Ctt Correios Portgl Sa

Good morning and welcome to CTT's first half 2024 results conference call. Please note that this conference is being recorded. For the duration of the call, your microphones will be disabled. However, analysts will have the opportunity to ask questions at the end of the presentation. To do so, simply click on the button to raise your hand and we will give you access to the microphone. If you are dialing from a phone line, press star nine to raise your hand and star six to unmute yourself. I will now turn the call over to Mr. João Bento, CEO.

Thank you, João. Good morning, everybody. Welcome to our second quarter results presentation. So if we move to the first slide, which is slide number four, we had a very strong execution in express and parcels, which drove the revenue growth. Indeed, we actually are with the volumes close to those in our last big season, having delivered more than 63 million objects in the first half. And since the second half of the year should be stronger, this compares extremely well with the 100 million parcels we delivered last year. We've started now a common segmentation of large accounts and a unique pricing system for Iberia, so no longer Portugal and Spain. And all this, including these very high volumes, drove us to record high margins in the second quarter. On mail-in dollars, we have a slight increase in addressed mail revenues, and we are using business solutions as a lever to enhance the commercial relationships with our customers, and therefore trying to improve the situation also through business solutions in mail-in dollars. Moving to the great part of the slide, talking about bank and financial services. We have not been standing increasing sequentially the placement of public debt. It's still not normal. So it's taking a little bit more than we thought to normalize, although we are, as I said, growing again. We have launched the online public debt placement in the CTT app recently. And we also have heard several statements, and we believe that improvement in the products and in the cap should happen sooner than later. With strong commercial activity, we are building up our insurance and health care plans book. The bank saw another 20,000 accounts open in the first half. So in line to, again, around 40,000 to 45,000 accounts in the year, with continuous focus on client engagement, supporting growth in business resources. We had a very significant increase in profit before tax of 45% in the quarter. So if we move now to the next slide. We see in both charts that we have very, very impressive growth, not only resilient, but also very high in Spain. We are growing 69% on top of 37% growth in the similar quarter last year. And also in Portugal, with good growth, 9% growth, comparing with the highest quarter that we had last year, which was exactly the second quarter. So Express and Parcels on path for another record year, which is not strange since we are the fastest growing parcel company in Iberia, indeed in Europe. Moving to next slide, we see that these volumes also brought record recurring EBIT margin in the quarter. with 42% growth in revenues, and with an average of 526,000 parcels per day. We see a very significant growth in margin, more than 54% in quarter-on-quarter compared to last year. With this, we see growth in volumes and that, in fact, is driving operational leverage, as we always said. We had built capacity ready for significant growth, and the growth is now driving us to significant margin increase. And with this, I would move the floor. I will pass the floor to João Souza to guide us through mail and public debt. Up to you, João.

Good morning, everyone. Thank you. Thank you very much. Well, as you can see on slide seven, mail price increase and mix are partially offsetting the falling volumes. Saying this, we know that some public entities have postponed some volumes for the coming quarters, even so. the address mail volumes decreased 10.9% year-on-year, but at the same time, we are seeing the average revenue per item increasing 10.2%. That's why we say these mail price increases are partially offsetting the falling volumes. In that way, we can see that address mail volumes increasing in this first half of the year 2.1% against last year, So that way we reach 189.9 million euros on revenues, on addressment revenues. We still, like we said in the last quarter, we are still implementing cost cut programs that will support the progression in margins. And as we're going to see in the coming slides, I just want to also highlight in this slide that we are still developing digital solutions like via CTT for the coming months to help us to address these customers when even they want to go for more digital than for physical in-mail. If you go for slide eight, as you can see, the... the costs in mail and others are reached 235.6 million euros, an increasing of 10.5% comparing with the last year. But this comes for elections, inflation and also lower financial services activity that drove expense higher on this first half of the year in this year. Because if you Assuming a normalized placement activity, in fact, the recurring EBIT and others will be 2 million higher. Saying this, we are, like I told you in the last slide, we are still implementing cost-efficient programs that we expect to see results in 2024. We are working on this progression in price that's going to help us to stabilize the margins. And we also see for the coming months a normalization in public debt that allow us also to recovering these fixed costs. On slide nine, and coming for the public debt placements, We are seeing sequentially subscriptions increasing. As you can see, in the second quarter, we increased 10.7% against the first quarter. We are doing a lot of actions to increase and to see a better path for the coming quarters. We launched a marketing campaign in this second quarter. that we see a good feedback from the market. So in that way, we are designing more campaigns for the coming months. We also launched last week the online platform for subscription in public debt. It's early days, but we like the early numbers we are seeing right now after one week of using this app. This allows just for you to understand that typical more young subscribers that likes more digital to use right now this app. Also, it's more easy in the customer experience for the customer who wants to do savings in a daily basis or in a weekly basis to have this online platform and don't need to go to our store. And also that we are seeing in the news, public information that suggests that the conditions of that certificate could be reassessed in the coming weeks that also give us a better view for the coming months, for the coming quarters in public debt placements. And after this, I pass the word to my colleague, Guy Pacheco, our CFO.

