Vittia Fertilizantes e Biologicos SA
BOVESPA:VITT3
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Vittia Fertilizantes e Biologicos SA
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Good morning. Welcome to the conference to disclose the results of the third quarter of '23 from Vittia. This video conference is being recorded and can be accessed in the website of the company like in the official YouTube channel. The presentation is also available for download. We inform that all participants will only be watching the video conference during the presentation and later, we will begin the Q&A session when further instructions will be given.
Before continuing, we use the moment to reinforce stated declarations have -- are based on the [indiscernible] from Vittia and the current information are available for the company. These declarations can involve risks and uncertainties have
[Audio Gap]
in view that they regard future aspects and depend on circumstances that may or not happen. Investors, analysts and journalists must consider that events related to the macroeconomic environment to this segment and other factors that may make the results be materially different than those expressed in the respective -- prospective declarations.
We have in this video conference, Mr. Wilson Romanini, CEO; Alexandre Del Frizzo, CFO and Director of R&I; and Henrique Monteiro Ferro, Director of R&D.
I would like to invite -- to pass the floor to Wilson Romanini that will begin the presentation.
First of all, good morning to all of you. In this moment, we are going to pass the results of the third quarter of '23. As Thiago said, we will have time at the end for Q&A that you give. So talking about Vittia in this third quarter, we have a gross revenue in the biological segment of BRL 105 million, 4.6% more comparing to the quarter of the previous year and BRL 171 million, considering the first 9 months, 11% more than the previous year.
Being that in biological defensives line, we had BRL 55.2 million in the quarter, which is 1% more and we take the first 9 months, almost BRL 110 million, 11% more than the 9 months of '22. The net revenue amounted to BRL 291 million, 5.3% less than the previous quarter of '22 and BRL 512.1 million in the first month, 17% less than in '22.
The EBITDA totaled BRL 90 million, 22% less than the quarter -- third quarter of '22, BRL 96 million considering the first 9 months, almost -- we remember that we had the first quarter that was very difficult and this total -- amounted to almost less than 40% considering the first 9 months of '22. The net income was BRL 58.1 million in the third quarter, 25% less than '22 and amounted to almost BRL 57 million in the first 9 months compared to the first 9 months of '22.
The CapEx, we had BRL 11.3 million in this quarter of '23, 22.5% less than '22 and BRL 38 million in the first 9 months, 23.3% less when comparing to '22. You must remember, that we basically finished our great investment in the part of the bio defensives.
Talking about the performance here, I would like to talk to you. The agri-business has its characteristics, we believe, in an industry that is an open sky. We were in a strong rhythm thinking about '21, '22. And now '23, we had many issues that must be considered, a political picture that is a little concerning within the agri-business. We have the issue of temporal landmark, safety of private property. So in this stage, when I was talking to a rural producer, he used an expression that was very interesting. The agri is [indiscernible] is fearful when we take a situation of the clients that have a perspective that is not as positive, and we have an issue like El Niño, the climate. The producer has been purchasing as we use in the expression here, from hand to mouth.
We finished the year of '22 with high stocks in the storage. So it's been a great challenge. It's interesting for us. We began the third quarter strongly. We -- but now we are here with a problem where we have today in Brazil, basically 50% of the area with grains. In the same period of last year, we were with more than 70%. So truly, there is a slower pace and we had in the period. The final days of October or beginning of September, we had a good time with rain, but we are with a little drought that can prolong itself up to the 17th or the 20th. And all of this will leave producers concerned with the reason and it's obvious that this will affect intensively the industry.
You can see the results of the other companies. I even used the example to talk about the [indiscernible] that in the third quarter of the last year closed with $402 million. It closed 1/3 with $2 billion in terms of result and profit. So the agri-business is going through a challenging scenario. I think that what's important to say here looking towards Vittia, a company that has a high degree of governance that truly has a team that is ready with good moments, for the good and bad moments, we leave this strengthened. I think this is very important to notice, and we are going to enter 2024 much more positioned thinking about the Brazilian agri business. I mean, it's like this. I've been working with this for a while. And sometimes, it like jokes with us.
