Good morning, everyone. Welcome to the Alpargatas First Quarter 2024 Earnings Release Video Conference. Today we have with us Liel Miranda, our CEO, and André Natal, our CFO. This video conference is being recorded and translated simultaneously into English. The Q&A will take place in the following format. After the end of the initial presentation, we ask that those who want to ask questions raise their hand in the Zoom toolbar and wait with their microphones muted until we signal you to proceed with your question. Before moving on, I clarify that any statements that may be made during this video conference regarding the company's business prospects, projections, and operational and financial goals constitute the management's beliefs and assumptions based on information that is currently available. I would like now to give the floor to Liel, our CEO, who will start this video conference. Liel, you can please proceed. Good morning, everyone. It's a pleasure to be with you. I thank you all for being here. Our results for the first quarter 2024, I think it's good to start out by saying that this is one more step in that turnaround process that started out last year, and we start to see positive results in several dimensions, both financial and operational. Another important thing to mention is that we demonstrate that the strategy adopted to have a focus on the portfolio, focus on the channels, and focus in the markets we operate in, combined with discipline in allocation of resources and execution, has been working, has been yielding the results we had expected. When we look at what we proposed to do in 2023 and that we continue to do in terms of cash generation, this month we had positive results of BRL 260 million. We are going to detail that later on, which was the focus of this first step in this turnaround process. As for the competitiveness in Brazil, we see some positive results. The first positive result is that we continue the optimization of our portfolio, focusing even more on the products. We have more competitiveness. And in addition to that, we start to see an improvement in our market share very recently. We see that our competitiveness in Brazil has been growing, and as a result, we improved the operational leveraging of the business in all directions. For the sustainable growth of the company, we also see some signs of improvement in the international business units. For example, we had a redefinition of responsibilities where the responsibilities of the teams in Brazil, as for the Brazilian market and as for the European teams, which is the responsibility of the European market, which is the responsibility of the European teams, and a new business unit that is now responsible for all the distribution markets. Havaianas is present in several countries in the world, but there are about 15 markets where we have to focus on because then we will be able to accelerate our growth. I think that this first quarter of 2024 is one important step, and we are going to keep on with this strategy that has been defined and which is yielding results as we speak. Now I would like to give the floor to André, who is going to give you the details of the financial results for the first quarter. It's a pleasure to be with you all of you. Good morning, everyone. We are in a sequence that, as Leo mentioned showing in the first slide, this is a journey, and this journey continues. I think this slide on the screen maybe is a great demonstration that the first phases of the journey were not discontinued. They are a permanent effort. They were a first step that was not abandoned due to other things that we would like to focus. We will keep up with the discipline in the company about the allocation of resources, the CapEx, and the good management of resources in the company. On this slide, we can emphasize on the first graph on the left upper side, one more quarter of cash release, working capital cash release. We know that was a pain point for the company in the past. So we have already seen four consecutive quarters of working capital cash release, and in this quarter, it was BRL 112 million. So the accumulated for the last 12 months is BRL 530 million. It was very important. You already know the story. You have been following this story along the quarters. Part of this came from the reduction of inventories, both for raw materials and finished goods, but also for the reduction of other accounts such as in working capital, like accounts receivables, e.g., accounts receivable and accounts payables. This has been key to our effort so far to stop the leveraging that was increasing. When we look at the graph in blue on the right side of the slide, we see the same levels of CapEx. When we compare it to the previous year, we started the first quarter investing BRL 114 million, and now our investment was significantly lower, about BRL 100 million. Smaller. This was a very important process in which we had to be very agile in 2023 by prioritizing what was really essential for the company and what we could really phase out or bring to a halt at the moment so we didn't burn our cash so fast. When we compare it to the budget, this level of BRL 15 million, I already anticipate that this is not that we understand it to be recurring. We just approved it in the last board meeting, a budget that suggests a return to part of the investments that we put on hold. I think it is more a matter of phasing, but it was important for the moment to put a break in the Capex expenditures and make a reprioritization to implement our capital, allocate our capital where we needed to actually deliver what we intended. This was a very important character in the story so far. When we look at the green graph on the left-hand side of this slide, we see that we also maintained our discipline in the expenditures. We also stopped in the second and Q3 of last year. We had a first break, but it was still granular when picking up the low-hanging fruit and also understanding that some of this stuff were not recurring. We emphasized at that time that this was not going to be recurring. So part of that was by freezing some of the expenditures that wouldn't necessarily get back, but over the end of last year and the beginning of this year, we would go deeper into the opportunities that we had so we could be able to return with the expenditures that were not recurring, that were not being frozen forever. So we returned with some of the expenditures, but we maintained a level of reduction in our expenditures in a more precise way, in a more accurate way. So it's more now recurring what you were looking at. When we look at the graph on the right-hand side of this slide in yellow, it is the summary of everything I have said so far. It's a reduction in the leveraging of the company. This was actually worrying for us because it was reaching our covenant clauses, so it was important to make the three previous adjustments I showed so we could reach the results that you see here, which is a meaningful result, relevant result, and brings the company to leverage levels which are absolutely healthy and comfortable compared to any other companies. So it's important to notice as well that in the yellow line, we have the EBITDA contaminated by the write-offs