Hello everyone. Thank you for waiting. Welcome to Hapvida's Q1 2023 results conference. Jorge Pinheiro, CEO, Mauricio Teixeira, Vice CFO, and Guilherme Nahuz, Investor Relations Officer will be present. I emphasize to those who need simultaneous translation that the tool is available on the platform. To access, just click on the interpretation button and choose the English option. This event is being recorded and will be made available on the company's RI website along with the conference complete results. You can download the presentation by clicking on the chat icon. Please note the disclaimers that guide the disclosure at the end of the presentation. During the company's presentation, all participants will have their microphone muted. We'll start the Q&A session. To ask questions, you must check on the Q&A icon at the bottom of the screen and write your name, company, and language to join the queue. I will turn over the call to our CEO, Jorge Pinheiro, who will start the presentation. Jorge, you may proceed, please. Hello. Good morning, everyone, thank you very much for participating in our Q1 2023 results conference call. I, Mauricio, Guilherme are gathered here with our IR team. Today, we're sharing with the market the results of a single company, each day more integrated, stronger, building a unique and relevant business in the Brazilian healthcare sector. Later on, when we break down the numbers, including comparative periods on the same basis, we will see that our business model remains solid, resilient, and disciplined. Starting here on the first slide number two of the presentation available to you, we present our main financial and operational indicators. As we had been communicating to the market, we maintained our strategy of ticket replacement and intensification of cost control. We know that this is a long-term process, but some of these actions have already showed some results in the Q1, such as the slight reduction in the loss ratio in the quarter against quarter. There was a significant increase in adjusted EBITDA in comparison with the same period of the previous year. We also concluded the acquisition of HB Saúde in São José do Rio Preto in January this year, adding just over 100,000 lives to our portfolio. We also performed an important step in integration process, optimizing our administrative and operational structures. As we had informed, the focus on this quarter was executing our plan, including, among others, a strict implementation process of the price adjustment, reviewing and optimizing our product and service portfolio, the continuation of the integration process of Hapvida with NDI, and integration of newly acquired company. On this last front, I'd like to inform you that we successfully implemented systems at the Centro Clínico Gaúcho, CCG, in Porto Alegre, Rio Grande do Sul. We also maintained our plans to increase the verticalization, integration, and optimization of our network with the opening of new units in strategic locations. In line with what we had been signaling to the market, we had an important improvement in cash generation in the Q1. Between April and May, we successfully carried out 2 capital-raising operations. Our third follow-on and a sale and leaseback operation, raising approximately BRL 2.3 billion. With this, we rationalized our leverage and remained even more solid to go through this period of high interest rates and volatile economy. After these two capital-raising events, our leverage in terms of net The purchase and sales process of São Francisco Resgate for an enterprise value of BRL 100 million. This transaction, together with two recent capital-raising actions, is also part of a context already informed by the company to optimize and strengthen our capital structure, as well as the focus on our strategic priorities and our core business. I now turn over to Mauricio, who will go into more detail about our operation and financial data. Mauricio, please. Well, thank you, Jorge. Good morning to everyone. I will start on page 3 talking about the integration between Hapvida and NDI. I will highlight two very important aspects where we have evolved a lot. First of all, the standardization and optimization of business practices, both in the areas of price fixation, which is a very relevant topic. We have also aligned processes, concepts, profitability and governance. The second aspect is the reorganization of our activities, including vice presidencies, with recurrent gains of BRL 8 per month. The third aspect, which Jorge has already mentioned, was the first wave, where on May 1, we also included CCV in our system, and we're going to have other waves, so that by mid-2024, we'll have a single and integrated platform consolidating the different protocols, centralization of purchases. All of this will help us, including our better efficiency. On the next page, we will talk a little bit about the capital structure and focus on the core business. The first one was the follow- on of a little bit over BRL 1 billion, where we had a record index of a priority subscription of over 60%, a demand of