Multiplan Empen Unsp/Adr

Good morning, ladies and gentlemen. Welcome to the earnings call of the fourth quarter of 2023 of Multiplan. We have here with us today the executive directors of the company. And we inform all participants that the presentation of the results is available for download at the website ri.multiplan.com.br. Before we proceed, we would like to clarify that anything that might be said during the earnings call regarding the business perspectives of the company, projections and operational goals are based on beliefs and studies of the board of directors of Multiplan based on information that is available to the company. Forward-looking statements are not assurance of performance because they involve uncertainties. And therefore, we depend on circumstances that may or may not materialize. Investors should understand that microeconomic conditions, industry conditions, and other operational factors might affect the results of the company and might lead to results that are materially different from the forward-looking statements. Therefore, I'd like to give the floor to Mr. Eduardo Perezillo. He will start the presentation. Mr. Eduardo, please continue. Good morning. Thank you to everyone that is listening. I would like to thank you and start this call in a different way. Let's talk about what can we implement? When have we implemented over the last few months? It's been about a year since I've been the CEO. And we really focused on getting the objectives and expectations of the team correct. So we can reach the objectives. We managed to do so. And we managed to translate this into action. Everybody knows what they should do to achieve what we want. What are the expectations and the goals of the company? So I wanted to comment very quickly on the indicators that you have in hand. We had a net income that is a record. We've had growth, record growth of sales. of foot traffic. It's the 50th anniversary of the company, and this is where we're going to start talking about the next 50 years from now on. It's important to mention that the company is very active. We have seven expansions programmed for the next two years, three already building and it works, and four are ready to start. We are not going to stop. We are looking at other opportunities. Nothing is close to Multiplan in terms of opportunities. Are we gonna continue to grow with Greenfield expansion? So it's first in, first out. What I wanted to highlight is something very important that we've discussed over the last few years, which is our digital strategy. Multi. It had a great performance last year. It reached five and a half million downloads, 18 million interactions. It's a record. And it's growing. This app is growing as time goes by. Our objective is that it is really a facilitator. and the presence of Multiplan. Well, Multiplan will be at the homes of people. And because this is a digital activity, it's limitless. We can add whatever we think it's important for the working of this app and the shopping malls. It's important to mention that the free flow, the initiative of remove, well, to update the parking lots of the shopping mall will be implemented by April of this year. So by April, we are going to have 100% of the updates on the shopping malls, on the parking lots. So we also have an enterprise of success in Porto Alegre. We got to the first phase, 60% of the sales of what is available. We will start the second phase, which is LEF 80 between April and May. And there is a closed neighborhood that we are doing. And we are also going to implement the internal infrastructure works of Golden Lake. So this is a year that the company has really worked for its objectives. I can see a great union. People are motivated to continue to grow. It's been 50 years, getting to 1 billion is important, yes, very important, but much more important is what we're going to do up ahead. The company is dedicated to continue to grow, improving the equipment so we can bring more diversity and compliment the enterprises that we have today. Thank you very much, and let's go to the questions. Thank you. Now we will start the Q&A session. If you have any questions, please click on the Q&A icon at the bottom of your Zoom screen. At the bottom of your screen, check again on the list. The questions will be answered as they are received. First question, from Gustavo from BTG Factual. Gustavo, please. Good morning, everyone. I wanted to ask you a question about the revenue on rent, the growth. When we see that it is, well, there might be a drop of vacancy that the company had and the same store rent, the revenue of rent is growing, well, less than what you are showing in the same store rent. I know that there is the turnover that might fiddle with the numbers. It might give you the difference with the basis of the same store rent and the growth of the rent. But I wanted to understand with you, how are the conditions, commercial conditions that are being negotiated with a new tenants in the shopping malls? Are you practicing a step up in the rents that is stronger than what it was? Or do you have maybe a difficulty after all these years that you raise the rent to continue to raise rents? very strongly to new tenants? Or is there anything on the profile of the mix of the tenants that are coming in with lower rents? Well, if you can tell us