Hapvida Participacoes e Investimentos SA

BOVESPA:HAPV3

Earnings Call Transcript 2022-Q3

[Operator]

Good morning, everyone, and thank you for waiting. Welcome to Hapvida's Third Quarter 2022 Earnings Conference Call. Joining us today are Mr. Jorge Pinheiro and Irlau Machado, Co-CEOs; Mauricio Teixeira, VP of Finance; Marcelo Moreira, VP of Integration and Investor Relations; and Guilherme Nahuz, Investors Relations Director.

Should you need simultaneous translation into English, please click on the interpretation button represented by the Globe icon on the bottom to bar and choose your preferred language. This event is being recorded, and it will be made available at the company's IR website together with the earnings release materials. You can download the presentation by clicking on the Chat icon. Be aware of the disclaimers at the end of the presentation.

[Operator Instructions] The Q&A session will have a hard stop at 12 noon Brazilian time. Now I'd like to turn the floor over to the co-CEO, Jorge Pinheiro, who will start the presentation. Jorge, you have the floor.

[Jorge Fontoura Pinheiro de Lima, executive]

Thank you. Good morning, everyone. Irlau and I are gathered here with Marcelo, Mauricio, Guilherme and the IR team today for this conference, and we thank you for joining us this morning in our conference to share the third quarter results of Hapvida and GNDI.

Some highlights very briefly before I turn the floor over to Marcelo. This was yet another quarter in which we could show the strength of our business model. We showed resilience and consistency in spite of the challenging scenarios. We have achieved numbers that are way above those that we saw in the Brazilian market.

Some highlights that I want to share with you. We are celebrating over 50 million health care plan users in Brazil. That shows the need of the Brazilian people to have coverage of a health care plan. And we, Hapvida and GNDI, have surpassed the historical mark of 9 million members. We can see a resumption of growth happening in Brazil, and in this scenario, our companies were able to attract from 25% to 30% of this new market. And we're very happy, reinforcing our commitment to our users.

Now another highlight is our MLR. We haven't yet gone back to historical MLR levels of the companies, but we can see stability compared to the previous quarter and a significant drop compared to the same quarter of 2021. And we have a huge avenue of opportunities with better management that will bring better results for our MLR, such as the gains in terms of integration synergies between Hapvida and GNDI; the improvement process in recently acquired companies, there are many recently acquired companies in both verticals; and the whole tooling with verticalization, technology and so on and so forth.

And finally, I want to reinforce our integration agenda that has been ongoing with many gains already captured. So on behalf of everyone, I want to thank you so much for joining us this morning, and I want to thank our employees for yet another quarter well lift.

And now I'd like to turn the floor over to Marcelo, who will give you further details about our numbers in the third quarter of '22. Marcelo, you have the floor.

[Marcelo Moreira, executive]

Thank you, Jorge. Good morning, everyone. Let's get started on Slide #2. I want to highlight the solid organic growth we had in the third quarter with improvement in our cash MLR. We had over 122,000 lives added through organic growth. This led us to achieve this important historical mark of 9 million members in the third quarter of 2022. With this number of members in the last 12 months, we had a 5% growth in our member base, our membership, which added to an increase in average tickets -- brought an increase of 9.4% in net revenue, achieving BRL 6.3 billion in the quarter.

In addition to the increase in revenue, we also had improvements in cash MLR, which is at 73% right now for the third quarter, down 1.7 percentage points compared to the same quarter in 2021. And our EBITDA has achieved BRL 922 million, a significant growth of 103%. So we had an increase in revenue, decrease in MLR. And SG&A was also favored for the reimbursement of expenses that we had in Minas Gerais with our Promed branch. We'll give you further details about that later on in this presentation.

Now moving on to Slide #3. Within our integration agenda, we keep a firm commitment to capturing synergies. But we know this is a long-term project. We have started to work even before February with a thorough planning process to identify our main synergy opportunities. And since February, we have been able to create a timeline and start to capture many of those synergies.

However, we understand that in order to obtain those gains and so that they are long lasting, it's key that we continue optimizing our organizational structure, unifying and reviewing processes, standardizing our indicators and also advancing in our technology journey, which is something that's going to be part of our job in the coming 3 years. This has already started, but this will continue as an important component of our agenda from now on.

