Via S.A. Q1 2023 Pre Recorded Earnings Call

About the results of our first quarter and finished me three of them Pan out.

I joined the company on the psyche of May in the beginning of this.

Obviously as you all know.

The entire C level of the company and our IR team.

Here today.

They won't be the ones delivering the results.

They'll be clarify any possible questions I'm still going deeper.

And I'll be available as well.

Possible.

They may have on my decision.

And what we're looking at.

With that I'll pass the floor to Cabela's he lead the Q&A session. So once again. Thank you so much for your participation.

Gabriel.

Uh huh.

Hmm.

Our first question is from Peter Puny.

You May proceed.

Thank you Ravi I'll hand off the budget pressure and everyone. Thank you. My first question goes to Virginia, we noticed a.

Variation in the cash position of $1 8 million and.

Our supplier.

And I was like you chip.

In a little more about the nature of this adjustment.

What we should expect.

Our head of one's waiting for funding that we still see in the balance sheet.

What the dynamic world.

Cash effect.

On this line.

Okay, well, thank you Kevin.

Further question.

And.

This is a short term lines and get already considered.

Okay.

It's a reduction of about one at the end of the year, but well see.

Happened in the first quarter is it fair.

He's in all its not sure disconnected your working capital and funding of our suppliers. So this reduction.

Due to the seasonality of the first quarter.

Order has a natural fact, the second effect.

Is basically the conditions with a lower supply in this line and because I own credit line.

A lot of banks stopped working with its credit facility, which impacted us as well.

Still carry and unfortunate significant value of these lines are pretty much catch it.

And our plan for the next quarters. So that's an important line for funding.

So we're keeping this a leak.

Okay.

Sorry, Brito can you hear us.

Yeah.

The budget.

Thank you Julia.

Not sure if you heard that but if he comes back we can repeat it.

I would like to call it.

Daniela acre for her next question Danny please.

Good afternoon, guys and thanks for taking my questions.

First I wanted to go deeper in working capital.

<unk>.

Connecting with this with lower offer supply we noticed in the moment with them, especially the receivables I wanted to know from your strategy you guys are using.

Did mitigate.

Or offset the slower la facility available in phosphate and also there's an increase in the stock levels and I don't know if this was some other movement and you guys are trying to work on with an expectation for stronger demand I wanted to know what your strategy is behind the stock.

Besides.

At this moment and then I'd like to also take advantage of this opportunity to ask you.

While a more strategic perspective, which is.

I know, it's not that much time ever since you joined but I would like to understand what your first impressions are about the company.

This movement. This change you had if you'd just fine yeah.

He or she T J changes now.

The company at this point in time.

Got it.

Well I'm going to start off anything for that and.

The for Fei.

And as John risk.

And credit card discounts are very similar.

Both paths are feasible.

And.

The reduction of this discount for farfetch or drawn risk, we decided to use more discounts of them credit cards in this quarter.

So.

These stocks are a little bit greater and we're already getting used to the preparing for the seasonality in mothers day.

Yeah.

No.

So yeah, I'm, sorry, I didn't mention it was for <unk>.

Yeah exactly so thanks, Tony for the question.

As you mentioned very little time five days only.

What I can say is that in all of our due diligence process in our decision, making what I reinforced.

On the video yesterday was that.

We consider.

We ought to be a very unique differ.

Differential with a very competitive.

Operation strong brands, a huge portfolio of customers and a capacity.

To just the operation that's really quick considering the market scenario and this has allowed the team to do.

Liberty's results and and the conversations I've had with the team so far.

When you add up the amount of hours are you, it's quite intense right. So.

We've been we've been surprised positively right and there's a lot in the oven.

A lot being built and it's important to mention also that.

This company.

Went through a very strong transition.

Where we had a team taking over with a big challenge to put it back on track.

And they made intense our investment so that the company could have.

But folio of solutions in Aberdeenshire grow.

And deliveries to our customers. So the company has.

And infrastructure, that's ready right, we do have a too fine tuning done there are important deliveries that needed to take place a project's operation sales and cost efficiency with actions that are underway.

And they wont be delivered that.

Okay.

This increases our competitive advantage is up here when we look at the earnings in our first quarter, we can see.

But most of the strong points, we have and the productivity in our stores.

The deliveries that the stores are providing this demonstrates such a friend Charles when he looked at.

Default being reduced the NPL indexes the coverage for aging.

And you can see that the know how with the credit conversion is very unique.

And what I'm most notice that made me more decided was the people right.

