and choose your language of preference, English or Portuguese. At the end of the presentation, we'll begin the Q&A session. To submit a question, please select the Q&A icon on the bottom part of your screen and write your question to enter the queue. We will only accept the questions in writing. We would like to let you know that this earnings call is being recorded and will be provided on the company's IR website. Today, we'll have the presence of the company's executives, Sergio Zimerman, the CEO, and Aline Penna, the VP for Investor Relations, Finance, ESG, and New Business. Now, I'll pass the word on to Mr. Sergio Zimerman. Thank you so much. Good morning, everyone. Today is a very special day, as we are right before we complete twenty-two-year anniversary, and we have the honor to announce to the market the definitive agreement on the signing about the merger of these two companies, and now we're just waiting for the closing. And I also would like to greet Paulo Nassar, the Cobasi CEO, that will be the combined company's CEO, the brothers, Ricardo and João, which will be our future shareholders in the company, within the board as well, and colleagues. As well as Cristiano and Camilo from Kinea, that were really fundamental in the entire process for the transaction on the merger. And through these people, we... And all of the other people in the Cobasi board, and also in the team, that helped work on the transaction, and it was extremely intense, but very loyal, very reasonable, very fair in every point and in every discussion. Which gives us the certainty that we really have a huge combined company ready to set a whole new chapter in the pet history in Brazil, as we think about the long term and even out of Brazil. Well, having said all of this, I will start off with the presentation, and the idea is that we'll be talking about the merger. Then I will pass the floor on to Aline, as she gives us some more details about this, how we're gonna be creating synergies, and then I'll get back to discuss the second quarter earnings. Here, in a very paradoxical manner, towards the company's reaction, I want to say that we have very good news to share, and excellent news, actually, to be honest. I had already anticipated that the earnings should not be expected to be so strong in the second quarter, but that we believed in a gradual recovery on the third quarter onwards. The truth is, really what we're seeing, and you're gonna understand this as we present this, but the number of evidences of how much positive news we have in the second quarter report, when you look at the full film and not just a photograph. Retail, of course, requires a longer term vision to be able to understand. Let's move on. Here, we have the creation of the best pet ecosystem in Brazil. It is the best and most integrated ecosystem. But let's get into the main rationales for the transaction. We split this into seven blocks, and we'll explain a bit more of each one, but I want to give you an overview on the rationale of this transaction. The first one is, of course, the scale gains. Through a platform for national pet services that already exists with both companies, and then, of course, together, there's an exchange and experiences and benchmarks, and one will kind of contribute to the other to the other's operations, so that if they're already really good companies, they'll be excellent and really learn from each other's experiences. The second point is the union of this business model and strategic guidelines that are quite similar, which is fundamental as well, in line with what we had already mentioned in previous calls, on the importance of really having a strategy for occupation in the market, distribution throughout Brazil, and working in markets and regions where we're still not present, and all of this is very coordinated, so that consumers can be extremely benefited by the rationalization of this expansion model, so the third aspect is strengthening the omnichannel approach to the combined platform. Naturally, as an example of what I was mentioning before, here we have some practices that can differ among companies, but as we see the best in each one, we'll be able to really create a much better model for all of the companies with the lessons learned as well. And so in the fourth point, you have the potentialization of the commercial strategy and obsession for the level of service. So this is already in the culture. And as we work together, this will be even stronger. And then the third point here, we have the best practices for the full integrated offering for pet services and aesthetics, but here it's gonna be really clear. But of course, the stores network for vet services is gaining an even more strategic importance, and the processes that each companies are working through to have partners to work with the aesthetic service centers through franchisee models, which is working super well, and all of this in a platform of almost 500 stores. The sixth pillar is generating value through sharing skills and synergies. So here we already have a pre-study by McKinsey, so that we can provide more visibility on the synergies and which synergies they are, the initial quantification or calculations that exist. But the work will have to go deeper still. Between the signing and the closing, there's gonna be a lot of work to go even deeper into all of these synergies, and actually thinking about the roadmap and the deployment of how it all, how all of this will happen at the moment of the closing. So this timing between the signing and the closing is gonna be optimized, so that we can really, in the post-closing scenario, know what we should or not do. So this will be very intense as we get into strategic discussions for the future combined company. Then, as we move on to the seventh and final point, which is super relevant, is the union of the reference shareholders in both companies. Paulo and his brothers are pioneers in the pet sector. They've been around for thirty-nine years with Cobasi, and as the founder of Pet Center Marginal, the current Petz, with twenty-two years of experience in the market, will really be able to find the best each one has to offer. I'll be taking on the role as the Chairman of the board. Paulo will be the CEO of the company, and when we discuss and have conversations ever since the signing of the MoU, this partnership will be really long-lasting and very productive because Paulo, as well as myself, have. We're not passionate about our own convictions, but we're passionate about our arguments. So this was really clear and transparent when we spoke