So we have been able to achieve some important targets such as the National Solution, which already has 69,000 active lives up until September 30; 53 new lives implemented into the individual product by the end of September; 30,000 new lives in the quarter; new tables for purchasing of drugs and materials; cross-accreditation through verticalization and sharing of network to our members.

And more recently, we have completed our main rounds of growth for non-medical services. Non-medical services are all of the services that are peripheral to our activities, such as security, cleaning, nutrition, removal, laundry as well as some other items such as communications and IT. So everything that is non-medical services has already been completed, and now we are starting implementation once the previously celebrated contracts mature or expire.

And our synergies -- recurring synergy targets, we can say that the target for February '23 has already been identified. And year-to-date, we already have BRL 99 million captured and BRL 70 million only in the third quarter, and we expect this number to go up as we finish capturing the synergies. Another important accomplishment that I wanted to share with all of you, and it's a reason for great pride, is that last week, we launched our integrated plan.

This is yet another product that is being launched, and this was only made possible by gathering the strength of our 2 companies. And we have the largest service network in the country present in 21 states. Now it's focused on the corporate market for companies with over 100 lives, so that's our initial target, and then we're going to test it and see if it makes sense to expand the product to other categories as well. And this is the member card of the product. You can see the visual identity, 1 single contract and 1 billing process. So something that is very user-friendly for our customers that want to have national coverage.

In terms of our ESG agenda on Slide #4. You can see that we continue with our commitment of having sustainability as a development pillar. There are many initiatives ongoing in all different spheres. But the recent accomplishments, I want to highlight, is the signature with EDP to produce clean energy of 85% of NDI units. This is going to be done by EDP Renewables and EDP Brazil. And we have this environmental awareness component in this contract, which will also represent savings for us.

We're going to be purchasing this at lower prices than we currently purchase, so the perfect match of savings and environmental awareness. This is only one of the initiatives in our journey to be carbon neutral by 2023.

And in the social sphere, I want to highlight a major event that we held this quarter in our headquarters with the presence of our co-CEOs and the whole Board. We signed -- are joining a Forum of LGBTQIA+ Companies and the Coalition for the End of Violence Against Girls and Women and The Entrepreneurial Network of Social Inclusion.

And much more than just a fad, in our view, these initiatives have a very well-devised strategy underlying them. You can see that we have a great focus on women, and this is because we acknowledge that our workforce of our both companies, in 65,000 employees, 74% of them are women. So we see how important it is to have an ESG approach that focuses on the characteristic activity of our company.

And we also have our sustainability report from the Hapvida vertical and GNDI vertical available in our website for those of you who want to learn more about this.

Now moving on to the next slide, our results. Our net revenue has achieved BRL 6.3 billion, a 9.4% growth, boosted by the growth in our health care plan and dental plan which has grown 10.3% and 10.4%, respectively. So the percentages of health care plans and dental plans are very close. The strategy that we have adopted for each one of the business lines is different.

In dental plans, the growth comes from the expansion of our member base. We are prioritizing the strategy of increasing customer loyalty, expanding the product offer through cross-selling. And you can see that the growth in dental plan comes from an increase in the number of members, 655,000 members added in the last 12 months. And in health care, we have a strategy that combines growth in the number of members with growth in average ticket or increase in average ticket. But we'll give you further details about the health care plan strategy in the coming slides.

Now moving on to Slide #6. Here, you can see for the details about our membership. As Dr. Jorge said, the Brazilian health care industry has achieved a historical mark of 50 million members. And in the same month, we have achieved 9,035,000 members that same month. The numbers are similar to last quarter's numbers. We see the maintenance of our sales force with almost 500,000 members coming from new contracts, a turnover that was really close to 0 because of the more favorable macroeconomic condition and cancellation rates going back to normal levels. So numbers that are very close to last quarter's numbers, 122,000 organic adds.

But I also want to highlight that as part of this growth, we don't -- I mean, we don't rely on one single initiative to achieve this growth. There are many things that have been boosting this growth such as the National Solution with over 69,000 members added, 29 new -- 29,000 new members only in Q3, in addition to the original plans that continue strong and our SME strategy. So many initiatives that add up so that we could achieve this growth of 122,000 lives.

