Multiplan Empen Unsp/Adr

Good morning ladies and gentlemen. Welcome to the earnings call the third quarter of 2023 from Multiplan. We have here with us today the executive directors of the company. We inform you that the presentation of the results can be accessed for a download at the website ri.multiplan.com.br backslash en backslash before starting. Let us mention that forward-looking statements that are done during this earnings call regarding the business perspectives of the company projections and operational goals and financial goals are based on beliefs and premises of the Board of Directors of Multiplan and based on information that is available to the company. Any forward-looking statement is not a guarantee of performance. It involves risks, uncertainty, and premises. These are based on forward-looking statements and depend on circumstances that may materialize or not. Investors should understand that general economic conditions, industry conditions and other operational factors may affect the results of the company and may lead to results that differ materially to those expressed in the forward-looking statements. Now, I would like to give the floor to Eduardo Perez, CEO of the company. He will start the presentation.

Mr. Perez, the floor is yours. Hello. Welcome.

I would like to thank everyone that is listening to us. It is a great pleasure to be with you here today and to share with you the results, the exceptional results unprecedented in the history of this company. I would like to highlight a few points that are very important and then really bring the attention to our performance this year and this quarter. The third quarter of 2023. Let's talk about sales. They've been growing in an accelerated fashion and overcoming our expectations. We grew in the quarter 8%, we grew in the year 9.5%. earnings are our earnings is 718 million until September and that is almost the earnings of last year all the year last year so 700 facing 445 million I remember the name the number off the top of my head but the important thing is that year on year we already produced the net earnings of last year and we still have the best quarter yet to come. So this is great news. The performance for the earnings over the last 12 months, our earnings reached 957 million. So we are here Empen Unsp & Adr and this is for the first time in the company and we got 500 stores rented sublet it so we are talking about 80,000 square meters of the ABL well the we have over 80,000 It's almost a bar of shopping of new stores. This brings vigor, new options for the people that visit our shopping malls. We've done over 800 events and this is a very important data. So we can analyze how we operate and how we make the shopping mall profitable. The pandemic has turned us into something more efficacious.

We improved the way that we operate our shopping malls. So we are improving

the promotion of the sales event. So the culture as well that lead to entertainment, they bring content for all the enterprises. Let me talk about the growth strategy that is based in the expansions and the revitalization of the shopping malls. This is not a strategy This is a strategy that is conscientious and it's a strategy that we've taken many, many years ago. We had here the opportunity to have a lot more malls than what we had before. But we preferred to have the best malls. So we are aware that we want to be the best in every single city that we are operating. This is our obsession as a company. We want to transform all of the malls, even the good ones, and we want to improve them. And the ones that haven't reached that maturity, we're going to get there. So continuing to invest in our portfolio today of all the options and opportunities that came up, this seems a more viable and more rental, more profitable. So this shows that we are in the correct path, that our path is a one-way street and we are gonna continue in that path. Just to exemplify a few things, and we're going to deliver next year. By the way, we have the expansion, 90%. If I could, I would open the expansion today, but there is still, it's a shopping mall that we're investing 300 million in expansion improvement, and it will be another equipment. Diamond Mall. It will be luxury to Belo Horizonte. And for the first time, we are going to transform the entirety of the shopping mall in high food, well, good food courts, international brands that were not there. We knew that we had that niche. And this is a shopping mall that has 40, 50% sublighted, but we are gonna have the expansion open. We have in our pipeline of expansion, I'm gonna show you that we're gonna start next year. One that is very important for me, and maybe it doesn't seem so obvious for those of you that go to the shopping mall, is ModernBee Shopping. ModernBee Shopping grows next year. We are gonna start the expansion in January. We start with a renovation, total renovation of the shopping malls in January. It's not, I think, we are going to start the works of the expansion and the revamp of modern video shopping that is scheduled for these two investments. We have 300, 350 million reais. And then people say, well, modern video is doing so well, what's happening? Well, that's what makes us work with so much will and love. We want to improve on what we've always done. So we look at Morumbi and we see failures that maybe people did not see in the very competitive market such as Sao Paulo. This is the important vision that allows us to advance every single day in the direction of being the best in every city. We will do the same in Brasilia. Brasilia is getting close to the 40 years. We revamped almost the entirety of the mall. We're gonna do the expansion in Brasilia. The project is ready, was approved. Same thing will happen in Maceió. So this is, this company has grown this way up until now. So I don't see why we should change and I don't wanna change it. We are, Taking a look at, well, we are still paying attention to all the opportunities, even in-house. The most viable and more profitable are presented close to us.

