Sonae, SGPS, S.A.

Good afternoon. We welcome you to SONE's full year 2023 results conference call. During the presentation hosted by Mr. João Dolores, SONE CFO, all participants will be on a listen-only mode. There will be an opportunity for Q&A at the end of the presentation. If you wish to ask a question during the Q&A session, you may do so by pressing the star key followed by one on your telephone keypad. If you're experiencing any difficulty in listening to the conference at any time, please make sure you have your headset fully plugged in, or alternatively, please try calling from a different device. I now hand the conference over to Mr. João Dolores. Please go ahead, sir.

Thank you. Good afternoon, everyone. Welcome to SENAI's annual results conference call for 2023. Besides myself and the investor relations team, we have on the call Fernando Wanzeler from MC, Luis Mota-Duarte from Sierra, Paulo Simões from Barton, and Cristina Novaes from BrightPixel. 2023 was a very positive year for SunEye. Our net asset value reached an all-time high of €4.5 billion, an increase of 14% year-on-year. Although total shareholder return did not follow the same trend given the evolution of our share price, we are confident that our track record of value creation will ultimately be recognized by capital markets. During the year, we performed several value-accreted moves in our portfolio that we will discuss in a minute. Our overall operational and financial performance was very solid in a demanding context. We ended the year with a very solid financial position and a record low leverage level, and also give important steps regarding our sustainability commitments. Finally, the Board of Directors is proposing a 5% year-on-year growth in its dividend per share to the next AGM in line with SANAE's dividend policy. Let me start by giving a quick word on the overall macro context. As you know, the international landscape remains complex and uncertain during 2023, as it still does in 2024. The long-lasting conflict in Ukraine and the situation in the Middle East pose a significant threat to energy markets and to shipping routes, particularly in the Red Sea. But impact on the global economy has so far been relatively limited in this regard. Inflation continued to trend downwards, both in the Eurozone and in Portugal, as you can see. Labor market remained tight, but with an overall positive performance. And regarding GDP growth, it remained quite positive in Portugal, above the Eurozone level. In fact, the Portuguese economy showed quite significant resilience throughout the year. I will now touch upon our portfolio management activity before going into our operational and financial results for the year. As you know, a significant part of our activity and the underlying value creation relates to our portfolio management activity. I would like to remind you that in recent years we have executed very important capital allocation movements. In terms of divestments, since 2020, we cashed in roughly 1.4 billion euros with a number of important transactions, namely exits from a few of our assets in DIY, insurance brokerage, cybersecurity, also sports retail, already in 2023. and also some dilutions of our participations in some investments, as we did at Sierra, namely with the prime asset transaction, and also with the sale of a minority state in MC2CVC capital partnerships. At the same time, we have been allocating capital to new businesses and to growth initiatives, both within our existing business units and also in new growth avenues, as is the case at Bright Pixel and also at Sparkfood, to which we have allocated roughly below €300 million in the last few years. We have also taken the chance to reinforce our shareholdings at both Sierra and Notch, two core investments for SONAI, and we did so at attractive valuations that we believe are value-accretive for the group. This portfolio management activity, coupled with our business's operational performance, fueled NED growth this year. As I mentioned before, 14% increase to 4.5 billion euros at the end of the year. Our retail businesses currently account for roughly half of that value. And then we have, obviously, real estate and telco and telecommunications representing roughly 20% to 25% each. And these are the three main blocks in our portfolio currently, as we hold a number of other smaller investments where we also see potential for value creation in years to come. I will now go into detail in each one of the main blocks that compose the portfolio of the group, starting with NC as usual. NC had a very strong year of 2023, very strong operational and financial performance, even