Q1 2021 Atento SA Earnings Call
[music].
Good morning, and welcome to attend to its first quarter 2021 results conference call.
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I would now like to turn the conference over to Mr. Shai Chore corporate Treasurer Investor Relations Director Force until please go ahead.
Thank you and welcome everyone to our first quarter 2021 earnings conference call.
Here with us for today's call are Carlos Lopez, Abadia, a 10th of CEO and Jeff <unk> Chief Financial Officer.
Following a review of a dentist financial and operating results, we will open the call for your questions.
Before proceeding. Please note that certain comments made on this call will contain financial information that has been prepared under international financial reporting standards.
In addition, this call may contain information that constitutes forward looking statements, which are not guarantees of future performance and involve risk and uncertainties.
Certain results may differ materially from those in the forward looking statements as a result of various sectors.
We encourage you to review our publicly available disclosure documents filed with the relevant securities regulators and we invite you to read the complete disclosure included here on the second slide of our earnings call presentation.
Our public filings and earnings presentation can be found net investors dot attentive dot com.
Please note debt unless noted otherwise all growth rates are on a year over year and constant currency basis.
I'll now turn the call over to Carlos.
Thank you Shay.
Good morning, ladies and gentlemen.
We have started 2021 with very solid results.
And on acceleration of our transformation, which makes us optimistic for the rest of the year 2021 and confidence on anything on exceeding our three year profit objectives.
In Q1, we have been able to deliver significant growth on revenue sales EBITDA and cash flow.
We've seen significant name on portal, where services in all the geographies, where we operate which has allowed us to deliver Q1 revenue ahead of plan with a growth of 8% year on year.
We have also significantly improved our sense over the same quarter last year, we said 50% growth.
We have been able to increase EBITDA.
By six 7% despite startup cost due to growth, particularly from Brazil, and U S and increased weakness in Brazil.
We expect the profitability to further increase in Q2 as the revenue from the contract catch up with the startup costs.
Very importantly, operating cash flow in Q1 has been the best since 2017, and almost 12 million higher than 2020.
As many of you know Q1 is on were weakest every day on cash flow quarter due to the seasonality for our business.
It is why it is very important for our annual results that we have started with a strong Q1 results.
Along with the financial results I would like to highlight some of the qualitative aspects of flow results, which also reflect the progress in our business transformation.
What do you mean growth in other geographies in English per segments on the cigar is leading the growth with an 11% year on year, but our telephony accounts has also been on 2.2 per cent.
No generally from services continues to be a significant portion of our sales around 30%.
As we have discussed in the past in addition to extending our leadership position in Latin America, and particularly Brazil, we continue to emphasize the U S market and improved profitability in EMEA.
As a consequence, we continue to grow as fast based on the U S 52% growth.
Helping has reached the level of 25% on lower revenue.
Currency.
We believe that the seamless two will be significantly different in the next five years from when he has been in the last day.
This is why we continue to prioritize innovation in everything that we do.
Entirely on externally.
As we have long we have been from that.
I will start to accelerate which is running four programs in parallel right now <unk>.
Providing us with a disruptive capabilities focused claims proving the customer experience.
We are launching at intellectual hub, which allows us to provide a centralized secure management of the work from home.
And Duane from recruiting training on boarding and engagement of agents working collaboratively from home across different regions.
Oh, well I think that home platform supports debate 82000 employees working from home and represents more than 65 per cent of old intercepts.
We expect the service to continue to be an important component of our service portfolio way beyond the current crisis.
Yeah.
In terms of outlook with fully on track to deliver the results of our three year plan.
Including the growth continuing profitability.
And very importantly, the furthest de leverage on the company.
On the go on pandemic continues to be a significant factor in suitable on major markets. We feel that we're on a much better position to monitor talented and take advantage of the opportunities that we were last year.
With the strong start of 2021 and accelerating transformation, we feel optimistic about the rest of the year expecting to deliver a strong overall business performance.
Let me turn it over to Jorge our CFO, who will amplify and provide more you're desperate goodness.
Okay.
Thank you Carlos and good day everyone.
