Wilcon Depot, Inc. (WLCON) Earnings Call Transcript & Summary

So good afternoon, everyone. Thank you for joining us today for our First Quarter 2024 Earnings Conference Call. Joining us are Ms. Lorraine Belo-Cincochan, our President and CEO; and Ms. Rosemarie Ong; our SEVP and COO. Lorraine will give a brief report on Wilcon's first quarter performance. After which, we will open the call for your questions. Before I turn over the call to Lorraine, may I just remind everyone that this call will contain forward-looking statements and that these statements made or implied are subject to risks and uncertainties that may cause actual results to differ materially from these statements. The notice regarding forward-looking statements is also included in the press release and in the materials. Let me now turn you over to Lorraine.

Thank you, Jean. Good afternoon, everyone. Thank you for joining us today for our first quarter 2024 earnings conference call. For the first quarter, our net sales for the quarter reached PHP 8.31 billion in sales, down 2.5%; comparable sales slid 7.3%; gross profit margin rate at 39.9%; PHP 740 million net income after tax, down 23%; and EBITDA margin at 15.6% and EBIT margin was at 11.8%. Two DIWs or Do It Wilcons were opened during the quarter, 1 in Luzon and another in Mindanao and 1 depot in Mindanao. We closed the quarter with 93 stores. For total sales breakdown for the quarter: the depot format stores comprised 95.9% of total sales with PHP 7.97 billion, DIWs accounted for 2.8% with sales of PHP 232 million and project sales at PHP 105 million accounted for the remaining 1.3% total of net sales. The depot format store sales dipped 4% or by PHP 335 million while the DIW format stores because of the new additions recorded a 37.2% sales growth year-on-year despite a same-store sales decline of 10.9%. Metro Manila stores, both depots and DIWs, accounted mainly for the slowdown in sales as these branches had the highest base recording the highest SSSG for the same period in 2023. Project sales increasing trend in 2023 carried over to the first quarter of 2024 growing by 108% year-on-year. Product categories performing better than average were furniture, furnishing and houseware; building materials; electrical and lighting; paints and hardware and tools. Tiles, plumbing and sanitary wares and appliances in contrast did worse than average. For comparable sales, they slid 7.3% mostly because of the substantial drop in March sales with the Easter holiday season shifting to March this year from April last year. Metro Manila stores had the highest same-store sales drop followed by the Luzon stores. March was also our highest grossing month last year. The depots SSSG fell 7.9%. The DIWs decreased by 10.9% mostly contributed by the converted Metro Manila home essential branches. Comparable ticket size was flattish at below 1% growth while transaction count decreased by 7.6%. Our gross profit margin rate expanded to 39.9% for the quarter owing to the increased contribution to total sales of in-house and exclusive brands from 50.4% same period last year to 52.6%. However, this was not enough to cover the drop in sales. Hence, gross profit still decreased by 1.3% or PHP 43 million to PHP 3.32 billion. Operating expenses including the lease related interest expense rose by 69% or PHP 158 million year-on-year to amount to PHP 2.472 billion at the close of the quarter. The increase is mainly attributable to expansion related expenses, specifically trucking and depreciation. Operating other income of PHP 129 million was 41% lower than first quarter 2023 as there was a oneoff rebate from supplier last year generated from a promotional campaign that ran the whole quarter. Income tax expense decreased by 23% to PHP 245 million due to the lower taxable income. Hence net income decreased to PHP 740 million for the quarter. A snapshot of our balance sheet. Because of the lower sales year-on-year, profitability and efficiency metrics likewise dipped, but we are looking forward to turning this around as we continue to work towards improving our performance. We are still self-funding our store network expansion. The company's liabilities consist mostly of trade payables and lease liabilities recognized under IFRS 16 guidelines. We opened 3 branches this first quarter and another 2 to 3 are set to be open in the second quarter. Total CapEx for the quarter reached PHP 845 million. Margins dipped for the quarter compared to the full year 2023 margins, but are still better than prepandemic margins. We consistently distributed cash dividend since listing. Our most recent dividend declaration was on March 20, 2024 for PHP 0.26 per share. Our key growth strategies remain. For our store network expansion plans, we will open at least 10 branches this year. We will continue to develop products in other categories for in-house brands to increase our contribution and diversify further our product portfolio. We are continuously improving our physical and online store layout and features and other customer experience enhancements and continued marketing efforts to further strengthen and increase brand awareness and visibility. Thank you. And I'll turn you over back to Jean for Q&A.