of the raw materials and finished goods that happened last year, which are not necessarily connected to the capacity of the company to generate cash. So these are accounting effects that arose from older decisions of collections, and you know that part of that became inventory that was transformed into a write-off along last year and this quarter. So when we remove that, we look at the blue line, which gives us an even healthier leverage level for the company of about 0.7 times the EBITDA of the company. So this shows that the first wave mentioned by Leo not only did not stop but also got stronger and more solid in this quarter. And this is something that we will keep up from now on with this discipline in the usage of capital. On the next slide, we see the impacts of that in the net cash generation. Here we have the perspective, remember what I have been telling you, to have the perspective of a movie, understanding what happened in the past, what was happening in the past when there was this rapid accumulation of leveraging of the company. And starting last year, we have been generating cash consistently, so 260+ positive now. So the accumulated over the last 12 months was BRL 765 million and creates now for us the possibility of moving on with other agendas and finance the growth of the company and the recovery, the turnaround in the scaling of production of the company. So on this slide, I would like to recap the sequence of our business cycle we have been showing this to you, and this somehow is an easy way to explain the overall. So in a year-over-year comparison, we see first the resumption of our sellout, which is a very important process to resume our scale versus last year. We still have a smaller scale. However, in Brazil, we managed to grow our sellout at the rate of 1%, and this obviously has generated, when we look at the sell-in, which was 12% higher. I think it's very important to emphasize that this higher growth of the sell-in compared to the sellout is not necessarily related to we pushing inventory into our sales chain. These numbers being different, it's much more related to the comparison of the basis for last year than the absolute levels of sell-in and sellout of the current period. So in order to, there is a reconnection between sell-in and sellout. It was expected, of course, that the sell-in grew more than the sellout, so now they would be a little bit more leveled out. I'm going to show that to you on the next slide. But it's important to notice that the sell-in and sellout are much more connected right now, and that's what takes that green curve, this green line curve below, to be more balanced. There was a destocking in our chains, and this is going towards normality right now, normalization right now. So there will be a slight disconnection between sell-in and sellout, especially because the sellout is not precise. We do not have a reading of 100% of our demand in the market, but inside the estimates, we have these numbers seem to be much more connected. Today, as a business principle, we make sure that we don't have any kind of disconnection between those two variables, sell-in and sellout. Then looking at the blue part of the slide, now we have production levels, which is 7% smaller compared to last year. It's important to say that last year, we were about 30% lower, had 30% lower production, which means that we are resuming our production levels to levels which are different from last year. It's still slightly higher than last year, but they allow us, since we have drained part of our finished goods inventory, we can also have a better connection between those two parts as well, what we expect to sell and what we expect to produce and buy in terms of raw material, the project that we designed that we called Rewire, so we could, through better planning and better streamlining of all of those four parts, to make those variables to be more even and avoid draining our inventory too suddenly or to accumulate inventory. When we look at the graphs, you can see that we have destocked our inventories, and these inventory levels are much more well-behaved, so as to say right now. Of course, there are seasonal points here because there is some seasonal demand, which means that we are not going to have an absolute number of inventory that's going to be always still, but we shouldn't have an unjustified accumulation of inventory anymore. The same when we look at the yellow graph, we are going to purchase—you can see that we purchased less material than a year ago, but when we look at the destocking of the inventory levels compared to last year, you can see that we got very close to being almost pretty much adjusted. From our understanding, it is adjusted, so it's worth noticing in the yellow graph. It took us a year to destock our raw materials inventory levels, and we understand now that this graph is inside the raw material. Right now is inside what we understand as what is to be pursued as an inventory level purchase. So we should remain within this band of raw material inventory. Of course, we have a variation of prices in the market, but in terms of volume, we feel comfortable with what we have right now in inventory levels for raw materials. On this slide, we rewinded a little bit of the story just to remind you of what we had been through before that generated the destocking in the chain. When we look at the sell-in in yellow and sellout in blue, we see that in 2021, in the secomd half, we had a much higher sell-in than the sellout at the time, and this generated a very large amount of inventory in the chain. So the second quarter of 2022 was a little bit more balanced out, and in the first, in the accumulated of this one and a half year, we accumulated the sell-in in the chain inventory that obviously was going to have a price that we will have to pay, and we paid this price in 2022, 2023 overall. So you remember that in the first two quarters of 2023, we went through a very strong destocking. So you can see the inverted yellow bar, smaller than the blue bar, and from the second half of the year on 2023, we saw this a little bit more connected, and now in the first quarter, also the bars are going to be closer. Of course, there is some fluctuation, and we are going to be extremely careful to have great disconnection between those two bars of sell-in and sellout. When we look at the basis effect on this graph on the right-hand side, we can see why the sell-in grows more because the basis of last year is low because this is when we were making a destocking of the chain. So they are pretty much reconnected. The levels of sell-in and sellout are pretty much reconnected now, and this is very important to keep the chain with a healthy inventory so that we don't lose our leverages. When we accumulate inventory, we lose part of the levers that we have. Now moving to the gross margin, EBITDA margin evolution in Brazil and internationally, as we had already seen it before, now in the first quarter of 2024, this is very strong. We have an important gross margin expansion compared to the first quarter of 2023 and 2022, and we get close to the first quarter now of 2021. In the lower part in the yellow graph, we see these numbers adjusted by write-offs, and we adjusted