Experiência de resultado. Welcome to our Fourth Quarter 2024 Earnings Call for Natura &Co. It's important to highlight that we have simultaneous translation in this platform. Please click on the interpretation button at the bottom of the screen and choose a language of your choice. [Foreign language] We have Portuguese and English. If you are listening to this conference in English, you can mute the Portuguese language audio by clicking on "Mute original audio." Today with us, we have Fábio Barbosa, Global CEO for Natura &Co, João Paulo Ferreira, CEO of Latin America, and Guilherme Castelan, our CFO. This presentation is available on our Investor Relations website. I will now give the floor to Fábio Barbosa. Go ahead, sir. [Foreign language] Good morning, and thank you for being here with us for this call about the fourth quarter of 2024 and the full year of 2024. We're going to start by recapping this journey towards simplifying the group that started in July 2022. Since then, we have sold Aesop and TBS and progressed towards de-leveraging and integrating the Natura and Avon brands in Latin America in 2023. With this, we arrived in 2024, integrating Natura and Avon, called Wave 2 in Brazil, and we're going through the voluntary restructuring of API Avon Products, which was closed in December, as you know. With regards to Avon International, we repurchased operations outside the U.S. through a credit offer of $125 million, but its operating result continues to be pressured by the de-leveraging of revenues. In Latin America, on the other hand, we showed a year of strong revenues and profitability, expanding 40 basis points year-on-year. Wave 2 efficiencies were partially reinvested in exciting projects and marketing, which led to an acceleration in sales trends throughout the year. Excluding the effects of system investments, which are now classified as OPEX instead of CAPEX, and royalties, which are now treated as inter-company, our margin grew by 160 basis points in 2024 versus 2023. This quarter performance also showed the acceleration of revenues, with emphasis on the gifts category. In profitability, the fourth quarter was impacted by the concentration of various investments that ended up interrupting a sequence of quarters with margin growth that we had been recording. On the other hand, these investments are important levers for resuming the company's sustainable growth. It was an intensive year, and Natura came first in Mercosur as the company with the best reputation in Brazil for the 11th year in a row. I'll now hand it over to João Paulo and Gui Castelan to present the results, and I'll come back for the final conclusions and Q&A. Good morning, everyone. This is João Paulo speaking. Fábio has just mentioned the many robust advances we made in 2024, and I'd like to highlight our advances in what we call Wave 2, referring to the integration of Natura and Avon within Latin America. I'd like to remind everyone that Wave 2 was based on integrating consultant and reps networks, which would give productivity gains for them and efficiency gains in commercial management for the company. It also included the optimization of combined portfolios and finally efficiencies in administrative and back-office processes. We concluded Wave 2 in Brazil in 2024, and there are the results. The performance in Brazil and other countries where Wave 2 has already been completed shows gains in revenue, substantial gains in profitability, and cash generation. In Brazil, specifically, we've seen an increase in cross-sell between brands, especially after the launch of combined ordering and integrated checkout, which now allows consultants to buy both brands in a single order and, in many regions, receive them in a single delivery. Now, a very important result of Wave 2 that I'd like to highlight is that all the efficiencies obtained have allowed us to increase our investments in innovation, in supporting our brands, marketing, structuring projects, which has brought market share gains for the Natura brand. I'm confident that many additional efficiencies will still appear in the P&L as our learning curve advances across all the countries we are in. For 2025, we're left with implementing Wave 2 in Mexico and Argentina, where our approach has been gradual and scaled. In Mexico, we've already announced at the end of the year that we were discontinuing Natura's multi-level model and replacing it with a bi-level model, which is aligned with our operating model in all other countries. This was an important step towards unifying sales channels between the two brands. In Argentina, we started Wave 2 in December by closing Avon's distribution center, thus beginning the logistical consolidation of the two brands. Anyway, this was the brief summary I wanted to give about the integration of Natura and Avon, Wave 2 in Latin America. I wanted to show our confidence in the results we've obtained so far, gains in revenues, significant gains in profitability and cash, and show that we are well prepared for the conclusion of the other countries in 2025. As always, I will be available at the end for questions. Good morning. In the fourth quarter, we are