Veste S.A. Estilo (VSTE3) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. And welcome to the Restoque's Second Quarter 2020 Earnings Result Conference Call. Today, we have with us Mr. Livinston Bauermeister, the company's CEO; and Jean Passos, the IRO. Today's live cast and earnings release may be accessed through Restoque's website at www.restoque.com.br. [Operator Instructions] Before proceeding we would like to mention that forward-looking statements made during the conference call are based on the beliefs and assumptions of Restoque's management and on information currently available to the company. They involve risks and uncertainties as they relate to future events and therefore, depend on circumstances that may or may not occur. Investors should understand that conditions relating to the macroeconomic scenario, the industry and other factors could also affect the results of the company and lead to results that differ materially from those expressed in such forward-looking statements. I would now like to turn the floor over to Mr. Livinston Bauermeister, who will begin the conference. You may begin, sir.

A good day to all of you. And welcome to our earnings result call for the second quarter 2020. As we have already anticipated at the end of the first quarter, the COVID-19 pandemic had a negative and very strong impact on the retail sector as well as on the revenues for the quarter. We had a loss of 82.2% in terms of revenues vis-à-vis the second quarter 2019. The wholesale and retail channels were strongly impacted, and most of the period during the quarter, the stores remained closed. The loss of revenue in the retail market was 88.4% and 87.6% for the wholesale sector, which once again points to the magnitude of the impact of this pandemic on our business. But this loss of sales was partially offset by a growth of 43.3% in our online channel, which concentrated the sales during the period during which all the stores had been shut down. During the quarter, therefore, we focused on the online sales, and we reinforce the distance sales modalities. Our sales team talked with the clients through social media. We also worked with a new modality consignment that has worked quite well, and we implemented the drive-through modality for those clients who did not want to enter a shopping mall, those that had already opened, and they could simply pick up their things. We were able to improve our sales this way, and the team will deliver the products purchased outside of the shopping mall to the clients. We also implemented the same-day delivery in the city of São Paulo. Once again, this is a modality that is being expanded to other cities. On the other hand, when we resumed the operations, especially during June, when the city of São Paulo had more flexible rules for opening, the resumption went somewhat beyond our expectations. The growth was at 9%, revenue vis-à-vis the projections that we had disseminated to the market on May 18, 2020. Regardless of all of this and because of the loss of revenue, we adopted a variety of short and medium-term measures to be able to reduce our expenses and to contain expenses and disbursements. And this has been broadly disseminated in our previous release. Now the debt has been postponed. And in the second quarter, as we were able to anticipate, we have several initiatives for the containment of expenses and others. But we do -- we did have expensive reductions that helped us to reduce this impact, as you can observe in the release. Thus, the EBITDA in the second quarter was negative by BRL 18.4 million. Now this figure, when we already take into account the adjustments and nonrecurring impacts that you will find described in the release, the EBITDA margin was negative 40.7%. As we have already disseminated broadly, we achieved that agreement for a lengthening of our debt and people have been adhering on a voluntary basis since June. We now have more than 80% of our financial credits that are 87% that are of a part of this lengthening. And we would like to clarify once again that this points to the confidence of our partner banks and investors in the company. We hope that this agreement will be approved very soon. We're referring to a period of 45 to 60 days as part of our expectation. So that we can once again carry out a new debenture issuance based on the conditions agreed upon with the creditors and of course, this will resolve the problem with all of our financial creditors, and we will have our market debt negotiated in the secondary market with all of the characteristics of the debentures that have already been announced. We're updating you in terms of our operations, as we did in the release for the first quarter, and we're now going to convey to you some data that refers to our operations, both in June, July and August. We began the month of June with 190 stores open. This includes brick-and-mortar stores and others. With these stores open, the work that we had been carried out to retain our clients had a very positive reaction. And this was included in the projections that we conveyed to the market. What is important are the conversion rates, which are the sales that are -- the sales from customers entering the store and that are converted, they are quite higher than the conversion rates last year. We had an increase of 82% and in John John 45%, 21% in Bo.Bô and 31% Rosa Chá -- 38%. There was also a significant increase in the products sold through service, and these figures can be found in the release, and it shows that the clients are being attracted to the store. They come in more determined than ever to buy and they're purchasing a larger number of products. Now the levels of revenue in the retail market improved considerably, pointing to a recovery that was much faster than our initial expectations. In June, the sales in the stores that were opened and operated during the entire month, represented 45% of the sales in those same stores in -- vis-à-vis July of 2019, showing that the level of sales has increased significantly in the wholesale channel despite the need for adaptations, the dissemination calendar and having to set up appointments for the clients. Because of the social distancing, the spring/summer collection is proving to have a very good performance, with the highlight for John John. In only 2.5 weeks, it complied with 100% of the goal foreseen for their collection and at present has gone beyond the sales expectation by 17% vis-à-vis the sales in 2019. When it comes to the wholesale channel, we also had the Sales Central with direct contacts with our clients. We inaugurated a new portal to service our clients with sales representatives and the multi-brand clients, and we implemented a new tool for the allocation of products. The sales performance in the month of July was higher in all of the brands and in all of the channels at 28% above the forecast that we had disseminated to the market referring to the month of July. We ended the month, therefore, with 236 stores open and operational. In the month of August, revenues had an acceleration that went beyond our forecast. Until the 11th of August last week, sales represented 74% for the same period in 2019, as we have indicated in the release. At present, we have 267 stores open. And despite the moment still requiring caution because the pandemic goes on, sales above the projections that we disseminated seem to point to a trend for acceleration. And we believe that we will have a more rapid recovery in the second semester. Now these are the points that we wanted to highlight here in this conversation. All the rest of the data and the figures for the quarter are part of our release, and we would now like to offer the floor to everybody to answer to the questions that you may have. Once again, I would like to thank all of you for your participation for accompanying our results. And I would like to state here that myself, Jean, Pedroso and the entire team are at your entire disposal. We understand at the moment that the market is working well in terms of our operations, and once again, we are at your entire disposal. I would now like to return the floor to the operator so that we can take the questions that you may have.