Now let's talk about the average ticket. Last quarter, you probably remember that we emphasized very much the new readjustment cycle that had started in May. I think that now we can share with you the data of the beginning of that new cycle we were talking about. When we look at the evolution of the average ticket in the last 12 months, it goes from BRL 216 up to BRL 225, a 3.9% growth. But the main component is an increase in price and mix of 5.2%, which was slightly offset by the negative readjustments in the individual plans that happened last year and 0.3 percentage points because of the M&As.

So we had this 5.2% increase, which we know is not enough to cover the inflation, especially medical inflation. But that's why we included this chart at the bottom of your slide. It's quite a simple chart, but it illustrates well how we are recovering average ticket prices since 2019, and it's very clear that starting in the second quarter of 2020 to the second -- until the second quarter of 2022, we and most of the industry had 24 months of an average ticket that was completely stable, flat. But that period is now behind us. And we see many signs and indications of increase in average tickets happening in both verticals, 4% in GNDI and 1.4% in the Hapvida vertical. So we're starting to see now the benefits and the new cycle being implemented. We believe this trend will continue. When you look at our pie chart with the breakdown of health care plan revenue, you can see that 55% of our revenue already has contracted readjustments, and that's individual, affinity and SME together. And for corporate, our after sales team is working really hard to recover that as the client contracts celebrate their anniversary.

Now let's talk about cash MLR on Slide 8. If you look at the chart, you'll see that we have achieved an MLR of 73% in Q3 '22. This cash MLR had an insignificant gain of 1.7 percentage points year-over-year. However, when we look at the margins, of recent quarters, especially if we compare to the second quarter of '22, we see a nominal increase in medical costs. And this increase happened both in our own network and in the accredited network and in both verticals.

In addition to the higher frequency of medical appointments and tests, as we were telling you, the third quarter was also impacted by an atypical seasonality and also annual pass-throughs of inflation. We have had collective bargaining agreements as well as readjustments in drug prices. The last 3 months of inflation in Brazil were close to 0. However, we continue to see the effects of the accumulated inflation rate. So this quarter, we had to deal with some of those costs, and that had an impact on our MLR.

In the chart at the bottom, you can see a breakdown of our cash MLR. And you can clearly see that a part of the 73% MLR, we have 1 percentage point of COVID costs; 1.9 percentage points of MLR from acquired companies, especially in the South of Brazil and in the state of Minas Gerais, these percentages are very close to those of the second quarter; and the negative readjustments which still has a 1.6 (sic) [ 0.6 ] percentage point impact here, but this should get to 0 by April next year.

If we exclude these effects, we would have an MLR of 69.4%, which is still not the 67.3% which was the pro forma MLR that we agreed for both companies in 2019 before the pandemic. So we acknowledge that we still have a journey to go through. And this encourages us to have discipline in our actions, our initiatives and our everyday work. And it's important because it includes our strategic agenda and our company's focus. And what do I mean by strategic agenda? More verticalization, more preventive care, chronic care, high cost management and IT as a productivity leverage as well as quality and efficiency as a whole.

Since we mentioned verticalization, let's move on to Slide #9 where you can see once again the evolution of the verticalization percentages. At the top of the slide, you can clearly see a higher maturity level of the Hapvida and NDI operations with higher percentages than the consolidated of both verticals because once we add the verticalization of acquired companies, then we can see that we still have great opportunities to grow and reinforce our own network in the new geographies we are now operating.

And because of that, now moving on to Slide #10, you probably remember that last quarter, we said we opened new units in Sao Paulo and an important new unit in Rio de Janeiro and the new hospital in Brazilia. And this quarter, we have the opening of a new advanced unit in Betim, a 24-hour day ER with 6 ER offices, elective, appointments room, observation beds and diagnostic imaging as well as preventive medicine programs. That's a very beautiful unit that was opened in Betim. And it's already serving members from both verticals.

So that is an important accomplishment that is being recognized as an increase in quality for the region. And in Hapvida, we had 4 new clinical centers opened in Araras and Pirassununga and Cajazeiros and Simões Pereira in the state of Bahia. We continue to expand our clinics. Here, you can see the Minerva clinic in the city of Belo Horizonte with 30 new offices, medical offices. And we continue to roll out our telemedicine platform for most of the recently acquired operators. This is a project that is being led by our IT team as well as our medical teams that are skilled to work with telemedicine.

