Morning, ladies and gentlemen. Welcome to Hypera Pharma's earnings call for the third quarter of 2024. We have with us Mr. Breno Oliveira, CEO, and Mr. Adalmario Couto, IRO. This event is being recorded. The video can be seen at the company's investor relations website, ri.hypera. com. br. We would also like to inform you that all participants will be in listen-only mode. We will then have a Q&A session. Further instructions will be given at this time. Before we proceed, I would like to reinforce that some information in this conference call may contain projections or statements about future expectations. This information is subject to known and unknown risks and uncertainties that may cause them not to materialize or to be substantially different from what was expected. I will now turn it over to Mr. Breno Oliveira. Go ahead, Mr. Oliveira, you have the floor. Bom dia a todos. Good morning, everyone. Thank you for participating in our third quarter 2024 results conference call. I'll start by talking about our growth on slide three. Our sell-out accelerated this quarter and grew by 11%, mainly due to the normalization of demand for products related to flu, respiratory pain, and fever. The normalization of demand in these categories, which is more relevant to Hypera than to the pharmaceutical market, has allowed us to accelerate our sell-out growth when compared to the second quarter of 2024, which was 6%. Sell-out growth in flu-related products was 11%, while in the second quarter of 2024, this category was down 1%. Demand normalization in this category also contributed to sell-out performance in Q4. In October, sell-out growth was 13%, resulting in an accumulated growth for the year of 9%. The sell-out performance is in line with the company's expectations for 2024 and was not affected in any way by the start of the working capital optimization process announced on October 18. Moving on to slide four, I'd like to mention two highlights on the company's sustainability and governance front. We were once again featured in S&P Global's Corporate Sustainability Assessment with a 10% increase in our Dow Jones Sustainability Index score. This recognition by S&P reinforces the robustness of our corporate governance, which stands out among the main global pharmaceutical industries, and the assertiveness of our recent ESG initiatives to ensure the sustainability of our business. It's also worth highlighting another important step forward in the development of the company's corporate governance: the completion of the revision of regulations of the Board of Directors and the advisory committees. This effort, coordinated throughout the year by the Governance and Sustainability Committee and approved by the Board of Directors, further strengthens efficiency among the company's governance bodies and transparency in our decision-making processes. I now hand it over to Adalmario, who will comment on the quarter's results on slide five. Thank you, Breno. Good morning, everyone. With the working capital optimization process starting in the last quarter, besides reducing our net revenue, we also had an impact on our income. As Breno said, our sales went down to work with lower inventory levels with our clients, which reduces our operational leverage on the short term. With our lower revenue, our fixed production costs were less diluted, but we were able to conserve our gross margin close to 60%. We are still investing in our brands to boost growth and sell-out. Marketing expenses went up 6%, and we had more investments in media, online and offline, free samples, and the medical visits team. Expenses with selling were 5% higher than last year, and this includes an R&D investment in line with what was invested in Q3 2023, excluding the benefits from the Lei do Bem. General and administrative expenses went up 10%, with higher expenses with consultancies, digital, and IT projects. With our lower short-term operational leverage, our EBITDA margin and net income went down this quarter, but our free cash flow generation grew 23%, and I'll mention this in detail on the following slide. Operational cash generation this quarter was BRL 738 million, higher than our EBITDA for this period, with a lower investment in working capital, increase in inventories, and receivables. CapEx investments represented BRL 107 million, especially in projects expanding our production capacity for the institutional market. We also are internalizing brands acquired from Takeda and Sanofi, and technology transferred to extract scopolamine, the main raw material in producing Buscopan. Our R&D investment is higher than 7% of our net revenue, which reinforces our commitment to constantly updating our portfolio through the innovation pipeline. This goes for the retail market and also for the institutional market. To conclude, we had a free cash flow above BRL 550 million, which reduces our net debt by over BRL 250 million in the third quarter. I will now hand it over to Breno for his closing remarks. Thank you, Adalmario. Before we continue with the Q&A, I'd like to give you an update on the evolution of our working capital optimization strategy. We're very satisfied with the implementation of the strategy so far. The feedback from our customers has been very positive. We've had a lot of support from them, and we're working together so that we have more efficiency in the chain with no impact on sell-out, both for Hypera and for our customers. The sell-out results for the months of September and October confirm that the strategy has no impact on the company's sell-out. A good part of the adjustment to sales deadlines and customer inventories has already taken place by the end of the fourth quarter, and we expect to see the results of this strategy in the company's cash