Thank you, Lorraine. We're now opening the call for your questions. Just click the raise hand button or type your questions in the chat box. Yes, John.

I have just 3 questions. First is will you be able to give out the same-store sales growth if we combine March and in April because I understand this minus 3% in Jan and Feb, but I wonder what that number is for March and April?

We haven't computed, but I would suppose if it -- do we have an estimate for I think year-to-date.

It will even out because whatever is negative of March is a positive of April. So it will even out actually because March last year was not Holy Week. The driver of the sales really on the number of days plus March last year, as Lorraine mentioned, it was the highest -- I mean in terms of sales, it was the highest month that generated more sales. So it will offset from the estimate that we have for April because April is very promising.

So I think year-to-date where in the Jan, Feb level around that.

Yes. Jan, Feb. And then if we see more improvements in May -- I mean if the improvements continue in May, definitely I think that it should be better.

Okay. Actually that was my follow-up question. I remember during our last call you mentioned some of your customers have already been picking up with their intentions to spend. So I guess again the question is have you seen a further pickup for May, June and probably July as in maybe an overview of your sense of the construction, whether construction is starting to pick up, et cetera?

Well, April seems very promising after the long holidays during the month of March. So hopefully it will continue.

In the first 5 days of month, 5 days of May.

First 5 days of May. And then remember we mentioned that if it fall on a weekend, it's not going to be a good holiday for us. But the May holiday was in the midweek so it's Wednesday. So I guess hopefully it will continue barring any unforeseen events again.

So I don't know if we're kind of sweeping the -- whatever the term is. But on May 1, the parking here in our head office, it was so full that up to the employees parking and it was on a holiday, right, so no employee cars were there. So they had to open up the employees parking for the customers. So for the first time since 2022, it has happened. So hopefully that's a sign that our customers are back to spending on home improvement.

Last follow-up to that. Talking to your suppliers and your customers because you're sensing a pickup in sales, what were the reasons that they've cited to actually induce more spending? Because interest rates and inflation I guess haven't decreased from the last time we spoke. So have they just adopted to prices that have reached these levels and now are more willing to spend or are there other reasons for that, supposed pickup?

We don't ask you why are you spending?

Again the sample size may not be a very good basis yet to say that they're really like full on this has been -- I mean just based on the sample size or like the most immediate or logical conclusion that we can just make is that it's like really the time for them to renovate or fix their homes. Because we said early on that in 2022 like everyone, even those who did not need to fix their homes, so that's why so it's an advanced spending. But like now 2024, I mean perhaps a good part of our market really has -- they now really have to fix some things in their homes or they really have projects that they have to continue or have to start working on for whatever reason again.

Yes. Jean, if I may share also earlier I was with the operations team and we're trying to figure out what would are the contribution now of our loyalty customers to our sales. So we got the numbers for April and it seems that we're going back to prepandemic levels because remember during 2019, the contribution of our loyalty members is about almost 50% of our sales, 48%. Now it has gone back to 47% so meaning we're seeing normalcy already because during pandemic, it's less than that. It's about 20% plus only. So mainly those are impulse buy or pent-up demand wherein it's not really planned. And then with the new program that we introduced, the ABCDE program that we introduced, we're seeing more interested contractors or ABCDE architect builders and professionals, they're more interested now to enroll so almost every day we're seeing enrollment. To-date we have officially enrolled more than 3,000, almost 4,000 members already of the loyalty. And from what we see also, Jean, I shared with you the ABCDE contribution now is increasing. It's even bigger than the contribution of our project or institutional sales. Earlier Lorraine mentioned that the contribution of institutional is about 1.3%, right. But now we're seeing even double than that the contribution of the ABCDE. So there's really that sense of normalcy already. Hopefully, it will really normalize. So because we mentioned that what we have experienced in the past 2, 3 years; it's all really abnormal or pent-up sales. But now we're looking at more advance sales. Instead of them doing it on a later date because since they're not doing anything, they want to do it at that time because maybe because of the timing. And what we saw in 2023 is that they're in a pause because they have other priorities, but now it's going back to normal. Hopefully what we mentioned April and first 4 days of May would continue. It would be able to -- it will sustain the trend.

[ Sangam ]?