more about the qualification of that turnover so we can understand how the rent revenue will evolve from now on. Well, Gustavo, this is Eduardo Perez and Armando. Oh, Gustavo, first of all, well, We would never imagine that the rent would grow as long, along with the inflation while there was a deflation and rent actually grew 5.1%. You have a same store rent that is higher with a real rent based on the index of IGPDI. It's not with the inflation is 3.9%. This is very positive. When you have a record turnover as we had this year, of course, we have a mix. You have discounts. All of that is natural and all of that creates Well, some differences in the numbers. This is natural, but the rent grows at the moment with the rate of inflation. Occupancy grows. This has a positive pressure in the growth of rent. The conditions that are negotiated are always market. Nobody does anything outside of the market. The market is always sovereign in that. And obviously it changes a lot depending on the mix that you had Well, you know, putting beverages is different than a jewelry store. And that mix that is changing is reflecting on that. And things are temporary. Well, you're always going to change the mix of the shopping mall. And Gustavo, I wanted to tell you one thing. Just so you know, of the challenges that we face here and on the day-to-day multi-plan, practices this to improve the enterprises that we have? Well, there are tenants that they pay, they're doing well, but they do not, they're not attractive. And so when they're not attractive, they compromise maybe a full floor. So you change the tenant for a different one that has a worse condition, but that has a lot of foot traffic. So you're going to have that floor working out again. So you have to see the change. It's not store per store. You have to look at the whole ecosystem. When you qualify the mix and you complement the shopping mall as a whole holistically, you cannot just take into account tenant per tenant. That's the wrong path. And everything that we are doing in the mix shows that we are on the correct path. Okay, yes, you answered. Thank you. Just to follow up very quick. It's more of an effect of changing the mix. And then the expectation is that with this flow and the shopping mall qualification, you think that we should all throughout the next years, we should see if the number of revenue of rent of location will grow as well as the same store rent, yes. Okay, thank you. Thank you, Gustavo, for your question. Next question, Taina Acosta, UBS. You can ask your question, Taina. Good morning, Eduardo, Armando. I wanted to explore the access multi. Eduardo even talked about this. You opened 100% of the parking lots. Well, can you remind us, what is the main focus of this strategy? Is it reducing costs, generating revenue, improving the user experience? And also, I wanted to get your opinion if that idea of the multi-access, will it coexist with ConnectPod or Semparar? or that removal of the gate, you can only get in with the multi-app and would that generate a user experience that is not so good for the client because they could not use the other platforms. Okay, thank you for the question. The idea, the initial idea, what originated the free flow gateless access to the parking lot is the opposite. So the, We can see that the client is annoyed because you come and go and the antenna doesn't read it. And we developed the technology to give a better experience to the client. Here, we're talking about an initiative that is on its baby steps, but it's going fast on its baby steps. We have partners that are looking, seeking the company to be a part of this project. I cannot say who the partners are, but this is an ambitious project that goes, you know, it goes to the future and it focuses on the improvement of the experience of the people that walk, that come to our malls. We reimagined the app Multi to to really make it a toolbox and an extension of the shopping mall in the mall, in the cell phones of the people. So we are just at the beginning of our journey. I see it with great eyes. It's future. And Eduardo, just to compliment your question, what Eduardo said is the most important thing. Our focus is on the client to make the experience better. The rest is a consequence. So monetizing, yes, it's an opportunity that we've shown last year. Reducing expenses, it's immediate. Can you just imagine how the payment system was in the past with hundreds of people working in the cash registers and you just, with the app, you reduce it and it's an operational efficiency and a cost reduction When you are working with a credit card, also, there is a cost. All of that is a consequence of a desire to service a client better. And many other partnerships are going to work with always with this objective. It's not just monetizing per monetizing, but to service the client. This is the money on the long term. Just to follow up, at the end of the day, these platforms should co-exist or the access of multi is the only path into the mall. Now we never forced and never obliged people to get into the access, multi access. This is one of the platforms that you can access the shopping mall. If you wanna get the ticket in, well, you're gonna have the possibility. If you want to pay through the app of Moti, but not doing the registration, you can also do so. We