over BRL 2.6 billion, and a lot of quality in our level of offer. I also thank all of our shareholders for their support, including the new ones who have started by means of our offers. The second operations was the sales of BRL 1.5 billion, where we sold 10 hospitals, who started paying rent at a cost of 1.5% per year below the current market price. With the commitment of the Pinheiro family. This was a competitive process. The third item we have just concluded last weekend and announced to the market yesterday, was the sales of São Francisco Resgate, a company which is a lead in its sector, but it wasn't part of our core business. With this resource, we can concentrate on the management of our core business and integration of the companies we have acquired. Now moving on to the results of the quarter. In slide 5, starting with our revenue, we've had an increase of 12.8 in the year-over-year revenue. We also increased our beneficiaries and an average ticket increase of 8.3%. This is the price recomposition that we've been pursuing since last year. Then, in the next page, we can see the specific activity for 2023, where we purchased Grupo HB Saúde with 160,000 lives in inorganic manner. We also had the turnover reflecting the macroeconomic environment. I will talk about the ticket, where we can see the effect of the readjustments we had last year, especially in the second half of the year, and that have accelerated to a different level, and we can see the ticket going up. When we exclude the M&A rates and others, we have a rate of 9.5%. On page 7, we talk a little bit about our cash and MRL over the past quarters. In this specific quarter, we can see the effect of the ticket recomposition and also the effects of verticalization and the MRL I'm sorry, MRL activities we've had from the beginning of the year. Even with the impact of ISS on the revenue, a new effect, and we've started using ISS in Fortaleza, and also with inclusion of HB Saúde, which has an impact of 0.28% on our MRL. On page 8, we can see administrative expenses with a decrease of 9.4%. This month, we provisioned BRL 678 million in SS before 2023. We also had a cost that we paid for the administrative restructuring that we've already mentioned when we had the reorganization of vice presidencies and other administrative levels of the company. We will be able to have a decrease of BRL 8.4 billion from now on. On page 9, we can see a dilution of the selling expenses because of decreased revenue. An important aspect here is that PDD remains stable in the retail market and individual plans. We have stable provisioning, and we have managed really well our default numbers. Now moving on to EBITDA on page 10. We can see the best EBITDA level because of the ticket recomposition, the control of MRL and G&A dilution. This even when we have a recurring RS, as you can see here, and we were able to have a net debt in the order of BRL 634 million in the quarter. Now moving on to net debt and cash flow. On slide 11, we were able to reduce our leverage from 2.44 last year to 1.3. This is before the liquidity events that we have already commented about. If we only take cash into account, the follow-on and the sales and lease back, the leverage would be at about six times. This is in line with our conservative management. On the next slide, talking about the cash flow. We can see less working capital. We had a decrease of receivables which were not received and were paid in the beginning of this year. Therefore, last quarter we also had a migration in the system and it was totally reorganized for this half of the year. With that, the working capital was even lower. This is the difference between rent, which is paid in operation activities in the order of BRL 160 million because of receivables in the Q1. I would like to highlight the CapEx reduction. This year we introduced a threshold and we were able to reduce CapEx in the order of BRL 117 million in the quarter, a reduction of BRL 119 million. In the next slide, we are providing more transparency, which was the question by some investors. First, about the solvency capital. In terms of solvency, we have excess BRL 560 million. We were able to solve the required solvency after we had an external audit where we were in compliance with all of the requirements and meet the required solvency with BRL 400 million. In addition to that, even with the reduction of the adjusted minimum equity according to MRL 486, we went from BRL 465 million last quarter to BRL 586. This was before the follow-on and the sales and leaseback, which provides a lot of capital in the order of BRL 600 million. They were evaluated in BRL 6 million, and this will provide non-recurring gains. This also reinforces our solvency in addition to the cash that becomes available at the holding after the follow-on. Looking at the technical provisions, we have BRL 2.8 billion in free cash before considering the follow-on, which is another capital raising for the holding and the sales of São Francisco Resgate. We have to wait for the whole proceedings and the regulatory approvals because this