I just wanted to understand after a long time now we are hearing a little bit positive feelers coming in especially from April and May in terms of customers coming back and buying. Is there a significant pickup in the average ticket size that you are seeing in these customers who are coming in April and May or is it more increased footfalls that is getting converted? How should you attribute this given that we had a significant lull last year when things were not towards the second half especially. So after this gap when customers are coming back, is there a pent up which is resulting into higher ticket sizes per transaction or is it like it's just the beginning where the transactions are just picking up?

Comparable traffic count, it's still at the negative, but of course we continue to add stores. So I think the contribution of the new stores have in terms of footfall or traffic count. But I guess the sales is really more coming from the transaction amount or the volume rather than the number of footfall because consumers have changed their behavior I guess because of the online with enhancements that we're doing with our website. So the customers before coming to the stores, they would visit first and browse in our online. So it's really complementing each other. So unlike before, they would hop from 1 store to another store or they would keep on coming back to our store before they make a decision. So foot traffic has not gone back to 2019 level, but we see improvements in the transaction count and even the transaction amount.

Got it. So given this new development that you're seeing in April and sustaining in the initial part of May now, is there a change in the way you would like to guide for the full year in terms of your growth, et cetera? Because we have been quite steady in terms of store expansion and this is a fresh development that is coming in.

Yes, I think we still stick to the guidance that for SSG or comparable sales, it's going to be I guess single, mid-single. And then for TSG or total sales growth would be in the mid-teens, but low teens -- mid-low teens.

Mid-low-teens. Double digit for the total sales growth up to low-teens, yes. And low single point...

Low single, yes.

We don't want to pull the trigger too early, we might spook that. The Chinese, they have all these beliefs. We might spook that.

True. Just as an extension of what John was asking earlier. Given the current scenario of higher rates for a longer time, do you think that now customers are kind of digesting the higher rates and saying okay, now this is the new norm and now they are recalibrating their overall demand scenario and that's how the budgets, et cetera, are now getting recalibrated and now the spends are happening? I mean is that an observation that you can say is correct?

Yes. That's a possibility that our market has adjusted to the inflation, the high interest rates and life must go on and are going ahead with whatever plans they have of renovating or even building homes, right?

Got it. So with this increased ticket sizes and to achieve this outlook?

Okay. The thing is for ticket size because we've been expanding like outside of Metro Manila. So every time we expand outside of Metro Manila, the average ticket size gets pulled up because again that's why just as a proxy and just as a broad assumption that outside Metro Manila, there are more newbuilds or more really major renovate renovations. So are you're here in Metro Manila with a mature market and most of the developments are high rise, then it's just really small basket sizes when they buy here. So it's really that factor because since last year, we haven't increased prices. And so it's really that drives the increase in ticket size. It's more where we are expanding. So most of the time where we are expanding at least in the 10, 20 kilometer radius, we have a zero base there. So really the impact really is more substantial in terms of pulling up the ticket size.

But given that the fixed costs other than outside Metro Manila were much lower, shouldn't that result in a better margin profile and better profitability as we move ahead? Because operating leverage should also start coming in, right, from these stores.

I cannot really. It's very difficult really to conclude because like if we group our stores by age, we group by area; really the highest and the lowest are sometimes really so far apart, right. Like if you get the average, it doesn't really tell you anything. It's more your head is in the oven, your feet are in the freezer, but overall you're feeling all right. So it's kind of like that for many of our -- or for some of our stores. So it's actually just really Metro Manila that it's more homogeneous. But for the other areas, the behavior is really quite diverse. So that's why when you ask, we always say it depends because we have averages, but it doesn't really -- we have solutions, just basing it on average, it doesn't really work. We have to be specific on a per store basis. So you might-- we've always thought that depots would have the better margins. But so far of the 4 standalone DIWs that we've opened so far, 3 of these DIWs despite these stores being new ones, they have higher operating margins than the average depot. So it's like that. And in these areas also where we have these DIWs, we also have other stores -- I mean other branches nearby so it's not also because it's just that 1 branch there.

Is it resulting in cannibalization in other branches nearby?

Yes. Definitely we experience cannibalization in certain areas, but the market warrants us to add a branch in the area because otherwise a competitor would move in so rather us than them. So that's the philosophy that we're following.

Yes, Mr. [ TRG ].

So my first question is would you consider doing capital raise just to pay down some of the debt and just to make the balance sheet a little bit cleaner?

We don't have any bank debt. The debts that are in our books are just the trade payables and those are the lease liabilities that we had to -- so those are "artificial debt" when we shifted to IFRS 16 in recognizing leases. So we don't really have. No, we don't have, not really. We don't have bank debts.

