Distribuidora Internacional de Alimentación, S.A. (DIA) Earnings Call Transcript & Summary

Good day, and thank you for standing by. Welcome to the DIA First Half of 2021 Results Presentation. [Operator Instructions] I must advise you that this conference is being recorded today on Wednesday, the 15th of September 2021. I would now like to hand the conference over to your first speaker today, Stephan DuCharme, Executive Chairman of DIA. Please go ahead.

Good morning, [Foreign Language]. Welcome to DIA's first half of 2021 results presentation. My name is Stephan DuCharme, I'm the Executive Chairman of DIA Group. Thank you for joining us today. I am joined by Jesus Soto, Chief Financial Officer of DIA Group. I will start with a strategic update for you, and Jesus will take you through the financial results over the first half of the year. We will then open a Q&A session. Please feel free to send your questions through the chat so that we can address them fully. Given that we closed our landmark capital increase and refinancing transaction only 13 days ago, it is appropriate that we commence the strategic update with this topic. We have worked very hard over the last 12 months to achieve a comprehensive long-term solution that takes the company from a solid capital structure to a long-term sustainable capital structure and a significantly strengthened balance sheet. The result allows the management team of DIA to focus exclusively on the business turnaround, both strategic and operational going forward and on the acceleration of such turnaround. The capital increase and refinancing transaction involved the conversion of EUR 769 million in debt held by LetterOne into equity, including EUR 200 million of super senior debt as well as EUR 293 million of 2021 bonds and EUR 269 million of 2023 bonds both acquired by LetterOne in August of 2020, and an additional EUR 7 million loan. The capital increase included a cash tranche of EUR 259 million that had a demand of 1.67x and was therefore fully subscribed. Finally, the capital increase and refinancing transaction included an agreement with the company's syndicated lenders to extend the maturity of our EUR 902 million syndicated facilities from March 2023 to December 2025 and to extend the maturity of the remaining EUR 31 million of bonds from April 2023 to June 2026. All of the elements mentioned came together to culminate in not only the most important financial milestone achieved by DIA in the last 2 years, but a strategic milestone in the company's business turnaround. I would like to take this opportunity to thank DIA's lenders that worked hand-in-hand with us to help complete the global capital increase and refinancing transaction. I would like to pay special thanks to DIA's minority shareholders and investors who participated in the capital increase in an amount of EUR 222 million. Thank you for your vote of confidence in the company's business transformation and long-term future. Maintaining a significant free float is an important element of DIA being a listed company. Finally, we are grateful for the continued support and long-term commitment to DIA of our reference shareholder, LetterOne, without whom the landmark capital increase and refinancing transaction would not have been possible. LetterOne has invested over EUR 2 billion in DIA over the years, underlining the belief by LetterOne in the potential of DIA Group and the company's long-term value. Page 7 lays out for you the benefits for DIA of its new long-term sustainable capital structure. We have reduced our net financial debt to a pro forma EUR 343 million, down from EUR 1.37 billion as of 30th of June 2021. This significant deleveraging is reflected in the reduction of the company's leverage ratio from 12.1x to 3.1x, calculated as pro forma net debt post-transaction and using last month's adjusted -- last -- excuse me, last 12 months adjusted EBITDA. In addition, as shown on this page, the company has no significant debt repayments until December of 2025. Furthermore, the capital increase has provided additional liquidity of EUR 259 million to the company to accelerate our business transformation. Finally, the transaction has properly addressed the negative equity position of the parent company of DIA Group. Independent of the recently completed capital increase and refinancing transaction, we have been working on a consistent and systematic basis over the last year to execute the commercial, franchise, operational and other initiatives of our global business transformation plan. These initiatives, which we first introduced to you in our May 2020 strategic road map, are based on the foundation of the new DIA, which features, one, world-class leadership, management and retail