Dexco S.A. (DXCO3) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to Dexco's earnings call for the second quarter of 2024. This conference call is being recorded. This recording may be seen at the company's Investor Relations website, ri.bex.co. The presentation is also available for download there. This call is also available in English. To listen to the translation, you can click on the globe icon and select English. You may also mute the original audio. We would like to inform you that all participants will be in a listen-only mode during the company's presentation. After that, we will begin the questions-and-answer session when further instructions will be given. Before we continue, I would like to underscore that statements made during this call are based on the company's assumptions and beliefs and currently available information. These statements may involve risks and uncertainties as they refer to future events, which, therefore, depend on circumstances that may or may not occur. Investors, analysts and journalists should take into consideration that events related to the macro economy, to the industry and other factors may lead these results to materially differ from those expressed in these forward-looking statements. We have the Executive Directors from Dexco and the Investor Relations team with us during this call. We will now give the floor to Francisco Semeraro, who will begin the presentation. Please, Mr. Francisco, go ahead.

Hi, everyone. Welcome, and thank you for attending another Dexco earnings call. I have Antonio de Oliveira, our CEO; and the Board of Directors from the company. We will begin on Slide 3 with a local macroeconomic environment and expansion in the population's income and the evolution of the IBGE's Civil Construction Retail Index, the Wood division once again posted a consistent performance, increasingly focused on optimizing the profitability of its volumes. In the metals and sanitary wear division, the structuring actions carried out throughout 2023 and '24 boosted our results, leading to a significant sequential improvement in results, even though they are still below historical levels. However, the tiles market is still competitive. So the division showed a slow pace of recovery. As a result, the company posted an 8% increase in its quarterly adjusted and recurring EBITDA compared to the same period last year. In addition to the consistent result in panels throughout the semester, the forestry business carried out in the first quarter of 2024 and the gradual improvement in the finished goods division meant that we ended the first 6 months of the year with an adjusted and recurring EBITDA of BRL 818 million, 17% higher than 2023. With excellent levels of quality and productivity, this quarter, LD Celulose posted its best operating results since start-up of a total EBITDA of BRL 376 million, of which 10 -- excuse me, EUR 184 million was from Dexco. If LD's results are taken into -- excuse me, not taking into account, we posted 500 -- excuse me, if they are taken into account, DEXCO posted an EBITDA of BRL 561 million this quarter and BRL 1.1 billion in this semester. On Slide 4, we see that due to the high utilization of the panel factories and the demand for wood for Dexcos' businesses, we opted to intensify investment in forestry CapEx, which was partially offset by efficient working capital management, leading to a positive operating cash generation of BRL 36 million. Generation in working capital led to the positive results of suppliers and a sequential drop in the ratio of working capital to net revenue to 15%. Also disbursements were made in relation to the 2021 to 2025 cycle, totaling BRL 111 million in this quarter and BRL 214 million in the first half, mainly in the construction of the new tile factory in Botucatu Sao Paulo. So we ended the quarter with a total cash consumption of BRL 207 million in the quarter and BRL 544 million in the first half of 2024. Slide 5 shows that despite the improvements in the results, cash consumption in the face of investments in the '21 to '25 cycle led to an increase in leverage to 3.46x this quarter. Besides that, the company continues to focus on its liability management initiatives, maintaining the average payment period at 4.6 years. And 86% of our gross debt was long term. We continue with Slide 7, discussing the wood panels market. Data published by EBA confirms the consistent performance of the market with sequential growth in volumes, both in foreign and domestic markets. This has led to high factory occupancy in MDF, MDP, which reflects the progress of the main markets. Slide 8 discusses our wood division. Since the market is high, we presented volumes at high levels, but due to maintenance stoppages on the MDF lines, demand was prioritized in order to optimize profitability, which impacted volumes at the start of the quarter, but they have been fully recovered. Still with this high level of the panel market, the forestry business prioritized supplying manufacturing operations. So there were no significant forestry deals in the quarter, which led to a sequential drop in revenue during this period. Based on the typical favorable seasonal pattern seen during the second half of the year, we opted to concentrate maintenance downtimes right now with one-off impacts on volumes, MDF occupancy and margins. The division ended the second quarter with an EBITDA of BRL 219 million and a margin of 26%, down 7% based on the same period last year, but up 12% in the first half. The next slide discusses dissolving wood pulp. LD Celulose operated at full capacity throughout the second quarter with an excellent quality level and advancing its productivity curve. Along with it, improved productivity, especially in using chemicals and the appreciation of the dollar against the real favored its profitability, which ended the quarter with its best results since start-up, a total of BRL 376 million, of which Dexco's share was BRL 184 million. In the first half of the year, the impact of