Got it. Okay. And then in terms of inventory level, I mean can you remind us what is the current inventory days and do you feel this optimal or not? What would be the optimal level?

No, it's not optimal. I don't want to say, you might get scared. But the first quarter -- 2023 had 8 months inventory days and for the first quarter of course because of the lower sales, it's higher, but should be temporary. Hopefully in the second quarter, that would go back to the 8-month level. So it's 9 months in the first quarter. Ideal for us is 6 months. We were at 6 months until 2021 when we had to address the supply chain challenges of that time. Nowadays there are other considerations. That's why it's taking us time and it is also not that easy to bring down I mean together with the softness of the demand and softness of the market. So there are other also considerations and other like buying strategies that we need to -- we are tweaking to take advantage of certain conditions in the market. So our principals, well, they think they really -- I mean having been here for 47 years, they kind of know when to take advantage of some things. I really cannot disclose any detail because it's very strategic, my bosses are here. So I mean why we're doing what we're doing.

Right. Should we think 8 months is going to be the new norm now versus 6 months before?

Well, it has been since I think end of 2021. It has been that, So in 2022, I think it improved to 7 months and then it went back to -- if demand will pick up, I think we'll slowly get our inventory days down. But we are willing -- because our GP margin is at 39.9%, if we round it off, it's 40%, right. So we think we have room just so we could balance it out with a more, say, manageable or less headachy inventory days. So we'll see. We're trying out things, pushing this, implementing this and that, just finding right balance. We normally really don't do anything so drastic so any result that you may see would come out gradually.

And in terms of store portfolio, I mean do you have nonperforming stores now and you're looking for a close on how many of them?

Of course, yes. Well, the old home essentials, which are really the old branches; they've always been on the brink or just below on the brink barely making it or now that demand is soft, really underwrite. We've in fact already closed 2 last year. Because these are old stores with loyal following so we're just really making the operations more efficient just so we could keep those stores open.

How about for the depot format?

For the depot, so we would have maybe less than a handful. But again because WDI already spent on the building so we have the -- but it's still tracking of course a payout say of 6, 7 years instead of the 5. So it's going to be more expensive not to continue with it and the area anyway is. So what we do operationally we cut down on manpower because of course we know already that the foot traffic is only up to that number and all that. So we're doing that so that to minimize the operating expenses. So we do that. We tweak even if we have a standard for a certain size of a store, we have that. So we tweak of course to be more efficient or to save some costs.

Yes. Can you quantify for the depot formats and how many stores are kind of been struggling or making losses at the moment? I mean can you...

I don't have it off the top of my head. Maybe you can email me and we will see.

Okay. And then my last question is on the demo SSSG, right? So you mentioned there seems to be some improvements in April and then month to date. Do you feel this is more specific to the home improvements segments or industry only or you feel it's more broad based general consumption economy?

Ms. Rose.

I think we're going back to normalcy even demos now.

By the way, it's your last question. Let's give chance to others.

Okay. So we're seeing improvement in the economy because even the malls now are spending for other sectors also. For example during weekends if you go to the malls now, people starting to go out already and spend money. So yes, I guess also people now stop traveling like last year. They're back to normal already. So I think all sectors are also -- especially tourism. I mean like I've got reports from some of the stores that some of those customers that have gone back are those building resort in second homes.

Yes, Joyce.

[Technical Difficulty] discussed this already. I want to ask for any commentary that you can share on the recent fire that happened 2 weeks ago.

Yes, the fire in Baliwag. It's very unfortunate. But however, we're still lucky because we didn't have any casualty. It was only damage to our inventory and of course to the building. But as of this moment, we cannot give you -- we cannot disclose yet any further information or any amount because it's still under investigation. So it has reached the national level already. So pending the investigation, then we'll be able to provide you detailed information. But definitely, how would you say, we will report some losses. But as far as the contribution of that store to the revenue of course it's a loss, but it's not really that significant because we have 4 stores in Bulacan including that one. So the 3 stores are compensating for whatever is lost due to the fire. And from what I heard also from operations, some of those stores within the periphery like for example, the Gapan stores, those customers coming from San Ildefonso, they're being directed to -- and we've seen some improvements in the sales of our Guiguinto and our Calumpit branch as well so hopefully. And then we feel that, Jean, because we have sales people there who are stationary so we assign them to go on the field and visit their customers. So we included them as part of the field customer experts. But definitely we will rebuild, Joyce. We will rebuild once we get all the clearances, once we're allowed to move because even the mayor is anticipating us to rebuild because we're #3 -- we're a Top 3 taxpayer in Baliwag. We were consistently for the past -- we've been there for 14 years. So next to SM Prime and SM department stores so we're #3.

