Zamp SA

BOVESPA:ZAMP3

Earnings Call Transcript

[Operator]

Good morning, and thank you for waiting. Welcome to BURGER KING's presentation for the results of the first quarter of 2020. We have Iuri Miranda, President of BK Brasil; Clayton Malheiros, Vice President of Finance and Investor Relations; and the Investor Relations team. We inform that this event is being recorded. [Operator Instructions]

This event is also being transmitted simultaneously through the Internet via webcast available at the address, burgerking.com.br/ri, where the presentation can be found. The slides will be controlled by us. The replay of this event will be available right after its closing.

We'd like to inform that this teleconference is being simultaneously interpreted to English in order to help our foreign investors.

Before going forward, we'd like to clarify that any declaration, statements that are made during this teleconference, estimates, business perspectives of BK Brasil, forecasts, goals, they are the premises of the company as well as in information available to BK Brasil. Any future considerations are not guarantee of performance. They involve risks, uncertainties and premises because they have to do with future events, and therefore, they depend on circumstances, which may or may not happen.

Investors and analysts must understand that general conditions, industry conditions and other operational factors might affect future BK Brasil numbers and might lead to numbers which differ materially from those stated under these future considerations.

I'd like now to pass the word to Iuri Miranda, President of BK Brasil, who will start his presentation. Please, Iuri, you may begin.

[Iuri de Miranda, executive]

Thank you for the introduction, operator. Good morning, everyone. I hope you are -- you and all of your families are well in this very delicate moment that we're going through. Thank you for the interest in our company and also for participating in this teleconference for results of BK Brasil in this third -- first quarter of 2020.

I'd like to start our call today thanking people, people that, even under such hard times, have worked hard so that our brands might continue to service our clients every day in all of Brazil. We think we have a key role in providing an essential service to the population in this epidemic. And without your performance, collaborators, suppliers, partners, this wouldn't be possible. And so thank you.

From the beginning of this epidemic spreading through Brazil, we defined a few pillars, which we thought were essential, which would help us to navigate through this challenging moment. These pillars are our employees, our clients and our business. Throughout this entire time, these priorities have been our compass every day.

To protect our employees in the restaurants, we reinforced our already rigorous hygiene procedures. We've updated our safety online training. We extended the use of protection equipment. And we provided all the support with medical guidance so that they would feel totally safe to work on the front lines of our restaurants.

Besides that, through initiatives like advanced holidays, utilizing time banking and, afterwards, the application of the Temporary Law 936, we have been able to -- until this moment, we've been able to protect the jobs of our employees even with a big chunk of our restaurants closed. For the main office employees, we already had some flex office projects implemented, and we took 100% of our team to work from home already starting on the 16th of March. We see that this might be a very interesting path towards our future due to the engagement and the productivity that we have seen.

For the same team, due to the current level of closing of our restaurants, we've reduced the hours and salaries in at least 25%. It's important to highlight that the salary reduction also has been applied to all the C-level and the Board-level employees. Trying to protect our clients, on the 23rd of March, due to the development of the pandemic and looking at the best BURGER KING and POPEYES' practices throughout the world, we decided to close all the saloons in our restaurants, collaborating with the distancing rules. Besides that, we've also expanded our coverage of digital channel sales through other aggregators and more cities into the delivery platform and special offers for drive-thru.

At the same time the sales would grow through these channels, we've distributed over 600,000 manuals with our lunches with messages of awareness building for safe eating in partnership with the Ministry of Health. We understand that our company, besides providing an important service to the population at this time with fast, delicious food, they also have the responsibility of helping society to combat the effects of the pandemic on the Brazilian population. That's why we have donated over 50 tons of meals to hospitals, nonprofits and communities at risk. Besides that, we donated, at the beginning of April, BRL 1 million to the National Health System, which provided money to buy protection equipment in Fortaleza, São Paulo. We are sure that these initiatives and the transparency that -- with which we have faced this moment contributed so that we be the second brand in all the food and beverage market the best -- or the top-of-mind brand during this pandemic.

And we've also adapted to the new reality so that we would be able to capture sales, reduce cost and reinforce our capital. To support our sales, the drive-thru and delivery channels had a key role, reaching a record of sales week after week and contributing so that the sales curve be increasing at the -- from April till now.

Our cost structure, still at the end-of-March anticipated holidays, we compensated existing time bank hours. And we suspended contract of -- labor contracts for employees undergoing onboarding or training. And the Temporary Law helped us through the suspension of contracts and the resizing of the hours worked. We got significant savings, which will help us in the second quarter to avoid firing employees. And this will keep us ready to reopen our restaurants.