[Operator Instructions] We have the first question from Mr. [ Milton Pereira ].

I would like to mention that sometimes I send questions to the IR team, but have never received a response. And I think this needs to be improved. And I also made some suggestions at the very beginning for which I received no response and these refer to the sales channel for Restoque. I'm a minority shareholder, and I think that all of this should improve and good luck. And I think a company creates better results to be able to work better with the shareholders.

[ Milton ], and thank you for your participation in this call. And once again, thank you for your comment, which is very important for us. We have received questioning -- questions both from our investors and analysts, it is a pity that we were not able to respond to this. We have had several interactions with many of our shareholders. We always attempt to answer them in a timely way and to respond to the requests and doubts. We're going to check and see what happened regarding your contact. I would also like to thank you about the comments on our online channels and how we have been enhancing this in the last few months. We carried out a significant change last year working side-by-side with our technology partner, and we faced several difficulties in terms of implementation. The online channel has grown significantly. And because of all of the investment made and the migration from the retail and wholesale sales to online, we still are faced with some gaps that will have to be eliminated. We're working arduously on this front. And everything that is within our reach, we are doing and very shortly, we will be announcing a very relevant evolution on that front, precisely, to comply with that need that we have of having an online channel that operates with a cutting-edge state-of-the-art operation. These online sales have a trend at least to enhance everything. This is what we are doing. Thank you very much for participating in the company and for your confidence. It has not been an easy period in the retail or other channels, it has not been simple for our company as well as you just heard, but we're looking forward with quite a bit of confidence in the future and especially in the long-term future. Now when it comes to our lengthening of the indebtedness until 2025 gives us a great deal of trust in our operations. We see that the sales evolution is going beyond what we had forecast at least up to August. We hope that this trend will remain, and should this trend remain you can count upon the fact that we will do whatever is possible to reflect all of this in our operating results. All of the initiatives that have been so important in the first quarter until the onset of the pandemic, we were following a rather positive trend in the company, harvesting results for everything that we had done in 2019, especially beginning in the fourth quarter and begin to observe that trend of enhancement. Now although we have a somewhat lower sales trend but you can be sure that the IR team and the company is looking forward. And we're speaking very little about the pandemic. Obviously, we have learnt a great deal in this period. It has been a curve with deep learning, but we're focused on building up the second semester for the year 2020. So once again, thank you for your confidence. Thank you for the remarks, and you can be sure that we will get in touch with you either today or tomorrow. Once we see what happened because of this lack of contact, and we will focus on your suggestions for the company. I would like to thank you for that. And I wish you very good luck.

