Hello, ladies and gentlemen, welcome. Good morning. Welcome to our Second Quarter Earnings Call at Sequoia Logística, related to the second quarter of 2023. Today, we have Armando Marchesan, the CEO, Bruno Henrique, the COO, and Fernando Stucchi, the CFO and investor relations director. The earnings call will be conducted by Mr. Armando, soon after, Mr. Bruno Henrique and Fernando Stucchi will also be available for the Q&A session. We'd like to let you know that this call is being recorded and translated. Simultaneous translation is available by selecting the interpretation button. For those listening to the earnings call in English, the option of silencing the original audio can be done through the Mute Original Audio button. During the presentation, all participants will have their mics off. Soon after, we will begin our Q&A session. To submit a question, please select the Q&A icon and choose Type Your Name and Company. As you are announced, a request to activate your mic will appear on the screen. You should activate your mic and submit questions. Any possible statements that could be made during this earnings call related to the business perspectives at Sequoia, operational targets and financial targets represent forecasts of the company's management that could or not occur. Investors must comprehend that political and macroeconomic factors, as well as other operational factors, can affect the future of the company and lead to results that materially differ from those listed in such statements. To start this earnings call for the second quarter of 2023, I'll pass the floor on to Armando Marchesan. Good morning, everyone. We'll begin the release of our earnings for the second quarter of 2023. I'd like to start off by slide four on this presentation, where we have the main highlights of our period. Despite the drop in revenue in the quarter, we can already see the beginning of the recovery of our services through the signing of new contracts, especially in the month of August, with the potential for growth in the revenue in the second quarter of the year. We had a successful procedure with almost 100% of the total value in the offering. With the entrance of the BRL 99.4 million, we equated a bit of the drawee risk factor, and that also led to important adjustments. Now, the results in the quarter were really impacted by the significant reduction in the working capital lines as a short term, affecting our revenue, also in the debt segment. It's important to mention that this only entered the company's cash by the end of May and by the end of June. That's why we had a high cost with the idleness in the DCs and routes, as well as the headcount in the period. In our vision, June and July are important points when it comes to revenue and profitability, and we mentioned the recovery from August onwards. We want to move on to slide five, where we give you more details about the numbers reported. The increase in capital, as mentioned, represented a cash increase of BRL 42 million by the end of May and BRL 56.8 million by the end of July, adding up to BRL 99.4 million. The drop in revenue of 38% had two main reasons, in the heavy-duty segment, and also a reduction in the light revenue by 33%, especially due to the reduction in working capital, with a drop in the drawee risk. With regards to the margins, we had a reduction of BRL 17 million in costs and expenses, representing most of the adjustments necessary in the structure, there's still some opportunities to optimize other areas that are in progress. The working capital consumption was a lot lower than last quarter, although the abrupt reduction in these drawee risk lines. We had a consumption of BRL 8.6 million versus the previous quarter, this is mostly due to the recovery of most of the receivables that were restrained. On page six, we have the earnings of the revenue in the second quarter compared to the previous quarter. The gross revenue had a growth of 18%, and the ones in logistics and food service grew 5% in the period. We had a drop of 38% of the total revenue, and this is mainly impacted by the receive of heavy duty, and this will bring benefits in the short term, and also considering the drop in some light transportation revenues. We had the gross profit in the second quarter reaching -BRL 21 million. On the right side, you see the adjusted EBITDA considering the costs and expenses of the project, reaching -BRL 47.1 million. The margins in the quarter were strongly impacted, especially due to two factors: the idleness of our bases and routes, the headcount, which was above necessary fixed costs and high expenses, especially in the months of April and May, before the capitalization, which allowed us to complete most of these adjustments. About working capital on page eight, the graph on the top considers the variations in the balance of accounts receivable, with about BRL 29 million in our budget. That is restrained due to the re-restructuring of heavy duty transportation, and we expect to receive this in the third quarter of 2023. After these adjustments mentioned, we can identify an improvement in our terms for receipt, from 80 days in the first quarter to 75 days in the second quarter. Still, still at about 60 days. The fall with our suppliers went from BRL 120 million in the fourth quarter to BRL 89 million in the second quarter, and a total of BRL 83 million, a reduction in just six months. Basically, the effect of the result in the lines of forfeit. On page nine, we also see the evolution of the debt and the new CCBs. On page 10, we show the variation on the balance of our cash on hand, going from BRL 62 million on March 31, 2023, and going to a balance of BRL 89 million on June 30, 2023. The principle of accounts that affected this variation were the private capital, our operational results affected by the reduction of profitability, and the expenses on interest and loans, and the increase in debt. Even though we had this operational and financial