I will start by presenting to you in margin, how we started the year delivering carefully profit table performance.
On slide nine you can see our first quarter figures on.
On the regions performed very well here over a year.
Revenue growing high single digits, but by multi sector debt extend the double digit.
Almost 16% in both EMEA and Americas, and nearly 6% in Brazil.
Now the clinical revenues growth of 2% for led by Brazil and Spain.
In terms of profitability.
We delivered very strong EBITDA growth in Americas and EMEA.
EBITDA in EMEA more than doubled with margin, reaching 12, 3%.
EBITDA in Americas went up 25% with margin of $11 one per se.
The improvements in both our regions come from operational efficiencies Capex with revenue growth, especially the expansion in the U S.
In Brazil, EBITDA went down nine 5%, mainly reflecting 1 million implementation costs related to the new client programs and higher personnel expenses.
Coming from the minimum wage adjustment.
$5 five per cent hats.
We had a soft january representing an impact of $6 6 million.
We expect this increase to be largely passage on to prices as we adjust contracts to inflation throughout the year.
If we exclude these impacts EBITDA margin in Brazil will hit.
Ben.
$17 one per cent, bringing consolidated EBITDA, so the 12, 6% level.
On the next slide Slide 10, we are very pleased to present, our operating cash flow.
First positive on record in our first quarter at CES 2017.
Despite the historical first quarter seasonality, we closely day period with $5 5 million in operate Shouldnt cash flow.
It is almost a $12 million improvement year over year as a result of solid EBITDA coming from increased revenues and operational efficiencies combined with continued strict control of our working capital.
The free cash flow in turn was a negative $16 1 million in the park.
These amounts include the $9 9 million, one time expenses related to the debt refinancing.
And bond interest payments net of hedge gains of $11 7 million.
It is important to highlight that's moving towards reflecting our debt refinancing.
And so this will be impacted by our bond interest payments.
20 million plus or minus net hedge gains.
On slide 11, I would like to explain to you.
How we are building a threat correct Kurt in capturing operating efficiencies.
As we discussed with you in previous calls we deliberate structural opex reduction 2020.
As a result of initiatives such as right sizing implementation of shared services and zero based budgets in total we carrying $60 million in cost savings from 2000 Twenty's.
While the 2020 efficiencies program focuses on the structural Opex I'm happy to report that we are already working on the second phase of.
The efficiencies program.
Now focusing on the profit the ability of our contracts.
We expect to capture additional annualized savings of $25 million to $35 million with is improving.
Heading to the $60 million strictly on our Opex reduction that we already capture it.
On slides 12, and non important highlights of the quarter debt, we already reported during our fourth quarter call.
It was the completion of our debt refinancing in February when we issue a new 500 million senior secured notes.
Extended the average life of our debt to $4 three years from one five years.
The net financing was a key milestone.
Resolve on their own.
<unk> related to our capital structure.
And by the way for us to deliver on our commitments.
So deliberate.
The balance sheets until the end of 2022.
These new notes are protected by a certain hedging instruments with coupons hedges through maturity of five years and.
Gracie, Paul hedges for a period of three years.
Easter meant consist mainly of cross currency swaps in Brazilian real Peruvian solace in here.
Has that reference the Brazilian rial costs operating Paul and coupon is approximately 180% of CDI equivalence to approximately 5% per year with the current CDI rates.
On Paris to the previous bond cost of 7% per year, which was four coupons solely.
Hedging the brief follow up the commitments that we have made to investors during the financing process.
To protect our equity and leverage from the FX devaluation.
Compared to the same period last year, our net debt went down by six 9% and total at 525 million with a net leverage at three three types.
As I mentioned previously we are committed to delivering the guidance of two five to three times at the end of the year.
Two to two five times at the end of 2022.
As we have been saying improving debt capital structure is one off.
The key elements of our ratings process.
We ended the period.
With a healthy cash balance of one on the $76 million, including the $50 million of drawing down revolvers.
I am happy to say debt, we have repaid one of the credit lines.
We had in Brazil of a variety of Italy 10 million U S dollar.
