SIMPAR S.A. (SIMH3) Earnings Call Transcript & Summary

Good morning, and welcome to SIMPAR's conference call to discuss the earnings regarding the second quarter 2020. Today, with us, we have Mr. Fernando Simoes, CEO; and Denys Ferrez, CFO and Investor Relations Officer. [Operator Instructions] We would like to inform you that this conference call is being recorded and simultaneously translated into English. Before moving on, we would like to let you know that any statements made during this conference call relative to the company's business outlooks, projections, operating and financial goals are based on the beliefs and assumptions of SIMPAR's management and rely on information currently available to the company. Forward-looking statements are not a guarantee of performance. They involve risks, uncertainties and assumptions since they refer to future events and therefore, depend on circumstances that may or may not occur. General economic conditions, industry conditions and other operating factors may affect SIMPAR's future results and lead to results that will materially differ from those in the forward-looking statements. We'll now turn the floor to Mr. Fernando Simoes. Please, Mr. Simoes, you may go on.

Good morning, everyone. I'd like to thank you all for joining our call today. We're starting the release of the earnings of the second quarter '22 of SIMPAR. We're going to start with Page 2, where we address the main highlights for the second quarter '22. We had record EBITDA of BRL 1.7 billion, which is growth of 94% as compared to the same period last year. Net revenues of BRL 5.5 billion, which is growth of 73%, with net revenue from services of BRL 4.2 billion, which is growth of 73% over the same period last year. We had net income of BRL 213 million a reduction of 38%. That's because of the increase in interest rates, but also in line with our strategic plan that we have been executing growth with high investments generating net CapEx of BRL 3.7 billion only in the second quarter with high liquidity assets that could generate revenues with even better yield to come. In addition, we have readjustments, negotiations with clients that sometimes take time to implement. And nothing reflects our numbers that certainly will meet the interest -- the increase in interest rates to come. On Page 3, we talk about our main strategic results. The consolidation and transformation of all our business with scale, capillarity and huge competitive advantages that set us apart from the competition. We revised -- we had an upgrade of our rating by Fitch Agency, SIMPAR, JSL, Movida and Vamos are now on the national scale, AAA and on a global scale, BB. What enabled the improvement is the cost and the profile of our debt. But more than that, it's based on the rationale of the scale. We have our footprint and the competitiveness of the 4 companies in the segments in which they operate. SIMPAR as a holding, JSL in Logistics, Movida in the car rental and the transformation of Vamos growing EBITDA with a suitable debt profile. In our history in recent years, we proved the resilience and the independence of our companies on the economic cycle in all the businesses in which we operate. We also launched in the second quarter, Automob. The holding that is consolidating all our dealership business, light vehicles. We have been operating in the segment with original for many years. We created Automob as a holding, and there are huge opportunities for consolidation and transformation in the dealership business for light vehicles. Today, we have 72 stores, 24 brands, and we are present in 19 cities. We had net revenues pro forma considered the acquired company in the last 12 months of BRL 5.2 billion which means the sales of 30,000 cars per year in our light vehicle dealership network. We had some acquisitions in the second quarter in line with our strategic plan. They are one-off, but complementary to the business we have. We are [indiscernible] a car dealership in the city of Sao Paulo for Volkswagen, Peugeot and Citroën assets recognized by top management and in line with our plan of acquiring companies that are complementary to our business with a history of delivery, governance, quality and people that make a difference. The same applies to Truckpad, a company that is completely digital for more than 10 years. That relates to small and mid carriers with a huge portfolio of truck drivers, all on a map. We acquired it by JSL. JSL will certainly accelerate all its digital processes with the acquisition and SIMPAR will contribute for the development of Truckpad that will offer more services to its clients, financial services, truck rental and et cetera. We consider acquisitions not consolidated in second Q, UAB [indiscernible] and Truckpad, we would have in our revenue, BRL 3.5 billion above each year, what we see in the last 12 months. Vamos, we opened the largest and dealership in the Americas in the city of Primavera, Dulles in line with the Mziq strategic plan. Today, the largest rental company for trucks, machinery and forklifts without operations and long-term contracts. It's really transformed in the last 24 months. It's dealership business, particularly in the agribusiness in the Midwest region of Brazil. With Valtra that today is the largest Valtra dealership network in Brazil and Fendt now. That quite modestly according to the market is the best -- have the best machines of farm machinery in the world. It is a German brand that has been fully adapted to our country, and we are going to open several dealerships in the future months. And with more than that, people that are qualified and trained to ensure the availability of the machinery in the field to our clients and using our DNA, connecting the best brand in the world, customers, users, availability, infrastructure and closeness. With that, we believe that we are going to generate a virtual cycle between us [indiscernible] and clients. Going to Page #4. I'd like to show to you our entire ecosystem and our diversification in car sectors that are core in the economy. We have leadership, we have revenue balance which is a consequence of our work, especially the work of our people and the quality of brands we represent and the services we provide. With that, we have a huge entry barrier against the competition and the comfort and safety to our clients, which really protects our revenues against any economic scenario and decreases our volatility, and that has been proven in recent years. On Page 4, you see SIMPAR the holding that controls 7 independent companies, more than 40,000 employees and more than 258,000 assets. In the upper part, you see Movida, then Vamos, then CS Frotas, and Vamos rental business. With that, you have an ecosystem in the rental business that goes from trucks to machinery to cars in state-owned companies, mixed ownership companies in sectors like sanitation, tourism, agribusiness corporate. So