Thank you, João. Good morning, everyone. So starting in slide 10, where we can see the bank KPIs, where we see business resources growing pretty much everywhere due to improved client engagement, namely on customer deposits. We can see on the left part of the chart, our customer deposits grew 58%. We continue to gain share. The public numbers show that the banking industry grew deposits 6.7% on the same period. And as you can see, we are gaining a significant share on this metric. On loans, all growing 10%, double digit, be it in auto or in mortgage. And as previously commented, we continue to invest in improving our client engagement. be it revamping our digital platforms or our physical channel, reinforcing our commercial capabilities in our retail network. On the next slide, we can see the main financials on the first half revenues are growing 2.6%. I would like to remind that we We exit the partnership with Universo and that is waiting on the revenue evolution. If we account for that exit, we should be growing almost 16%. And as you all know, net interest margin is being slightly compressed on this period, apart from the the interest rate environment and part from the exit of the universal coming down from 2.9% to 2.3. Nevertheless, in profitability and as cost of risk improved in the period, Following the same movement, we see a very strong progress in profit before taxes that is growing 45%. And our return on tangible equity normalized, it's on 8.8% coming from 7.1% in the last year. Moving on to our financial review and page 13, we can see our key financial indicators. As Juan mentioned, it was a good quarter in terms of revenue, 9.3% growth, although our EBIT was still heavily affected by the strong comparable performance in 23 of the financial service business units. Nevertheless, our recurring EBITs reached 18.1 million in the second quarter, declining 20.1%. Net income growing 24.9%, reaching 12.4 million euros, and our free cash flow was 6.7 million in the second quarter. The next slide, we can see the detailed revenue evolution where we see this strong contribution from Express and Parcels. Express and Parcels was growing 42% in the quarter, 32.3 million, with Portuguese and Spanish operations continuing to perform, especially the Spanish division, with a fantastic level of growth of 68%. Portuguese operations also growing 9% on revenues. We continue to sustainably grow gaining market share and we are seeing price per unit starting to stabilize. That is also good news. On May 1st, 1.9 million growth, coming most of it from business solutions that continue to gain traction in the market and proves that the diversification strategy in the B2B market is paying off. Male revenues, were slightly declining, almost flattish, with price increase enabling us to contain revenues despite the volume declines being 10.9% in the quarter. Financial services declined 11.8 million, with placements reaching 326 million. but the difficult comparison with 23, where we placed 3.8 billion in the same quarter last year. We continue to see the volume gap introduced by the Portuguese government and the current lack of competitiveness of the product vis-à-vis setting alternatives, namely term deposits. as being impairing the normalization of this line. Although we remain confident that normalization will occur, it's taking a little bit longer than we initially expected, but we remain confident that normalization will happen. This is Banco CTT revenues flat with the reduction of net interest margin following the end of Univeris partnership. If we exclude for that effect, in the quarter, we'll be growing more than 12%. Next slide, we can see our OPEX. Our OPEX increased 12.4% in the quarter, driven by express and parcels and mail. Express and parcels increasing 41.2% or 29.5 million euros. This is driven by by volume growth, strong volume growth in both geographies, but mainly in Spain, with unit costs improving sequentially as we continue to invest to improve capacity and deploy more efficiency measures that will continue to drive our margin that continues to grow as we will see. Melanada increasing 4.7% or 3.5 million euros in the quarter. This is following the wage inflation after the wage increase of about 4% that was agreed with the unions. The additional costs of lower use of the retail network by financial services That's been partially offset by the efficiency measures that we are putting in place, be it on ad count reductions, be it in other efficiency in the corporate structure. Financial services declining 4.7 million in OPEX. This is mainly linked with decreased activity. And Banco CTT also decreasing 1.4 million euros. Several effects here, but the main one is the cost of risk that declined to 0.7% in the second quarter from 1.3% last year. In the next slide, we can see that our EBIT generation, that as we mentioned before, it will be skewed for the second half. Our EBIT declined 20% in the quarter with the expression parcels and the bank contributing to the growth with 4.1 million euros. Mail with higher volume decline, but also higher cost of inflation and the lower use of the retail network by financial services. So still impacting the performance. Financial services also declining, as we mentioned, with the effect of lower demand this year, although expected, but the normalization is taking longer, although we remain very optimistic. very confident that that will happen in the next quarters. In the next slide, we can see our cash flow evolution. The operating cash flow for the first half stood in 20 million euros with the big impact of working capital. Several effects here. We have 6.3 million coming from government receivables that are taking longer to collect associated with the mobility subsidy. We also have 6 million coming from the new environmental revenues that are basically linked with outside of Europe or intra European Union transactions and as such we don't collect VAT on those invoices although we continue to have the ability to deduct that VAT but as a working capital impact by that effect and some payments regarding our clients sorry The rappel for settlement for some clients that was done this quarter also impacting in 5.9 million euros. Most of these effects will be reverted in the next quarter, except the VAT as we continue to assume the same kind of revenues on these regions and going forward. Free cash flow in... reaching 10.6 million euros. Our net financial debt is actually a cash position in terms of consolidated, 25.3 million euros. If we account the bank as an equity accounting, it will be under 60 million. And as such, I will pass to João Bento for the outlook and final remarks.

