Vivara Participacoes SA

BOVESPA:VIVA3

Earnings Call Transcript 2020-Q1

[Operator]

Good morning. Welcome to the conference call of Vivara to announce the results of the first quarter of 2020. Today, we are going to have Messrs. Márcio Kaufman, CEO; Paulo Kruglensky, Vice President of Operations; and Otavio Lyra, CFO and IRO; along with all the Investor Relations team of the company. This conference call is being recorded. [Operator Instructions] The audio is being simultaneously presented on the Internet at the address ri.vivaro.com.br.

We would like to clarify that statements made during this conference call relative to Vivara's business prospects, operational and financial projections and goals are beliefs and assumptions of the company's management and are based on information currently available. They involve risks, uncertainties and assumptions because they refer to future events, and therefore, depend on circumstances that may or may not occur. Investors should understand that general economic conditions, industry conditions and other operational factors may affect the future performance of Vivara and may lead to results that will likely be different from those expressed in such forward-looking statements.

Now I would like to give the floor to Mr. Kaufman, who's going to start the presentation. Mr. Kaufman, please?

[Márcio Kaufman, executive]

Good morning, everyone. Thank you very much for attending our conference call to announce the earnings release of the first quarter of 2020. We are moving to the second month after the beginning of the pandemic in the country. So today, we have today Otavio Lyra, our Investor Relations Officer; Paulo Kruglensky, Operations Vice President and also our Investor Relations manager. As we did for Q4 before we effectively start talking about our results, I would like to take the opportunity to give you some information about the measures adopted by Vivara. The Crisis Committee, as announced to the market, has been working since mid-March and has gained a different concern such as, for example, e-commerce, people and relationship with suppliers. These groups map and analyze and expedite the decision-making process. We were able to advance many initiatives and projects to mitigate, even if only partially, the effect of closing our stores. We have accelerated the implementation of OMS to the main markets. And we structured the shift from store very rapidly in 7 locations to assure express deliveries for Mother's Day. So drive-thru is also a reality in many markets. We have improved our digital presence, making even more products available in the marketplace, such as in Amazon website. And today, we have 140 active salespersons indirect sales through WhatsApp. So saleswomen approach customers that frequently go to stores, help them to choose products and complete sales with all safety that is necessary in the e-commerce platform. This already accounts for 15% of our e-commerce sales. All these actions, combined with the reliability of our brand, have been fundamental for us to significantly increase the sales of our channel in April and May. We have reached 25 million sales in April, and we have already exceeded the mark of a few million in the first 14 days of May. Of course, this is not the revenues that we would like to have had our stores been open and that we were operating normally. However, considering the current scenario, our team is doing an excellent job.

When we look at our future in terms of expenses, we're now a track record of expenses in revenue have come a long way. We have sought alternatives that assure us to preserve our resources without affecting our capacity to become even stronger when we recover. We are the first retail company to complete negotiations with unions. And we could apply the mechanisms to reduce work shifts and to extend work contracts. So we were able to keep the staffing structure that is the most appropriate to the current time without affecting the income of our team.

We have also reviewed the investment plan for 2020. In addition to the 12 stores that were delivered in the first quarter, we are going to implement another 9 stores that were already going on before the quarantine, totaling 21 stores for the year. Projects related to the omnichannel strategy are now priority, in addition to investments in the factory are planned until the end of the year to increase our production even further.

We have started to gradually reopen stores on April 29. Until yesterday, 13 operations had reopened, reaching, on average, 50% performance in same-store sales as compared to last year, in line with our original expectations. Other than that, we have a solid balance sheet that will make it possible for us to overcome challenges. We closed the quarter with BRL 473 million in cash equivalents, BRL 279 receivables from cards, in addition to BRL 384 million in inventory. Vivara is well positioned to make the most of opportunities that might arise. And we have an unchanged commitment of increasing sales in the same -- in leading shopping malls in the country and making the most of all channels. Our resources are involved. We have a commitment to our shareholders to make sure that we use our resources to support our long-term growth strategy.

Now I'm going to go rapidly through the -- some points of the first quarter of 2020. 2020 started with great sales prospects. In January, we grew 10 -- more than 10% in spite of Carnival. In March, we had 2 very strong sales -- weeks of sales in the beginning, until there was a reduction in the flow of people going to shopping malls and then stores closed. More than 90% of revenues coming from physical stores, we felt very rapidly the drop in sales. And after April, we tried to have cost reductions and expense reductions. So our margins were pressured. If we compare the 2 periods, it's important to highlight that the pressure in the gross margin came exclusively from the factory without any effect of increase in raw materials in dollar, which was offset by the good performance of our collection items and our appropriate pricing policy.