in the face of a challenging macroeconomic backdrop and also highly intense competition in the grocery market. In 23, Continente was able to consolidate its leadership position in the Portuguese market, and as a market leader, it continued to fulfill its mission to serve Portuguese customers with the best offerings, with the most convenient channels at the best prices. Top line increased by 10.5% to 6.6 billion euros, with a like-for-like growth of roughly 9%. This outcome was achieved in a dynamic operational context and a resilient performance in terms of volume. Continents saw strong growth across all banners, and particularly in the health and wellness and beauty segment as well, where we saw positive growth, double-digit growth in both Patamal and Wells. Profitability improved on the back of this top-line evolution, and also lower energy costs, combined with an ongoing focus on operational efficiency gains. In fact, EMC was able to offset the pressure of the strong price investment that it did throughout the year and also the impact of trading down on the part of consumers and was able to increase its underlying ETA margin to 9.7% and 639 million euros. This operational performance, coupled with a strong investment plan, both an expansion with the opening of a record 21 new proximity grocery stores and also important store optimizations and refurbishments, resulted in a year-on-year reduction of cash flow generation, which nevertheless remains solid at 136 million euros. After the dividend distribution that the company did this year, a total of €214 million, MCE continues to showcase a solid leverage of 2.8 times net debt to EBITDA. Moving on to Vorten. Vorten also had a very positive performance, as you can see, growing 5% year-on-year to €1.3 billion. If you take into account the marketplace sales, the three-piece sales from our sellers, we actually achieved 1.4 billion euros in total sales and an even higher level of growth. And this is becoming an integral part, an important part of the value proposition of the business. We saw the core segments maintaining a very solid performance in electronics. and and if you add to the marketplace sales which have accelerated also the services parts of the business which is becoming more and more important and this has made up a very strong growth profile for the company and and we continue to be bullish on what is yet to come in the near future online sales continue to be a strong contributor to this growth if you take gmv again Total online sales actually grew 12.5%, so in a more accelerated pace than physical store sales. And as a result of this performance, Vartan consolidated its leadership position in Portugal and also in the Canary Islands. In Portugal, we increased market share again, both in the offline channel and the online channel. I would like to highlight iServices that also delivered double-digit top-line growth in a year which was marked by the beginning of its expansion beyond the Iberian Peninsula with store openings in France and Belgium. The strong sales performance coupled with the ongoing digital transformation efforts and some pressures on the cost base led Vortens and the line of EPA to stand at 75 million euros roughly stable versus last year. Vorten continued to invest in its digital transformation and also expanding its physical footprint, namely with the store openings I mentioned of iServices into new geographies. Going on to Sierra. Sierra delivered very strong results also in 23 across all its business segments. The year was positively impacted by the strong performance of the shopping center portfolio in terms of tenant sales. which impacts our direct result. We continue to see a strong momentum in our prime assets, with tenant sales achieving record levels and very high footfalls. So we are clearly out of the pandemic impact on our shopping centers, showing sales well above pre-pandemic levels, with nearly full occupancy in all our shopping centers and maintaining strong collection rates. We also saw important milestones in terms of the services business. We continue to scale the services business at TIERRA both internally and also externally. We saw a 14% increase in services turnover during 2023. And we continue also to explore development opportunities with five new projects in 2023 ranging from mixed-use buildings to office and residential sectors. In terms of investment management, we continue to add new vehicles and new funds to the portfolio, particularly a new real estate vehicle in the German market and also the management of CTT's real estate portfolio in Portugal, comprising more than 360 assets. All in all, Sierra's performance