Good morning, everyone. Welcome to the conference call for the results of the second quarter of 2022 of Vivara. In this quarter, Vivara has changed the modality of its conference call. We're going to dedicate 100% of our conference call to the Q&A session. The video with Paulo Kruglensky's initial comment, company CEO, and analysis of the financial performance by Otávio Lyra, CFO, are available and can be accessed at any time at Vivara's website. If you need simultaneous interpretation, this tool is available. It says Interpretation at the lower bar menu of the screen. Then you click on the little globe, and you can choose Portuguese or English. For those of you listening to English, you can mute the original audio by clicking on Mute Original Audio. For sell-side analysts, and we make available the possibility of having a live participation. Just send us a message with your name and the icon. We are going to allow you to open your microphones and ask your questions. Just put your name and the company you're representing so that you can ask your question live with an open microphone and camera. To other participants, questions should be posted through the Q&A icon in the lower bar menu of your screen. If your question is not answered during this conference call, our investor relations team will get in touch with you afterwards to answer your questions. Introducing Vivara's team. We have here, as usual, Mr. Paulo Kruglensky, CEO of the company, Otávio Lyra, CFO and IRO, and Melina Rodrigues, Executive Manager of Investor Relations. Now, please wait for a minute while we collect the questions. Good morning, everyone. Taking the opportunity of this time when we are collecting questions, first of all, I would like to thank you all for your presence here today. We are very happy to have you here in our conference call in the first half year, when Vivara is presenting a significant gain in market share and major growth. Now the focus for the second half of the year is total steam on sales, end of year sales. We are going to have the 60th anniversary of Vivara, which is a very important landmark for the company. In this second half of the year, focused on training quality in order to assure excellent services, improvement of quality processes, efficiency. We are very excited and confident that we are going to deliver the second quarter with the same quality as we had in the first quarter and the results that we have been delivering since Vivara went public. Year after year and quarter after quarter, Vivara has been delivering its commitment to expansion, profitability, efficiency, and this is how we expect the end of the year to be. Now we can open our questions and answer session. Great. Let's start our Q&A session. Our first question comes from Danniela Eiger, Sell-Side Analyst from XP. Danniela, we are going to allow you to open your audio and video. I'm here already. Thank you very much. Thank you for taking my question. Congratulations on your results. I have two main questions. The first one regards prospects. I think that something that made you different from other players with mid and low income is that you're still very optimistic about the year. This is a point of attention. How much growth can we expect for future quarters and also considering a more normalized basis? Could you tell us how you're seeing the third quarter and why you're so optimistic and what are the main drivers to keep your growth and also the dynamic of volumes, which is interesting. You mentioned that you are increasing volumes. How does it compare to 2019? Number two is the profitability dynamics. This is very much explained by the pressure of strategic projects. Thinking into the future, how can we think of EBITDA margin dynamics and how you've been seeing the new stores and how they are maturing and their evolution? I think these are the two main points. Thank you very much. Thank you, Dani. I'm going to take your questions. Well, starting with the outlook. Well, we are almost halfway through the third quarter. I think that the trends for the company's growth are similar as compared to pre-pandemic levels. To take the effect of the months that were affected by the pandemic last year, and this has an impact in terms of total growth and growth of volume, as we announced here in March and April are the two months that were most affected in 2021. Now, if we compare to 2019, the company's growth is almost equally fast. If we look at this quarter, it's 52% growth as compared to 2019 total sales. This is in stores, mainly. With the help of e-commerce, which had different share in the past. Now looking, and if we break down the profile of our growth, it comes both from jewelry and Life. So we had 21% in Life in 2019. 32% if we compare in contrast with 2021 against 2019, almost 50% product. So I think that we are still seeing similar rates against 2019, even though we have not so hot numbers in total sales growth. We continue with the same expectations as we started the year in terms of 25% growth for the year in terms of revenue. For the second half, this is the main focus, especially in Q4 when we have even stronger numbers. This is according to our expectations. We are keeping our expectations. I think that we are. Before getting into expansion, you asked about volumes versus 2019. I think that here is something very interesting for us to talk about. We see growth in volume in jewelry as compared to 2019. 