Compañía Cervecerías Unidas S.A. (CCU) Q3 2021 Earnings Report, Transcript and Summary

[Audio Gap] these factors were partially compensated by negative external effects mainly from higher cost in raw materials, in line with the upward trend of commodity prices during this year. In all, net income totalized a gain of CLP 42,168 million, more than tripling versus last year. In the key operating segment, our top line expanded 36.4% due to 26.6% growth in volumes, driven by all main categories, and 7.8% higher average price. The latter was associated with positive mix effects, mainly based on a strong performance of premium beer brands and the implementation of revenue management initiatives. Gross profit grew 41% and gross margin improved from 46.7% to 48.3%, mainly as a result of the expansion in revenues and efficiencies in manufacturing being partially offset by higher cost in raw materials. MSD&A expenses grew 18.4%, consistent with the higher volumes and the normalization of marketing activities. Nonetheless, as percentage of net sales MSD&A expenses improved from 36.9% to 32% due to efficiencies to the above-mentioned ExCCelencia CCU program. [indiscernible] EBIT expanded 72.5% and EBITDA margin improved from 16.2% to 20.5%. In the International Business Operating segment, which includes Argentina, Bolivia, Paraguay and Uruguay. Net sales recorded a 106.6% rise as a result of an increase of 71.8% in average prices in Chilean pesos and 20.3% higher volumes. The better average prices in Chilean pesos were explained by revenue management initiatives, positive mix effects and favorable effect related with hyperinflation accounting. This allow us to compensate higher U.S. dollar-denominated costs from the depreciation of the Argentine peso against the U.S. dollar, higher cost in raw materials and inflation. Consequently, gross profit expanded 147.9% and gross margin grew from 39.4% to 47.3%. MSD&A expenses as percent of net sales also improved from 49.3% to 45.2% due to efficiencies from ExCCelencia CCU program compensating higher inflation. As a consequence, EBITDA grew strongly during the quarter, and EBITDA margin improved from 2.8% to 9.1%. In The Wine Operating segment, revenues were up 2.8%, explained by an 11% growth in average prices, while volumes dropped 7.4%. The higher average prices in Chilean pesos were mainly explained by a better mix in both the domestic and export markets. The lower volumes were largely explained by a contraction in export associated with global logistic difficulties, which has caused disruption to our shipments. This was partially compensated by the Chilean domestic market, which expanded an excellent mid-single digit. Gross profit was down 3.3% and gross margin decreased from 41.2% to 38.8%, mainly due to higher manufacturing costs an increase of cost of wine and a lower contribution from the export business. MSD&A expenses as a percentage of net sales improved from 24.5% to 23.9%, thanks to efficiencies driven by the ExCCelencia CCU program. In all, EBITDA contracted 8.2%, while EBITDA margin dropped from 21.2% to 18.9%. Finally, in Colombia, where we have a joint venture with Postobon, we kept gaining business scale by growing double digit in volumes. In addition, during the quarter, we strengthened the mix of our portfolio, driven by an outstanding performance in premium beer brands, especially Heineken. We will keep executing our strategy in Colombia, focusing on gaining scale, consolidating our portfolio of brands and deliver -- and delivering better financial results. Now I will be glad to answer any questions you may have.

[Operator Instructions] And we'll take our first question.

I have 2, both are related to Chile. Can you share what is your view on consumption? And how do you expect dynamics to behave? I mean, how are you thinking about volume performance in the coming quarters with a tougher comparison on one side and the potential approval of the [ store pension ] with role on the other side? That's the first one. And the second, can you comment about the price of [indiscernible] would miss it on the are suffering and how much room do you see for further hikes given that all consumer companies are increasing prices?

Can you state you name, please?

Yes, sure. Fernando Olvera from Bank of America.

Fernando, we had a lot of noise. It seems from your side. Can you repeat the second question, please?

Yes, sure. If you can comment about the drive elasticity when is it on beer and suffering and how much room do you see for further price tag given that all consumer companies are raising prices?