Why this demonstrates confidence in the future cash flow generation the payment of additional revolvers real largely depends on how the pandemic and boss.
If leverage is a key aspect of our re rating process.
I would like to quickly discuss how the FX fluctuation.
In effect, our consolidate get the results on slide 13.
On the top left and the right charts, you can see the impact of Q1, 2021 the effects of the valuations when compared to Q1 2020.
Despite greater results in constant currencies, such as a percentage of revenue growth.
And the six 7% EBITDA expansion the reported figures and that being on February or April.
While this has been a hertz.
Wins for a while now, especially with performance of the Brazilian real.
We believe that the FX will play a less relevant to roll in the next couple of quarters.
As you can see in the bottom chart on this slide.
Following our share.
That decline between Q1, 2020, and Q2 2020 as a result of the pandemic Brazilian real has stabilize it from Q3 2020 onwards.
If we take consensus for FX year end 2021 has a proxy.
We believe that they reported the results on a year over year comparisons as of Q2, 2021 will be less impacted by FX devaluations.
On a better.
Better reflect actual operating results on package.
But we have not only depending on external factors have Carlos explained we have been increasing the share of hard currencies in our results.
So Laura these effects.
Prove our profitability and deliver it to the company.
This is aligned with our focus to deliver value to our shareholders.
With that this concludes my prepared remarks, thank you for your interest and support let's now move to the Q&A.
Yeah.
We will now begin the question and answer session.
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At this time, we will pause momentarily to assemble our roster.
Yes.
Our first question comes from Vincent.
Cold Chill.
With Barrington. Please go ahead.
Yes Carlos.
Curious if you could give us some color around.
Second improvement on the U S market.
What were the drivers there was it sales was it changing up the offering.
Okay.
Hum.
Yes, all of them off and is nothing debt.
That's what happened in Q1, you may recall that from I guess my first the first time we spoke.
I indicated that one of the priorities, we're going to out west to emphasize the U S market U S market has been traditionally very small for us, but we saw a significant opportunity both in terms of growth margin and also very importantly, the day. The fact that it's.
Are they nominated and and over time, it will help us to grow our balance to dampen our foreign exchange fluctuations.
Is the result of our continuous improvement have you thinking it themselves.
One off Q1 is not.
And he's been a very focused first of all on on sales on growth for the market.
To the some of the refocus that we've done globally in stem cell sectors and new services have played very well in that in the U S market and we continue to improve also our sales motion and the U S. So we expect to do.
Continued progressing.
The U S. That's part of the plan from this suggests now.
Quarter after quarter of results on a on the U S.
Good day Theres no question.
Yes. Thank you.
And.
I'm curious about.
Wage inflation.
Do you think you'll be able to pass through most of that this year.
Hum.
Okay.
Yes, I'll make two comments on that so.
Particularly in terms of the impact we had in Q1 in terms of so we improved significantly very much every every number as you've heard.
EBITDA bridge.
Versus Q1 last year et cetera that day.
Percentage.
That day, the profitability and maybe that sounds took.
Took a bit of a hit.
For some of it for good reasons, because we have a number of we've been very successful in the sales activity and we have number of contracts starting up and we have costs head on.
Oh revenue, which we will see the positive impact in subsequent quarters. So that's a good a good costs. The other one guy says you are focusing on are rightfully. So is on the way Timberlake inflation in Brazil with respect to fully absorb that over the course of the year. So that's not.
We don't see that asset from in terms of delivering day the.
The plan and delivering day that we sold with committed to you guys in.
In terms of specifically on how we do it on this.
Oh for pass through.
Keep on improving our pass throughs capabilities, we've gotten over the last couple of years more on more systematic about passing through Hum.
Inflation in many countries, especially on being very important for us of course, but.
Across the board so we keep on doing better as you know its always impossible to pass 100%, but we are improving and we expect to improve this year also and I would pass to over last year, but they are they on a portion of a portion of them over the impact is that's only one on all the components and as I said.
We we don't see that the assay program I don't so we were very happy with how we started the.
On a year in terms of both the <unk>.
On profitability not to mention day.
They're very good cash flow resources that we have as I mentioned in my prepared remarks.
