CVC Brasil Operadora e Agência de Viagens S.A. (CVCB3) Earnings Call Transcript & Summary

[Interpreted] Good morning, everyone. Thank you for waiting. Welcome to this video conference to present CVC Corp's Second Quarter 2025 Results. [Operator Instructions] We'd inform you this video conference is being recorded and will be available on the company's IR website, www.cvccorp.com.br/ir, where you can find complete information about our earnings. You can download the presentation. The link in the chat window here also in English. [Operator Instructions] We want to remind you that the information in this presentation and statements that may be made during the video conference in relation to business prospects, projections, operating and financial goals of CVC Corp represent beliefs and assumptions of the company's management as well as information currently available. Future considerations are not a guarantee of performance. They involve risks, uncertainties and assumptions as they refer to future events and therefore, depend on circumstances that may or may not occur. Investors should understand that general economic conditions, market conditions and other operating factors may affect CVC Corp's future performance and lead to results that differ materially from those expressed in such looking forward considerations. Today, with us the company executives, Fabio Godinho, CEO of CVC Corp; and Felipe Gomes, CFO and Investor Relations Officer. I will now turn it over to Mr. Fabio Godinho.

Good morning, everyone, and thank you for joining us. Thank you for your time in CVC Corp's Second Quarter 2025 Earnings Presentation. And today, August 13, is our dear Felipe Gomes birthday. So happy birthday to our CFO, who will present robust earnings to our shareholders that our company is delivering again. Now let us talk about CVC financial and operating highlights in the second quarter of 2025. We will maintain the same presentation format. First, we talk about growth, profitability and then CVC capital structure. This quarter was really important. We made a lot of progress in our balance sheet, P&L and operating cash generation. which was a request we often got from the market. So now we delivered a robust operating cash generation number this quarter with a higher EBITDA, higher top line and a stronger balance sheet overall. The CVC Group shows traction and sales diversification, our revenue streams. This is important and will further improve in the next quarters and years. Diversification in our revenue streams ensures stability and consistent earnings quarter after quarter, as we saw in the second quarter. So looking at growth, we opened 50 new stores in the second quarter, totaling, Brazil and Argentina, 1,565 stores, which means 100 more CVC Corp stores than we had in the second quarter of 2019, 100 stores more than we had right before the COVID-19 pandemic, 41 more stores in Brazil, showing a continued confidence in our business among current franchisees and also attracting new prospects interested in opening new stores. And thanks to our CVC sales model, a much lower CapEx, lower OpEx, no longer dependent on having the customer walk in the store. They can also buy using their own device using our digital sales model, really attractive for travelers. And only CVC can offer this sales model. So we continue to see new store openings, both in Brazil and Argentina. It shows our franchisees are confident in CVC business and also in Almundo, but also in the country's economy, is performing really well. In terms of growth, we're talking about a 15% corporate growth, revenue growing. Sales were BRL 537 million higher than in Q2 2024. So Brazil grew 10%. We are focusing on B2B. We restructured this business, as you know. Of course, CVC, B2C, that's where we started the recovery, and we had growth in B2C last year with more stores, stronger top line, higher same-store sales, et cetera. But we also conducted a deep restructuring in CVC finance strategy, B2B operations and also in our companies in Argentina. So now these efforts are bearing fruit. And so our numbers are showing it. Brazil is growing 10%. Again, we are leaders in hotel distribution in Brazil via Trend and in air travel distribution via RexturAdvance. Strong results also coming from Visual, in line with our plan for this first year of ramp-up. So we gained market share. And also, we become more international. We're moving away from our land and air distribution model in Brazil and Argentina to become a truly international distributor of tourist content. This is driving sales in our B2B unit, especially in Brazil. But Argentina continues to perform strongly, growing 37% year-over-year. Now this quarter, we're going back to the same sales level of Q2 2023. So we're now very close to the level of sales we had in the second quarter of 2023, now in the second quarter of 2025. And 2023 was a very strong year in terms of profitability for our companies in Argentina. Net revenue growing 16%, Brazil up 16%, Argentina up 18%, mainly in B2B. Ola is doing really well in Argentina, gaining market share there in B2B. We promoted a significant change in our strategy, operations. We have a whole new team there. So now we can see the benefits of these moves in B2B, in B2C and also in our companies in Argentina. Obviously, this is giving us more than 30% growth in EBITDA, above BRL 90 million exactly, BRL 92.3 million EBITDA with a healthy 27% margin, 3.1% higher than in Q2 2024; and last but not least, our capital structure, operating cash generation of BRL 130 million, that's BRL 40 million above the second quarter of 2024, leading to a reduction of BRL 118 million in the company leverage compared to the previous quarter. Now looking at our four strategic pillars, we showed this slide in previous quarters. So look at the evolution as we improved the company's operating result. Exclusive product sales continue to grow, now 21% in the second quarter, up almost 5% versus Q2 2024, increasing the concentration in preferred and recommended hotels. This is important. More volume in exclusive product means that we can ensure availability, price competitiveness and a higher NPS. So we are the only RA 1000 company in the Brazilian tourist industry because of the high quality of services we provide not only in our stores, but also delivered by our tourist service providers. And this is because of the trust we built in the relationship with them and our growing volume of sales of both air and land