64% growth in total sales of jewelry. We see about 5% growth and almost the 50% growth in Life. It's been dropping as compared to 2019 by 15%. Why is it so? I think that the main effect in terms of this drop in volume is that as part of the launches that we made, we added SKUs and combinations of sold products. A combination of a bracelet with two or three charms that we sell, and we consider this three to four SKUs. This is being booked as one product that is sold in the company, and it's computed in part of this drop in volume that we are seeing today. The opening of stores obviously has provided a quite interesting additional volume and very transparent. The change in strategy that we have had since the beginning of the year in digital has taken out a little bit of Life's relevance in digital. All effects combined, the volume has been increasing into the future, especially due to new stores that we are bringing new customers to. With Life, I think that we are super happy with the expansion of the two brands. I think that we have been keeping very good returns as compared to the previous season. More specifically in talking about Life, which is we are going to expand more intensely in the future. 35-40 stores this year, plus 15-20 of Life and above the range of Life in our case. Next year, we are going to even give it a little bit more for Life in this positive and balanced. Going to specifics here, the number of stores will go threefold as compared to last year. We are increasing by 10% the market. This additional portfolio has been very assertive, and it's already yielding fruit. We're seeing that the maturity of stores on average as compared to initial expectations that we had once we approved these stores is something like 75% of the curve in year one, which is quite fast too. I think that with some additional degree of optimism, I think that we are going to have a combination of two things, a more accelerated curve and more potential for revenue. When we look at Life versus the plan for stores that we have approved without going into too much detail. The stores have four to five points ROI, which is above what we have been approving for the first year of the expansion, both for the 2020 and 2021 seasons of stores that we opened. With all this issue, 43 stores and 29 stores in maturation. There will still be improvement in the numbers that I am mentioning to you today, and also to profitability as a consequence. These stores, and more specifically Life stores, have EBITDA between 45% and 50%. Except for a few specific bigger stores that are at a range closer to 40. They are specific store openings. It is not the average. The numbers are there for you to do the calculation considering the median. For this reason, we are happy going forward. Life is already providing good product margins. We see an additional 1.7% in product margins with the insourcing that we did in the factory as compared to last year. This effect is not yet regime. We are looking at a point in time versus last year. Once we annualize these gains, which in June went from 1.7 - 2.1, it's still evolving. We hope to have even more benefit for the margin. Another point of concern that you usually have, and I will take the opportunity to mention, is the pressure that the factory has on our results. This additional Life margin, which has not yet been 100% incorporated in our financials, is greater than what the effect that the factory has in our result. I'm confident and because I am inside a long time, we are going to eliminate this pressure on the margin, which causes a relatively small effect when we compare gross margin in the company year after year in our growth levels. We are going to see more clearly the gain of mix for Life with the maturation of all the stores. For a few years, we believe that Life can get to 40% of the company sales mix and this transformation from 30%-40%, which is taking place today. From 30% today to 40%, that's where we are going to see the true benefit of something that will provide 15-17 additional points in the margin in terms of the sales of jewelry today. Complementing Otavio's answer on Life, he talked about the change in mix that instead of just one SKU, or instead of selling the charm, we sell the bracelet. Number of tickets, we are growing, but we are not growing in terms of number of SKUs, so there are more customers buying Life and weight. We calculate it very much in kilograms, so it's been growing too. It's the way we are offering the products rather than SKUs dropping or not. Another important point, we talk about the acceleration of the maturity curve of these stores. We are really excited about this. I joke with Otávio, and I'm not sure whether we are accelerating the curve, but in the end, it's going to be better than our expectations. But the truth is that it's been performing better than we imagined. Initially, we thought we would sell BRL 4 million-BRL 5 million in year three. We are already selling that amount in year one. Now, what we need to know is whether they are going to get to BRL 8 million or