the shutdown in the first quarter was more than offset by stronger operating results, leading to a total EBITDA result of BRL 607 million, up 5% on the same period last year. Even with consistent operating results considering that LD Celulose functional currency is the U.S. dollar, the exchange rate variation generated an accounting effect with no impact on cash referred to deferred taxes, excuse me, related to deferred taxes, which had a specific impact on net income and led to a total loss of BRL 43 million in the second quarter of 2024. Slide 11, discusses the finished goods market. According to ABRAMATA data, the finished goods market ended another quarter with signs of improvement, showing an average growth of 8% compared to the same period last year. This rate of growth has allowed the association to revise its projection for the year to a 3% increase on last year. These indicators are quite broad and include many other categories beyond what Dexco sells. Continuing with Slide 12, showing our results in the metals and sanitary wear market. The positive market signals and the progress made in sales as a result of the successful commercial initiatives carried out throughout 2023, especially in the Metals segment led the division to present a more premium mix during this quarter. This led to a 14% year-on-year increase in its net revenue in the quarter. In comparison to the first quarter, we saw continuous improvement in costs as a reflection of the structuring actions, which also boosted profitability. The combination of these factors led to a resumption of a positive level of adjusted and recurring EBITDA of BRL 52 million this quarter, a significant improvement versus the same period last year and the previous quarter. EBITDA in the first half was BRL 50 million more than twice as much as the first 6 months of 2023. On the next slide, we discuss the tile market. According to ANFACER data, the floor and wall tiles market once again showed an unstable performance this quarter with wet production, our operating segment still shrinking compared to the previous year. In addition, the market continues to have inventories above historical levels across the chain and consequently, capacity utilization is still low. The next slide shows that in view of this, even with volume growth above the market level, prices are still under pressure due to the instability of the segment and the level of idleness. At the same time, the company remains disciplined in its initiatives to improve productivity and effectively manage expenses as a lever for results. If we disregard the RC2 capacity that was suspended temporarily in 2023, the division's pro forma occupancy is 74%, in line with the market, which contributed to diluting costs and capturing returns linked to the structuring actions carried out last year. The competitive market environment advances in volumes and greater dilution of fixed costs led to an adjusted and recurring EBITDA of $6 million this quarter and $10 million in the first half of the year. The next slide shows some of our ESG highlights. This quarter, we published the company's integrated report, reinforcing our practices in ESG. This is the fifth year in a row that we have published this material, which mainly seeks to show how Dexco is generating long-term value through its operations and practices for all stakeholders. In addition to the details of Dexco's main initiatives, I would like to highlight our 2025 sustainability strategy, which shows the evolution of our goals and commitment. We reached a 0 landfill mark at the metals unit. We finalized the framework for all panels at E1 formaldehyde emission levels. We monitored an industry and consumer trends and have reached the 70% mark for replacing packaging with recyclable cardboard reducing the demand for nonrenewable inputs. We also had a phase out of coal in the ceramic tiles operations with a total replacement by natural gas and biomass. In addition, Dexco also took first place in the buildings materials sector in the Merco ranking ESU responsibility 2023. Further recognizing our reputation supporting the group's perception on ethics and responsibility in business actions. We believe that bringing ESG to the core of the discussion is an action that goes beyond best practices, ensuring that we anticipate risks and opportunities generated in the sectors we operate.

Please hold, we'll continue soon. Once again we will resume soon. Please hold, we'll continue soon.

Continuing this presentation, let me discuss perspectives for 2024. For the second half of the year, amid uncertainties linked to the local and foreign scenario, but the basic interest rate is likely to be affected with the same cycle of cuts that began last year being interrupted. Even though the retail construction index is still expected to grow, the magnitude of this growth may be limited given the uncertainties in interest rates for the rest of the year. In wood, we remain confident with the performance of the panel segment. We are redirecting the use of wood from our forest for its production, given that the performance has been able to achieve a lot in productivity, profitability and volume. At the same time, we confirm our competitive edge in forestry in the face of a still scarce wood market. There has been a gradual improvement in profitability in the finishings division, but with a different pace of -- in face of a competitive market in tiles. At LD Celulose, we had consistent results, productivity gains, and we are maintaining excellent operating parameters with a positive outlook for price increases. We are focusing on making projects in the '21 to '25 investment cycle, including the start-up of the new tile factory in Botucatu this year with new products, better efficiency and better strategic positioning for the benefit of our customers. And all of these initiatives start from a very solid working capital management base and diligent in cost and expense management. We will now continue with the questions-and-answer session.