products in hospitality. This is in Brazil and internationally, 70% concentration now in preferred and recommended hotels. Secondly, alternative payment methods. This is very important. This strategy grew 1%, not because we lack market acceptance, this was a decision we made internally. Why? Because we are very cautious to approve installment sales to protect the company from a spike in payment delinquency rates. So we decelerated direct CVC credit for installment sales. That is why we grew only 1%. We could have grown faster. There is a strong demand for installment sales. but we decided to raise the bar in terms of credit scoring to protect the company from a possible spike in payment delinquency, which we can see in the whole retail industry with 15% basic interest rate. We can expect a higher delinquency rate. And we could see it coming. So we did not really grow installment sales quarter over quarter. It was a decision made by the company, but consumers continue to show great interest in alternative payment forms. Looking at new store openings, we continue to perform strongly with 50 new stores. And again, most of them in smaller towns throughout Brazil, where our digital sales model is highly attractive. Today, average CapEx is below BRL 50,000. And OpEx is low, too. Basically, you need 2 people to operate the store, have to pay the rent. But in Mato Grosso, there is a store paying BRL 800 rent. So CapEx and OpEx are really attractive. With that, we feel confident in CVC brand, our new store formats, our business model, which no longer relies on the customer having to walk in our store. And this is the fourth pillar of our strategy, increase our digital sales model penetration rate. Today, in CVC brick-and-mortar stores, 56% of sales come from our proprietary WhatsApp sales model, developed together with Meta, available only from CVC. Only CVC can operate omnichannel in the tourist market. That's why we continue to open new stores. We always talk about being an asset-light company. So our assets are our brands, obviously. Our brands have a great credibility, a strong reputation. But above all, we have our team. For a number of years, CVC applied for the Great Place to Work stamp, but it was not approved. And now this management is proud of the actions we've implemented. Based on our fluid program to take care of our employees' mental health, physical health, emotional and social health; it's a super complete program. No doubt, the best in the Brazilian tourist industry. So now we are happy to announce for the first time in CVC history, we have received this important stamp, Great Place to Work. Our people are CVC's most important asset. The tourist market is largely based on relationships. So this step crowns our efforts, and this management focus on the team. Again, we were awarded the ABF Brazilian Franchising Association Excellence prize, given to CVC. And Experimento brand is older than CVC. CVC is 53 years old, Experimento is 60. So this important award gives us motivation to continue to roll out our digital sales model now being implemented in Experimento. And in Q4, we will begin together with Meta in Almundo stores. Argentina is performing well, 37% growth year-over-year in Q2 now without the digital sales model. They still rely solely on customers having to walk into their stores. We delivered 37% growth before the government allows tourist installment sales. Argentinian tourists are 90% international. In Brazil, international travel is only 30%. In Argentina, almost 90% is international travel. So installment sales can be a solution to control USD leaving the country, and the government doesn't want that now. Installment sales have already been allowed for real estate, electrical appliances, vehicles. So we believe the tourist market next year in the second half will also be allowed to sell in installments. And now all our current travel sales, the 37% growth we delivered this quarter, all of it was paid cash. Can you imagine our growth when our customers are allowed to buy tourist packages using bank credit lines? It can become another big growth trigger, I think, in Argentina next year. Now strategic partnerships. This is under Belan as our B2C Vice President. We will keep focus and accelerate. We are leaders in Brazil in travel credit partnerships with Santander Bank, Livelo. This quarter, we signed with Bradesco Disney, an exclusive partnership between Bradesco Bank and Disney, plus Beto Carrero, RCI, Privalia. And we have a number of ongoing negotiations. And here, this is long term. The cost of changing partners is complex. So this is almost like having recurring revenue because we receive new customers from different markets. These are high-quality leads with probably no overlap with CVC customers, and they have a captive audience. And their tourist demand is shared with us. And these partners, they have a great potential to bring high-quality leads to CVC. We can have that not only in Brazil. We're leaders in Argentina. Practically all banks in Argentina, Galicia, Entre Rios, Santa Fe, [ AmEx ], Macro, Patagonia Bank; all these banks, they have their own travel agencies. This is a traditional model. Also in the U.S. In the U.S., Chase is the largest travel service provider with the Chase travel website. So a number of banks have similar initiatives. And nearly all travel financial products in Argentina operate with Almundo white label offerings. So we'll keep focus on this model, and you can expect news in the future. Talking about news, well, revenue diversification has become a hot topic for us. So we don't have to rely solely on Brazil B2C or on Brazil B2B or on Argentina. I think our competitive advantage, it comes from the CVC Corp group of companies. And we want to make sure we will maintain consistent growth and profitability. As we are delivering now, even in a challenging environment, especially in the credit card dependent medium to high ticket retail, I believe we're now at the peak of this challenge. So from now on, we will possibly see a gradual improvement. But our view, Felipe's and my own, and we've been discussing about that; it's not a bright outlook, especially the interest rate. So -- but our B2B has been overperforming. Argentina has been overperforming with a net-net 15% growth, EBITDA up 30% and operating cash generation of BRL 130 million. With that, I'll hand it over to our dear Felipe celebrating his birthday today, and I'll be back soon for the closing remarks.