Yes. Denise.

Could I ask what your expectations are on margins for the second quarter? Are we likely to still see the impact of negative operating leverage since you're incurring additional expenses from the new stores or do you see maybe potential improvement in SSSG kind of offsetting those incremental costs?

Definitely if we have positive SSG should be sufficient to cover any expenses due to expansion or the new stores as shown in the previous years, right, except in 2023. So yes, positive SSG is really key. So yes to your question. That's why we are not changing our guidance that we could still make -- we can still do a positive SSG for the year.

Okay. Also just a quick question maybe on current consumer trends. Are there any favorable trends that you're seeing in the second quarter particularly on the end consumer side and maybe on construction activities as well? I think in particular what I'd like to ask about is maybe any positive or negative impacts from El Nino currently or maybe we could be seeing some improvement in demand for appliances or on the other hand maybe any delays to construction activities because of the hot weather? Any insights would be great.

Definitely there's impact on construction. In fact as we've consulted some of our customers that are mostly contractors, they're saying that they changed the working hours instead of the usual let's say 8:00 a.m. to 05:00 p.m. So what they did. Morning they made it earlier 6:00 to, let's say, up to 11:00 and then 2:00 o'clock up to 06:00 p.m. So they've adjusted also now. So because once you've started, you have to continue. So what they did is that they made some adjustments on the working hours. So as far as the consumer behavior is concerned, as I mentioned, I think they're more -- they do research first before they go to the store I mean through browsing online. And also we've seen the interests of our professional and even non-pro, I mean those who are builders and contractors, they're quite interested in the program that just recently introduced, the ABCDE because it's tied with the loyalty. So they're interested with the concessions and also with whatever advantage they will get when they enroll in the loyalty program or the ABCDE program with loyalty.

Any more questions? Yes, [ Nadine ].

Just wanted to get more color on SSSG divergence between the regions. Understand that Metro Manila was up last year, but how are the SSSG per region as of year-to-date 2024?

I think SSG for all are negative, right?

For the first quarter, yes. I think South Luzon and Mindanao are both positive. All the rest of the regions are negative SSG-wise. It's only South Luzon and Mindanao that has some -- is it Mindanao or Visayas, Jean? It's one of them. South Luzon is positive. Mindanao and South Luzon. The rest are all negative especially Metro Manila, Central Luzon and even North Luzon. They're all negative, yes.

Yes, they're all negative.

No, you're talking about total sales growth. But SSG all are negative with Metro Manila having the highest.

Highest negative.

But it's really because of the March. But Jan, Feb although I don't have it -- Jan, Feb definitely some areas are more positive.

And then in terms of sales growth, we saw positive for South Luzon and Mindanao. Is that correct?

Yes. For the SSG pillar.

Our TSG company wide is negative right 2.5%. But we have some areas are positives so Mindanao and South Luzon, right.

Yes. As of for April and May, we're already seeing positive SSSG format from Manila or we still see that?

Yes. Because for April, we're already high single positive. So definitely.

Okay. Just another question on margins. First, on gross profit margins. We saw record contribution from the private label and exclusive brands. Do you think that the 52% contribution can be sustained into 2024 and in turn you guys can keep the GPM at above the 39% level?

It can be sustained, but I don't like -- but we don't want. We miss the local sale, the nonexclusive sales. What I mean is they also bring their own -- I mean they have their own following. But yes, definitely it can be sustained because January we were like, 54%. It just got pulled back to 52.6% because of the march because there was no construction. So, our in-house brands are really majority are in the core product, the hard products. So that pulled down the quarter contribution. But in January, it got to almost or right just hit the 54% mark. But the sales are so low.

Are there specific initiatives being done to push the non-exclusive brands?

Well, on our part, we're just doing the normal. So any initiative, it's really initiated by the supplier.

And then last question. In terms of OpEx, do you think that the OpEx to sales ratio of like close to 28%. Can you expect this to be lower for the year as you improve sales or is this the new normal for OpEx?