Okay. Okay. Thank you, Fernando, for your questions. First of all, your question related to consumer consumption dynamics in Chile. You are right. We have had, I would say, outstanding volumes in the [indiscernible] year. But it's not completely [indiscernible] government [indiscernible] though the effect in resale [indiscernible]. And also the pension fund withdraw, as we stated in our questions. Is aspart of the hike in consumption especially in some categories where we are seeing, as you know, an upward trend for, I would say, 2 or 3 years, especially here in Chile, where we are seeing an increase of consumption. Looking for what is difficult to predict, I don't know what will happen with the vote of the fourth pension fund withdraw, certainly is not a good policy. But some of the consumption patterns after the pandemic will remain because there are changes in behaviors. You know, consumers now they will change the share of wallet to work more to our products than to other products, for example, such as travel such as transportation, maybe more people will work from home. Most people will do more sports. So we are confident that the levels of scale we have reached really will grow at a lower rate any [indiscernible] but we will -- the industry will maintain the scale. We are working on that scenario. But you know, a huge contraction in the economy also could be a problem. And linking that with your -- your second question, we are facing an extremely high cost pressure due to the commodities. But also, and this is something that I'm very concerned, Chile is the exchange rate that is going up in the last 1 or 1.5 [indiscernible] and it has to do with all the political dynamics and all that has to do with the pension fund discussion. So -- and also Argentina, certainly, we saw the gap between the official exchange rate and so called blue rate there is something to adjust in Argentina in the near future. I don't know, but it's a risk. So certainly, price hikes will be necessary and -- but we will do that through our revenue management initiatives to compensate that. How much is the activity Look, I think our products, our consumption should be in conjunction with other consumer needs and how this will evolve. So I think that if we see a good time of good consumption. But in the future, it will depend a lot on the alternative of the consumer. But by saying that, our categories are very resilient this kind of consumption reduction, to be honest. I answered your question, Fernando.

[Operator Instructions] We'll take our next question.

This is Mohammed from Foyston, Gordon & Payne, and congratulations on extremely good results. I have 3 questions. The first one is you're currently running volumes in Chile, 20% above pre-COVID levels. Can you give us some color on how much of that is market growth versus market share? And perhaps some color on how the 3 main segments [indiscernible] spirits are doing relative to 2019, like whether they're all up 20% or some are up more than others? So that's the first question. And then I'll follow up with 2 more after.

Yes. Look, compared to last quarter, market share about stable. However, overall in Chile, we are gaining market share against against last year with a very good performance. I would say the categories where we have share gains are nonalcoholic and also bear but year more in the premium side. So the industry [indiscernible] certainly. So there is no -- so I would say, stable market share with an outstanding industry growth, not only non-alcoholic [indiscernible], but also [indiscernible], okay? That's for -- and the second part of the question, what was the second part?

[indiscernible]

Yes, [indiscernible] give you some color against prepandemic volumes. So I think quarter 3 2021 compared to to quarter 3 2019. In Chile, it's outstanding across the board. From 1 category, I would say 21%, other categories, 32% up to 46.6%. So overall, against the -- in Chile against we are growing all across the board, Mohammed, in both the third quarter and accumulated volumes. So we are very delighted on 30% [indiscernible] because in these tough times of many supply chain constraints believe me it's difficult to supply these volumes.

My second question is on the international ASP quarter-over-quarter, so sequentially Q3 versus Q2. I mean I just looked at -- I mean I'm no expert in currencies in Argentina, but I looked at up at [ Google line ], it didn't seem to be a significant change sequentially. So -- but at the same time, your ASP went up from 60 to 80, Q3 versus Q2. Can you give me an understanding that is this just because of the official exchange rate versus, I mean, what I would call actual exchange rate that's causing this disparity because ASP of 80 in CLP terms has been the highest for several years by a large margin. And I'm just trying to understand how real it is?