reporting a revenue increase of 16.1% in constant currency, highlighting Natura's strong performance in Brazil, where the brand grew 21%, maintaining strong sales momentum and benefiting from productivity and volume gains, especially amid investments in marketing innovation, but also a healthy beauty market in Brazil. In the Hispanic region, the brand's performance was also robust, recording improved trends in Wave 2 countries and accelerating revenue growth in Mexico. Looking at Avon in Brazil, the brand remained basically stable, down 1%. For the year, the brand also delivered stability, but the brand's performance is still highly dependent on commercial incentives, such as promotions, marketing initiatives, and innovations. In the Hispanic region, Avon showed a growth of 1.7% and a drop of 16.5%, excluding Argentina. Both Mexico and Argentina have already felt the impact of the brand integration stages. The home and style segment showed stability for the fourth quarter in the Wave 2 countries, but it still shows a sharp year-on-year drop. Slide 7 shows our profitability. The recurring EBITDA was BRL 703 million, with a margin of 9.1%, a reduction of 70 basis points year-on-year. As you can see, we started with a lower gross margin this quarter. There was a stronger result in gifts with smaller margins, and there were tactical incentives this quarter, which are reflected here, basically the impact in Argentina. Excluding Argentina, we see an evolution year-on-year. Our increased G&A is due to investments in structuring projects, especially IT channels, and that led to an increase of 10 basis points in our recurring EBITDA margin, excluding intangible investments and royalties. If we include them, there is a reduction of 70 basis points in our recurrent EBITDA margin. We also saw a reduction in corporate expenses, down 36% year-on-year. Avon International's recurring EBITDA impact took place in December. Here on the profit slide, you see that the reported loss is basically related to the non-operational impacts of EBITDA and the discontinued operations line. Returning 34% of the tax shield from these EBITDA adjustments, the adjusted net income is positive by BRL 238 million. The BRL 703 million of recurring EBITDA for the quarter was more than offset by the discontinued operations line of BRL 114 million and BRL 843 million of expenses related to the API Chapter 11, the non-cash reconsolidation effects of Avon International and the Wave 2 investments. On slide 9, you can see our cash flow. The adjusted net profit was BRL 3.1 billion in 2024, similar to 2023. However, this year's income includes BRL 610 million in expenses incurred by the holding with API Chapter 11 and other strategic projects. In this sense, the year showed an underlying improvement of BRL 595 million year-on-year. This is due to margin expansions, even including BRL 217 million invested in systems accounted as OPEX instead of CAPEX. As a result, the CAPEX line also decreased year-on-year. These improvements were partly reinvested in operating working capital, which went down BRL 251 million year-on-year, given how we lengthened receivables that we mentioned during the year, and this was partially offset by the payments line. In addition, taxes this year were also higher due to a lower payment of interest on own capital from Natura Cosméticos to Natura &Co, the holding. In 2024, the company's cash flow was BRL 321 million, or BRL 931 million when we remove the non-recurring effects of the holding's expenses, mostly related to the Chapter 11. On this slide, you can see our indebtedness. As a result, we ended the fourth quarter with BRL 4.5 billion cash balance and a net debt of BRL 2.4 billion, which brings our net debt to EBITDA position to 1.27 x. Our debt position is low, but slightly above our initial expectations, and it was impacted by non-operational effects of the Chapter 11 and the non-cash impacts of Avon International, which totaled BRL 560 million in EBITDA for the year. In addition, as of December 31, 2024, we had $420 million in derivatives to mitigate exchange rate risks on the principal of our dollar-denominated debt. They had a gain of close to BRL 300 million in the quarter, which are not included in the net debt position. Adjusting for these effects, our net debt to EBITDA would stand at 0.86 x. I'm now going to hand the floor back to Fábio for his final remarks and next steps. To wrap up today's message, I'd like to emphasize the following. First, I want to congratulate the entire team on the completion of Wave 2, which is an important landmark that has strengthened our company. The efficiencies in productivity, which we achieved, have allowed Wave 2 countries to grow, improve margins, and free cash flow while investing in strategic projects for a sustainable growth path. We're working now towards even greater progress this year in all those metrics. It's important to remember that Wave 2 should be finalized by the end of the year, with the completion of the process in Mexico and Argentina. Also, the company's simplification process is evolving and continues to be management's primary goal. It is along these lines that we continue