I think sales will improve definitely because most of our OpEx are kind of fixed, right, it's not really variable. So yes, the higher sales should solve that. Rainier, before I get to you, I'm just going to read out this question from Carissa. Can you elaborate on the new ABCDE program that you mentioned earlier that is gaining traction among customers? It's a subloyalty program that we're offering to ABCDE. ABCDE is architects, builders, contractors, designers and engineers. You may recall before when you asked us about how much percent are the contractors, how much are pure retail; we're saying we treat everyone as retail. So with this program, we are now kind of having a special treatment for the professionals and for contractors. So we are asking them to sign up. They just present their credentials that they're professionals or their business permits and we will give them -- I mean we will grant them membership and they will be entitled to special privileges, discounts and first dibs on any promotion or pretty much like a loyalty, but they have like a sub unit. It's system based also based on our loyalty system and just we just kind of carved out a subcategory for them. So that's the idea to encourage them to buy from us because we felt that during this pandemic and during the slowdown when everybody was downtrading, it was then that because they have to protect their margins, they have businesses to run that really went somewhere else most probably to get like cheaper options. So that's the program. So what is the update on the Baliwag store? Do we expect it to reopen? I think yes, we're just doing -- Ms. Rose, right. I think Ms. Rose explained it earlier.

So half of the store we can rebuild. I'm sorry. Half of the store we can rebuild. It's only the portion of the DIY or those where the paint section are that are heavily damaged. But we can -- probably once we get the clearance, we can start moving in and start rebuilding. So yes, maybe give us 2 to 3 weeks they will release already the clearance to us so that we can start going inside and even adjust also [Technical Difficulty]

How much would the closure impact work on sales and profit? Last year the sales of Baliwag accounted for around 1.43%, around that.

The other stores are compensating for the loss because we saw some improvements on the sales based on the daily average of this sales within the periphery, they're improving. And then as I mentioned also we're sending them out to the field for them to get more leads in the area.

[ Rainier ], your turn.

Just 2 questions. I think we've heard from your competitors as well and they're attributing like a part of their sales weakness as well due to I guess some of the older inventories even coming from the pandemic. So can the same be said for Wilcon that you still have some remaining inventory that are pretty much outdated at this point?

There no obsolescence in construction -- for the products that we sell like for example tiles. I mean the different themes are timeless like Mediterranean, whatever you call it, or contemporary. So there are old inventories, but not really that -- there's no obsolescency in terms of trend, it doesn't go out of fashion I would say. So I don't know what probably they're referring to in quantities meaning they cannot sell it because for example for tiles, you cannot sell it if there's no more matching, let's say, plain that will match coordinates. But for us, I guess what we do -- even if you do some promotions, it will not move out unless there's demand for it.

Like I cannot see I mean the connection. I mean if you have old stock, then they cannot sell.

For example for sanitary wares, unless it's very, very old -- the trend now is that we have smart water closet. But the smart water closet that we have, they don't get out of style, they don't get out of fashion. We can still sell them even 1, 2, 3 years down except when of course there's new technology. It's not like cell phone and entertainment like television which gets out of style because there's no trends or they always improvise the features. So we're not selling like your cell phones. But basically even the appliances that we sell, I mean those that are installed or you call them built-in appliances, they don't go out of fashion. What would hurt the inventory is that if there are, like what I mentioned, broken quantities. Your inventory, let's say, is scattered all over in 70 stores and they have different coat and shade. But we have a way, we have a strategy on how to consolidate them because each area -- I mean each cluster will support each other. So what we do is we move out within the cluster those broken, we call it [Foreign Language] broken quantities or...

Broken quantities and MCAS mix.

Yes, that's MCAS. So what we do, we give price off just to be able to move it out. And hopefully with the ABCDE program, as Jean said, aside from the discount concession that we give, first dip on whatever promotions or price off or let's say pilot sales, we sell by pilot so we give more discounts when they buy in pilots.

Okay. Just last and like [Technical Difficulty].

I'm sorry, you're breaking up. We can't understand.

I'd just like to clarify the SSG for April for the consolidated or basically for total sales for all regions, I mean it's high single digit.

For the SSG, as I mentioned, it will compensate whatever negative we have in March for April because we cannot give you the exact figure. But there's...

Not yet anyway, yes.

So it's very promising I would say. That's the only thing I can say. Very, very promising.

Ms. Rose, you cannot sleep. You have to sell all these tiles and you have to go out the street and sell so that to substantiate your very, very promising promise.

Promising only, take away the very. It's exaggerated.

Any more questions? If there are no more questions, we'd like to thank everyone for joining us once again and see you in our next earnings call.

Thank you. Happy Mother's Day.