And finally, considering the main sources of medical inflation, and we've been telling you that in the last 2 years, the group of therapies has presented a significant increase. And because of that, we opened our centers for integrated therapy. Here, you can see the pictures of 2 units that offer services to patients on the autistic spectrum. We have 5 new therapy centers that have been opened, and we have new units in our pipeline to be opened preferably within our clinics so that we can dilute fixed costs.

Now moving on to Slide 11. Let's talk about selling, general and administrative expenses. Our cash SG&A has reached BRL 243 million this quarter with improvements with the Promed reimbursement of BRL 417 million. And yes, we had an increase in administrative expenses if we exclude the Promed reimbursement. There are many lines that are being monitored when it comes to third-party services, location and functioning. We have noticed an increase last quarter, but we started to dilute these expenses this quarter, and we expect a downward trajectory from now on.

But this quarter, we also had personnel costs that were impacted by increase in salaries and all of the labor provisions that accumulated. This year was a year in which inflation rates were really high and salary increases were very close to IPCA levels. And our projections were way below the IPCA for the quarter.

Now when it comes to the Promed reimbursement, it's important to highlight that these were expenses incurred after acquisition, but the responsibility was the previous owner. For a very long time, we talked about MLR levels in Minas Gerais above 100%. So that shows our ability to recover part of that. Of the BRL 417 million, BRL 200 million -- approximately BRL 200 million were already detracted from the future installment.

And we already had BRL 120 million installment to receive in September, but we're liquidating this getting 13 million in shares of Hapvida 3. That was a suggestion of the company's management to get part of that amount in share. And the Board approved. So now we only have a remaining installment that will be reimbursed by the sellers. So we finished the process in October, and we already have the 13 million e-shares.

In terms of commercial expenses, you can see that in the last 12 months, the expenses were around 7.5%. And this quarter, they have reached 7.7%. That's a mild increase but this is 100% connected to our sales efforts. We have been focusing on individual and SME, and that impacts this percentage.

Now two final comments about this slide. First is that, yes, we have a target to improve our SG&A. You remember that on June 30, we have unified the VPs of our companies, and of course, we had to pay a few compensations as a result of that unification. But the important thing is that now, the area leaders have a mission to plan how the new area will be like to have more efficiency, productivity and operational leverage, which is really important for us.

In addition to that, when it comes to stock options, this is the last quarter that we will be at the level of BRL 140 million. We had the first best in August, and in the coming quarters, this number is going to be cut by half, half the levels of the last 3 quarters.

Now on Slide 12. Our adjusted EBITDA was 103% better, impacted by the Promed reimbursement, but we also had improvements in our net revenue, organic net adds and MLR reductions. So even if we exclude the reimbursement benefit, we also had a real growth of our EBITDA in the quarter, achieving BRL 505 million.

And how have we used the cash? On Slide 13, you can see how we have used our resources. Because in addition to our growth target and our obsession in reducing MLR and improving profitability in all of our lines, we are also tracking our cash from up close. With our recurring EBITDA of BRL 505 million, we had a consumption of working capital. But even though our EBITDA was able to finance our strategic agenda, BRL 178 million was used in CapEx and BRL 48 million in M&A, so still have a balance of BRL 135 million for our free cash flow.

Now when it comes to the net debt. The net debt went down to BRL 6,466 billion and the Promed reimbursement was the main reason for that. But at the end of the day, that led to 2.2x net debt-over-EBITDA with a 4-year duration and a lower CDI cost of plus 1.1 -- 1.61%, sorry. Now you see not only a long duration, but with uniformity of amortization.

For those of you who know our company and our cash generation potential, that's a very well arranged debt profile.

This concludes my presentation, and now I'd like to turn the floor over back to our Co-CEO, Irlau.

[Irlau Filho, executive]

Good morning, everyone. It's a pleasure to be here with you this morning. Thank you for joining for our earnings conference call. I think Marcelo has already given us a very comprehensive explanation, so I'll be brief. I only have a few highlights to reinforce a few things we have already mentioned.

One of the highlights is our organic growth. We are twice as big as the second ranked operator in the company -- in the country. We have gained more market share than anyone else in this market with our business lines that we're focusing on for the fourth quarter. In 2021, new companies acquired operations in different locations with verticalized health care plan. So we are excited about those opportunities with the recently acquired companies.