across all business units resulted in a direct result increased to €63 million, and total net result increase of €58 million, also impacted by indirect results and the revaluation of our real estate assets, which benefited in Europe from a strong operational performance, and in Brazil from both the operational performance and also yield contractions. In total, the NED of the company surpassed €1 billion, increasing 9% versus the end of 2022. Regarding Nosh, Nosh, as you know, already published its results recently to the market. Nosh had a very strong performance in terms of growth, 5% growth to €1.6 billion here with a very strong display in the telco segment, but also in the cinemas, exhibitions and audiovisuals segment. which showed a very strong recovery in 2023. Obviously, this performance in terms of sales in the telco segment originated a very strong increase in market share in the Portuguese market. So, the last figures that we have from the third quarter imply a 60 basis point increase in market share in terms of revenues in the telco market in the country. And this is very much leveraging the strong investments the company has done in recent years to improve its network, both in fixed, but particularly in the last few years in mobile, where we have achieved the second market position in the country this year, which was an important milestone for the business. Profitability increase, both in terms of the BPA margin and also in terms of recurrent net results, as you can see, so a 30% increase to 181 million euros and a very strong free cash flow generation given the reduction in capex that we started to see this year versus the last two to three years of a more intense capex deployment. And so given this strong financial performance, the company, the Board of Knowledge, has proposed to the General Assembly the payment of a dividend of $0.35 per share, which equates basically to a payout of 100% of the company's net income. So going on to the consolidated view of our performance, All in all, turnover grew 9.2% to 8.4 billion euros, mainly driven by the performance of MC, but also with positive contributions from Vorten and Sierra. EBITDA practically reached 1 billion euros, 7%. increase versus 22, with a very solid operational display being mostly driven by MC, but also with an important capital gain in the sale of our stake in ISRG, which we're able to offset the strong capital gains that we displayed in 22 with the sale of MDS and Maxis, and the year with a positive evolution of total EBITDA. This positive operational performance was, however, more than offset by increased depreciations given our investment efforts in the expansion and digitalization of our main businesses, but also higher funding costs given the increase in interest rates throughout the year, leading direct results slightly decreased to €427 million in the year. On the other hand, we had a very positive evolution of indirect results, which increased €42 million due basically to the improved contribution from Sierra, as again the slight expansion in real estate yields in Europe was more than offset by Sierra's operational performance in its core assets. All in all, net results increased €22 million to €357 million, a new record high level for Sonai. In what concerns free cash flow generation, we registered a total of 187 free cash flow before dividends paid. which is practically in line with last year. This cash flow was basically achieved on the back of strong operational profitability and a BPA, also asset sales, mainly the sale of our stake in ISRG, and also dividends received from our subsidiaries, which more than offset the high levels of investment that we saw both operationally and also in M&A. and also higher financing costs this year when compared to 2022. But all in all, a very solid display in terms of cash flow generation. And this being said, our financial strength continues to be strengthened, reinforced. Our financial net debt continues to decrease and stood roughly just above 500 million euros. Our total net debt to the BPA totaled 2.6 times, a significant decrease versus previous years. We ended the year for the first time at Sonai with a net cash position at the holding level and with a residual level of loan-to-value. If you look at our main businesses, they also remain with conservative and prudent capital structures. NC, despite the strong dividend payments to its shareholders and all the investments it has been making in strengthening its value propositions, Retains a net debt to a BPA below three times, so 2.8 times at the end of the year. NOSH below two times, 1.8. And Sierra reduced its gross LTV from 22 to 