it's not a car company or a truck company for rentals. It is a whole ecosystem and in part meets the whole needs of clients. Remember that the rental business in Brazil is just starting. On the right, we have sales. You have Movida, [indiscernible], you have the dealership network under Venmos with 26 stores with trucks, machinery equipment. You have the sales of used assets in a network that we are creating. We have more than 25 stores, 14 have used and the other 11 of Volkswagen Truck assets, and you have cars with 72 stores and 24 brands. So you have the sale of assets in a completely independent area, but also encompassing all the segments and assets that we deal with, not only equipment but sectors. Then CS Infra on the right side, still on Page 4. We have Ciclus, which is a center for waste treatment generation of gas at the highest growth standards in terms of governance and the quality of waste management. We have CS Ports with the 2 ports of Aratu that we won the concession in pre-operation and under construction in the next 2 years, we're going to be completely transformed and the huge potential of agribusiness. We also were awarded the [indiscernible] a concession in Piauí, and we also have a stake in BRT Sorocaba. BBC, Financial Services that has been operating as a leasing company. And in the last 3 months, turned into a bank offering services to our clients and starting its cycle of development. And still on Page 4, we have our logistics services, JSL. This is where our business started 66 days ago today a completely independent company focused on the logistics business, but with a huge differential. It is the only logistic company in Brazil that grew based on client needs, diversifying its services and sectors. So it has inbound operations, transportation, urban distribution, warehousing, refrigerated cargo more than 16 sectors, 7 countries, 6 in Latin America and 1 in Africa, growing in a very sustainable manner. That's it. It is a unique position, really differentiated in terms of sectors, services, diversification and particularly the opportunities of our clients and the work and dedication of our people, bringing resilience in revenues and predictability. On Page 5, we are going to talk about JSL. Of the listed companies aren't going to be brief. All the results have already been disclosed, and the numbers speak for themselves. Page 5, JSL. With the capacity of execution of its people has been showing strong growth organically and inorganically, the quality of the acquired companies are not only growing and improving margins and returns, operating margins when you have growth of 56% in revenues. EBITDA that grew more than 100% in the second quarter year-on-year. Net income was slightly lower, in line with the strategic plans because of higher interest rates and the execution of CapEx generating backlog. In the second quarter alone we already had more than BRL 1.4 billion in new contracts. If you take a look, we have more than BRL 5.5 billion in net revenue from services compared to the IPO about 2 years ago, it is growth of more than 100%. It is the excellent work of our people. Now Page 6. Here, we have the main indicators for Movida. Movida is a company today of 207,000 cars showing transformation since its acquisition, the IPO and you see record numbers in revenue year-on-year. This is a company that aligned with its strategic plans, knew how to transform itself in the past 2 years. Today, it has scale and capillarity that is very competitive. A position in terms of digital processes that contribute to customer loyalty from getting the cars to returning them. In line with the strategic plans, it had a great movement in recent years, renewing its fleet, bringing its separate age to 9 months, which is the newest fleet in Brazil, 8.5 months to be more precise, in line with customers' needs. It brought in the last 12 months, more than 1 million new clients in the rental car business. So in the quality of its strategy and with that improving returns and operating margins. Going to Page 7, we talk about Vamos results. Thanks to the capacity of its people management and execution of its strategic plan. Vamos shows revenue, EBITDA margins and increase in net income and more than that, a backlog quarter-on-quarter, year-after-year that is really transformational, contributing to its scale, capillarity, the improvement of its margins and once again, a unique positioning in an ecosystem in rental with the dealership network and in the sale of used assets. On Page 8, we talk about Automob. Today, this is a company that is 6x higher than it was in the past with more than BRL 5 billion in revenue, added to the acquired company, more than 30,000 cars a year, EBITDA of BRL 374 million with a margin of 7.4% and net income of BRL 180 million. In line with our strategic plan as well, this is a company that you see on the right. Original going from BRL 900 million to BRL 5.1 billion, 6x higher after acquisitions. Remember, acquisitions have been very responsible based on brands, regions, but companies are always completely independent with management and focus on their business. We have acquired companies that have a high capacity of management, quality and that are focused on their clients, and that are complementary to our business. We intend to continue focus on consolidation and the transformation of the size of the business. On Page 9, we have BBC Bank. In December last year, we got authorization, but we started operating as a bank 90 days ago, approximately, and the numbers start to show the transformation upside. This is the start of a huge cycle of development within our ecosystem with responsibility and contributing to our companies to have more customer loyalty and to enable us to sell our assets. On Page 10, we talk about CS Brazil. Remember, CS Brazil continues to be an independent company. It was CS flat that was moved into Movida. CS Brasil is an independent company with fleet management and outsourcing in state-owned or mixed ownership companies. And we have operations with driver services, and we grew 20% year-on-year. And compared to '19 and the second quarter, we have completely transformed the numbers in terms of growth and better operating margins. On Page 11, CS Infra. This is a company that is still developing. You have the waste treatment center, the largest waste treatment center in Brazil and governance and the engineering at the highest world levels. And we have the 2 ports of Aratu that are operating, but just starting, just starting construction. Transcerrados concession in the state of Piaui and BRT in Sorocaba. As I've always tell you, we have focused on long-term concessions whose location is services, therefore, contributing to customer loyalty and providing better services to Brazilian citizens. On Page 12, we are going to talk about the highlights of our financial numbers, and I'm going to turn the call to Denys. Denys?

