Q2 2023 Via SA Earnings Call Q&A
Speaker 1: Thank.
Speaker 2: Fourth.
Speaker 3: Good afternoon everyone. How's it going? Welcome.
Speaker 3: to our earnings call for the Q&A on the results of our second quarter of 23 and also our transformation plan. Before we open up for Q&A, we'd like to recap on the material that was shared yesterday.
Speaker 3: our release and our presentation, as well as the video where we go over the main pillars of the transformation plan. Please.
Speaker 3: We can move on to the next slide.
Speaker 3: First of all, I just want to make it clear the change in VIA's positioning and what we are at VIA. There is always a concern and some issues related to new generic platforms or marketplaces that are coming into the market and why this is not a concern to us. So, VIA is in question and the reason why far too long theirstained
Speaker 3: a company with very clear assets, a unique positioning.
Speaker 3: And we're really concentrated in our core.
Speaker 3: And in our 1P we have our core categories which are furniture, refrigerators, freezers, screens, portable devices, and electrodes.
Speaker 3: home appliances, etc. So the tail is complementary to our customers categories. It's very different than our generic platform. BCVs as an opportunity.
Speaker 3: We even have some contracts we've signed and we're starting to provide this kind of service.
Speaker 4: Next. So quickly.
Speaker 3: We want to discuss the shift in the strategy. Our first four years, from 2019 to 2022, ever since we had a shift in the company's control, were essential for the construction of this mega platform. The expansion of our store's new sales channels has been
Speaker 3: marketplace, construction and even technology solutions.
Speaker 3: We are starting a new phase with a big focus on profitability, cash generation and returns on domestic capital. Please you can move along.
Speaker 3: So this means that the main indicators in the company that we were to look at like GMV, the gross margin, the EBITDA margin, etc. and the main indicators is the free cash flow with the commitment to have a robust free cash flow with a good interest coverage. And the main indicator to measure performance.
Speaker 3: that the management and team is Return on Investment Capital, the ROI. We're going to work on this to deliver good spread on a cost capital. Having said that, the EBITDA and GMB are just a consequence and not predefined targets that are isolated and they did not necessarily deliver a robust cash flow on return on investment capital.
Speaker 3: fundamental, which is a bit of the mindset shift.
Speaker 3: We were looking at GMV and the gross margin which included the variable expenses and now we start including the direct expenses of each business and product that we sell, the cost of the stock and the cost of funding to consumers. This changes the company's decisions, the governance, KPIs and of course it changes our targets and culture of the company.
Speaker 3: That was the new mentality that really unleashed what we have on our new slide that made it possible for us to bring levers.
Speaker 3: an initiative with a level of maturity that's a little more robust.
Speaker 3: and others we're still working on. So we have over 100 initiatives.
Speaker 3: And it's 18 labbers.
Speaker 3: that go through our P&L and cash generation dimensions and capital structure. Bringing in this slide, it was non-exhaustive examples of these levers. So we already brought this and...
Speaker 3: Some examples here add up to 900 million re-is, for example, in the renegotiation of indirect expenses that the lease contract brings in about 100 million re-is, other indirect negotiations going on. So we have a plan for 1 billion improvements in P&L.
Speaker 3: improvements in the LAIR. So this shift in the culture and this process with clusterization and organularity that releases its own billion rears in stock that will be used for our cash is fundamental to bring a new oxygen to the company and allocate value.
Speaker 3: and use this cash for initiatives and business opportunities to have a really high tier in the company. Moving on.
Speaker 3: As we look into our capital structure, you've seen Elsie's presentation and the video with everything we're doing, but I want to recap the main points here. The deployment of FDIC as a model and a financial instrument for a binocular is a structural change.
Speaker 3: We're talking about half of the cash debt that's going to be migrated to the capital market, releasing room in our balance sheet with the bank.