Q1, typically is the weakest quarter of this company because of the seasonality of wage inflation and other factors and is starting to starting the year. The way we have started a 2021.
It's very important for asking stems from our prognosis for the rest of the year.
On the only to accomplish Carlos.
Important to say debt.
The amount that we have the effect this year.
Represents two years yeah.
He is very important.
When do you need we don't have any adjustments and we have two two to adjust now.
And then I think one on fees.
The inflation pass through you have around 70%.
This year, we expect it to target between 80 and 85% at least.
So those are two very good points that I'd, just say Ah Ah I neglected to mention particularly the first one which is the impact was disproportionate compared to cool pool to the past, but still with respect to fully absorb it in our operations.
And Jose how meaningful can the second phase of the cost savings plan compared to the first phase I'm, sorry, if I missed that if there was a number on that.
Yes.
On the difference between the bulk is in the first moment the first waves if we can say.
Coming through the CBD once more.
Simple two cuts if I can say is simple.
The process that we have to change I give you an example.
We have implemented quite simple and finance we have implemented this year I'd say the standard you have to reduce it some quantity of people.
Digitalized and we feel ongoing digitalized our processes.
We paid less for systems like ERP and <unk>.
This is this kind of thing when we look for this wave now.
It evolves all lie.
Are we speaking about revenues.
It's quite simple inflation pass through an agreement is one of them.
We have some.
Efficiencies in terms of book quite simple share service center operations that we see.
Got to know the excellent centers, we start now to deploy.
Worldwide.
And we still have some opportunities.
In terms of fixed operational costs and we are speaking about sites that we have in the model. How we operate for example, Wow.
Wow.
At this moment is more.
Yes.
Emergency hold because we want to accomplish.
All clients.
The demand as we are all clients.
And another point is why has the new products, we have already worked on needs in cash.
Uh huh.
Have a big fronts.
On debt.
Is to say, what how has the progress.
We have.
Create a model.
We then will allow us quite simple to close some sites in the future. It's a more long term, but that is our expectation that is why we speak about it.
Efficiency in profit to get profitability in terms of.
The contracts and debt.
That is the reason, it's a bit more on long term is not that we go to day and cuts in debt. It no. We need some time, we need to invest where it needs to make some investments quite simple to growth sites, we have to do it.
If we can have a better.
<unk> in the future.
Thank you for answering my questions.
Youre welcome.
Again, if you have a question. Please press Star then one if youre at your computer. Please do use the submit a question box on your webcast anyway.
I would like to turn the call epic and Mr. Shang Chuang additional questions received via webcast.
Thanks, Sarah So we have a couple of questions here first of the questions related to results versus the guidance for the year.
So when you develop your projections for 'twenty, one and the guidance how.
How is Q1 compared to the one two on delivered compared to.
Your internal expectations.
As I mentioned on and my prepared remarks.
We are ahead in most metrics are in Q1 as I said, it's very important for us because the weakness of the traditional weakness of Q1 due to seasonality.
So that allows us to feel very confident about the guidance that we gave you.
Okay next one on hard currency Carlos you mentioned.
About the hard currency.
Being 25% of revenue do you have a target for going forward, how we should look into your heart currency business.
Well this is these.
This is a very good question I ask as you very well know there's a lot of advantages of being the market leader by a long shot in Latam I cover there's some other challenges that come with it and one of them is that our investors investing in U S dollars look at asking in U S dollars and we make a lot of our.
Revenue on.
Net income in in.
In other currencies.
So it's a long term strategy to to dampen fluctuations on the balance to have more of the high currency of that business that we have in Europe, EMEA and U S being critical pillars.
All of that do we have a long term objective not per se.
But what we like to continuously increase that are that number I think you will see a will be a.
Reported to you on regular basis. They are the progress we're making in bad debt.
Mark and its really in that regard.
And I think you should expect this to steadily improve quarter after quarter and get up again.
Okay, and a follow up on on the Q1 and seasonality.
Can you help us understanding the seasonality on whatsapp user usually the.
Stronger quarter for you.
Sure I think if you look at debt there.