challenges, we had an improvement, a significant improvement, in our working capital and reduced the CapEx for the period. Going now to the second part of the presentation, I would like to point out the principal initiatives underway on page 12. As we said previously, in June and July, we had the lowest levels of sales, and starting in August, we started the recovery in the fourth quarter of 2023. At the end of June, when we started to receive the cash, a lot of the resources coming from the private capital, which permitted us during these months in July and August, to realize the next start of the firings and returning of bases, and the finalization that will make us operate at the new level. In the fourth quarter, we should see a more, a cleaner financial statement with the cleaning of these costs, fixed costs and SG&A adequately, adequate SG&A. In relation to working capital, we hope to have more news going forward with the balance of the of redoing these forfeit contracts, and also this, which is the segment has started to improve in the third quarter, and of this third, second, and end of the second quarter. We also see the money that's been held up, we received during this third quarter of 2023. Going to page 13, being analysis the evolution of our sales in the last four months. The numbers on the graph, we're going to a database of 100 from the 30th of April, and show an advance of revenue in the four weeks, a rolling average. We see the beginning of the recovery, the, with the re-entrance of 37 new contracts, which we saw. On the point 47 of the graph, it shows the maturity of these contracts, which can bring approximately BRL 30 million in additional revenue, above the baseline, actual baseline. Finally, our commercial pipeline is robust. Looking at this base of 100, we have gone back to the monthly revenue of the first quarter. Looking at page 14, we bring an update on the initiatives of demobilization for the reduction of costs and expenses, and the impact that this has on our EBITDA. We have a total of these costs over the quarter, especially in the second quarter, in the months of May and June. The impact of one-off of these reductions totalized BRL 25.3 million in the quarter, in the half, in the first half, as we show in the adjustments presented on page five, being BRL 17 million on the second quarter and BRL 8 million in the second quarter, in the first quarter. These costs were represented, costs of rentals, the return of distribution centers, and improvements that have been returned, as well as layoffs. In the second quarter, in the second half, we have the expectation of making additional BRL 22 million in additional cuts in costs, fixed costs, buildings, and so forth. The impact of this will be approximately BRL 10 million. They were talking about a financial statement in the company, which is inflated by approximately BRL 134 million, representing the unused DCs and the operational bases, as well as the excess labor costs, which are not related to that. On page 15, we bring the financial statement of the company, the management company, of management, financial relations of the company, with the results showing a result in the first half of approximately 4.5% EBITDA margin, ex IFRS, adjusted ex IFRS, and an EBITDA of BRL 20.6 million. It's important to point out that this margin is not at the ideal level, and we have the potential to gain scale and grow revenue. Looking at page 16, before opening up to the section of questions and answers, we'd like to answer, pass you along to the final message. The scenario is still challenging. However, starting now, we have now shown the recovery of growth in both our businesses, B2B and B2C, as well as logistics and food service, which as we've shown.... which we have total confidence for the other result, of improving results. We've also implemented new structural changes that will be realized during the third quarter of 2023. For this, we expect an operation more normalized at the end of the fourth quarter of 2023, when we'll have the expectation to presenting a leaner operation, more efficient and more integrated. The initiatives that we have done up until now were essential to guarantee the health and strength of the company, and we are confident that our plan, in our plans for the second half of the year. We'd like to thank you all for your participation in our results call, in our results call. I'd like now to open for the question and answer period. Thank you. We will now begin the question of questions and answers. To make questions, look at, click on the please on the Raise Hand button so that your microphone can be released. Please wait while we collect the questions. From Lucas, from BTG Pactual. Lucas, your microphone is now open. Lucas Marquiori. Good morning. Thank you for the call. I have a few points on from my side. It's evident in the results of the quarter, the points that Armando reinforced, the visibility of this being the low point in the recovery this year. If you can help us to see a little more, the second half of the year, Armando, looking at this margin, let's, which is one digit, 4.5 in a simulated exercise here, after costs, how much do you think this is doable in the third and fourth quarter? It's important for the market to see a signal of the generation of cash in the second half of the year. Also, if you can give us a little more thermometer about the market itself, e-commerce is okay. There were some shocks in the news and so forth. It's also built into this worsening of results that you reported in the first half. What do you see for the second half, going forward from the clients? Is there demand on the table? If we should be doing better in the second half to be able to corroborate, let's say if this is the low point. Thank you for the call. Good morning, Lucas. Thank you for the question and for your participation. In terms of margins, we expect, in fact, a recovery. We're gonna, we're gonna look at the