Now I am going to turn the conference over to Otavio, who's going to address in more detail the numbers of the quarter. Otavio, you may go.

[Otavio Chacon Amaral Lyra, executive]

Thank you, Márcio. Good morning, everyone. Thank you for the participation, where we can see the details of the company's operational sales. We had BRL 263.8 million in gross revenues, with a retraction of 3.7% in comparison to the same period in the year before, with a highlight to physical stores. And this -- we had BRL 238.5 million and a positive highlight, our e-commerce that had been growing that started this quarter. And then there were some stores that closed, and it was small. And we started seeing the effect of our actions and e-commerce multiplied its volume. And we had BRL 22.3 million sales in the first quarter.

Net revenue was BRL 263 million. Same-store sales were minus 7.4%. It's important to highlight again, as Márcio said, that until February, we had a very positive performance with 10.7%, in spite of the unfavorable time of Carnival this year. So we were coming at a strong base with many -- with good sales, new stores in the first days of March from the 1st until the 19th when we started to feel a stronger effect of stores being closed after March 21. From the 1st to the 19th, we grew 31.5%. So if we were to continue at that pace, we estimate that our growth would have been around 12% in the first quarter, which would be very positive.

So as to our sales mix, jewelry gained share. Accessories is also gaining share, and we had a loss of share in watches considering the period if we only look at products. And then I'm going to give you more details on the next slide.

March revenues had a drop of 28% as you can see to the left of the slide showing the effect of closed stores, and it was very strong for obvious reasons.

Now on the next slide, here, you can see the evolution of gross profit and gross margin with BRL 137 million, in contrast with BRL 145 million last year, a decrease of 8%. So as to the margin, it was 67.6% in contrast with 66.5%, a retraction of 1 percentage point. And the reason for that was related to the reasons we mentioned before, the increase in the factory structure, remembering that we were prepared for a quite accelerated growth pace, reinforcing the structure in the -- the personnel structure in a factory. And this in a scenario, when there was an integration of sales, was very strong. And obviously, this affected the profitability in the period. We had employees being laid off in March. And we have had a reclassification of some factory expenses to better represent our margin as compared to previous periods.

And here, I'm talking to the table on the right-hand side of the slide. So some expenses have been reclassified and appreciation, too, is related to the factory. So there was a pressure in the margin of 1.7% and the rest came from personnel. It's important to highlight here that the company is showing our efforts to neutralize. And also in the beginning of the year, we were very successful if we compare period-on-period. It's important to highlight as a trend that until February, the gross margin of the company was 68.5% with an expansion of the margin as compared to last year.

Now going to the next page. You can see our sales expenses when we had BRL 78.8 million in contrast with BRL 73.7 million same quarter last year, with a growth of 6.8% representing 38.2% of the net revenue, in contrast with 33.5% of the net revenue last year. And here, the effect of March, especially with a lower dilution. So the result of this increase in expenses, especially related to increase in our staff, also the head count with new operations, new stores. And so in the beginning -- in the scenario where revenues had been going down, this has an impact. Freight increased because of the e-commerce operation by almost 30%, and it's also a cause of short-time pressure here as compared to previous periods and not for services. So pre-operating expenses for new stores and consultancies related to the e-commerce operations.

Now going to Page 6, showing general administrative expenses. We had in April BRL 31.2 million, an increase of 17% as compared to last year, in contrast with BRL 26.7 million of G&A. So it accounted for 15.1% of our net revenue in contrast with 12.1% in the year before with a pressure on margin arising, especially from expenses with personnel. What you can see here is that we had about BRL 4 million came from the line of personnel due to the reinforcement of the strategic areas and our new corporate governance structure. So last quarter, it was already at levels higher than the current. And if the company also increased its structure, the Board and other governance -- other changes in the governance structure to support the growth of the company. And here also, we have contracted services with consultants being hired to support our long-term strategy.

And then this was affected by this period of sales in March. As Márcio said, there are many initiatives. And obviously, it doesn't yet have a significant effect in March, but it had been -- you're going to see the impact of those actions next quarter, as you're going to see when we publish our financials for the second quarter in August.