Another line of costs that we're working intensely on is related to our rental contracts, which are being renegotiated individually with the tenants. Through a good sense and commercial partnerships, we've been able to adjust our occupation roles to the reality we face at this moment.

Finally, we've done disciplinary work in terms of discretionary expenses, suspending travel, hiring new employees, salary increases and promotions. To reinforce our cash, we've worked quick, and we did 2 financings: one in -- BRL 170 million in the month of March and another of BRL 50 million during the first week of April. These financings were done with the objective of protecting our liquidity given the volatility of this period we're going through.

It's important to mention, based on our financial discipline in a moment like this, we will reduce our investments in new restaurants. Due to this, we've already agreed with RBI, the franchisor of the BURGER KING and POPEYES brands, that we won't have any contractual goals of openings of new restaurants for 2020. And in a moment of better visibility post-pandemic, we will assess the development goals for the next years. This allows us to reassess the decision and the best timing for the execution of each of our investment plans that we have in our pipeline.

I would like to go to Slide 4 of our presentation, where we'll share with you what will be the priorities at this time. We have the conviction that the new norm, even with different habit, will continue to be related to 4 key items that we tried to build throughout our history, product, convenience, experience and focus on the client, will continue to be key pillars in our company.

We also have the commitment of being able to protect, in all ways possible, our clients and employees. And we have developed a strong plan of going back to work based always on a rigid hygiene and re-adequation to the sanitary norms, the health norms. But we'll still continue focusing on the sales channels and digital channels due to the important role that these channels will show in the future, which actually have been sped up due to the epidemic. We will continue focus on maintaining a solid financial position because we believe that this will give us competitive advantage in a time where opportunities generated by the crisis start to show up. And we will intensify our efforts so that we might have a business that's stronger than ever, contributing to a better world.

I would like now to say, tell you our results of the first quarter of 2020. Please, Slide 6.

We started 2020 with an acceleration of sales, which is important when compared to the end of 2019, with a growth of 460 bps in sales compared between the fourth quarter of 2019 and the first 2 months of 2020. This bounce back was based on 3 important changes that we made: the back -- the return of the Whopper, the highlight of the Mega Stacker family in the premium line and the entry of new aggregators into the delivery pipeline. And even with the closing of over 65% of our business during the second week of March, we've been able to keep the revenues of the quarter very close to comparable last year, totaling BRL 649 million, which represents a slight decrease of 2.4%.

As far as comparable sales, we had a decrease of 1.8%. I highlight that until February of 2020, our comparable sales presented a high of 2.4%, showing good bounce back compared to the performance of December of '19. The advancement of the pandemic in March, we had 65% of our business closed, especially with the malls closing, and due to the certain distancing rules that were imposed.

We also saw a significant change in sales channels where drive-thru represented 50% of our sales and the delivery jumped to 35%, with the rest coming from the takeaways.

In the case of delivery, our sales increased over 200% if we compare the first quarter of '20 to the same period of '19. That's why our digital sales in delivery, plus totem, plus BK Express, reached 10.4% of our revenue in the first quarter, growing around 800 bps compared to the previous year, and confirming the importance of the investments in technology, which we had and continue to implement.

In terms of financial results, we got an adjusted EBITDA of BRL 3.9 billion due to strong impacts on revenues coming from the effects of the pandemic without having enough time to -- for cost adjustments in the first quarter. Due to the characteristic of our business, this move gave us operational deleveraging because of the closed business.

With this now, I will pass the word to my partner, Clayton Malheiros, to give you more details on the performance of the company. Clayton, please.

[Clayton de Malheiros, executive]

Thank you, Iuri. Good morning, everyone. Going to Slide 7, we see that in the first quarter of '20, we had the opening of one BURGER KING restaurant operated by franchisers. We closed the period with a total of 913 restaurants and business under the BURGER KING and POPEYES brands, of which 714 are operated by BK Brasil. and we continue to be the biggest fast food operator in Brazil.

It's important to highlight that the first quarter historically is the weakest of the year in terms of openings. And due to the impacts of the pandemic, a few forecast openings for the second week of March were put to a later time where the restrictive measures won't be in effect.

Still on the same slide, in terms of development of dessert center openings, we closed the quarter with 359 units, which represents an opening of 101 dessert centers in the last 12 months. Additionally, as far as POPEYES, we maintained the same number of restaurants in the previous quarter.