to execute opportunities for additional efficiencies, which were mapped out by the holding company, and we continue its studies for strategic alternatives for Avon International. Avon International's executive team is focused on finding ways to recover while minimizing cash outflows in the short term. Third, we will keep an absolute focus on capital allocation, seeking an optimal structure that supports profitable investments so that we can deliver good returns to shareholders. Lastly, our ongoing commitment to the triple bottom line strategy, which remains strong in order to unlock sustainable shareholder value. Thank you, and now let's move on to the Q&A session. We will now start the Q&A session. To post a question, click on the Q&A button at the bottom part of your Zoom screen. As you are announced, a prompt to activate your mic will appear on the screen, which then should be clicked to ask questions. We recommend that you ask all your questions at once. Our first question comes from Joseph Giordano from JP Morgan. You may now unmute your mic, Mr. Giordano, you may carry on. Hello, good morning everyone. Good morning, Fábio, Gui, and JP. Thank you for taking my question. I'd like to go back to the topic I was discussing with some investors overnight about expenses. When we do the adjustment vis-à-vis IT contracts and so on and so forth, you'll still see the expenses were still above expectations. We also understand there was an increase in marketing expenses, but I'd like to have some more color on whether there was some other non-recurring investment or provision for bonuses or P&L. When you look at the year's snapshot, it was not the snapshot of the fourth quarter alone. The whole year was a different one. Q4 was slightly or considerably below market expectations. I'd like to understand that mismatch and how we should see the company going forward in terms of expenses and how we can envision a growth in top line. As for Avon International, I'd like to understand a bit more your views on alternatives today for sales, carve-out, potential joint venture with third parties. Where do you see Avon International going forward? Thank you. Good morning, Joseph. This is JP speaking. I'm going to take the first question, and I'd like to ask Gui to address the second one, okay? For starters, I have to say that Q4's profitability level is also frustrating for us, and we are committed to expand the company's profitability, cash expansion, just as we did in the full year basis, despite additional pressures coming from software expenses, as you mentioned. I'd like to start by reaffirming our commitment, our objective in terms of expense control. I am sorry that Q4 turned out to be a quarter where comparisons cannot be made directly because of several non-one-off effects. That also shows, of course, in G&A expenses, Joseph, as you can see. You have already mentioned that correction around software expenses, which came out higher than the year's average because we are replacing software or we were acquiring new tools. Throughout the year, we consumed 100 basis points in terms of expensing software. For the quarter alone, we were above that level, but it is an abnormal seasonal effect. Not only that, Joseph, effects coming from Argentina and the hyperinflation they are experiencing there, and that correction for Q4 2023, those effects were also quite significant. You will remember that in Q4 2023, we had this maxi deval in Argentina in addition to inflation effects, and they highly affected the comparative basis. Not only that, it also affected numbers for 2024. That has an out-of-proportion effect on Q4 2024. Those two effects, hyperinflation and IT expenses, they account for most of the variation in G&A that you have mentioned. Of course, you have additional investments to support the brands, to grow the brands. Nothing really out of the ordinary, to be frank. Our trust in our offerings remained. At the end of the year, Christmas season was great, as you've seen, and we saw Hispanic country regions also moving forward, not only Brazil. A bit of R&D because of our new lab being built. We have a transfer of roles from Avon to Brazil as we finalize the lab. We are spinning up the pipeline also for Avon looking forward. Of course, investments to support the brand, as I said. The largest contributor for those variations are, as you said, IT investments, seasonality, and effects coming from Argentina and inflation. With that, I turn the floor over to Guilherme, please. Thank you, João. Joseph, thank you for your question. As for Avon International, we've been conveying to the market in the past quarters, and it's also in our material fact announced a few days ago. We are trying to build alternatives. I think, basically, we have been talking about this journey as it were two and a half years started back in July 2022, a journey that oftentimes can be frustrating for the market when you make comparisons. Many things have happened affecting results and so on, but it is all a consequence of a larger transformation that the company has been going through. The last bit of this journey, of this transformational journey, is bringing Avon