the whole historical series. So it's important to notice that we are at a 43% level when adjusted by write-offs, and in these quarters, we adjusted only the write-offs, but it's important to remember as well that we had important provisions related to labor contingencies due to all the reduction in personnel we had to proceed with last year. And if we excluded and we normalized it, that the 43% would turn into 45% of gross margin and EBITDA in terms of gross margin, just to give you an idea of the non-recurring effects that we expected to see improvements over the next quarters. So this is just to say that we are at a level that is equivalent to or close to the level of the gross margin in the first quarter of 2021. And compared to that period, we still have our sell-in 3 million pairs less than at the period. So even with a smaller operational scale right now, we already see a margin expansion that's quite interesting, so as to say, and more compared to our historical levels. If we go even further back, we were at regular levels in 2019, so we can say that we are at a very competitive level right now compared to our historical records. Again, we are going to keep pursuing productivity gains so we can see right now great recovery in those variables. The same happens in the EBITDA margins. We see an important expansion and a sequential expansion. And again, back to 2022, this is contaminated by the same problems of the labor contingencies, so this 16% would be closer to 18% compared to the first quarter of 2022. On the next slide, we then bring the international business of Havaianas, which is coherent with the narrative that we brought to you in the last quarter of last year. What we tried to show at that time was two important points. One, that the recovery of the international market has a kind of a delay, a longer delay than the one we saw in Brazil. First, we saw Brazil first as having priority in the recovery, especially because of the size of our business, but also because of our capacity, because we sell all year round in Brazil. We don't have such a strong seasonality in Brazil as it is in the rest of the world. We don't have a season that ends in the middle of the year, etc., etc. So we managed to deploy initiatives and see the effects of these initiatives throughout the year. And on the other hand, in the international markets, we are there through pre-orders, and there is a series of effects that whatever we do throughout the whole year, in the short term, we are not going to see those effects. They are not going to be the effects that we expect to see in the future. So it's a longer journey to see the results, but it's absolutely possible, given the power of the brand and how well known we are abroad. And another message that we brought to you was that last quarter, last year, was not a good reference for profitability of the business. We had had, in sequence, two quarters which were quite different. When we look at the EBITDA graph, we arrived at -BRL 51 million and -BRL 100 million in the third and fourth quarter of 2023. So this brought a kind of a perception of a risk that was bigger. So at that time, we tried to make a point to the market that we didn't see that as a recurring level of our business. Obviously, I would like to say that it won't get where we want quickly, but we also understand that we are not at that level that seemed so bad in that fourth quarter of 2024. So once again, we have lots of homework to do here, lots of opportunities. We are having a very deep study in each one of the regions, and we have plans inside the company, but they will take their time to be executed. So this graph on the right-hand side, we only make this comparison in the volume of millions of pairs, and in the other axis, our average is in thousands of BRL. So this comparison shows that the two dots are the third and fourth quarter of last year. So we seem to be at a very more difficult position than we actually were. We are now a little bit compared to a little bit worse compared to the first quarter of last year, but we see an important perspective that over time, we are going to be recovering levels that we had already had in the past, which are going to be better. Now I'm going to give the floor to Rafael Estides, who will continue with more details in each one of the regions. Thank you, André. I'm going to start out talking about the volume and revenue and net sales. We had 12% growth in volume, 14% growth in net sales in the net sales per pair. It's important to emphasize the stabilization of our sellout. When we look at the sellout breakdown by channel, we had a more positive sellout in our food retail and our D2C. The footwear retail grew 3%-6% year-over-year, so this is the most important and relevant channel for us. So it was a very meaningful recovery. Moving on to the international markets, we bring to you the breakdown by regions. So in the consolidated for the international, we saw a 10% decrease in volume, 14% in net sales. This was driven mainly by the USA and EMEA and also distributors, which saw volume decreasing of -4%. It's important that our most important operation in Europe, we already have a more adjusted logistic structure. That was a very important and recurring topic last year, which resulted in loss in volume and distribution costs, which were elevated last year. So this year, we have the structure working in a much better shape. So we started out the beginning of the high season delivering the volumes that we expected to deliver to our clients, and as we managed to replenish the shelves of our clients from the very beginning of the high season, we have these good prospects to advance in the Sellout and Sell-in in this very important region, which is Europe. In the distributors market, we're still in this process of normalization of the inventory levels of our distributors, but already at a very advanced stage. You remember last quarter, there was a very steep Sell-in decrease because of this normalization of inventory levels, and at the beginning of this quarter, we have advanced well through this process. In the United States, we saw a volume decrease mainly in our B2B and mainly in the off-price channels. We started out the year with smaller inventory levels as well, so we gave less discounts, smaller discounts, and this affected both volume and revenue, net sales. Going into our gross profit, we saw an increase of 11% in the consolidated, growing 31% in Brazil, and decreasing 13% in the international operations. Important to emphasize, as André mentioned before, we adjusted 5% our year-over-year cost per pair reduction, and if we use the write-offs and the labor contingencies, we would be actually adding 4 percentage points in this gross profit in Brazil. In the international operations, it was pretty much stable. A little bit of an advance that comes especially from the cost reduction in Europe. As I said, our logistics operations there are much better, and also distribute markets cost reduction that are much more aligned to our cost reduction in Brazil since these are markets that we serve through exportation via our distributors. It's important to reinforce that this cost per pair reduction, we had a very important reduction in labor, and there