whether they had a faster maturation. Well, only time will tell. Thank you very much for your answer. Congratulations on your performance. Next question comes from Gabriela Morais, Sell-Side Analyst from Itaú BBA. Gabriela, we are going to send a command for audio and camera. Good morning, everyone. Thank you very much for taking my questions. Congratulations on the results. Here we have two questions. First one about cannibalization. I would like to understand how you are seeing the cannibalization between Life and Vivara stores. The second point is about your customer base. The new customers that are joining the base, especially in Life, are you seeing these customers remaining on the base? Are you seeing that level of recurrence? That's it. Gabriela, thank you for your questions. Starting here with cannibalization of stores. Well, that number is very much under control. We are still working with the range that we initially shared with you, with a view, which was the expectation of a very small sample of stores, maybe a little bit bigger, maybe 4% of sales. It's still very timid for the additional return, for additional sales that the new stores are bringing. If we think in terms of numbers, even bigger numbers, we are not really worried about that looking from the inside. Vivara could lose 100% sales of Life that we still would have returned above the cost of capital. Without adding an overall fear, of course, this is very, very far from reality. Now we have a large sample of stores and that will become even material before the end of the year. We are going to close the year with more than 70 stores, probably. We are going to build on that number. Between 4% and 5% of Vivara sales is a very small number for additional sales that grows more than twofold in the same mall. I think that we are building more and more confidence that cannibalization once Life expands more intensely is not going to be a problem for us, going into the future. Obviously, we are paying attention. I'm sorry, just complementing this part of cannibalization. The universe is still small considering the number of stores that we believe that Life can have, and the time is also very short that our many stores in the first year of revenues. Something that really motivates us and makes us confident with the expansion is to see in all clusters a kind of a stable cannibalization, from additional A plus clusters to C cluster cannibalization is very much under control. Another point that we should monitor going into the future is the maturation of C cluster store. They are much faster than A cluster in the malls. This makes us much more confident about the expansion of Life. We are confident by thinking of the number of complexes and the number of B and C malls that we have in Brazil, and we have been performing very well without affecting the performance of Vivara. Otavio, if you would like to complement the answer. Well, I'm going to the next question about customer base. As I said in the previous question, the growth is very much based on new customers, in fact, and the recurrence is still around 1.7 x. We still haven't been able to see this number changing much with the addition of new stores. Without any major changes in that regard. It's very clear. Thank you very much. We have received a question from Wellington Santana, a sell-side analyst from Bank of America, and I am going to read the question. He wants to know about Life stores, about their capacity to have good points of sale for these new stores, how they are performing as compared to your expectations, and I think that Otavio has touched on that already. Whether we could give some more information on the maturation curve of these stores, how is maturation going, how we see sales versus profitability of mature Life stores as compared to, Vivara mature stores. Okay, thank you, Wellington, for your questions. I need to admit that I had read your questions already, and I tried to include to answer them together with a previous answer. I'm going to complement what I have already said. Starting from the first topic, capacity for new stores. I think that we have been able to open a small number of stores in the first half of the year, considering the challenge for expansion that we have with the year, with the confidence that we already have 100% of our expansion contracts, closed. We know the timing to open all stores this year, and openings of the third quarter will be much more relevant as compared to the volume. We still have a slightly bigger number for the fourth quarter with a little bit more than 20 stores for us to open in October and November. The conversation is still very receptive with the malls. Life is revenue per square meter, which is very interesting. Considering our ambition of reaching major penetration and to be in many malls, our conversations, we are talking about batches of stores. For example, in Iguatemi with Multiplan and other more relevant shopping mall owners, we've been able to close, unlock negotiations to make sure that if we can open more stores. At the same time, the group negotiations take slightly longer than individual negotiations. I think in order to assure the quality both of malls and the points in the malls that we are going to, I think