International on board. Of course, in the past, we had the voluntary Chapter 11 filed by Avon International, which was an important step that Avon decided to take to prepare for what was coming after that, for this year, for us to be able to separate the companies. In terms of alternatives, Joseph, it is all on the table. This is what I can tell you. As you said, we are open to conversations to a potential divestment sale. We mentioned that in the material fact. We are negotiating without exclusivity. Sale is an alternative. Another potential alternative would be to join forces with a third party, a partnership, a joint venture, as you mentioned, to try and speed up the process and therefore minimize cash outflows. The fact remains that when we look forward, and I've been saying this before, we do not see today, as is, synergies of Avon International with Avon Latin America. Even though the Avon brand in Latin America is an important asset for us, no doubt, and it's an asset which will be taken into account whatever alternative we come to choose. Okay. Thank you. Our next question comes from Danni Eiger from XP. You may carry on, sir. Good morning. Thank you for taking my questions. The first one is a bit of a follow-up on profitability. That was the main topic of discussion here. You do mention on qualitative terms that the margin has improved ex-Argentina. It would be nice if you could comment on how much that improvement was and how can we think about it going forward. That improvement year-on-year, we do not have a sizable idea of what that improvement was. That will help us think about things in the future, 2024, 2025, what assumptions can we have for the company going forward. Number two, as for Wave 2, it would be nice if you could tell us about the kickoff in Mexico or Argentina. We have been trying to monitor that. Number one, if you could perhaps share the first impressions you have, especially in Mexico. We saw that there was a bit of disruption in products. There would be a lot of demand because of new launches. If you could perhaps specify and describe those first impressions. I know it's early stages, but it would be nice for us to better understand, especially because consultants were made to adhere, to buy into this new program. A bit of an update would be nice. If you could also comment on the cost of transformation, given that apparently part of the costs related to Wave 2 in Mexico and Argentina were already absorbed in Q4. What can we assume going forward for 2025? Is it going to be lower year-on-year or not? That would also be helpful for us. If I could ask another question about the dynamics around the simplification process of the company. I saw some people a bit concerned about Fábio's term in office or your role in this transformation, Fábio rather. A question for Fábio, where do you see this process going to? How will it unravel? Is there a chance that you would leave before the process is completed? What's the end game in short? When are you going to feel that the process has been completed, the mandate that you were given? Thank you. Okay, Danni, this is JP speaking. I'll address your first questions about the operations, and then I'll turn it over to Fábio and Gui to address the other question you asked, your final question, okay? As for profitability, I'll be careful not to give you any guidance here, but in any event, I'm going to move backwards here if I may. We are committed to expand the company's profitability in Latin America year-on-year. That's what we are working for, and we are confident about that. Now, as for gross margin, which would have grown or actually did expand ex-Argentina, and it was a very significant expansion. If you look at the pace of growth in the previous quarters, the expansion in Q4 ex-Argentina was not exactly the same as the previous quarters, but still, it was quite relevant. It's getting close to previous levels, despite being slightly lower, but getting close. Just to be sure, we continue to present profitability as a fundamental driver, just as cash generation is. As for Wave 2 in Mexico and Argentina, that segmented approach has been very, very positive, taking into account all the learnings we had, we acquired from previous countries, and also taking into account all the specificities of all those countries. You know how sensitive things are in Mexico when you talk about multilevel models. The first impressions have been very positive, to your point. I have to say that we are positively surprised with the reactions, with the reception within the network. Our focus on prepping consultants was exactly placed on them so that they would feel supported, the consultants. Changes in the commercial structure were quite mitigated because of that preparation. Consultants have been very active, very receptive to the changes, doing good deals. We are now approaching a moment where integration will finally click in a much more reassured position than we thought before. Finally, in terms of transformation costs, those costs are high. We have done a lot, but there is still a lot to be done. We have manufacturing facilities that still need to finalize operations here in