So growth is that.

I wanted to talk about an important point, which is our digital initiative.

We wanted to remove all the entries of the shopping mall with a device that we created with another company. This is a shared technology. So we can facilitate the, well, the customers that are getting into the shopping mall, we are implementing the new gate system in three new malls, in a third of the malls. Our intention is that this new gate system for the first four months of next year, 100% of our network will have no entry gates. Why is this important? It's important because it improves the experience of people at the shopping mall. We created the app with that function, with that definition, this path moving forward. We are investing in a tool that will make the life of the user of our enterprise, it will be a better, more quality life. That's how we're improving the quality of life of people and we're bringing a big amount of information for us. So the growth is very expressive over the last few months. The recurrence of use is very good. because people that try it, they don't wanna stop using it. Well, we're not making it mandatory that people use Multi. They can pay physically in a shopping mall if they want to. But we want to convince the people that this app is good. It's better that you are in this environment. This is our objective. And I would like to highlight, the social initiatives that we've had this year, the shopping malls. They have an interaction and an interactivity with the communities that we are inserted that is very important. Whether if it's doing improvement works in hospitals, in schools, I'm going to show you the example, recent example of Porto Alegre that went through a terrible flood. People were without their homes, without food, without their needs. And the shopping mall donated and we've gathered a lot of things and we donated it back. And this is what we do in all of the cities that we're present in. Our initiative to take to placing the possibility of providing schooling for our employees in the primary, secondary school is expanding. We had it first in Barachope and now we have it in Sao Paulo and we hope that in the near future that we have the entirety of the network for education, the continuous education of our employees implemented in all the network. So I would like to remember, remind you, Multiplan is going to be 50 years next year.

It's an important date.

I'm very proud to be a part of the 50 years with such an important result, very symbolic and significant. 50 years of dedication, extreme dedication and an obsession for improving the experience of the consumer. The results that you're seeing here, of revenue. We are going to have a record setting year next year because of the improvements of the experience of each of these roles. This is our obsession once again, and I would like to thank enormously to the people that are here with me in the room, the people that work with all the malls, whether if it's our employees or subcontracted parties, that make this day to day ever better for everyone. So thank you very much for listening to me.

Thank you. And now let's go to the Q&A. Thank you. We will start now the Q&A session.

For investors and analysts, if you have any questions, please click on the Q&A button and write down your name and your question. The questions will be answered in the order that we receive them. First question. First question is from Mr. Gustavo Calbava, the analyst of BTG Pactual.

Gustavo, you can ask your question. Hi, good morning, everyone.