Now on Slide 7, adjusted EBITDA and EBITDA margin. We had a 29.7% in contrast with 39%, a retraction of 23.7%. As compared to Q1 '19, the margin was 14.4% in contrast with 17.7% for the reasons that we have already mentioned.

Now moving to the slide on net income and net margin. Here, you can see BRL 19 million in the period. In spite of the impact of the COVID crisis, a retraction of 34.8% in contrast with 21 -- sorry, BRL 29.1 million in the first quarter of 2019. The net margin was 9.2% margin. Our net income had a negative impact. When we use IFRS 16, we -- when we had BRL 3.5 million in the period compares to BRL 1.6 million in the same period last year. And this is because we have more stores now. And when we look at the adjusted net income, we had a decrease of 26.8%.

Now moving to Slide #9. You can see CapEx in its evolution. So we had BRL 14.2 million, especially in new stores. As Márcio said, we opened 12 stores in the period. We've converted 6 kiosks in stores. And we had -- saw the impact from new stores, renovations and maintenance of stores. We also invested in our factory and in systems and IT and others, representing almost 7% of our net revenue. And this is the CapEx for the first quarter.

Now moving to Slide #10, where you see operating cash generation. And so here, you can see the result of sales. The company generated BRL 33 million approximately of operating cash or BRL 18.7 million generation of free cash with a payment of BRL 14 million of CapEx, and we encompassed with almost BRL 25 million last year. So we should make the same adjustment as we did before. There has been a change in the prepayment of receivables. And this obviously has had an impact in our comparison basis. And if we isolate that effect, the generation operating cash is on a more comparable basis. And the difference is attenuated. So the BRL 36 million, almost BRL 35.7 million in contrast with BRL 36.7 million with a negative impact because we did not advance the receivables.

Now moving to Slide 11, indebtedness. We had here the net debt and net cash. Here, you can see that our net debt in this quarter was BRL 173.8 million in contrast with BRL 165.4 million, a decrease of 5.1%. And here, you can see the effect of the FX rate because we have many -- we settled the effect of foreign currency and this has an impact in the results because of our exposure. We closed the quarter with BRL 473 million in cash, cash equivalents and securities in contrast with BRL 435 million, a difference of 8.5%.

Now coming to the end of our presentation. Thank you very much. We are strong and firm to raise capital and to generate capital in spite of the COVID crisis. And as you know, we are doing our best. And in our IPO in October last year, we have been very successful. And we never indicated the use of capital for COVID-19, something that we had not thought of. So if we kept the resources so that we may allocate in the right way and as we had planned, so this has reduced. So we are conservative and there was -- we hope to have a very strong recovery after the full opening of our stores. And we hope that the entire strategic plan for the long term is still very solid. We're still sticking to it and we want to open stores. And obviously, not right now. We still -- there will be new investments. We have not given them up. We just need to adjust the timing. And so we will grow again and invest in the opening of new stores, demonstrating our capacity for execution. We also want to diversify our sales portfolio, which is good for our sales, both in physical stores and then the digital platform. And we are going to continue doing this in the future. So now we wanted to invest in new platforms in our multichannel strategy and to meet the needs of our customers. And we have also expedited new investments in order to leverage the alternatives even further for our customers. As Márcio said, put very well in the beginning. A new brand, too, as I said, that we have the 4 pillars in our company. And all the 4 pillars that we mentioned in our IPO still make sense to us. We have Life and in our points of sales, close to Vivara in our company. It's a very strong brand. It has its own identity, so it really makes sense.

In a long time, it's a brand that is very compliant and that will help us. And now we are open for questions and answers.

[Operator]

[Operator Instructions] Our first question comes from Mr. Ford for Bank of America.

[Robert Ford, analyst]

I think you are doing well. Márcio, how do you feel about your businesses and the shopping malls? And what are shopping malls doing for their tenants?

[Márcio Kaufman, executive]

Well, what we've been doing as to the shopping malls, we have a good relationship. It's possible for us to have a major opening to meet our demands. And we've been using the same changes and the same conditions that the malls have been giving to all store owners. So the malls here in São Paulo have provided some conditions in March and April. They're giving the same conditions to all their malls and all store owners, regardless of whether they are bigger or smaller. Most of the malls are negotiating the same terms for all store owners. Large store owners sometimes have better conditions than smaller stores. So it's only fair then to help everybody.

And what I have been seeing is that they are giving promotions. For example, the closed malls in April, and it was closed for the whole month, so they offered better conditions than they offered in March when only half of the month was closed.