Thank you, Gui. So if you join me on slide number 19, the most relevant aspect that I'd like to highlight is the very solid growth of our businesses, excluding financial services. moving from 51 to hopefully 70 million euros as we guide, which represents a 36% improvement. Therefore, if financial services recover significantly in the second half of the year, given the expectation we have on changes in the cap, And eventually after the summer, even in the conditions of remuneration, we could grab another 10, between 10 and 20 million euros of EBIT associated with the financial services, which leaves us in line. with an interval between 80 and 90 million euros of recurring EBIT in line to our targets to 2025 that we have announced back in the capital market today of 2021. And finally, moving to our last slide, where we call the attention of us being growing like no one in Iberian Express and Parcels, In fact, we are beating records on volumes and on margin, and we see the outlook going along these lines for the second half. On mail-in dollars, we have stabilized revenues through price increase and mix, and we are now moving to operating efficiency and costs to drive improvement in mail-in dollars. On financial services, we are fully prepared for improved conditions on public debt. The fact that we are now able to place online, very soon we'll be able to also open accounts online in our app, and the changing conditions provide also a better outlook for the second half. And in the bank, we continue profitable growth very much along all business areas. And with this, we believe that our final year 24 recurring guidance, excluding financial services, will improve too. and at least 70 million euros, which will represent, as I said, the 36% growth versus last year. If placement levels remain subdued, recurring EBIT financial services will be around 10% instead of the normalized 20%, although we expect, as I said and repeatedly said, that these conditions shall improve, and therefore the same should happen to these financial services-related EBITs. So, against the current backdrop of public debt placements, we set the guidance range between 80 and 90 for consolidated debit recurring. Reminding that our initial guidance was 88 million, provided that we'll be able to place 3 billion euros. Let's hope the conditions change now and we have a better second half. Reforcing focus on costs and profitability with some new measures coming on the second half, and results for sure will be there as well. Stepping up investment on express and parcels in Iberia to keep improving our competitive position, namely in terms of increasing capacity, since we feel that we are now able to grab even higher volumes, provided we have the right capacity. and our balance sheet leverage offers organic and inorganic growth optionality, and we keep this very much in mind. We have also announced recently a new share buyback of €25 million, which is now under execution, equivalent to about 40% of our market cap. And with this, we close our results presentation and rest available for you for the Q&A. Thank you.

We are now available to take questions. As a reminder, analysts that wish to place a question should click on the button to raise your hand and we will give you access to the microphone. Analysts dialing from a phone line should press star 9 to raise your hand and star 6 to unmute yourself. We will take our first question from João Safara from Santander. Please go ahead, your microphone is enabled.