I wanted to ask a question more in regards to the investments that you mentioned on expansion. I wanted to understand, given this scenario of wholesale, of retail that is more challenging, the expansions, do you think that the investments are gonna be more focused in expansion And maybe thinking about Greenfield, there was something very important, the growth of the company. Do you think that for Greenfield, is it still far away? Or in this scenario that the sales of Multiplanet are growing well, can you think about Greenfield? And also the second question is, well, it's a follow up of the issue of investments. You've distributed a lot of dividends and the company at the same time is unlevered. So do you have any intention of maybe increasing the payout via dividend or JCP, or are you gonna remain with the current threshold and the leverage that you're guiding? That's it. Gustavo, this is Eduardo Perez. Let's subdivide the question. I'm going to answer the first one, and that's concerning the expansion and the greenfield. But to clarify, do you have a preference to do expansion? Of course, yes, because this is a strategy that is positive for the company for many, many years. I close the doors to the greenfield. Never, never. However, greenfield is different. Much more challenging. Specifically, when you don't have the certainty of the economical variables that we're gonna have up ahead. So the uncertainty makes us move towards the direction of the expansion. We are not, are we looking at Greenfield and acquisition? We're always going to do both. And I'm gonna let Armando now talk about the dividend distribution that you commented. and deleveraging. Well, look, Gustavo, we keep, over the last 12 months, 1 billion and 50 million Reais in a capital allocation distributed amongst the return to the money to the investor and repurchasing of the shares that added to the 685 million Reais. And Capex, that's 440 million Reais. So, if you take a look at our earnings, there is a record, a long record of, you know, the profit sharing with our investments, investors. And we've been, since 2011, we've profit shared over 50% or more of the net revenue post-reserve. With the exception of one year that we had a big, Empen Unsp-Adr Not only will we have the space to do the profit sharing, but without fiddling with the leverage in a big way. We're also repurchasing the shares. As you know, we have the announced approved program in June. And if you look at this year, it was 4 million. I think it was this year or it was 12 months, sorry. 4,800,000 shares repurchased. And as Eduardo has said, we have money in CAPEX and we have a pipeline of growth. But this is because of the strong operational goal of the company. There is leverage. And even though we're getting more money to work when compared to the last year, there is a small deleveraging because of the good results. So we can do more. So, well, we have to be in two, three. Three times is something very comfortable through the covenants. What we do not want is to place ourselves in a position that we cannot take on the opportunities that are in the market. We're always gonna work with some leeway, and then if we want to, we can act immediately.

Thank you. Have a nice day. Now we continue.

The next question is from Felipe Lenza, Southside Analyst City. Please, go ahead, take the floor.

Hi, good morning. Congratulations on the great result. My question will be very brief. Given the continuity to the previous question, there is a possibility of acquisition of an asset from ALOS, for example, Parque Maceo.

Hi, Felipe. This is Eduardo Perez.

Well, your question, you talked about ALOS, but we are here analyzing all the opportunities that we think that makes sense for us. I think that you mentioned Parque Maceió, right? Well, nobody told us that it was for sale. If it is, we're going to take a look at it, but here, We're not pursuing to try and be the largest. We want to be the best. So we are going to continue down this path, which is important. And sincerely, out of the opportunities that we've taken a look, I can mention one. There is a lot of shopping malls in the market that is in the same city of a mall that is the same of ours, and they started the same time that we did. And at the beginning in the 1980s when there was the inception, they had a better performance than ours. I'm not gonna say the name of the asset or the city, so it's not really out there.

But when I looked at the numbers,

To my surprise, happy surprise, our shopping mall grew three times what that shopping mall sales. So the path that we are undergoing is a prosperous one. We're always gonna take a look at all the assets, whatever they are, even if they're an entire company. Did I answer your question? Yes. Perfect. Next, our next question is from Tainan Costa, analyst UBS.

Tainan, please take the floor.

Good morning, Eduardo Armando. I wanted to explore the theme of provisioning.

Until the pre-pandemic, the provisioning was something about 15% of the total of accounts receivable of the company. And now when we look at the last report of the quarter, that number doubled. Close to 30%. I wanted to understand what needs to happen for this provisioning to go back to a level that was closer to the pre-pandemic 50%. It would be the delinquency more control for more time. And maybe we would see the reversion of provisions more recurrently on the short term. And if that's the point, what would be the level of delinquency that is ideal? And for what time can we deliver those reversions? Thank you for your question, Tainan. Well, I'm going to start backwards. There is no level of provisioning that is ideal. The provisioning is possible and in accordance with the circumstances of the time. Your question is appropriate in this order because it shows a strong recovery of rents, previous rents. specifically of previous quarters. As you commented during the pandemic, there was a provision that was increased. And they increased because there is an increase of the percentage that your provision of the rent because of the time that goes by, which is aging. So you start provisioning 15%, whatever, I'm just giving you a number off the top of my head. It all depends on the deadline, the time that it spends. But that success that you mentioned on the receivables, It's also, you know, it's a mirror of the performance of our tenants in the shopping malls, the desire to be in the malls and a series of other circumstances. There is no one specific explanation. It's a set of factors. But the main factor is that Eduardo already mentioned this. we are making our shopping malls better for our clients and this is going to be better for the tenants and consequently they want to stay and do not lose that point of sale and that helps in the recovery of provisions and consequently reduces the percentage as time goes by that provisioning growth grows as you grow your rent uh revenue And this is what we see over the pandemic from the end of the pandemic to now. 50% growth in rent. So this is due to the volume and the time. Did I answer your question?