was also a sequence reduction in the raw material cost reduction. Moving on to the expenses, the SG&A expenses consolidated were nearly flat year-over-year with relevant benefits such as the OBZ packages with a 13% decrease compared to the first quarter last year, and also distribution expenses -9% versus first quarter 2023. If we make this math per pair, given the volume we gave, we reduced our costs per distribution of pair in -15%, of course here emphasizing the optimization of our logistics and distribution operations. On the other hand, we have negative impacts of bonus provision. We are provisioning the bonus, which is related to this current year, and we also have a variety of expenses related to volume increase like in royalties, collections, etc., which are aligned to the volume growth that we saw in Brazil. We also had a market expenses reduction of -8% year-over-year, but these market expenses were still 21% higher and 28% higher than the first quarter of 2021 respectively. Again, we remind you that the plan of our company in the long term is to go back to resume these investments in markets, to invest more in our brand, especially in the priority markets. Part of these savings that we have managed to generate so far with the reduction of the OBZ packages should be reinvested in the brand, and that's what we will be seeing in the mid- to long-term. Starting at BRL 107 million for the normalized EBITDA for Havaianas, we had an addition of BRL 3 million from other operations reaching BRL 110 million. For normalized EBITDA, we had extraordinary items, especially in this quarter related to the simplification in the operations we have been executing and the costs associated with it of BRL 10 million reaching a statutory EBITDA of BRL 100 million. Going into the net financial position and operational flow, we had a very important release of working capital. Once again, as for the inventories, we had a reduction of BRL 30 million compared to the Q4 of 2023 and especially compared to the first quarter of 2023, 34 days of products in inventory compared to the first quarter of 2023. In this quarter, and that's a novelty, the biggest contributor for this working capital release was the receivables with a release of BRL 120 million in receivables, which means a reduction of eight days of net sales. This all reflects a much higher discipline in our management of our receivables and an improvement in our processes for approval of receivables deadlines with our clients. Of course, we don't expect this to be recurrent, but the average level that we got is already much more aligned with the historical records of the company, and we do expect it to maintain at this level right now. From the suppliers' standpoint of view, we had a reduction of BRL 38 million, a decrease of BRL 38 million in suppliers. This is still reflected by the reduction in the raw material purchase. As André mentioned, we decreased 13% and 28% the value, reflecting the cost reduction of the raw materials in the market. As we normalize our production and the purchase of raw materials, we expect our suppliers to go back to more normalized levels according to the historical records of the company. Moving into our net debt, we saw a variation of BRL 260 million referred to the operational flow in CapEx, BRL 285 million of working capital in other and BRL 15 million in CapEx and BRL 21 million related to no operational flow. Moving into Rothy's results, we had a quarter that was aligned to what was expected with $34 million, 10% growth in the revenue, negative EBITDA, but getting very close to the break-even point. It's important to remember that this first quarter is the least relevant considering the top line for Rothy's in the United States because of the seasonality, and that means being closer to the break-even point gives us a positive perspective for the rest of the year in a perspective of bottom line and EBITDA numbers. The company is still seeing important advancements in the gross margin, seeing less costs in the shipping costs for the last mile, and also important optimization of expenses in the reduction in lower customer acquisition costs and expenses optimization. It's also important to see that we had the same store sales growing 12% year-over-year and launch of products that performed extremely well at the beginning of this year in this first quarter, which brings us a very positive perspective for the rest of 2024. I'm going to move now into our Q&A. We are going to follow the order of the people who raise their hands. The first question is from Guilherme Vilela, J.P. Morgan. Guilherme, you can go ahead with your question. Good morning, everyone. Thank you very much for taking my questions. I would like to understand a little bit more this margin in Brazil of 43%. When you remove the write-offs for labor provisions and compare it to last year, which was 41%, can we understand that this margin [Foreign language] is a to-go for for the company considering that we have less volume and excluding eventual cost pressure, that this is going to be a recurring number? My second question about the international operations is I'd like you to give us a little bit of visibility in the pre-order process that you mentioned, making the deliveries in spring and how this is happening, this shipping is being happening. And also about the international, if you could give us some idea of the profitability for each one of the regions isolated and how this would dialogue with an eventual revision of the footprint from now on. Thank you all for taking my question. Thank you Guilherme for your question. Good morning. When we look at the gross margin, as you mentioned, there are several moving impacts. There is an important part of the reduction that you see there of the cost reduction that you see, therefore, which results in margin expansion comes from the gain productivity of our workforce in the way of operating, and therefore we managed to stay at the same levels of production and spending less in the production. So in this 43%, if you remove the labor contingencies that I mentioned, it probably would be at 45% of margin. There is a part of this process that is obviously connected to the movementation of the raw materials. So it's very hard to be precise about the recurrency because this depends on the commodities prices in the market, and we are not able to predict how the price of commodities will be. But when we look at the movements that we have seen so far, we saw obviously the price going down of the price of the main raw materials. The prices went down last year compared to the prices that we saw we had in our inventories. So in the market, we had much lower price than the price we had in our historic inventory, but we couldn't buy because of the huge inventory levels we had for raw materials. So only at the last of last year, we resumed this process of buying raw material, and in the beginning of this year, we did the same. So we saw part of these benefits of buying raw materials at lower levels, lower prices. The first important thing to notice is that there is a difference, a delay between a lag, a time gap between we buy raw materials at a lower price and this reaches the inventory. Since we work from an accounting