[Robert Ford, analyst]

And how do you think about your capacity of leveraging personnel? How are you thinking about your mix in the mid and long term, please?

[Márcio Kaufman, executive]

Well, as to the sales force, right in the beginning of the pandemic, we tried to leverage the salespersons who were not working in the malls. We gave them quotes and we called those action [ jewelry ]. And the saleswomen were in the stores with a very large customer portfolio, encouraged them to increase relationship with customers, to keep customer relationships at celebration days like Christmas, Mother's Day. And now they have seen the value of having a good relationship network. So we have been encouraging them to keep in touch with customers and to tell them many customers were not used to using e-commerce for shopping. And we have seen how much they can help them in online shopping. So this has driven up conversions in the site a lot. And we have more saleswomen, and there are more and more joining. We are going to have them working all over Brazil on the sales force. And the fact that we have a well-trained sales force with the best prepared skilled women in the malls, we may use to leverage our tool. Additionally, we have our delivery program so that we aim to offer the same convenience that we have in São Paulo all over Brazil, which is delivery on the next day. So this is very interesting because customers who have the habit of going to the mall, they can just drive to the shopping mall into the parking lot and pick up their product, just like a drive-thru. So they drive through the mall's parking to pick up whatever they have bought. So in terms of logistics, the saleswomen who are at the mall separate the products, and the logistics company delivers that to the customer's home also. That's another alternative. So we have home delivery and buy and pick up. And then our saleswomen are also calling the customers' homes, and then they can have their jewelry delivered the next day. And buy through, they buy through WhatsApp from the saleswoman and then they go to the mall to pick up their products.

Now 13 of our stores are open, and we are planning to open another 5. So all these digital tools, along with the website, are making it possible for us to minimize the losses from having our stores closed. We were really surprised how well this went. As I said in April, we had a threefold growth as compared to last year. We have sold more than BRL 20 million, which means 500x more than we sold last year. Although we are going through difficult times, I believe we have been able to minimize the losses.

As to the product mix, as you have asked, we were already thinking of a broader product portfolio, accessories, glasses, perfume pens. And what we see is that these items are gaining share. And now with the pandemic, these items have increased their share even further. And also, we were preparing ourselves since the beginning of strategy to increase some sales of silver jewelry because we've been seeing a drop in the sales of gold jewelry. So we were able to increase the margins, producing well. So the representative [indiscernible] of silver or the share of silver in our sales has grown as compared to gold, and we are prepared to meet the needs of customers with a broader mix.

[Robert Ford, analyst]

Is it possible to compare different margins?

[Márcio Kaufman, executive]

Well, we can't really hear your question because your connection is not so good. But we think you're asking us to compare the margin of silver with something else.

[Robert Ford, analyst]

So these items that you have mentioned have a very good margin.

[Márcio Kaufman, executive]

It's more than 70% greater than the margin of gold. What we have been seeing over the past few years is that our new jewelry items have increased their share. So silver jewelry has increased their share. We have been able to in-source production. We have both yellow gold plated, and these jewelry have been gaining share, especially in Life brand and in its mix, and their share is going to increase even further. Having a jewelry that looks like yellow or red gold is good. They have a better margin. And when we do it in our factory, we use our own factories, the margin is even better. It's a good mix for us to leverage.

[Operator]

Your next question is from Joseph Giordano from JPMorgan.

[Joseph Giordano, analyst]

Márcio, first, asking you a question. I would like to explore that you mentioned in a material fact regarding the IPO cash. I would just like to understand what you think when you look at all the evolution and everything that has been going on over the past month. How would that impact your expansion plans and your growth?

[Márcio Kaufman, executive]