Yes, thank you.

Next question from Daniel Gasparete, analyst of Itaú.

Danielle, the floor is yours.

Good morning. Thank you for the call. Congratulations on the result. The quality is impressive in a very difficult retail wholesale market. Two questions. The first is to understand the dynamics of rent in a few assets. It's bringing our attention to the evaluation of the rent in modem B, but our shopping and evaluation quarter on quarter. I understand that quarter on quarter is not the best analysis, but to understand my view, we observed that there is a small drop dip, even though we saw a great performance in sales in general in the market. So I wanted to see that first point, understand it. And second, I wanted to understand the issue regarding the publication, the communication on the I'm going to read it in regards to the statutory authorization for the creation of preferential shares after the shareholders agreement. I wanted to understand more why you're keeping this infrastructure and why not seize this moment and migrate to a new market? I'm sorry for the question, but more so I can understand the rationale behind that. These are the two questions. Thank you once again and have a nice day.

Hello. Okay, Danielle.

First, rent. Really, the comparison quarter on quarter on this exercise doesn't make any sense. There are many things affecting here. That's why the comparison year on year makes more sense. And the comparison over the last few months is better, in my opinion, because you get any hiccup, let's just say, during the quarter, as you mentioned. Specifically, in the shopping malls that you mentioned, we had a few isolated events due to actions and success in negotiations that affected the results in the second quarter and not the third quarter, just to answer your question. Besides that, you have also When you open the rent, you start to see that the complimentary as well as merchandise, it decreased over the quarter. And when you look at the close rent, you see that there was no growth in the second quarter of 23 to the third quarter of 23. Would you like to compliment anything? Well, something else. Merchandising in the second quarter usually seasonally is higher. So in these two, we had great campaigns for merchandising in the first quarter. We have the increase, the decrease. Second quarter is where you have Mother's Days. There is a lot of seasonal merchandise that gets in the second quarter that leads to this. So Armando talked about this. We have Valentine's Day. We have seasonality. I know that you know very well if you compare it to this quarter it's going to be higher because seasonally fourth quarter is stronger so that comparison is limiting as you mentioned but the point that you mentioned merchandising in the last quarter in the shopping malls where it's very strong remember the barra shopping last quarter grew create quarter and quarter year on year over ten percent twelve twelve percent so we have a campaign that is very successful in the last quarter Second point, Danielle, the issue of the market motivated because of the conversion of the preferential shares, extraordinary shares. of our partner, there is today a bigger difference than what happened before between the disclosure level two and the disclosure to the market, which are not the preferential shares, which make it difficult for that migration within the market. But regardless of the disclosure, what the company tries to do is to adopt the best governance practice so we can do not only our guidelines and also that our data is permeated by this. Recently, for example, we have an internal audit area that works to support the team supporting our processes in a way that is very proactive amongst others, amongst many other actions for governance that we have here today. So not answering directly And we are not looking for a new market in the short term. Thank you for the answer. Thank you, Hans. Thank you, Armando. Have a nice day and a nice weekend.

Next question from Mr. Igor Altero, analyst from XP. Igor, the floor is yours.

Hi, everyone. Thank you for the... Congratulations on the results. Two questions on my side. Let's go back to Well, I want you to understand, if you see a space for the selling of assets of any of your portfolio asset that is non-core, and secondly, I want you to understand the performance dynamic of Santa Ursula and Olimpia that are really bringing attention on the sales performance. What do you attribute to this very positive performance? And if you can share the initiatives to improve the performance of these assets.

