Good. Morning and Welcome to the. to the conference for quarter 2024 results. The company will devote 100% of the time of this video conference on the question-and-answer session. The video "Initial Comments and Analysis of the Financial Performance by Otávio Lyra, Company CEO" has been available since yesterday and can be accessed at any time at Vivara's IR website. For those of you who require simultaneous interpretation, please click on the globe icon on the bottom of your screen. When you select it, please choose your preferred language, Portuguese or English. For those of you listening to the video conference in English, you may choose to mute the original audio in Portuguese by clicking on "Mute Original Audio." For all sell-side analysts, we offer the possibility of live participation. All you need to do is send a message with your name, company, into the Q&A icon on the platform, and we will invite you to ask your question in the order of arrival. By default, your name and the company you represent will be announced so that you can ask your question live with your audio and video on. Just accept the request at the request on the bottom button on your screen. For the rest of the participants, please send your questions through the Q&A icon at the bottom of your screen. If your question is not answered during this video conference, the IR team will contact you later and will answer your questions. The Vivara team is here with us today, CEO Otávio Lyra and Investor Relations Director Melina Rodrigues. We'll now open for questions. Bom dia a todos. Enquanto a gente. Good afternoon, everyone. Good morning, everyone. While we're waiting for these questions, I'd just like to say a few words. Of course, we're available then afterwards to answer any questions you may have. I'd like to talk about our wonderful results. These were expected results. A lot of what we've seen in these results are things that we saw in the last quarter, last year, and in this first quarter. We basically see the continuity of these effects. Despite fiscal pressures, which we expected because of legal changes and also because of some of the maturation of certain assets, we've still had a wonderful quarter of wonderful growth. Primarily with physical stores, and obviously our more mature portfolio has also done a wonderful job, nearly 8% growth. We opened 18 stores in the quarter, and basically we are on track to open 70-80 stores throughout the year. This is not just expansion. We're also delivering on better results in this quarter and the following quarters given the trends that we've seen thus far. This is also due to the reclassification of expenses and taxes. This has obviously favored us in terms of our results. In terms of cash generation, we've done a wonderful job. The company has had excellent working capital. We really took advantage of our credits, ICMS credits and other tax credits. Our new tax regime was passed in Minas Gerais, the state of Minas Gerais, and we were able to take advantage of this and the seasonality of the last quarter to really jump to the BRL 90 million available for recovering. This benefits not just the states. I don't mean the states. This affects not just cash generation. This will affect us through September, and this new tax regime, which was finally passed, improves throughout all of our tax generation. This will affect not just this year, but the following years as well. We are very well prepared for the seasonality. We know what expectations, and we understand the trends for results for this coming quarter. We are always well prepared for the seasonality of our business. We have about 10 new collections that we expect to launch, strengthening the pressures and that we really strengthen our identity as a company. We will be strengthening our stores and a wonderful mix to complement everything. Our representatives are better trained than ever, very excited for Mother's Day coming up soon, and we expect excellent results with both digital and physical stores. We saw this excellent show of this in the first quarter. We've also seen great operating results as well. We were able to expand our gross margin. So we were able to internalize more product where we're doing technology transfer through Manaus right now. And what we see moving forward, once again, is that we'll be doing redigitalization, better operationalization, especially in this first quarter. And moving into the second quarter, we do see this as a strong quarter where we will be focusing 30%-40% of our sales for the company. So this has been the quarter where we've been able to truly see the specific adjustments that we have been implementing in our business. And now I'd like to open up for questions. And thank you once again for being here today. Starting with the questions and answers today. First question is from Maria Clara, sell-side Itaú. Maria, we are going to open up for you to ask your question. Please turn on your camera and ask your question through the microphone. Thank you once again for the opportunity to ask a question. I actually just wanted to do a follow-up on your question, Otávio. You talked about recovery of the gross margin. So based on this, could you talk a little bit in the second quarter with Life growing? Do we expect that expansion in this gross margin, and how do we expect the gross margin to change, or what's its trajectory over the year to come? Thank you so much, Maria Clara, for the question. As I mentioned, we do expect a trend in the short term. Bear in mind that we still have a gap between growth of gross and net revenue. There are some reasons for this, and we will continue to see this little gap for the coming semesters. But over the next few quarters, it's going to improve. It also bears knowing that in the next quarter, we will see an impact from the ICMS rate that's switched over to 90 days. So it's