We will now begin the question-and-answer session for investors and analysts. [Operator Instructions] The first question will be asked by Caio Greiner from BTG Pactual.

First, I have a couple of questions on CapEx. During the first half of the year, we saw that your overall CapEx and especially maintenance CapEx has been going up significantly. You mentioned that there was some replanting CapEx included in those figures. So I'd just like to understand how I can interpret this growth and if it's connected at all with the standing wood sales, which have been stronger. [indiscernible] is it because the wood division has been having high utilization rates for the last couple of years is that why you are replanting more? So if you can tell us what should we expect for this maintenance CapEx from now onwards -- maybe as an annual figure, what should we use in our models still on CapEx. For some time, we had been close to BRL 1 billion, but you've already used EUR 700 million in the first half. So should we continue working with that assumption of EUR 1 billion? Or -- and will there be a slowdown in the second half? Or should we consider a higher CapEx for the rest of the year? My second question is about Deca. This 10% margin was very surprising was a fast recovery. There was an improvement in mix, some productivity gains and all of these points that we've discussed in previous quarters. What I'd like to understand is what is your potential margin gains that you might still have for the Deca unit simply from the operational resumption. Last quarter, you mentioned that its potential was even higher than 20%. Is that level still something that you consider? And if you could break it down and explain how much of these additional gains could come from operational improvements in company and how much of it would depend on the market, that would be very helpful.

Okay. So I'm going to talk about CapEx and invite Anika to talk about wood later. So according to the scenario that we've been presenting in financial figures, the wood market has been accelerating for some time. This is due to the forestry business and also the high level of panels manufacturing. So as a general perspective, we know that all of this history will normalize at some point. So since we are at a very good level of general profitability with panels, since we're balancing profitability and occupation, naturally, our CapEx has been pressured but this is temporary. We believe that from now on, it will go down to what we've presented. But we have made use of this positive environment to capture profitability opportunities for panels. We've done good forestry deals. But that also means that forestry expenses have gone up. We saw some of that last year, some of it this year, but the general balance is that this is still a significant and important investment to ensure that we have the right supply that we can run at the right capacity and to have more opportunities for these businesses that have been very positive for the company. So the company is making a conscious choice to balance their short-term burden, but it is still very positive in net terms. Now I'll pass it over to Henrique, who is going to tell us a bit more about the wood division. But I just wanted to give some context before.

Thank you for your question, Caio. Good morning, everyone. So I just want to confirm what Francisco mentioned, we are rebalancing our forest every day. So that's one of our that's one of the efforts that we make in buying and selling. We want to reduce the average distance in what availability. And as a reminder, what happened in the last few months was boosted by the COVID pandemic. We used a lot of our forestry assets due to the high production levels that took place there. So we've been replacing them gradually. Forest are not something that you can simply wait for. If your forest is at the right time for harvest, you need to either harvest or sell. Otherwise, it goes into a critical cycle after the optimal growth phase. So this is a natural part of the forestry cycle. It creates some unbalance in the short term. But at most within 24 months, this will be rebalanced and we consider that are planned to be self-sufficient in most of our consumption is still valid. This is what we're trying to implement. And also to answer a part of your first question, you asked for a guidance on the CapEx level for 2024. Our guidance is slightly above BRL 1 billion, probably BRL 1.2 billion. As a reminder, we had a significant carryover of projects from last year to this year, especially the tiles plant. We're now at the end stage of that, but of course, it impacts CapEx specifically on the project line. But when you look at the investments we've made into forestry, it is a bit higher, but it should go down as soon. So I just wanted to give you some color on what you can imagine here. But please do take into account that we've started a number of initiatives to ensure that this entire investment in 2023 and 2024, which were our more intensive CapEx years will probably bring in good results as we've seen across the different divisions and in consolidated terms.