during many meetings. And we understand there's a lot of flexibility in understanding different arguments and perspectives that can help us to build the best for both companies. Let's move on. First, I wanna show you one point here that I think is central. This transaction will bring benefits to consumers. This is sometimes I joke around about this because if the CADE or the antitrust body understood the spirit of this merger, they would approve this in one week, because it's so good for the consumer. Everything we're doing here is gonna really focus on improving services for consumers. Rationalizing our costs will provide a more competitive environment. We'll be able to deliver services that are better, we'll be able to deliver products that are better, and everything will benefit our consumer. Why is it all in benefit of our consumer? Why are we so obsessed by this? Because the market, as you all know, has been transforming itself at incredible speed. are the marketplaces that are excellent, that have their own interests in different segments, but they're not specialized. And so what we're doing with this merger is that we can be very strong, so that we can compete with these marketplaces. Because if you take a look at each of these, you're kind of competing with millions, sorry, with thousands of pet shops through the marketplace. And that's why we must be extremely strong to ensure that this competition is healthier and always benefiting consumers. So anyways, here we have the big numbers, BRL 6.9 billion, and here we always have a base, which is 2023. And the data of course, until the closing moment, will be a lot better than these. But the official data for 2023 are these: BRL 6.9 billion in our gross revenue, BRL 464 million in EBITDA, and this would represent about 11% of the market share, according to the best sources we have for estimating market size. The second aspect is this union will provide the strategic similar guideline, so we'll be able to have really greater potential on the offering of services and more precision also in the assortment. Here, I think we have a lot of value to be exchanged on some of the practices we have, and that for the combined company will really build value. The third aspect is strengthening the omnichannel approach, as I've already referred to previously, because of the possibilities and exchange of information that we have with each of the brands in their omnichannel approach. I want to remind you all that we have percentages of omnichannel approaches that are very different. Actually, the adoption of the best practices in the company will lead to this convergence of the omnichannel approach. The fourth aspect with the potentialization of this commercial strategy, here I want to highlight our private labels that really have an important role when it comes to holding on to the margins that are naturally pressured by the increase in digital. So the subscription plan, the exchange of the best practices, the NPS, and operating in an excellence zone. Then we also have the best practices for the full offering of services. And so here we have a huge potential, because when you look at the market share for the Petz services, the combined companies are considering about 2% of the market only. So we have a lot more to do here when it comes to services in order to acquire greater relevance and in both companies, and I've spoken with Paulo a lot about this, we're absolutely aligned on the importance of the service strategy when it comes to consumer loyalty and how we're going to be investing on this so that consumers can have better, more democratic services. Naturally, you have greater value creation for the Petz and Cobasi shareholders, and you guys are going to see this as we map out the synergies, which, upfront, will already lead to an initial study, and we'll see clearly the importance of these synergies. And initially, of course, these were mentioned by McKinsey, but they still have a huge potential to go deeper on in the next months. And as we've already mentioned, Paulo, as the CEO of the company, and me as the chair of the board, in a relationship that is a 52.6% for the Petz shareholders and 47.4% at stake for the Cob asi shareholders. Naturally, a board that will have all of the governance criterias of a publicly held company, with the committees also advising the executives in the company and bringing in the best data and information to the board as well. We can move on. Now the highlights for the combined company. We're talking about a number of 494 stores, a revenue of BRL 6.9 billion, 464 million, and a positive cash position of 194 million, which is data from 2023. Naturally, at the moment of the closing, the data will all be updated. Next. On the value creation, I'll pass this on to Aline, so she can keep up with the presentation, and I'll be right back to get into the earnings in the second quarter. As I mentioned, please pay attention to this. Above all, in the seeds that lead to the results in the second quarter, you'll see the signs of the recovery that's so interesting from the third quarter onwards. So right now, this is a call after many quarters of difficulties. It's a call that is extremely optimistic when we see the magnitude of this merger, the quality of what this represents with Cobasi and Petz in the market together. And, despite it all, the specific Petz numbers that we are also going to share in an isolated manner, which were a bit weaker, but extremely exciting when you look at the full film and not only the photograph. And we're going to see this in the results in the third quarter as well. I'll pass this on to Aline. Well, good morning, everyone. And here... Sorry, guys, we had a little microphone technical issue, but anyways, here we had a preliminary synergy study. As you mentioned, we hired McKinsey, and over the last few months, we had a very complete specification of the main synergy blocks. And we didn't want to be, we didn't want to cover everything here with all the details, but of course, in the closing, we'll be able to mention a bit more of this action plan. And anyways, here we have a very important store footprint and expansion footprint. We've always mentioned that on one side, one thing that's so important in the synergy is if we look at the future openings and how both companies, as competitors, were still sometimes disputing the same locations and real estate, and so how this would be really an important point. But of course, it's also sharing best practices, looking at store clusters, increasing sales per square meter. And there's so much more in this, expansion