Speaker 3: for other purposes. So in the long term of course we will probably have a cost reduction and especially more stability, unleashing our capacity to sell more of the binoculars and increase the penetration. So there's a transformational shift from a business perspective and also from a biology perception.
Speaker 3: and from a vision perception in the credit areas and the banks, which is very relevant.
Speaker 4: We can move on.
Speaker 3: Besides this, we have other initiatives that we access for banks, other sources in the capital market, investment agencies and a lot of things that are going to extend the duration of the debt. Initially we don't expect to reduce the cost but increase the duration and then after we're going to start working.
Speaker 3: on liability management, constantly reducing capital on the spread as the company gains more strength and it becomes bigger. Besides just the monetization issues were all accelerated, we already had this part with the tax credits expected, it's two and a half billion that were recurring for 2023-24.
Speaker 3: And then we brought some initiatives. So the stock, as I already mentioned, previously there's some real estate assets that we're operating to consider a sales impact, actually up to 200 million rears, and there's a sales company that did here.
Speaker 3: that we have with the fiscal credits that we can also sell. We have about 4 billion RIs in monetization of the assets that we can try to work on also in the short term. We can move on. And then I reach my last year so we can get into Q&A where we reinforce the attributes of income.
Speaker 4: our unique positioning when it comes to logistics and commercial strength.
Speaker 3: And also the training of our team, our AMI channel approaches, an iconic binoculars and all of these will unleash major potential. So, you know, a lot of growth and participation.
Speaker 3: But it won't be our focus on the first two years because, first of all, we have to apply the cash into what we already have in house and it will bring the return rate.
Speaker 3: without a risk of execution, then as we generate more value and we have leftover cash, we'll apply this into some opportunities. And when we have the appropriate time, we'll present this.
Speaker 3: This is a summarized agenda that we presented in more detail on the video yesterday and also in our material. But now I will pass the floor on to Gabriel to start with the Q&A session so that we can get into more details that you guys consider to be important or maybe give you guys some more color on some points. Thank you all again for your presence. Gabriel?
Speaker 3: Thank you, Hennato. Good afternoon, everyone. We're going to start off with our questions and answers. The first question is from Victor Pinny and Safna. Please, Victor. Thank you, Kirov. Good afternoon, Hennato and everyone.
Speaker 3: I think I wanted to talk about this new plan. I think that by what we saw yesterday that you guys published and a little more details now. What I really like is that it's relatively simple. It seems simple. It's not easy but we have clear levers and they're all quantified.
Speaker 3: But I think the main point here now is how you're going to have the execution at the end of the day. It's going to be made by people. And I wanted you to talk about this and give us some more information on how you've aligned your incentives here at the top management level but also the guys at the commercial operations that had sales target.
Speaker 3: I wanted to understand how in the short and long term you have this alignment with incentives that define can be well delivered.
Speaker 3: Thank you, Lisa, for that question. We really have this transformation of incentives and targets in the company. So when we look at the entire commercial team and stores, the main indicators which are GV and gross margins, and we change this and we create margins one, two, three, and four, I have a net margin that incorporates the cost of capital.
Speaker 3: So, the stock went off to the category, kind of impacts the target, and the same thing applies when you have stocks that are closed and it's going to the store. So, the shift in the KPIs helps to change the culture when we talk about the short-term target.
Speaker 3: When we talk about long-term targets, we're incorporating the ROYX and the TSR.
Speaker 3: But of course, the program is still being reviewed and we're looking into all of the long-term compensation for the senior management team. We have triggers that are compatible with the returns for all the stakeholders. That's why CSR and ROI have triggers, but we're still designing and balancing out this proposal.
Speaker 3: so that we can submit this to the board and approve it, transforming it into the long-term plan for the company. And the last question here, I don't know if you can maybe give us some more details about the timing for the deployment or capturing of these gains. See you guys.
Speaker 3: Great, but the initiative has a timing, and we tried to illustrate this well in those little balls with how advanced these are. The examples that are not complete, of course, they're all basically having decisions made. The impact depends on the initiative, and we look at the personal impact of the initiative.