perspective in the average inventory, this will take some time to be reflected. Also, when we buy raw materials, it takes some time for this to be seen in the COGS of the company. So it takes about two months in order to see that. So in practice, not all of this process of reduction of the raw material prices that happened over last year was translated already, went through the cost of goods sold because we have to go through the inventory level prices and also through the COGS. On the other hand, it's important to understand that in the beginning of the year now in the market, there are some geopolitical tensions and also questions, matters related to the rubber industry. So this took the prices of the raw materials to increase again compared to the decrease we had seen last year. If on the one hand, not all the movement has been made through the COGS, on the other hand, the purchase of raw materials from now on by the company, especially because we will start buying, we will resume the purchase of our raw materials in the H2 of this year, we will probably perceive a higher price of the raw materials compared to what we saw in the past months. So it's difficult to predict exactly at which level, 43%, 48%, 45%, where this is going to be stabilized because we have this moving impact. So first, we're going to see this movement of the benefits throughout the COGS. So we are pretty much well covered in the first half of this year in terms of pricing of raw materials. On the other hand, we will try to keep the recurrency of our purchase of raw materials. So this will take us, lead us to obviously buy sometimes the raw materials at a higher price than we see right now being practiced in the market. So the easy answer is the part that comes from the raw material is very difficult to precise from now on, but we are comfortable that from now on we will keep looking for newer suppliers or also to gain efficiency in our purchase processes as well as to better manage our daily manufacturing operations and our industrial operations. We are very comfortable with these levels. We are very well covered in the first half of the year, but after the first half of the year, we will have to rely on prices that I cannot tell you how these prices will be in the second half of the year. And now I'm going to request Liel to talk about the second question and obviously the profitability from market to market. We won't be able to give you the breakdown, obviously, but what I can tell you is that we have a very detailed understanding and our planning has been designed to try to correct the distortions that we have seen over time. So we won't be able to give you a breakdown right now. But Liel can address a little bit the second question that you asked, okay? What we are doing in the international operations. As André mentioned, when he talked about the slide on the international operations, differently from Brazil, where we have continuous sales processes throughout the year in the Northern Hemisphere, especially U.S. and Europe, as the main clients are large distributors, large accounts, usually this negotiation happens, for instance, at the end of 2023 for the summer season of 2024, June of 2024. So our capacity of reaction to seek additional volume to ensure that we have growth as we are seeing in Brazil, which is a little bit more dynamic, our capacity is limited. So that's why we say that the Brazilian market was much quicker in demonstrating the improvements of our competitiveness considering price, execution, and distribution. On the other hand, in the international market, this takes longer because we need to deliver this year of 2024 based on the orders that we received in 2023, which of course does not prevent us to keep working harder to find more opportunities for growth inside this summer season of 2024 through more distribution, better execution at the stores, but the space for growth is kind of more limited than what we saw in the short term in Brazil compared to what we saw in the short term Brazil, which means that we are going to see this improvement in competitiveness in the international scenario maybe later than what we see in the first quarter in Brazil. As for the international markets, obviously, we cannot break down our results market by market, but the most important thing, as André mentioned, since we made analysis of many of the markets where we are in, we are focusing now in the markets where we have the biggest scale, which means that with a bigger scale, we are going to be able to accelerate volume and with better margins quickly or more quickly. So the point that I mentioned of having more focus in the right international markets will help us to have more positive results in the mid to long term. Thank you very much for your answer. It was very clear. I appreciate you took my question. Next question. From Larissa, XP. Larissa, go ahead with your question. Good morning, Liel, Rafa, André. Thank you for taking my question here. I have two questions. First one is a follow-up on profitability asked by Guilherme and reaching more a bit aside. Since you mentioned the productivity gains, what do you see as of spaces and what are the low-hanging fruits in terms of efficiency and simplification initiatives that you commented that started in the month of April? And my second question, also about the international operations and thinking a little bit more in the American market is if you could tell me a little bit more about these channel strategies that you have been working, where you are at with it right now and where you intend to get to. [Foreign Language] Hey, Larissa, thank you for your questions. First of all, Larissa. There are some problems for us to share our projections from now on. We cannot give you any kind of market guidance, and obviously, we have to be very careful here to be careful not to say anything that sounds or seems that it is a guidance where our margin should be converging to or what the potential of cuts in expenses that we see right now. First of all, I can tell you that we don't have no low-hanging fruit at the moment. The fruits are all high right now, so it's much more complex right now. I think we did a very well-executed job in the end of last year. There was some external support, but the entire team was involved in mapping opportunities, and so we did. We mapped opportunities that make us comfortable to believe that there is something to be executed over time. W at we decided to do, first of all, is that we can't do everything at the same time. So part of these opportunities are going to be carried out in a more phased way. Some of the things are more straightforward, and some of the things they rely on automation preparations or processes that then enable us to capture those gains, to benefit from those gains. So from everything we mapped, we can't, unfortunately, tell you a number or a percentage or a million because we can't give you a guideline because of regulatory matters. But everything that we mapped here in terms of options for efficiency gain and simplification will be carried out over a period that includes part of this year. Part of this we have already done. Part of this we are carrying out right now and will be carried out throughout the year. We'll