store footprint, which is the core of the company. And when it comes to operational efficiency, besides the commercial aspects and the private label, we're looking at exchange and the best practices, preventing losses, corporate culture. And so there's a lot of, this in the operational efficiency. Operational expenses, which is quite classic in M&As, with companies that are so similar among each other. You have a reduction of G&A at a corporate level, efficiency and indirect costs with suppliers that we're going to be working on throughout the next months, once the operation is approved by, the antitrust body, CADE. And of course, look at footprint for distribution centers and get into more details on how to supply the stores better, as we have stores that are close to each other. And of course, there are opportunities, no doubt at all, to optimize the routes of the trucks that currently deliver to our stores. Then when we get into digital, and we look at investments also in the big platforms for digital, our subscription plans, there's a lot of the best practices to be shared. And finally, in the services front, I think there's another initiative Petz was working on towards greater profitability, looking at more formats, which is something that has already been adopted by Cobasi. And so here in the service front, we should also have some news and of course, some improvements in the combined compensation and profitability in this segment for Petz and Cobasi. So for the next slide, it's important to mention our estimate for synergies considering the study we worked on, which is still really preliminary, but we're talking about an increment in the annual EBITDA between BRL 220 million and BRL 330 million. It's important to mention that we're estimating that this amount will be calculated by about 85% in three years. I saw there's a lot of questions related to this in our Q&A. And also important to mention that these blocks that were mentioned previously were here, they're just illustrative. It doesn't mean that all of them have the same value combined in the synergy, so it's just a reference. Let's move on. Here I'm going to show you the main terms of the transaction. Here, it's important to reconcile a bit of what we had in the MOU, where we had an exchange ratio of 50/50 and a cash part that was BRL 450 million. Here we have an adjustment. Actually, we increased this volume of shares and the exchange ratio for Petz. So we have 52.6% of the shares for the Petz shareholders and 47.4% for the Cobasi shareholders. In exchange, the cash part of BRL 450 million becomes BRL 400 million, and we split this into two blocks with the economic effects that are pretty much the same. The first block is BRL 270 million in cash at the closing, paid by Cobasi, and then another 130 million reais through extraordinary dividends that are going to be split between the signing and the closing. I think here it's also important to mention that Cobasi, as Sergio mentioned just now, has a very robust cash position to handle the payment of this cash installment of the BRL 270 million at the date of the closing. And then about the structure, we also did not bring in the MOU what would be the structure used. So here we're going to use the incorporation of the Petz by Cobasi situation, and it's important to mention that here we discussed a lot about what's cash, what's dividends, and we wanted to work on the scenario that would be able to maximize the goodwill, but also optimize the tax conditions for shareholders when it comes to capital gains. So here, we're talking about how the shareholders that are subject to a capital gains taxation when incorporating the shares, will be able to request a loan from the combined company. So for whoever doesn't have, like, a fund structure for individuals, but even for Sergio's stake, and the combined company will provide a loan so that the shareholder can have a court deposit if there's possible future disputes, if the tax payment is due or not due. So this IR team will also be available to get into more details on this point, if you would like to schedule a follow-up call. So it's important to get back to the rationale. Maximizing the goodwill with the exchange of the minimization of the tax issues for the shareholders of both companies. And that's why it's also so important to understand that Cobasi will be registering the publicly-held company, and then they'll be incorporating Petz shares, which was also a structure that would maximize the goodwill. And this is a process that will take place between the signing and the closing. So listing Cobasi in the Novo Mercado process. So when it comes to governance, a lot of things we had already discussed with you. So we have a shareholders agreement between Sergio and the Nassar family with an eight-year period. The votes of the people signing in this agreement is going to happen as a block. Paulo Nassar will be the CEO of the combined company. Sergio will be the chairman. The board, I think there's no changes in regards to what we had already presented before. Nine members with four indicated by Sergio and five by the Nassar and Kinea family. The committees, we considered five mandatory committees, the financial committee, strategy and audit committees, people and sustainability. One point that we hadn't mentioned is the lockup. The first six months after the closing is a total lockup, and then from the sixth and twelfth month, the sale can be made in blocks with a first offering right to the Cobasi controllers and shareholders. Here we have the pre and post-transaction structure. Here, the shareholders at Petz, we have 52.6% compared to 47.4%, where Sergio, as a reference shareholder at Petz, becomes directly holding 16.5% of the total combined capital in the company. If we include the indirect stake through derivatives, then we have the stake going to 24.9%, and then the Nassar and Kinea family can keep up with what they already had in Cobasi. The family of Nassar has 42.6%, Kinea has 3.7%. We can move on? Here, when it comes to the next steps, we will sign now. Actually, today we signed, and we're announcing this to the market. The antitrust body protocol should take place in the next weeks. Then soon after, we'll begin. We'll call on the general shareholders meeting to get the approval of the transaction. And then it's important to mention that the antitrust body process, once we have the protocol, of course, this is an estimate. It's a whole ritual that should take between six to nine months. That's what we're initially estimating. Of course, there could be modifications, possibly, and