Now when it comes to SG&A, we had a onetime situation with some of the retrospective salary increases, the collective bargaining agreements. And we also had some compensations to be paid because of the team integration we started. Now part of the integration process requires the support of some external consultancy firms, as we had already told you, and we have been engaging with these consulting firms to help us in this integration process.

Now let's start the Q&A session. We're all here available to answer your questions and to help you to better understand the numbers that we have shared with you this morning.

[Operator]

[Operator Instructions] I'd like to start with our first question by Gustavo Miele, sell-side analyst with Goldman Sachs.

[Gustavo Miele, analyst]

Now I'd like you to talk about the impact of the collective bargaining agreement in costs and personnel expenses. Can you give us further details about the retrospective increase on both lines? And what would be a baseline of recurring G&A? Marcelo talked about the efforts of the company to reduce this line in the coming quarters. So what are you planning for the rest of the year?

Now my second question is about net adds in the National Solution. We saw that the performance this quarter comes basically from a contract that you signed last quarter. So what is the commercial effort of the company to accelerate sales of the National Solution until the end of the year? And can you give us more details about the economics of the lives that joined Hapvida this year. Can we estimate the average ticket of the National Solution compared to the rest of the portfolio?

[Unknown Executive]

I'll start by answering the second part of your question regarding the national product. If you consider the concept of ticket, this product is close to our portfolio products, but it offers more convenience to clients because the calculation -- the actuarial calculation is done by location. And of course, it's an actuarial calculation and not an arbitrary definition of price. But right now, considering what we have been seeing in our competitors from the last quarter numbers and also the public information about our competitors' MLR, there is a great gap in MLR compared to our MLR, and that enables us to offer more competitive products in the national market. Now when it comes to client, we continue to have an important client base. Our targets are around 400,000 lives.

Now I think Mauricio can answer the first part of your question.

[Mauricio Teixeira, executive]

Gustavo, yes. We still cannot tell you what the impact of the retrospective -- or retroactive collective bargaining agreement was because we have different numbers for both verticals and we have the recurring number and the retroactive number. And we also have to calculate the 13th salary, vacations and social fees related to that. So we're still waiting for the October numbers to be completed so that we see the recurring amount for October in order to reconcile these numbers so that we can share the numbers with you. Our IR team will finish that in the coming weeks.

[Unknown Executive]

Let me just add to your answer, Mauricio -- to your question, Mauricio. There are many unions in Brazil and a very large number of collective bargaining agreements indeed, and that adds complexity to the calculation. That's why Mauricio is saying that we're still working on the numbers in order to know exactly what the effect was on each area.

[Operator]

Our next question is by Samuel Alves, sell-side analyst with BTG Pactual.

[Samuel Alves, analyst]

I have two quick questions. The first one is more of a follow-up. I understand that you cannot quantify the retrospective collective bargaining agreement effect. But about G&A and revenue from now on and even if you look at the September numbers, do you have the feeling that the company should -- will be running at 10% of the revenue from now on? Or also salary increases might have polluted the third quarter numbers?

And now my other question is about financial results. We saw an increase of almost BRL 100 million in net financial expenses. And you said in your release that in addition to the higher CDI rate, there was also some monetary update about contingencies and compensation liabilities. Is that the level of financial expenses that you expect for this new level of CDI?

[Unknown Executive]

Thank you for your question, Samuel. About the impact of the collective bargaining agreement on SG&A, this agreement was provisioned for in each state at around 5.5%. So we provisioned for that. However, some of the increases were 10% to 11% in some of the regions. So there was a delta here compared to the provisioned amount. That's the main impact on SG&A. Part of it is recurring and part of it is one-off. And there's also another point here, which is the consultancy firms that we have hired in Q3, IT to unify systems and also some compensations we had to pay and also inflation adjustments in some of our contracts considering the IPCA levels. Of course, we can negotiate and we pay levels that are below the general inflation, but there were some readjustments in those contracts as well. So there was an inflation pressure on expenses as well for services in general.

Now in terms of the financial results, before we talk about the financial results, I just want to remind you that we're talking about percentages of our revenue I'd like to remind you that up until May this year, we had negative readjustments that impacted many of our accounts. And that's going to become a positive impact throughout the year, after May, with amounts that were higher what we saw in SG&A coming from collective bargaining agreements. So in percentage terms, we think we're going to continue diluting SG&A in our results. These contract adjustments are at lower levels than what we are asking from our clients, so this should be diluted, and also once we exclude our one-offs of consultancies and readjustments. So we expect this level to go down from now on in SG&A.