23 to roughly just above 38%. In what concerns dividends, and as I mentioned before, we maintained our policy, and so we maintained the proposal to increase 5% dividend per share this year. So we will propose to the next AGM a dividend per share of 5.639 euro cents, implying dividend yield at the current share price of just above 6%. A final note to natural and social value creation. As you know, SONAI's mission is composed of economic but also social and environmental value creation, and I would just like to give you some highlights on some achievements this year on the natural and social front. In terms of natural value creation, this was an important year for SONAI, as we were for the first time awarded the CDP-A rating for the group. This was both achieved for MC, but also for Sona as a whole. This is an important landmark for us because it reflects the significant efforts that we have been putting in place to make sure that we make progress on our environmental goals. As you can see, we continue to reduce our CO2 emissions. Six percent this year, scope one and two. We have currently achieved 87 percent of recyclable, compostable, or reusable plastics in the packaging of our own label products. And currently, 40% of our energy consumption comes from our own solar production and also green energy contracts. some very important milestones here as we continue to progress towards the difficult and challenging objectives and targets that we put forward to the market recently. As for social value creation, we also made important steps, important developments. I would like to highlight Gender parity this year with 40% of leadership positions held by women at the end of this year, so important progress towards the goal of having gender parity, and by gender parity we mean to have the least represented gender occupy at least 45% of leadership positions. And we continue to support our communities this year by increasing our donations and our community support to a total of 33 million euros during the year. So just a quick word on the output before we open up the Q&A. As you know, the global economy continues to face challenges, the same challenges it faced in 2003 in terms of geopolitical tensions, climate concerns, technological advances. So going forward, we must remain flexible, collaborative, and with a forward-looking approach to be able to navigate the uncertainties and see if the opportunities apply again. During 24, Sonai will continue to be focused on supporting the growth and leadership position of our main businesses. MC will remain focused on consolidating its leadership position in the Portuguese grocery market. And in health and wellness and beauty, the priority will obviously be the successful integration of Arenal and Druni, while positioning the company to maintain its attractive growth profile and capture the synergies from this combination. Vartan will continue to push its omni-channel strategy on both products and services, focusing on accelerating its digital transformation and defending its market leadership position. At Sierra, Prime Assets should continue to perform well while the company continues to execute its strategy in the new growth avenues that it has been exploring in recent months. NOS will leverage the strong investments done in recent years in 5G and fiber networks to continue to attract new customers in both B2C and B2B and improve its market position in Portugal. BrightPixel will continue to actively manage its portfolio of investments in technological companies seeking exits that may crystallize value while it continues to invest in new companies and reinforce investments in existing portfolio companies. And in addition, this will also be a year of important additions to the portfolio beyond Druni, which I already mentioned. Musti in retail is going to be obviously an important year to integrate Musti into the portfolio and support the company in achieving the value creation plan that we have for the company. At SparkFood, we will integrate PCF, which is the recent acquisition that we announced in France, the biggest one up until now in the portfolio, making sure that it serves as a platform for the company to continue to grow in this segment of innovative ingredients. And we will remain focused on making sure that we provide the best conditions for our fashion managers to succeed in their markets, and also to, together with Bank Inter, make sure that Universo becomes the largest consumer credit operator in the Portuguese country. So, This being said, I would like now to open up the session to Q&A, and we would be more than happy to take all your questions. Thank you very much.