Yes. It's a good question. I think I catch up your question. But if I'm not answering what exactly you want to know, let me know. So you need to understand that Argentina has had a higher inflation than a higher devaluation. So that means that up to September, we were able to increase price in line with inflation, which is much higher than the valuation of the currency, okay? So -- and this is the explanation why we are doing so good in prices in Argentina -- in Agentinian pesos term, but also when you translate the results into Chilean pesos that we translate the results due to the hyperinflation accounting at the exchange rate of the last day of the quarter. So as of the 30th of December. So [indiscernible] Argentina in the period year-on-year was 52.5% and devaluation against the Chilean peso, which is the currency, what I report the result was only 26.5%. So you have a high gain on that. We -- remember, we are in nicer inflation accounting. So until the last year of -- excuse me, the last day of the year, we need to restate the Argentinian results as a consequence of hyperinflation accounting. Did I answer the question, sorry to be technical?

No, that makes sense. So that was my understanding. I guess, I just have to sort of look at what the -- like are you able to take out capital at that exchange rate out of Argentina?

Yes. You can buy machinery. So as you know, we are doing investments to -- in Argentina, in our [ Lujan plant ], our beer plant. And the government allow you to buy at the official exchange rate for capital goods.

But that's for import. I'm just saying taking capital out.

Yes. So no, but that is to pay -- no, you are not allowed to send dividends from Argentina for the time being.

Okay. Just a final question on operating expenses, which I just wanted a confirmation that that's largely volume-based increase. So there was nothing significant cost inflationary on a per unit base out of it?

No we have higher level of inflation, cost pressure on top of volumes, but also we have efficiencies that compensate the cost pressures because it's not only cost pressure in raw material, but also in salaries because we have higher level inflation, of course, the volumes also push you a lot in terms of hiring more trucks more extra hours. So -- but overall, also, we still have our robust ExCCelencia CCU program that you know and Mohammed, we have talked many times about that. in many fronts, manufacturing, logistics, procurement, G&A, general and administration. So because we need to have a [ feed ] company at the end to to gain the scale benefits. Of course, there are scale benefits, but also we have cost pressures, but also we have efficiencies

And once again, congrats on the results.

And next, we'll take our next question.

Yes, this is Felipe Ucros from Scotiabank. Congratulations on the results again. I have a few questions. Maybe I can start with the strategy. A few quarters ago, when I started covering the company, you discussed this strategy where you were going to concentrate on volumes and very slowly worry about margins for the much longer term. And I think the environment has been probably a lot better than you expected. So just wondering how you're plans or your strategy, your long-term strategy has changed since you've performed so well? And then I'll follow up with some other questions.

Yes. Remember, when we [indiscernible] in 2020, we had 3 objectives: first, protect the sales of our people. and the people we interact with; suppliers, customers, clients. Also maintain our operation continuity, but also to keep scale because our business is important to keep a scale. This is where we were talking about keeping the volumes. And we were very successful in doing that. But also, we talk about financial health. And financial health was to protect our cash, but also, let's say, protect our margins. So -- but this strategy also is very flexible, to be honest, in the different priorities. Ahead, we will suffer even more cost pressure than today. due to commodities increase and exchange rate volatility and higher level of inflation. So we have 3 focus that are very similar with the ones we stated during the pandemic or if you remember a few quarters ago, Felipe. First of all, and hence, our revenue management efforts, we will continue with our ExCCelencia CCU program, which will which will be reconverted into a transformation program in the upcoming years, incorporating a lot of digital technologies. And third, we think we will keep our scale and our volumes. These are very resilient even if we see a drop in consumption. This is also based on the high performance of our brand that in the last year is higher than ever, I would say, the brand preference of the consumer because in order to build the scale and the market share, you need that new brands to be in the heart of the consumers. So I'm able to take your second question now, Felipe, unless you have a doubt of my answer.