This is Antonio. This projection of yours of BRL 1 billion is reasonable after 2025 after we've concluded this investment cycle. We probably will not be too far from that. And to answer your second question, Caio, about Deca's potential. We've been saying in general that -- since you are working with a turnover for the inventory, it takes some time for it to be captured. But we're starting to see it now in the third quarter. So this is a result of being more efficient, and we're seeing a reduction in unit costs. But of course, we used to depend on the market. We hope to continue to improve profitability, as we've mentioned before and keep an eye on any potential opportunities. I'll let Raul talk a bit more about that.

Caio, thank you for your question. This is an important topic. And from the third -- the second or third quarter of '23, we had been discussing these cultural changes. In the first quarter, we expected it to be weaker and for the second quarter to improve. And this is consistent with what we've been discussing before. So I think we can say that we're still pursuing this. We firmly believe that we will have above 20% EBITDA margins in our business, mostly from operational improvements. You know that in Deca, we have different businesses with different behaviors and different levels of action. So, we should expect 1-digit growth in efficiency in metals and sanitary where we're starting to see some opportunities, first slide adjustments in production, which will remove significant bottlenecks and give us more product possibilities. Since Deca is a leading brand, this also boosts our sales as we improve service levels. You might remember that we created this goal for 2024 depending that on the market growth. We believe that it would still be very small. if the market bounces back more, we believe that this recovery will happen slowly. So obviously, if this recovery is faster than we expect, we're going to capture a part of it as well. But I'd say that from now on, as inventories start to have some turnover, especially in ceramic tiles, but also in metals and sanitary ware. We're going to start seeing the benefits of the products that went into the inventory at a lower cost. This is going to begin this year and in 2025. So we're still early in that process. And although this margin we presented is promising. This is still far from what we want to achieve.

And just a quick follow-up for Francisco. You mentioned the total CapEx this year and I'd just like to understand if we should expect a relevant reduction this quarter.

Yes, we believe that it will be 1.1% or 1.2% with the new projects and sustaining the previous ones. In general, the cash effect of 1.2% or 1.1% still makes sense for us.

The next question will be asked by Rafael Barcellos from Bradesco BBI.

So this quarter, Dexco has already shown some evolution with Deca, but we are wondering about how much the ceramic tile segment can recover. So I would like to understand if a challenging scenario is still because of the market or because of your brand repositioning. and what do you believe will happen in the second half of the year for this division? Still on that, we see significant idle times in ceramic tiles. So is there any operational adjustment going to happen? Or what plans do you have for the division? So, if you could tell us about the competitive environment and any price increases and also on the long term, what are the main projects and opportunities for this division. Is there still some space to consolidate the industry and how should Dexco position itself in this scenario?

I'll let Rahul answer that question.