the conclusion of this transaction is expected for 2025. So the beginning of the synergies would start happening between 2025 and potentially in the second semester and 2026. So it's important to mention, as we've discussed, the strategic consulting to work on the preliminary synergies, as we mentioned to you guys. But now we also have the detailing process of how the synergies are going to be achieved and how the integration will take place. And here we include how the governance will be planned, how the organizational structure will take place, talent retention, cultural integration, and all of this. So this is going to become planned throughout the next 24 weeks. It's a process that's already hired by McKinsey, as well as all of the preparation for day one. So the day after, let's say, the closing. So basically, this is the main message on the transaction. I'm not going to go further on this. The final slide is just some final remarks on what me and Sergio have already mentioned, and now we'll get back to have Q&A and get into any other questions about this that we may have on the transaction. Now, we're going to move to the second part of our call, which is actually where we get into the earnings for the second quarter, and I'll pass the phone to Sergio to be able to continue. Thank you, Aline. Well, as I mentioned in the beginning of this call, the second quarter, when you look at it from a photograph perspective, it looks pretty ugly, but if you look at it from a film perspective, I think it's a very interesting film, and let's get into the details, so the highlights for the second quarter that you can still see here on the photograph, 44.4% of share in the digital channel in our overall sales. To give you an idea, what this represents is 8.7 percentage points growth year over year. Then, when you look at 21% increase in the amount of active customers in our base in June 2024 in the digital channel. We also reached an all-time high in the amount of subscribers. Over 500,000 subscribers, which represents an all-time high and an ongoing growth. We also had same-store sales with a positive performance of 0.9%. Oh, is 0.9% bad? Yeah, I think it's bad, but in the last three quarters, it was negative. We start seeing that there's a reversal or recovery. What's most interesting, we still haven't ended the third quarter, right in the middle of it, but by the data we've seen in the first half of the third quarter, this number continues to follow an improvement trend. This is really exciting. Anyways, we also reached an all-time high of 10.2% share in our private label. This is super significant to have reached the double digits, and we're convinced that this number in the next quarters will continue to grow. Still on the private label, it's important to highlight that private label, when we merge all of the private labels together, is already the second biggest supplier in the company. If we were to have a single supplier, let's say, as an example. Just so you can have an idea of the magnitude of our private label, we're saying that it represents 38% growth year over year. We can move on. Here on this year-over-year growth, you have the first message that is extremely important and positive. The number is weak, but quite frequently, we see some analysis looking at IPCA. IPCA helps to talk about expense inflation. However, there is also an inflation in the sales price that we calculate internally. And this internal inflation, after especially in the pandemic period, after we reached numbers that were really high and a lot higher than the IPCA, had actually went backwards until it reached a number that was about zero, minus 1, minus 2% inflation. It's almost like a deflation. When you look at 0.9% share in the same-store sales, you can see this is a real growth, right? Above the sales inflation. When you look at the total growth, you also have to consider that the total growth that's normally nominal and in line with inflation, then in this case, it can be seen as the nominal growth can be seen as a real growth. Another important point is the operational efficiency, right? Many initiatives we've had over the first quarter that already started to lead to results in the second quarter, and this will be intensified in the third quarter. Then the increase of sales in digital, which is an ongoing process, and we have to follow and respect the consumer's desire as he about how he wants to buy, adding a level of excellence that's higher and higher. But we're, of course, creating alternatives to this pressure on the profitability. And so we reached another all-time high in omnichannel sales. We had a number that was already above 90%, and now we reached 94% sales in the omni-channel sales. So we have the best omni-channel case in the world. I was always saying this, where it was the best case in the pet segment, but I started to prospect a bit more on this, and we can imagine that it's probably the best case in retail in the world. And so then, when we think about products, we have the pet food category. We are expanding categories that we didn't work with that much, and that didn't penetrate in the market. But of course, this was something that was so interesting and added consumers that were not users in the network to be able to buy without any cannibalization effects, in regards to what we're already doing. It's an ongoing, sustainable growth of drugstore and cleaning and hygiene products, and then you have the discretionary items, which I've been mentioning some of the difficulties about. We had four quarters of drops year over year, and now finally, we had, in the month of July, an inversion or reversal of this flow, and then we start seeing in the more recent data we have, that there's a strong reversal in the sale of discretionary items, exactly as I had imagined in the beginning of the year, which was our vision for the shift in the semester, and I wanted to say that it's super confirmed, so when it comes to the perspectives for the second semester, and all of the signs are moving in this direction. Gaining customers, we've also started a bigger volume of customers, and yes, we have a percentage of margins, but of course, we have a big focus on the cash margin as well, which is a more modern, interesting way to see customers as a whole, and if something pressures the margin, because we have to be more competitive in pet food, we win in the total share of wallet that we're taking from this consumer. Basically, the price strategy is exactly what I mentioned. We had some micro adjustments on competitive issues that brought a lot of energy back for customer