capabilities; two, best-in-class operational standards; three, trust and long-term relationships with all of the company's stakeholders; and four, a new performance-based culture. I am now going to give you an update on the main transformation and growth initiatives, including what we have achieved so far. Let's start with commercial initiatives. Based on new store concepts that we defined in our geographies in 2020, we have now initiated a store refurbishment program with 300 stores completed in Spain, 59 stores in Portugal and 42 stores in Argentina as of month end June 2021. We took our time to appropriately test stores last year, and to establish appropriate internal capabilities to execute such refurbishment programs and to control and monitor CapEx spend, but we are now executing at a good speed. Sales are responding positively, but it is too early to start sharing detailed information about the results at this time. In Brazil, we are currently testing the right store concept with a view to proceeding to a refurbishment program in 2022. The rollout of an optimized assortment has been fully implemented in all 4 geographies with a special focus on fresh products. In the process, we have embedded learnings from the COVID-19 crisis and current customer needs into our offering. The adapted assortment also reflects an increased private label or own-brand presence. In Spain and Portugal, we have launched over 800 new SKUs, which we are calling DIA super brands. You will be able to see these products and more importantly, buy them in any of our stores in Spain and Portugal. Argentina and Brazil are also rolling out an improved private-label offer. All of our own-brand products feature the highest level of quality in our markets, along with significant value for money for our customers. Based on the adaptability shown in response to COVID-19 last year, we have accelerated our online and express delivery presence, now available in all markets. Online today represents approximately 3% of our sales in Spain, 1.3% in Portugal, 0.9% in Argentina and 2% in Brazil. In terms of our loyalty program, we are still working on the development of such program with the client at the heart and supported by best-in-class data analytics capabilities. Moving to our franchise model. 80% of the franchise network in Spain and 90% in Portugal are now operating under the new model introduced in 2020. This data excludes Clarel stores. In Portugal, the plan is to end 2021 with the full franchise network already under the new model. Franchisees' feedback is very positive, and we see new entrepreneurs being attracted by the model, which allows them to be one-store or even multi-store retail operators who feel themselves as motivated owners, all within a framework of support provided by DIA Group. Based on the new model and the reaction of the franchisees, we are once again converting company-operated stores into franchise-operated stores. Work to update the franchise model continues in Argentina and Brazil, which we are concluding this quarter. Finally, we continue to focus on streamlining operations and gaining cost efficiencies in all we do, especially in the logistics processes and the operating model across the entire supply chain. We are also investing in new talent that will help us develop the digital and technological side of the business, including in operations, which is key to success in the future of our retail industry. DIA's leadership and management teams are at the heart of our business transformation. I'm extremely proud of the 10 members of DIA Group's Management Board, our 60-plus senior leaders and all of our employees who are dedicating their lives to making DIA the preferred proximity food retail experience in our 4 geographies of operation. Since last summer, our operating model is based on empowered local country leadership in Spain, Portugal, Brazil and Argentina with strategic guidance and support provided by a lean corporate center, our [Foreign Language]. As of this year, we are dedicating increased global focus to technology and digital to further drive our business transformation. In this sense, we have recently created a new empowered product business unit, which will support digital acceleration. The first half of 2021 featured 2 arrivals to DIA Group's management Board. Carlos Valero as Group CIO to drive our technology transformation; and Luis Paulo Maia as Head of the newly created product business unit. This is all from my side for now. I look forward to continuing to update you on the progress of our strategic and transformation initiatives in the future. I will now hand over to Jesus, who will take you through our financial results for the first half of the year. Jesus, over to you.