Good morning, everyone. Thank you for joining us. Thank you, Godinho, for your words. So now let us talk about our financial performance. I'll show you a few more numbers of the second quarter 2025. So this page shows Brazil, Brazil's confirmed bookings, net revenue, take rate and a few highlights. In Q2 2025, confirmed bookings or sales, Brazil grew 10% in Q2 2024. We can also see the first half of 2025 growing 12.5% over the first half of 2024, reaching BRL 6.2 million. Our net revenue increased even above sales, up 16% and the take rate moving from 9.4% last year to 9.7% now, and revenue in Q2 was BRL 281 million. Our revenue grew 12.5%, reaching BRL 563 million. And take rate remained stable, slight drop from 9.6% to 9.5%. Further down, some highlights, Godinho already mentioned. So briefly on global clients of RexturAdvance, our strategy is proving to be correct, bringing good results in our air consolidator unit, which remains the industry leader, actually, in increasing this leadership. About new store openings in Brazil, 41 new stores, as Godinho showed us, most of which away from capital cities, following our strategy. Take rate higher than last year. We have a higher margin, and we are pursuing higher margin, but it's also related to our product sales mix. You can find further information in our media release. There was a maritime capacity reduction determined by shipowners. And so that also we have information about our take rate and the product sales mix. There's also information about our successful inventory distribution unit contributing for our growth. It's called Conectaas, and it operates in with Trend. Next slide on Argentina, strong growth in the second quarter. So top line up 37% in Q2 2025 over Q2 2024, reaching BRL 924 million, so returning to the levels of 2023. Looking at the first half, that is an impressive growth because we also had a growth in the first quarter. So we're talking about 66% growth compared to 2024, nearing BRL 2 million in confirmed bookings, so which means an increase of BRL 800 million more than in the first half of 2024 in Argentina. Net revenue up 18%, hitting BRL 60 million. Take rate moving from 7.6% to 6.6%, explained by a change in our product sales mix. Almundo, our B2C brand in Argentina, is growing, and it has a higher rate. But our B2B unit, Ola, is growing even faster than Almundo, so pushing our take rate down. The B2B rate is usually lower. And as B2B gains more relevant, the take rate trends down. But this is a good problem to have. Looking at the first half of 2025, we hit BRL 141 million, up 27%. And the take rate we have already explained. Down to the highlights, Godinho very well explained. In Argentina, we are harvesting the benefits of our strategy months ago. When the market was weak, we reviewed our strategy. to have more alignment in our processes of Brazil and Argentina. And we focused on new store openings. Now the economy is picking up, we are well positioned to serve this wave of good economic performance in Argentina. So -- and then the EBITDA margin in Argentina hit 22% this quarter, which is good progress compared to historic levels, reaching BRL 13 million EBITDA in this Q2. We also opened 9 new franchise stores, hitting 172 stores in this Q2, which shows confidence in the country's economy, but mainly in our brand, Almundo, our B2C brand in Argentina. And we will continue to see more store openings there. And the take rate, we already mentioned, is explained by our product sales mix. B2B has gained more relevance. Both are growing, but B2B grows faster than B2C. On the next page, our consolidated numbers. On the left, 100% consolidated. On the right, expenses in Brazil, excluding in Argentina. There's a foreign exchange effect, and so we show this separately because we want to keep this historic timeline we've been tracking. So on the first chart, on the left, net revenue for CVC Corp, as Godinho said, at the end of the day, our business units, they complement each other. One unit may be performing stronger now, and -- but that helps the company as a whole to maintain strong numbers. So net revenue up 16% in Q2 2025 over Q2 2024. Take rate practically stable in the first half compared to the first half of 2024 and revenue up 15%, hitting BRL 704 million. Take rate a bit down also in Q1 due to a change in our product sales mix. Argentina gained more relevance in the business and a few other points mentioned. On the right side, at the top, we are looking at expenses, G&A over revenue. And this management has made a commitment to keep this number down, always looking for more efficiencies. So we can see a 4% increase from BRL 142 million to BRL 148 million. That's below the inflation rate. So this is an important number for us. And we see a clear drop from 58.7% to 52.8% expenses over net revenue. So again, we are committed to pushing down this ratio of G&A over net revenue. And so we're seeking to improve the efficiency all the time. Looking at the first half of 2025, the expense increase is even lower, 3.4%, well below inflation, and the ratio coming down from 56.7% to 52.1%. And we also have a separate view of sales expenses, so that is expenses over confirmed bookings or sales. There's a correlation here. So