Good morning, ladies and gentlemen. Welcome to Camil Alimentos Conference Call. With us today are Mr. Luciano Quartiero, Director, President. Flavio Vargas, CFO and IRO, and also the company's investor relations team. In case any of you need assistance during this call, please press star zero to reach the operator. This audio is being presented simultaneously, in the investor relations website of the company. Comments from the management, and the Q&A session may contain forward-looking statements. Related to future events that are subject to risks, and uncertainties. And therefore, may lead to expectations. That may or may not occur, or that differ substantially from what was expected. Mr. Luciano and Flavio, you can proceed, please. Good morning, everyone. Here is Luciano Quartiero. I would like to welcome you all. Yesterday, we were able to conclude another step in our strategy. Because since the IPO, and even before the IPO. Our strategy, has been to pursue organic growth. In the category, and the countries where we operate. Our growth, also contemplates inorganic growth. Involving operations, and assets in other countries in South America. And also, it's pursuant to the company's desire to get into new categories. Recently, we announced the acquisition in Ecuador a few weeks ago. And yesterday, we signed our first step into the wheat category. This operation, through the acquisition of Santa Amália. Is very synergic to our current operations. And this is something that the company, has talked about for several years. With this acquisition, we meet three objectives. Number one, our entry in the wheat category. Entering into the pasta category, acquiring a leading brand. Santa Amália is a number one leader, in the state of Minas Gerais. With over 41% of market share. Also, they are leader in the Area Two at Nielsen. And a fourth Brazilian player in the pasta segment. The second objective of this acquisition is the enhancement. Or we want to improve, our distribution in the state of Minas Gerais. Santa Amália in Minas Gerais, covers over 12,000 POSs directly. This will be very important to our operations. Because it increases our distribution of grains, and sugar in the state. The third objective, is that with this acquisition. We also add people with great expertise in the sector. Every time Camil ventures into a new segment. It's very crucial that we maintain the individuals, that are experts in that field. Because they can help the company to proceed, and progress in that direction. The three objectives were met, with the acquisition of Santa Amália. We are very anxious, and also very pleased with this new step. I say that we are anxious, because this will also involve a step with CADE. We don't anticipate any issues here. Even though, we are still in the beginning of the operation. And we are about, to capture all of the synergies gained with the transaction. The value of the acquisition amounts to BRL 410 million. The company last year, by the end of December of 2020. Posted an adjusted EBITDA of BRL 39 million. In a very conservative way, the company estimates synergies of BRL 20 million. The company in terms of synergies, we are very conservative. In this case, it's no different. I think that after the IPO, we spent a few years. Where all the opportunities, that we exploited. Were in fact, going through our pricing standards. This year, we anticipate a more positive scenario. This is the second opportunity this year, that fits within our standards. Therefore, the company is very pleased with this new step. And very anxious to start the operation, and begin to exploit all of the synergies of the companies. Having said that, I'll now open the floor for questions. We will now initiate the Q&A session to investors, and analysts. In case of questions, please press star one. Our first question, from Guilherme Palhares from Bank of America. Good morning, and thank you for taking my question. You were talking just now, about synergies of about BRL 20 million. Could you please tell us, about the leverages in terms of synergies. And how much of that is revenue? How much that is cost? The second point is, whether you could comment on the commercial integration. Given your presence in Minas Gerais, and your presence also in São Paulo. I just want to get a better understanding. About your strategy in commercial, and logistic terms. Considering the two companies, because we do understand that there is a large rice market. How will the company be able to get into this new market? What is the CapEx involved? I also want to understand, whether using your operation. As it is today in terms of your capacity. Whether you can also serve, the São Paulo market with that new brand. Well, thank you for your question. This is Flavio. I think, that whenever we look at the synergies. I think, that the obvious thing whenever you make an acquisition. Is that you look at expenses, and SG&A. Because that's where we believe. That we would have better opportunities. Better yet, that's where you have things within your reach. Because in terms of execution, it's easier. We also believe, that there might be synergies in sales. And maybe some synergies in logistics. But usually, to capture the synergies requires you to be more cautious. Because you do not want to compromise, the recently acquired asset. Right now, we look at things in a more operational terms right now in SG&A. Because probably, we will also have gains with supply or procurement of wheat. Because this is not exactly our core business, wheat. But we can add scale, with that