So maybe we could rethink. In multichannel, Joseph, we've been working very intensely in our multichannel strategy for many years. So for more than 3 years, that people can buy from home and go pick up in the stores. And after, the pandemic is significant part of e-commerce, 30% to 40%. And now -- and we've been working with the multichannel strategy in stores, and then people can buy on a website. And that can be faster. So what we've launched this month, the company customers from other states from Rio de Janeiro, Brasília, Curitiba, can buy on the site. And then the next day or even on the same day, they get their items at home. So this multichannel tool, we see that the pandemic is here to expedite things that have already been going on. And we think that this is going to be even further increased. So many of our customers who used to buy on the physical stores, they are buying now on the website. So we believe that these are trends that have come to stay. So before the crisis, the e-commerce was about 8%. Now it's going to increase even further during the crisis and even after the COVID crisis. I think that it will take a while for people to go back to the shopping malls, even after they reopen. So the physical stores in the shopping malls are a location of experience. Our saleswomen are trained to provide that to customers. And customers who -- when sometimes customers went to the stores and then end up buying from the website. So web stores will be a location for them to experiment products, and they will buy from the store from the website. So we have always paid well our saleswomen. So if they buy in the website, although they don't buy directly from the saleswomen, but they gave some consulting, they're paid for that. That's something that we want to keep. And I think that shortly, we will no longer separate what is a physical store and what is e-commerce. Everything will be together. So people go to the store and buy online or look at things online and go to the store to pick up. So customers want to go to a Vivara store. They enjoy having the experience going there, seeing the store, trying on a product, talking to the customer. That's why we still have physical stores open. This will continue to happen. We will have customers who want to have a Vivara store close to where they live.

I believe that we will be able to have even better negotiations with shopping mall owners, and we will be able to choose even better. Unfortunately, I believe that after the crisis, many retailers who have problems may go out of business. And then I believe that shopping malls will be able to offer us better conditions and better locations, too. And next year, we were planning to open 80 new stores, and we are still studying because things are changing very fast. And it's very difficult for us to make any forecast of how many stores we are going to open because we have the goal, a number at the goal, but we need to put that on hold and reanalyze everything and think better and wait and see. We have many shopping malls and the virus spreads only in a few of them, and we need to reassess our plans. We are a 30-year-old company. We might have 1 or 2 years slightly more difficult than we would like, but we still have long-term plans. We want to invest on verticalization in our saleswomen, too.

[Joseph Giordano, analyst]

Just another point regarding your online channel. What have you been seeing in terms of the marketplace? So the company is already connected. How do you see demand, customer profile? How has this been this experience for the company?

[Márcio Kaufman, executive]

Excellent question. This was not one of our main strategies. Now they have become naturally, and we know how important this is. We work today with Amazon and B2W website. We can still do much better, is to have better conditions. And now we have a marketplace policy and our team will work in those websites. It's very important to say that we have a very broad range of products. And now our wisdom is to identify the right product for the right website.

The mix I offer in Amazon is different from -- than the mix that I offer in Americanas. So we have shopped together gallery and others. So we are negotiating with other sites to sell the right products in the right sites. So sometimes, it makes sense to work with Vivara products; in others, it's our brand Life; in other, it's watches. So as we have a broad range of products. We have a different strategy for each marketplace to best adapt to be present everywhere we can. And we want to have more presence in more channels where customers can see our brands.

[Operator]

Our next question comes from Helena Villares from Itaú.

[Helena Villares, analyst]

My question also regards e-commerce. I would like to understand better, what are you seeing now exactly in April and May in terms of our customers, the mix? You say that silver will be gaining share. What do you see now? What do you see in terms of your performance during the lockdown? And are you performing worse or better? And also regarding the mix, as you said, you're going to gain relevance. What's the difficulty of the day-to-day in the store? The average ticket, is it much smaller than gold? What can you provide in terms of profitability to stores as to the mix in the website and the mix we offer in our physical stores?

[Márcio Kaufman, executive]

Before the pandemic, we had -- gold had a larger share in our physical stores. And the share of gold was higher in physical stores than it used to be in the e-commerce. Now in e-commerce, the -- its share is very similar to what it used to be in stores, about 50% in the e-channel.

Silver, which had a 40% share in e-commerce, today has a share of 30-something percent, a smaller share. And in the stores, it accounted for 15%. So what we see is that the share per category on the website is now very similar to what used to be on physical stores. So as people that used to buy in our physical stores are now buying online, this has changed the shares of products that we are selling online. And that's why the share of silver has changed, as I said before.

In terms of profitability, we see that effect, that share is -- has now a larger share will help us.

[Operator]

Please standby. We are having some connection problems.

[Technical Difficulty]

Please standby while we reconnect. And now our next question comes from -- please standby, we're having connection problems. We are reconnecting.

[Technical Difficulty]

Please, ladies and gentlemen, stand by while we solve our connection problems. Ladies and gentlemen, please wait while we connect the speaker. Thank you very much.

[Otavio Chacon Amaral Lyra, executive]

This is Otavio Lyra. I apologize. We had some technical problems. So you may continue with your conference call. Thank you very much.