Ladies and gentlemen, the Q&A session starts now. As a reminder, if you would wish to ask a question, please press star followed by one on your telephone keypad. Our first question comes from Joel Pinto from JB Capital. If your line is open, please go ahead.

Hi. Good morning, everyone, and thanks for taking my questions. I would like to start with Sonia MC. Mercadona continues to increase sales densities at a quite impressive pace. I'm just trying to understand the potential impact. Your like-for-like remains strong overall, but can you update us on the like-for-like dynamics for stores located near Mercadona supermarkets and if you are seeing price competition increasing given the success of Mercadona and if this will lead you to accelerate CAPEX in any way to refurbish stores. My second question also for Sona MC Can you guide us through the building blocks for the EBITDA margin in 2024? Specifically, do you see room to increase gross margin? What will be the sources of upside and downside for OPEX versus 2023? And what's your view for EBITDA margin overall? And finally, regarding MUSTI, can you provide or do you plan to provide new long-term targets for this asset? Many thanks.

Very good. Thank you, João. Thank you for your questions. So I'll hand it over to Fernando to answer the MC questions, and then I'll take the mostly one at the end.

I'm going to try to answer not the two questions, but the multiple questions you have, but going step by step. So, in terms of the first question around Mercadona, as you know, we don't comment, obviously, on specific competitors, but I want to highlight a few things. As you know, the Portuguese market, the food retail market, has been quite competitive for a long time now. We have been facing a competition on international players, domestic players, discounters, non-discounters, and so We are playing already in a very highly competitive environment for many years, and so we feel quite confident with our strategy and the way we have delivered it. In terms of the dynamics of the like-for-like, and as you rightly pointed out, we have been doing, I would say, a very good 2023 strategy. We have maintained consolidated our market share in the year. We have reinforced our leadership position. So we are quite focused on delivering the strategy for NC. And one last point on that specific question that I would like to emphasize. I think it's also important to mention that Although we are talking about food retail, there are different concepts and different formats within food retail. And so all the comparisons between different players in terms of sales, productivity, profitability, and also investment needs to be seen in that lens. And I'll give you a couple of examples. Obviously, the different formats of the different players have different dynamics. It's very different from being a player online. with hypers that play with supers, the discounter, non-discounter, with more private label, less private label. There is obviously an impact of new players opening stores without a large footprint, which doesn't impact cannibalization. So I think we need to bear in mind that all these comparisons need to be seen in this context. We obviously respect very much all the players. We'll continue to be focused on our strategy. And as I said, our goal is obviously to continue to consolidate our market position, obviously respecting all the players and strengthening our value proposition. In terms of the price competition sub-question you had, As you saw in the different statistics of INE, we are seeing a very competitive market. Inflation levels in the beginning of the year are quite low, as you know, with several categories already in deflation. And so I would say that we have been seeing this price competition for some time, obviously, and now in the beginning of the year with a low inflation even at a stronger level. So that's in terms of the first answer. In terms of EBITDA margin for 2024, as you know, we don't provide specific guidance. I would like to point a few aspects. In terms of competition, as I cover, we are in a very competitive market. In terms of macro, we are seeing, obviously, a lower level of inflation, which eases competition. the trading down impact to a lower level, but still we expect to see some trading down in the market as well as pressure on volumes. And we see players expanding more and more their footprints, and so many different players opening stores. And so we feel a very competitive and dynamic market, also in a lower inflation. And so in terms of top line, obviously, it's going to be a very different dynamic compared to 2023 markets. In terms of gross margin, we expect the gross margin to continue to be pressured. As I mentioned before, less so in terms of trading down, with deceleration of trading down, given also the lower inflation level, but still some pressure there. And obviously, the continued investment in price, which, as you know, is at the core of our value proposition. And so, I would say that in terms of gross margin, we'll continue to see some pressure. In terms of the remaining costs, as you know, it's what we call a transition year, where a lower inflation impact in revenues, but a higher inflation impact on costs. And so we are going to see high inflation or high costs increases in energy, in salaries, in rents, which don't go into the IFRS 16 EBTA, but still an important variable for us. And so overall, obviously, we feel that our EBTA margin is going to be pressured. That being said, and as in the previous years, we continue very focused on efficiency measures. We have been delivering a very strong efficiency plan to ensure that all the efficiencies we have also allow us to invest more and more in price for our consumers to maintain our value proposition and obviously to sustain and reinforce our market position. Obviously, a challenging year from a margin standpoint, but quite confident on the plan and the strategy we have for the future. I'm not sure if I have answered all the questions. I tried my best, but please let me know if I forgot something.

It was very detailed. Thank you very much.

Okay, so I'll take the Musti question. Look, as you know, with Musti, our stated intention was to take the company private originally. We achieved an acceptance below 90%, but I must say that we are quite happy with the outcome that we got from the offer. And so our goal was really to take control of the company and make sure that we have the right level of participation to put us in a position to help the company grow and succeed in years to come. And I think that was achieved with the 80% acceptance. This being said, settlement hasn't even happened, and so it's still early days. We will obviously meet with management now. We will start discussing a number of important topics of integration and also about the value creation plan. And so in those discussions, we will also discuss at the board of the company what makes sense in terms of disclosure to capital markets going forward. What I can tell you is that we have a strong ambition of growth for the company, and we want the company to accelerate its growth path and even beyond what the guidance that was given to the market recently. So we have a strong ambition to grow both organically within the Nordics and also potentially going into new geographies, and this is what we are going to be working on with the team, and we will have more news for you in the next few months.

Thank you very much.

Thank you, João.

Thank you. And our next question comes from Jose Rito from CaixaBank. Your line is open. Please go ahead.