still have in our parking lot some interesting ideas to explore maybe throughout next year as well. Another thing that I can tell you is to anticipate for you is that part of these savings, obviously, we have the interest of reconnecting that by bringing these numbers back to our investments in marketing. That's why we talked about the OBZ packages, excluded marketing, because this is exactly what we want. We want to invert the spiral cycle that the company had been performing, which was a spiral of growing other expenses and not marketing, sacrificing marketing. So we are now reconnecting to what we call the good spiral, to be efficient where we can be and we can. So we have the money to invest in the market boosted so we can see growth in the top line of the company in the future. So not all of this money will translate in EBITDA gains because part of this will be reinvested in the business so we can go back to growing our top line because our volume growth will be also a very important component in the expansion of the EBITDA margin. So at a certain moment, we have to reinvest parts of these savings so we can keep growing the EBITDA margin in a sustainable way. Otherwise, we're going to be in a dynamic of only cutting, but we also have to see an expansion of the top line, of the volumes that we sell. So again, some of the facts of what we did last year, we had to revert, but we also managed to implement other initiatives at the end of last year, in the beginning of this year, so we could have a counterpart to this non-recurring event. In March and April, we had some more adjustments. We had some headcount adjustments. We had some restructuring. Liel said in his very part of his speech about the redefinition of the global and the local teams. In this discussion, we recentralized some functions that were local in each one of the markets. We brought them back and reconnected them to the global areas here in Brazil. So obviously, this generated some opportunities for headcount reduction and restructuring as a whole of leadership positions and so on. These movements have been happening, but we can't anticipate these numbers, and we want to do that. I'm going to ask Liel now to answer your question about the channels in the international markets. Thank you, André. Thank you, Larissa, for your question. I think that the American market is very similar to what we mentioned for the international market as a whole. Obviously, what we have in the United States is a distribution based on two large channels. One channel, which is the department stores, clients which are organized under large accounts, and another part that is even more important in the U.S., which is the digital sales, the e-commerce. Those two channels for us make all sense, firstly because to be present in the department stores and in more premium department stores positions our brand as a brand that has added value to consumers, to the end users, and to have online distribution is a must as well. So we have to be able to be competitive and be able to execute online as well. So this is our strategy for channels in the U.S. We'll keep pursuing this strategy to make sure that this strategy is going to result in the scale that we want. Our challenge is that it's an expensive business to do, expensive market to do business, and to gain scale there is not so simple. So I hope I have answered your question, Larissa. That's super clear to me. Thank you very much, and congratulations on your results. Obrigado pelas perguntas, Larissa. Vamos para a próxima pergunta. É o João Soares do Citibank. Thank you, Larissa. Next question will be asked by João Soares, Citibank. Thank you, Rafael. Good morning. I think you talked a lot about margin, but I would like to insist a little bit on that because there is one aspect I would like to better understand. First of all, from a more comprehensive point of view, I saw that you did lots of investments to go into a capacity portfolio that's going to be much smaller. So there was a reduction in the number of portfolios. So there is certain idleness of your factories that I need to, that will need to be addressed, that I need to understand if this is correct. If there is some idleness of your production capacity, if this could be actually something good for the gross margin, this is an important point. I don't want to discuss the commodities, the commodity prices aspects, but I would like to understand what you have of visibility of the cost per pair over the year. If there is some margin to decrease the price per pair throughout the year because of the lower raw material prices that you have in inventory, is that correct? Is my understanding correct, or should this be something that you are going to see in the beginning of next year? And one last question. I'm sorry to ask a third question, but as for the international businesses, we have the EBITDA margin, sustainable margin. Before, we had an opportunity of being even higher than Brazil given that the gross margin is better. But nowadays, what do you see the long-term EBITDA margin for this international business? How it compares to the EBITDA margins we see in Brazil right now? Thank you, João, for your questions. João, what we can answer is, in terms of your evaluation of the idleness, it is correct. We have some idleness in our production. We have some manufacturing gap. We gained a lot of productivity. So there are two elements to be mentioned, three elements, by the way. One, we did investments. We made investments. So certainly, we expanded even though we didn't have concluded the installation of all the equipment, but we do have manufacturing expansion because of the investments we did. There is a second element, which is we have reduced the size of the scale of our company for now, at least. And this is the part that should vary over time because obviously, we have a product, brand, and space to go back to growing and reoccupy those idleness that we have right now in manufacturing. And obviously, there is one element that because we gained productivity, we operate in the same machines, the same capacities, we can do this in a more efficient way, which also translates in a certain way into increased manufacturing capacity. So I would say that because of those three facts, maybe the conclusion that I come to is, and it's important to mention too, that when we look at the margins, there is an increased depreciation effect. We have more overload of depreciation than actually an increase in volume and capacity that we are operating at right now. And this is even something that makes our accounting suffer a little bit. Maybe it would be more fair to make an adjustment of the size of the depreciation to be able to see what is precisely the profitability of what is being actually used. But it's true what you were saying. There is some pressure because of the depreciation that are moving through the inventories. We still have some issues, right, that they are ongoing. But another way to look at this is the fact that we did this inside our strategic review last year. We can see a capacity to grow the volume of the company, at least here in the foreseeable future, without a need for larger capital investments. So obviously, we have a capacity that