So it's important for us to have the capability, the management spirit to understand at this moments can come and then go, and who effectively [leaps] well can collect good fruits and we had an important issue with this challenge, the daring market, and without a doubt with a downfall in the prices of input, this effectively touches up on our revenue.
Let's talk about the scenario. We have a good scenario. We have the cultures being -- giving to producers a good profit, but all of this depends on the climate. How will it be effectively thinking about El Niño. An important thing that you can see in the -- that they did not have such a big growth. We had some information, the market went down. And you can see that the market of biological although this retraction has been growing. With our position, we still do an entire work in the part of investments, thinking about PDI, Research and Development, RDI, there is a downfall in the prices of Bio Defenders. And it's important for us to effectively bring innovations in terms of new micro organisms that are able to solve the issue of plagues and diseases. This is a constant work. For you to truly be able to create value within the process, we continue intensively working in the issue of the relationship, both with producers and distributors and the opening of new distributors and at every moment, we are working very intensely in new portfolios, products, technologies.
Now I pass the floor to Alexandre Del Frizzo.
Good morning. Going for the gross revenue by business line, we have the 2 lines of biologicals with growth in the quarter. In the quarter, the defensives grew 1%, inoculants, 9% and both through the year have grown 11%. The ones that have suffered most were the ones that continue with this process, mainly the organominerals. So in the quarter, they went down 31% with a downfall of 55% and the industrial products had a 66% fall both in the quarter and in the year, but soil micronutrients, we had a growth in the quarter, but in average, through the year, we had a small downfall and the foliar fertilizers, we have fall in the quarter and in the year.
And here, I would like to highlight, as Wilson said, we have a pressure on prices. The average price of the company in the year of 2023 goes down 10% against '22, we have a drop in prices in all these segments. In this segment of bio defensives, the drop is smaller, 4%; in inoculants, it's 9%; in foliar 16%; in organominerals 20% of drop year-per-year; in soil micronutrients 13%; in industrial [24%]. This is the average price of this segment. Of course, within them, we have an issue of mix. But just to give a magnitude on the pressure of prices, how this has been impacting the company and this lines individually.
Regarding the margin, we have a year with a lot of pressure due to this market scenario and the pricing. Our bio products, we have a small drop in the third -- both in the third quarter and in the year. The price went down both inoculants and bio defensives, and we are able to fulfill the part of this downfall with productivity gains. The part of foliar fertilizers and industrial products also had a margin drop. Most of this margin drop is due to the industrial products line. As you have seen, it was a big drop in prices and revenue, but foliar fertilizers also presents a small drop when we see the numbers separately.
Soil micronutrients have a drop in the quarter and in the year. A drop at least this line within a normal profitability. In 2022, we had a profitability that was a little bit better on what would be the historic average. And in organominerals, due to the low volume of sales, we had some input with high prices of fertilizers in those standards of the period of the conflict, which made us have in the quarter a negative result and also in the year. But we still have a little bit of this stock, but up to the end of the year, we have this perspective, we can equalize this, and we hope that things will come back to normal in '24.
Next slide, in the part of selling, general and administrative expenses. We are keeping our strategy plan. We continue to invest in the part of market development, amplifying the commercial team. This has been a strategy since the beginning of the year. We know that this is a challenging scenario, but we still do not have a long-term perspective equivalent to what we are facing in a short-term.