Can you hear me? Sorry. Yes. Oh, okay. Yeah, thank you. It's just I wasn't sure. Okay, so two questions from my side. The first one, and sorry to be so repetitive with this question on the Banco CTT approval. We've seen Yesterday, I think it was yesterday or the day before in the press saying that it was likely that this transaction would be approved by October. And so I just wanted to have some update from your part. And also on the terms of the transaction, the news mentioned that one of the conditions was a veto right by Generali that it seems now it's not going to be applied if the transaction is going through. So just wondering if that has any implications in terms of the price that it was settled, the transaction in the beginning. And that's my first question. The second one, it was more to try to get an idea or a guidance from you in terms of free cash flow generation. I understand what you mentioned in terms of working capital and taxes, but it would be useful to have an idea how much should we expect these figures to be in the second half of the year. And if you can give us any idea or any range in terms of the free cash flow generation expected for 2024. I mean, even not taking into account the operating performance, but just based on these two drivers, which seem to be, I mean, more difficult, at least from my front, to estimate. Thank you.

Thank you, João. Hopefully you can hear me. So on the Bank of City approval, what we saw yesterday is a piece of journalism. What we have to say, actually, we were quoted on that, is that we believe that all the questions by the Bank of Portugal have been not only answered, but also attended. and our expectation that the approval should happen, well, at any time. Typically, there are interactions between the Bank of Portugal, Generali, Banco CTD, and ourselves. At this stage, there's nothing from the bidder's side, neither from Generali, neither from the Bank CTD, neither from CTD, and the Bank of Portugal is processing. So we are very relaxed, and the authorization should come at any time. October, of course, is within that expectation, but my personal expectation is that it should happen earlier than that. The fact that there were references to some of the changes that have been required, we are not commenting on that. We are just saying that we are very happy with where we came amongst ourselves, the Bank of Portugal generally, and ourselves. And, of course, there is no price implication whatsoever. I will ask Guy to address the free cash flow generation question. Thank you.

Thank you, João. Let's see. I won't provide guidance on free cash flow, but let me at least address what I think are the most difficult parts. So, Capex, we gathered the market for a slight increase this year, given the investments, the renewed investment in capacity in parcels and the investments on digital channels of the bank. So you should expect Capex to grow year on year. And on the working capital, as I mentioned, there is some effects that will remain this year because of the change of the mix of the revenues related with extra-communitary flows or inter-communitary flows. But you should expect, and we are expecting, this working capital to reverse at least more than half. And with your expectations on EBITDA, you should be able to do your estimates. Thank you.

Thank you very much.

We will now take our next question from Filip Leite from CaixaBank BPI. Please go ahead. Your microphone is enabled. We are not able to hear you, Philippe. Try to connect, maybe try to connect the microphone or choose a different option. Maybe while Filipe is trying to connect, we can pass on to Antonio Saladas from AS Independent Research. Please go ahead. Your microphone is enabled. Antonio, you have to unmute yourself, please.

I had everything. Sorry, very much. Sorry. I had everything OK. And then sorry about this. Excellent. The first question is with parcels in Portugal performance about three or three point two percent growth. So I think it was it was below the market. So maybe you can confirm it. And if you are losing market share. The strategy seems completely different from the strategy that we are applying in Spain. The second and third questions are related to the bank. Performing exposure remains above my expectations and it's difficult for me to understand that because the economy is doing well, unemployment is low, so everything seems more or less okay. And the last question is related also with the bank and the writer's issue that basically, or the new partner that basically confirmed that should occur in the coming month. So my question is, the bank is already overcapitalized or, well, it's overcapitalized. And so what do you think? What are the strategies to grow? Because up to now, well, it's true that in the second quarter is quite an assets increase. So are now increasing and in line with probably we will expect. Nevertheless, the bank remains overcapitalized and we don't know exactly where the bank would like to grow. And now with more capital, maybe we can provide more color on what we should expect from the bank. Thank you very much.

Hello? Yes, Antonio. We are just preparing the answer.

Okay, sorry, sorry, sorry. I was worried that it was not working. Thank you. Sure, thank you.

Antonio, can you hear me?

Yes, yes, yes.