is an entity controlled by [Ultrasound], and they don't have any solvency requirements or technical provisions. This cash will also become free cash. Without even considering the follow-on and the sales and leaseback, and the snapshot does not consider any of that, our company had an excess of solvency and an excess of technical provisions. After the follow-on and the sales and the leaseback, our capital structure will be even further strengthened. I would like to turn the floor over to Jorge, who's going to talk about our strategic priorities for the coming years. Thank you, Maurício. That was great. I would like to emphasize that we're in line with the plans that we devised in the beginning of the year and that were broadly communicated to the market. The integrated management of the combined company has laser focus on executing all of those plans. Implementing the necessary readjustments to achieve a financial rebalancing of all of our contracts. Optimizing new portfolios. Strengthening initiatives to reduce MLR. Increasing verticalization. Sharing medical protocols and best practices. As well as continuing with our integration plans and systems deployments in the acquired companies. I would like to conclude by emphasizing that we are writing our history in the year of 2023 in a balanced and diligent way, disciplined in executing our strategic and operational plans. I would like to thank our employees, doctors, dentists, brokers, suppliers for their collaboration, the strategic work of our board of directors, and the trust of our shareholders, and mainly our clients. Now we're available for any possible questions you might have. Thank you very much. We're now starting the Q&A session for investors and analysts. When your name is called, a pop-up window to unmute your mic will be shown on your screen. Please unmute your mic to ask your question. Please send us all of your questions at once. Let's start with our first question by Vinicius Figueiredo, sell-side analyst at Itaú BBA. Vinicius, please unmute your mic to ask your question. Go ahead, Vinicius, you have the floor. Good morning, everyone. Good morning, Jorge and Mauricio. Thank you for taking my question. You've been working strongly to control costs related to therapies with strong verticalization, opening new clinics for children in the autistic spectrum. Do you have any estimates of how this impacted the company's results in Q4? How much of the verticalization that is ongoing was responsible for the improve in the MLR that we see in the consolidated numbers of Q1 2023? Another question. The second half of the year has a seasonal effect with a worsening of 200 basis points in the MLR in the quarter-on-quarter comparison. Since you are making efforts to verticalize regionals 2 and 3, and you're cutting costs, and we can see some first effects of your stronger readjustment policy, does it make sense for us to think that the quarter-on-quarter effect can be lower than your history in the quarter? Thank you very much. Vinicius, thank you for your questions. Let me start with your first question about the new autism therapies. Last year, the regulatory agency increased the number of sessions, for children in the autistic spectrum, and there was a strong increase in the number of therapy sessions as a result. Our company reacted really fast, which is very typical of our company, by implementing many of our own units that have already been opened. We still have in our pipeline another 13 units that will be implemented by the end of the year. These are quick works that are already part of our CapEx plans. We've been using up mostly, ready units for that. Yes, there was an impact of the volume of new autism therapies, but we've been able to buffer that with our actions. We have groups to define better protocols, and we also opened up new care units, as I told you earlier. We've been able to buffer such impact. That's one of our the strengths of our company, to be able to manage MLR in a reasonable and efficient way. About your second question. Yes. The Q2, as you well know, usually has an MLR between 2 to 3 percentage points higher than the Q1 of the year. This is the dynamics of the healthcare market, as you know. It's only natural that we would only, you know, work hard in order to mitigate those effects. It's important to mention that, and how we've been talking to the market broadly, we do have a very robust plan involving not only ticket recomposition through the necessary price readjustments, also reviewing portfolio. That's on the side of expenses. We are also integrating systems. You know, the whole cycle takes a year. That will take place up until mid-next year. Most of the effects will be seen starting in May. That's the case of the readjustments, for example. With a higher readjustment policy, we'll see positive impacts starting in May, you know, as part of that cycle that will continue up to the Q2 of next year. Yes, historically speaking, there is a higher pressure in the Q2, but there are also other things that start coming stronger in the Q2. In the annual cycle, they will be