For us, even some companies, we have chemicals that have shown their results recently. We do not see the scenario for Vittia. We must hope to have more clarity in the next harvest to understand if some adjustments must be done. Possibly, yes, but no structural adjustments. We understand that the bio market is still very promising one that has a favorable condition to present growth -- high growth rates. So we do not want to dismount or restructure what we already have. Due to the smaller revenue, we have a drop in the EBITDA in the quarter and in the year and a drop in the margin. We'll finish by keeping our strategic plan. We finished the amplification of the Phase 2 of the biological plan, doubling our capacity of solid fermentation. It's already operating. And we also incremented a little bit in the part of liquid fermentation. So we are still with a capacity of liquid fermentation and solid fermentation operating in its totality.
Move to the -- let's say, stop in the growth and the pressure of our cash flow during -- connected to the sector where the sellings are different and it gives an increase of this capital. We have been keeping a financial position that is very solid. And we have a reduction of the debt, both in nominal and relative terms, considering the drop of EBITDA in this period.
So the company is very strong financially to go through this difficult moment and to use eventual opportunities that may arise during this period. A little bit of our financial results of '23, much better. Due to this better position of the net debt of the company regarding the income tax and social contribution, we have a drop, so a better result. And in our net profit, we have a little drop smaller than the one for EBITDA due to our financial results, but a nominal drop and in terms of margin, both in the quarter and the year itself, the 9 months.
Now I pass the floor to Henrique to talk about R&DI.
Good morning. Vittia is still strong with investments in R&DI as planned for the budget of '23 and mainly investing in the new technologies of bioproducts. When we compare quarter-by-quarter of '23 to '22, the bio lines had a small reduction in investments of BRL 4.5 million and fertilizers 11.2%. But when we look towards the year, the 9 months, which is most important, we have increased the investment to 27.9% in the bio lines when we compare 2022 and an increase of 11.4% in investments in technologies related to fertilizers when compared to the 9 months of '22.
Regarding the total amounting to 2 lines, there was an increase in investments of 23.1% when we compare to the 9 months of '22. So Vittia continues strong. We have increased investments for the development of new technologies, both in the bio products and fertilizers, but focusing more in the development of products based on biologicals. Regarding the CapEx investment, in 2023, there was a reduction of 72% and the operation of the OpEx, an increase of 36%. When we see the revenue in R&D regarding the net revenue, we have 1.4%.
Regarding the key developments in our risk development of R&DI, we delivered -- it's worth to highlight, we have the regulation of 6 -- 2 new products approved by the MAPA. One pesticide that is microbiological based only fungus [indiscernible], which is exclusively from Vittia and an innovative formulation from Vittia also to control the whitefly and [indiscernible] that can transmit a bacteria that causes a disease called [indiscernible] in the culture. It's a disease that causes great economic damages for this crop and Vittia has registered and we put the technology in the market to help cultures in controlling and handling this plague.
We have also received 11 recommendations of usage for the products in our portfolio. One of them we will highlight is an inoculant to apply in the air before sowing to increase the profitability and productivity. The other recommendations are related to the new application of special fertilizers, in this case, application via the seeds.
Now I will give back to you, Alexandre.
Talking about our stock market. We still keep a growth regarding the [MPO]. We had an adjustment in our view due to this challenging scenario for the part of the supply that we see in companies -- international companies in the segment of chemicals. In the part of volume of negotiation, we had a drop in November. We have our repurchase program open, assessing opportunities. The company has no intention to repurchase. We always want to be closer to the market to expand the net value, but within a scenario that can offer opportunities, opportunities to the base of the stock market, our program is approved by the council and we will use eventual opportunities for prices. And we had the change of the market going through a BTG in the market.
Now we enter the part of Q&A.
[Operator Instructions]. And our first question comes from Gabriel Barra from Citibank.
I have 3 points to mention. The first one looking towards the issue of volume. You have mentioned that there was a drop in prices. And when we compare this with revenue, you can see some different dynamics mainly of the biologicals growing volume and a drop in volume for organominerals, chemicals and et cetera. What I want to understand here and maybe Wilson and Frizzo could enlighten more how you are viewing this last quarter of the year that our view will be the -- in our view will be the most important quarter for the company. And even the same question that I did in the last quarter, how much this volume was fast through the end of the year? If there is a possibility to pass this to the beginning of the next year, given this delay in this year -- a culture in this year that is more uncertain.