[Operator Instructions] We have a question from [ Bruno ] who asks, if we take into account the turnaround that you did previously by reducing the number of stores and by the increase in intersection among the stores, is there going to be a similar initiative? And what is happening with the strengthening of the online channel? Which were the initiatives adopted for this?

[ Bruno ]. Thank you very much for your participation and for the two questions here. When it comes to the reduction in the number of stores, in fact, last year, we had worked on this issue last year to have a more adequate number of stores of our store part, and we reached a level that was quite balanced, vis-à-vis the operations we were planning for this year. With the pandemic, once again, we are reassessing this and we might have a few closedowns in the stores. I'm referring to approximately 10 or 15 stores additionally to what had been forecast. We do have a period of recovery in this semester, and it is our understanding that some of these operations should be discontinued. Once again, this is a one-off adjustment in a very small number of stores compared to the stores we have. We are going to ensure to inform the market about these reductions. But once again, these figures are quite low, and they're based on this reassessment of our number of stores. When it comes to the strengthening of the online channel, this question is very important. This is one of the company priorities at present. And for some time already, this has been underway. Last year, we deployed this. We changed our e-commerce platform. Our ERP system is already in place. It was providing to our stores, and we acquired the omnichannel platform that was launched in midyear. And since that time, we have been facing some difficulties in terms of implementation and integration of the omnichannel platform and the omnichannel tool per se in our operations. It was a period with a great deal of work, a great deal of interaction with the media last year and this year as well as during the pandemic. You will observe that we had significant reductions, but we want to reach a level that the company truly wants to have. We're reassessing our decision in terms of investments because the bet was to have an operation integrated with service providers and what we want to do is eliminate these integration problems and have a single relationship channel. Now despite all of this, the channel has been growing, thanks to our expressive efforts in terms of marketing. More than half of the investments are done in digital marketing, and this will continue going forward. We have been disseminating this since the fourth quarter. Marketing will be ever more geared to having contacts with the client, with the client experience and a direct contact even with issues that perhaps have less relationship with the clients. So we are gearing all of our marketing efforts to digital marketing and for the integration of this marketing online. We're significantly focused on this issue, and after the pandemic, the importance of this channel, of course, has grown very speedily. So we're working arduously so that at the end of this semester, we can offer significantly better services to our clients and so the channel can grow to higher levels as this seems to be the trend of our sector, not only abroad, but also in Brazil. Thank you, therefore, for your question and for the opportunity to speak about this channel and to also speak about the focus that we adopted since 2019.

We have a new question from the webcast from [ Carlos Gabriel ]. He asked about which is a situation of the renegotiation of loans on the short-term financing?

[ Carlos ]. Thank you for your participation. As we have disseminated, we carried out diverse agreements with our creditors and banks. This agreement was disseminated and signed on June 4. And how does this agreement operate? More than 70% of our financial creditors adhere to this agreement upon the signature. And during the month of June, July and August, this number has increased to 87%. So this agreement foresees that all of our financial indebtedness, which means the contracts loans from banks and similar modalities and all of our debentures, we had 5 issuances of debenture that were still ongoing, therefore, all of these instruments will comply the same schedule of payment included in the agreement. It allows us 12 months of cash for the payment of interest rates, 3 years of grace period for the payment of the principal and 10% of the total value of the indebtedness will only be due in 2025. So the debt has been lengthened to 2025, enabling us have the significant terms of grace to pay the interest rates and the principal. Now the rates are very similar to the rates that we had practiced until then a CDI plus 2.7%, CDI plus 2.9%, a very interesting rate in the present day scenario. And this agreement was done. What is pending is its approval, the approval to ensure that we're complying with all of the formal requirements and in truth they all have been fully complied with. And in a period of 45 or 60 days, we should disseminate this. And ensuing this, we're going to issue a new debenture to which all of these creditors have migrated. The banks and others all will have this new debenture with the rates that I mentioned previously. And as of that point, our financial indebtedness will be favorably lengthened. At present, it is frozen. There is no debt about to mature, neither in their short nor the long term. And as soon as we have the approval and the issuance of a new debenture, we will have that single instrument with the features that I have just mentioned for you. We're quite optimistic in terms of this, and it is a very clear and strong proof of the confidence that our financial creditors have in terms of our company, our brands and our management, and it shows the confidence that despite the unprecedented turbulence that we have faced, our business is a strong and resilient one, and it is a business that will recover through the coming months. We're simply stopping, breathing a bit and focusing on the operations, on the opening of stores. Practically, all of our stores have been reopened, still selling at levels that are lower due to the scheduled restrictions and because of the social distancing rules but we do believe that these levels will accelerate. They will improve, and this situation will improve in the coming months with a resumption of sales and a return to normalcy for operations. Thank you very much, and I return the floor to the operator.