Thank you.

Good question.

Well, Santa Ursula and Villa Olympia. They improve because of insistency. Nothing overcomes insisting. We are going to insist until they work out. So nothing happens for no reason. They're growing. We are seeking operations and solutions for each and every one of them. It's not easy. These are cities that have a lot of competition, even Ribeirão Preto. There is a level. I think I didn't do, but But GLA of Ribeirão Preto is comparable. Procedurable area is comparable to São Paulo. So it's in an area of the city that the first Mall Santa is in a deteriorated area. We're trying to make it into the growth point for that region of the city. It's not easy, but we are never going to give up. Villalimpia also. It was in the best moment pre-pandemic. We were doing very well. There was the region of Villalimpia suffered an enormous impact, mainly with the remote work. And then here, you can see that several places all throughout the world, business centers, they cease to exist. We're still privileged because there is a path moving forward and there is work to return it to its former majesty. There is a lot of houses being built, apartments being built around Virolifa that is gonna be a benefit on a medium long term. But we're gonna continue to promote, insist, and should take the good operations because from then on, we're going to get a return on investment. Selling assets, yes.

Look, might happen. I'm not saying no.

People don't really talk to us. I mean they do, but you buy stuff that we're never going to sell. So that's it. These assets, we never stopped to think about that. If it's worth it or not, we discuss it. But the option is to continue to improve. When the asset is good and there is several people interested and then we don't want to sell it. It's complicated, but it is what it is. It happens to us.

Thank you.

Now, the next question is from Mr. Bruno Mendoza, analyst, Bradesco.

Bruno, the floor is yours.

Hi, good morning.

Thank you for the opportunity and the presentation. Eduardo Armando, Hans, two questions. My first question, when Eduardo was talking, it was very focused in an investment in the assets and taking care of these assets. And thereafter, you talked about the digital strategy and investments in these lines. I understand that this is a maintenance capex. Every quarter that goes by, it's more proven in your results that this investment increases the differentiation of the assets in regards to the rest of the market, and that gives you good low-hanging fruits. But can you quantify how much that investment is costly. I mean, what is reasonable historically with our models, there is always a capex of minus, I don't know, a percentage of the NOI in the revenue. So I wanted to understand how you think about this investment. And this investment, I mean, for the entirety of the group, I mean, revamping, digital strategy, anything that is investment to maintain, The capacity of the assets to generate revenue and grow growing as they've been growing. But how do you think about that percentage of the revenue of the NOI? Is there a different math?

This is the first question. Bruno, are you there? We lost you.

If you can tell us, sorry, can you repeat the second part? We lost your connection. I understood until you said KPEX for investments and digital.

Second part, I didn't hear it.

I wanted to see if we can quantify that CAPEX, maintenance CAPEX, if it's a CAPEX for maintenance, a big group for digital strategy, anything that is initiative to keep the capacity of the assets generating revenue. We saw it as a revenue percentage and a Y percentage. Do you think about that in that way? Or is there any other way that we should think about this investment? That's the first. Second, you can hear me now? Yeah yeah, go ahead. Second, I wanted to go back to the theme that Gasparetti mentioned on the issuance of maybe the MPs. I mean, it's clear that this is a new movement for a new market. It's not so obvious, but do you, can you tell us a hypothetical situation where you would think about using the prerogative of issuing these, for example, to pay MNAs or What would be the other situation that would justify you having this prerogative in your guidelines?

Hi, this is Eduardo. I'm going to share this in two times. Two parts.