Brazil, in São Paulo. We still have commercial activities in Mexico and Argentina, which are still up and running. We have systems supporting all that. This is a year in where the order of magnitude of transformational investments will continue to be high. I hope I have answered your questions, Danni, as you model your estimates. I turn the floor over to Fábio, okay? Thank you, João. Just as a reminder, Argentina is causing a distortion when you have to include it and remove it from the equation. On your question specifically, first, I'd like to remind you that in the mandate for Avon International, which is still an asset that we're seeking strategic alternatives for, we have a strong cash consumption reduction initiative. We're waiting to see what happens besides what Gui has already mentioned. Meanwhile, we are making several investments so that cash consumption is substantially lower than what we had last year. This continues at the same time while we find a strategic solution. Still on this, one good thing is that at the end of the day, the company's financial situation right now is much healthier. When I look at the newspaper and your analysis about indebted companies and interest rates, as we all know, our feeling is that we're glad we're not in this situation, that we addressed the issue before the high interest rates came. I think that gives us some more time to continue some of our investments. There was a large concern in the past. I think you know this. Something that had startled me before I was in charge of it was that João Paulo was making investments in marketing and IT, and that scared me. I spoke to the founders to see that this might harm insurer and that might be reversible and that we could not do it. That is when we started this entire story of wondering how we can protect it and go back to the right level of investment so that the company can remain competitive in IT, in marketing, and in terms. Gui and I, and of course, João Paulo have always been talking about reducing cash consumption. We are not making our accounts receivable flexible while our competitors were. I just wanted to say that this all is addressed. Considering this mandate specifically, I do not think it has been concluded yet, but this is a part of the company. This mandate is no longer on my hands. It will be on João Paulo's back, and my commitment will be to the entire company, and it will continue to be so. Anything else to add? Thank you, Fábio. I think you said it right. You mentioned that this mandate is concluded, and I think mandates are never 100% concluded. It is always about finding gaps and closing them. Just like João Paulo and Fábio said, we continue to find them. In this company, we went through a large cultural change in the last three years. Although quarter to quarter, we were a little bit frustrated as well with everything that we need to do and explain. Obviously, the results were not what we expected, but the company has a very different culture right now in comparison to three years ago. Of course, the core of our culture, which is well-being, is always going to be there. Nature is not going to change there. We have a culture that focuses on margins, on cash flow after all we went through, and this is very strong in the company right now. Just to make sure I understood something, the order of magnitude of this cost of transfer will be the same in 2025, or will costs be there but not the same magnitude? We can't go into details, Danni, but there's still a lot to do in 2025. This is what I can tell you. As soon as you reconnected, I just want to add some more details on returns, like Fábio said. We are investing in supporting brands, and we will continue to do that, structuring investments in systems, omnichannel, research and development. This was necessary, as Fábio said. One might argue that this is a pressure on the margins, and it is. On the other hand, I want to remind you that Wave 2 in Mexico and Argentina is still going to be concluded, and this is something that directs our margin gains. Logistics in Brazil have just gone through a merge. We are now receiving combined orders. There is still efficiency to be captured. There are still systems being eliminated, G&A efficiencies. The strength of the brand, especially the Natura brand right now, is giving us some space to adjust prices and make promotional investments so that we can maintain or expand our margins. I just wanted to say that if on one hand, we are investing more in the company's business health, we are also focusing on efficiency gains to give us this confidence that I am trying to pass on to you about our expansion journey that will probably continue in 2025. Great. Thank you. The next question will be asked by João Pedro Soares from Citibank. Go ahead, sir. I have a couple of questions here. First, about the gross margins. You mentioned some of its effects, and I think it's important to separate the wheat from the chaff. I know that there are some effects here from starting commercial activities later. There is an effect from the mix, gifts, Argentina. I would just like to understand what we should understand as a recurring effect. I