in Q2 2025, this expense line grew from BRL 45 million to BRL 70 million. But there are two important effects here. There's a timing factor. A number of our obligations for actions we implemented in Q1, they were carried over to Q2. So in the first quarter, we spoke about this timing factor. And in the second quarter of 2025, we had CVC anniversary campaign. So we made a significant investment to gain share. And we gained share, and that also helped. So looking at sales expenses over sales, we prefer to look at the first half of the year because of the timing factor. So here, the absolute growth number is 19%. But compared to sales, and again, these numbers are closely related; we do not really see any growth because it was 1.9% expenses over bookings, moving up to 2% in the first half of 2025. So it remained practically flat, as we announced to the market to all of you. Further down a few highlights, revenue is growing, as we said. We want to highlight the B2B performance in Brazil and -- but also Argentina. G&A expenses growing below inflation. The drop here is 5.9%. This is G&A over net revenue and higher sales in Brazil, as we mentioned. On the next slide, a consolidated view. So we can see our EBITDA and net income. On the first chart on the left, we're looking at the EBITDA in Brazil, up almost 30% from BRL 60.8 million to BRL 78.9 million with a wider margin moving up from 25.1% to 28%. And remember, because of seasonal effects, the second is our weakest quarter. Our business is subject to seasonality. So -- but even with that, our EBITDA margin is nearing 30%. This is a relevant number for us. Looking at the first half of 2025, EBITDA soared 25%, nearing BRL 160 million in Brazil, and EBITDA margin of 28.1%. Next, the same information on Argentina, 40% EBITDA growth, hitting BRL 13 million and EBITDA margin in Argentina reaching 22.3% compared to 18% in Q2 2024. Looking at the first half of 2025, EBITDA margin is 27.5%, growing almost 30%, reaching BRL 38.9 million. The next chart shows both together. So really, this is CVC Corp in the second quarter. EBITDA closed at BRL 92.3 million compared to BRL 70 million in Q2 last year, growing 31%. In CVC Corp, the corporate margin in the second quarter was 27%. The first half of the year, our margin grew almost 26%, EBITDA hitting BRL 200 million in the first half of 2025 with a 28% margin. Further down, the company's adjusted net loss in the second quarter was BRL 15.9 million compared to a loss of BRL 4.8 million in Q2 2024, so an increase of BRL 11 million, impacted by financial expenses as the interest rate remains at 15%. But now we expect this number to improve. Looking at the first half of 2025, we had a positive adjusted net profit of BRL 8.1 million profit compared to BRL 1 million loss in the first half of 2024. This is an improvement of BRL 9 million at the bottom line, even with the current interest rate higher than last year. I think we've already mentioned these highlights. CVC Corp EBITDA growing 31% with a 3.1% margin increase, hitting 27% in the second quarter. And also, we've already spoken about the bottom line. To conclude, this slide has very relevant information showing improvement in the company cash management, and we can see our debt. You know how this is important to us. On the first chart, we can see our operating cash generation, moving from operating cash consumption of BRL 29 million in Q3 2023, then BRL 92 million in Q2 2024. And look at it now, BRL 131 million in Q2 2025. Operating cash generation moved up nearly BRL 40 million. And that's relevant to us, consistent to our growth in the last few quarters. On the right, the overall debt, which is the company's total debt, and also detailed disclosure of our credit card receivables. And we see an interesting improvement, looking at debt. We don't compare it to last year, but we can see the previous quarter. The company overall debt had a reduction of BRL 18 million. We had a significant payment of interest on debentures in April, May. So we closed the second quarter with BRL 560 million overall debt and BRL 251 million in cash. And this is the cash level we plan to maintain in the company. Net debt moved up BRL 41 million, reaching BRL 400 million. And here, you also have information about the company's receivables. Looking at the net debt leverage, the number remained stable at 0.9x. But looking at the next decimal place, we can see a slight improvement. But our portfolio -- our current portfolio of receivables is much greater than it was in the last quarter in Q1, with BRL 95 million more in credit card receivables in our portfolio and also a lower amount of receivable backed loans of BRL 64 million, which means we now have more credit card receivables, obviously, thanks mainly to our operating cash generation. So adding up these two lines, net debt plus the balance of receivables, we can see a significant drop from the previous quarter of BRL 118.6 million, which has an effect on the overall debt over the last 12 months. So in just 1 quarter, the number dropped from 2.7x the EBITDA down to 2.3x. Even I am impressed at this improvement in such a short time. So this is it for today's presentation. We look forward to hearing your questions now. Thank you.