acquisition. And there might be new developments going forward. When we look ahead, we believe that we will have to make some investments on the industrial side. Be it to adjust the production lines, in case of a future expansion. And we also believe, that there might be some low marginal investments. With the small investments, we can adapt the production. And at the same time reduce our costs. Now, I will turn the floor over to Luciano, because the point you mentioned. Related to the commercial aspect, logistics, and distribution of the transaction. Is very critical to our business. This is one of the areas, where we have to be very cautious, when integrating both companies. Well, I would just like to stress one of Flavio's messages. We are conservative. Within that BRL 20 million of synergy gains. We do not anticipate, exploiting the potential of Santa Amália's growth in São Paulo. In fact, the company is very comfortable with that. Flavio talked about CapEx investments, and the company is analyzing that. To improve efficiency, and also idle capacity or the production capacity. All of that, because we want to better serve the São Paulo market. The challenge of the commercial, and logistics departments. I think, these are the most important challenges. Because the company, has to learn how to operate in that category. The commercial side is more sensitive. Santa Amália has a very strong team. They serve the entire state of Minas Gerais. They also have a very extensive coverage in Rio de Janeiro, a nd at a last degree in Espírito Santo. Camil has a high concentration of sales in Belo Horizonte. But not so much so outside the capital of the state. Therefore, we are not anticipating any overlapping of the commercial teams. In São Paulo, Santa Amália does not sell as much. Because Camil is very strong in terms of distribution. Therefore, we see this as complementary. One company complements the other. The same thing happens with logistics. Our geographic coverage is very large, especially in the greater São Paulo area. And this will be exploited with Santa Amália's brands, and vice versa. Although, that logistics coverage, that Santa Amália has in Minas Gerais. Will also be leveraged with our own brands. Therefore, we are very excited. Thank you, Luciano. I just want some further clarification. Because when you talked about, the potential of the Minas Gerais market. Is it fair to think, that very soon the company. Will also add your other lines of businesses within the state. So that you can leverage a sales position. The second question is that, when you refer to BRL 20 million? You're only referring to G&A synergies, but nothing in terms of revenue, right? I'm just looking on the cost, and expense side. Yes, Guilherme. Only to add another comment, you're exactly right. In regards to distribution, we understand that this capacity. That Santa Amália has, b ecause they are very strong in the Minas Gerais market. And this can be a very good opportunity for us. Allowing us to increase our penetration in that state. Before today, when we look at the Camil business in Minas Gerais. We see a higher concentration of our products. In Belo Horizonte, the capital of the state. When you look on the client side, we are more present in larger clients. Because with that, we have higher penetration. But Santa Amália, I think the strength of that company. Is their distribution, the distribution matrix. Because they have commercial reps, and a very good logistics. With their logistics, they can make. They have a very strong logistics activity in the state. Therefore, we will try, to use all of that distribution capacity. To leverage the current Camil's products. The idea is to come in with rice, beans, sugar, and also, we should review our fish model. Because that is also important to us. We believe, that by using that distribution strength that Santa Amália has. We will be able to increase, the penetration of our own products in that state. When we run our own estimates of gains. Strategically speaking, we see these new leverages. There is also the possibility, of bringing the Santa Amália brand to São Paulo. And also, into other states, where we also have relevance. This is a possibility. It may be probably a little bit more difficult. When it comes to exploiting rice, and beans in that Santa Amália region. We can also put that in our strategic agenda. However, when we try to justify the acquisition in terms of synergies? These leverages, which are a bit more difficult to capture? We try not to put it into the price, because it will be an investment with returns. Thank you. That's very clear. Our next question comes from Lucas Ferreira from JPMorgan. Hello, good morning. Could you share with us, how much your growing? How much, what is the growth of Santa Amália's revenue? In the last few years, that revenue that was posted. How much the company was growing prior to the pandemic, and after that period? And whether, you see any other strategic opportunity along the same lines? So that you could grow in the pasta segment, maybe in other states. Or you want to grow, the Santa Amália brand in other regions. Not only in São Paulo, whether you want to take it to other areas. Do you want to expand Santa Amália? Or you want to create M&A opportunities in other regions? So that you would grow within that pasta segment. Santa Amália's growth in terms of volume in the last few years was small, about between 1%-2%. The company has always been very concentrated in Minas, Rio de Janeiro, and Espírito Santo. With that market leadership, as I mentioned