Speaker 3: Yeah bread ups in July and obviously start the saving September . When he looked at the snow.
Speaker 3: when you start the savings in September , when you look at the stock.
Speaker 4: Of course, it's going to be.
Speaker 3: This stock and whatever setember in the fourth quarter and November of Black Friday we'll finish. So we're going hope that I, just where we can already captureto thefu benefits, except for the F, I do think So as just launching that we LL start capturing this in the mid capacity to have.
Speaker 3: 100 to 700 million per month and this migration is going to take about a year to have full
Speaker 3: migration for the moment when we start doing it. So we'll see no full benefits by the end of 24. Some will start noticing the beginning of 24 when there will be an L. Other lepers will start having more exposure up ahead. That will impact us a little more up ahead because they take longer and they have more complexity. We brought what's really low risk prosecution and allow us to...
Speaker 3: So we can have this ramp up of 2024 and delivering and...
Speaker 3: fixing the company and then by 2024 we will start this new cycle. Thank you very much.
Speaker 5: of it or
Speaker 6: Thank you, visitor.
Speaker 3: Our next question is from Pedro Badescu. Pedro, you may proceed. Thank you, Gabriel.
Speaker 3: Hi, Hinata and team. I'm going to add two quick questions here. The first one is about suppliers. How have they been reacting to this new plan? Because it kind of considers a bit of a downside. Are you guys renegotiating terms?
Speaker 3: This is negotiation kind of following the same track. I want to understand this a bit. And also, another question is about the gross margin. So maybe it's a little bit early to try to establish the expectation best.
Speaker 3: Here we have some indications that are very important in the 1P, 3P, final pay later categories. Do you guys think that you can already have an idea of what will be a reasonable level for this gross margin from now onwards? Well, thanks for the question. First about suppliers, there's a good side, which is we're so relevant to our supply chain market gonna go to tech and get some sort of three to five percent effective for dementia,
Speaker 3: that everyone is very has a strong buy-in to whatever is going to strengthen the company. So we have a lot of support normally from our managers perspective in our conversations. Our partners are really good. This is not going to match the short-term demands that everyone wants to sell more and we're trying to be more disciplined to this.
Speaker 3: because we have to deliver this material on invested capital. But we want to also have profitability in our operations. And it's important to say that our core product line, that for the engaged to come, we don't have much of a reduction.
Speaker 3: So the reduction we have is normally on the tail and other categories that are not core and that we're in some way destroying value. When we look at core products, we see opportunities. Now we're being a little more selective on the SKUs and families because some give us more returns and others have a more optimized stock. And when you ask about the
Speaker 3: The question... Sorry, what was the question? Oh, the cross margin, yeah. So the cross margin will have...
Speaker 3: is impacted and now in the third quarter it's going to be more impacted because it's been this hour and this long term. We see opportunities to have this...
Speaker 3: just as the past are a little bit higher with an incremental improvement in the growth margin.
Speaker 3: on shifts in the market. We believe that the market is going to be a success.
Speaker 3: improve at such a point in time. But you know some categories kind of push the category upwards. So this would help the growth margin get better. And without considering this, we would consider the growth margin similar to what we had in the past year with some also incremental improvements to this pricing and make some progress.
Speaker 3: reviews, but it's not going to be the main driver because the gross margin is just one more way for this because it's not necessarily going to guarantee the proper visit into last time. So I know it's better to have a look.
Speaker 3: smaller gross margin in an item that will deliver a lot of returns in the last line because there's low capital investments than the opposite. So this stock turnover is really important and the EBIT or LAIR margin would be a lot better and easier to see the evolution of companies.
Speaker 3: Thank you, Renato, very clear. Thank you, Pedro.
Speaker 3: Now we're going to talk about a question from Philippi, from CityBang, please.
Speaker 6: Hey, good afternoon everyone.
Speaker 6: We want to understand a bit more because we charted out what it is.