[Operator Instructions] The first question comes from Wellington Santana from the Bank of America.

I have two questions on my side. First, about financial expense. We could see a bigger impact of financial expense in your numbers, also because you had more receivables backed loans and a higher Selic interest rate, the basic interest rate. So how can we mitigate these effects in the future, looking at your capital structure? Because we know we are in a scenario of higher interest rates. My second question, as Fabio mentioned, this is a challenging scenario for consumer goods. So what do you have to say about the competition in this scenario? Question would be about not only the recent Chapter 11 we had, but also the acquisition of Despegar we saw recently.

I can begin. Sure. Thank you for your question. This is Godinho. I will begin answering your question about the business, and then Felipe can talk about our strategy to improve our capital structure. About the competitive environment, the first half of 2025, we had a very aggressive pricing action by Azul up until July. Now in the second half of the year, well, first, we had the Chapter 11, so they are already working in their reorg. And so we grew sales in Azul Viagens, and we needed cash. But that move is over now. So that is something that the aggressive pricing action is no longer having such a big impact. And also, they have zero growth in terms of ASK for the second half of the year in domestic travel. So after that with zero growth of ASK for the second half, the inventory of leisure travel is over for them. And we still have lots of seats available to sell with LatAm and GOL. LatAm is outperforming the competition. They are growing in Brazil. GOL is expected to grow 8%, and Azul will possibly grow zero. So the current scenario, especially in domestic travel, for us is better than what we had in the first half of the year. Obviously, we still have the effect of the maritime capacity reduction, also credit with interest rates of 15% and an average ticket of BRL 4,000, BRL 5,000, BRL 6,000; which would be the price of a family travel, obviously, the high interest rate will continue to have an impact in the future. About the acquisition of Despegar by Prosus, we view that as we don't believe they will stop the pricing action. They are providing promotions to grow sales in their conglomerate, including iFood and other. But in direct sales on the travel website, on the direct competition and the few stores they have and the travel website sales; we can see that the discounts are logical and well controlled on their part. So the problem was with Azul Viagens, but now it no longer has such a big impact. They continue with their promotions, but now it's more like a more rational promotions, a more fair competition.

Great. Wellington, let me answer your first question about financial expense. Well, those of you who track the company, know this is a relevant topic. All the time, we keep an eye on these numbers, looking for an opportunity to improve. In this quarter, we came to the peak of the financial cost. The basic interest rate at 15%. Now we expect it will remain stable. So this would be our most difficult quarter. Now there's some interesting action we are taking in the company. So trying to release working capital, so we can reduce the overall debt and not need to have receivables-backed loans because we really want to release our cash, improve our working capital to reduce our financial expense in the future. We've been able to implement, and this was something we wanted to do for a long time, and we've implemented that. We'll see the results in the next quarter. This is a new trading desk for receivables because we always had the receivables-backed loans with the same acquirers. But now with our receivables trading desk, we will be able to obtain a more advantageous cost. We have already seen a cost reduction in these receivables-backed loans. So that will help us, too. In addition, we always keep an eye on the market to do something with debentures. We work very closely with our creditors, and we keep the relationship with the banks. So if we see a window of opportunity, we're always looking at improving our capital structure. As we have more working capital and a better rate for the receivables-backed loans, I believe that we will improve our capital structure. So these are some of the things we are doing. And our expectation is that in the future, we will begin to see a lower interest rate, at least lower than 15% as we have today.