flow from the first quarter of 2025. As we said on the last call, we're quite sure that despite the negative short-term impacts, this strategy is the best for the company in the medium and long term. At the end of the process, we're going to have a much stronger company, and we see a lot of potential for generating value for our shareholders in the long term. Thank you, and we will now continue with the question and answer session. We will now begin the questions and answer session for investors and analysts. If you'd like to ask a question, please click on the raise hand button. If your question has been answered, you may remove yourself from the queue by clicking on the lower hand button. The first question will be asked by Mr. Joseph Giordano from JP Morgan. Go ahead, Mr. Giordano. Hello, good morning everyone. Good morning, Breno and Adalmario. Thank you for taking my question. I'd like to talk about lower inventories, or rather inventory adjustments on your channels, and explore your growth levers. I'm just trying to break it down. You mentioned that your sell-out has been different. So how has it been behaving, considering that you have new products, new launches? And how has it impacted your legacy portfolio? So that's my first question. My second question is, how do you see this happening in retail as well? Finally, lower purchases from the supplier side. Has that had any effect on the company's bargaining power, or have you been spending more? Thank you. Hi, Joe. Good morning. So to answer your first question on growth levers, as I mentioned in the first part of my presentation, we see that demand has been growing for more seasonal products, and that includes most of our mature portfolio. So that is probably bringing us close to the market levels, actually slightly above than the market level in some categories when we look at the comparison in the same category. A big part of our growth comes from new products. We know that for us and for the market, the growth is coming from launches, and we haven't stopped investing in them. Quite contrary, we're investing more and more, and we're above the average for our competition. We intend to continue doing that. That's what's going to boost the company's growth in the future. To answer your second question on bargaining power, we don't really see that impact, as I said. This process is neutral for our clients when it comes to working capital investments. Clients have less time to pay, but they also have a lower amount in their distribution centers. They have less inventory. This generates efficiency. There's no loss on our client side, and we can capture this efficiency through smaller working capital investments. But just to summarize my answer, we do not have to invest more because of this strategy. Adding to Breno's answer, this innovation strategy means that not only are we investing on our pipeline with over 15 projects for the next years, but we're also collecting the results from all of the investments we've made in the past. So for example, this year, we're leading in new drug registrations. So this year, we have over 12 registrations for medications, and that's excluding supplements, cosmetics, and other products. No other Brazilian pharma company has been able to do this much this year. So that also strengthens our position. Most of these new registrations are in categories where we had a more limited portfolio, so we're becoming more competitive, and that's really going to help us with market share gains across the categories that we have a higher stake in right now. Great. Thank you, Breno and Adalmario. Thank you. The next question will be asked by Mr. Emerson Vieira from Goldman Sachs. Go ahead, Mr. Vieira. Good morning, everyone. Good morning, Breno and Adalmario. I have a couple of questions here. First, it was very clear that your performance quarter to quarter has been reflecting your optimization process, but it's difficult to see that in your accounts receivable because your quarter to quarter drop has been below the reduction in revenue. So how much of your revenue is already running in new contract terms? Continuing on what was said, what is your goal for the end of the next quarter? So that's my first question. The second question is also a follow-up on growth. You mentioned your innovation data, and we can see that this percentage has not grown year on year despite this reduction in revenue. So can you tell us a little bit more about how your market share has been evolving in the products you launched recently, and how does it compare to your company's expectations? Also, if you can tell us about the competitive dynamic for new molecules and legacy molecules, especially for generic drugs? Thank you. Hi, Emerson. Good morning. I'll answer your first and third questions. So to answer the first question, we optimized this process by the end of the third quarter and the last three weeks of the quarter. So you still can't see it in the numbers, the inventory levels, the shorter terms, and the calculation is based on revenue. So with that, you have an increase in accounts receivable, but that does not correspond to reality. So the sales that are being performed, especially in October and November, have a smaller term because our inventory levels are also smaller than the accounts receivable we're seeing here. This is going to become clearer in the first quarter of 2025. We'll be at a lower level, and much of the sales we're doing in the quarter, well, a good part of it will be in the next quarter, considering inventory levels and the lower terms. And Emerson, about how much has already been implemented, is it being done client by client? This is being done generally. And as we mentioned, this is also gradual. With that being said, we started the