would like to understand how this will go in 2025, pricing, how much cost will be repassed, and how much efficiency we can gain in gross margins. The second point, considering this discussion on Avon International, I would just like to understand this. We have an estimate in our dockets of $60 million to close non-core markets, which are the ones that burn the most cash. I would like to understand this. What is your perspective on that? Can you generate value by continuing some operations that are now not profitable and that are burning cash? How do you understand this? Finally, looking at your adjusted leverage of 0.86 x, that still leaves room to pay out dividends when we consider the optimal capital structure of 1x-1.5 x. That is what I would like to discuss with you. Thank you. João, this is João. I will talk about the gross margins, and then Gui will answer your other questions. Gross margins and effects. First, the fourth quarter has a seasonality in gross margins because of Christmas campaigns, holiday campaigns, Black Friday to a certain extent. Gross margins are always a bit lower in the fourth quarter, and this is a seasonal effect. Additionally, this quarter, our performance in gifts was very good, and there is a mixed pressure there for the quarter. If we exclude these effects, we can discuss Argentina. Considering the seasonality effects, comparing the fourth quarter versus the fourth quarter, if it were not for Argentina, our gross margins would have grown significantly year-on-year. I hope that helps you, and I'll hand it over to Gui. Thank you, JP, and hi, João. I hope you're doing well. We'll talk about the capital structure later on. The number you can see in the docket is the one that the company calculated with its advisors, referring to these markets. First, that they do not generate cash, and secondly, because we have a lower right to win in these markets. That is how we got to the range you mentioned. It is an option. We still believe that the Avon brand has a lot of value outside of Latin America. This is a brand that has over 100 years of history. We have several contributions from it, and we can even see some revenue growth in some countries. In many countries, of course, we do not see this right to win. Obviously, one of the reasons why we did not renew after the exclusivity rights were over, and we are still negotiating. I can say that again. One of the reasons is that we want to accelerate this agenda. What is happening in this first quarter at Avon International in cost cutting? I know that we have been talking about this for a long time, but what is happening is that this current wave has never happened in the past. What we are doing now in the first quarter, obviously, without exclusive rights, we can also start working in potential closes, selling off our rights in specific countries, and so on. Again, we still believe the brand has significant potential in some countries, but we know that in others, our right to win is not so significant. If we do not have a structural deal announced in these countries, we will try to accelerate this in the next months. Concerning capital structure, you mentioned the value, and of course, our leverage for this quarter was impacted by EBITDA runoffs, especially the ones caused by Avon International's Chapter 11 process, which impacted the top number and the bottom number with cash and EBITDA. Of course, when you look at our leverage, we never liked saying that it was adjusted, but when you look at these runoffs, that creates some space for our leverage to become more optimal. With that being said, we have some important steps to go through before we pay out dividends again on the short term, and we want to give confidence to the market. Of course, the company has a strong cash generation, and we have a strong EBITDA margin expansion, and we're confident, as we said before. I think that's important right now. Just to conclude, João, of course, Natura in the past has always been a company that everyone sees as a good cash generator, and this was before the M&A deals, before The Body Shop, before 2017. It was always seen as a company that paid most of the income it generated, but when you look at it now, and this is an important point, when you look at shareholder value generation on the medium term, and this is not a guidance, I'm just trying to help the market to understand this, I see that we will see more generation from EBITDA expansion from the BRL 1.8 billion that we've reported, much more than dividend yields on the medium term. Again, this does not prevent us from paying out dividends on the short and medium term. When I look at shareholder returns, it's much more about our margin expansion. Again, Q4 had significant runoffs, and of course, we have to admit that it could have been better in some countries. This is going to be the main lever for us in the short and medium term. This does not prevent us from paying dividend yields potentially, but it will be based on EBITDA expansion. Okay. Thank you. Thank you. [Foreign language] Next question from Vinícius Pretto from Itaú BBA. You may carry on. Good morning, everyone. Thank you for taking our