dependencies that we saw in the presentation, approximately BRL 20 million-BRL 24 million. This has a one-off of BRL 10 million, so it will be a, but we expect a recovery really in the fourth quarter. As we can see inside these categories, different business units that we decided to invest in and come back up for growth, we see operating margins which are healthy, and so therefore, we project this ramp up of margins very strong as well as EBITDA margins starting in the fourth quarter and looking at 2024, totally normalized with the recovery, both the profitability as well as growth. I think that the third quarter is the end of this period, of this process, these final adjustments, which have been almost finalized, looking at the end of August, and this also between July and August. But in the fourth quarter, it's totally normalized, with the results already, with a cleaner results on these financial statements. Looking at the reorganization process, we're in a phase where, as we said, the synergy, which is aimed at the services, the recovery of contracts. This is a different phase, more of an expansionary phase rather than a reduction phase. The expansion in the business units, which remained, and we have total knowledge and confidence in the dominion of these categories, and the operation is more integrated and more efficient. This will, in fact, help us and simplify greatly the management of the company going forward. We have this expectation in the third quarter, consolidating these results in the, in the fourth quarter. In terms of general demand, I think you touched on an important point, the fact that we saw in the first half, not just the, the internal challenges here, of restructuring of the category of heavy freight and the falloff in demand, we also see, in general, the fact that the e-commerce is weaker in various categories. We also see now, Lucas, a recovery of this, of this activity with the reduction of interest rates by the Central Bank and the, with the, in the first quarter, with the credit crisis, which scared the retailers. I think all of this is now in the rearview mirror, and our understanding is that this dynamic is in the past and things are getting better. Now see a market which is more active, a pipeline, as we mentioned earlier, with lots of orders for, of information and cost requests, and looking at the commercial pipeline. We see activity more heating up in relation to the first half of the year. Where we had really seen a big falloff and a, and a cooling off, but we now see another dynamic, and we think that. This will be related to the macro, the reform and interest rates. We perceive this improvement and this is, it's greater stability of our principal markets where we operate. We think, see a pipeline that's more robust, which helps us to believe that in 2024, with a stronger recovery, starting in 2024, getting back to the levels that we have established in sales and profitability and a capacity, operational capacity. I think in the short term, as we demonstrated to you, in fact, we look at June and July as the bottom of the, of the curve. We're looking at this starting in August with these 36 contracts that we have already celebrated and at, which are the beginning of this implementation. This is the scenario that we see in the company today. Thank you for the question. Okay, very good. Thank you very much. Our next question comes, has been written from Daniel Mercado. " Good morning. In the previous quarter, you had commented about the possible sale of the Logtex. Can you give us an update of this process?" Wait. Hi, Daniel, good morning. Thank you for your question and your participation. In fact, we announced this process. This process continues of the Logtex that we announced. As we mentioned, we have Ártica helping us in this process, and our expectation is to be able to conclude this process by the end of this year, which will bring to us a investments in these units and a return of the capital that's been invested. The process is going forward. It's a process which generally, it's a long, it's a long-term process in terms of seeing the results in all the stages that we have to comply with, but it's going forward, so as we had expected. We now expect to focus on this process, and the expectation is by the end of the year, to conclude this process, at least in one of the two companies. I think that's the update that we can give you at this point in time. Our next question comes in writing from Nicolas Filpi, and is the following: Good morning. I would like to understand what is the size that the company expects to have after this restructuring and falloff in revenue. Good morning, Nicholas. Thank you for the question. There's two ways of looking at this. One is the short term, by the end of the year, a little bit what we demonstrated in the slides of the recovery of the signed contracts. This projection includes none, none, doesn't include any of expectations of conversion of the pipeline. These are only those contracts which are actually concrete, concrete and signed contracts with clients. We see, put here a vision of recovering, to 80%, 87%, of a base of 100, by the end of the year. I think that one point is that, each one, the market is very large, our share is still small, we don't see, with the recovery of the size of the company in terms of sales, revenue. I think the market is very large, and so all of the categories in which we operate, and which we will operate, going forward and have operated, such as e-commerce, B2C, and is a market of more than BRL 20 billion. Our share is less than 10% of that market. For express delivery, food service, logistics, middle mile, these are all segments which big operate, offer a size of a market of BRL 80 billion. We have lots of space to grow in all of these categories. The most important thing right now, at this first moment, is to grow with profitability, not just grow, signing contracts that we're confident about having a