Thanks, Fernando. Good morning, everyone. Talking about the financial highlights of the second quarter '22 consolidated SIMPAR. We start at the top left on net revenue. Net revenue in the second quarter was record. We reached BRL 5,463 billion, growth of 73% compared to the same period last year. When we get net revenues, and we annualize that would be equivalent to almost BRL 22 billion, which would already show a 58% increase compared to the full year of '21 when we delivered approximately BRL14 billion. Here, EBITDA in the second quarter, also a record, we reached BRL 1.73 billion it was double the same period last year, reaching margin of 40.5%. That is an increase of 4.5 percentage points. When we analyze the numbers, we would have an annualized number of BRL 6.8 billion, already going to BRL 7 billion annualized numbers. That is 66% higher than the full year of '21, a clear indication of the size of our transformation and cash generation. Going to our EBIT, we show similar behavior. We see a record of BRL 1.27 billion, also doubled the same period last year, margins of 30.6% and an increase that is quite substantial, 4 percentage points year-on-year. Annualized numbers that would be approximately BRL 5.1 billion, which already shows compared to the full year of '21, a material increase of almost 70%, 68% to be precise. Going to net income in the right quarter, we closed the quarter with BRL 213 million, a decrease compared to the BRL 343 million recorded last year. That's basically because of financial expenses year-on-year. We have to think that the nature of financial expenses can be twofold. We have a higher expense because of our organic growth, or invested in operational assets in the existing businesses, we have an increase because of the extension of our businesses, timing of acquisitions. As an example, Automob. And of course, there is an item that you all are aware of, which is higher interest rates if we compare the second quarter '22. And the second quarter of last year, we had a fourfold discrete. And therefore, we had this net income. But remember, we are growing a larger company with these investments, and they have a range of time until they start yielding cash and the existing business is being adjusted to the new reality of inflation and interest rates. On the next slide, on Page 13, we still talk a bit more about the behavior of our businesses in an inflationary scenario. So if you go to Page 13, you can see on the left 2 lines, one in blue, showing the evolution of our gross margin from services consolidated and the dark line, which is the IPCA rate of the last 12 months. Remember, gross margin from consolidated services does not bring the sale of assets or retail-related business like dealerships, for cars and trucks. So with this, you see that we had a peak of IPCA in 2015 and now another one in the year of '22 in a process that started to accelerate in '21. And our gross margin in the period showed significant improvement, which reflects the best returns on invested capital that we have recorded and that you will see further on. On the right for you not to have any idea in terms of business mix, you see that the effect happens in our main companies like JSL, Movida and Vamos. So this is a characteristic of the group. The group has mechanisms and the possibility of making adjustments as we have discipline in our pricing system in view of the market conditions. With that, we go to Slide 14, where we talk about our indebtedness. Traditionally, we have kept strong liquidity. And we have a debt amortization schedule that is quite long. On the left, we have our cash position of about BRL 10 billion, which is enough to cover the short-term debt by 5x or all maturities until 2025. And for SIMPAR as a holding, isolatedly in light blue, we have an available cash of BRL 2.6 billion, which covers 6.5x our short-term debt or all maturities until 2030. In addition, the group also has BRL 1.2 billion in undrawn revolving credit lines. With that, our consolidated net debt is at BRL 22 billion and the holding debt at BRL 3.2 billion in the end of the period, which already reflects the contribution to Automob in the building of this new avenue of growth for the group. Now we are going to talk a bit more about investments on Page 15. Here on the left, you see our evolution. We show that in the second quarter, specifically, we invested about BRL 3.7 billion. That is about 1.7x higher what was invested in the second quarter '21. And year-to-date, we have about BRL 12 billion year-to-date in the last 12 months later to the end of the second quarter. And compared to the full year '21 is already an increase of 36%. On the yellow line on the top, you see the assertiveness and the evolution of cash generation. All that, keeping our responsibility towards our capital structure. In the quarter, we show on the right a net debt-to-EBITDA ratio of 3.6x or if we consider the current base, thinking of the second quarter and annualizing the number 3.1x. Remember, our commitment is to decrease leverage gradually and always measuring the final number in the end of the year. Again, it's important to mention that our investments and our assets are investments that can always be adjusted to demand. And they have the benefit of being high-quality assets, enjoying a net secondary market. Remember that most of the investments have just not contributed to company results or cash generation given the cycle of investments and operations. Now we are going to go to the final slide before I turn back to Fernando, where we show that we have been growing. And we are very much paying attention to the responsibility of the return on invested capital. In the last 12 months, we had a return on invested capital of almost 14% and on return on equity to our shareholders of about 28%. With that, I turn the call back to Fernando. Please, Fernando, you may go on.