Speaker 6: We plan and captain over order so now let's get a bit out of the market. Think we can imagine. Or have we been looking at them.
Speaker 6: A double digit print here maybe, that thing's point would be just highlighted.
Speaker 7: I will see the N-x Chain.
Speaker 3: The shared gains are the core items which are the strong points for data.
Speaker 3: I'm considering this vision in the market, awareness, what are you guys thinking about in regards to Black Friday, the second semester? Do you guys think you're gonna invest, stop, burn, and see the reporters? So maybe we want to tend to stand more about.
Speaker 3: in regards to this core. Well, thank you, Felipe, for the question. When we talk about this weekend, when we look at core and Black Friday, there is seasonality. We do hope to have a semester that's stronger, but we still have recovery in the market.
Speaker 3: And so it should be similar, but there is still seasonality in the quarter and that helps a lot. We have some marketing initiatives. So we wanted to get that there in a friendly way.
Speaker 3: and were using this pink ell Nevatore
Speaker 6: And we do hope to have a lot of shared points.
Speaker 3: Because of course it will help with our sales a bit, but we understand that there's a market to do a lot about this. We're gonna bet on the core, we're gonna have growing stock. And then in the third quarter, we have to compare and see how we're gonna use this, because there is seasonality that you buy to have like Friday. And...
Speaker 3: is going to be considered. We're going to talk about the OPDAT margin. We're not giving you a guidance. We're saying that the company's target is not OPDAT.
Speaker 8: If you...
Speaker 3: How much do you need to have a healthy free cash flow? We look at the initiative for the P&L.
Speaker 9: Blitz.
Speaker 3: So if you look at this and the ROIC of the loss of capital, you can see that there's an increment and it should be delivered in the EBITDA market and it's going to be to reach this point where it's close to what you mentioned. So we understand we're close up, we're just not providing a guidance.
Speaker 3: from an EBITDA margin perspective, but there is an improvement to be delivered and that's what we're working on and it is significant. Okay, thank you very clear.
Speaker 6: Thank you, Felipe. Our next question is from Danny Agar from XP.
Speaker 3: Hi guys, definitely a new thing for my question.
Speaker 6: My question is really related to you.
Speaker 3: Like competitive narrowsstu.
Speaker 3: Now you guys have the strategy. I'm focusing on four categories.
Speaker 3: Maybe you'll leave this work competitive, generalist, Mark with the place in there, but even these categories, there's a bit of competition, right, from some players.
Speaker 3: Omni or a little more physical
Speaker 3: Players also are just in this discussion to categories of higher to average. So it's important to look at the view of the competitive scenario, what you guys consider to be the main difference of.
Speaker 3: And the second question is about the main risks that you've mapped out for the execution of this plan. And what you guys brought I think is really cool because you have a lot of transparency, it's really clear....when it comes to deployment...
Speaker 3: relatively right because nothing is totally simple but there doesn't seem to be such an execution risk.
Speaker 3: What have you guys focused on more and what should we focus on more towards this plan? Thank you.
Speaker 10: Thank you very much.
Speaker 6: Thank you so much for the questions.
Speaker 3: First of all, in competition, we really have been trying to have the market for rational competition. We've seen the main players of this trend. If you look at the month of July , we've already tried to find ways to tighten up a bit of the payment method. If you look at the installments, if you have interest, you really change profitability.
Speaker 3: And that's a huge lever. And where else can we have maybe where we can see a little more competition? Well you have regional small players that are on the point at the front of the field due to cash needs, end of demand. Sometimes they have more aggressive special sales that are a little more irrational. We're not getting involved in this struggle because we think India has competitive advantages.
Speaker 3: online in the market with more competition where this is your brain taking with unique pricing in payments and installments free of interest or different price options which really helps the last line profitability
Speaker 3: We're seeing that the market is a little more rational and no doubt the industry is pressured because there's a lot of volume. We need to adjust production, but there's not time to adjust the cycle subject.