Our next question comes from Victor Rogatis from Itau BBA.

Actually, three questions. First, thinking about B2C in Brazil, you had the maritime capacity reduction. And will that impact continue in the next quarters? Second question about working capital in Brazil. Looking at suppliers, we have a weaker number than expected. So I'd like to hear from you, what happened? And what can we think about the suppliers line for the second half of the year? The third question is about your digital sales model, which is gaining share in sales. So Godinho, can you share with us what do you see in terms of global trends for sales conversion, either online and offline?

Yes, Victor, thank you for being with us. I will answer the first and the third questions, and then Felipe will answer the second question. The impact of the maritime capacity reduction, it was relevant in the first half of the year, and it will be even more relevant in the second half of the year. Why? Well, because as we come closer to the summer in Brazil, then the share of maritime travel that came up to 20% of our B2C sales last year, as we come closer to the summer, this share grows. And so therefore, the negative impact will grow deeper. And -- but we have 30% less inventory, so with 3 ships fewer in operating in Brazil. For the next years, we are looking for other options, also bringing our own CVC ships so that we are not exposed to the risk of this capacity reduction. If you look at a market such as Rio de Janeiro, they were selling 1,000 cruise ships. But now you no longer have the ships operating there. So of course, it had a big impact. Yes, we will orient to other products. We have a whole [ two-front ] table for the customers of cruise trip and also at the stores and also using WhatsApp. So we have this [ two-front ] table providing other options for the same average ticket. But there are people who like to travel on cruise. They -- and now we have much less capacity. And so the impact will certainly be felt even more in the second half of the year. But not only that, we had a few regions, for example, agriculture, regions, where agriculture was extremely important, Mato Grosso, Mato Grosso do Sul, Goiás, Paraná. These regions are important for CVC. But because of a lower U.S. dollar and a high interest rate, we have fewer people coming to our stores. And that's related to a macro economics of agriculture. And -- but of course, we had the maritime capacity reduction, also the difficulty to have credit, especially for medium or high ticket. If you have an interest rate at 15%, you will feel the impact. Also a higher price of airfare in domestic flights because airlines in the last 2 or 3 months, they're trying to impose price raise. So in the low season about April, they were not really successful in April, May. But now in June, July, the average ticket, the price is up 10%. And that helps B2B, of course. But it makes the average ticket for B2C higher. And B2C is sensitive to price, so you also have that impact. Plus the geopolitics. The war in Israel, we had trips canceled, group trips canceled, groups that were going to Israel. There were days when Qatar Airlines and Emirates Airlines were not operating. So Israel war had an impact. And also the geopolitical issue with the United States. About 35% of our experimental customers, they do student exchange with the United States. But now with the current situation, how can you send your son to the United States? Will he be able to enter the country or not? So this volume came down to 5% in the last 3 weeks. Of course, we believe this will be only a temporary effect. But again, it also had an impact. And we do see a light at the end of the tunnel. We are doing a lot of activation. We are working together with these promotions. August 8, July 7, we are now in a partnership for the August 8 activation. And so B2B is going to deliver, again, double-digit growth. And so the market, even with all of these adverse impact, reduced maritime capacity, geopolitical issues, high interest rate; it was very important because now Azul travel stopped the aggressive pricing action because now they have zero growth. And -- but -- so we believe that in August, we will grow double digit, a low double digit, but we will grow double digits. So there is a light at the end of the tunnel. This is how we view B2C for the second half of the year. About the international market, and your question was very good about that, last month, I spent 12 days in China. Amadeus, the largest tourist travel technology, this is a company worth 30 billion in the stock exchange in Spain. And we are the #1 Amadeus customer in Latin America of Amadeus. And so Amadeus had a whole agenda with the 12 largest customers in B2B and B2C, and we travel to China with them. So we met all of these companies. We now have this -- a new company of delivery coming to Brazil, really strong. I said we were 12 customers, right? And this was the largest Asian tourist group, which is Trip.com. They were also there in the meeting with Amadeus. And I was surprised to see in Trip.com that they use exactly the same digital distribution model. Similar to CVCs, they have 3 business units. One is transportation where they sell train, bus and airplane tickets, but it's basically for short stay, a weekend trip. And so this is what they sell on their app, on their application because Trip.com, they are the largest agent tourist company, but they're not part of any super app. We also visited super apps, Alibaba and -- but Trip.com, they have their own app with multiple functionalities as you see many in China. And so they sell this kind of air travel and they have an accommodation unit where they sell hospitality. From today to tomorrow, 1-, 2-, 3-day stay at a hotel, this is the kind of product they sell online using their Trip.com app. In the tourist market there, they don't really use desktop apps. But they sell these like commodity products. But then they have a third business unit similar to B2C, and they call it vacation. So they have transportation, accommodation and vacation. And there, this is the largest Asian tourist travel agency with 6,000 agencies franchised using this brand, Ctrip. Actually, they changed the name. It was Ctrip, and that's how the CVC group started. Ctrip is their CVC, let's say. And they have 6,000 travel agencies owned by franchisees. For 2 days, we were visiting small travel agencies on the street, in shopping malls in Shanghai. And these were all stores existing for less than 2 years, low CapEx, low OpEx, digital sales, only 2 or 3 employees to operate the store. And new store openings there began after the COVID-19 pandemic. One day in 2024, Trip.com using this brand Ctrip, they're a giant group; they opened in just 1 day, 200 POS. And so it's really funny because you go to China, look at technology and tourism, it's like going to the future. So we went to the future. And what did we see? The digital sales model very similar to our sales model. So this was a surprise. And of course, we are now connecting with all of these 12 clients of Amadeus so that together, we can do the distribution using our B2B platforms. Our B2B platforms, we can see that they will rely less on having to sell to Brazilian travel agencies. So RexturAdvance and Trend and now with this new business unit, Conectaas that we're adding hospitality and other land products, this is going to be a global tourist content distributor. So very soon, we will have revenue streams that will be coming not from Brazil, both in air distribution and land distribution of products. So we tend to go more international. This is what we see. About artificial intelligence, very little, only a few players using this in real life. There are some initiatives beginning, but still very small. We are in contact with that, we are working with an American AI company. We will see news up until year-end, especially for the digital sales funnel in terms of receiving customer information, supporting the salesperson to convert more sales. So these are some things we learned, we brought from China.