[Operator Instructions] Our next question is from Restoque.

This is [ Boris ] from [ Constellation ]. And I would like to ask about the inventory. If there is a great deal leftover from the third quarter, if you still have a great deal of products for the winter season? And if you could comment on same-store sales for the months of July and August.

[ Boris ], and thank you for the questions. When it comes to our inventory, we work rather intensively in terms of rescheduling our inventories and our collections with the onset of the pandemic. When the pandemic set in, we rescheduled the receipt of products, we delayed the receipt of products. We postponed them, and we adapted all of our collections as of that point, which means that we were still able to act upon the winter collections because in March we usually receive everything until April. So we were somewhat late, but we were able to act on this, especially regarding the second semester for the spring and summer collections. We were able to implement significant reductions in our collections, the postponement of the receipt to adjust them to the curve that we expect in terms of sales recovery and some postponement for the year 2020. We were able to do this with part of the winter inventory. We do have an inventory that remains for some time in terms of coats and more perennial winter clothes. We reduced this to a lower percentage, and this will be kept for the winter of 2021. Now instead of having a sale and purchasing very similar pieces, we decided to maintain this inventory that so far has not gone to the stores. We didn't think it would make sense to hold the sale for them. Now when it comes to the winter inventory per se that remained. We carried out significant adjustments in terms of what we expected for sales. And this means that beginning in April and May, we made these adaptations for the winter products that were being sold for a markdown. And for those pieces that were more neutral or that were long lasted, we use them as part of our collection for that transition between winter and spring. So these are the initiatives we have adopted. And in terms of the second semester, once again, we have worked arduously to make sure that the inventory will be appropriate to our sales forecast. As the sales recovery is better than we had forecast, we're being very careful not to have a shortage of merchandise, and in terms of one or another line, we are prepared to eventually work with replenishment during the collection period per se. We're quite focused on this at present, managing the inventory as best as possible. Our sales have dropped to a different level. We had to do this to be able to sell-out our inventory as best as possible, and we give this in all of our retail segments. Now since the pandemic, the environment is more promotional. We're following up on this. In July and August, we're launching our new collection at full price. We still have a slight percentage of pieces that will be set with a discount from the previous collection to minimize our backlog. But once again, we're very focused on making the most of our collection, selling most of the pieces at full price. The environment tends to be more favoring promotions but Dudalina, John John, Bo.Bô, Le Lis, we are convinced that all of these sales will have a very positive performance in the months of August and September. We're quite attentive to this, working tactically and adjusting to the market needs at present. When it comes to inventory for this year, we still don't have a very clear visibility of what will be necessary if we need more provisions in terms of our inventory. We are going to follow-up on the sales performance to see if it becomes necessary, and we will make this decision going forward. Basically, this are the -- these are the answers in terms of inventory. I think that you had an additional point, [ Boris ]. If you could repeat it, please?

If you could give me an update of what will happen -- or what did happen after July?

As we disseminated in our release, we have been observing a growth in sales vis-à-vis 2019. In July, the level was 45% more sales if compared to the same period in 2019, and this level has now increased to 74% in August, considering only that first week of August, which, of course, gives us quite a bit of enthusiasm. We do not know if this trend will remain this month or in coming months. The situation is rather unpredictable but this curve has been improving since May when we reopened the stores. We began at 30%, 35%, 45% in July and now in August, a significant increase to more than 70%. This may be a trend due to Father's Day where we had strong sales. We had events in several brands, and we reinforced these events, and that is why the performance was better than in 2019. We still do not know nevertheless if this is a trend that is here to stay, we're being positively cautious working to improve the sales to maintain them at better levels, but always prepared to deal with any new situation that may come up day after day, week after week, but we are quite confident in an improvement in sales.

Our next question was sent through the webcast by [ Carlos ]. He asks, how is the relationship with your suppliers? Is anything happening due to the judicial recovery?

