the end of the day, our comps are similar to previous quarter, maybe slightly lower. Well, I think for the rest of the market, I think they are feeling way more of this environment because of the difference in execution that we have because of digital, even pricing. I mean, we survey prices on a very continuous basis. Whenever we see in a specific market, something different happening if all of a sudden, there is a gap that wasn't there, we won, we adjust.
So we first do what we have with our prices. Then we ask ourselves how we pay that. This is how we do and it works. And -- but we are paying that because market because private label is growing because of -- we just ran recently a generic tender that was very successful for us. So we are gaining efficiencies and we are reinvesting sometimes the efficiencies.
Other times, these efficiencies are paying for things like higher 4Bio mix, higher 4Bio share in the mix, higher digital share in the mix and things like higher -- even higher Ozempic share in the mix, as I mentioned, Ozempic has a very low margin. So when Ozempic grows a lot, this is another driver of pressure that we have to somewhat mitigate but we have been able to do. But the fact that we see a weakness, we look at the prices and we move very promptly means that in moments like that, we have the firepower to invest to defend or even to gain share other companies must be much more careful.
Alex, just going a little bit deeper here on the answer. First of all, thank you for the reinitiation of your coverage. But going a little bit deeper on this answer. You mentioned these different clusters. We have -- and it's true that we changed some stores among clusters here during this quarter more effectively that we have been doing in the past quarters. But this is -- we do it frequently.
So we upgraded some of our stores from popular to hybrid and from some stores from hybrid to premium stores. This is related to not only changing prices or addressing prices in a different way, but also related to different assortment we bring in the different clusters.
So we increase assortment on specific categories, and this improves revenues for the stores. So our average of BRL 1 million per month per store average sales is not happening by hazard. It's happening by design. So we are constantly tracking these opportunities for a store to improve sales, and this is the way we do it.
Yes. Just to complement on that. I mean, obviously, when you look at the geographic footprint, start in Sao Paulo, doesn't move to Rio. So it's a fixed basis. When you talk about clusters, we are always able to review the decisions. And very often, we are more conservative when we open a new store for 2 reasons.
Generally, a store that has a very luxurious look and feel, if it's in a new area, customers may be reluctant and believe the story is expensive. The other thing is that premium stores, they take more investments in working capital than standard and popular stores. So very often, we start more conservatively and over time, as the store gets established, and as we believe there is opportunity for premiumization, we will change the classification.
So we'll put more working capital in additional inventories. We'll sometimes when we renovate, we may bring more luxurious fixtures to the store. So it's not a fixed base like the regional basis is. And I think Flavio explained well that we had a reclassification and the reclassification is very seldom, very seldom goes down. It's generally the store stays where it is or we premiumize it. Premiumization is a good opportunity for us. We are eager to do it whenever we can.
The Q&A session is over. And now Mr. Eugênio will present the final messages.
[indiscernible] for your support as shareholders. We are very appreciative of that. And just to summarize on some of the messages that Flavio and I shared with you today, I think this was another very strong quarter on top of a very strong year. So if you -- when you look to the quarter, 16.3% top line growth, very meaningful growth, probably the fastest growth of any listed drug store with 6.8% in mature store growth.
If I believe we have the fastest top line growth of the pack, I am sure we have the fastest comp of the [indiscernible]. That's absolutely -- and this is a reflection the whole [indiscernible] transformation that the company is undertaking. And mature stores have systematically outgrown inflation and allowed us to dilute sales expenses, to gain efficiencies and to increase our margins.
If you look year-to-date, we have an EBITDA margin of 7.4%, this consolidated. This EBITDA margin is 20 bps higher than 9 months last year. But let's remember that 9 months last year, we had a much higher inflationary gain on inventories because of a 10.9% price increase. That obviously didn't repeat itself again. So this is a headwind.
Huge 4Bio growth. which margin-wise is another headwind, a huge digital growth with margin-wise another obviously, lifetime value growth is amazing, just like 4Bio but margin-wise, is a headwind. Ozempic growth which is also a headwind. And despite all these headwinds, we are able to expand 20 bps.
So I believe this is an amazing figure, and this is an amazing performance by the company. And we believe we can sustain this company and our aim is always to keep expanding the margin. But we have been very successful, and we're very happy so far about the results. And these results, they underscore the strength of the digital transformation of the company.
We had record digital channel share, 15.7% very unique mix, very focused on the most -- on the healthiest and best channel there is, which is the app. Very little almost nothing in call center, which for most of our competitors, is 25% of what they call digital. Another aspect is that we have the fast deliveries growing very fast, and the fast deliveries, they are faster than in the past. And by the way, this is another expense headwind because it's more deliveries on a shorter term, that cost us more, but we're also dealing very well with this by gaining productivity all across the business and digital at the end of the day has reached BRL 5.4 billion in annualized revenue.
So Raia Drogasil if it was a separate Raia Drogasil digital, if it was a separate company, between -- we'll be fighting for the -- to be the 4 largest chain in Brazil right now, probably the fifth closer to be the fourth. So I mentioned the unique mix. I mentioned the fact that web is only 10%. And the web customer is an opportunistic customer. The app customer is an engaged loyal customer. So we are [ chin-agnostic], but the lifetime value are very different between a web and a mobile customer, especially if the customer is a net customer. And we're very happy to be growing when it matters, which is in the app. So this is also very important.
Click & Collect, 61%. This is great economically. Deliveries for us account 2% or less than our digital revenues. This isn't heard of, and this is what makes this channel very profitable for us. The marketplace is also growing a lot. We are starting to -- it's starting to ramp up. We'll provide more details about that in the Investor Day. And same with health care. We don't talk much about what we're doing in health care, about store services.
Some of our competitors are way more vocal than us. But I think we are second to none in what we're doing here in terms of the marketplace. Digital and also in the health care side, and we'll be happy to talk more about that on the Investor Day.
We are very happy in terms of the advantage in sustainability and the ratings show that. We're not a fan of the ratings. We don't work for the rating, we want to do what we believe. I think there are a lot of problems we rate even ethical problem, some of these companies, they give more disclosure to [indiscernible] the service than who doesn't like us. But still, they are seeing what we're doing and the ratings are improving.
And finally, we keep very optimistic about the future. I mean there's so much more to happen on the digital side. We have a lot of projects and initiatives, and we'll be sharing those in the upcoming Investor Day. So we know it's a [indiscernible] mentioned whoever can come, we'll be very, very happy about. Otherwise, I mean, we'd be happy to talk about some of these things in the upcoming conferences.
I'm going to New York on February 15 and 16. [indiscernible] going to San Francisco in January at some point in March will be in Europe. So we'll also be able to discuss some of these things in further detail with you. So thank you all for attending the call, and especially thank you all for support as long-term shareholders.
Thank you.