Hi, good afternoon to all. I have a question on CapEx for the SunIMC business. So last year we had more than 300 million euros in CapEx, a step up from the previous year. What levels should we expect in 2024 and which should be the areas of investment, the city store expansion, remodeling? This will be my first question. Also related with AMC, so if I understood correctly, so basically with deflation, gross margin down, OPEX going up, even if you have efficiency, I think that you were saying that eventually the margin could be slightly pressured in 2024. My question is if you still see EBITDA growing in Euro terms. That will be my second question. And finally, on the M&A activity, we have this acquisition of Mosty, just taking Mosty that was slightly below of initial expectations of taking the company private. So there were some savings, let's say, that were in terms of firepower. Do you still think that Fonay could look into other business to invest, or for the time being, you are happy with the recent acquisitions? Thank you.

Thank you, Jose. Maybe I can take this last one straight away and then I'll hand it over to Fernando. Look, I think we are in a position, in a very strong financial position at this point in time. So given the financial position that we have, Our goal is to continue to invest significantly across all the business units in the portfolio and continue to make sure that the value propositions of our businesses are the best possible value propositions to address the market. In terms of M&A, it's true that we reached 80% and not 100%, but I don't think that changes the way we look at the next few years in terms of capital allocation. We will continue to be on the lookout for interesting investment opportunities, both organic and inorganic. In terms of M&A, you know that we have an active investment strategy in BrightPixel and SparkFood, and we continue to be on the lookout for specific bolt-on acquisitions if we feel that they are value-accretive for our businesses. What I can tell you is that it's unlikely that we will be looking for opportunities of the magnitude of Musti. Obviously, Musti is an acquisition which is quite significant for Solai. And as you know, we like to be conservatively levered. We like to be prudent in our financial profile. And so it's unlikely that we will see another transaction of this order of magnitude in the next few years.

Very good. Hi, José. Two questions on CAPEX on margin. I'll start with the CAPEX question. So, as you asked, our views that will probably maintain more or less the capex level in 2024 of 2023. And I'll say more or less with the same breakdown you have seen in 2023. Just a couple of qualitative remarks on that. As you know, we have been opening stores, mainly proximity stores, in the last few years. We'll continue to have these expansion plan to reinforce our value proposition. And we are seeing very good results in terms of the economics of those openings. And so with that dynamic, our goal is obviously to continue to expand this smaller format. As you know, and in terms of the maintenance and refurbishment, I will also say that We have been investing over the last couple of years more strongly in the refurbishment of our stores. The preliminary results we have on those refurbishments were quite attractive, and so we'll continue to roll out these refurbishments, which are obviously particularly important in an environment where you see more and more competition, and we need to make sure that our assets are prepared to deliver the value proposition that customers are expecting. And so we'll continue to have these two dynamics in terms of CAPEX and expansion on our food retail business and obviously on our health and wellness business. As you know, we continue more focused obviously on the expansion side because our stores are more recent and there is less need in terms of refurbishment CAPEX. So that would be it. In terms of the EBTA margin, to be very quickly on that, our expectation is obviously for EBTA in Euro terms to grow. Obviously, as I mentioned, we are seeing pressure on the cost side, but we continue confident with the same track record we have been doing to date to find the necessary initiatives and efficiency initiatives to maintain a very strong profitability level, and that's our key focus for the year.

Thank you. Just a follow-up on the investments and the remark that you made regarding the returns on the good results in terms of the proximity stores and the refurbishments. Could inflation over the last two years have a positive effect on these returns? And if so, if you are seeing lower returns, could you reduce again the capex level or do you think that intensity is of CapEx will remain, as you are mentioning, around 300 or so.

As you know, we... Sorry to interrupt. Please go ahead. No, no. I was just saying, as you know, we have seen a lot of inflation, obviously, over the last year in top line, but we have seen even more inflation on the cost side. So, as you know, our margins have been stable or declined a little bit in the last year. And so, we are not expecting that a different dynamic in terms of inflation will change the economics of dollar refurbishment. And so, All our analysis and all our assessments, obviously, for the future are based on our expectations of a lower inflation environment. And so we are not expecting at all that these different dynamics in terms of inflation will impact the economics of our refurbishment and openings. But obviously, if things change materially, we will reassess. But as we stand today, we feel quite confident on what we're doing now.