Thank you, Rafael. So we don't expect to see any adjustments after while we found a very efficient model. So we're starting to bring inventories and our production to a very competitive level. So this requires the right occupation level. And this occupation level will not raise our costs. There are some fixed costs. But in terms of variable costs, we won't see any additional impacts. So this is very close to what we believe we need to operate this production system. So we're going to take our space back in the market. We want to do this at a structural level with good trade marketing initiatives, getting closer to our partners and clients with a consistent policy with a products -- with new products, right? We want -- we've had the best performance ever with the collection we launched last year. So this gives us some confidence, but we do need to look at our volume. That's why occupation is so important right now. We need to make use of the lower occupation costs and also occupy some space in prices. So we want to expand our sales volume. We want to increase our market share. And at the same time, we want to maintain good operational levels. It was very difficult in 2023. We had downtimes for inventory readjustments. So we have the rest of the year to adjust these inventories, so that this cost becomes a result at the end. Finally, market terms. We're starting to see the dry line going up again. Our market was left a bit behind, but we're still 10 points above the rest of the market. So we expect it to be favorable, but it will be a bit of a struggle. You see that ANFACER mentioned 74% occupation rate. We have some room to take that space. We can do something structural without making large sacrifices, and we expect to have a couple of quarters where it will be more complicated for ceramic tiles. We want to show some improvement, but the most important thing is to finish the year with a good market share, good trade marketing,we want Botucatu to be operating at the right capacity with new formats and new products even. So this is what we intend to do from now on. We're confident that this division will play a role for the next years and will be as relevant as Deca. I think ceramic tiles is probably on the minds of most analysts and anyone following us, many investors. So I'd just like to take a couple of minutes and save this. We had a couple of quarters working on the ceramic tiles area. And I've always said that this is a poor market for ceramic tiles. If you ask any of our competitors, they would say that this is a difficult market. There's a mix downgrade, there's the ANFACER data. So, there's still that vision that we've gone through the worst of it, and we're starting to grow again. It's not going to be fast. It's going to be gradual, but we're confident in that. You all know that we had a lot of homework to do, structuring the team Raul is concluding this. There are still a few adjustments. We're bringing in talented people. We're adjusting the team, and this is practically ready. That's structural part has already been done, but in Portinari, we changed some of our positions, which didn't make sense anymore. And I'm not going to go into that, but there's a strategy that we have been going through very well. We're making huge investments in showrooms. We have over 600 new showrooms this year, and this is our space in our clients' stores with different segments. So we are making big investments in that led by Raul and Marina and marketing. So on sites -- we're trying to set the sites to put Portinari and USA where they want or they need to be. This is all being done. And last but not least, of course, in the moment where the market is facing troubles, we have to optimize our investments. I was recently with Raul when we bought Cecrisa and SSA, we had a lot of investments to make. Some lines were better than others. And we decided to focus on Botucatu, which we will conclude now this year. It will be concluded by October or November. So it will be a great plant of high-end products close to Sao Paulo. So that will give us a lot of competitiveness also in comparison to our test of the market and which are in other locations. Finally in Criciuma we made a few line adjustments, but they were very fast without requiring relevant CapEx. And that gives us the structural base for the industry. You can spend many years without having relevant investments. The company is up to date. We have very relevant plants and so on. So the industry has been well positioned. And if you execute a good go-to-market project, correcting a few things with a good team. So we just need to work to collect the results. But it is a medium-term project, right? These are things that cannot be corrected within a couple of years. So we had to make use of the conditions set by the end pandemic while we were investing, but this is a critical and important segment for us. And we believe that we are much better positioned to compete in the market. The new space, we are going to have and the investments we've made with clients and consumers, there's a big effort, and we're confident that we are recovering very well in this process. So I apologize for interrupting, but this is something that everyone needs to know. We also have a strategy for metalware, for sanitary wear, we're making adjustments and recovering very well. So, we're confident that we will see a substantial recovery in the next years.

So connecting to what we've just discussed on finished goods. Looking at the overall numbers, it almost seems like 2 completely different markets. It's like having another Brazil within Brazil. The difference between our market and Dexco is clear because we have different conditions and that translates into results, market share participation, volumes and prices as well. So yes, who has performed very well. But there is a big difference in the number of players or between the players, excuse me. Have So talking about the short term, our performance has been going well recently. And in Dexco and wood in general. We know that we are making our efforts seen. So this is not something that we just recently started. We restructured our bases in wood and probably at a higher dimension than Endeka recently. So nothing happens by chance. It's something that we did over some time in order to have the right levers to manage the highs and lows of the market. The competitive environment is a little bit more rational currently. We're talking about a rationale that is tough to achieve, especially with standing wood. We clearly see that there is a limit. Just as Dexco and Duratex have been adjusting their prices significantly in the last 3 months. We're also seeing some competitors going in the same direction. So we decided to have discipline in this process, executing our commercial policy to balance volume and profitability. But we see that there's a perspective that can improve price due to the impact of the costs, not only for wood, but also for some raw materials like resins. These costs have been going up recently, and we expect this to be in our figures in September. Main Heisman. So we hope to see this reflected in our results soon. Price increases are always gradual. We never really see that from A to Z. It's structured by product, by region. So still on the competitive environment. It also seems like there is a significant recovery in the furniture industry. So we see that furniture hubs have been recovering. We're very close to them and trying to capture the volumes from this time where the market is more positive. Major retailers also are helping with that mix. Recent news show that they are going back to basics in their product portfolio. So yes, we do expect to see some price changes, but it should happen gradually. We're not going to let go of our market share, we've done that in the past. And as a reminder, what we're assuming is that Duratex's position based on forest availability is better than our competitors. So looking at the future, in the Northeast in Alagoas, we have nearly 20,000 hectares for us, and that might provide an opportunity for investments. I just like to underscore that. And there doesn't seem to be a reduction in capacity in major paper and pulp companies. We still see a major pipeline over BRL 80 billion in investments. So if the market is difficult, it doesn't seem like wood availability will improve. About consolidation, it's hard to say after Marceses acquisition, there was nothing significant in the market. So I'm repeating myself, but it's always going to be based on what availability. But it's hard to see assets that make sense based on location and availability. This is a very difficult asset.