complete. Yes, we will try to mitigate the effects of a higher MLR level in Q2, but yes, they do exist. Thank you. That was very clear. Congratulations on your results, Jorge. Moving on to our next question by Gustavo Miele, Sell-side Analyst at Goldman Sachs. Gustavo, we are going to enable your microphone so that you can ask your question. Gustavo, you have the floor. Good morning, Jorge, Mauricio, and other participants. Thank you for your presentation. I also have two questions. The first question is related to mix. In recent quarters, we've seen new types of contracts gaining relevance in the company's consolidated portfolio. You've been talking a lot about co-participation plans as an important tool to retain some of your clients. You also have a national solution that has been gaining momentum in the combined portfolio of the company. I'd like to hear from you about the economics of these new contracts compared to the more mature portfolio. Co-participation, for example, we're talking about a product with a more affordable ticket. Can you tell us about the frequency of those members as compared to the legacy members that you have in your portfolio? Just so we can understand the MLR of these new products vis-à-vis your existing products. That was my first question. Now, my second question, if you allow me. I would like to understand about provision for lost debt and working capital. Considering this very challenging macro scenario, you obviously had a higher impact on certain numbers, but provision for bad debt had actually a good performance. What helped it? Did you have any changes in your collection policies or any other external factor? Any changes in the healthcare plan operations as compared to last year? Can you talk about receivables and provision for bad debt? Why were they relatively stable, considering this very challenging macroeconomic scenario? Thank you very much. Thank you for your question. Starting with your question about mix and pricing. Indeed, co-participation and changes in our products are tools that we use in order to adapt the readjustments to the customer's reality that oftentimes cannot afford higher readjustments, but with the profitability that we need. If we talk about the readjustment of 15%, and the customer didn't have any co-participation in the past, but now they accept co-participation, we could have an increase of, like, 12%. There is an equivalence of co-participation and changes in product. This leads to changes in products, inclusion of co-participation or franchises for service in order to mitigate the higher prices that members would have to pay. That's actually a common tool that has been used for a long time, and especially now in this new moment of the company in which we're increasing our readjustment levels. Whenever we have price increases, we have like for like, price increases for the same product, and depending on the customer's reaction, we can just readjust their structure, offering co-participation so that they can feel, they can have a lower readjustment on their plans. That's a common tool that has been used by the whole industry. That's a natural movement, and the goal is to keep the same level of profitability. There is an equivalence, considering that the MLR of the contract will be the same. We'll have changes in the top line, in the readjustments or the changes in the customer's MLR. That's our goal when we implement those tools. About working capital and provision for bad debt, we're working hard to understand the market conditions and implement our policies and collection procedures. I talked about commissions and prices, but there is also a lot of governance and collection rules that were unified in both regionals, so that we don't have any disruption in service in cases of delinquency. We're talking about corporate customers and small and medium businesses. For individuals, we call them, we send them reminders, and we have a stricter collection policy to make sure that these customers that have a lot of pressure on their income can continue paying us, and our services can be kept for them. You know, high-quality health care is a very important item for Brazilians today. About working capital, the Q1 was benefited by the loss that we had in Q4 in receivables. The loss I mean are the increase in receivables that were offset in Q1. That was smaller than the working capital receivables. In terms of provision for bad debt, we've been working really hard and strictly to make sure that we are paid on time. That was very clear, Mauricio. Thank you very much for your answers. Our next question is by Joseph Giordano, sell-side analyst at JP Morgan. Joseph, we're going to enable your microphone so that you can unmute and ask your question. Go ahead. You have the floor, sir. Hello. Good morning, everyone. Good morning, Jorge, Mauricio, Guilherme, Nahuz, and the whole IR team. Thank you for taking my question. I'd like to talk about 2 topics. The first one is, you know, you're investing in your product grid. What are the opportunities that you see today to expand and gather new lives