Going to Slide 8. The comparable sales in the same-stores BURGER KING were 0.8%. As I said in the opening, it's important to highlight that all initiatives that we implemented throughout the first quarter of this year started to generate positive results in our business and have been able to change the sales -- comparable sales trend to an increasing trend in January and February. The implementations were the return of the Whopper and the return of the Mega Stacker family to the premium category and the entry of new aggregators in deliveries. And even with a positive result during the months of January and February, the COVID impact on the second week of March, at the end of March caused us to close 65% of our business. And our total revenue became 2.4% below same comparable period.

Going to Slide 9, we'd like to give you an update of the status of our business during the first weeks of the second quarter as far as the percentage of stores open and the sales performance. Here, you can see that the percentage of open restaurants has maintained stable as since our street restaurants are open and our business and shoppings is all closed, leading us to 38% of the open restaurants. However, despite the strong impact coming from the closed restaurants, it's clear the strong sales growth in the open restaurants since the [ first ] week of April until the [ first ] week of April. And when we look at these numbers in the next weeks, they continue to develop continually, even due to the delivery, which has 2 new aggregators, which are ramping up and increasing sales.

Going to Slide 10. Due to the expected impacts and the change in consumption habits from consumers and the evolution of digital performance, we decided to bring higher detailing of the evolution that we had in our digital incentives. And here, we can see the strong growth of sales in these channels, on and off-premise as well, during the first quarter of this week compared to the same period, growing 800 basis points and showing that the company is more and more prepared for the new norm.

Technology has been taken on more and more important role in our business. And accelerated by COVID, we've already started to capture good performance from channels, which will be a big differentiator for big players in the future.

In the first quarter of 2020, our delivery, now with Uber Eats, Rappi and iFood, more than tripled and started representing [ 7.2 ] of the total revenue of the company with an increase in coverage of more cities compared to 2019.

Our BK Express allows the consumer to make their order and to pay through the app going just to take away their food. Although it doesn't represent total sales a lot, it's growing a lot and it's getting more relevant, boosted by the thousands of downloads, millions of downloads from our app. We believe in this weapon to increase sales in the takeaway orders as well as in the future -- in the near future in our drive-thrus.

And last but not least, the self-service totems have been an important tool to minimize our interactions with our clients. And its expressive growth of 16x versus the previous quarter allows us to go to more efficiency -- higher efficiency levels in terms of operational costs, higher speed to service and a higher possibility of customizing and getting more of a -- getting a higher average ticket. This is a development of our costs and expenses.

Total restaurant expenses totaled BRL 667 million and represented [ 104.3 ] of the net operational revenue. The cost of goods sold as a percentage of operational revenue reached 49% and a growth of 260 basis points if looking at the comparable dates, looking at the drop in the balcony sales, the losses and donations of products made by the company due to the closing of restaurants due to return of the Whopper and the King -- Double King and the brand being in new aggregators. We believe that with the opening of our restaurants, we'll go back to see higher normalcy in this line compared to previous moments.

Sales minus depreciation represented [ 72.2 ] of the net operational revenue, expanding 17 basis points versus the same period of 2019, the result of a strong operational deleveraging due to the loss of sales in the second week of March. As the measures that started to be implemented in this period, especially focused in the renegotiation of rental amounts and reduction in employee costs didn't have an impact on the quarter, but they will help us in the second quarter.

General SG&A -- corporate SG&A, like percentage of the net operational revenue, reached -- increased 16 point -- basis points. Besides the operational deleveraging provocated by loss of sales, we also had an increase in the expenses for labor contingencies and a nonrecurrent expense in our compensations with shares. We can see the [ 8.3 ] and the adjusted EBITDA reaching BRL 13.9 million in the first quarter of 2020 due to the strong impacts on revenue coming from COVID, generating an operational deleveraging, which is relevant due to the nondilution of the fixed cost existing in the closed restaurants. With this, the EBITDA, adjusted EBITDA contracted 1,800 bps. It's important to say that the POPEYES brand is still in its initial stage. And as expected in our business plan, it impacts negatively in the consolidation with the BURGER KING restaurants. The adjusted EBITDA margin impact, due to the development of the POPEYES brand, was 19 basis points.

Still on this slide, we can see that due to the impacts of the epidemic on our business, we had a net loss of BRL [ 55 ] million. I'm sorry, I didn't get that number.

Going into Slide 13, we can look at CapEx, financial leveraging and free cash flow. In the first quarter, our CapEx was BRL 81 million, an increase of 4.3% compared to the first quarter of '19. This growth would support the expansion plan of the company forecast for 2020, which has been temporarily suspended due to the liquidity measures implemented to help the company go through these turbulent waters.