First part that you asked about the remodeling, revamping the digital projects. Is there a magical number to invest? No, there is no. It's more according to the need that you perceive of your assets. At every mall, they need an intervention so we can, so we don't lose a market. There is a funny situation and I was talking to a partner about an asset, New York, and we were at the beginning of the remodeling and he was saying, well, finance is questioning me because we're investing a lot. What do I tell them? I say, you have two options. No investing, losing the asset, or investing and continuing with the asset. So revamping, remodeling maintenance is that. I mean, we are still, remember, licking the wounds of the pandemic. So when I talk about that, Morumbi was a mall that needs to be taken care and a lot of care. We didn't do anything big in terms of renovation in Morumbi for many, many years. The pandemic really caused a lot of problems and taught us a lot, but caused a lot of issues. So in terms of number, we will have more of an expense next year and less expense over the next year. Maybe 250, 300 million of digital initiative and renovations for next year and 100 maybe for 2025, if I'm not wrong. But these are not set in stone because this number can change. I mean, there are times that you cannot do anything as it was an epidemic, but when you need to do things, you need to do them correctly. This is our speciality. Bruno, just to compliment, I know that it's very difficult for you guys, NLS, to place it in a model. For us, we also get into a model to confirm as a percentage of NOI, but this is just a reference, as Eduardo mentioned. Not necessarily, it's going to be mandatory or limited to do that. It all depends on the opportunities, the perception of the manager and of each mall. Second question, the issuance of the MPs, the PMs. Well, I'm not proposing anything. We have here the possibility of maybe one day, if there is an opportunity, we're going to do that. So we are here celebrating results of a great management and a great control of the company, of the infrastructure, the capital allocation of the company. And I think it's important and fundamental. So what we want is to have instruments in the market that have opportunities, a market where the players listed represent a fifth of the GLA or less national and We see a great opportunity for growth. So we just want to convert this opportunity. So there's nothing proposed in the case of the, should we have a conversion? We will leave it in the guidelines of possibility of doing it. There's nothing being proposed now.

Thank you. We're going to continue the next question.

Fanny Oring, Santander Analyst. Fanny, we're going to open the audio. You may take the floor. Good morning, everyone. Congratulations on the results.

Really good. Two questions. First, can we talk about Golden Lake? How is the expectancy of sales? What do you think about terms of launch in 2024, the project? And the second one, if we go back to the theme, on average, the investors are very uneasy with the M&A and the possibility of Multiplan doing an M&A that is transformational. We know that there are several assets of Multiplan, important ones, such as outstanding minority participations that would make more sense. But I wanted to know how important it is to Multiplan to do this transformational M&A from the strategic standpoint. And Multiplan, in my opinion, has one of the best, well, has a great part of the great assets of the market. So I wanted to understand Hi, Fanny.

It's a pleasure to answer. Thank you for the questions. Golden Lake. Marcelo is here to help me.

We have a strategy on the long term, the project of 10, 12 years up ahead. We are here in the first phase of the Golden Lake Victoria. with 54% sold. We are where we wanted, could have been better. It also depends on the economic variable because the sale of a real estate is very sensitive to the future of what people see in stability of the country economy. But we didn't stop. We still are building. We're gonna deliver Lake Victoria at the end of next year. We're gonna launch, maybe in the first quarter of next year, a smaller enterprise with the possibility of having a smaller ticket and products, diverse products, within the same condominium. We'll help with the liquidity. You will have, I mean, the point is that place didn't exist. It was the backside of the Jockey Club. We transformed it into a real estate. It was a very complicated operation. It took 11 years to happen. Every time that I visit the place, it's almost Barra da Tijuca of Porto Alegre. We still have here to invest almost $150 million of counterparts that are going to be in the region. making the continuation of the lakeside of that part of Beira Rio. In regards to the second part of your question, an M&A, transformational M&A, I don't know, it's difficult to answer because I don't see something that

that excites us to really look at the numbers.

For now, nothing happened guiding us towards that path. Might happen, yes. The only guarantee that I can give you is the following. You're gonna be the first ones to know if that's gonna happen.

Now, it's not. Did I answer the question? Well, sort of.

I understand that it's complicated. I think that there is a big anxiety in the market in regards to the level of the values they negotiate versus the private market transaction. So the investor is really thinking, well, Multiplan negotiates a cap of 12, but buy somebody with a cap of seven, and then you dilute that threshold. Maybe that type of point frightened us. So it was for us. Does it make sense something like that for you guys? Is there any that you say, well, would that make sense? So I think that this is the anxiety of the investor, giving you a feedback of what we discussed.