and new contracts, considering your national product or maybe a possible verticalization in certain areas and a higher integration level between the two companies? Where do you see the greatest challenges in terms of contracts and portfolios today? My second question is. You talked a lot about capital raising to decrease your debt with the sales and lease back and increase in capital. Do you see a chance to reschedule your debt amortization schedule to have, you know, to reduce the pressure on the cash flow that you might have with a more, you know, with a harsher scenario or something like that? Thank you very much. Thank you very much for your questions, Joseph. They were very good. We have worked intensively this year so that we can prioritize what we have that is the best. We have about 90 hospitals scattered throughout the country, and we have almost 2,500 beds that are closed. They don't have the required stuff to operate there, this is a result of the different acquisitions we made this far, and also the expansions we've had. We have reviewed all of our products. This is ongoing work, and this is done by the new business vice presidency. We have a very active team in the commercial area. We have also created new products that are adequate for the different regions, in the regions where we have our own network. In addition to that, we have a plan to open new units. We are going to expand existing hospitals. We're building new ones. This is in our plans so that we can increase our presence or create a presence in new markets. Therefore, the first new movement we've had was in reviewing our product grid. Also we are reinforcing our media efforts and marketing in the regions where we're going to have a better return so that we can guarantee a better growth. More than that, more efficient margins since we will have a control of our own network. Furthermore, where we have our own network that is not being used, so we'll be able to reduce our costs. This is activity that is being held with a lot of discipline, and we have different products that are being created so that we can achieve this goal. In addition to that, we have the integration of Hapvida and NDI and all of the acquisitions we've made. I will give you some examples now. In the state of Minas Gerais, NDI crossed with the accredited network, and today they use our own network, Madrecor. Therefore, we no longer need to use the RTC network. In Belo Horizonte, we have just implemented, just this month, we just released an emergency department in Santa Efigênia, today, Hapvida and NDI users can have access to this wonderful service. The users of NDI who used other hospitals in Joinville now use our hospitals. We have just sent our portfolio to São José dos Campos, where we already had a verticalized operation. The same thing happened in the state of Pará, in Parauapebas, where NDI used an accredited network. They are now using our Parauapebas own hospital. The same thing is ongoing in Brasília. Part of the portfolio is now using according to an established schedule. They will use our hospital in that city, which has a low occupation. Our portfolio in Brasília has increased. In other words, we have a series of synergisms among our own networks. Many of them have already been implemented. The others have been scheduled. Therefore, we have opportunities in creating our portfolios, using our own resources, expanding our own resources, and using the synergism of the companies in the integration program. Also, the integration process with which we have been very successful and disciplined. In December 2022, we implemented all of the systems with standardization and information, intelligence, performance indicators, so on and so forth in Belo Horizonte. Now we've already reinforced and mentioned that on May 3rd, we had a very smooth transition to our center in Rio Grande do Sul, the CCG. As we implemented the system, there was a series of gains between the networks and products. I'm not talking about some additionals that we will retain after 90 days. We have been very disciplined, working hard on the day-to-day. Our vice presidency team is very engaged with our plan. Our plan is best, extensive. We work in different fronts, but all of them are going to enable us to be more efficient, to reduce costs, and have more options for our users. I now turn over to Mauricio, so he can talk about the reprofiling of our debt. Everything we've done to enforce our cash was meant so that we can make our payments by the end of next year. We have reinforced our cash so that we do not have to count on the credit market and pay for all of our debts. We have no urgency in reprofiling. We have increased our capacity last year, including our debentures, and we also have a mean cost of CDI plus 1.2 to pay. Then in January this year, we paid BRL 800 million of our debt, and we had a cost of CDI plus 1.6. Therefore, everything that was able or possible, we did last year. Then we have lower cost. The market today is more limited. It's not as accessible. Because of that, and because we're very conservative, we chose to