growth. Then the mix of products in stores has also been improved constantly by the company's commercial department. And you have an increment of customers that doesn't only happen with the arrival of new customers, but also the reduction of the churn. Because when you see our operational efficiencies, we try to have a big focus on losing less and less customers. So the private label, as I already mentioned, would be the second best supplier in the company, as I mentioned. And there's something super interesting. Zee.Dog is doing super well, and now Zee.Dog, in the end of August, will have the launch of a Marvel collab. So we're gonna be having this product with licenses for many countries, not only Brazil, but Zee.Dog is gonna be having this partnership with Marvel, and customers are gonna love this for sure. It's gonna be a bit more innovation also with Zee.Dog. So the sales for Zee.Dog in the Petz channels, when we look at the Petz brand, grew 21% year over year, which demonstrates the energy of the brand. Then, Zee.Now is growing almost 18%. So Zee.Now is really being carried by and integrated with, Petz and performing super well. And then the hygienic mats also have reached a share of almost 84%, 84.3%, which demonstrates the precision in our private label approach. So before we move on to Q&A, if we see, Petz was really standing out in the last few years, as a player that really tests things. And, so we're completing 22 years ever since we started, and exactly at the same address. And that's where we launched the pet wholesale operation. What do we want to do with this pilot project? What are the conditions we imagine this could expand to, and which are the conditions we believe this could close and be deactivated? We operate with a product mix that's very different. You have some items that are the same, but for example, you don't have super premium items, and there's this intersection with the premium products and lower products. This is basically the areas where the pet stores don't operate. Consumers that love their pets and that also want to pay less and have more accessible products. The wholesale operation, the Atacado Pet, which means wholesale, is that every consumer that buys two repeated items will have a price difference that's quite interesting, and some discounts that will reach 15%-40%. As an actual model for competing with the cash and carry is doing that sells the pet products that have low margins. But here we're creating a low margin model. But of course we'll have total focus on making this generate some small cannibalization in Petz, and that it can actually generate or add more value, bringing and attracting new customers, small stores that want to buy with good products, and they can optimize their working capital if they buy with us. And all of this will also help us to develop new suppliers that weren't even part of our role of suppliers at Petz. So as I mentioned, we're super comfortable with this experience and this test, because if the business moves along, it's because it was good and it added value, and if it's not adding value, then we will end it. And that's what we think about when we consider all of the initiatives in the company. So for now, I'm wrapping up here on the presentation, and now we will get into our Q&A. Oh, sorry. Aline will quickly talk about the financial earnings, and then we'll get into Q&A. Sorry about that. Well, just very quickly, the main highlights here, and I think you've seen the results yesterday already, but basically, we had a gross revenue of 3.8%. And here it's worth mentioning that we had a strong comparison basis, but we grew 18% in the second quarter compared to last year, and the big highlight was the digital channel that grew 29% in this period. And so it's interesting to mention how much this delta represented. So if we get into the gross margin, we had pressure of, like, sixty basis points. So these sixty basis points or beeps, once we increased our digital share penetration, this was a really healthy gross margin. In the second quarter of last year, we had 35.7% share in digital, and we migrated to 44.7%. So there was a delta that was super high. And as you all know, although we have slowly but surely closed this gap, the margin gap between one channel and the other still exists. So another point is that the same-store sales went back to being positive. It was 0.9% after three quarters that were negative. So from an EBITDA perspective, we still had some pressure of 130 basis points. Part of this came through the gross margin aspects. Another point came with sales expenses, so that's including leases and personnel payroll, which are where you still have a same-store sales that's more flat. So it's operational leverage and new stores that we continue to open, and then when they come into our base, they're still a little bit lower than the expected margins for maturity. Although when we consider the G&A, we actually had a reduction year over year. So then from a... When you see the net income, there's a slide about this up ahead, but I think it's important to mention this drop. It has a non-cash effect. So we had about thirteen million BRL of mark-to-market of our 4131, which is a debt in dollars. And as we had this negative adjustment in this quarter, in the next quarters, we imagine this should be offset. But over the period of the debt, this effect is going to be zero cash effect. So basically here, it's worth mentioning that we're having a sequential evolution in the sales, so April was behind expectations. We were more flat when it comes to sales, and in May and June, we had an important unleashing of these sales. So we already had high single digits in the Petz standalone and the combination of Petz standalone that we had mentioned after the incorporation of Zee.Dog. As Sergio mentioned, we had some highlights in the drugstore category. They've been growing about 13-14%. Accessories, once again, is a sector that we're really excited about because it resumed growth quite a bit. We can move on. In digital, we already had these 8.7% share, and consequently, the challenge for a gross margin of 60 basis points. And here about the store performance. We can see the same store sales how there was an improvement in the last quarter, which was normalized, where we don't have new openings polluting the numbers. We had this sequential improvement of 2-5%. For our EBITDA, which we have some more accounting procedures here, which are also in line with the numbers in the last quarter. 