Thank you, Stephan. Good morning all. And after this strategic update, I will now do a quick overview of the group's P&L. We cap our net sales -- net losses in a 44% in the first 6 months of the year on the back of positive operational improvements and continued cost and financial discipline that was able to mitigate in part the 9.1% drop in our net sales and minus 9.2% in like-for-like. As we anticipated in Q1 presentation, sales evolution is impacted this year, especially in the second quarter, by a complex and challenging comparison base. We are measuring ourselves against last year when sales were twisted by the extraordinary activity experienced during COVID-19 lockdown and mobility restrictions in all 4 countries. Net sales evolution was also affected by a rationalization of our store network with 407 less stores compared to June 30, 2020, which represents 6.4% drop in the total number of stores. During first 6 months of the year, a total of 205 stores were closed, mainly in Spain and Portugal and 29 were opened. Part of that closing are due to the specific programs as Clarel business closing in Portugal, [ 52 store ] we mentioned last quarter. On top of that, net sales have the 35 devaluation of -- 35% devaluation in the Argentinian peso and 17% in the Brazilian real. This context was already foreseen in our internal budgets, so we focused on preserving our adjusted EBITDA margin, which reached 1.5% in the first half of the year, close to 1.7% seen at the same period last year in a very different trading environment. This was driven by 86 basis point increase in the gross margin and operational improvements put in place. If we look into the second quarter, we reached 2.5% adjusted EBITDA margin. In absolute terms, adjusted EBITDA dropped by EUR 12 million, offsetting much of the EUR 42 million fall in gross profit. Total adjusted EBITDA was near EUR 48 million. And this is an increase of EUR 115 million if we compare it to the same period of year 2019. Labor costs remain at 11% as a percentage of net sales because we are still covering COVID-19-related additional staff needs. In terms of OpEx, the increase from 5.4% to 6.3%, mainly for a 41% increase in energy costs, increased maintenance and advertising costs. Restructuring costs also increased due to the process initiated in the last quarter 2020 to convert owner store back into franchise stores that imply some selling cost and lease cancellation fees. Depreciation in this period came down near 14% of a smaller -- because of a smaller store base and financial results improved significantly in EUR 97 million to the active management of FX impact related to our intercompany debt. Moving to our market-by-market breakdown, starting with sales and like-for-like performance on Page 12. Like-for-like in Spain and Portugal were the most affected countries by the challenging comparison base in the second quarter with minus 12.3% and 8.1% drop. In the 6 months period, Spain was minus 7% and Portugal, minus 5.3%. Net sales had a similar evolution in the 6 months with a reduction in Spain of 7.7% explained in part by 5% less stores. In Portugal, net sales dropped 4.2% on the back, again, a more streamlined store network with 12% less stores and still affected by restriction of opening hours. If we look into the like-for-like considering a 2-year period, we can see good improvements in like-for-like sales comparing 2021 versus 2019, with plus 5.3% in Spain, a plus 3.4% in Portugal. As Stephan mentioned, this uplift in the refurbished stores is promising. And we want to see the global effect at the end of the year with a bigger basis. The focus in fresh products is working properly in all the markets, as also Stephan has mentioned. And in line with this, as you have probably read in the press, Brazil has implemented the new fresh offer in more than 600 stores so far. Brazil like for like remained positive, reaching 1.3% in the quarter and 4.3% in the 6 months period, showing some resilience despite the challenging macro environment. In that sense, in terms of net sales, they were down 5% in local currency with 14% less of the stores. Finally, Argentinian like-for-like was negative 5.3% in the quarter and 3.9% in the 6 months period, but performed well in local currency, with sales up 33% in the first half in a challenging macro environment. In terms of adjusted EBITDA, the group reached 1.5% margin in the first 6 months of the year in similar levels than same period last year. It's important to highlight, as I have mentioned before, in the second quarter 2021, adjusted EBITDA margin of the group reached 2.5%, which shows the positive impact of the initiatives implemented and the cost discipline in place. By country, adjusted EBITDA was penalized in Spain by a reduction of 50 basis points, reaching a 1.8% margin to a lower sales but with a better performance in terms of gross margin and other costs, taking in account the important effect of electricity costs, near EUR 14 million more than last year, mainly in the Q2. And in Portugal, the margin was reduced 30 basis points, reaching a 1.2% margin. Brazil shows negative adjusted EBITDA but remains stable as the business was able to offset the negative effects of legacy franchisees' issues that were already solved at the beginning of the year. Last, Argentina shows an 80 basis points increase in margin, reaching 2.6% on the back of a cost reduction plan providing good results. Moving to the balance sheet. Trading working -- trade working capital was reduced in EUR 26 million driven by the drop in sales and an increase of receivables related to the new franchise model in Spain. In Spain, for example, the change in franchise model represents around EUR 10 million impact, 2 days of working capital. In terms of accounts payable, in Spain, a drop in sales represent circa EUR 71 million, but it is improved in 3 days, which results in a change in payables of EUR 26 million. Net shareholders' equity at the parent company level remained negative in EUR 50 million as of 30th of June 2021. As I've mentioned before, the situation is resolved with the capital increase completed at 6th of August. Pro forma, the net equity of the parent company after the capital increase will be near EUR 975 million. On Page 16, we look at the cash flow evolution for the quarter and for the 6 months of the year. We ended with EUR 246 million in cash and cash equivalents in the 30th of June of 2020, EUR 100 million less than at the closing of last year. Cash flow from operation amount was positive EUR 32 million; negative trade working capital amount, EUR 26 million, as previously explained; and CapEx investment was up EUR 63 million of the back of the store modeling program put in place before the capital increase. In terms of available liquidity, we ended with EUR 300 million liquidity as of June 2020, 80% represented in cash and cash equivalents. As mentioned before, after this very important milestone that is the capital increase and the agreement with lenders and bondholders performed after the capital increase, the financial net debt is EUR 342 million and the liquidity available, EUR 460 million based on the figures of 30th of June. And with that, I now hand back to Stephan for some concluding remarks. Thank you for listening.