going to take 90 days. We're going to 90 days for this to enter into effect, and we do expect even better benefits when it comes to this gap with the gross margin. There is a small difference with the presumed credit, ICMS credit in Manaus. Keep in mind that last year, we anticipated production before moving our factory, and we expected that for second quarter. So that took some of the pressure off the third and fourth quarter, and so this obviously is going to affect this quarter as well. Nevertheless, we have taken wonderful mitigation measures tax-wise so that the company will be able to absorb these changes over the course of the year. We've had price transfers that we've been implementing since February, and we have some actually programs or scheduled through the periods of seasonality, and this is going to help us offset some of this effect throughout the year. We have taken some other mitigations. There are some other things that we have done to mitigate some of these effects, and we expect it to be a very smooth transition throughout the year. Thank you very much. Thank you very much. Continuando, a próxima pergunta é do. Next question, Luiz Guanais, sell-side BTG. We're going to send you a link for you to turn on your video and mic. Vocês me ouvem, Melina e Otávio? Ouvimos, Guanais. Can everybody hear me? Yes, we do, Luiz Guanais. Two questions on my side. First, Otávio, you talked a little bit about price transfers, and if you could talk a little bit more detail about this, how do you see this for life and Vivara over the next few quarters? My second question is, since the fourth quarter, you've been talking about ICMS subsidies in Manaus. What do we expect in terms of a more normal level of this vis-à-vis gross revenue over the next few quarters as well? Thank you so much. Thank you very much for your questions, Luiz. In terms of price transfers, we've been doing this occasionally since February. This is some areas of our inventory. It hasn't been across the board. It's just been a few areas. This is the two different brands and two different products. We've seen some results in some of our collections and jewelry portfolios, and in some areas for Life jewelry. Some of them are a bit more significant percentage-wise, but in all cases, it was less than 10%. This leads to unit prices not jumping off, and we've had some adjustments. Vis-à-vis downturn cities, there are some areas where there have been more expensive jewelry, and we've had to make some adjustments with the Life collections. In terms of forthcoming adjustments, they're going to be even less important. They're going to count for even less of a percentage of both of our brands. But it's basically just to make some necessary adjustments vis-à-vis the tax changes that we have been seeing implementing starting in April. And there's the presumed credit as well, which have already started to affect the company. It actually started to affect the company starting back in January. As far as the subsidies moving forward, we've been really drilling down on potential improvements that we can implement, whether it's jewelry, whether it's Life for our improvements in our inventories. We've really got nominal amounts for this that's very close to the amounts that we had recorded last year and will be maturing this study of opportunities that we have moving forward. It might be that over the course of the year, we find some opportunities to increase inventory and subsequently potential sales. This goes for both jewelry and Life. We basically see opportunities in certain cities, cities where we currently have operations. These are generally cities where there's not as much competition. Basically, Vivara is the store, the jewelry store in the city, so this adds to our portfolio relevance and increases our portfolio. There's really an opportunity for us to increase our ticket in these specific types of cities. There's also an opportunity that we've seen to strengthen our inventory in some of our clustered shopping malls. And this is throughout Brazil. Life stores, we're increasing the variability and the variety of the products that we offer. We're basically testing what we can see. We went from BRL 250,000 per store when it opens, but there's a lot of variation. There's a lot of variation in this inventory. But we basically reduced this vis-à-vis Vivara, and we're basically placing some bets to basically see how elastic this available inventory needs to be. So we made some investments. It's not major investments, specifically because of the Manaus factory change and this first and second quarter. And basically, we're exploring the different opportunities that are available to us right now. Expectations are that we're not really going to see major changes vis-à-vis the presumed credit last quarter. I'm just going to add to that. Price increase is not the main leverages. That's not going to lead to our changes. The main leverages that we're talking about, the main action that we're taking is internalizing Life and the portfolio changes that Otávio just mentioned. So just to give you a better understanding of the effect of this as the mitigating lever, we're basically talking about internalizing. That's going to go up more than 10 basis points for Life. Life has a lot more space for us to maneuver. And when we compare the product price internalized vis-à-vis the products that come from China, which is where we had most of our volume, our inventory volume from last year, we see that it's a 15-ish% change. So this is our main leverage. We're basically not anchoring our profitability, even with all of the fiscal challenges that we're facing in this price transfer. This is the real driver that we're seeing in our profitability. Our real driver is our internalization of life. There's a lot of opportunity for us to capture the margins there, and performance has