[ Carlos ], it's a pity that -- well thank you very much for participating in the call and following up on our results. [ Carlos ] , as we have been remarking with you and our investors, we had several interactions with our suppliers as soon as the pandemic set in. We work very closely with the suppliers during the pandemic. And it's necessary to underscore for the market and for those who are participating that the agreement that we made with creditors' judicial recovery only encompasses a lengthening of the financial debt. It does not include any other segment of activity from the group or -- this has nothing to do with these suppliers, with the associates or employees, or with the amount due in terms of taxes, the company continues to operate normally. This agreement refers only to a lengthening of the financial debt and no other commitment from the company. What did we do for these other commitments? We had very open and close conversations with these suppliers and vendors once again to discuss terms of receipt or reduction of purchases and agreements on the payment of amounts. We're maintaining our payment terms 100%, those that were agreed with the suppliers, everything is fully up to date. And as part of our operating cash and from the cash that we have, that we have been preserving. And in our view, this will be sufficient to honor all of the commitments with our partners, be the suppliers or personnel from service and much more. We also had very positive conversations with shopping mall operators who are quite sensitive in terms of the present day moment. Their business was severely impacted because of the close down of shopping malls, and we obtained significant reductions that are quite aligned with a new level of activity. And in terms of this, we're maintaining all of our payments fully updated. Now your question is very pertinent and it allows us to once again underscore that this agreement with creditors refers strictly to the financial indebtedness. All of the other commitments are being paid on time and they're being maintained this way as had been forecast. And we observed no change whatsoever in this forecast, especially because presently, we have a better cash generation that we had estimated. Thank you for the question, and thank you for the opportunity of responding. Once again, we're still at your entire disposal to continue to speak about our operations.

The next question that comes from the webcast is from Mr. Andrey Monte from Daycoval Bank. The company has been to reduce by 70% the lease line item this semester. Now when will these postponements have an impact on your results?

Andrey, thank you for your participation and for the very pertinent question. I have already somewhat responded to this in the response to [ Carlos ]. Now how was this negotiation? In the month of April and May, there was the exception of lease. We simply paid some of the expenses for lease. That is to say condominium and other at reduced levels, simply to be able to honor the fixed costs of a shopping mall. In our case, this was not a postponement. It was an exemption, and I'm speaking very generally because the negotiations with shopping mall operators are done individually. Now beginning in June, with the gradual resumption of operations, we have been maintaining frequent and direct contact with our partners, and we're obtaining discounts in terms of the leases. As our activity levels are now beginning to evolve, it would not make sense to pay a full lease in an operation that is performing at practically 50% of its previous performance. And we observed this percentage increasing through time. And this is what we have done frequently with monthly renegotiations. With some partners we have obtained reductions that are proportional to the sales for the year. And as the sales curve improves, the leases are paid proportionally. And regarding others, month after month, we hold these renegotiation conversations. But from partners and shopping mall operators and others, we have observed a very clear understanding of this moment. And we do have -- it doesn't make sense to have full lease expenses at a moment when the entire segment has been impacted due to the COVID-19 pandemic. I think this basically responds to your questions. Thank you.

[Operator Instructions] We have a question from the webcast from [ Corchia Investments ]. He says, I have 2. First, which has been the online sales performance in the marketplace? And is the management thinking of selling off some of the brands at present?

[ Romulo ], and thank you for your participation, and thank you, of course, for following up on our operations and our results. Regarding the online sales, as I mentioned, they're quite higher than the sales of last year, once again, because of the difficulties of the retail market itself. But we have observed a relevant evolution despite the difficulties that we mentioned regarding our platform. So this is an investment that the company is bidding strongly on because this was a priority and has become ever more critical after the pandemic. As we refer to in the second semester the online channel has had a growth of more than 40%. This may not seem relevant, but we're comparing this with a sales period in 2019, which means that the sales had, had a growth of more than 100% in April and May. And when you compare this to the sale in June, then this percentage is more balanced and the sales have had a strong growth once again vis-à-vis 2019. If you could repeat your second point, please, your second question?

Of course, the second question is if the management is thinking presently of selling off some of its brands?

Please forgive me. [ Romulo ], no, we're not. We have strong brands, brands with a very good awareness in the market. And all of them are having an expressive recovery as you can observe. And these are brands where we have made several adjustments in term of the operations throughout the year 2019, and they have had a good performance in the first quarter as we released. You can see that the performance of Le Lis and Dudalina that were brands that had changes in their previous model had a very quick response with gains and reachieving their clients at 40% increase with the launch of the collection in the first semester. They are very strong brands. They are a very complementary part of our portfolio, and they're recovering well. I think we have gotten over the worst moment of the crisis. They have all had a very good response. Our team is working cohesively in great alignment and they're working on the strategic planning for 2021. We deem that 2021 will be a more normal year, and we're going to work arduously to deliver the results that we disseminated to the market. So emphatically, we're not considering this. Our operation is recovering. We have a strong operation. We're a leader in the premium retail sector. We have been for some years, and we're going to continue to work hard to maintain this position. All of our brands are operating well.