Thank you, Jesus. A few concluding remarks from me. We want to thank again our shareholders and creditors for the successful completion of the comprehensive capitalization and refinancing transaction. While we still have a lot to do on our business transformation agenda, and we've always been clear that the turnaround of DIA could take up to 5 years, we feel that we are delivering against the key initiatives in our strategic road map. We are now focused on accelerating such initiatives based on the additional funds achieved through our capital increase. We are working in a systematic and long-term sustainable manner to position DIA Group as the leading proximity food retailer in all of our countries of operation, featuring innovative commercial and e-commerce solutions delivered by a committed management team to achieving our goal of being Cada DIA más cerca [Foreign Language]. Thank you very much. We can move to take any questions at this point that you may have. Here with us is Miren Sotomayor, Head of Investor Relations. She will read out the questions received.

Thank you, Stephan. Good morning. Let's start with a question from João Pinto. Following the capital increase, have you accelerated the refurbishment plan in Spain? Can you quantify how many stores you aim to refurbish until year-end and update us on the refurbishment targets until 2023? Let's take it from there. I will continue.

I'm happy to start and Jesus will jump in as he wants. In terms of the acceleration. Just to remind you, we've literally just completed the capital increase and refinancing transaction 13 days ago. So we have a list of things we would like to accelerate. The refurbishment program features on that list but we are now having to turn towards how and where we would be able to accelerate. We are continuing to monitor the stores already completed. As we've said, positive responsive sales, but it is too early. At this point, we would prefer not to provide any targets in terms of stores completed by the end of this year. If you go back to our strategic road map, I think it is pretty clear that we would look to complete the refurbishment program at the end of 2023.

Is there any other investments that you would like to accelerate in the short term?

Well, continuing with Stephan, the remodeling programs are not also -- not only in Spain but also in the other geographies. And of course, to improve our store network in the different initiatives we have. An additional initiative, as Stephan has mentioned, also technology is a big part of this turnaround on the change of how this company is working. And of course, that also needs some investments.

In line with this, [indiscernible] asks, how much is the median sales increase in the 300 Spanish stores with the rollout completed?

We look forward to be able to share details with you at a later stage in time. At this point, we think it is too early. We'd like to have numbers settle around a larger project, and we'll come back to you at the appropriate time with detailed sales uplift.

A question received from [indiscernible]. And congrats on the magnificent turnaround. In your view, what is the key to increase margins and drive profitability of the business?

Well, I think this -- I think the most important is to increase our sales in one hand because I think this is a business that needs sales to be profitable. But as also has mentioned, as Stephan, I think also has mentioned about this, we are working in all the lines of the P&L, not just cutting cost but really transformation, the way we do the things to be more efficient, to have less fixed cost and, of course, to improve our margins. In that sense, sales, an increase of sales density is the key. And as I told you before, efficiency in logistics and in all the cost lines is very important to really keep the increase of the sales as increase of the EBITDA.

In line with this, a question from [ Ana Gomez ]. Could you give us some guidance in terms of sales and EBITDA for the rest of the year?

I think as we have explained before, we are in a very volatile environment, all 4 of our countries, and with this point, prefer not to provide such guidance. We do commit to updating you regularly as there is relevant information on not just the performance but the progress on the business transformation.

Yes. I think you answered with that, the next question from [ Ana ], when should we expect to have an updated midterm guidance? Let's move to sales dynamics. Do you have all the -- can you elaborate on sales dynamics during the summer? Can you elaborate on sales dynamics during the summer?

During the summer, the sales had a difficult evolution because a lot of people has gone to holidays. We are not very -- with a lot of presence in touristic areas. But in that sense, we have taken advantage of the situation to increase our remodel works in our portfolio.

And if I can just add, yes, add to that on a slightly cheeky note, 30% of our business actually was not in summer, it was in winter, and we're very pleased with the performance, especially at the Argentine payables in our summer there.

Yes. Yes, that's -- so sorry. Thank you, Stephan.

So we also have during the -- a question on winter sales from [ Javier Perez de Lesa ]. What are your expectations for the Christmas business?

I mean all 4 country CEOs are very, very focused on the preparation for the Christmas season. As you all know, there's differences. I think the proximity store format features slightly less of an uplift in Christmas than do supermarkets or larger stores. That's a known pipe. That being said, last year demonstrated to us that good preparation is the key to having a good Christmas season. This ties in with the work we're also doing around our private label and own brands and last year saw, for the first time, private-label brands introduced specifically for Christmas, and we expect to see a continuation of that this year.