is bigger than what we need. We know that. But the flip side of the coin is that we won't need to make any kind of large investments when we increase our production numbers. So for what we have as challenges for the future, we don't see a need for new larger investments or large investments. You are right. There is certain pressure of the depreciation, but there is also the opportunity to reoccupy this capacity with a very, very small cost because the capacity for production is already installed. As for the reduction in the price per pair and commodities, it's important that you look at two effects that happen in parallel. The first one is this time gap that I mentioned in the first question. There is a time gap between we purchase at a certain price, and this goes through the inventory, affects the average inventory costs and prices, and then through the COGS to the end. On the other hand, when we look at the last month, when we look at the raw materials, the commodities that we trade, their prices went up last month. So when you look at the rest of the year, and it's hard to say, right, where this is going for the rest of the year, number one, because we cannot say, number two, because I don't know what the price of the commodities will be for the rest of the year. When we look at the near future, I would say that we are quite protected considering the levels we are at right now until the end of the first half of the year. But when we continue to buy or to purchase, we are already purchasing at a higher price than we purchased like 3 or 4 months ago. So this combination of effects sort of pays off and levels off. It gets even from our perspective. So again, it depends on what's going to happen to the market of the commodities. So I cannot tell where it's going. I don't know where it's going. But at least for the first half of the year, we are very comfortable at the levels we are at. As for the EBITDA level for the international operations, they suffer. They scale with the scale effect. They saw the increase of expenditures last year affected the EBITDA margin, and also the scale reduction has an effect. So nowadays, we suffer a little bit with the two things: smaller efficiency level, but also smaller scale because you saw our volumes decreased a lot. They decreased about 10% compared to the first quarter last year. So this effect in the margin is quite important, especially because when we look at the graph, the dispersion graph, you see there that we are operating very close to the break-even point. In this quarter, we had an EBITDA of about BRL 16 million, which is very close to zero, right? It's positive, but it's very close to the break-even point. So the scale should be extremely relevant from there on, right, because we would be able to recover that. But as Liel mentioned, it's going to take some time before we can scale up again and reach the scale levels we had in the past. And in the meantime, we are trying to reduce expenses. There are always capacities. For instance, in the logistics expenses, we saw a very large increase in Europe because of the new service providers, the warehouses. We have plans here to reduce those costs. Again, João, it's hard, and I can't give you a number about where this gross margin is going, but I can tell you that we will keep working on both fronts, going back to the expense levels that we had in the past, so try to delete this inefficiency we gained, but also to try to expand the volume and gain with the scale and expand the EBITDA margin per pair. To finish, to wrap up the answer, I don't see any structural reasons to have worse EBITDA margins from now on. We should be able to find again those efficiencies, streamline operations, and go back to the better historical record levels of expenses. But this is going to take also a recovery of the market. So this combination of the two things should send us back to the historical levels of the EBITDA. It doesn't mean that I'm giving you any guidance that we are going to go back to the EBITDA levels of 21%, 22%. I think I covered the three points that you asked, João. If we summarize the international narrative, we have to imagine a company that's going to have a volume aligned with the historical records once you gain scale again and also margin aligned with the historical records, right? Because there was before the idea of gaining market share in the world. So I think this narrative nowadays is a little bit far-fetched when compared to what we think right now in the current scenario. João, I think that what we see for the international is fix the basics. Let's ensure that we can do what we are already doing or we have been doing in the past, but execute it well. As you saw it last year, we lost some leverage in the international. We had elevated costs, especially in logistics. We lost distribution. We lost volume. So this is what we are trying to leave behind. So what we need right now is focus on the markets where we have scale to regain this operational leverage, recover the volume we have already had in the past at a better cost. So from there on, we can talk about the growth of the international above what it was in the past or what it reached in the past. As I said, for the international operationals, this doesn't happen in the short term as this is seen in Brazil. That's why due to the nature of the channels and it's a more seasonal product, it's not a product that can be sold throughout the year as it is here in Brazil. So the narrative is we are focused on the markets where we have scale now so we can ensure the recovery of volume and we can regain the historical margins that we saw. So from there on, we will be able to discuss growth because obviously, we believe in this opportunity. But right now, we are focused on the discipline of those markets where we have scale to regain the volume and the scale. It was very clear. Thank you very much, Liel. Just one more point here, André here. It was important, this strategic revision that we did. We looked a lot at a lot of data. We looked into a lot of data last year. And a good sign is that we see that there is a lot of market in flip-flops worldwide to be gained. And we do have a brand. We are top of mind in the main markets where we work in. So it's not that we don't believe anymore in this possibility. It is just that it doesn't help at all right now to talk about our potential to gain share in the future and grow more if we have not been able to fix the basics, as Liel mentioned, and regain that solicited scale we used to have in the past. So we need to phase the narratives. So right now, we are focused on being down to earth and work on the turnaround that we are carrying out right now, okay? Thank you for your questions. Thank you, João. Let's go for the last presentation. Pedro from Safra. I think the biggest part has been already addressed, but I would like to understand a little bit more about the price per pair. We saw different results in the international. There was a little bit more of a participation from the distribution in Brazil because of the price year-over-year a little bit flat. I'd like to understand your point of view for the rest of 2024 about that and also to understand how competitors, especially in Brazil, are