44% of our stores are still not mature. We can move on. I think here we also covered this with Sergio. The main point here is the cash margin. Since we've been focused on optimizing the cash margin and how we've been adding a lot of new customers to the base, this generates positive effects for the next quarter, so that we can continue to increase the cash margin within our results. I think we can move on here as well, but I just wanted to mention a point on the net income. Here we have a bridge of the detractors in our net income in regards to the previous year. You have about BRL 10 million that are completely operational. You have the gross margin issue, greater penetration in digital, and in the CapEx, we had a reduction of the CapEx this year, which is really significant. The impact of the CapEx is a lot smaller, but of course, the mark-to-market of the instruments and the combination of the debt that's higher year over year, and the company brings in this financial result. I want to remind you that from this result, there's approximately 12.4 million that are completely non-cash, which is kind of the explanation for the bridge in our adjusted net income. We can move on. Next slide, I just want to call your attention to the investments issue, because we've been talking about the reduction of our CapEx, optimization in our CapEx, opening up smaller stores, spending less per square meter, and also rationalizing our investments in technology. We had phases where we were working on a lot of base work and infrastructure, and these results already demonstrate how we've been reducing this, so we have the total CapEx in 35%, with 65% in new stores and 27% in technology investments, so finally, our leverage is pretty neutral from a net debt to EBITDA perspective. One point that I didn't mention is that in the combined company, I think that the scenario we're looking at for the company, already including the distribution of dividends and the cash effects, and Cobasi to handle the Petz shareholders, we're considering an average leverage of between one and a half and zero point seventy-five percent, which would be the EBITDA of the combined company, which is important to mention here, 'cause I see it's in the Q&A questions. So now we're gonna start off the question and answer session. We're gonna mix a bit of the questions on the transaction and earnings, but if you have any additional questions, you can also add that to the chat. I'll read them, and then we'll answer them one by one. Thank you so much. We have some questions that we've already answered throughout the call, but I think we should just reinforce. A question here from J.P. Morgan and Nicolas. "So thanks for taking our questions, and I want to ask about the timeline for capturing synergies." We mentioned that we have 85% of that interval to be captured in up to three years. "And what's the listing structure for the NewCo?" I think we've already answered. Cobasi and how it's gonna be incorporating Petz and this publicly held company registration. We're gonna have another, a new ticker, but the idea is that we'll continue to be in Bovespa, right? The idea is that we don't wanna lose our classification on the index, but of course, it's gonna be a new ticker, and there's a publicly held registration that Cobasi needs to work on, and actually, a Novo Mercado listing. So then the last question from Nicolas is, "If there's any additional color on the changes in the cash installment, and why Petz keeps 53%?" Do you want to answer that one? I can answer that one, yeah. Nicolas, so basically, this naturally is part of this process between a merger intention and where you have the process with the companies where possibly this could have happened. And we've seen things that were potentially better at Cobasi than we had initially seen, which naturally affects the exchange ratio and also the increase of our share. This was an adjustment process to generate comfort for both companies, but everything was really in line with the MOU spirit that was signed, and naturally, with some slight adjustments that led to this definite agreement for the merger. But anyways, no important relevant factor, really, that should modify the MOU conditions. Yeah, I think it's just worth mentioning that the BRL 130 million come from the distribution of accumulated profits at Petz. And there's actually a question if Petz would have to leverage itself a bit more, but that's not the case. We have these accumulated profits to be distributed between the signing and the closing, and the other BRL 270 million come from Cobasi. And then what's important to mention is that possibly, we will have a lot of individual shareholders that maybe have this question, right? Because we talk about BRL 130 million, and shareholders may have questions. And basically, I'm gonna give you an overall perspective here, but if you look at BRL 400 million, and we have BRL 450 million, we're probably talking about BRL 0.87-BRL 0.88 per share. You don't have to have, like, precision in this calculation, but it's around that. So about BRL 0.85-BRL 0.90, and that's what's going to be the receipt per share of each shareholder at Petz. Oh, wasn't it BRL 1? Yes, but it was 50-50, but now it's 52.6. So you kind of change the exchange ratio. So you can imagine that as a Petz shareholder, you're going to have a share that's a little greater than you would have if it was fifty-fifty. So we just switched around a bit of the cash by and the stakes. So the next question is from Gustavo from XP on the rationalization of the expansion of the store networks, where you have synergies. Is there already an estimate that's more precise on the possible need for closings? Well, actually, for the needs for the closing, I think maybe that's not the right word or the most adequate, if we think about synergies, right? So I think that I would maybe use the opportunity for closings. That would be the best word, because that's going to mean, possibly in areas where we have a specific kind of density, where the closing could maybe lead to a more healthy share with the remaining stores, and this kind of decision, which is exactly why, actually, one of McKinsey's tasks is to go deeper on this study. So there's an initial vision, a preliminary vision, but it's just like an initial preliminary vision. So the next weeks will be really dedicated to really looking at the roadmap, understanding the opportunities we have to make the business healthier and more profitable. So the second question from Gustavo is about the gross margin. Could you provide details on the potential improvement through greater commercial rationalization with the transaction, and how will the new company