third quarter, and the plan, as I said, is to do most of this process between the third and fourth quarter. We estimate that about 50% of the adjustments will have been concluded by the end of the fourth quarter. And then the pace will go down, and we'll fine-tune this process throughout 2025. Also, you mentioned market share. So I think when we look at the OTC and consumer health category, we're leaders. So we have almost twice the share as the runner-up in consumer health here in Brazil, and we have the same share levels as we had before. But our share fluctuates in this category depending on the seasonal flu products. So with this recovery we had in the third quarter, we also gained some share due to how much this category represents in our portfolio. When we look at other categories, especially prescription drugs, which is where we have the biggest concentration in our pipeline, we have been growing significantly in chronic treatments, especially central nervous system, endocrinology, gynecology, where we also have a high concentration of products to be launched in our pipeline. We know that it's a smaller base, but these are the fastest-growing categories in the market. But our launches have been growing above market levels in these categories. So this will be important in the future. It's a category that represents the biggest part of the Brazilian market for prescription drugs. And with the pipelines we have and patent breaks that will take place in the next years, we will probably continue gaining a share of the market. And the institutional market is also a new initiative. We started strong in 2024, and we have a good expectation for launches by 2028. Many of the products that have been approved will be launched by 2028, and this will make our revenue for the institutional market reach our goal of BRL 1.4 billion by 2028. Do you have a comment on generics? Yes, so about the competitive scenario for generics, we still see a very competitive scenario. We've been very aggressive with this market. We've accelerated our growth in generics, and we will continue strong with this strategy in the next quarters. Our focus has been growth and profitability in generics, but we still see a lot of competition here. We've talked a lot about this. There are many companies that have gotten prepared for a lot of growth, buying inputs, so there's a higher availability of pharma inputs. I think companies ended up having excessive inventories with us and with the competitors. This competitive process continues. It will continue in the next quarters. Great. Thank you. Thank you. The next question will be asked by Mr. Bob Ford from Bank of America. Go ahead, sir. Thank you. Good morning, Breno, Adalmario. Thank you for taking my question. What are you doing differently in advertising and in the sales force to maintain the sell-out levels? And what is your competition doing? Hi, Bob, as we've been saying, as we've been saying for some time, we've been changing how much we've invested in media. We've been prioritizing investments in online media, and this will continue in the future. Our goal is to accelerate our penetration in the digital channel, which we believe will dominate the market from now on. That's an important point. We've been preparing our internal advertising agency, so we're hiring professionals with a new kind of profile to work efficiently in this new scenario, so this is an effort we've been making in the last years. In 2018, this was 8% of our investments in digital, so we can basically invest everything in digital in the next years, and we've been preparing ourselves for that, so that's the biggest change we've had in our way of advertising, and also, the company varies to a certain extent. We have a number of marketing levers, so POS promotions, media, discounts for end consumers, so we've been balancing this portfolio, and we hope to prioritize media instead of commercial discounts so that we can maintain our investments in points of sale, which we believe are very important as well. We need to have a lot of exposure, a lot of products in points of sale, so I think that's it. I think the changes we've been making is that in media, we've been focusing on digital media, and we're balancing by giving fewer discounts and having more media from now on. This is what you will probably see in the figures in 2025, and just a follow-up question: what percentage historically did not receive any advertising that is now receiving it through the digital channel? Great question, so in the last couple of years, we've been going up. So in 2024, we went from 10 brands that did not receive any investments in media in consumer health, and now we're investing in them, and starting next year, we're going to have even more brands, or rather, more than 50 brands will receive investments in media. So we've been making this effort. Very strong brands like Torante, Merthiolate, Gelol, these were brands that did not have a lot of media investment and will now receive more investments. But they have a lot of appeal for the population. So we see a lot of potential for these brands with the additional investments we're making, especially focusing on digital. So the digital world allows us to invest in smaller brands and accelerate their growth. Great. Thank you. Thank you, Bob. The next question will be asked by Mr. Lucca Marquezini from Itaú BBA. Go ahead, Mr. Lucca. Bom dia, pessoal. Obrigado pela oportunidade de fazer perguntas. Hi, everyone. Thank you for taking my question. I have a couple. First, about foreign exchange. We've seen that the political scenario has been a little bit volatile. So if you can tell us a bit more about it and how you expect it to impact your company for 2025, especially your hedge policy. And secondly, I'd