earlier on in the call. I think that the main reason behind that low growth, is that they are not growing into new areas. This is one of the things, that we want to exploit. Taking advantage of our distribution network outside those regions. Speaking about next steps, I think this is the company's first step towards the wheat segment. Certainly, the company is willing to take Santa Amália into other states. But our growth strategy goes through acquisitions. Therefore, the company is always open, looking at new possibilities. And we have a good appetite. We are looking at other opportunities, to make acquisitions in that wheat segment. Within that same category, we still have flours, pasta, and cookies. The company is also interested in looking at these other categories. Thank you, Luciano. Next question from Carlos Ferreira from Counter Insider. Good morning, and thank you for taking my question. I look at the financial figures from Alicorp, and I was concerned. Because they showed a company, that they acquired back in 2013. Santa Amália, that had problems back then. By looking at the figures, from last year's second quarter. And even excluding non-recurring effects of the pandemic. The EBITDA shows, that they're running at a negative EBITDA in the second quarter. Alicorp is a company with expertise in the pasta, pasta segment in Latin America. What went wrong in the case of Alicorp? What is the financial situation of the company? Because, they have a negative EBITDA, and there is a debt that got worse. What is their financial situation? Do you think that you can make a turnaround? How long do you think it will take? For you to turn the asset around, and make it profitable. Well, thank you for your question. Alicorp certainly, is a very relevant player in the pasta industry. And they know how to operate, that industry quite well. What we analyzed, and what is your interest? Is that we are only analyzing the Brazilian operation. As I said in the beginning of this call, last year, their adjusted EBITDA was BRL 39 million. They had an event with an ICMS lawsuit, that had a non-recurring effect of approximately BRL 20 million. The accounting EBITDA in Brazil was BRL 19 million, but there's non-recurring. Plus, there's not a recurring effect of approximately BRL 20 million. Which gives BRL 29 million of adjusted EBITDA, that I mentioned earlier on. Alicorp made that acquisition back in 2013, 2014. They worked hard to restructure the company Alicorp operated with over 30 categories. They were restructuring the operation in the past few years. To allow them to, come to the point where they are today. Pasta accounts for about 80%-85% of their sales today. My personal opinion is that, they did some beautiful work in the past 10 years. I believe that Camil can add something else, differently than what Alicorp did. In our case, it's our better distribution network. Alicorp was mostly concentrated like Santa Amália in Minas, Rio, and Espirito Santo. They did some excellent work. They are leaders. They carry a leading brand. At Nielsen, they have a very good pricing position. I believe that Camil, once we add distribution from other states. We can also add additional knowledge that we have. We will be able, to enhance the performance of the company. Therefore, as you said it yourself. It's a very challenging thing, especially for us. Because we are entering into a new segment, and pasta has its own peculiarities. Therefore, I said at the beginning that the people, that are there are very important to us. Because they can help us expedite our learning curve. I hope, therefore, that I answered your question. If you still have anything else you want to ask, please feel free. Yes, I do have another question, that has to do with possible tax credits due to accumulated losses. Do you anticipate any possible tax benefit going forward? In Brazil, usually when there is a takeover. The company that was acquired, loses the benefits that have been accrued. In the time being, we will be operating independently. Santa Amália will be a subsidiary. Once we incorporate Santa Amália, all of these tax credits will be lost. Just to answer your question, these credits will not be considered in our evaluation. Thank you. Our next question, from Leandro Fontanesi from Bradesco BBI. Mr. Fontanesi, you may proceed. Good morning, everyone. Congratulations for the acquisition. I have two very quick questions, about that BRL 20 million in synergies. How long do you think, it will take for you to capture all of that amount? My second question, you talked about areas of opportunities in distribution of Camil in São Paulo. Well, we are very familiar with Camil's approach in rice, beans, and sugar. Now my question is, what will be your approach regarding pasta? I mean, whether your focus will be in recovering margins, and G&A, and volume would come with time. My second question is just to understand, the company's approach in that particular pasta segment. Thank you. Thank you for the questions. In terms of synergies. Well, I may be repetitive, but the company. Has always been very conservative in terms of synergies. These that we identified, and quantified. We will be able, to capture them in up to 12 months. And we are very comfortable with that period of time. Now, in terms of our approach, Flavio just talked about. The need for us, to make some investments to improve efficiency. The company has appetite. We are getting into the pasta segment. Because we want to play an important role in this industry. What will limit our growth capacity right now, is the idle