understand possible gains and negotiations with suppliers? Here may be within the aspects of this M&A is probably where I would add maybe, like, no focus at all. I don't think we need to think about this from this perspective, and I'm going to explain why. Because both of the companies, and this was really clear, of course, through the work provided by McKinsey to map out the synergies, both of the companies are really efficient when it comes to the relationships with suppliers. Both of the companies have quite a bit of scale, and when you have high scale, scalability and two companies with high scalability, one scale that's like double this doesn't necessarily mean any kind of situation where you're going to have major margin gains. Of course, if this is going to take place in a manner that is agreed upon with suppliers, if there's opportunities in this sense. But the merit of this transaction doesn't actually go through this as one of the central topics. If we were to look at the opportunities, maybe this is not even actually going to be in the top ten opportunities we have for this synergy. Well, the next question is from Felipe Rached at Goldman Sachs. Good morning, guys. How's it going? I wanted to discuss the relevance that the online channel should have in the consolidated company. It's a channel that's been growing a lot, and the sales mix has led to a certain negative impact in profitability. So in the combined company, should we expect that the online should have a healthier margin, considering the synergies? What about the combination itself? Should that lead to a competition environment that's more rational, or would the other players be the ones impacting the prices with the horizontal marketplaces or online? Thank you for this, Felipe. Actually, the competition between online, we really need to be clear on this, that it's competition that took place from outside in, right? To be competitive and to have more relevance, we need to be meeting the needs of our consumers and trying to provide the best prices possible. That's the current dynamic in the competitive environment. I'm not going to tell you that we're going to change this dynamic. Consumers are going to continue to, through Petz and Cobasi, having access to conditions that won't encourage him to want to switch suppliers or company or retail companies, because online has an ease for comparison that's really clear and quick. So this is the central point where we know the market is complex. So as I mentioned in the beginning, and I'll repeat here, in any area where you are thinking about competition, which is like this half a dozen pet shops, if you unite these, you have another three thousand pet shops that are in 3P of the main marketplaces, and we're competing with these guys also amidst consumers. So this is the awareness we need to have, that there's no point in thinking we're going to improve our margins by increasing prices. Actually, as I mentioned, we should be reducing the difference between online and physical, but not because online is going to increase their prices, but because physical should reduce prices. So how does physical reduce prices without pressuring margins? Too much to the contrary, improving margins. Well, because with the central measure of the merger, the optimization of cost is so important. The rationalization of the expansion has a very important impact, so that's very significant for the cost relevance. Part of this is going to be transferred to prices so we can be more competitive in the physical world, which is more expensive than the online, and we want to make it more competitive. And the other part is to reestablish competitive advantages that in the last quarters has been pressured by this increase in digital. Just one more point also on your question of what we expect as share. Anyways, we expect that, whatever the consumer wants, right? We're not going to calculate what the share is, because it's just about the consumer's desire, if he wants to buy online, or if he wants to go and walk around the store, or if he wants to have a subscription service. Naturally, what me and Paulo talked about quite a while, is that we have the same vision on the strategic importance of the services when it comes to, rescuing the growth, physical. We know that it's super important to bring a bigger customer flow through services, and there's a very intense agenda for this restructuring of the services for both companies so that we can, reap the fruits in the products area. Next question is from JP Andrade from Bradesco BBI, and he's saying, "Sergio, what do you think will be the main factors behind the pet deflation, and what's the trend at the store level?" Thanks for that. This pet inflation, and this question actually already has another issue in your question, because this is the sales inflation, it's not the cost inflation. We don't measure the internal inflation by the cost criteria, but by the sales price, comparable sales price, because that's how you can compare if your nominal growth in your sales is real growth or if it's just because of inflationary issues. Actually, you have embedded in the margin pressures, something that's natural. We had maybe a bit more pressure in the costs, especially because of the mix. So you can imagine that as digital goes up, you have a more aggressive share in pet food, which has lower margins. So this is super interesting, right? To help you understand the dimensions of the hard work we've been doing here with costs. I just went over the presentation, and I showed you almost eight points of growth in the share of digital. So you can see how much this pressured our profitability, right? So if you just don't do anything to be more efficient, the pressure is going to be greater. So within this pressure that we presented, you have many different things that pressure this and other things that release this pressure. And with this combination with Cobasi, these things that provide relief will work really well to help us get back to the scenario with margins that are a lot healthier than what we currently have. Well, there's another question from Felipe Reboredo, if Sergio could explore a bit more of the service model, right? And what they think Cobasi does better than Petz and vice versa. So does the project provide the service franchise to be on hold during this period? Well, thank you, Felipe. Starting off with the second point, no, there's nothing on hold. Cobasi continues to follow everything it's done, and Petz continues to follow what it has done. And we'll have the necessary opportunity in this project to go deeper with