Yeah.

I mean, once again, I understand the fear.

and the lack of surety of the market.

Today we don't have it. Today I can affirm that there is no negotiation on the table.

We do not look at everyone and today it doesn't happen. It's difficult to assemble this operation.

M&A is not something easy because it depends on The other side, we didn't choose to grow through expansion. We wanted to do expansion and growth through Greenfield. First, we are good at it. Secondly, we can measure and do this. M&A, I cannot. I'm not gonna do it. I don't need it.

So there's people that exist need M&As. I don't need it.

I don't know if I answered your question.

So just to compliment, well, the definition that a transformational for us is bottom line. Transformational, you grow the line of the revenue and you lose money down below, it doesn't make sense. So it's very much aligned with the investors. And as Eduardo said, Look at the records of the company of growing in an organic way, growing with new projects, growing with expansion. And there is a lot to do. I'm going to give you an example. The biggest operation that this company has done, we bought Bozzano in 2006. That was the other half of our orange. Multiplum was half.

We bought and we ended up buying debt, just debt.

opening while listing and we couldn't and then we had the Canadian well maybe there is another opportunity like that yes but it doesn't make any sense for me to change the control that I have today just so I can have well today I have a company that I know what it is I control that delivers results expressive results why am I going to change this for something that I don't know what's going to happen. I am the biggest. Well, just to be bigger and transformational. No, that's not in the minds of anybody here. So just to tell you what we do not want.

Thank you. And congratulations for your numbers. Now, the next question is from Mr. Masarumata.

J.P. Morgan analyst. Marcelo, please, the floor is yours.

Good morning, everyone. Two questions very quick. First, in the services revenue, if you can, if you can tell us the volume, if there is anything else that you want to give us, if that was cash or just a volume on the contract, then what would be the options? And do you think that in the future there is still more to explore with that issue of the and well, the agreement with the telecom and the second is the. Expectation for Christmas, we see that retail is more cautious with Black Friday, the sales because of inflation, smaller when we see the nominal coefficient is weaker, but we want to understand what you're thinking about the fourth quarter and Christmas. Well, this is Armando, first part. That services was larger with the contract that we've done, We cannot give the disclosure of values in a negotiation. It doesn't make sense. But if you look at the second quarter, there was another revenue that we negotiated because of multi. And we do that for 50 years, seeking optimization of our revenue, optimizing our results. Well, we have the potential of bringing up revenues that the shopping mall has, that the portfolio has. So that is part of what Eduardo said of the obsession of making the mall better and that generates the opportunity to grow also in the financial part. Well, would you like to comment on the expectation? Yes. Thank you for the question. The expectation for Christmas is great. We are very optimistic. We are working Christmas all day, all year, sorry. So whenever I go back to the beginning, I start the strategy at the beginning of the year. We work with Christmas all throughout the year, and now we're thinking about next year already. It's an obsession to have differentiated Christmas.

What does it mean? Promotions, events, experiences, is to surprise the consumer in every way possible.

and we are a company that makes sales. Everybody that operates a shopping mall opens the door and waits for people to get in, get out, buy, and then they charge the rent regardless of the tenant. Here, we don't work that way. Here, we fight for every single cent and we fight for every improvement that we can find up ahead. My expectation for Christmas is very good. We're very much prepared with several campaigns that are important and iconic things that will happen in a few cities that were installed that will make our Christmas better. That's the certainty.

Thank you very much.

Now we received a few questions written down.

I'm going to read them for the board. First one is from Mike Sell. He says, could you tell us about the changes in the tax reform and the impact for the company? Repeating, could you talk about the changes of the tax reform and how those changes impact the company? Thank you for the question. It's too early to do an analysis on the tax changes that are upcoming. Some of the changes are they do not impact the result of the company directly, others yes. So we have to evaluate what's coming up. The tax reform is undergoing. The real estate sector was included with a specific regime, still undefined. What is going to be the percentage that's going to be in a complimentary law in the future, but the tax reform that we are seeing it should be transparent given that this is a payout of the tax that you do. So there shouldn't be a direct impact in the DRE of the company. The reform that discusses the interest rates over owned capital, there is another impact and it's very preliminary and there is nothing being proposed that was approved at the chamber in the Congress. So we're waiting and seeing how we're going to adapt in the best way to the reforms.