Going into financial leveraging. We closed the month of March with a cash position of BRL 469 million, 40.2% above the same quarter of '19, benefited by the financing of BRL 170 million done at the end of the first quarter as a measure of reinforcing our cash and the financial health of our business. As a consequence, our net debt went from -- was BRL 222 million, maintaining a [ 0.09 ]. It's important to highlight that in April, we financed to increase our cash. This financing was done with a 12-month term, but the company is looking to extend this debt to longer terms. In the last quarter of this year, the operational cash flow was BRL 74 million. The company showed BRL 115 million. This higher consumption was due to the decrease in the operational result impacted by the retraction of sales due to the closing of the stores and the higher need of working capital due to the seasonality of the period and the high concentration of store openings in the fourth quarter of '19.

With that, we close our presentation. We'd like to open up for Q&A. Operator, please, Q&A.

[Operator]

[Operator Instructions] Our first question comes from Bob Ford, Bank of America.

[Robert Ford, analyst]

Can you tell us how we are in terms of costs? And how you're thinking about the business pace in the malls? When the malls open back up, how do you think the business will pick back up?

[Iuri de Miranda, executive]

Bob, I hope you and your family and the entire Bank of America team is well. In terms of cost structure and cash flow, we see a second quarter now, a harder second quarter than the first. Because if you think that in the first quarter we had 15 days impact of COVID, now we're talking about around 2/3 at least of the quarter has been affected by COVID.

On the other hand, all the cost structures and the measures that we started to implement, already starting at the end of the month of March, they start to help us in this quarter. So the Temporary Law measures as far as labor, the labor in the restaurants with this reduction of work hours, reduction of salary, the initiatives also taken as far as the corporate office.

I mentioned the adjustments in work hours and salary adjustments in the order of 25% reduction of all fixed costs that we were able to renegotiate with suppliers and all the other lines of all the other restaurants.

In terms of occupation, Bob, we have over 1,000 rental contracts. All of our restaurants are in -- are rentals. And we have over 1,000 rental contracts. And to this moment, we've been able to do good work here, and we've been able to renegotiate 90% of these 1,000 contracts.

Of course, we're not able to reduce the cost in all of them, but the savings that -- the savings in variables, we can't -- we haven't been able to take care of all the variable costs, but there was a significant reduction in the rental expenses. And we think the good sense in the partnership with our tenants.

I would say that all the expense lines -- all the cost lines that we were able to work on, that we could work on, we did work on. And this helps to minimize a bit of the impact from the closing of the restaurants in the second quarter.

And as far as sales, I will -- I show the presentation. He sees a very good trend of sales in the digital channels, especially delivery and drive-thru. Week after week, sales have been growing in these channels. And something positive is -- we got sales surprises from POPEYES. POPEYES, even under this realm, I mean, they -- under this reality, they start to show positive same-store sales despite this entire situation we're seeing. So besides being a harder quarter than the first one, the second quarter, I believe that the measures that the company was able to implement to reduce the impact were done.

As far as your second question of how do we see the -- how do we see things when malls open back up, if I understood you, I would say that we have a few ideas. The measures of reopening, really, they are happening. Sometimes they vary by city. And so we see a reopening plan. Despite running all these restaurants, I would say that some -- all of the reopenings have come in pillars. On the other hand, we have to be very flexible in terms of analyzing case by case, mall by mall, city by city, how the behavior is after reopening. And in the city of São Paulo, for example, and probably throughout next week, they will give us a detail of what will be the rules for reopening malls. This is important for our business, and we'll have to see what's the -- what are the hour restrictions if the -- if people will be able to eat in there, if they won't be able to. But we're ready to adapt to whatever reality that comes before us and to see what's best for our business. Perhaps, there are business that, at initial opening, given the restrictions, it doesn't make sense for us to open financially. There are other malls that makes -- that it would make sense. We're going to have a huge network. We can concentrate our deliveries into 1 restaurant in the region, and then we can maximize the chain results.

And so I'll tell you that it's going to be a case-by-case thing and city-by-city scenario. I don't know if I've answered your second question or if you have any other questions.

[Robert Ford, analyst]

Yes, it's been clear, Iuri. Thank you. There is a way to extract efficiency. Some malls are doing drive-thru. The malls are doing drive-thrus. The stores in the malls are doing drive-thrus. Is there any way of doing the same thing in a restaurant?