positioning in the market. I think that's the main point I'd like to understand better. Pedro, tudo bem? Obrigado. Hi, Pedro. Thank you for your questions. I'm going to tell you my point of view, and Liel and Rafael can complement my answer. It's clear for the company that over time, we have carried out adjustments. This is very objective. We made price adjustments that were higher than inflation in the previous year. So obviously, these generated a series of impacts for our competitiveness at certain price points, at certain channels, and in different geographies. For example, this was not a problem only in Brazil, but it also happened in other geographies. We increased our prices much more than the product group and also than the inflation in Brazil. Obviously, we don't think this is a good way to go. I think the opportunities will appear in RGM, but they cannot generate a steep increase in prices as it happened in the past. So we know nowadays the challenges that we have. We lost share because of that for several reasons, but this certainly had a role in this market share loss that we had year-over-year when we examined even against 2022. But we already see a recovery of our market share. So we are regaining part of our competitiveness. We have seen an important regain of our market share. We have an important growth of sellout. And there is a market share growth because of that. Our sellout growth was even bigger than it was when we reported before when we looked only at the grocery channel, the food retail channel. So there is some evidence there that we are indeed regaining our capacity to be competitive in the market. But that goes through several factors. This goes through price management that is more careful. And I can anticipate, of course, I cannot tell you what we're going to do about our pricing adjustments in the future because of competitive issues, competitiveness issues. But we're going to be very careful about any kind of increase in prices. This price increase will have to be very well controlled, very well applied in our portfolio products and aligned with the inflation and aligned with what other competitors are doing. We don't see any kind of a price war or anything that may call the attention from a competitive standpoint of view. What there is is the reinsertion of some of the price points. We abandoned a prominence we used to have in certain price points. So we want to reoccupy those price points again. This is an important part of our journey of competitiveness. But we also have been operating with much more care to regain this competitiveness. The result is what you see in the numbers. We have already started to gain traction. We have already started to expand sellout and to regain part of our market share lost. We also don't believe in any movement of going back in price to give big discount movements that can generate. So we don't have any intention to regain big chunks of market share. So we want to consistently regain market share. So we don't have any interest in regaining market share that is not—to gain market share that is not recurrent. So we won't have to operate any kind of price increases that are above the inflation. Of course, we are going to pay attention to adjustments we need to make, but we are going to try to be more aligned with the market compared to what we have been in the past years. Now with a simpler portfolio, but also with a better positioned portfolio in the price points that we want to occupy, we are going to be much more precise in managing those revenues according to the price points where we want to compete in. So I think we are competitive right now and that we are gaining competitiveness right now. If I could only complement what André said, you also asked about the international markets. As André mentioned, we are very careful as well about the price increase in the international operations. Just to give you a little bit more about the results of the revenue per pair, it was almost increased, what's almost pretty much related to geographic mix, considering the gain relevance of the distributors' market where the price per pair is a little bit lower because of our business structure per se in those markets. So there is no price reduction in constant currency. It's much more because of the mix of products and because of the geographies. In Brazil, as André mentioned, we are thinking much more about the changes of the structure of our portfolio. We have been telling for a long time with the successive price increases we had in the past, we almost abandoned, so as to say, certain price points that are very important for the category of flip-flops. And somehow we fixed that in the second half of last year. And the products that we inserted at this price entry price point have been gaining relevance in our sales and have been helping us to regain competitiveness and regain—Rafael, Liel here, I would like to complement. When we talk about optimization of the portfolio, it doesn't have only one operational benefit of reducing cost, reducing inventory, and all the complexity so that we can be more efficient. The optimization of portfolio also has a commercial standpoint of view because with the number of SKUs, more adequate number of SKUs, and more adequate number of models, we can drive what should be sold in each specific channel or in each market outside Brazil. This allows us, enables us to manage prices much more efficiently than when we have the same portfolio competing all the channels. So part of our strategy, when we talk about nationalization and optimization of portfolio, means to help in both sides, to be more efficient, operationally speaking, but also to be more effective from a sales standpoint of view, having the adequate portfolio for the specific channel and with the right pricing for that channel because we reduce overlapping in channels. This all should result in positive numbers. Of course, as Rafael mentioned, we had results of a mix of geographies and mix of channels in Brazil. And these all together resulted in what you saw was the net result of everything that's added to this. Thank you very much, Pedro, for your question. We are going to move on now to our final considerations by Liel. I'd like to thank you all. Today, I'm completing 100 days here at Alpargatas. So this is my—and I'm satisfied with the numbers we are sharing with you, which are the results for the first quarter. This shows the consistency of the work that has been done last year by the entire team of Alpargatas. And this brings what we have been reinforcing, that is our focus: manage well the allocation of resources to ensure the financial health of the company, improve our operational efficiency, improve our costs to ensure that we regain our competitiveness. And from there on, we will be able, as André said, to reinvest and to go back to pursuing sustainable growth with opportunities that we have not only in the Brazilian market but also in the international markets. I think this quarter was one more advancement in the step that we have been commenting on since last year, which we will not abandon. On the opposite, we are going to focus on the initiatives that will generate better returns to the company. Thank you all. Have a great weekend.