like to ask about CapEx, if you're focusing on the institutional side and how it compares between 2024 and 2025. Thank you. Hi, Lucca. Good morning. So I'll answer on the exchange rate. So for this year, the impact that we've been having to our cost is still very small. The average exchange rate that affected our cost was about 5.20. In the third quarter of 2023, it was 5.13. So the impact is still low, considering the inventories that we have of raw materials and inputs. And next year, there are a couple of points impacting our gross margins. First, how the exchange rate will be for 2025, and the other one is price adjustments, which will probably be defined in February. If our exchange rate remains at this level until then, remember that calculation takes into account a high- water mark and not only inflation, so with that higher exchange rate, we will probably also see some price readjustments, so I think that's something that we need to keep an eye on and that will help us build our margin again. Another important point besides that is the dollar-listed price of raw materials. After COVID, especially in 2023 and 2024, we saw a reduction in raw material prices in U.S. dollar terms. Many of these companies that are input suppliers increased their capacity during the COVID pandemic, and now, with their higher capacity, we have been able to negotiate smaller prices. That also helps us to reduce the impact of the exchange rate. And, Lucas, regarding CapEx, our focus remains. I mean, we've made big investments in expanding our capacity in the company in the last few years. And from now on, we've been focusing on three main projects: internalizing our portfolio from Takeda and Sanofi. This process will be concluded by 2025. Most of the investments will be made by then. The pilot plant and the oncological products plant for the institutional market. This is a long-term project that was started in 2021 by creating the business unit. So we've been working on it. We've been expanding our portfolio and also including partnership programs. But I think some of the growth will come when we have our investment capacity and when we are able to develop things in our innovation center. And the third project is the scopolamine production plant. So that's the molecule for our main product, Buscopan. So we've mentioned these projects in the past, and they're going to give us a lot of efficiency and cost improvements. We now buy IFA from Boehringer. So we're going to have an opportunity to reduce the cost of what we produce and also sell this product and export IFA for the rest of the world. So these are the main products that we've invested in. Next year, our CapEx will probably be at a higher level than the CapEx we had for 2024, but this is not very significant. And from then on, we will see a reduction of the CapEx to a maintenance level and some increase for some of the company-specific lines. Great. Thank you. The next question will be asked by Mr. Renan Prata from Citibank. Good morning, everyone. Thank you for taking my question. I'll be very brief. This is actually a follow-up question on capital optimization. The supplier line has gone up from one quarter to the next. So I'd just like to understand your improvement. Should this continue? Are there any seasonal adjustments? I don't know. And you also mentioned a pilot project with smaller clients. So I'd just like to get updates on how representative these smaller clients have been. If you have any concerns about the macroeconomic scenario, that's it. Thank you. Good morning, Renan. I'll take the first question, and Renan will answer your second. As we had mentioned before, as our inventory levels balance out, we're very close to the 200 days that we mentioned that were the normal inventory levels and inputs. We also start having more frequent purchases with our raw material and input suppliers, which have longer terms. So it's normal for this line to go up, and we'll go back to the inventory levels that we had and also the supplier that we had before. Can you repeat your second question? Oh, you had mentioned a pilot project. Okay. So this was something that we had with some smaller clients before the end of 2023 and late 2024. But I think the most important thing right now is what is happening with all of our main clients. As I mentioned in my presentation, results have been even better than we expected in this beginning of the transition. So clients have been very supportive. And I think it's for a simple reason. Not only are we one of the main suppliers, but they also don't have a cash impact because we're reducing receivable terms, but they're also reducing their inventories. So for their working capital, this has no impact. And it's good for them because it frees up space in distribution centers. For some clients, with some distribution centers specifically, they had bottlenecks and limitations. So it's very good for them to free up that space. And we're doing it gradually in order not to create any unbalance in their inventory levels. We're very happy with what's happening right now, and we don't see any problems in implementing the strategy for the next few months. Great. Thank you. Nossa próxima pergunta vem do senhor Arthur. The next question will be asked by Mr. Arthur Alves from Morgan Stanley. Go ahead, sir. Bom dia, Adalmario, demais participantes. Saindo pouco só do... Good morning. So can you tell us a little bit about your institutional market? And how do you see the competitive dynamics in this sector? Hi, Arthur. We're very happy about this performance. We've been growing according to plan. We've been able to work and extend our market growth with the molecules that we already have in our portfolio, which is not the ideal portfolio for the institutional