reinforce our cash so that we can make all of our debts without requiring reprofiling. If we have an opportunity, we can do that, but it's not planned, at least in the short term, because we have enough cash to pay for our debts in the next 18 months. Perfect. Thank you very much, Jorge and Mauricio. Our next question is from Fred Mendes. Well, Fred, can you open your microphone so that you can make your question? Fred, please proceed. Good morning, everyone, and I thank you for the call. I have 2 questions. The first has to do with the price increase policy. We can see that there has been a significant increase in the last few months with NDI running at 13% or 14% and half the in the corporate sector. I wanted to better understand if this is an optimal level in terms of price increases and taking into account your client base. Do you think there's an opportunity for further increase? This is the first question. The second question, could you talk a little bit about your PPO? I think there was a decrease of debt in this segment, and I wanted you to better explain this, especially if it's different from the average of the company or not. Thank you very much. Well, I'm going to thank you for the question, Fred. In terms of price readjustments, we started implementing a price readjustment that was a little bit higher in February this year. We have individual plans, but we're waiting for the agencies to inform us of what we should do. It includes an increase of about 10%. PME, we've already informed about the readjustments, and in Hapvida, it's 19.9%, and for NDI, it is 21%. In average, we have 20%. In the corporate sector, we've increased it since last year. We reached an average readjustment, and this year, the suggested readjustment is in the order of 15%. As mentioned before, we propose readjustments 90 days ahead of time. In February, we announced readjustments to be made in May. What we practice and apply for the clients will be now in May, where we will have the 15% increase with some nuances, but there will be compensations when we change the different networks. The adjustments will be implemented, and we've seen that There was an impact in the second half of last year, and this year, this volume has increased, and we had readjustments at a higher level, aiming at 15% in the corporate area. About PPO, we have a higher ticket, but we also depend more on our accredited network. In PPO, the average readjustment will be of about 15%, and this is what we've seen in this market. In terms of the PPO strategy, would you like to talk about it? As Mauricio mentioned, PPO is a product that we will keep in our base, especially in São Paulo. It's important to have a mix of products that can meet the needs of corporate plans in Spectro. We have a well-defined strategy. A percentage of participation over the complete portfolio. There's no doubt that our main product or our main activities is in the sense of implementing our own products, integrating the network, and requalify it more and more so that we can offer an HMO product that has a very high quality, complementing with PPO products in very specific situations, in a specific market, keeping this strategy. Perfect. Super clear. Thank you, Jorge, and thank you, Mauricio. Our next question is from Mauricio Cepeda, Sell-side analyst from Credit Suisse. We're going to open your mic so that you can ask your question. Mauricio, please proceed. Hello, Jorge. This is Mauricio. Thank you for the opportunity. I have two questions. First, regarding CapEx. I know that you're now prioritizing craft preservation and that you have decided to optimize the assets that are already operating. What happens with CapEx from now on, since you already have some areas that you need to verticalize? What are you considering in terms of CapEx? I understand that the control of MRL will depend a lot on the verticalization of the more expensive MRLs. The next question has to do with your vision on the nursing salaries and how you see these discussions and the possibility to be prepared for that. Thank you very much. Cepeda, thank you for the two questions. Both companies have been investing significantly with a high CapEx volume as it happened last year and the year before last. In addition to that, we have made purchases with that will bring about assets for diagnosis and outpatient departments. As I mentioned, we have vacant network with 2,500 beds today. Of course, we still have specific needs. We are carrying out our plan as intelligently as possible. We reduced our CapEx for this year. It will be in the order of BRL 400 million. We've also been able to, within this amount, to expand the existing hospitals, the creation of new hospitals, such as the case in the state of São Paulo, which will be concluded in September this year. We are also creating our new emergency units. As it was the case in Belo Horizonte, we have just delivered it. We are being more flexible and efficient so that some of these units, such as, 3 emergency departments that are being built this year, and they are in our plans and will be constructed. We are