positive margin for the generation of cash. For those, for 2024, we don't see a difficulty of recovering, the recovery of growth because the market is very large, very, very fragmented, and we think that we can still find several verticals for the recovery of this level. I think, but more importantly than that, it's for us to focus on the level of quality, flexibility, which are the principal points that the company has always delivered to our clients. This is our initial client and our initial focus in this recovery period. Our next questions come from Matheus Duarte, through the Q&A tool, and are the following: I would like to have a better breakdown of how the falloff in revenue came from the demobilization of the heavy freight business, how much came from the light freight business. The second question, we saw a falloff in SG&A and rentals, but still timid, since there is still a series of one-off effects. What is the level of SG&A and rentals that you plan to have going forward? Very good, Mateus, for your questions, for your two questions. The first question, as far as the falloff in revenue... If you've had access to the presentation, you can, you can see it on our site. On slide six, we give you a better detailing to answer your question. We had categories that grew, such as express, middle mile, which grew by 18%, and the food service logistics, which grew 25%, and also a falloff of 45% in SFx, which are the light e-commerce category. The return in the heavy freight business, which fell off by BRL 50 million in the first half, this falloff affected our revenue very greatly. Now, to answer your, to answer your first question of Lucas Marchioli, we plan to have a recovery, especially in the segment of first mile SFx, which is the light freight, which will be the principal recovery area in the second half of the year and in the final quarter of the year. In relation to your question about SG&A and rentals, in the presentation, we also detailed on two slides, number 14 and number 15, we're you're able to take a more detailed look at removing the effects, one-off effects, and also, what we understand as the normalization. Since reduction, yeah, yeah, of the half in this half, BRL 14 million, just in installations, buildings and rentals, and, and other fixed costs, BRL 19.9... No, BRL 17.9. We have a prediction looking forward of how this number might be in a normalized basis, composing this, these, six months in a pro forma way. As you mentioned, it's had a great r-reduction of almost 50% in our, in our, the, in, in, in building installations. That's what we imagine as a stable, on a stabilized basis. On page 14, we see a plan to continue the demobilization and the reduction of these areas. There's a line, on line 14, of building installations, which we see in the second half of 2023. Thank you for your questions. Our next question, it comes in writing from Diego da Silva. It's the following: What are the strong points of the company looks-- plans to exploit, and what is the process to arrive at these points, to arrive at these numbers? Good morning. Thank you for your question. Who's answering is here is Bruno. The strongest points that we always have, since we started the company, is a focus on the client and the realization of work with quality. Looking at the principal verticals in which we have grown, if you look at a slide that Armando commented on, basically, we've attacked where the business lines in which we have more capacity, and in which continue to grow, even with the difficulties that we've had in the express service, middle mile, and now a great deal on the, on the first and last mile, which are the principal businesses of the company. We believe that they will be a lever for important to pave the way for further growth in the next months and year. We've built this capacity during 2022, understanding that the niche that would continue to grow with the verticalization was an important niche. Since then, the segment, which has grown the most in the company, is exactly the solved capacity and everything that we developed in the way of systems, makes a lot of sense for the segment. It's also the express service, which have high quality, which is also one of our strong points, and we have been growing in that area in the last 18 months. Basically, we're paving the way forward in this segment, and we're gonna be focusing now, especially on our teams for the heavy, heavy freight, as we have planned in the last few months. Our next question comes in writing from Eduardo, from Asset. With the reduction of these DCs and the bases, how's your situation for the segments which remain? Thank you for the question. Bruno again, speaking here. I think that the good news in relation to your question, is that every segment that, in which we remain, we have not lost any capacity for revenue and operational capacity. This means that we have a great deal of tranquility, so that in the coming months, the levels with the segment of heavy freight can be reached, however, with services and segments which are more profitable for the company. We have here in our projections, total conditions to come back to the level of sales, which we saw previously in 2022, with the total capacity that we have currently, without having to make any additional investments in CapEx or installations. The question and answer session is now closed. We ask now Armando to make his final comments. We're gonna thank you all for your participation in the call, and thank also the team for the continuation of our plans to reverse these tendencies, and from the Sequoia team, and we're gonna continue here strongly in the recovery, in these plans that we have shown to the market. Thank you very much, and have a good day. The results video conference for Sequoia is now closed. If you have any questions, please send your questions to the teams of IR through the email, ri@sequoialog.com.br. Please, we thank you for your participation and have a great day.