A number of years going back you could see that typically Q1 is there is it is the worst that typically improves more or less a steadily throughout the year. So this was seasonality has a number of effects in our case one of them.
On an earlier comment which is typically wage inflation in different countries. There are union agreement on this government agreements that tends to impact our inflation our cost.
Early in the year when these agreements Ah come into effect.
And over the year than us one of the questions are addressed.
We we tend to pass through as much as possible. So the contracts that tend to have closest debt inflation adjustment pluses, but that happens through the year and in wholesale from mark about the percentage that we expect to pass through this year in the order of 80 or 85 per.
Per cent.
It's an important.
Constant improvement for US you can never pass a 100% that's a fact of life, but we can and we will continue improving debt not percentage.
There's also seasonality effects that have to do with the number of contracts are they snap on campaigns and volumes that are associated with certain quarters, particularly the Christmas season.
And the ramp up to the Christmas season on November and December tend to have also higher volumes in.
In a number of.
On a contextual buffer to two factors the oldest but that's probably what you're thinking in those times debt.
That gives you a little bit of a picture there and and.
The risk of repeating myself, if you look at the profile tends to be you know again it could be a planned out for different reasons, but tends to be steady improvement quarter over quarter or four day here and as I said earlier. The fact that we started very strongly. These there is a very important question.
So you got a question here on.
On the result on EMEA very strong profitability can you elaborate.
This seems a stronger result, compared to previous years, what we should expect is a normalized level of profitability in your EMEA business.
But truly you mean by normalized but indeed, it's a significant improvement even considering that last year was not Q1, but later quarters of the year for EMEA, where were very difficult with the pandemic.
Particular big impact on net spend you may recall in the in the early phases. All day all of the pandemic, we are a little bit on as I said about the U S. This is nothing no.
EMEA has been a very steady our base for weapons, though.
We are sick.
We sought to improve that and one very important thing for Atlas improving the profitability of our office space continues to grow on Spain, Spain in EMEA in general continues to grow but one of the things where we've been focusing on is improving also the profitability of all day operational weeds.
We are basically are still enjoying it quarter after quarter you figure again.
Nothing, particularly one offish on on the results of course, there will be fluctuations quarter after quarter, but in general. This is a trend that we've been if you look at our numbers. We've been we've been having oh here over a number of quarters already and we expect to continue.
Okay.
On.
What makes you most excited about your business as you speak today and what are your biggest challenge.
Well I, you know I've been a bit like yourself in a pessimist.
Manifest it myself tells you first they because it sounds if they could sell it to the one that we'll have a pandemic. We started very strongly in the year, but I always look at that.
Unique circumstances as we have right now we would caution we I'm optimistic in terms of how the pandemic will evolve and meaning that we expect to improve from here, but clearly we have a significant impact and in most of our major.
Economists are the major markets, where we operate so so this evolution.
The second trend are we supposed to believe that things are going to improve from here, but we are cautious and we I always believe of hope for the best prepare for the worst so as I mentioned in my prepared remarks, we are much better positioned to manage.
The situation is as the result show, but nevertheless, we on attentive towards so to how things evolve and in particularly we do not.
We don't get complacent. So we were very focused on on making sure that we protect our employees that we protect the continuity of the operation and that we protect the overall business of a tense on the investment of all the shareholders.
What makes me very optimistic.
And probably see it from.
My prepared remarks.
Some of the challenges that are we sort of tackling on in a couple of years ago are beginning to yield to the continuous improvement.
I'm very happy every time I I can answer the question as I look that is not a one off we are that that shows that day.
Steady progress quarter after quarter.
I'm very happy with what we've been able to do commercially and in the commercial front.
Not only in being able to grow our sales capability, but also the type of sales that we have refocused the company in in those sectors.
New lines of business more services that are higher margin than debt.
Then our traditional once and have much more growth.
In the next 235 years.
That makes me very very excited the fact that day when we put emphasis in and you know at least on.
Microsoft is where our sales continue to improve our position there.
But also we when we focus on on bank back from markets, we've touched on two of them.
U S and and and our EMEA debt that we're doing there.