that a little longer delay for the opening of stores is natural and justified, as we see it. Obviously, it's more appropriate for expansions to be better distributed from the first quarter onwards, and we always work to integrate it in the future. This is part of us having a bigger number of stores in this first phase of the expansion, and then we are going to correct our trajectory in future years. About performance, I talked a lot when I answered Dani's question. The thing that we had a threefold growth in a number of stores, fourfold growth in footage, and adding 10% of value, we see a capacity for marginal result with very high margins adding to the results of high profitability that Vivara has for future years. It's almost 2/3 of the stores that we have all opened are still maturing, and we are going to build on top of those numbers as we see here. These are stores of BRL 3.5 million, BRL 4 million yearly revenues for Life. As we said, we have positive surprises in spectacular malls as well as we have outliers for Vivara, clearly for Life too. We will see this for Life too in very differentiated malls in terms of flow and sales potential. We have even higher number getting to expectations for 2022 or 7 or 8 million yearly. The maturation curve also touched on it on year one. It's 75% of the curve estimation in our plans. Then we think of sustainability of Vivara stores. Vivara's mature stores have an average of 40% margin. EBITDA margin, more specifically. The new Life stores, we're looking into their maturity, and they have an EBITDA margin even higher, 10 points above. It's about 50%, some of them even higher, depending on the region. They add profitability even during the maturations as compared to Vivara's portfolio of stores. Once again, complementing Otavio, Life is going to a positive cycle of expansion when the brand starts to be desired by shopping malls. We are going to close the year as the second-largest chain of stores in Brazil. Top one is Vivara, number two is Life. We are going into malls, and malls want to have our projects in terms of performance. Sometimes it was difficult a year and a half ago to engage them with the new brands. Today, this brand is already a reality, and the marketing volume, processes, expansion, visibility of Life will increase year-on-year. You will be seeing these processes of Life in gaining power in the future. This year and next year too, even more so. Okay, now continuing our next question comes from Eric Huang, sell-side analyst from Santander. Eric, we are going to allow you to open your camera and microphone. Good morning. Thank you very much for taking our question. We have two questions, actually. Number one, we've been seeing the evolution of Life. Could you tell us a little bit how the mix has been evolving. So if you think in terms of collections, it would be interesting for us to understand sales. And another question looking into e-commerce that you are conducting the whole migration. What can we expect in terms of acceleration on sales once the platform is fully implemented? And will this provide extra or additional sales leverage for Life? Eric, thank you for your question. So I'll talk about the mix, and then Paulo will talk about e-commerce. As to the evolution of mix, the Moments category, which is the category of charms for bracelets, its share has been dropping in recent years, in a recurrent way. This is partly combined with a strategy of increasing the mix that we have implemented in this category. We have invested in building a mix with higher value added with stones and collections, and this has reflected very well in sales. For the first time this year, we saw the category of Life Coleções exceed the category of Life Moments, which is something very interesting for us because this product is more profitable, provides us more flexibility in terms of price transfers. It's more differentiated as compared to others, Silver players. This is a delivery that we have been celebrating, which is something that we were looking after when we thought of empowerment and a mixed composition for this category. This is what we've been seeing in the last quarter. Paulo will talk about the new e-commerce platform. Talking about the implementation strategy for the new platform. To date, 20% of the flow of the site is in the new platform. We decided to have a migration that would not be bang, a more structured rollout. To understand, we have a replicated lay-layout structure from the old website to the new website. This new website, just doing with the speed and a more advanced technology. By itself, it has increased conversions. The first numbers that we have here, we see a higher conversion, regardless of journey improvements. The site is very important for us. More than 90% of our customers go through our website to buy at Vivara, regardless of where they finalize. Whether they finalize at WhatsApp store or in the site itself. This flow and this omni-channel journey is very important for us. There is a package of improvements that is almost ready. After the first wave, once we migrate the website 100%, which should take place until the end of next month, we are going to start implementing customer journey and experience improvement. From search