Speaker 3: So, eventually we will see different conditions and when things get tight, this kind of brings in concentration of the special sales channel which allows us...
Speaker 3: to have prices that are very aggressive but that also generate good margins and good value. So this is how we're looking at it. We haven't seen a big change in demand or overall scenario. This is going to help the market be more rational about the risk of execution. As you mentioned, we wanted to show and take on as a commitment here that we'll have some simpler
Speaker 3: delivering what we know how to do. And there's some other levers that are a little more strategic that have more complexity, so we're not considering.
Speaker 3: It's been fun, we just saw it because they involve external factors and negotiations that are more complex.
Speaker 3: and that we need to attract the right partners to make those feasible and monetize some other strategic assets. These things we're going to advance.
Speaker 3: We just consider what we believe has a low execution risk and have under-promised and over-delivery. As we share these levers, we will have a more controlled bridge and disposal to the market.
Speaker 3: so that we can create this with a lot of consistency and after a few quarters we would really bring credibility and then we would be able to get into this new cycle with a lot of support from the market for everything that we have to do.
Speaker 3: That's a bit of our agenda. Thank you so much. Excellent. Good luck with the execution.
Speaker 6: So, you also just...
Speaker 3: I want to highlight that this plan was built and we discussed this in the video that it depends on our management and our action plan. It doesn't depend on an improvement of external scenarios.
Speaker 3: to be able to execute and have the company financially sustainable and stable in the reality that we expect to achieve. So it just depends on our management. It doesn't depend so much on external scenarios.
Speaker 11: jigalu DI.
Speaker 6: Okay, thank you. Our next question is from Nicholas from JP Morgan. Nicholas. Thank you guys for taking my question.
Speaker 6: I want to talk about the CDCI, which is one of the competitive levers, and the company in it now should operate under the FITC.
Speaker 3: How do you look at the penetration of this product up ahead? It already represents out 25.
Speaker 3: I'm going to put that in the store a little less online. How do you consider...
Speaker 3: this product would be able to reach when it comes to penetration.
Speaker 12: Thank you Nicholas.
Speaker 6: EDCI really has many opportunities, so having the final pay later, we'll use the funding from the FPCA in the history when we had a bank limit exceeding this, we had 30-31% of the store. So, thank you.
Speaker 6: We understand that at least to recover the 30 or 31 percent is all we should do. The second quarter was really impacted by the drop.
Speaker 3: And this limit, and it's kind of a little bit below this percentage you mentioned, of course, this training too, is really impacting profitability, but recovery to the 30 percent really brings in those 250 million re-add in the last slide, which is the first line of that summary that we mentioned of initiatives in the P&L.
Speaker 3: Of course, we have an initiative to increase a bit of our penetration in the stores.
Speaker 6: to increase a bit of our penetration in the stores and online.
Speaker 3: We are not placing this limit yet because it's just not mature yet.
Speaker 3: because it's just not mature yet. We'll be able to take on.
Speaker 3: this commitment for penetration above this level. Today what we're considering is resuming historical levels and keeping online at a very conservative level. We think we need to have an improvement in the market of higher representation.
Speaker 3: Today we currently prefer to do more conservative so we don't have risk of communication. So that's pretty much it. Getting back to the 30%. Thank you. Good afternoon everybody.
Speaker 6: Thank you very clear. Thank you, Nicolas, for the question. Now I'm going to call Felipe from Goldman, please. Thank you, Gabriel. Thank you, Renato. Thank you, Nicolas.
Speaker 6: I first of all had a quick follow up on Nicholas question.
Speaker 6: So, in regards to the final per liter, besides structuring the FITs and understanding that the market dynamics when it comes to the call is not the most favorable, I want to understand what other measures besides structuring the FITs will be implemented so we can get back to scale up on the final per liter.