Okay. We're a bit puzzled here with the button. So, João Souza will address the parcels in Portugal. We believe your statement is not right. And Gui will address the non-performing exposure. Coming back to the overcapitalization of the bank, as you claim, just a reminder that... First, the bank is growing extremely well on deposits, very much above the market. And therefore, the leverage ratio, which also accounts for capital, is getting higher. So that sense of recapitalization could not be as expressive as you mentioned. On the other hand, the bank has been declared a resolution bank because of the number of clients. And for that, there will be MRL requirements that we have already mentioned before. So that sense of overcapitalization is indeed not very, very significant. And with this, I will ask João Sousa to address the question.

Good morning, Antonio, and thank you for your question. We don't see this feedback that you have about market share. In fact, we are seeing the opposite. We are growing in the customers we have, and we are grabbing even big customers that was important for us from the competition. So what we are seeing is the opposite. So we don't lose any customer. We are growing the customers that we are sharing with the other ones, with the big customers, and even we are winning two or three big customers this last quarter. So we feel that we are increasing market share, not decreasing this market share.

But the second quarter, the volumes in Portugal went up by 3.2% year-on-year, I think. I'm right on the figures. So you think that the market just grew by 3.2% year-on-year on the second quarter?

You are talking about the B2C or the global market of parcels?

Well, I was talking about the figures that you provide. Yes, maybe it's all the figures, yeah.

Yeah, what happened is, as you know, the express and parcels are large services. So where we are very focused on is in the B2C and the B2B, in fact. And where we are seeing the market growing is more in the B2C. And all of this, what we are talking about, is the B2C path, okay?

Okay. Okay.

Just complementing on the first one, the numbers that we have from Eurostat, we see e-commerce in Portugal declining more or less 3% during the last two months of the quarter. There is still one to be reported by Eurostat, but just giving that data point. On NPLs, As you know, NPL is going up as our portfolio matures. We now started something that is usual in the industry, but for us it's the first time we are doing a sale of non-performing loans with economic gains that still to be booked in the balance sheet. but we already provided some numbers of the performer. Our NPLs will come to 4.2%. It will be 4.2% in this quarter if we account for that sale that we did in the last days of June.

So the sale was done in June or in July?

We signed the agreement in June and the promise so it will be taking effect in July and that's why we still didn't move the balance sheet.

Okay. Thank you very much.

We will now take our next question from Joaquin Garcia Quiroz from JB Capital.

Hello, can you hear me?

Yes.

Okay, perfect. Just two very quick questions. One is if you could provide a bit more color and you said that you expect the government to revert the limitations on the public debt placements. When could we expect this? Do you have any, can you provide a bit more color on that? And then on the mail segment, If financial services remain at these levels, should we expect margins also to be affected in the second half of the year and have a small decline year on year? Thank you.

Thank you, Joaquin. So on the financial services, of course, we need to be careful, but both according to our contacts with government and the IGCP, the public debt agency, we believe that change in the cap is to happen very, very soon. Of course, we cannot make statements on behalf of those entities, but very soon, meaning days or a few weeks. We also expect that because we've seen statements and we've also interacted on that, and also because the IGCP had a few institutional placements, short-term placements, at higher rates than the current death certificates. We also believe that after summer, something could happen on the conditions, eventually a new series. We've heard, all of us, and the press echoes that. the finance minister saying that we should somehow improve the attractability of public debt as a way of the Portuguese public save, well, manage their savings. So again, on the cap, something should happen very, very soon on different conditions eventually after the summer. On the middle segment, We said that we have basically two positive expectations. Well, one thing is that we've seen some of the state agencies postponing some of their months. So we believe that something could happen in terms of volumes in the second half. But the most relevant one is that on Monday, On the one hand, we hope financial services to improve and therefore their contribution to costs also to improve. On the other hand, we have a number of cost managing projects that we've referred during the call that should have an effect on the second half. So it would be very unlikely that the situation would not improve in the second half vis-a-vis the first one. Thank you.

Thank you.

We will now take our next question from Philippe Lloyd from CaixaBank BPI. Please go ahead. Your microphone is enabled.

Good morning. Can you hear me? Yes, perfectly. Perfect. Sorry for that. So on my side, I have three questions. If I may, first one, if you can explain the reason for the slowdown on ENP volumes in Portugal, because in second quarter, it increased by just 3%, while in first quarter, it increased by 12%. And how do you see second off in terms of express and partial volumes in Portugal? Second question, on inorganic growth, opportunities that you mentioned and if you can clarify what type of opportunities are you looking for and in what markets and last one is related with the Portuguese government decision which was announced recently that the judicial notification will now only be sent to the companies electronically I would like to understand and if you can give us more visibility on that what should be the impact of this decision in your volumes and revenues in mail, because I understand that this is a type of mail with a higher price per item when compared with average mail, and eventually if the decision is extended in the future for all judicial notifications, what could be the final impact from this measure?