We also have question made by [ Bella Betta ] in Spanish. [Foreign Language]

Okay. I'm going to give you some data, you can do a very easy calculation. The new syndicated -- the loan, the syndicated loan is near EUR 900 million and the cost is 3.5%. So there is a 3%, 3.5% and also the bonds the EUR 30 million of the bonds is 3.5%. All the details are also in our communications to the CNMV with all the data. And if you use that calculation, you can achieve the right figure.

In line with that, we do have a question from [ Oxenia Boves ]. [Foreign Language]

I think that now the value of the share is what it is in the market. But of course, we are working very hard to turn around the company and to create value in the long term, as Stephan has also mentioned before.

And just to underline Jesus' point, we're obviously very focused on the strategic and operational turnaround. We believe in doing things in a sort of systematic and long-term sustainable way. That being said, as we see the results of this turnaround, in the same way that we've communicated progress on the initiatives, we will continue to do that on a regular basis. And we think then telling the story will be equally important to executing the story. But currently, our focus is very much on executing on the various initiatives, but we will share the results with you as soon as they are available.

[ Albert Vertranos ] asks when it is expected to get positive results.

Well, I think that also coming back to the previous conversations we had, I think this year, next year are very focused in the transformation. This is a long run, and -- well, I think next -- this year and next year, we will see again, negative results because we are transforming our business. We will see later. But as you know, we are not giving right now any guidance and working in the transformation, taking care of the figures and taking care of all the initiatives to have the results we are looking for.

Continuing with questions about the business. [ Carlos Hernandez ], following the launch of 800 new private-label SKUs, is the relaunch of the DIA private-label range now completed?

I would argue that on the commercial front, the work is never completed. So it is work in progress. We are very pleased, to say the least, with the super brands that have been launched in Spain and Portugal, but it's going to be an ongoing process. More and more of the current label will feature under the super brands. I would encourage you to go to our store and look at those super brands. They're really, really well done. And equally, we are doing work in Argentina and Brazil. It's an ongoing process. So as we finish this year, there will be more work to do on improving the range next year. We're looking at maintaining what we think is a very healthy balance between private-label, own-brand but also branded products. Customers want a combination of the 2, and we will continue to work with both sides of that equation on a continuous basis into the future.

Going back into refurbishment. How quick is payback on refurbishing? What's your target for payback on CapEx? Okay. How quick the payback on refurbishing and what's DIA's target for payback on CapEx?

We are -- internally, we are looking 3 years of payback. So always, we are trying to push that. In remodelings, sometimes the payback is smaller. But as a general payback of any initiative we launch in the company, we are looking for a payback of 3 years.

On the corporate level, we do have a question from [ Fernando Ristolosa ]. Do you plan any type of merger, acquisition of the business in the medium term?

And you are familiar with our road map, which is very focused on making DIA a better business at heart in all 4 geographies. Our focus continues to be on that on the commercial, operating, franchise and franchisee and, increasingly, technology initiatives.

And on corporate cycle, [Foreign Language]?

Well, let me say, and afterwards perhaps Stephan can underline something. I think as Stephan has mentioned at the beginning of the conversation, that for us to have, after the capital increase, to maintain a free float higher than 20% is a very good new. And in that sense, we can assume that for us -- and I say that for us, it's important to be in the market. I don't know if, Stephan, you want to add anything.

I can only confirm what you've said.

Going back to business. Are you already higher customer frequency following the turnaround efforts? And how do you see the competitive backdrop evolving in Spain in terms of price competition?

Okay. So regarding frequency, we are achieving increase of frequency in all our -- in -- I mean you -- we can see this in our remodeled stores. But also, we have a mix effect of changing again the habits of the consumer coming back to the store with a more frequency because if you remember during the COVID lockdown in last months, the frequency was down because we did have a bigger basket that was because of the situation and now it's coming back to a higher frequency and lower basket. But in that high frequency also is pushed by the refurbishment and increase of the sales of our network. And the other question was -- it was?

How we see evolving price competition?

Price competition, we always say that this is very competitive market. All our competitors, they do very well their job. They are very, very good competitors and very, very professional. So this is a business with a very low margin. So we can beat competitors, but we can do -- we cannot do any nonsense. We don't do and our competitors don't do.

Okay. Going back to capital structure. How is the 2023 bond going to be amended? Bondholders will receive funding security or the terms of the existing bond will be simply changed?

But this has been already done and with the meetings with the bondholders and so on and all these have been done, and disbursal from 2023 has moved to 2026, as has been mentioned before. And also as we communicate to the CNMV in the [Foreign Language].