So just to add to what that just said, we need to get used to seeing the wood market as we saw the wood panel market. We're going through a very good moment. It's very favorable right now but we have to see that we probably won't go through that same cycle that we had in the past when get close to the cap we start seeing new projects in the market. But there are new projects there are no new projects in the market. I don't think there are any viable projects. What can happen is that there will be a change in demand, but we don't believe there will be an increase in capacity because of the forestry issue. there are 2 things that limit capacity increases in the market with new players. So this is a long-term issue that will not be resolved quickly in Brazil. major pulp and paper investments still require wood. So when you are in the expensive part of the cycle, you can't get around that, and that might be favorable for us as you might be seeing in the results. Now, the cost of new projects, greenfield projects have gone up, the cost of assembling imports, so we believe that we will see an increase in the cycle in the next years as everyone is busy. So we really have to pay attention to the price because costs are always a threat. So we probably won't see any major competition for price. The market will be more rational. What may happen is a displacement. So if you were a major exporter, you might start servicing the domestic market. That may happen. But I think the scenario -- the future scenario for the woods and panels business, in general, will be positive in the next years without having new players coming in.

The next question will be asked by Rafael from Bradesco BBI.

That one has been answered.

So the next question will be asked by [indiscernible] from Bank of America.

I have a question about I don't know much about the forestry market. So we would like to ask if this changes LD, the relationship with your partners and what impact all these disclosures might have on your strategy. Do you believe that there might be an expansion with LD. So whatever details you can give us, that would be great.

Okay. So to discuss LD. LD is in a very promising moment right now. First, starting with the actual operation. We see that the plant is testing its capacity limits day after day. It was a 500,000 tonne plant, and we're close to 550,000, 560,00 which is a border line for the physical limits. The LD team has been looking at opportunities, debottlenecking but we're at about 600,000. But we are operating very well with a 100% quality level, which is unexpected on good grades of dissolving pulp. Dollar prices are high, which also favors our results -- so the plant is doing very, very well. I would say we just know -- we just need to fine-tune now. We have a new management starting in the second half of the year, someone who is very experienced from our team and we have a very mature process, a very good one and business perspectives are very good as well for the solving pole. Regarding Suzano, I think you should ask Suzano itself. But I would say that the Suzano operation is at the level of our shareholders, Lenzing, which is also our shareholder. So there's no direct relationship with Suzano know but we have great relationships with Suzano. There are many forestry projects. There were things that were done jointly. So it's a long-standing relationship. But this is Suzano's strategy. And we believe that this is a company that can contribute a lot with Lenzing, they're a very experienced company in Brazil, and they know the market very well. So we have a society relationship with Lenzing. If they change their reference shareholders with Suzano, this is a good thing for us, but it doesn't change our strategy. It doesn't change anything about our LD strategy here. We also don't foresee any expansion process. They might -- we might have a debottlenecking project initialised, but not an expansion. We can't fit a new dissolving pulp plant there. So,nit's a society operation above the Lenzing, but it should not affect our structure or LD's strategy. And it doesn't affect our strategy and our participation in LD. We have 20, 25 years contracts -- it's a plant and logistics operations. So we expect consistent results. So we're improving costs, financial costs. We've been working on that. So we see this with very good eyes. We believe that in this operation, everything we planned will be delivered without a doubt. And since everything has been sold since we're using international prices and so on, it's important to control the cost, the productivity, and this has been doing very well.

Okay. Thank you, Antonio. And we will ask Suzano, this is interesting.

So for the sake of time, we were a bit late. I just want to let Antonio make his closing remarks and thank everyone for being here. And of course, our Investor Relations team is available if you have any questions that weren't answered during the call, and thank you for listening.

Thank you, everyone. Thank you for your questions. We had great opportunities to answer some of your questions. And as Francisco said, we're available if you have any others. We're excited and we're working on several fronts to improve our results and make them consistent to our long-term strategy. Thank you. Have a good day.

Thank you. Goodbye.

This concludes the Dexco's conference call. Thank you, and have a good day.