for product integrations, upsell, cross-sell, and to have a more random window with higher technology. We are very excited that the technology development team is working intensely to that, and the migration is very well structured. Let me complement, if I may, Paulo. We have, with this 20%, we have already reduced the upload time by half, so it's the new website is much faster. Rejection rate is down by 400 BPS. We are really confident because of those numbers to enable a migration. After Father's Day, we are going to intensify trainings of stores for the omni-operation, and then we are going to start rolling out the old platform so that we migrate to the new website. Looking into the future, we are still seeing the omni strategy. When we think of websites, it has become increasingly more difficult to separate things. Today, 26% of our sales are through digital, so this number is already quite relevant. The mix is growing. More than 20% of e-commerce sales are being shipped by stores, and we are expecting to have an increasingly more technological platform, more and more prepared for the omni strategy. The two channels can coexist and complement each other. One should support the other in terms of technology experience. Because in the end, it doesn't matter to us whether we are selling through the store or website, so long as the customer has the best experience so that they can decide where they want to buy and how they want to receive. This is our mindset. We see space in e-commerce for higher revenues. Today, with this issue of mobility coming back and leadership of our stores into our business, this is very clear because our product is very much about seeing and touching. The stores have a leadership in terms of the customer journey. We are not giving up e-commerce because we believe it's still very relevant to assure full experience for our customers. Great, Melina and Paulo. Thank you very much for your answers. Okay, now continuing. Our next question comes from Guilherme Vilela, Sell-Side Analyst from JP Morgan. Vilela, please open your mic and your camera to ask your question live. Hi, Paulo, Otávio, and Melina. Could you tell us a little bit more about the store expansion and how they are going to be distributed in terms of geography in Brazil? And my second question is related to e-commerce, whether this 14% drop is related to the change in e-commerce platform. And if so, what should we expect in the next quarter, considering terms of special dates and the important calendar going towards the end of the year? Thank you. Thank you very much, Guilherme. Starting to talk about expansion and the orientation of new stores, and how they are being distributed in the country. We are still prioritizing the malls with higher return. They are concentrated in the regions in the southeast, although we have very good malls spread in other regions of Brazil. About 75% of the new openings that we did this year and in the last business year, 78% to be more precise, they were concentrated in the southeast region. 11% in the south and the northeast and other regions with 11%. This year specifically, we haven't opened any stores in the north, neither in the center west region. When we talk about Life expansion, there can be Lives everywhere in the country, in 100% of Brazilian states. This is it. They are concentrated in the short term in the region where we have a higher sales potential. Now, the drop in sales of the e-commerce is not caused by the system. It's something that has been going on since January this year because of the strategy that we shared with you last call. We don't want to offer so many promotions, as Paulo said in our last conference call, to be slightly less present in promotional campaigns. In the short term, this can provide some effect in terms of limitations, especially for life. That's why I mentioned before that in a digital channel, life is still suffering a little bit more as it suffered last quarter. This is also going to be normalized, and it's very good for the channel as a whole. As Paulo said, and Melina has reinforced, the first indications of the new platform are very positive, very rapidly, and still during the test phase. We have the ATG conversion. ATG was the previous system, and other benefits, loading time, lower rejection rates and a better experience as a whole. Quality of images, algorithm for suggestion of products and other improvement potentials, and some of them are in the second wave that Paulo has mentioned. We are only expecting good things. We are not seeing any negative impacts coming in the future. Just to complement, Otavio, if you allow me, and there is one issue of comparison basis. April last year was very much impacted by store shutdown. We had a very high penetration of e-commerce that month because until the end of April, we had the impact of stores being closed. One part suffered this effect, and the other is because of Joia em Ação. There was a drop in penetration in e-commerce because of this year's seasonality and because we are not depending so much on inventory. Salespeople do not depend on e-commerce inventory. They had the infinite shelf. But e-commerce is complete. There's a full mix. Because of inventory composition in stores, they are not