Thanks, Denys. Carrying on with our presentation on Page 17, we show you some of our main pillars that are the foundations for us to transform future results in a sustainable way in all our companies. We are creating people and strategic planning committee at SIMPAR, strengthening the focus on our people and sustainable development of the holding and its subsidiaries and also the perpetuity of our culture and values that are paramount for our development regardless of the size of our company. We have focused and the committee will help us with that for the continuous evolution of the organizational structure and management model, which is unique and contribute to development of our companies, keeping them independent with solid governance and focus on their core activities and the commitment to deliver the strategic plan defined by the Board of each companies. We have the diversification with development of prospecting of new businesses with high potential to growth and profitability and investments in operating assets that are needed by clients, but there are also with high liquidity and capacity of appreciation because of our scale and capacity to buy. We have made acquisitions that are recognized for the quality of their people for the quality of their services that have investments in innovation with that, that can be complementary to our businesses, always seeking services that are needed by our clients and desired by them in each of the companies with which we operate. We believe that if we offer clients what they need with excellence, we are just extending our commercial relations. Discipline in expense control with robustness in balance sheet and strengthen cash positions to ensure the continuity of our strategic planning with responsibility and safety. We have ensured the necessary resources to transform the size of our subsidiaries, including a possible IPO of other companies in the Novo Mercado and even thinking of holding an interest of less than 50% in any of them while maintaining control of the companies, not because of ego or vanity, but because we believe in our assumptions and values. And with that, we bring the stability to the sector, agility in the company and also keep values and cultures. And of course, we are looking into possibilities of going international with responsibility in a way that can contribute to our dedication in revenues in hard currencies. These are our main pillars that I'm pleased to share with you. Once again, on behalf of our people, we thank you for the opportunity and attention, and we are going to open for your questions. Once again, thank you very much.

[Operator Instructions] Our first question comes from Gabriel [indiscernible].