McKinsey and answer your question better. So it's maybe a little premature to reach any conclusion with superficial knowledge still. So I would love to have the opportunity to get into the models a bit more and what each one's doing so that we can then and of course until the closing we'll have this perspective right? But I'd rather not issue an opinion without actually understanding this very well. Well perfect. We have one last question from Santander. And good morning thanks for taking our questions about the potential for synergies. If you guys could talk on this capture curve and I think we already answered this one but the EBITDA for all when you look at the profitability EBITDA dynamic it seems that besides the pressure on the profitability generated by the new openings there is a deterioration in the economics at the store level. Could you talk about this, if this is more due to a more restricted effect in operational leverage, or do you also feel impacts in the gross margins? I think we also explained this over time in the presentation. So from a hundred and eight and thirty basis points that we had at pressure, about sixty came from the gross margins, and the rest of these came from the expenses on sales, where we had a bit more pressure, as I mentioned, with logistics expenses, lease expenses, and employee expenses that kind of grow at a pace that's a little higher than what we've had with the growth in the sales, and this is the trend. The trend is that we'll see the reversal throughout the second quarter. So I think it's a combination of new stores, but also a better operational... Sorry, a worse operational leverage that should be reversed now throughout the second semester. By what I'm understanding here, Sergio? We've already gone through most of the questions. There's a question here from an individual investor that is repeated multiple times, and he wants to know if there's any fine, if there's, like, any of the parts, if any of the parties give up on the transaction, right? I think this kind of contract for signing, which is different than an MOU, where you can give up without any kind of penalty, and the agreement that was signed this morning doesn't have this nature. It can't be revoked, and there's no room for giving up on this, right? It's actually exclusively subject to the antitrust body, CADE, so that we can improve it and then get the approvals in the shareholders' meeting at Petz, and then you would have the closing and completion of this. And this is a topic that where we naturally know that from so much of the information circulating in the market, that what I can tell you about is that we are really comfortable about it, right? We actually have lawyers. We have economic consulting services as well, that have a very consulting nature, let's say, and it's something that's really central when you think about the antitrust body, which is CADE, is not here to protect competitors, but to protect competition. And this is a central point, right? The antitrust body, their interest is protecting competition. So if a competitor is annoyed, that's part of the game, totally normal, but CADE is there to protect competition and consumers. And in this sense, I can ensure to all of you that this merger will really help competition. It will really help, the life of the end consumer, because there's a lot of merits, as we reduce operational expenses. And, this is, of course, not gonna pressure, we're not gonna be pressuring suppliers negatively or price increases, like, "Oh, you're gonna do this to increase prices." That's, really foolish, right? Because, we would never merge just thinking about increasing prices, because that would mean the end of our companies at the end of the day. The world is completely interconnected with online, so people have cell phones on their hands, and if you do anything stupid when you're pricing, players will immediately online will just rob our customers away, and there's no situation where you can dominate the market, right? You can dominate the market while maybe you have a good level of service, consumers are satisfied, and you're practicing the right prices. But when you stop doing all of this, things just end. Whether you're on your own or together with the Cobasi, or if you want to merge all four of them, you would still not be able to do anything because the market has no entry barriers, right? So, if you notice the other guy wants to have a higher margin, then you just sell at a lower price, and that's how the marketplace has a lot of merits, because they kind of regulate the market. They make the access of the small guys to sell anywhere, and they can sell in a competitive way all over Brazil, so in any neighborhood, right? It's not just half a dozen of physical stores, but you have another 3,000 online stores that are kind of knocking on the door of the consumer, crazy to sell and to find any kind of gaps, when it comes to pricing. So we have to keep our eyes open and be vigilant, and that's why we have many reasons to trust on the excellence of the CADE technicians and really know that they're gonna be doing exceptional work as they analyze the merger of our businesses. Sergio, we have no other questions from institutional investors, and for the individual investors, the IR channel is available to answer, and so now we can move on to your final remarks. I'm gonna wrap up here by thanking you all for your time, and I'm super happy to know that we are writing out a new chapter in the Brazilian pet market. We are super excited with the future coexistence with the Nassar brothers and also the Kinea team, that we had excellent chemistry with during this period between the MOU and the signing. Ever since till the MOU, we didn't have much contact, but then throughout the last months, we had the opportunity to get to know them better, and I think this was mutual, and that really gave us the conviction that this union will create a lot of value. Have a great weekend, guys, and we'll see you all in the next earnings call in the third quarter, as we look into if what I already gave you a preview about trends are gonna be confirmed or not. If it depends on the first half of the third quarter, I'm letting you all know that things will be confirmed. Of course, I can't talk about the future because we still have half of the quarter up ahead to take place. But thank you all. Have a nice weekend. The earnings call for the second quarter of 2024 is officially ended. The investor relations department is available to answer all of the other questions. Thank you so much to all participants, and have a great day.