The second part about the propylene, the leverage. When you look towards the -- you are actually more in a comfortable position. And when we talk and we had this question also in other calls regarding M&A, a sector that is going through a difficult situation, I would like to hear how you see this market in terms of allocation of capital? You talked about repurchase, there is a limitation due to liquidity. Could you enlighten more how you allocate capital and M&A? Would be very interesting to hear from you.
And the last one, if you could enlighten R&DI, what's the focus of the company? What can we hope of new products? And where do you see more opportunities to launch products and opportunities for growth?
Well, Gabriel, regarding the first question. I think you may have seen, I mentioned we began the third quarter -- the fourth quarter very positively. We had a strong October and considering even the drop in prices, October was amazing. We have an expectancy of this last quarter that is very strong, but we were taken by surprise with El Niño, which is very complicated, and we are 10 days with no rain in Brazil. You may have seen the news that replanting in areas in Mato Grosso, stopping the -- cropping the harvest in other regions, a serious problem of excess of rain in the south.
So it's what I say, the agri business is an open sky industry. We may do everything in the best way possible, but we must count effectively with the climate. And we know that El Niño is not that simple. We have an expectancy now with the return of the rains in the 17th. And without a doubt, the plantation will continue. The producers, as I said, when you take the issue of the culture is profitable, there was an accentuated drop in the price of supplies. Without a doubt, this will cause a bad situation.
We even had last week or the past [indiscernible] gives an advisory for you to understand the producer taking the harvest of soy in some moment, especially the south had BRL 15,000 of profitability by acre and now it's around BRL 5,000. This can be sad for them. When you have [indiscernible] the more, the better. So you have it so small, it's really bad. The country is profitable and the producer will use technologies. We do the application, you even take when we go for the scenario of foliar fertilizers. Right now, this was the moment to be tractioning and more intensively.
So we hope that with the rain, we are going to have a good November and a good December. And without a doubt, with the delay on the planting, there will be a low for January and February. I understand the climate. It's interesting. In January and February, we will have the possibility of being a strong month.
Speaking about this issue of this last third quarter, how will we enter the first and second month of '24. Regarding the leverage, we took on a position, as I said, Vittia and us, we have -- we are very cautious in view of how our business works. For you to understand, we were well positioned in the M&A around November, October of last year, and then came the elections. There's questions on how the agri business would be, and we decided and there were some particularities, but we thought it would be better to leave that and standby and automatically preserving the issue of the financial health of the company.
I have been for more than 30 years in the agri business, but one of the things that makes the company a winner is for it to be well positioned in the financial part. I have seen a lot of people in the agri business that truly did much more than they should and the debt disappearing, are living in a situation now that is extremely unfavorable. But we have this characteristic. Of course, we have a department headed by Frizzo in the issue of M&A, we have a lot of things.
We are looking and assessing. Without a doubt, the price of these assets will go down and we are thinking about this. This is very important, and that's it. We do not discard anything, but I mean, we want to do this in the most positive time, it's the right shot the way that we conduct our operations here.
Well, now I will pass the floor to you, Henrique.
Thank you, Wilson. Well, Gabriel, in general, we are focusing in bio prospection of new microorganisms to control plagues and diseases, should meet a gap in the portfolio. But of all the market, there are some plagues that are difficult to control, that no chemicals control and we are trying to control this plagues and diseases. So to meet this gap of the market and consequently of the Vittia portfolio. But Vittia has a complete portfolio of biological technologies to control plaques and diseases, one of the most complete in the market. Thinking about the development of inoculants, which are the products based on bacteria, we are -- there is an enormous gap in the market now inoculates the technologies, basically for legumes and specially soy, we are looking, developing, seeking macro organisms for many other species, cultures that are planted in Brazil.