Fernando and Denys, congratulations on strong results once again. Fernando, your final comment about going international. The media published an article about the intention of the SIMPAR Group being interested in markets like Europe. So which segments or subsidiaries are you talking about? Where should we see more growth? JSL perhaps is a clear name to head this movement, but I'd like to hear a bit more from you. And also, I'd like to know if that would be growth from [indiscernible] M&A? Or are you think also of organic growth with clients that operate globally? And the second topic is about Automob. We understand based on what Denys mentioned that the group wants to expand organically as well. We already announced 4 acquisitions of dealership groups. So I would like to know, talking about deleverage and continue to grow, should we expect anything from Automob this year?

Gabriel, this is Fernando speaking. Gabriel, talking about going international. First, we do not want to go international with any business that is something that we don't have. This is very important. Second, we don't want to have the international movements that are huge. We really believe in time to have revenues in foreign currency as it was part of our strategy to diversify services, businesses and segments. So now we want to diversify currency. But without compromising our growth in Brazil and really contributing because we think we can help with our business model in going international and also technologies that can also help us. In addition to strong currency, there is this exchange of experiences. This is what we believe in. And Mazel, for instance, Mazel is a company that was acquired by logistics. 65%, 70% of its revenue is in dollars from Chile, Argentina, the food segment. And you have a growth of Fadel in Paraguay. It has operations of [indiscernible] and also in Africa. So this is happening in a very organic comfortable way that contributes to our revenues in foreign currency. And in parallel to that, we can do something in Europe or in the United States. But remember, small businesses with responsibility that can contribute to our development. In terms of deleverage and I'll let Denys add to my answer. We are focused on deleveraging the company year after year. And when we have opportunities in companies like Vamos, we are going to have deals that are at a fair price, and we are doing that, but also focus on deleveraging. Automob the acquisitions made are part of our strategy, and we are going to continue the consolidation in the dealership business. And I'd like to highlight that the model that we are following participating stake, parting cash, but the stake from Automob contributing to the developing of our business in the dealership segment and also contributing for leverage not to be as high as we should think. But the idea is to continue consolidation in light vehicle dealerships. If it's going to happen this year or not, well, that I don't know. I would just tell you that there are huge opportunities with the model we are building. I think that those that sell and partner with us are pleased, OEMs are pleased. And once again, we are making these companies independent, and we contribute with the holding or in projects to support their growth. So that's a bit of color for your questions. I think Denys is going to add.

Yes, Fernando has already said it all. But just to remind you, Gabriel, we had a contribution to Automob from SIMPAR to give stability that is necessary for its growth. It was a contribution of BRL 500 million. That, I'd like to what Fernando just mentioned, enables us to continue developing Automob with this balance between cash and stake Okay?

Our next question comes from Victor Mizusaki from Bradesco BBI.

Congratulations on your results. I have 2 questions. The first is a follow-up on Gabriel's question on the international expansion. When we take a look at SIMPAR's balance sheet, we see that part of the cash is in foreign currency already. So the first question, does it make sense for us to expect that part of the strategy and exposure in form of currency is to optimize your balance sheet since the cash is going to be outside of Brazil? And the second question about cash position. When we see SIMPAR's balance sheet, you have a very extended debt schedule. But when we break down and see what debt is in the holding and what is in the subsidiaries. We see that most of the debt is at the subsidiaries level. Do you have a plan at SIMPAR to change anything with regard to the payout of subsidiaries to increase cash and have an M&A plan?

Victor, I'm going to start answering about the cash and where it is allocated. It is true it is in foreign currency part of it where we have a carry cost that is lower. And also, if it is used in Brazil, there are 2 companies that have cash abroad Movida and SIMPAR, you have the benefit of the conversion into reais, which is a lot more favorable today than it was last year. Just to give you a number, the cost is down by 20%, 30% of the CDI. If today, you internalize the foreign revenues compared to the past. But this is cash looked at the lens of liquidity regardless of the strategy for the future with regards to go international that Fernando mentioned. It's always the possibility. But today, the idea is to think of liquidity of the group as a whole from the lens of SIMPAR and we are saying that we are going to have a carryover cost. The idea is to have liquidity to have flexibility within our strategy. And when you see the group as a whole and you think of all subsidiaries, well, historically, given our growth profile and because of the responsibility and guidance of the Board of Directors that support us we always brought responsibility before development. We have been very prudent and that's the idea. We don't want to make any changes at least nothing formalized with regards to payout. That is the decision of the Board of Directors in a timely manner. But today, we continue to be prudent in a group that is growing in terms of extension and organic growth because we offer the value to customers that makes it more rational for them for the use of capital with the gain in profitability.