question. I have a follow-up to Avon International's comment, Gui. I'd like to understand when you close down inefficient geographies, does it start now, and how much are you willing to invest in that process? How do you see a total divestment across the operations? A second follow-up about gross margin and EBITDA margin. We saw relevant expansion for the past quarters when we were ready at higher levels in Q4. We understand some of the factors are more promotional-geared mix, but we'd like to understand what the recurring level would be. The comparison basis we had in the past, which was somewhat inflated by Argentina, and the recurring level for Q4 should have been lower than expected, or is there an additional effect? If you can perhaps quantify the difference in Q4, that would be helpful. Thank you. Okay, I'll address the first question. This is Guilherme speaking. Vinícius, as for Avon International, of course, we're not going to give any guidance about cash consumption or cash burning, and of course, about what we're going to do first and the process and the phasing. The message we want to convey to the market, of course, if we do not have a doable transaction in place, we are working on closing down those markets, yes, we are working on that, be it through changing towards a distribution model, of course, always with an eye at minimizing cash outflow in the short to mid-run to provide good returns for the shareholders. We are not going to stand still and wait for a transaction to materialize in three or six months, no. We are going to continue to work, and I'll repeat what I've said, something we have already started doing, and we have already started in terms of cost transformation in Avon in this quarter. This will continue, right? Of course, we have items in the pipeline for some countries. This was never done in the past. Just to add a comment, if I may, this is Fábio. Actually, we cannot stand still and wait for things to happen. We believe the solution will have to be strategic. We are not going to wait for that to happen. With a healthier company, other businesses will be easily or more easily achieved. The bottom line is to have low cash consumption. That is the bottom line. No major investments. There is enough to keep the company afloat, strategically speaking. Okay, back to you, Gui. I will try to answer your question, Vinícius. This is JP about recurring margins. Vinícius, if we look at the full-year scenario, gross margin, EBITDA margin. With an eye on the full year and on the fact that we are still midway through Wave 2, which is the main vector for profitability expansion. We remember back in the day we were looking at the company's historical averages. We would reach conclusions about Avon based on that and would assume how Avon's numbers would go forward. We're not there yet. There's a lot to be done. For example, Mexico is the largest country for Avon in Latin America after Brazil with lower margins. There are ways to go. Argentina, number two. There are avenues for expansions going forward, not to mention other G&A efficiencies we are still capturing as we change the corporate structure in the region, transactional systems, control systems, accounting systems. There are a lot of efficiency sources to be captured. When we consider that we're still halfway through capturing value in wave two, when you look at the full-year averages, reinforcing our commitment to expansion, when you combine all that, we could predict, and this will help you, Vinícius, identify recurring effects. Also, as a reminder, that is not linear. That does not mean that every quarter will have a well-defined, clear-cut sequence of events year-on-year. We have passed the most difficult part. We can now predict our journey going forward on average, based on average. And our gross margin acts in Argentina has improved. That is true. If I could make an additional question on gross margin, if I may. You said it well, that there is a trend towards an average, but the concern on the part of the market about the gross margin Q4, we do not see it that way, right? Of course, things are fluid, dynamic, but if you look at the three main impacts on gross margin, even when you include Argentina with all the impact that the country had, and of course, our operating reasons, inventory management, and so on, there were non-operational impacts which were important. The shutdown in the factory of Moreno, which impacted Q4, that will not happen for the remainder of the year. When you look at the category mix, of course, the impact was high. We are not going to announce the impact on different categories, but the overall impact was high because of the weight on the category of gift, as João mentioned. Of course, when you think about revenue management to continue to improve margins through innovation, this will be a very important lever for the future. There is a higher weight on specific occasions, of course, in Q4, which must play an important role, of course. Lastly, as João mentioned, I would like to reinforce revenue management and tactical investments in pricing. That is also very fluid. We do not see that happening every quarter. Again, there