[Iuri de Miranda, executive]

Well, I believe so. Productivity in the malls can be maximized. For example, Bob, when the stores start to open again, you'll have the sale to the mall employees. That's an important avenue for us. So we offer them a delicious, safe, competitive offer. And there, you can see additional sales where you can dilute costs.

The other thing is the growth, Bob, in the digital channels. So we've gone -- we've seen lots of developments in terms of order totems. In some malls, actually, if there is no room on the sides of the store, if you don't have your own saloon for the totems, and what happens in some of our stores, we are putting some totems on the actual bench where people can go there and make their request. This helps us as well in terms of productivity, and we've seen growth in delivery.

Another characteristic, Bob, which might grow as time goes by is takeaway. I believe that COVID now, through the pandemic, it's sped up. There was a catalyzer of a few effects. And the question of you being able to buy and take away can grow. This behavior could grow.

And then you have our app, which has got over 24 million downloads. People are using the app more, and they're doing all the transactions through the app. And they just come to our restaurant to pick up the product and to take it away wherever they wish.

So I believe that all these technology factors and behavior changes, the clients will want less contact. Other clients will still want to go and deal with the cashiers. If you offer these contact alternatives, yes, that could influence productivity in the malls.

[Operator]

Our next question comes from Roberto Browne, Morgan Stanley.

[Roberto Browne, analyst]

You explained the initiatives to control expenses. I'd like to know about the gross margin expectation from here forward. There's been this decrease, which was mentioned in the first quarter. Could you quantify how much of this was related to the promotional environment? And what do you expect from here forward in terms of the promotional environment, promotional actions? And if you have had any cost pressure, which could also affect your margins in the next quarter? Taking advantage of this, I would like to know how you are looking at the delivery margins considering that there's more competition. So how are you dealing with discounts for that channel?

[Iuri de Miranda, executive]

All right. Thank you, Roberto. I hope you and your family are well, the guys at Morgan Stanley, all of you. In terms of gross margin development, we have to look at it 2 ways. First, in this environment, it's a bit harder. We're going through a health crisis, and we're also seeing economic pressure. This is going to make the consumers more sensitive to price.

We believe that a transfer of cost is more difficult or to transfer the price to the consumer is a bit harder, but this improvement in the margin could come through a mix.

For example, at this time right now, this pandemic moment, we see a reduction in dessert and soda sales, which is important because the delivery channels and the drive-thru channels, they get less of these orders. And these are categories which represent the gross margin, which is extremely high. We believe that with the reopening of the restaurants, this product mix situation might improve things.

With all this acceleration in delivery and drive-thru, we are able to get knowledge -- a better knowledge of the dynamics of delivery. We introduced 2 new aggregators this year, Rappi and iFood. We were only working with Uber Eats. And right in this introduction, we also decided to offer special promotions even to show that BURGER KING and POPEYES were also available in these 2 important delivery channels. So this brought an initial margin pressure, which I believe is that as time goes by and people get more aware and people see that they're going to find delivery at iFood or Rappi, this could also be -- this could be worked on. This could improve things.

I also believe in your questions in terms of delivery. Besides the new release offers that we had, and I mean that softens as time goes by, another option that we have been working with, and we've already started to do a pilot on this, we are -- we're working on our own delivery or just a stand-alone delivery structure. It requires systems, adequate systems. We've also acquired the experience of how that delivery business works. We're not saying that we're not going to have the aggregators. They are part of the business. They -- it is an important channel. But nowadays, just reminding you that it's 24 million downloads that are BURGER KING users in the BURGER KING client base and people who we can make our own delivery, bringing us additional sales with an interesting margin.

And the third point is, as far as gross margin, also in a project that we started 1.5 years ago, we had been talking about this. We ran a pilot in the country of São Paulo at the end of last year. Now in the second semester, we're going to roll this out, the Customer Relation Manager, the CRM, which will prove itself at this moment when the people's income is less available. This will be an important tool for you to be able to customize the promotions and to really deliver where you need to deliver, offers and where -- and you can customize it at will.

As far as price pressures, I believe that the entire market will go through this. There is a certain worry with soy and corn, and this could bring an impact on chicken commodities, but we haven't felt the impact.

If you think about the size that we are, the scale that we have available at this time, we have -- we've been able to get good understanding from our suppliers. And the impacts, which could have -- which we could have seen from contract clauses, adjustments -- inflation adjustments weren't done in some cases. We thank the suppliers for their understanding on that. And in some cases, we actually had an extension of payment plans from the suppliers, and it's something where the entire chain is uniting and seeing that we are going through hard times.