[Foreign Language]

There is nothing about that in our strategic road map. In fact, we are trying to do a stronger brand, and we consider that DIA brand is very well-known in the 4 markets we are, and we have to push that brand and also to put on the table all the values that, that brand has.

I think that's a very, very important point made by Jesus. We actually see there is a lot of value attached to the DIA brand, both as a corporate and on the consumer front. Not all of that has been visible over the last few years, but with the work on the road map, with the remodelings, the consumer is responding very positively to the DIA brand and confirm there are no plans to change that in the future.

In terms of basket and frequency, how it is developing? Would you be able to keep showing the same trend that you had before on recovery of basket and frequency per month?

At the end, we are a proximity business. And for us, frequency is the key. So we really are tracking and pushing the frequency. In that sense, also, as Stephan has mentioned, the fresh products is a key part of the assortment, new assortment policy. If we want frequency, fresh products has to be a key -- has to play a key role in our stores. And we are pushing that and tracking that to really be sure that the increase of frequency we are achieving the goals we want.

In relation to Clarel business, [ Jose Raul Del Monte ] asks, is there any action plan about Clarel stores?

As you know, we closed the Clarel business in Portugal because it was completely noncore in that country. In Clarel, we think -- in Spain, excuse me, we think there is a role for Clarel to play. The team is working on an improved value proposition for that and testing various initiatives, and we will come back to you with more details at the appropriate time. I mean in the bigger picture, just to remind you that Clarel is actually a very small part of the group. So the main focus of the business turnaround is on our food retail business.

We do have similar questions around the store refurbishments from [indiscernible]. Congratulations to DIA's team for progress made during the last quarter both from a financial and operating point of view. Could you please provide some detail about the number of stores that are now on spending to be refurbished by country?

Well, as Stephan has mentioned, our goal was to have refurbished our proximity network at the end of 2023. That was the message we sent to the market 1 year ago. And of course, as also we have mentioned, with the capital increase and the new cash, we are really studying how we use -- how we allocate that resources.

What is the reason to recover franchise system back? What is the reason to recover franchise systems back? I guess it refers to going back from corporate to owner.

I mean on the -- we will share that. We're sort of looking at one another here because we both want to jump in, given the -- I mean, franchisees are at the heart of what we do. And I think it's back because we have created -- we are creating -- I mean, it's all a work in progress. We're creating a win-win relationship between entrepreneurs, small entrepreneurs, franchisees who would like to feel they're running their stores within a structured system that DIA has created for them around stores, products, logistics and operating processes. And let's say, it's a way in which those 2 worlds come together in a win-win way. That, at a philosophical level, is why we believe this can work and is very relevant to the proximity space. Jesus, do you want to add anything to that?

That is -- at the end, this is a proximity business. Also to have that ownership is very important to really be close to our clients and that's also a good point.

Okay. I would probably wrap up with questions around DIA stock. Who can tell us -- what can you tell us minority parties who entrusted this company from the beginning and we have a change of capital increases? The price decrease of the capital increase below EUR 0.02. We can expect the same commitment from this company as retailers have? I think it's wondering about the price of DIA stock going below the EUR 0.02.

Well, I can say that, of course, the value of the stock has to reflect the value of the business. And as we have mentioned before, we are working hard to improve the business. And if we improve the business, we assume the stock will grow.

I think that's exactly the point. There is a management team in place that is very committed to this turnaround. And I am very confident of our ability to deliver the turnaround. As I've said, we will do it in a systematic and consistent -- in a systematic way, in a long-term sustainable way, but the initiatives are beginning to land. The initiatives are landing and as per Jesus' comment, the focus is on sales, sales density, frequency and obviously having that flow through to an appropriate adjusted EBITDA margin. And as we deliver that, as we're able to share that with you, we believe that will have a positive impact on the share price. But it's about delivering the business performance first, and we think that will flow through into the stock performance over time. Let's not forget this is a turnaround, and we still have 2 to 3 years of hard work to do which we are doing and are committed to delivering and are very confident that we will be able to deliver.

[Foreign Language]

No.

And finally, are you considering the possibility of a reverse stock split?

We will see that when the -- in the moment is appropriate, but we are not -- it is not in our plans nowadays.

I think this is it for today.

All right. Well, thank you for -- to everyone for your time today and for your questions and interest in DIA. And please contact our Investor Relations department for any follow-up questions you may have. Thank you again for your time, and have a nice day.

Thank you very much.

That does conclude our conference for today. Thank you for participating. You may all disconnect.