were important impacts on the gross margin in Q4, with or without Argentina, and they will not necessarily be repeated going forward. Things are not linear, as João said, but still, we are quite confident that there is lots of good news going forward, and Wave 2 is one of the main drivers for that in Mexico and Argentina. Thank you, Gui. Thank you for your answer. If I may, a quick follow-up, the comment that the order of magnitude for cost will remain, that also caught our attention. I know you are not going to give a guidance on that, but the presentation made during the start of Wave 2 showed a linear advance in terms of cost. Your comment on that also caught our attention. Also, when you say that, that's in comparison to 2024, or is it in accordance with what happened in Q4? What is the comparison basis for that, for how costs will behave going forward? Transformation costs, we never said it's going to be the same or different. We have to look at the effect on the change from CAPEX to OPEX for software. That's also included in the transformation cost. We're doing a lot of work on systems, which has been embedded in that. I hope that helps as well. Vinícius, to your point, when we made the presentation in 2023 about Wave 2 that you mentioned, the mapping out we had for timing, for scheduling, was also very fluid. We expected Mexico to have been completed in 2024. We have started important initiatives in Mexico and Argentina on that, but of course, most of that will only be ramped up in 2025. This, of course, improves both margins, gross and EBITDA margin. Those programs are very complex. Because of that complexity, it's difficult to predict. We are very excited with the numbers we've seen across all countries where Wave 2 has been implemented. Even for Q4, where we had different expense situations for those countries, when you look at the net result coming out of Wave 2, we are quite happy with the results we've seen. This will happen in Argentina and Mexico next year. It has a transformation cost linked to it, and the team is working hard to minimize that. Thank you. The next question from Andrew Ruben from Morgan Stanley. You may carry on, sir. Hi. Thanks very much for the question. I was hoping you could talk through some more of the trends for the Avon brand in Brazil. I know you mentioned the more difficult comparison base, but I'm curious items such as how you see the Wave 2 sales uplift, balance between the Natura and Avon brands, maybe how you think about the marketing investments going behind Avon, and also if you can just remind how much of a drag there could still be from the de-emphasis of certain products and categories within Avon Brazil. Thanks very much. [Foreign language] There's still a lot to be done for us to renew and strengthen the Avon brand, but there are already in place some very positive trends. If you look at the second half of the year in Brazil, just to try to eliminate the effects coming from the transition in 2023, September 2023, we saw a growth of 5%-6% of the Avon brand in Brazil in the second half of the year. I would like to highlight the categories of makeup and face products, which have been historical strengths of Avon, and they have been performing really well. In the last quarter, we had an important launch in perfumes. The perfume Far Away was launched in Brazil, in Latin America, and has been performing really, really well. When I look at 2025 going forward, our confidence level increases because the management of the Avon brand in Latin America has been transferred or was transferred down here in late 2024. As we separate Avon International and Natura, we have also agreed on separating the management of the brands. The The team managing the brands for Latin America has been renewed, revamped, and the team has been seeking new plans to position the brands in market areas which are at the same time complementary to Natura and even more relevant to the Latin American consumer. All of that has led us to remodel the innovation pipeline when we see the trends around key categories for Avon, makeup and face products. The first trends to strengthen perfumes. When I see also what has been changed in terms of innovation pipeline, all of that makes us all very confident that we are on the right path, a very promising path to strengthen the Avon brand in Latin America. It still needs to be proved, of course. Our track record does not allow us to be totally convinced that this will happen, but there are several signs pointing to a promising pathway. That's great color. Thank you. [Foreign language] I think that concludes our questions and answers session. We apologize. We know there's a lot that can be clarified, but what I always say is that we're paving the way for Natura to reach its potential in Latin America. Of course, we did not have time for everyone's questions, but Elena and everyone in the investor relations team are available, as well as all of us. Thank you very much and have a good day. This concludes the company's fourth quarter of 2024 earnings call. The investor relations department is available to answer any outstanding questions. Thank you and have a good day.