And focusing on formulation. It doesn't matter to find a good microorganism to have a good efficiency in [indiscernible], but we cannot take this to the field and the formulation should meet the characteristics as fundamental. So we are focusing on these lines and also in nutrition, the special fertilizers, the [indiscernible] biofertilizers. We always seek new competitive materials that are more efficient than one we have in the market. I hope I answered given an overview to you. Thank you.
Our next question comes from [indiscernible], a sell-side analyst from XP.
I would like to first talk about biologicals. Mentioning what Wilson said that it had an impact of prices in the third quarter. If this affects biologicals, given that we through the quarters have seen that this business line has a resistance in prices. So as we said in the beginning, even because we have heard that some other competitors would be any momentum of a downfall in prices, as you can see in the competition of this adjustment of prices, this would be the first thing to say.
And the second point regarding something that Wilson mentioned regarding the liquidity, how much this is an agenda or a concern of the management? And if it's truly something that the management is interested in, if there are more measures aiming to improve the liquidity?
Good morning, Pedro. The issue of the drop in the prices of biological products will happen without a doubt. We had the biologicals, this still has a similarity with chemical products. And the chemical products dropped prices in an absurd way. So we will have a drop in biologicals without a doubt. But what has Vittia been doing to support this fall in prices? You can see the investment that we did in terms of the manufacturer to scale. We are working every time our volume this year is much greater and we have a very interesting capacity to amplify this. And one of the things that we touched on is the issue of new technology to improve the mix of the business to have a better result in this operation. The technologies that we have today in the market begin to enter.
We have a lot of competitors. And without a doubt, the market notices this, and it will pressure for a reduction in the pricing. So what we hope for is a reduction in prices, but we do not have a expectancy of a lot of a margin drop because we will be able to do this through a scale within our process of business in our biological products line. And talking about the world, the liquidity, I will pass to Frizzo and he will explain better.
Pedro, without a doubt, this is a constant concern issue of liquidity. Obviously, we have, as I said, to be a company that is closer to the market of going -- we are going through a first phase, but the specific issue of the current moment has 2 factors. The first one is that we are -- do not have a lot of leverage. So ways to increase the liquidity would be to make an offer, but now we see that it makes no sense to do an offer. We always said that we would have to continue our M&A strategy. And then we are obviously being very cautious hoping for better opportunities and the best moment to execute this strategy.
And the second issue in the allocation of capital. As I said, it's not what we desire, but we are going to do this if we put this to the current base of the stock market. As I said, it's not -- we did not open this. It's not the objective to repurchase. But if we understand that the price is different from the fundamental, I think that -- even being not that much leverage, I think that we must use this opportunity for the current stockholders even though this goes against our strategy to increase the liquidity.
So we have a long-term view, but in a short term, we need to be very cautious and to use the opportunities. As Wilson said, we want to do the M&A, we want to be -- we want to have more scale in the market. But in the short term, we need to be intelligent when executing these strategies. So we are going to see the M&A with cautiousness to bring one that can generate value and we are also going to look towards the repurchase programs to give value to the shareholders who want to have a long-term strategy, but we also want to generate value to our base of shareholders. And unfortunately, it's more important -- I don't know, fortunately or unfortunately, to get value for the shareholders in the bases than the liquidity, this is truly in our front in terms of priorities.
And if you allow me, just to use -- dig back on the last question, you talked about M&A and allocation of capital. But thinking about CapEx, you mentioned this about CapEx, [indiscernible] is the normal cycle of CapEx without impacting the leverage considering the industrial capability, the company, is it comfortable with the capability that it has for the next years? It's a little bit difficult to measure, each category has a metric of volume. But now are you comfortable with this industrial capability?