So we continue to have strong negotiating power. We continue to have a good chain where the biggest operator of same stores in Brazil, and our suppliers have been wonderful when we talk about price pressures.

[Operator]

Our next question comes from Ian Luketic, JPMorgan.

[Ian Luketic, analyst]

My questions were answered in the previous answers, but I'd like to understand what was the level of same-store sales in the first quarter with the stores closed? And please let us know the performance of same-store sales in the first 2 months of the quarter now?

[Iuri de Miranda, executive]

I also hope you're your well, your family and everybody at JP. Well, we've reported, in terms of same-store sales for this quarter, minus 1 month. I know you asked us to include the closed stores. The way that we report same-store sales is the same way that we -- that our franchisor report same-store sales. Even for us to be able to compare ourselves to other BURGER KING businesses, there are other companies that have the same methodology.

We understand that through this methodology, we can measure the performance of the restaurants, which are open, as well as when you take a look at the total revenue of the company in the quarter, you could get an idea of what was the move, the position of the total revenue of the company at that time. So you can see how revenues varied versus last year. And you can, with this KPI, measure for the restaurants which were operating what was the performance of these restaurants.

As I mentioned recently, POPEYES is showing same-store sales, which are positive and the development of sales that they've been seeing in drive-thru and delivery. What we see in the first quarter, now we're getting close to May, we got a number for the BURGER KING restaurants, which is slightly negative for BURGER KING.

[Ian Luketic, analyst]

How about a follow-up question? What about cost pressure? I mean you talked about the price of soy and corn as a potential impact on the price of chicken. But when we take a look at meat domestically, we see prices growing 20%, 25% year after year. Does that worry you? I mean you've mentioned that it would be difficult to pass on the cost, and there is an increase in unemployment. People are getting their salaries cut or wages cut. So does they worry that your cost pressures might increase?

[Iuri de Miranda, executive]

Worries about cost pressures are always around. I wouldn't say that we're not worried, but there is another side in a scenario like this, which is the reduction of demand that's in the market as a whole, which will make it. So we will make it so that there is a pressure to the contrary as well. That's my perspective.

And in terms of meat specifically, we had a contract, and we talked about this in the last call. We had a contract with our supplier at the end of last year. It's a very interesting contract for us. And till now, we really haven't felt no effect, no higher effect from this price pressure. So until now, we have not felt any pressure.

[Operator]

We now close the Q&A session. I would like to pass over to Iuri for final conclusions.

[Iuri de Miranda, executive]

Thank you, operator. Well, as you have been able to see throughout our presentation, we've had a very exciting beginning in 2020 with an interesting change in sales trends versus the fourth quarter. With the pandemic, we were impacted in our business. Of course, if we look ahead, we should see a second quarter, which is even more challenging, as I said. Unfortunately, we'll see impacts from closed restaurants for at least another 60 days. The difference in the second quarter, and I said this, we have been able to do cost adjustments, which will help to minimize the impacts coming from the current sales scenario. I also mentioned that, in revenues, although there is no compensation with the closed restaurants, the growth of delivery and drive-thru has been continuous.

The positive surprises -- there are positive surprises like performance of POPEYES sales with positive same stores in this scenario, also an impact from POPEYES that we've seen in other markets like the American market.

The month of May is significantly better than the month of April. We hope that with the lessening of the restrictive rules, especially in the malls, we might be able to open our restaurants to service all of our clients the best and safest way possible. And with everything that we've said, and with the priorities that we've talked about at the beginning, we believe that a fragmented market like ours in Brazil, our company, through its known brands, through its solid financial positioning and its history of good financial backing and good execution, certainly, we will be well positioned to leave this crisis even stronger than we went into it.

This pandemic could have acted as a catalyzer to improve certain consumer behaviors. There are trends which show themselves clearer in which we had been preparing for strategically as well as structurally. I refer to the miltifinalities with the growth of off-premise and the digital experience. These aspects, integrated strong systems, intelligence systems will make the difference. And that's along the lines -- along these lines that we've been preparing ourselves.

Another trend has to do with the growing importance that the consumer is seeking in the quality of what they consume, in the ingredients, in the food safety, and always, always in our business, the flavor of the product. We know this pandemic will go by us, and we will still be focusing on offering a unique eating experience. We will be prepared to capture the opportunities that the transformation that we're seeing will bring.

I thank you all for your attention and participation, and you all have a wonderful day, and you please be safe. Thank you all.

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