depending so much on the e-commerce inventory, and that's why this has reduced the share of Joia em Ação. These two effects explain the 14% drop in e-commerce, which is not a concern to us. As Otavio said, everything goes as expected. Thank you very much. Okay, now continue. Our next question is from Rafael Teixeira, Sell-Side Analyst. Rafael, we are going to allow you to open your camera and microphone. Good morning. Can you hear me? Congratulations on your results. I would like to understand the dynamic of higher costs in your factory expenses. How much of that increase is related to a sales increase, and how much of the new investments will be able to support sales growth in the end? When are we going to see a higher dilution of these factory costs? Hi, Rafael. Thank you very much for your question. Well, we are still within a volume expansion trajectory that is quite significant because of the contribution the Life provides to our business. To show how different Life is as compared to Vivara, Life accounts for 30% of our volume and more than 30% of our items. The expansion, the opening of stores, of Life stores that we are going to open in future years too, we continue to accelerate the factory in that direction. The growth in the volumes manufactured are still significant. In that direction, we are evolving to a new factory in the first half of next year. It will be ready and we will have completed our change in Manaus because of all the benefits that that region provides to our business. Over there, our capacity there is going to grow twofold, our manufacturing capacity. Obviously, that is related to growth in future years, and it's not going to be immediately in the following year. We will continue to see some pressure, but smaller than the current one of the factory on our margins. The higher headcount is very much significant. We doubled the headcount in the factory, and we are going to hire a significant number of people for the new factory and with the growth of life that will come and, with higher volumes too. In terms of face values, the factory's payroll is going to go on growing. We also see the benefit of MP in 2021. This pressure is not so significant or slightly smaller. It suffers the impact of one-off effect that we had in the past. Once again, what I said to you about life before, the expansion of product margins for life that we are already seeing today in our business as compared to one year ago, it's already enough to more than cover this 1.2 percentage points coming from the factory, which adjusted to AMT would be below one point. Once this benefit is annualized, this pressure is going to go down next year. Another important point is our seasonality history. As we work with just one factory, we try to eliminate peaks and troughs and try to produce or manufacture the same volumes every month so that we get to the end of the year, we have inventory, and we don't need to pay overtime and to hire temporary employees to do that if we look in the medium-term and long term. The pressure that we have in terms of revenue, the pressure in the margin in percentage terms, it's in the first quarter, it's always bigger than in the second quarter. Because in the first quarter, we are always selling 1 B, and in the second quarter or second half of the year, we always sell more. We are not going to increase the headcount in the factory in the second half of the year just because we are selling more. The costs are more diluted. We have this pressure, and as the company grows, this is going to go down. It's the size of our manufacturing plant that we need to have to cope with or to serve the expansion in stores. Sometimes we are manufacturing or we have capacity that we are only going to use next year. We are very confident with the expansion of the factory both in terms of expansion. In terms of headcount and also the expansion in technologies. We are insourcing more and more technologies. When we're talking about gold factory, it's not just gold goes in and products go out. So we work with many different types of products and manufacturing technologies, and we always try to find new technologies. We have been insourcing these technologies. It's very clear. Thank you very much. Thank you for your answer. If there are no more questions, we now end our questions and answer session. Now I would like to turn the conference over to Mr. Paulo Kruglensky for his closing remarks. Mr. Kruglensky, please. Thank you all very much for your presence here today. I especially liked the new model of us focusing much more on questions and answers in our discussion time. I think that we managed to have a good quality and more questions and answers being used, and maybe we are going to use it in the future. We'd like to hear your feedback. Also in terms of how we can improve it even further. We are counting on you for future conference calls. We are possibly going to have a Vivara Day, so I would like to invite you for our Vivara Day as well. Thank you very much and see you soon. Thank you all very much. Have a good day. Vivara's conference call has now ended. Our investor relations department is available to answer any other questions you may have. Thank you very much for your attendance, and have a good day.