been amazing, really on track for what we expected for 2024. And I'd like to stress that this has been a wonderful, very positive lever. Moving forward, well, actually, keeping in mind that since the second quarter of last year, this is a very important percentage of the number of products that we produce in Manaus, and it really places us in a place where we're actually ahead of where we expected to be at this point in terms of internalizing Life this year. This has really been amazing. We are pretty much reaching 80% of all of the internalization that we have contracted and prepared for in Manaus. This number is wonderful for our inventory, and we expect this number to increase even more over the next year. This is not just 2024, actually, 2025 as well. And basically, this is the great lever or driver for mitigating the effects of the tax changes that we've seen. And Life has been growing a lot more than Vivara, right? Yes, actually. Yep, that too. That too. Well, thank you very much. Thank you very much. Next question comes from Eric Huang, sell-side analyst, Santander. Eric, we're going to send you the link so that you can turn on your microphone and camera and ask your question. Estamos sem seu áudio, Eric. Rodrigo, se quiser, enquanto o Eric se prepara aí, enfim, com o áudio, se quiser passar para o próximo só para a gente. Perhaps if you want to jump to the next person while we're waiting for Eric to fix his audio. Nope, Eric's back. Só que nós não estamos te ouvindo, Eric. We still can't hear you, Eric. Pode ficar aqui, Eric, com a gente. Stay here with us. We're just going to invite the next analyst over to turn on their mic and ask the question while you fix your audio, okay? Next question, just so we don't lose time here. Então, continuando, a próxima pergunta é do Vinícius Strano. Next question is from Vinícius Strano, sell-side, UBS. We're going to send you a link. Please turn on your mic and camera. Bom dia. Bom dia a todos. Bom dia, Otávio, Melina. Good morning, Otávio and Melina. Thank you so much for letting me ask my question. Staff, in terms of expansion of stores, what about labor and salespeople? Have you seen any bottlenecks in operating bottlenecks or any problems because of the number of staff members that you actually need moving forward with this massive expansion? Thank you, Vinícius. It is a major challenge when we're talking about retail, not just retail that's expanding, but naturally, retail, when we talk about retail, has churn issues, and it's no different for us. As you know, we work with this curve. We've got numbers that are a bit higher, on average, than retail. We hire about 2,500 people a year. So basically, it needs to be a well-oiled machine so that this doesn't lead to any operating bottlenecks or any bottlenecks when it comes to opening new stores. This year, we're going to be opening 70 new stores-80 new stores. So the challenge for us is that there's even more of a challenge with this massive number of stores. There are differences from region to region. We see a lot more speed and ease when it comes to hiring in large cities, and it's a little bit easier in the South, Southeast, both in terms of number and in terms of the quality of the skilled labor. It's slightly different in the more remote regions of the country. For Life and for Vivara at this moment, we're seeing these differences regionally. The challenges are kind of different in each of these cities or regions. Again, it takes a little bit longer, and it's a little more difficult for us to find proper representatives and salespeople in the cities and towns that are farther away. And sometimes moving salespeople from one place to another is quite difficult. Life is still expanding a lot. This is exactly what Vivara faced initially. Actually, Life's been a bit easier. So I wouldn't say this is a bottleneck. The machine is well-oiled, as I mentioned before. We have really been able to quickly hire and onboard new people. You also talked about the pressure because of human resources expenses. I think it's quite interesting. We're addressing this pressure head-on that we face from these different regions. We have a lot of pressure in terms of sales prices. So some So some of these expenses is challenging. Reclassifying expenses from the second quarter. So some of these expenses have been reclassified, and we've been doing this since 2023, and this will continue to benefit us moving forward. But certain expenses are going to not be a benefit. So it's really going to balance out. We still work with, again, benefits, special food benefits for our employees. But we've been addressing this issue since last quarter. This is an adjustment that was made in October, and it came into effect in November 2023. Because this is because we have a lot of a large number of very mature stores, over 95, from Vivara just last year. And this is really putting a pressure on us, but we are addressing this and correcting it over time as we mature. Most of our stores now are hitting maturity, and this will allow us to continue opening other stores. Now, obviously, there's going to be a little bit of pressure, but nothing we cannot address. We are making some corrections and adjustments. We should see more benefits starting second quarter of this year. There's kind of like a disadjustment. This is caused by the maturation of the Life stores, which led to payroll remunerations that were a lot higher in certain regions. This is a little bit more than we expected, but we've been adjusting this over time. We've made a few specific adjustments. We made a few specific adjustments in April. This happened in about 20 stores, just to give you an idea of size. And we're going to make some adjustments that are more significant after we go through this seasonal uptick. What we do is mostly adjust for the most evident or the most obvious discrepancies. And