[Márcio Kaufman, executive]

This is Márcio. This is Márcio Kaufman. I was giving you an answer. In terms of customer profile, we do not yet see any changes. Although we work with A and B class customers, we are seeing the same sorts of customers on the website. Now as more customers are migrating from the store to the website, so we have more sales and more gold being bought through the website and fewer watches on the website in terms of share. We do not see any changes in customer profiling, and I don't think this will happen. I think that we are going to have more customers going into Vivara as in 2017. When in spite of very strong retail crisis with significant drops in sales, we could keep our revenues in 2016 and '17 with all our customers. Now in spite of the increase in share, we have brought many more customers. It has doubled in a year, especially with silver. I believe that now we are going to see a similar change in large customers, maybe buying more accessories. It's something that we have seen in past crisis.

[Operator]

[Operator Instructions] We have a question from Mr. Pedro Fagundes from XP Investments.

[Pedro Fagundes, analyst]

Márcio and Otavio, I have 2 questions. The first one, it would be great if you could share with us a more firm assessment of pricing industry as a whole, but how Vivara is positioning itself? You have been able to increase competitiveness a little bit with the recent changes in gold prices. And I think that one of your main competitors has always been tourism. Can you see any opportunities to capture a larger share of the market with people traveling less? And I say this, once life goes back to normal, more or less, with people traveling less and spending money in other things.

[Márcio Kaufman, executive]

So Pedro, I hope now the connection is better, and it seems to be better. So your first question in terms of pricing, we are playing close attention and monitoring everything and the FX rate that has a strong impact in gold prices in Brazil. So in the last week, we see a lot of volatility in gold prices in our expectations, and we have heard during -- whenever we talk to people, especially in terms of the gold prices, we have reduced our inventory. And this helps us to have faster reactions, so before we [ rebuy ]. So we suspended purchases. We are not manufacturing anything since March 25. And we might resume our operations in the next few weeks. And there are opportunities for us to capture. Before we start buying gold again, gold and silver, too, although it's a less relevant competitor in terms of raw materials. But we are prepared, and we are working with in-sourcing and to take on additional volumes in silver, too. But we are having some price increases here and there. So in January 19, gold prices was at [ BRL 155 ]. And now it's almost twice as much. It doubled. So when we see the long-term effect of that, it really affects us. And it has an impact as we change products. So as we do as we are doing, reduce the impact on the front end and we have an advantage with the rest of the market. So for this period, when our stores are closed, there are very few jewelry stores that are very well structured for online sales. And then if we take major names that have active sales and invest on material resources to try and capture customers, which is different from direct sales through Instagram or Facebook, I think that by now we're already identifying an advantage in that area. We see some of the most -- more promotional players. They are having to have promotions and sales, and we are stable in terms of our levels, and we've been working to offer the right product for the right time for our customers. And they are accepting it very well.

[Pedro Fagundes, analyst]

As to tourism, Márcio, would you like to say something?

[Márcio Kaufman, executive]

Well, Pedro, as to tourism, in fact, with the crisis, we have seen that people travel less once the dollar is very expensive for us Brazilians and people decide to give a present here in Brazil instead of investing in a very expensive trip. So our prices are very inviting. So once it becomes very expensive to go on a trip and people would spend too much or buying something more expensive, they do not buy a car, don't buy a house or a house or a car or an expensive trip. And instead of that, they buy a good piece of jewelry and that certainly helps us and we can grow in that space. It's also time when gold has higher value and people assign more value to that. We've been following gold prices. We know that a ring with 5 grams of gold today have a value that is sustained. They want products that are memorable, that are long-lasting and special. And I believe that right now, when people are going through difficulties, afraid of diseases, people want more long-lasting items, something that won't tear or be spoiled or worn or anything, that will last for a long, long time. I believe that the fact that we have a very well-structured website will be good for us to gain market share in the next few months.

[Operator]

If there are no further questions, I would like to turn the conference back to Mr. Kaufman for his closing remarks. Mr. Kaufman, please?

[Márcio Kaufman, executive]

Thank you all for your presence today. At this time of difficulty, when everyone is staying home, I hope that you are staying home, too. We've been working intensively with a very focused team to overcome difficulties and would like to thank you all for your presence. And I would like to apologize for the audio problem that we had, the interruption of our call. And thank you very much for your attendance, and have a good day.

[Operator]

The earnings release conference call of Vivara has now ended. We thank you all for your participation, and have a good day.

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