already preparing our budgets for that, as well as, the equipment that is required for the verticalization of high complexity procedures. They're all included in the CapEx of BRL 400 million that I mentioned for 2023. Now about your second question about the floor for nursing salaries. This is a very important category for us. My sister is a nurse, and one of the major pillars of our company is the nursing staff, and we need to value this category. The decision we were informed last year, this was sent to our association, and we still need to understand its effects. We are very calm about this decision by the superior court because their goal was to preserve a category that is really important for the company, keeping employment levels. Considering what was happening in the past, there was a risk of mass cuts, job cuts, as mentioned, throughout the country. The second point was to maintain quality of care. The decision that was made by the minister takes into account these two points and values the creation of collective agreements in order to keep the jobs, preserve the jobs and the quality of the care provided. Great. Thank you, Jorge. Our next question is by Samuel Alves, sell-side analyst at BTG Pactual. Samuel, we're going to enable your mic. Please unmute and ask your question. Please proceed. Good morning, Dr. Jorge, Mauricio, and everyone else. I have two questions. First, a follow-up on the first question in the call about MLR. Can you share frequency indicators from April and May with us? Frequencies are higher and in line with the seasonality of the quarter or not. Do you see any type of accommodation in those numbers? The second question is about the loss of customer base in Q1. We know about the unfavorable seasonality for growth in Q1, but what do you expect for the rest of the year considering the commercial discussions, do you think that you can offset this organic loss of lives in Q1 to have some type of organic stability for the rest of the year? What is your commercial strategy for the rest of the year? Thank you very much, and congratulations on the improved results you just shared. Hi, Samuel. Thank you for your questions. About volumes, we see today a typical quarter for the times we are going through now. You know that the rains start impacting the North region, then Northeast, coming to the Center-West in the beginning of the year till May and June when the rains stop. Together with the rains, we have many viral infections that impact those regions. That's what we saw just along, you know, historical levels and seasonal levels as expected. The southeast of the country is more impacted by respiratory diseases in the middle of the year. We're going back to a normal seasonality aspect of viral and respiratory infections now. As a result, the Q2 usually has an MLR that is under more pressure than the Q1. But as we said, we've been taking measures to mitigate all of that. Of course, there is a step by step and a schedule to be followed, but we're very disciplined implementing all of the measures in order to mitigate this historical seasonal effects. Now, about the loss of lives. That's also usual for Q1 due to well-known factors. Our customer base is affected by the beginning of the year expenses with school enrollment and taxes for vehicles and real estate. Historically speaking, that's a quarter during which our customers suffer more pressures on their income, and that's why our customer base is also impacted. As we communicated to the market, we have a strong indicator to recompose margins. We've been prioritizing the necessary adjustments, and this can lead to the fact that we might not have organic growth levels as high as in recent years. This is because we are prioritizing margin recompositions, as I said. It's important to mention that we have a wide range of products that can be very attractive during the ups and downs of our economy, because in times of high readjustments by our competitors, we have a more efficient product to offer. When the economy recovers, we have a product, an entry-level product that can grow a lot in the country. We are prioritizing margins now, but we should not forget that our products can be quite surprising because of this very characteristic dynamic that we have. Thank you very much, Jorge. Have a great day, everyone. Our next question is by Leandro Bastos, sell-side analyst at Citibank. Leandro, please unmute your mic and ask your question. Please proceed, Leandro. Hi, everyone. Good morning. Well, I have 2 questions here on my side. You just said that you're prioritizing margins. Looking at your portfolio today, do you see any contracts that are not a very good fit considering the times you're facing? Do you think they might be adjusted in the short term? Now my second question is about the technical provisions. We saw a mild drop in PSL going back to similar levels to Q3. What can we expect about this from now on? Thank you very much. Thank you, Leandro. Let me answer your first question, and then I'll turn the floor over to Mauricio to answer the second question. About portfolios or