Speaker 6: Because as I mentioned, and you guys have already said, this is a very important lever for the profitability and for sales and the company. Thanks Andreen few minutes earlier
Speaker 6: If I could submit another question that's not related within the transportation plan. I understand that there are some categories that are going to go from 1B to 3B. So I want to understand in front of a market-based scenario.
Speaker 3: From the technological perspective, soundboarding of the sellers and everything is pretty general consensus and it works well. But I want to understand from the competition perspective, have the sellers been kept on the platform, what's the churn of these sellers. Can you give us some more color on that? Thanks. How do you do it?
Speaker 6: Thank you, Felipe. I'll stop and I'll pay later. To get back to the 30, it's a lot more about pricing and then we'll reach the 30 percent. I'm going to hit the button.
Speaker 3: Then we have some leverage. First we talk about the UX, right, from the customer and the seller that affects us. So we're getting into this month, for example, we began the app 2.0 for the stores and that really changes the...
Speaker 3: and facilitating the sale of the final pay later, and also the offering of additional services. This is already in search and store as we improve the conversion of it, and we're rolling it out to all of the stores for the month. That's one of the initiatives. On the website, you have the revision of the customer journey. We have some deliverables.
Speaker 6: to push up to collections every two months or harm this.
Speaker 3: So we can change customer journeys and really favor the hiring of these additional services. And so of course when we have funding that's a little more mature and we can bring in these additional offerings for funding. This will allow us to price things differently.
Speaker 3: A lot of what we do today, considering the climate, have a tier that's above 30 percent.
Speaker 4: Eventually we also talk about that.
Speaker 6: You can see that you have a tear that's a little bit more balding.
Speaker 4: We're always going to maximize the bottom line.
Speaker 3: And so this is a lot of room. I'm just giving some examples. There's a team that's working to bring in other lovers to improve the final political service squad just for the final political services. When we look at 1P and 3P, I could please.
Speaker 3: You're right, it's really well structured and we can actually accelerate growth, but we were really concerned with the health. And then how do we improve profitability? Well competition is what it is. So the products become a little more commoditized, but when I look at our strategy here...
Speaker 3: If I consider investing in Google to bring customers to go into my website and pick up up two products, profitability becomes harmed and it becomes a good sense of when I use this to be complimentary to those customers that already get into a site to buy another product then it becomes a lot cheaper and I make more money.
Speaker 6: So what we're doing is that since we have.
Speaker 3: a really big customer base and redirecting these investments in marketing. And this costs 0.1% instead of 5 or 3%. So when you go to the open ocean, the best result is 2%. There's a lot of items that go up to 5%. There's items that even go over this. You have to get the average ticket.
Speaker 3: you can see like 7 or 8 BI spent, it gets really heavy. So this strategy will bring more health. It's already changing the health of the marketplace. And about leading this transformational plan, now it's a lot lighter.
Speaker 3: I'm more focused now and we're going to have smaller growth. We do hope to have growth in the market. We think it's going to be more organic and not just bringing in new customers. So it's about recurrence.
Speaker 3: So the seller churns, we have some negotiations going on and there is a bit but nothing that's going to leave the normal panorama. We're already at this level of 150,000 sellers and this gives us a lot of granularity and diversity and the SKU knows something.
Speaker 3: with less competition and shorter, slower turnover. And then that's where we're going to really start making money. Instead of using money to build money and make more, we want to profit-advised what's already done.
Speaker 3: Our next question is from Eric from San Francisco.
Speaker 3: Thank you, Gabriel. Thank you, Zippy. Our next question is from Eric from San San Jose. Eric, you may proceed.
Speaker 6: Thank you guys. On our site we have...
Speaker 3: a little more of the modernization of the assets and the foreign potential for the EOIP of 2023. It's a lot more about understanding how your expectations are.
Speaker 6: and what you guys think is a little easier, and what could be a little more difficult, and what you guys consider could possibly even have an additional potential.
Speaker 3: Thanks, that's pretty much it on our side.
Speaker 13: Thank you very much.