We have one more question from the webcast from [ Leandro ]. Are the brands planning to launch a product with a characteristic in terms of prevention of pandemics such as masks or special fabric, special clothes?

[ Leandro ], thank you for your participation. Yes, we have already launched the masks since the beginning of the pandemic, the John John mask was very successful. Now the success is over now. We had to have some replenishment orders. And every time we sell this mask, it sells off quickly. The other brands also launch masks. Now when it comes to the fabric, special fabrics, yes, we do have a product that will be launched very soon by Dudalina. This is a fabric that is protected against virus and bacteria and this product will be launched very soon. Thank you for the question.

[Operator Instructions] Our next question is from [ Boris ] from Restoque over the phone.

If you allow me one more question, Livinston, regarding the e-commerce and the platform. My first doubt refers to the purchases carried out online. And which is the mix of omni clients and those who come from a single channel? And the second questions refers to the e-commerce platform. If you're planning on migrating to another platform as you had referred to priorly? These are my two questions.

[ Boris ], thank you for participating once again and for your additional questions. When it comes to the e-commerce and omni sales, more than half of the e-commerce sales are from omnichannel. There's a very good interaction between 2. And this was the solution for São Paulo through the same-day delivery. This was very well accepted. It was a huge success. We're expanding this modality to other cities beginning with Rio de Janeiro very soon and then expanding to other markets in Brazil. Omni is highly complementary we have significant use of the platform that is operating well and we're working with the store personnel in terms of conversion. They also participate in the commissions for the omni sales to ensure that these sales can gain greater proportion in terms of the e-commerce. And more than half of these sales are already being done through the omnichannel. Now regarding your second question, the platform, we're going to carry out an in-depth evaluation in close contact with Linx. And we're looking for cutting-edge that we can offer to our clients. This decision is about to be taken. It is underway. And what we can say at present is that we're going to look truly for a cutting-edge for our client. This is of supreme importance to have the very best there is in terms of an e-commerce platform. Thank you. Thank you for the questions.

[Operator Instructions] Our next question is from [ Rodrigo Geja ]. He says, this is [ Rodrigo Geja ], congratulations on the resumption. Could you please explain this BRL 34 million of recognition in terms of marketing expenses?

[ Geja ], it's wonderful to have you participating with us in the second quarter '20 conference call. You have always been a partner and has backed us up during this complex period. These marketing expenses are expenses that we had already incurred upon through time, once again, in preparation for the coming semesters and for the beginning of the second semester. Now these are campaigns that we had already done and that in truth were not connected to the moment of the pandemic. We had to recognize these expenses. This is a noncash recognition as we had already incurred on these expenses previously. But these were campaigns and advertising pieces that had no connection with the moment and that we preferred not to use. We wrote this off during this period and we're now working on campaigns that come closer to our day-to-day reality. Thank you for the question.

[Operator Instructions] At this moment, we will end the question-and-answer session. We will turn the floor back to Mr. Bauermeister for the closing remarks.

I would like to thank all of you for your participation. We had a very good interaction. Many questions, many doubts. And of course, this is very important as it gives us the opportunity to clarify your remarks. We continue at your disposal and if there are more questions coming from the webcast, we will collect them and answer them directly to you through the IR team or in other ways. Once again, we will contact you directly. Once again, we're at your entire disposal, and we're going to make sure that all of the contacts coming in through the IR team are properly dealt with and so that we can respond to them promptly. This interaction with our shareholders and investors are -- is very important at present. Many of the remarks that come in are pertinent and they allow us to analyze different angles. Your participation is very important and we count on your participation. Thanks again for that good participation, the excellent interaction and myself, Jean, Pedroso, and the entire team is at your disposal to maintain you properly informed. Information, of course, is of supreme importance. Thank you for the participation, and have a good day.

Thank you. The earnings release conference call for the second quarter '20 of Restoque ends here. You can now disconnect from the call. Thank you. [Statements in English on this transcript were spoken by an interpreter present on the live call.]