Victor, thank you for your words. Now let's answer the question about working capital in the suppliers line. This is more an accounting issue. With sales and consumption, we have to include that. So you see we had an expressive increase. But when you look at these two lines together, and that's how we see the suppliers line, we had a big increase of almost 4 days. So I believe this is just a temporary accounting effect. We did not see a change in the time to pay for our supplies. Now what do we expect in the second half of the year? We still keep an eye on this, strengthening our negotiations. So as we sell more preferred and recommended hotels, and this will grow because that's part of our strategy, so our stores will also sell the suppliers who are strategic suppliers for us. And the idea is that you will see further improvement on this line, also with exclusive products, where we are at a comfortable level and also more long-term products. Now for August 8, we sold exclusive products already for 2026, based on our relationships. And so that's really helpful in the suppliers line because for the airfare, I'll have to pay that closer to the time of the trip. And so we're also negotiating with international suppliers so that we can grow this partnership to gain a few days more to pay for the supplies. We expect that in the second half of the year, this time, we will continue to grow. We have a good expectation that we'll have more time to pay our suppliers.

Our next question comes from Vitor Fuziharo from Santander.

We have two. The first one is about the growth in innovation and AI. This agenda has many benefits, but are you going to increase investment in OpEx or CapEx for this rollout? Second question is about payments. You had a few relevant changes in third-party financing, which gained more relevance and CVC credit. Your own credit, you had a reduction. So what do you expect for the future in these two lines?

Thank you, Vitor, for the question. Well, we keep a focus on technology. This is and will continue to be a key driver for CVC. Now that we have reorganized our debt, which, of course, is relevant, we need total focus to pay for the debt; our leverage has to fall. But the way it was, it was just impossible. So now we've organized our balance sheet, looking at assets, and we are now generating cash. We have already restructured our strategy for B2B and B2C. In Argentina, we will be implementing the digital sales model. So now focus on technology growth. We even have covenants in our debt that will not allow for us to spend more than BRL 120 million CapEx. And of course, we will comply with that. But I see in the next 5 years, an increase in OpEx related to technology improvement. We are very close to CIT. So they have helped us make a transformation to have digital simplification of our systems because we still have legacy systems from companies and -- but so we will make a lot of progress now in the second half of the year and especially in 2026. Also, we are investing together with them. We are investing to transform our CCO, our operating control center. And we may receive funding to finance more technology. When we took on the management, this control center where we control all operations, we issue tickets, we reconcile our air distribution; we used to have more than 1,000 employees and the lowest NPS of all tourist companies, based on RA, Reclame AQUI data. So then our Vice President, Pinheiro, and like everyone here in this new management, well, not so new, we've been in the company for 2 years; so he has deep knowledge about the business. So today, our operations control center has 800 employees, and we have the highest grade, and we are the only RA 1000 company in the Brazilian tourist industry. But we have a lot of automation to do process automation. We have to work more with AI. But now the operations control center is ready to receive these improvements because the organization is clearly defined. So we will now be ready for the next wave of evolution, which we will be working with Stefanini and CAA. So now I mean, to answer your question, no, we are not overshooting the CapEx threshold. But in terms of OpEx, we will certainly increase investment in technology. But we will obtain funding from other sources. As we've always said, one of the drivers that we relentlessly pursue in this management is to reduce SG&A over net revenue. The ratio was 90% when we took the management. It's now 52%, and we want to come down to 45%. So although we will make more investments in technology, I will have to find the source of this funding so that we can continue to save and improve this number.