Pretty good environment work environment for working in ever United and engaged.

With a clear direction.

The agenda, we're going to see any big drastic changes.

What I'm here to contribute with.

Is so that we can bring more.

You've already had this focus right now when it comes to capital allocation. So it's all of these avenues for growth have major potential for growth Kelly one P. GP.

Selman.

<unk>.

Everything can grow and the allocation of capital understanding which.

How much capital we allocate.

Order in every period.

And then really taking care of.

Richard.

So this of course will help us.

To understand with greater clarity, how this will impact our numbers up Manhattan, but I'm Super excited.

I'm very positive surprises.

I did with how the company has been infected.

Pleasure.

And of course, you have these investments.

And even more than an evolution of that.

So the the to rising up ahead is very positive because.

We've already finished that phase, where we need to invest a lot of cash.

With most of the machinery or tools up the team passed at this point in time, Okay perfect. Thank you.

Thanks, Tony.

Our next question is from Eric from sensor there.

Eric You May proceed.

What's that.

Well good afternoon, guys and thanks.

Right.

And I am the person fun, when we lost but it was done.

Yeah.

She theta is yeah, we have.

Good numbers.

So we just want to understand what could be like.

That's a little better with more acceleration.

Credit.

Do you notice any marginal improvements.

Sure.

Identify some indicator at all.

With the credit Crunch anymore, and then when.

When he looked at blizzcon.

Richard.

This competitive environment.

When you see one scheme at all.

This is Phil.

Jean Marc, especially when you consider.

The products that require credit.

For consumption.

Yep.

Entering this competitive environment with relevant player.

How have you looked at it.

From an overall perspective.

And the opportunity to have an unfortunate turn around.

Think about the first quarter and the sites dropped any kind of shift in the second quarter.

Thanks.

Got it.

Thanks, Eric Thanks for your question.

I'm going to start talking about the credit indicators. So remember in the last call I had mentioned that.

The first quarter 'twenty to see would have a recession.

And are over 90 indicators in our provision.

Which was some deep.

This is due to do it.

As you know with a change in strategy.

Credit policies that we took place.

The third quarter of 2022, so when we started this probably.

Notice that the AR.

Mark It was deteriorating.

Two important adjustments.

And I'll go ahead Lee.

With the harvest in the third quarter, especially in our brand more ahead.

E have been.

Pardon me very well so we are comfortable up ahead.

We know that the market in the situations that Brazilian consumers are quiet.

So we need to be careful about.

We've been having some okay no credit.

Opening so in this scenario where faithfully cat.

Joke around we're really comfortable because so far things have been performing well and.

And we believe that the indicators, they're gonna be stable not sure who the second question was for but.

Thanks.

Hey, Eric Thanks for the question.

About two one.

Uh huh.

Considering economic situation nothing changed that much.

Okay.

Sales in the same pace as the first quarter.

We were having a big bet on mother's day is always prepared very well receive tomorrow merchandise.

<unk> extended terms and not the many started really well so you've been with e-commerce.

Being a really tough we're still gaining share we gained share in the first quarter and we're getting share.

Which was really good but the market is still very tough.

Especially for higher ticket products.

Okay Super clear guys. Thanks for the answers.

Thanks, Eric for participating or.

Our next question is from is from J P. Morgan Nicholas please.

Yeah.

Thanks, everyone.

Don.

I wanted to know about your initiatives from an expense perspective, well have you already done and what do you think are the main initiatives you can work on the rest of the year to help with your operational leverage thanks.

Hum.

Well.

Sure.

Thanks for the question good afternoon.

Okay.

Ever since last year, we have been working on.

Efficiency programs and.

So we have been working on this for the past.

Orders with the operations or productivity.

Hi.

Pressure still on inflation.

So sales have been.

Having growth low what it's what they should be which pressures that's off a lot and we have been working on and that's fun to review.

This structure and this goes through all of the areas in the company. So we actually disclosed that.

We are just part of this in the first quarter and then the different work initiatives.

I consider beyond the administrative costs.

Also go through marketing logistics operation.

Hum.

Closing stores in D. C that are not as efficient as well.

We're really quick on these funds.

Brands and the trend is that the growth of this business.

Compared to last year.

Okay.

Michelle.

Sure then.

And see all related to the revenue that was really.

For the rest of the expenses are quite flat.

We should go deeper in these initiatives.

Yeah.

For a minute she finished during the year.

And you should see this quarter.

But it's going to focus on the whole company really.