We're doing well, there and particularly on the U S. We're very very happy with it.
Increasing progress that we make there which had not been in the past it is a big market for us and and you can see that our will quickly become on a so so all of those things on there on the market side on the.
Sales side make me very very excited.
Also on the operational side I touched on that sometimes it goes like this we talk about cost and cost reduction, which is important but cost reduction is not what he is going to make your great in the long term efficiency improvement.
Year after year after year.
That.
It will change overtime, our cost position in a sustainable way and that's what we have been focusing on on you're beginning to see again.
Some of these calls on calls that talks about you know we had X number of the cost savings you know X percent of which will be a recurring you can't read probably most of the time into that debt.
We've made changes to the way, we do business that allow us to have a better cost structure. So that is very important again, we will make steady progress on all of these things.
Today's on particularly in the middle of the pandemic, what we had to make significant investments.
To protect our employees on the operations.
But you can see that happening so but those things on most exciting to me is the progress we've made in sales on markets and the progress, we're making a steadily on on a changing world.
We are the way, we operate to little by little but but to steadily improve our cost structure for them on that.
So long answer but.
So I feel very strongly about what we're doing and I'm very optimistic about the future of our debt though.
Yes.
Okay.
There are a couple of questions here about the contracts I'll try to summarize and put them all together so.
On.
Can you can you elaborate on your average contract.
How do you in force inflation pass through is inflation in contracts or inflation. These negotiated in the renewal of the contract.
It's a little more about the inflation in the contracts.
Sure.
The average standard may have a contract with debt.
Tends to be a around the three year, Mark sometimes and you have to distinguish them. There's a huge there's a huge variation right. There. The standard deviation is escape we have contracts that have been in place for 10 years longer right and and some others that could be free.
Through six months rarely any shorter than that but but if you think it you know two to three years is probably a good a good average that we use for planning because although after two or three years in many cases, we continue to have the contract.
Things change and and and modifications are made then if that book service at times and so on and so forth. So you think in terms of a two or three years is not a.
It is not a bad average in terms of inflation pass through first of all there's no hard and fast rules, but if you know what we we've been doing over the last few years is ensuring that every contract that we have we he has any further inflation pass through.
<unk> price.
In some cases, that's not possible, we bake that into the pricing so that we take into account that they expect debt.
Inflation.
Just because you have it or because you don't have that clause in the contract is make your life easier or more difficult, but not guarantee anything.
Anything in life, you know in many cases, you have a class a foreign inflation pass through and it happens with them, particularly on things.
Work.
The way, they're supposed to not always the case you know are these.
These events and particularly in the situation that we leave a two day. There's always exceptions. These are these are these last number of months, whereas the pandemic.
There's lots of things that ought to happen automatically maybe they don't happen and that requires some element of discussion or negotiation nothing that is hot and fast whether you'll have it on the contract or you don't but we obviously prefer to have it on the contract if not we bake it into the pricing.
Okay.
Yeah.
Okay Stu on the contract.
Do you have any substantial contract renewals in the near term and can you elaborate on the negotiations with telefonica on the MSA.
A very good we always have a we have a thousands of contracts. So there's always.
The slate of contracts that are important that are being trained on.
In the year.
This year is not a particularly unique when you have some large contracts that are either on the north we have full expectations that we will.
They are you can never win on any clarity you can have a win and the per cent, but our our record of AR and contract renewal is still on the same way that I talked about them.
How how happy I am about what are all the improvements that we've done on the sales front.
I have two two to always recognize.
The only what our current team is doing but that same sense.
But great relationships with our our customers are the length of our Oh that day there.
They are tenure of a customer bases is second to none on the relationships on a phenomenal. So we have a very good.
A very good track record in terms of a contract on all.
I forget I don't know if it was a two part question or maybe it was just one.
No. We would have had on the low end on the Telefonica MSA negotiation.
You know, there's always discussions on on analyst day like in any any any contract Ah I would Uh huh.
Ah three of the same thing I E.
Based on my team or what what I and I'd say from Telefonica, one when I made regarding these day the contract.
This is very important for us.