contracts that are not a good fit for us right now. What we see is that, yes, indeed, we do have some contracts that have negative margins. We have two differentials here. There are situations in which we have our own service network, and there are situations in which we depend on third-party providers in places where we're not making investments. In the second case, where we depend solely on third-party providers, and in locations where we're not planning to make any verticalization movement, there is only one alternative, which is passing through the prices, the necessary adjustments in order to recompose our margins. This is where we may decide to discontinue a specific contract. On the other hand, we've been much more competitive and able to grow where we have our own network, our own service network. That's where our strength lies and where we have much more flexibility. What can happen is that we make adjustments where we depend only on third-party providers, and we need to recompose our margins. Now I turn the floor over to Mauricio to answer your second question. Hi, Leandro. Thank you for your question about accounts payable and our medical claims. That's natural and seasonal. The accounts payable for medical accounts is lower than Q4 because of the seasonal effect. There is no other external effect here. It's just natural and seasonal. Okay. Thank you very much. Have a great day. Our next question is by Ricardo Boiati, sell-side analyst at Banco Safra. Ricardo, please unmute your mic and ask your question. You have the floor. Hi. Good morning, everyone. Thank you for taking my question. I would like you to clarify the price readjustment dynamics and how this can impact your average ticket with a higher price readjustment. Considering the data you've been sharing, we may see the average ticket prices going up. Prices have gone up about 10% this quarter. I believe that by the end of the year, we can get closer to 15% considering the readjustments you are defining. Can you tell us about the demand for your products and how your mix can be affected by a more aggressive price increase or price readjustment? How can price readjustments impact on your average ticket? Thank you very much. Hi, Boiati. Indeed, this is the year to recompose our margins. We see inflation in medical costs. This is the year for us to bring back our margins. It's time to rebalance the contracts with the necessary readjustments so that we can have a financial balance once again. This is what we've been doing. This is one of the priorities of the company, and we know that some specific segments and some channels, this can lead to higher pressure on certain clients. Jorge has already mentioned this. We are aware of this effect. Because of that, the organic growth throughout the year might not be as strong as in recent years, but that's part of the dynamics since we are prioritizing having an optimized portfolio and the profitability of the company right now. That's a risk of not growing our customer base. We've seen moments of high inflation and high readjustments in the past. Customers and HMOs sometimes start considering a verticalized product as an option in times like this. This can attract customers from other HMOs because of the high price increases they are facing. They decide to have a lower cost and an efficient product in a verticalized HMO. This can create some friction, but it can also be a benefit for us when we look at the market as a whole. Okay. Thank you, Mauricio. I was just trying to understand the effect on the mix. If some customers accept co-participation or a narrow network so that the readjustments can be lower, the impact on the mix was around 1% in the quarter. I know it's hard to define that, but do you have any idea of how much this could be? If you accelerate price increases, how much the line of the mix effect can be impacted to neutralize the effects of price readjustments on your average ticket? Okay, I got your point now. Indeed, when we say that we're going to have a 15% price readjustment, we don't feel that on the ticket because of the tools that we have to offset this to customers that, you know, this brings the same gross margins, but in a different way by reducing frequency and the use of our third-party network in a more verticalized way. These things are analyzed on a case-by-case basis, depending on the customer's willingness to pay the price readjustments or not. Would you like to comment on this, Jorge? Sure. I just want to say that our pricing team, our after-sales pricing team, has been working in line with all of the dynamics. Whenever we see the necessary adjustments, they try to convert to other modalities, you know, reviewing the network. In places where we don't have our own network, we talk to the customer maybe to have some type of co-participation. We convert these alternatives into prices being flexible to user. That's one of the commercial strengths that we have, the ability to offer products that are a perfect fit for the customer's reality and the customer's needs. Great. That was very clear. Thank you very much.