chose to convince the client that this is a good product. There is no obligation. Perfect, thank you. Thank you, Toynan, for your question. Next question is from Andrea Marzini. from Citibank. Please, Andre. Hi, Eduardo, Armando. Thank you for the call. My question is the power of the tenants. We saw that M&A, that will probably happen between Soma and Arezzo. We did the math and basically it's going to double the share of rent that these two players are going to pay. It's half of the size. Well, they had the same size, one or the other, and now they together are gonna double the size with the shopping malls. By our math, it's not gigantic. It's gonna be two to 4% in the total rent, depending on the asset. But this movement of the tenants being closer, do you think that really increases the bargaining price with them? And a lot of their sales are with the shopping mall operators more than they pay for the rent. So 4% of rent that comes from Somain Arezzo is more than the share of the sales through the shopping mall. So how does it work that their bargaining power, they become a key account that is larger, the relationship changes. What can you tell us about that dynamic? Hi, Andrea, Eduardo. Well, I believe that things are going to continue as they are. For you to look at the participation of clothing in our mix is 30% of the mix. Our desire is that all those M&As work out and that we have others and that that brings vigor to retail. Multiplan is a place for tenants to work and I don't think that we should change the relationship. It's going to improve the relationship. I understand it this way. I don't see it as negative. I see it as very positive and I hope that retail and other brands are gonna come to be able to add and to sell an ad to the public that goes to our mall. And Eduardo, there was a lot of questions about the tenants that as the tenants are growing, we become stronger as well. Thank you, Andre. Thank you, Eduardo. Thank you for your question. Next question. is from Igor Altero, XP. Hello, good morning. I wanted to understand, given the level of deleverage, which is very low in the company, I wanted to understand what you see in opportunities. And if you can tell us more details while you're talking about expansion. So I wanted you to understand how is your mind for Greenfield, the M&A issue. And the second point is the occupancy dynamic. So seasonally, the first quarter is more challenging, but are we gonna see more leveraging on the first quarter? What can you tell us? Hi, Igor, this is Armando. If I understand correctly, you have three questions, right? Leverage, about... Opportunities for growth, M&A, Greenfield. And the third about the perspective of the first quarter, right? Perfect, yes. With occupancy. Okay, leverage. We earn another 25 basis points in regards to 22 to 23. I think that primarily this is a great operational result in regards to the cash flow of the company is very big, surprising us positively. And looking at the resources, we had records of returning the money to the investors through the leverage on our own capital and Capex, which is three times. And even so, we had a deleverage of the company. And I think that this is because of the operational result. Well, the market, and we have several investments, that are in expansions that Eduardo commented and that are going to consume our cash. Looking ahead, well, Eduardo commented in the initial comments that all opportunities are taken into consideration. These opportunities are discussed. in terms of strategy and capital allocation and return on investment. So M&A, sometimes we have interesting opportunities, but they're expensive. And we have had great opportunities to continue to grow through the development of expansions or as we did in Parque Jacarepaguay in 2021. So we look at everything. We look at everything and we see what the best allocation is. We have a capital structure that allows us to do so. Grow, returning the money to the investor, and sometimes getting deleverage in 2023. And last but not least, the first quarter, traditionally, seasonally, we saw that exchange of mix that is high, but there is an environment that is prosperous. You can look at the sales of last year. So we have 8.9% different on what we see the retail that is weaker. Well, there is a prosperous environment. There is another indicator. You can look at the, but that it's negative in the third and fourth order. So I'm giving you several indicators. to show you that we are doing very well. And this is what is guiding the decision of the company to continue to grow, to continue to invest and seizing opportunities. Okay, thank you. Thank you, Igor, for your question. The next question comes from Marcelo Matta from JP Morgan. Marcelo. Please continue. Good morning, everyone. Two questions on my side. First one, when you comment the expenses, administrative expenses, you, If you can quantify that incentive remuneration so we can understand what is the normalized level of the EBITDA margin of the company. And the second question is about the celebration of the 50 years of the company in this year. Congratulations to the company. But I wanted to understand if that might take you to an increase of commercial expenses if you can have more marketing campaigns. And how can that line evolve all throughout that year? Good