Question about it having said that more important than ever.
It is to make sure that we earn.
The business that we have with Telefonica the same way that weighed on the business with any other cost them Theres no theres no contract in the world that can save you from poor service, particularly they seem to stay where volumes can change so much from one more from on older.
From one quarter to two two on all of it.
I'm happy to I mentioned this a last few quarters and I'll repeat it today I'm very happy with the relationship with Telefonica. The fact that we have increased our.
Our.
He got accounts and our market share in that AR accounts speaks more than what I can say about the relationship I do believe that the best Ah Ah.
Our customer satisfaction.
All are or test is repeat itself now that it's particularly important in the industry are they still have come telecoms that is as a whole there's no secret to visa as a whole tends to decrease the services that they buy from us from the industry from in this case from.
Companies like us so even even with that background. We continue to do Oh, not just world, but a better with telefonica and I'm very happy to say that so as important as the MSA Ah is it's more important to deliver good service to have a satisfied customer.
And on the business that you have with any customer every day over the weekend and in every month of the year.
Alright next one here.
Can you remind us on your three largest shareholders. If there is look up when they expire then how your conversations with them have been.
He probably I'm going to have to ask you a share you probably remember this better than me, which probably in a way answer. The question is is not something that debt.
Upfront in my mind, that's always regarding share holders.
I have two who I skipped to ask them and I don't want to I cannot and I should not represent what their plans are even if I happen to know them and in this particular case. The only thing I can tell you is that I haven't had any substantive.
Discussions that would lead me to believe that any one of my Uh huh.
Largest shareholders have any particular urgency to who they've asked on the holdings, but having said that.
But what are the plans also so I'll have to refer you to them.
Yes, and just and just to add Carlos.
Have a lockup that was signed for 24 months.
There was signed in June last year, when they joined the company. So the lockup still valid for slightly over a year.
They haven't.
One last question I have here.
On the web is.
Recently U S shareholders' approval to move out of Luxembourg, the corporate entity any specific.
The idea that you want to elaborate on this.
Not particularly on things that I mean that I don't think that has COVID-19 is still a proof by a number of our regulatory authorities on the the.
Shareholder meetings so although.
Although that is there the intention all day of the company a is not a is not on just yet.
And Luxembourg.
And.
In particular, our Atlanta.
Advantages towards two to 10, so I'm sure it's terrific purpose whenever.
That was set up that way.
Hum.
We're looking to.
Closer to what our businesses are and and and.
And how we serve our customers on investors.
I cannot put it in the newspaper.
Yes.
Carlo I'll just complement on debt.
There is also some cost savings because we already have offices in Spain.
From our processes as well.
<unk> everything makes it.
Slightly cheaper to be in Spain. So so it's part of our efficiency program as well.
I have no more questions here on the Oh, Yes, I've just got one more Carlos can you elaborate about the competitive environment the market share.
And where you see the most.
Upside.
To your business.
In terms of geographies.
Sure. This is a very competitive.
Our business is in.
Now, it's an interest to where there's.
Lots and lots of players in every geography, so extremely competitive business nothing that has changed particularly recently.
Probably for US the second part of your question, which is you know where do we see more upside clearly we were very strong and in many geographies. Brazil is there is a heart of day.
Of the company. So we continue to to be the leather and expand our leadership position in Brazil, that's very important for us.
In terms of growth.
Yes.
It is a potential for us, but relatively small in the U S was growing very fast it's a it's a very attractive market per se.
And we have a good on it.
And on and growing our presence there.
We get a very good margins in the U S as well so.
In terms of.
Upside I would say that it's one of our Ah is.
So on the top on my mind, I said Mike.
Yeah.
Thanks, Carlos Oh, we have no no more questions on the webcast sorry back to you.
Yeah.
Thank you. This concludes our question and answer session I would like to turn the conference back over the next day, Carlos Lopez Abadia for any closing remarks.
Well I have to thank all of you for your time your attention on very good on probing questions I really like the opportunity to address our concerns but to do that in the prepared remarks, but not always do that so I really appreciate that day.
Yeah the question.
Yeah.
We'll talk soon.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.