Yes, we have a capacity that is very comfortable. We have a third phase. Obviously, it will depend on the rhythm of growth in terms of volume. But even considering this third phase that is basically just the purchase of equipment that the entire structure was already done, the CapEx for the industrial part of biologicals is not relevant, given that we can reach 10 million of leaders considering this third phase. Truly, the CapEx for biologicals and industrial, we do not see anything relevant for the next years. We will not even reach the CapEx of the level of the previous years. Of course, we seek opportunities of efficiency investment within our plant, this will create an investment, but surely, we do not see nothing that's relevant.
Our next question comes from [indiscernible], a sell-side analyst from Itau BBA.
Can you hear me well?
Yes.
If you could just come back on an issue that we talked about in the beginning, but I'm certain that many are thinking, which is regarding the delay in planting soy and potential delay in corn. I think that beyond the issues of delay, there is an entire potential of profitability, a reduction of the area of corn. I would like to understand, first, how do you see these risks for the next crop? But above all, what can you do in terms of commercial strategy to decrease the risk because this is one of the greatest strengths of Vittia, I would like to hear from you on a daily basis, but you have been talking with sellers, I think it would be interesting?
If I could just make another question, thinking more about the short term. We have been seeing issues about replanting soy. I would like to understand if this can push [indiscernible], if it can impact the results of the fourth quarter to improve their perspectives, what are these 2 things?
Okay. Let's begin with the replanting. Without a doubt, we have technologies that are highly connected to planting soy, some products will be used. So we have been expecting yesterday talking about the daily basis of our work, we were looking towards the part of inoculants. What do we have? We have today the stock within the manufacturer able to supply the entire chart that we have. There is a lots happening in the region of the country, the Northeast. So we are easy regarding this effectively the demand that will come. Now we even made a decision, we usually, in this time of the year, we migrate directly to other technologies within this lab which is the case of the [indiscernible]. And we decided to leave not in the same intensity that we have.
But to leave a little bit of reserves first to have a capacity to meet these [indiscernible] that will come from soy. And obviously, you have an entire issue of foliar fertilizers, there are the seedlings, the biofertilizers, and we see an expectancy of having an increase in this lines in face of this problem of replanting because the problem is very big. So we can see that this will effectively enable something in this sense.
And speaking about the delay in the soy, without a doubt, we are going to have a drop in the [indiscernible] within the expectancies that we have, I think that corn will have a value that is very big in terms of pricing. In the period when the market truly notices the size of this drop, we talk about 20%, 25%, and not only regarding the drop off, the planting but also the technology itself. So if you diminish technology, you have a smaller productivity by acre. And we hope that even with this reduction of 20% today regarding corn [indiscernible] is that the producer that will plant, if they can plant it, without a doubt, they will have this grain valued and will use technology to produce more by acre.
So those who can plant this corn in the right window, without a doubt, we'll have good fruits. And with that, of course, you talked about strategies, Vittia has been looking towards the opportunities. We have other markets. We have a functional focus in the market of sugarcane, a market that is very strong, both on the power plants and effectively the supply of sugarcane. So Vittia is seeing where it will truly seek a performance to increase its results. This is our great job.
Our next question comes from [indiscernible], a buy-side analyst from Versa.
Can you hear me well?
Yes.
I just have a question for Henrique. Henrique, your comment was interesting about the product on the greening of citrus. From what I understood, this year, it's been a headache for the producers in Brazil. And historically, it was devastating for Florida, the U.S. and Brazil being one of the greatest producers of orange in the world. But it was very interesting that there is no cure for greening about this product. I'm curious if it's promising if it can bring an important solution for those who produce citrus? And given the size of the production in Brazil, what is the level of optimism that you have with this project, given that it's a first project that brings some kind of solution for this problem?
Truly this is a worldly problem of those who produce citrus. And here in Brazil is no different. It's a serious problem. The technology that was developed is another tool for agriculture. We do integrated handling. So it needs to be adopted, but we have many tools to adopt for us to reach integrated handling and the biological technologies are one of the tools to control the vector, which is the facility. We use -- we received the regulation in this last quarter. And now we're going for the development of the market of this technology to integrate this technology to a dose that already exists, and even with the proposal with other products that we have biological technologies and reducing little by little, the chemical defenders given their high biological efficiency.