Thank you Patrick.

Thank you Nicolas for your participation.

Question is from as you well from Bradesco shrunk May proceed.

Good afternoon, guys. Thanks for taking my questions I have two.

Two questions.

One.

It's about.

Your dynamics for the revenue from services.

So what would be like note that.

Kevin are there any levers that you have been working on them.

That should be considered.

Second question is what's your perspective.

The capital improvement if we can expect any kind of changes or improvements that are more structural in regards to this part of the business.

Bill will talk about the revenue for services.

So the revenue for services the last bit of it.

Because of the.

What we can see that.

It's really in line with the sales of the buy now pay later, but good job.

We've already recovered these that normal pace and the rest of the year.

It's just a difficult financial situation based on the major special sales in January . So then you lose it but I'm quite sure.

So selling with extended warranties.

Arnold.

Products that are being exhibited as tourists.

For instance.

Sure of almost one fifth and 800 and we.

<unk> shifted things around for the rest of the year. So it was really a occasional and it's under control.

Sure.

And how about the word from capital.

Sure why don't we.

Already done some work very significantly in the past.

Cortez to green.

Optimizing our working capital on the right.

Just stared at least.

Continuity.

So very intense rig for and working capital investments.

Should he that's kind of balance from now on.

Okay.

Okay perfect guys. Thank you.

Hello, and thanks to all for participating.

<unk> is from Gustavo <unk> from Oakland.

Gustavo you May proceed.

It sounds like going thanks for taking my questions.

On one side you had a problem we need to be spent.

And then on the other side so can ignore how does it can be so.

And I understand if you looked at this migration in a little more back to the store and if you can.

So in the second quarter. Thank you.

Hello, Gustavo Thanks for the question.

We've been.

Gaining productivity in our stores.

So we have productivity with our sellers at the stores that are really strong I always been instrumental.

New technology ever since you began with them in Chamonix. The Doctor you can call me on that.

Our sales reps at the store and so we've been gaining a lot of productivity.

You heard Kathryn getting back doors, but not at the same pace.

What we're doing is an expansion of their productivity and capacity. This is Charlie first choice.

That's a lot higher than our competitors. This is a big differential up yeah.

Perfect.

Perfect. Thank you Super clear.

And stop a further push.

Our next question is from Charles slot into the city.

You May proceed.

Good afternoon guys.

Thanks Al.

I think it's the first time, we've been speaking with enough. So I wish you luck came out.

In this new position and I wanted to advantage of an opportunity.

Got it.

We've been reading them No center person meetings with the management and I think that's really important to understand things though.

Do you have a relationship.

Hey, Todd.

It was essential to recover.

The close relationship and I remember that at the time.

You wanted to continue to the wholesale business.

Right.

The suppliers. So now it's just a softer competitive environment I think there's even a question about this I think it's important to understand what how you.

Relationships today, and how the role of this.

Store manager is it's before he was focused on selling services that is more focused on selling products. So what.

Your understanding of the role of the store manager and lots of fun.

To understand the digital operation, how you've been managing this what's your mindset light.

The market place so we've seen an improvement.

The take rate.

So it's really important to understand how you guys are monetizing the business and what Youre looking at up ahead and the growth of golf with a digital visit sorry, a lot of questions here, but just wanted to give you a broader vision of all of US. Thanks guys.

So.

Well I just wanted to thank him but of course, all that up I will talk about our relationship with suppliers and strategy.

Wanna say anything stupid, let me do my homework here and next time, we will have greater investment.

Knowledge to country more but about can answer about the Fisher.

Thanks, Joel further question and our relationship with the surprise is a very strong long term.

Nation ship and it's an important pillar in the country, we have strong partnerships it's been working.

Long term.

So everything we do basically.

We already have like a full year close with all the industry isn't a big number so.

The industry has three key as well.

Right.

And then as a long tail.

Strong partnership and we don't have this kind of struggled from one side to another.

We complement each other here in house.

The other question you asked.

So many questions. So I forgot if you sorry about that.

Thank you.

I wanted to know about the role.

Our managers.

Well when you get back.

The businesses have a lot more autonomy.

Store manager when it comes to discount this.

This is something that remains.

Fundamental piece of the business.

That's why we have very important productivity above average in the market.

Services are.

Are really an important part of our results and.

As I mentioned, we had a drop through Fannie Mae.

Special sales and reduced our socks as well.

And he really wanted to prepare a stock for the year.

It was to grow old occasional situation when it comes to services.