market. But we've been able to make some very good work with the dedicated products. I mean, Dramin was purchased from Takeda, injectable Dramin, and it's been having a lot of growth in the institutional segment. We've been able to increase the number of clients and hospitals that use it. We have a small team that's dedicated to visiting hospitals. So they are promoting this product and other products from the company. We started launching dedicated products for the institutional market. So enoxaparin was recently launched. This is a huge market. There's also parecoxib and propofol. So there's a number of products that we've been able to sell. We also have injectable Buscopan, which is a brand name reference drug that was outside of the market for a long time and is now being produced again. We see a lot of potential in it as well. But I think there's even more potential as we have new and relevant molecules, especially in the oncology market, and they're starting to come to the market by the end of 2025. They depend on ANVISA authorization, but by the end of 2025 and early 2026, we'll have good molecules for the oncology market as well, so we're very happy. We hope to reach BRL 1.4 billion by 2028, and we're on track for that, so by reaching this level, this will mean about 2 percentage points of additional growth for Hypera's totals for the next years. Great. Thank you. The next question will be asked by Mr. Yan Cesquim from BTG Pactual. Go ahead, Mr. Cesquim. Good morning, Breno, Adalmario and everyone else. We have two follow-up questions on our side. The first one continues Emerson's question about working capital optimization. According to the expected schedule, most of this adjustment will take place right now in the fourth quarter. You mentioned that 50% of the adjustments will take place by the end of the year. So I'd just like to understand if you expect that the company's P&L line will keep at the same level with revenue growth from mid-2025 onwards. My second question continues Bob's question about marketing investments. We know that there are changes in the investment mix, but I'd just like to know if we can work with a scenario maintaining marketing investments during this optimization process. Those are my questions. Hi, Yan. Good morning. I'll take your first question, and Breno will discuss marketing. Our expectation is the same as we mentioned in our last call, so this process will be more accelerated now. We started in the third quarter, at the end of the third quarter, and now in the fourth quarter, it will be accelerated, and I think that's normal considering that inventory levels are higher in the chain, and then throughout 2025, we're going to balance this out. Our goal is to look at our inventory per SKU, per distribution center, per client, and to have this balanced with a focus on not having stock out of any products, so that's the first assumption that we're taking in this optimization process, and throughout 2025, this will be done more gradually, but once again, in the beginning of the process, this is easier to do, and that's why it's faster. Probably in the fourth quarter, we're going to accelerate more and more, and in early 2025, we will as well, and this will be balanced out on a monthly basis towards 2025. If you put this in your models, you'll see that despite this adjustment still being made next year, but since most of it is being done now and since we're going to have a lower comparative basis, we're going to see some growth from the second quarter, so we'll see the bigger part of the adjustment in the second and third quarters, and from then on, we'll just do some fine tuning and growth in comparison to the previous period, and even more accelerated growth when we look at the second quarter of the next year. To answer your question on marketing investments, as I said, we're seeing higher media investments in the future. This will probably increase since we're investing in more brands and maintaining investments in the company's major brands, and on the other hand, we also expect our media investments to be offset by our lower investment in commercial discounts. We believe that there are some efficiencies that we can seek on this front. We have to look at the efficiency of all of these investments up close, and we'll probably see some discounts, which will finance higher investments in media, but this will not impact our total investments. We're just reallocating that so that we can sustain these brands that didn't have many investments in the past, but this is in our budget process. We're still in the budget process for 2025. When we conclude the process, we'll have more details for you, but this is how we see it in general. Again, this is not connected to our working capital adjustments. For the future in 2026, at the end of the investment, we're going to see potential to improve margins because of the efficiencies that we are going to capture throughout this process. Again, we're optimistic. We think most of this process is already ongoing, and a lot of it will be concluded by the fourth quarter. A good share of it will also be concluded by the third quarter. Thank you. That was very clear. This concludes the questions and answers session. We will now hand it over to Mr. Breno Oliveira for his closing remarks. I'd like to thank everyone for being here for this call. Once again, I'd like to make our management and investor relations team available to answer your questions on results, but also on our strategy and how it will continue taking place in the next months. I'd also like to reinforce that we're very optimistic and sure that this was the best for the company in the medium and long term, and we're going to see strong cash generation starting in the first quarter next year.