sometimes these are just mistakes that we find in one period, in one time. But basically, overall, our business is very solid. What I can say is that these larger adjustments have never been really significant because of the number of the maturity of the stores and the number of stores that we've been opening up. Again, over 60 stores in the last 12 months, 62, 63, something like that. This is obviously going to make it a little bit harder. But again, we expect less pressure, not just because we're finishing this reclassification period, but because we're going to be making some expected adjustments in the second quarter. Thank you, Otávio, and thank you, Melina. Thank you, Vinícius. Next question. Eric Huang, sell-side, Santander. Eric, please accept the link and turn on your mic and video. Can you hear me now? Yes, now we can. Good. Thanks. Sorry about that. Two questions. One is working capital. You saw that there was a significant increase in inventory. Could you talk a little bit more about working capital? What do we expect moving forward through the end of the year, and not just working capital, but also recoveries? You mentioned something about recoveries. I'd actually like to know what the size of it is. Can you gauge it, and what can we expect moving forward? And this is specifically for Life stores, which have been maturing. You said there was a lot of them. And how does this compare with this maturity curve that you had originally anticipated? Thank you very much. Thank you, Eric. Okay, working capital. I did mention this early on. We're still analyzing different opportunities. I think there's room for us to increase inventories without negatively affecting us. We have a lot of cash flow for us to really work with this and consider this as a possibility. And again, it requires proper management of inventories with healthy margins, healthy timeframes. Sometimes this just requires regularizing and standardizing purchases. With manufacturing changes, last quarter, we didn't actually buy anything. So this is going to affect us. We always try to keep the least amount of metal in the factories possible, but we did have to buy some. So we're going to see a little bit better in terms of terms moving forward. Stocks, inventory. Expectations are that we end the year with nominal inventories than we had this year. Last day of March as the reference point here. And I think we can really move on this to take advantage of some of the opportunities with Vivara and Life. But I do see a lot of opportunities for inventory turnover. Inventory turnover, I think, is a great opportunity. We thought it was going to be 25 years. That was our initial projection. 25 days. We thought that was our initial projection. So we actually think that this might drop moving forward. In terms of taxes that we can recover. So this is around BRL 90 million. This is BRL 90 million for taxes that we could recover. BRL 13 million, BRL 13 million, BRL 14 million were spent in December. No, sorry. No, no, I'm sorry. I mixed up the numbers here. No, last year, we used BRL 50 million of the BRL 90 million, and the rest is expected for we're expected to use in September of this year. So another BRL 40 million, 40 million-ish of this remaining balance. When it comes to buying gold using this credit, which again is seasonal, and there was this huge gap. We're still subject to these credits, and so we still need to follow along. Now, instead of gaps that are years long, we're actually seeing these smaller gaps of just a couple of months. This was specifically because of the tax regime change. I would say that now we have up to BRL 5 million in credits for improving cash flow. This is once we go into operations following September. Basically, we're bleeding our stock. This is not a recurring thing. This is a consumption of greater stock. The running rate moving forward is a lot lowered because this is part of this recurring purchase of metal. Maybe 2% of what we're buying now. This is what we absorb in a recurring manner. Just to make it clear, we're not talking about the recurring level. This is what we're doing is we are consuming our current inventory. In addition, we have about BRL 12 million-BRL 15 million annually for consuming ICMS credit in Pernambuco. I don't know if I think we haven't talked about this in a while, but there's a special tax regime that we are able to achieve up there vis-à-vis distribution in the state. And this allows us to, at the time, allowed us to use about BRL 50 million in ICMS credit to our favor. And as we supply and the stores, there are obviously ups and downs, but we have about BRL 1 million more or less per month for use. So size-wise, this specific line should drop over the year as we really take advantage of cash. You were talking about the maturation of life as well. Yes, we've been following along. We see it quite positively. It's been doing excellently. As the shopping malls are becoming more dense, as we go into more shopping malls and we're moving into more secondary shopping malls, it's going to slow down. But this is exactly. This is perfectly in line with our projections. This is exactly what we had planned right from the get-go. And we still see excellent performances. Actually doing better than what we projected. 