Our next question comes from Lucas Barbosa from Santander.

Fernando and Denys, congratulations on your results. Two questions. First, truck prices in the secondary market. Could you talk a bit about the dynamics for the coming years? We have interest rates going up, but we have also the transition to Euro 6, perhaps Euro 5 trucks would be appreciated even further. So can you talk about the price dynamics for the secondary market? I'll ask my second question later on.

Hi, Lucas. This is Fernando. Tracks, 3 years ago in 2019, a track would cost BRL 450,000, BRL 470,000, BRL 480,000, a new truck. 4, 5 years would cost BRL 250,000, BRL 300,000, BRL 350,000. Today, the truck cost BRL 750,000, BRL 780,000, a track that costs BRL 450,000 3 years ago. Today, it costs BRL 770,000, BRL 780,000. So you see -- and if you are buying well, you're going to pay BRL 750,000. If not, you pay BRL 800,000. So the used truck now is going to be sold at BRL 4,000 and there is a market to buy. And why? Because people look at the new truck price and a truck that is 4 years old, it's like a car that is 1 year old. That's the same ratio. So the secondary market is very much heated and it is selling a lot. And then you can say, "Oh, but it decreased a bit because of interest rates." It can be a bit less demand, but you have the consolidation of sales. And the secondary market does not tend to go down, even with Euro 6. So first, because I never saw prices going down. You can have a bit of a discount, but going down does not happen. In Euro 6, people are talking about an increase of 15% to 20% over this year's price. I have transmitted that I even joked with OEMs and I said I don't know. Who is going to afford that? A truck is going to be BRL 1 billion with a single tractor, people talk about technology. So the increase will come. If it's not 15%, 20%, it is 10%. So prices have transformed completely. And then Fernando, you're going to say, but that is a completely different business. But abroad, trucks are $150,000. This is the price. This is the price today. When you talk about the secondary market, it's important to say that the Brazilian fleet age average is 19 years. In the first road, it is 8 years. Now the congress, the Senate is thinking of a fleet renewal program. All first world countries did have a program like that. So what I want to tell you is that with or without programs in real economy, there is an important segment that is road transportation. Trucks will always have a price. The price is not going to go down and the market will continue to be heated in the secondary market because of new truck prices. and just making a comparison to logistics. Today, a truck of BRL 700,000 is the tractor, right? You still have the trailer. So what do I mean by that? For you to start road freight, be it piles, sugarcane or oil, you have to have NBL 1.2 million, NBL 1.3 million per truck. It is going to be more selective. People will have to do their math better, and that brings opportunities to us, both in logistics for new businesses because people are going to be more selective because you have to have credit for new projects and in Vamos because if you do the math, it's going to be easier to rent them by. So this price transformation brings also other opportunities for companies under SIMPAR and I truly believe that this is here to stay. And in Brazil, we have the average fleet age that will also contribute to price. And that really appreciated our assets a lot higher than the financial indicators, which really gives us the comfort of our equity.

Fernando, a second question. A topic that you are used to answer, which is M&A in logistics. I'd like to ask you the question. I know that you are used to that, but there was a change with the change in interest rates. Companies are worth less, even listed companies have dropped a lot. So my question is, given that today, the amount of last mile companies has decreased. Does it change the appetite of SIMPAR for the segment?

Lucas, quite modestly. We always believed in the last mile business, as we believe in [indiscernible], A-to-B freight, we believe all segments are complementary. But at SIMPAR and the companies that are part of the group, we never served feds, weight. Oh, digitalization, last mile. We never thought the world was going to end in a single segment. We've always been very responsible, very humble and preserved ourselves to the things that we believe to have support and return to shareholders. The last mile retail companies are going through a bad time. We believe things are going to resume. If client is in a very favorable situation, we not necessarily have to enjoy things with them. We have an alliance with customers. And if they are well, we are well too. So I think this is a moment that is going to pass. I think that it is an alternative. People instead of going to shops are going to have things at their homes. It is just a complement to logistics. And whenever we saw last mile, we never saw appealing margins that are sustainable. We continue to look into the business. But within our strategy, we prefer to have a diversification of revenue, services and segments. This is a segment that we want to be, but we don't want to be supported by it, even if it is much better or if it is mature. Just to be part of it as in any other segment.