Speaker 3: Thanks, Eric. Let me take that question. So, we mentioned $4 billion invested in 2023, by which $2.5 billion of tax credits. So, we performed the second semester with $1.2 billion. And we're saying, and reaffirming, that the $4.5 billion was $2.5 billion invested in 2023.
Speaker 3: and confirming the performance and expectation for the second semester, which is going to be $2.5 billion in a higher margin than what it was last year. So there's the crescent and the monetization.
Speaker 6: And this is also really important because now we start seeing.
Speaker 3: When you look at the balance of the ICMI, we can see that the third quarter where the total balance already had a reduction indicating that we're monetizing more.
Speaker 6: and the actual generation of the credits.
Speaker 3: And so stocks with one billion rand are already underway.
Speaker 6: and we began the non-purchase of categories that were migrating.
Speaker 6: And so, these purchases are already suspended and now, as Kenalto mentioned, we have the next few months for Soty Bush journey.
Speaker 6: This cash will come into the company, of course we have seasonality and structurally after this period we will reduce the company stocks at this level.
Speaker 6: And it's important to mention that the stocks...
Speaker 3: There's a lot of benefits. We have the release of crash. There's a benefit of how we're doing things that will also improve the profitability since we're going from business categories that have low margins and these should improve overall. I burger off his Indeed.
And then they'll bring, as we mentioned, this migration and the shift in the mindset. And then we place the cost of capital in a very visible and relevant way for our day-to-day decision-making. We want to sell without losing the sales. So you'll be generating a healthy friction.
with logistical management and you have to position the stock in the best way possible.
Finally, the reduction in stock will also lead to smaller accumulated credits in ICMS that we have here. So there are many benefits. Here we have the assets and some stores here. We're going to have a lot of these processes already taking place.
In the past and now we are at this phase where it is like a final stretch in the process. So we have these 150 to 100 million to continue to monetize this short-term. And then Sales and City Aries is a company that actually has over 500 million of tax losses. It's a small thing, where […]
When we talk about income tax and...
When we talk about non-fascinated tax losses and this is...
something that we're going to be working on with the execution. These are all levers that are under our management. 3.5 billion are the main.
ones that we have already mentioned.
The other ones we already mentioned as well, we're working on them until the end of the year.
Okay, thank you very much for the answer.
Now we are going to call Yago. Yago, you may proceed.
Thank you for watching!
Also if I want to eatthat.
Thanks for taking our questions and congratulations on the details. We had two questions on our side. The first one is about the closure of stores.
So, it's 50 to 100 stores that you estimate to close. Is this closure concentrated in a specific brand? We saw there's a lot of closures in the Pompidio stores. So, could we imagine that this would be more concentrated in Caspaíano?
If it is concentrated, it may be in commercial spots that are in shopping malls or more on street. Could you talk about more details in regards to the closing and also...
Okay, here goes the video.
And speaking of depot, I think some other!
Are there some examples of categories that are going to go from 1P to 3P?
So we can have more details about this.
Thank you. The Ponce de Rio grant
had some adjustments to keep it in regions where we're stronger.
And some regions were stronger, so there wasn't a competition in France.
In Rio we didn't have any kind of utilization and now we decided to do this a little more but we tried to look at opportunities and cities where we have stores open so there's nowhere where I'm going to leave the market.
And we can see the negative margins that we can capture part of the sales and other sports.
And so we see that the opportunity to close is the best solution. And the other 50 we can possibly keep it open for negotiating the rent and also the reduction of the stock and the course, optimizing the working capital and depending on the performance.
part of it can be more profitable, so we can keep the stores open.
So when you go to 153P...
We're giving a lot of granularity on the plant because we think that the company needs to keepcal documented.
and trust, but this opening and breakdown brings some strategic decisions. So I think we're good to go.