This is definitely something that's super unfortunate.

Yeah, we continue to have strong.

Okay.

About three P. M. P is mostly for recurrence, so we get back to growing in.

In the past.

John D C.

Burton.

Are you able to red hat.

Todd This recurrence and we're getting back to growing and so we had a growth of double digits. We finished very well and it's like what are the.

At the same pace for first quarter and three P. So really all of them.

So I wanted to go.

Today, we have basically.

Our 20000.

Although the selling area.

No.

Products that were not part of our portfolio for the managers in the stores.

Citizen themselves today.

Sure.

Terrible.

And there's one other point I wanted to cover about the B b.

Business. So I saw there there are a few opportunities.

See some different platforms, so intermediate other platforms as well so I wanted to understand how this has been analyzed by the company has an opportunity in the long run.

So we have a very strong b b.

It's one of the lines that most froze here.

Chang with different partners and we.

So this has really helped us increase.

Our strength in the industry and so I have a strong market by some competitors.

And you've seen this as well so.

No.

This was a very profitable business line has been growing a lot this year.

More details about this but it's a sales channel that's super important for via today.

Thanks, Paul and thank you everyone.

Once again good luck.

Right.

Yeah.

Our next question is from Andrew from Morgan Stanley .

And he has a question in English and we can answer.

And Oh excuse Andrew you May go.

Just a follow up on that.

Commerce operations.

Hello.

No.

Yes.

Oh sure.

Let's see.

Regardless of this call.

Although loan growth.

Oh I'm sorry.

Okay great.

Oh.

No I got it for Hawthorne Hipness Crestone went Liberty goggle.

Yeah.

Yes.

Hum.

Okay.

Angela can you hear me.

Translation.

Sure.

Okay.

You don't want to do.

About E Commerce and.

He and our long scale.

The ratio yes.

That already between the moment, we're experiencing in the quarter and we did notice better.

The smaller growth of the long tail items.

What we were having before but this doesn't change our strategic direction with the roll up.

Bringing this return.

This quarter you also saw.

The growth rate of different long tail categories are really high.

Quarter as well so for various categories and diversify our sources of revenue. So we're moving towards the strategic direction for <unk>.

So we did have a moment, where we were going through this.

In a moment, but of course it doesn't change your strategy. So.

The competitive environment that take rate I'm going to do this.

What we mentioned with greater penetration of services and a focus on health and profitability of our.

Operator can you start.

Operator can you start.

Supported by further penetration with logistical services.

The buy now pay later as well so you know that recently, a three or four quarters ago. We started this I'm not sure what the final visit or in the market place with a really big provides independent for penetration and so you're going to see we're focus on penetration of these services, which supports our profitability India operation.

And while it also brings the strategic objective of allowing for recurrence.

Thank you.

When somebody goggles.

Thank you Andrew.

And if you don't have any other questions.

For two for your final remarks.

And I want to thank you all.

Okay.

Well guys. Thanks, again I want to thank you all for your messages wishing me good luck.

This is of course your hard work and here, we have a lot of that.

So we've got a company.

Oh gosh.

There are some imports in differentials.

Let me translate the question from cities and enforced.

Right. So just want to understand how the company's assets have been performing and how quality so much higher right.

The store manager you mean.

Yeah.

The conversations I had during this month of conversation and I did visit from stores and you can see that there's.

That desire to really meet the customers needs.

Our relationship with the suppliers is long term, but it's all at all.

Yeah, its elite iron different categories, there's strong reliance so we can build this long term alliance as well focus on all of us at <unk> on both ends may we have the complementarity of having this portfolio of the.

Marketplace solution.

French strong b to B that works well and this gives US you conditions to optimize the profitability. So once again I'm Super excited I just came in here, so I can't reach conclusions yet.

So my first perspective.

These are positive.

It's a big opportunity.

In each of the points. We're looking at we have a lot of opportunities not Sapphire gene, yes, we're gonna be prioritizing the execution a lot more so that we can do.

Generate more value.

So this is what our agenda and I want to thank you all for your presence and won't be.

Exchange anymore information you have mother's day, so don't Miss out on the special sales. If you don't have our app download that you say you can buy in.

Like a purchase experience at the best storm.

Just because I don't feel we are indifferent.

Brands and we.

We have a lot of different products that have.

Her a valuable asset to the company.

Count on you guys to begin.

And our company and generate even more value you think you all have a great day.

Yeah.

Okay.

Yes.

Yeah.

Yeah.

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