And in terms of financial results, the greatest impact is our -- is the interest rate and the indebtedness level that has been higher. But it's going down and our net debt is stable, and there is no non-recurring or one-off effects in the financial results.

[Operator]

Our next question is by Fred Mendes sell-side analyst, BoFA.

[Frederico Mendes, analyst]

I have two questions about Promed. You had the BRL 417 million reimbursement, but can you give us further details about that reimbursement? Was that debt and the balance was paid in cash and shares? 80% of the amount was paid in cash. Is that what you said?

There are two huge companies. Are you facing any challenges there in terms of information that includes systems and software integration or not? Do you think this is happening as expected with no additional challenges than initially expected?

[Mauricio Teixeira, executive]

Fred, thank you for your question. About Promed transaction, that transaction was signed in 2020 with the closing for May 2021 of BRL 1.5 billion. BRL 500 million was in debt, BRL 500 million in cash and BRL 500 million in Hapvida shares.

The cash part, I mean, we only paid BRL 65 million, and we held back the rest in order to honor a few commitments. And considering the financial situation of the company and the liabilities that we saw close to the closing. And that was during the pandemic, all operators were being penalized in their cash and working capital. So what we held back of installments to be paid, some were agreements with third parties that we paid and the rest was the liability of BRL 217 million. So the part of shares was transferred.

And the cash, only a small part was transferred, and we did an addition in the closing day and we increased the held on part. But we honored our commitment with third parties but we still had EUR 217 million in liabilities. And the readjustments, what we saw in the company after the closure in terms of liabilities, with vendors or discounts on receivables and other things that were not registered and could not be detected in any type of due diligence, there was an adjustment of BRL 417 million. So we in all the BRL 209 million to be paid, and we got BRL 190 million to as receivable. We have already received around BRL 108 million in Hapvida shares, and that was our choice because that was a very complex transaction in terms of guarantee. But the shares were transferred, and 45% of the volume of shares were in our name as guarantees for compensation and price adjustments.

So when we had to settle things down with the sellers, we wanted to reinforce our position. So we wanted part of the payments to be made in shares. We got 13 million shares in the treasury, and we still have 12 million to receive by January next year. So that's the structure of the transaction. I could give you further details later on if you want, but the cash amount disimbursed is very small when we started to better understand the situation of the company. That's why we made that big adjustment of BRL 417 million.

[Marcelo Moreira, executive]

Okay. Well, Fred, you're also asking about the challenges of integration. Well, I would say that, first of all, we all understand the magnitude of this integration of two companies that were ranked first and second in size as the largest players in the health care industry in Brazil. And of course, that leads to difficulties and complexities. And we need to understand the size of the challenge to have efforts that are enough to face those challenges. So we were very disciplined with targets, meetings and the top management of the company involved.

The only committee that we have that convenes weekly in this company is the Integration Committee. I think that's the agenda -- I mean, the topic in the agenda that we talk about every quarter, integration. So we're very much focused on that, first of all, trying to capture the synergies, as we told you. But also in the chart, you saw that we are building a new future company. And what we want is that this future company is not just an addition of NDI and Hapvida, but a collection of the best practices of each one of the companies. And that's a 3-year long journey that involves different difficulties and challenges, but we are facing and overcoming all of them. Our team is highly committed. And I think there is nothing that we would say is not what we expected.

[Unknown Executive]

And Marcelo, if you allow me to add something here, it's not that we talk about that only once every 3 months, but actually every month. And you asked about information specifically, right? We created a methodology in the integration group, working group that is led by Marcelo, where we identified some differences in terminology like average length of stay, what do you mean by that or not, what is an occupancy percentage and from now on. Because it -- as hard as it may seem to believe, depending on the time, you can have different concepts of these terms. And we have identified around 100 of them. 40 of them have already been completed, and we have different ways to work on that, so that we have one single number for the whole company. And that's really important for us to conduct an internal benchmarking in our units. So that's the moment we're facing right now when it comes to information.

[Operator]

This concludes the question-and-answer session. Now the earnings release conference call of Hapvida is now completed, and the IR team is available to you should you have any other questions. Have a great afternoon, and thank you for joining.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]