Vitor, about payment methods and our trading desk, about third-party financing or our own financing, this is something we wanted from the beginning. Let me take a step back. When we took the management of the company 2 years ago, we did not even have a trading desk, we did not have credit lines with the banks at that time. So because we know our customers and because we know how important it is for us to grow sales, we began to provide our own financing. That's what we could do. But then we had conversations with the financial players so that we could again have credit. And now we already have a few partners, more recently, Santander that came in really strong. So we saw a growth in bank financing. So no longer we have to finance using our own CVC balance sheet. And now we can work with banks. Today, 30% or 35% of our sales is financed by third parties, no longer by CVC. And I believe that in the marketplace, we can still grow. Of course, we have Santander and CVC, but we will have at least 2 more players working with us and -- for an even cheaper credit as we have a lower payment delinquency. So the idea is for us to continue to have more third-party financing. Looking at the second quarter, we even had more credit card sales. And that is also because of our cautious stance. Because of a higher delinquency on the market, we have raised the bar. And so some families go back to using credit card for payments. The change is not very big. But we also have news when we look at this evolution, which is cash payments using PIX and other alternative payment methods, whereby we receive the money immediately, and that's 26% of our B2C sales. That's it.

The Q&A session is now closed. At this time, we'll hand it over to Mr. Fabio Godinho for his final considerations.

Again, thank you all for your time. Thank you all for joining us to talk about our evolution. This management has been working at CVC for the last 2 years. And in this last quarter, we could see the strength of the diversification of revenue streams. You see our 3 business units. When B2C is facing a challenge, and here, we grew 10% in B2C. But in the second quarter last year, we grew 16%. So the maritime capacity reduction, geopolitical issues, the aggressive pricing action of Azul, but we also had a higher take rate. The take rate in the second half -- in the second quarter of last year was 12%. It's now 13.8%, the take rate in B2C. This is the number for the second quarter. And the overall take rate for the company fell, but that was because of dilution because in B2C and in Argentina, we had a growth that was lower than the growth in B2B. But we could see how important it is for us to have different sources of revenue. Even in this challenging scenario, we delivered 30% EBITDA growth, BRL 130 million cash generation and the debt was reduced by BRL 120 million. And this is our mantra. This is our #1 goal. However, there are many things happening. There are lots of improvements in our stores, in technology in B2B and B2C that's already going live. For example, there's something that will revolutionize our operations in CVC, which is the flex commission. You see so the salesperson always had at the store or in the website, and there was no flexibility in terms of price. The price was BRL 1,000, that was the price. The salesperson could not lower the price to convert sales. It was very bureaucratic. He had to take a screen print and then send it to someone so that it would be approved. But today, all product screams of CVC, air products, flexible packages, exclusive products, hospitality or hotel. Only we have the flex commission. So the travel agent can share the commission. So the salesperson can even increase the commission to 12%, let's say, for a certain product or 16%, but also the salesperson can bring the commission down to 8% to convert the sale right then and there. And we did that with Disney tickets, and sales grew 500% when we implemented this flex commission. And this was rolled out for all our stores footprint only last week for air products. And this will be a revolution for salespeople to have this flexibility at the end. And together with the digital sales model that already accounts for 56% of our sales, plus AI, we will have in the second half of the year to improve the digital sales model. These are very relevant changes. The website has improved, the app has improved. So all of this to increase sales. There are lots of things happening in B2B, in B2C. But number one, the strength of our group of companies, this is our power to give us resilience in our results in the future. So thank you all very much, and see you in the next quarter.