So our next step is to focus on the development of the markets and technologies. So the expectancy is very positive. So we are going to an area of market development, commercial strategies that will be implemented in the next months and years.
Well, I understood as if it was a cure for greening. So it's no cure. It's just a way to try to reduce its [indiscernible] via vector.
That's okay. This tool is to control the vector. So killing the vector, there is no introduction of the bacteria that will cause the greening in the plants.
Our next question is from [indiscernible] an investor in MGK.
The third quarter presents a expressively better result than in the second quarter of '23, but it's still below the third quarter of '22. What's the commercial strategy? Mainly regarding the territorial broadness in business partners to improve the results of the next quarter. We can still see a significant evolution in the result of the Southeast region and involution the result of the center, the Midwest region comparing to the second period of the previous quarter. What's the action plan that will be taken to improve the result as a whole? Will it be excellence in the same regions or the development of new markets, which ones?
The issue is the following: as I said, [indiscernible] has been seeking how to improve the performance. When we talk about the second quarter regarding the third, we highlight even in the position with you as to the market, the first semester of '23 was truly very complicated. The third quarter did not came in the same strength that we hoped for. Automatically, we have an interesting expectancy for the fourth quarter. As I said, October was a strong month within the company. We have an expectancy if we have the issue of the climate regulated in November, December also.
And the issue that we have been working on, you can even see though through the explanation from Frizzo. We have been working with new teams in certain markets. So this position of the Southeast disconnected to the coffee market, the position of Vittia in the market of sugarcane and these markets are less relevant in the Brazilian Midwest. The Midwest has been hurting more than when we see the Southeast and some regions where we have an index of irrigation that is much bigger. But our work is constant, how will we do this effectively, being closer to our partners, looking towards the opportunities. That's it. This is the work that we do on a daily basis.
What we want is to have a good performance. But sometimes, I even use an expression here, there's a little logic. Sometimes we cannot take milk from a stone. And we must be wise so as to not lose more money. This is our business model in Vittia. We are now creating a division in the Northeast, thinking about the coast that has a lot of opportunities aiming for the market of bio defenders, be it micro, macro, this is the work that we do in the company.
Our next question comes from [indiscernible] an investor.
Looking towards the next year, what's the perspective of the gross margin for the segment of biological? Must it be aligned with -- will it be aligned with '23?
I mean, we are working towards this, but to be able to effectively land on this issue will depend on the market. The market is more dynamic. It's sovereign. We are working, as I said. We are -- Henrique has just given some examples every moment trying to bringing actually new targets, new micro organisms, scaling, something that we talk within this world of bio defense, biological products as a whole. So we understand that we can preserve this margin for some years. But of course, it will depend on the dynamics within the company, both in innovation and in the scale in the productive process.
[Operator Instructions] Having no further questions, I declare the Q&A session closed. I would like to pass the floor to Wilson Romanini to close this session.
Thank you, Thiago. Making the final considerations, of course, we always want to show the best that we can what we have within our work, in our philosophies to show what it is. And we live effectively in a challenging moment within this business. As I said, I have been working in this market for more than 30 years. I mean, I have been here since I was born. My father was with self fertilizers. So I always heard about was soy, corn, coffee, among others. And particularly, I love this segment. And what I can tell is that we have some issues, but what it gives us is much greater. So me, as an executive of the company, believe in this sector, believe in Vittia. There's no issues that we are having -- are a part for us to have a perception that many things can be done within the company which would be -- I would like to leave this to you. So thank you very much.
We are now closing the video conference. The area of R&DI is ready to receive you.
[Statements in English on this transcript were spoken by an interpreter present on the live call.]