morning. Thank you for your questions. First, we are very proud to be able to get 50 years in operation is much higher than what it was. And this is a reason for a pride and joy. And this is a celebration that is going to have expenses. We're of course, going to celebrate the 50th anniversary. And we're looking, as we told you, the next 50 years. This is what we are working, what Eduardo has commented initially. We are here thinking about the next 50. In regards to the one-offs expenses in the fourth quarter, it's part of having a success and reaching a revenue that was much higher than what we planned. It's part of provisioning, it's part of taking care of the shopping malls and having expenses with marketing that we had in the fourth quarter so we can make a more prosperous and better shopping mall. So there's always gonna be one offs. I would love that the balance sheet would be as planned, but things change. They evolve. Some things are good, some things are better. The expenses is not something good, but you're planting something good in the future. Now, in regards to the provision of bonus, we had a great result that we reached. If you don't stimulate the people, you kill the growth of the next year. So here we are very stimulated and the company is very focused in continuing to grow. I hope I answered your two points. Thank you. Have an essay. Thank you, Marcelo. Next question is from Fanny Santander. Now you can ask your question. Good morning, everyone. Thank you for taking my question. I have two questions. The first one is in regards to the revitalization of motorbike shopping. I wanted to understand if you can give us an example of the last revamp that you did and what was the impact of growth of sales and also growth of rent. And the second question is in regards to the demand of the retail. And how do you see the demand for the next, for the new stores in 2024? Well, you see a certain expansion of some tenants and of the listed ones, and I wanted to get your opinion on the non listed ones. And on that line, I was at modern beauty shopping this week. And I've seen a lot of the stores that have experiences. Well, you know, you have the reservation store, and All the stores have an experience for the tenants and they demand a higher ABL. So do you see the rollout of this type of store that is happening? And there was just one question. And on the line of the demand, well, you can see in Morubi Shopping the amount of digital native brands that are coming to the shopping mall. So how do you see the opportunities of bringing these stores to the other shopping malls? Thank you, Fanny. This is Eduardo. Let me go step by step. If I forget something, please let me know. So let's start by the revitalization of ModernBee. ModernBee will have an update as Belo Horizonte did. We had 100% of Belo Horizonte. ModernBee is one of the crown jewels of Multiplan wannabe deserves to receive all the revitalization. What is the effect of that by ZRI in Belo Horizonte? Well, the shopping mall after the revamp of revenue, of rent, of sales, you invest and modify an environment that is very good, things are gonna be better. So, that will happen at Morumbi shopping. That is happening at Patio Savasi. We trust strongly and very happy to fix things that can improve. This is the DNA of Multiplan. We've always done that well and we will continue to do so. Second part of your question that comes to mind about tenants and the demand of tenants. Well, since last year, we've felt an increase for the for seeking more space, whether it's an experience. Well, food and beverages has grown a lot. And I like to imagine the shopping mall as a flexible platform. And we Those that stay in the shopping mall is the consumer that chooses, not ourselves. So this is a growing number, yes. There are several companies that are online and today they seek the mall to be also a physical store. Did I answer everything? Yes. You have the experience and Well, to me is very clear. We come from this week, we had 140 proposals in a committee. So it's very good for the week of Carnival. Well, just another follow up. Do you see from some of the brands more demand for the ABL or the GLA? Well, It's higher than what we see in the other malls. Do you see these brands trying to do a rollout for the other shopping malls of Multiplan? And we see and we stimulate this. As we say, well, we work with the tenants and sometimes we have two stores and have the capacity of having eight, nine, 10. We're going to propose. Well, this is happening and we are expecting that this will happen Thank you. Thank you for your question. Now we would like to thank you for all the questions and the interest. We will now close the Q&A and we will invite anybody that still has a question to get in contact with the RI, Investor Relations area. Now we'll give the floor to Eduardo Pérez. You may take it away. Thank you very much. Once again, I would like to thank you, thank the team of Multiplanet that dedicated enormously to deliver the objectives that we've written. The company is growing and to be 50, it means looking at the next 50 years. I would like to thank the trust of all the investors that have followed us. I'm very optimistic for the future. Thank you very much. Thank you. The earnings call of the fourth quarter of 2023 of Multiplan is closed. You have an essay.