Okay, understood. But I think that, well, at least in 2023, the margin was slightly up and this inflation also affects the working capital. So from a cash perspective, working capital and the returns are also benefiting by this, I think. I understood your question.

No, no, correctly. But look, we feel that even with the new assumption or the new projections in terms of macroeconomic, we feel that we are at very comfortable levels in terms of returns. We'll continue to have attractive returns and create value to our shareholders.

Thank you.

Thank you. And we'll now move on to our next question from Antonio Saladas from AS Independent Research. Your line is open. Please go ahead.

Good afternoon. Well, most of the questions are already answered. I just have two. One still related with SunIMC. So from my understanding, you mentioned that in absolute terms, ABTDA should increase. However, you should see some pressure in terms of margins. So just to clarify, if I understood well. And the second question is regarding related with BrightPixel. If you can share with us, what do you think for the coming quarters? Should we see more acquisitions or more capital spending or disposals? Thank you very much.

Thank you, Antonio. Fernando, do you want to start with the MC question?

Yeah, I'll do just a confirmation answer. So, exactly as you said, EBTA, in absolute terms, to grow. In terms of the margin profile, we are in a very volatile environment, obviously, with some question marks. We are going to feel and we are feeling a cost pressure in terms of the majority of the cost lines growing. higher than the top line because of this dynamic. So it's difficult to really give you a guidance on margin profile. So what I tried to do was really to walk line by line with what is our views. And as the year progresses, we'll be able to give you a little more guidance. Not guidance, but views on what we expect for the year.

OK. Thank you very much. OK. Cristina, do you want to take the question on BrightPixel, please?

Yes, of course. Thank you, Antonio, for the question. So acquisitions and sales is our activity. So for the next years and months, we are expecting to do both. It's difficult to predict exactly when it will occur and which amount. Because it doesn't depend only from our side. So we need to find the right opportunities, the right moment to do it. We don't have any pressure in terms of time for the exits. And as you know, IPO market and M&A market is still very close. But we are optimistic and we expect that at least before the end of the year, the things will get better. And we are here to embrace that opportunity whenever it happens. For dispositions, we have been keeping more or less the same level of investments the last year, and we are expecting to maintain it. I don't know if you have an answer, Cranston, if you have any additional. I think so. I think so.

Thank you.

I think you can also predict.

Thank you, Tina. Thank you, Antonio, for your question.

Thank you. As a reminder, ladies and gentlemen, if you wish to ask a question, please press star followed by one on your telephone keypad. Thank you. We have a follow-up question.

Okay, let's go.

Pardon me, pardon me. Follow-up question from Antonio once again. Your line is open. Please go ahead, Antonio.

Sorry, thank you very much. Can you explain why the merger between Druni and Ernal is taking so long?

Sure. No, Tony, very good question, and thank you because it's an important update. So, as you know, we are going through the antitrust authorization, and so it doesn't depend really on us. We are waiting for the green light from the antitrust authority in Spain, and we hope that within the next few weeks we'll be able to have the green light and then complete the transaction. No really concerns, so it's not a question of really concerned is really a question of process and time and we expect to have it close over the next week so we can really work on the integration of green rnl

So you are not expecting any kind of remedies or you don't need to sell stores or disposal?

I think it's difficult to predict what the authorities will do, but looking at all the assessments we have done and also the rationale of the transaction per se, the overlap of the store footprint between Arenal and Bruni is very, very limited. So we are not expecting anything material at all. And so we are We have done a lot of work about it prior to the announcement, obviously, and so we are quite confident that we will not have an impact on the transaction.

Okay. Thank you very much. Thank you, Antonio.

Thank you. There are no further questions in queue. I would now like to turn the call back to Mr. João Dolores for closing remarks. Thank you.

Thank you very much. Thank you everyone for listening in and for asking questions. It was a pleasure to speak to you today. We will be back again in May to present our Q1 results for 2024. Talk to you soon. Thank you. Bye-bye.