Another question from Daphne Lushnier.

She's asking, would like to have a better overview about the lower growth of Barra shopping. Do you consider that the shopping in Jacarepaguá captured part of the public of Barra?

Thank you. Hi, Daphne.

It's an interesting thing that we showed

If I'm not wrong, in our public meeting last year, we showed how Barra Shopping was on sales in New York, which is complimentary and the sales grow. Campo Grande was open. Well, it's a competition, yes. And the sales of Barra grew, and Campo Grande from zero had a potential for sales that is great. Village was open on the side of Barra Shopping, Embarra Shopping is growing in the village, also in a market that did not have... Well, and it's growing even more. It's our second best square meter. And the same thing with Jacarepaguá. Jacarepaguá was born in 2021, November 21, rose, started from scratch. There was nothing there. Embarra Shopping continues to grow. So there is a change in mix that is important. And we cannot do the omelet without breaking the eggs. So in a sense, you have a store that a new operation, some operations that are coming that are spectacular. But another one closes, you lose sales temporarily until the tenant leaves. And we start preparing the project we implement. And We're going to start from scratch. So this is what we're seeing exchanges in mix that is important that has a specific impact in the revenue of rent and consequently of sales. On the contrary, the fact that Jacarepaguá is more complimentary. The operations that we have in the shopping malls are complimentary and we're very proud to see in the long term That's why I asked you to see this presentation last year, that we showed the great growth that we had all throughout time. I hope that I answered your question. Another question, no question from . Could you give us how it was the first months of the gate list, what was the delinquency behavior?

Could you repeat the second part? What was the behavior of the delinquency? I mean, from the company or the parking lot?

Doesn't mention.

But possibly he wants to know if there wasn't any. So, could you give us how it was the first month of the gateless parking lot? What was the behavior of if there was any delinquency in the parking lot.

Well, answering the question. Why was the gate list was my initiative. I had the idea because we really wanted, we were satisfied with the antennas go back and forth and that creates a problem at the entry of the malls.

The shopping malls have a tumultuous entrance. It doesn't read very well, doesn't read here. So there has to be a better technology than the antennas. So that's why we created the PFO. Well, we were not gonna remove the gates, but we evolved to say, well, I don't need a gate. If I have the license plate reading connected to the payment, why do I need a gate? So it evolved so we can really provide a better service.

Up until now, wherever it's implemented, there is a success.

People like it. Those that want to experience, those that try it, they like it. We don't mandate, oblige every, well, many cases in the world, you'll see that you have access to Disney. You need to download their app. Otherwise you don't use anything. It's not a case of the free folk. We created something easy for those that want to use it. So the, it's very positive for the malls that we implemented this. And I mentioned that the delinquency is over if somebody doesn't pay the parking lot. There is no possibility of that because the gate is at the exit, so the control continues to exist. We created the ease for people to get into the mall, and we will keep it throughout the network. I hope that you can answer your question. Thank you. Well, thank you for all the questions. We close the Q&A session and we invite the participants that still have questions to get in contact with the investor relations department. I'd like to give the floor to Mr. Eduardo Perez for the closing of the session. The floor is yours.

Once again, I would like to thank everyone.

It's a very special moment for the company. We return to growth. We return to dreaming. So we are very excited. with the prospectus for growth of the company, the results. They speak for themselves. It's a very special moment, historical moment, another year of breaking out the record. So I think that we're down the right path, doing the right thing. So thank you to all the analysts, investors, partners, non-partners, Employees and my colleagues that work with me at Multiplan. Thank you very much. Have a nice day and thank you for the result. Thank you. The earnings call of the third quarter of 2023 of Multiplan is closed. Have a nice day.