25% of our revenue for what we saw in 2023, 2024. And again, these are the non-mature stores. So really, we've been doing an excellent job. We basically have seen no trends showing anything other than that. Everything's been absolutely positive. Just bear in mind that it is natural that once we start adding more stores to this mature group, we're going to see things starting to settle down. This needs to be in our radar. We don't want to cut out mature stores, obviously. We don't expect them to be growing 80%, right? The mature stores don't grow as fast. So this type of movement is natural. It's going to start to settle down. And we've been mapping it out so that we can really follow the cases. It's very natural to expect this settling of this growth as we hit the mature store. And this is just natural maturation. This is the natural order of things based on maturation and advances in the past. But we've done an excellent job with this channel, and performance has been absolutely surprising and wonderful for us. Well, thank you very much. Thank you, Melina. Thank you, Eric. É do Pedro Pinto, sell-side, Bradesco BBI. Next question comes from Pedro Pinto, sell-side analyst. Bradesco. Oi, pessoal. Bom dia. Conseguem me escutar? Good morning. Can everyone hear me? Perfeito. Obrigado, Otávio, Melina. Thank Obrigado, Otávio, Melina. Thank Obrigado, Otávio, Melina. Thank you, Otávio and Melina. Tenho duas aqui super rápidas, tá? Two quick questions. Em relação ao processo de timing para o novo CFO. For choosing the new CFO. Can you tell us anything about that? Secondly, I'd just like to drill down on Eric's last question. The maturation of the Life stores. We've seen a lot of SG&A pressure with this natural maturation. And we'd like you to talk a little bit about SG&A. You talked about 20%-25% sales above business plan, but we'd like to talk about this trajectory. Is this going to be positive? Can you just give us a little idea of how this pressure is going to affect the margin over the next few quarters? Okay, well, I'm going to answer this question first, and then I'll hand the mic over to Mel so that she can explain it even more. For the time being, enough CEO changes, right? We've had enough. No, no, I'm sorry. All jokes aside. I'm actually quite excited about this process. Looking for a new right hand. Actually, I have a lot of right hands on this team at this time. We've been talking extensively, actually, with a few people over the last few weeks. We're looking at the kind of final funnel filter in this process. And then we're going to get the board on board to choose this very, very important position, hopefully for the next few years. So, to answer your questions, we hope not to take too long to choose this new executive and trying to do both jobs at the same time is really hard. So we really want the entire team to take a leading role on this quickly, soon, to answer your question. With the expansion of Life, we are seeing a lot of positive é verdade. verdade. It's only in the third year that they become mature. So it still works at 40%. But in the first year, it is not it isn't pressure. It's actually below the margin. So it's still a positive margin. So it's actually good. Life's business model, I think, is quite difficult to find in retail. Their gross margin is very high. So it really absorbs these maturation expenses. So I'd say 2022, 2023 still have posted upwards of 40% on average. Excellent. That was super clear. Thank you very much, everyone. Uma pergunta é do Pedro Coutinho. Next question comes from Pedro Coutinho, sell-side analyst, Banco Safra. Pedro, we're going to send you a link to turn on your video and audio. If you could, click on it and ask your question. Bom dia, Otávio. Bom dia, Melina. Obrigado por pegar minha pergunta. Thank you, Otávio and Melina, for answering my question. I'm looking at your capital structure. Net cash is the company's balance of the company. How can you leverage the of the company. How can you leverage the company's balance sheet? And then, if you're thinking about doing this, how are you going to re-leverage this balance sheet? So I think that's it. Thank you very much for the question. It's a matter of timing when it comes to improving our debt structure and using the instruments that we have to back that up. Basically, we want this to be less of our finance team's concern over the next few years. We don't want them to be doing the next few months. We don't really want them to be doing this full-time. In the very, very short term, very, very short term, we are a bit de-leveraged so that we could maximize our financial results in this first quarter and to offset the BRL 70 million that we faced as an impact from the tax regime change. Obviously, this is suboptimal. I think the thing that's going to trigger more internal visibility, and that we're going to be sharing this positivity with you, is that better designing all of our international opportunities, better mapping it out. We don't see many short-term changes, reallocation of capital, or anything like that. But at some point, once we have some very important confirmations, we expect to gain some velocity vis-à-vis expansion abroad. Even though the board has to approve this, etc., etc., I think there are going to be some cash expenses that are going to be much better for us in expansion and in working capital right now. The company generates cash, and we wouldn't need additional cash if we were just to stay on track right here. But the real trigger here, the real trigger is that in the next few quarters, we want more visibility and offer more transparency to you for how we allocate our resources for all operations outside Brazil. Well, that was very clear. Thank you very much. Thank you, Pedro. Sincero, não há mais perguntas. We will end Vivara's results video conference. We will answer questions if they come in. Thank you very much to all the participants, and have a wonderful day. Obrigado a todos. Foi prazer. a todos. Foi prazer. a todos. Foi prazer. Thank you, everyone. Once again, it was such a pleasure. We're here to answer all of your questions. Our investor relations team is here throughout the day, throughout the week, to answer any of your questions. And we're just about to jump into high season here. And give an extra hand to our buddies and everyone in the South that's been suffering through some of the very bad news. So we're going to give you a hand as well. Thank you so much.