Flip, thank you very much for your question about the slowdown about EMP. Like I was saying to Antonio Saladas before, we don't see this slowdown. I think it's comparable because, as you know, last year was a very strong year of winning new customers in Portugal. That way we increased market share. And unfortunately, the market does not have new companies and growing like we like it. But what we see in the correct numbers inside of our – when you look for our numbers, it's like I told before to Antonio, it's increasing in the same customers. So it's market share inside of our customers and even winning some targets that we had for these years. So the view for the coming months is to continue on this positive path. and also continue to help the SMEs and the other companies that are not yet in digital so that these companies can go for digital. And in that way, we grow with the market.

Okay. Thank you, Philippe. This is Rombe on inorganic growth. what markets and what type. So markets, for sure, Portugal and Spain, mostly Spain, given our market share in Portugal. And what type? This should be obviously in the E&P value chain. So we've said before, we believe that we should have a higher presence on something which is already a relevant business for us, which is logistics fulfillment, storage and fulfillment, and also on customs clearance and the and e-commerce delivery, last-minute delivery, treatment delivery. So the issue is that, as you know, in Spain, most of these companies are franchise-based companies, which we believe is an optimal scheme for e-commerce growth. And because we position ourselves as an e-commerce logistics player, we are mostly interested in operations that we can, entities that have their own operations. So Having said so, we are active on the market, and if anything happens, we will, of course, let you know. On the judicial notifications online only new scheme, so first of all, this is, of course, not good news, but the judicial notifications for companies is a very, very low volume of mail, and is a very low margin volume, sorry, business for us. We are actively discussing with some of the government agencies to be part of the online notification. As you know, we have several digital mail options working and ready to work. And so we are basically trying to manage actively the consequences of this change, but we don't see a major risk in the short term. Thank you.

Thank you. We will now take our next question from João Safara from Santander. Please go ahead. Your microphone is enabled.

Yes, thank you. So just one more question from my side, just trying to understand your exposure to the volumes that come especially in Spain, the volumes that are below the 150 euros threshold that the European Commission is now suggesting to put duties on, how much of your volumes of express and parcels would be below this threshold? And that's my only question.

Thank you as well.

So volumes below the 150 euros threshold is a good part of our volumes, maybe around half. What we see is that it could actually bring an opportunity. So there is an elasticity issue, since if there are duties, then the price will increase. What we see, and we're talking about Chinese e-commerce, is that the price advantage is so high that any kind of duty will be almost irrelevant in terms of demand elasticity. On the other hand, if this will improve, sorry, increase the requirements for customs clearance, I believe that the process that will develop will be as smooth as the one that developed when the VAT de minimis was removed. As you might remember, most of the Chinese e-commerce didn't pay VAT. And all of a sudden, everything pays VAT. And when one buys anything in one of the Chinese e-commerce platforms, one pays VAT. That VAT ends in the relevant tax authority. And that is completely transparent for us. But it also brings a business opportunity because we are in the business of customs clearance. And we do a good part of customs clearance for the Chinese e-parcels that we deliver. And so, I mean, we are looking at this very carefully. We are relatively, I would say, relaxed on the elasticity impact in terms of duties and price. And we see as an opportunity the increased customs clearance mechanisms that this will bring. Perfect. Thank you very much.

We still have a raised hand from Antonio Slavage from IS Independent Research. Do you wish to ask a question?

Sorry, thank you very much. I just forgot to lower the... No problem.

Thank you, Dan. And as there are no further questions at this time, I would like to end the call back over to Mr. João Bento, CEO, for any additional or closing remarks.

Thank you, João. Thank you, everyone, for attending. As I said, it was a quarter with record volumes for INP. We see our business except financial services performing very, very well. We are guiding for an increase in performance for year-end, and we have good expectations on the improvement on financial services. So bear with us. We are, of course, available for Any complementary questions that you might have through our IR team. And again, thank you for coming. And for those going to foreign holidays, have a nice holiday. Thank you.

Thank you. This concludes today's conference call. Thank you for your participation. Ladies and gentlemen, you may now disconnect.