These are products with very low average tickets and there's a lot of volumes per day. So we sell a lot but the cost of service was pretty expensive and including the stock we have. And, I had to initiatinglowed a huge number of cars.
products were very low after tickets and there was a lot of volume per day so we sell a lot but the cost of service was pretty expensive and including the stock we have to add 150 million in stock.
personal hygiene, et cetera. So, 23 categories that we have a lot of granularity, scale items that customers buy frequently, involves less than 5%.
of our customer base. I'm not going to lose these clients because.
The difference is that
Instead of having a gross margin of 15, but it costs maybe $14.50 to $16, it would meet everything.
I can make 10 or 12 at the take rate and then it's clean. The cash is ours and this improves people a lot and without the investment capital. So when it gets raw it gets healthier.
Okay, perfect. Thanks guys.
Thanks, Gerardo. Our next question is going to be in English and I'll invite Andrew to submit his question and we can answer in Portuguese.
Thank you.
How are you? I can't hear you.
Thanks very much. After theeorite These were capture
Thank you.
I believe you have a problem with your mic.
Please, I don't know if Gabriel can text him. I will make it.
Hi, Andrew. Can you hear me? Hello, Andrew Vasenazov. Hello, Andrew.
Hi Andrew, can you hear me? Hello Andrew, what's in the ZOVI? Seeing? I can't hear you, but...
I guess mine is not coming through.
Okay, we got some words. I believe that you mean that you will follow up with Gabriel later, right?
I believe that now we can hear you.
Oh, yeah, okay. Okay. Thank you. Sorry about the difficulties. The two items I'm curious on is how you think about the impact on the channel sales as you close the stores and then second an update on full commerce how the logistics of the service is progressing. Thank you. Perfect. Perfect.
For comprehension of all here, I will answer in Portuguese, okay? Do you have some translation?
Okay follow the onlyic kind of irig.
how many channel aspects of Indus-Hannes and Soswers were closing. We're still having stores in the region online, so there will even be a migration maybe from physicals online, but we think they're different markets.
We believe that this store will probably make it more to a neighboring store than an online operation. And it's all under control.
But about the second question, sorry.
about the second question.
about full commerce yeah and so about
Full commerce actually is fulfillment and the fulfillment plus as we've been doing more of so it's something that we really believe in And this migration of categories is actually a stimulus to bring in more sellers here So it's a business that we're going to invest in, here you have margins and not much capital invested So it's worth saying that since we have idle capacity in our system, we're just going to put in particular which is
The only one the size of 99 TCs in all of Brazil. We do plan to accelerate full commerce.
So, the fulfillment to suppliers, but also logistical services. Not necessarily fulfillment, but that I can work on just the higher logistics with the margin. Here we have retailers, fashion retailers, generic platforms for marketplaces and manufacturers, industry suppliers.
that are hiring our services as well as logistics. So the actual full commerce that's operating with pricing and white label, we practically don't do. We have just a little bit of fulfillment plus where we perform.
a little bit of the website's operation. I hope that was clear. Let me know if you need more clarification.
Great, thank you. Thank you, Andrew.
And after all, no Tim was my story
So we do not have any other questions. I'll pass the floor to you, Hinalta, for your final remarks.
Thanks guys. Anyways, I just wanted to leave this last message here that we're really excited. One thing I've noticed that I think was really surprising was the capacity of execution.
We expect to reach the 100 days with so many levers already and maturity. So we're working on this plan with a lot of groupies and this is allowing us to have a deeper and anticipated perspectives of initiatives which puts us in comfort to understand.
that we have a solid transformational plan back to the basics, low risk, and we can really reach the end of the year with a whole other company and maybe take one, two, or three quarters until the market starts noticing this and looking at the balance sheet. So I thought, yeah, there's a company that's not only solid and sustainable.
but there's a lot of capacity to capture other possibilities.
So, we have been profitableizing the platform a lot and we really want to thank you for your trust and participation. Count on us and especially I want to thank the huge, great team at VIA that's delivering a lot and really I want to thank everyone with such full dedication. Let's go guys, thanks.
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