capacity. That is currently in place, and the time that it will take for us to expand. We are coming, with that eagerness to grow. This is the beauty of operating in more than one category. We already have relevance with our clients. We have commercial strength, that can be further exploited. All of that will be used, to house further growth to Santa Amália. Thank you very much. Ladies and gentlemen, I would like to remind you that for questions, please press star one. [Break] We received a few questions through the webcast. I'll start with the first question from Nicolas Corkhia, about what do we expect to see in terms of the EBITDA margin? Whether it will be at 1 basis point closer to our own EBITDA margin. We do expect some improvement. The company does not give any EBITDA margin guidance. I'm sorry I cannot answer your question. Well, it's just obvious. We have BRL 40 million, which was last year's EBITDA. We have the expectation to generate BRL 70 million. If you do the math, it will be closer to 12. I mean, for the acquired business, not Camil as a whole. Moving to the next question, Alexandre Martins, is talking about the difficulty. To transfer the cost of wheat to the end user. He wants to understand, the behavior of Santa Amália's margins in the last quarters. And what are the measures, that you anticipate to recompose your margins? Well, we operate in sectors, where transfer happens quickly? In terms of grains, rice, and beans. We have price transfers almost every month. When we move to sugar? It happens mostly on a quarterly, fortnight basis. The company operates in three segments in Brazil. That have a different pace, in terms of price transfer. When it comes to wheat, the transfer capacity is lower. I believe that Santa Amália, as other companies in the industry. Struggled throughout the first half of this year. At the end of the second quarter, and in early July. They were able, to increase that pricing pass-through or transfer. We will go through our learning curve. This is what I can tell you at the moment. In terms of how prices will behave. We received several questions from investors, and individual investors. I will try to put them all into a single question. In terms of this entry into new segments in the food sector. Whether that is part of Camil's strategy to diversify its revenues, and grow. The other question is about, how much of Santa Amália's volume? Or revenue come from other products sold by Santa Amália. In terms of new segments, Camil's strategy is not deviating from the commodity risk. Because Camil has always dealt well with that. Our rice margins have always been very stable. The volatility in our results is very small. Historically, our margin is between 10%-11%. Two years ago, it was maybe between 7%-8%. In fact, there is a very low volatility. Our desire to venture into new segments, comes from the fact. That we want to gain relevance. And scale with our customers throughout the chain. Because the larger the scale, the larger the cost reduction will be. And we will be more efficient, and this is a positive spiral. In addition to wheat, the company has always expressed its desire. To enter into the coffee category, and the company is now working towards that end. Now, in terms of the percentage of revenue coming from items. Produced by third parties at Santa Amália, and that is currently at around 13%. There is another question, Guilherme Palhares from Merrill Lynch. Would like to understand, our view concerning the recent price increase. When compared to March inflation? And what are the other competitors doing? Or vis-a-vis what the other competitors are doing? One of that is also related to price transfers, because there was an increase in the cost of wheat. Their questions relate to, how other players are having a difficult time transferring these costs? As I said, there was a cost increase, as we mentioned before. And I think, that the entire industry is struggling with that. Companies have different positions in terms of, how they buy their raw materials? And this may increase or decrease the level of difficulties. What we see when we look at the performance, of the first seven months of the year? Is that, in fact, the cost increase has been transferred or passed through. You know, and it will be normalized in the second half. There was a process of margin recovery, that has started throughout the second quarter. But I cannot yet tell you, whether it has been 100% concluded. It is at a lower pace, now when compared to before? I think, that this is very typical. Because every industry has its own profile. Because of the speed of that price transfer. When you have an increase in raw material cost? As a result, this puts pressure on the company's margin. On the other hand, you also have the opposite effect. When there is a reduction in raw material prices? Be it because the price of wheat was lower, or because of a lower exchange rate. When these moments occur, the transfer to consumers. Does not happen at the same speed a s in the case of rice. Because there are moments, when the industry operates at a higher margin? I think, we have to look at the moment. But when we look in the long run? You have to look at the average of the industry. Taking into account all of the peculiarities of the industry. Ladies and gentlemen, as a reminder. If you have questions, just please press star one. Thank you. If there are no further questions, I would like to inform you. That the Q&A session of Camil Alimentos is now concluded. Thank you very much for participating, and have a very good day.