Great. That's very clear. Maybe just a follow-up on that first. Obviously, as Mohammed said, you are obviously very high in volumes when you compare it versus 2019. So I'm just wondering how you guys are doing in terms of capacity. Are you having any constraints on production right now? Are you operating at full capacity?

We have taken all the measures to cope with this volume, not only our capacity, but also with our suppliers' capacity. So we have also anticipated a couple of investments that they were in the pipeline and in the master plan. We have a very robust process in looking at all our capacities, our aggregated capacities, but also in our specific capacity to be very flexible because you have changes in the behavior of the consumer, sometimes now, for example, we are experiencing a high consumption of glass individual bottles because of premium. Last year, we were experiencing a high consumption in can that continue -- that continued. So what we have done, we have reinforced our CapEx and [indiscernible] up on this very good performance. Not only in Chile, but also in Argentina. So -- and also working with our suppliers because also we have not only problems we are facing with the international [indiscernible]. So at the end, we have been working very consciously in debottlenecking every constraint we could have in order to serve this high consumption.

Great. And clearly, you're doing it very well because the numbers speak for themselves. Maybe turning a little bit to away from Chile. I was just wondering if we could talk a little bit about Bolivia, Paraguay and Uruguay. We don't usually talk about those divisions too much, but when you look at it over a longer term over a few years, you've managed to gain some ground in those markets where the operation was very small. So just wondering if you could tell us how this year has gone in those 3 countries? And what your long-term vision for those markets is?

Yes. So Uruguay, Paraguay and Bolivia [indiscernible] because they are markets that we are fully committed to continue growing and building scale along the time. They are still small businesses for us. However, we have seen a lot of progress, especially in the year gaining market share in all 3 countries. There are differences between the different countries. Uruguay is more stable. It has not been so affected by the pandemic. They have had a very good, let's say, management of the pandemic along the time, affected certainly at the beginning of the year a lot by a drop in tourism, especially from Brazil and from Argentina. However, the results are very encouraging. We have been improving profitability there through focusing on high-margin products and having outstanding results in the beer category. In the case of Paraguay, very affected by the pandemic, we have a very big, let's say, juice business there that especially with the school closures, where you have the individual occasions of consumption of children during school, we saw a huge drop on that. However, this has been recovering. But I would say that in the year, we have been gaining share with excellent results, excellent performance of Heineken and [ Amstel ] in this market, and also we have a craft beer called [ Sahni ]. So we are experiencing now in Paraguay, a full recovery. In the case of Bolivia, we are affected a lot by the parallel trade. Bolivia, as you know, has a fixed exchange rate. But certainly with the devaluation of the countries of the surrounding countries, let's say, Peru, Chile and Paraguay and Argentina, we experienced a lot of parallel trade. But we are committed with this business. We invested in a new carrying [indiscernible] last year, but is now producing. So -- but we expect that sooner or later, this will be more controlled the issue with the parallel trade. That affects a lot, the area where we have higher market share, which is the Santa Cruz region or the West region. But for us, these are -- we are committed to continue growing in this market. And we saw recovery in 2 of them. And the third one, as I explained, I look forward that in the future, this will be more controlled the so-called parallel trade.

That's great color. And a question that I wasn't going to do originally but that you mentioned in my first question that I thought was very interesting. You mentioned that ExCCelencia will continue, but it will more towards transformation and digitalization. Just wondering if you could expand a little there on what your plans are, given everything that's changing in the beverages [indiscernible] in Latin America?

And we'll move on to our next caller.

Sorry. Sorry, Felipe, you want some clarification on transformation program. I didn't understand. More color on that. Okay. Thank you, [indiscernible] here. So yes, when we have started the ExCCelencia CCU program in 2015 for those of you that are following from a long time ago, with very high fruits in several areas, traditional areas such as [indiscernible] sales, such as manufacturing procurement. Now we are moving the program to the next stage and this involves a transformation program that also started this year with the change of our ERP, SAP, but we were very successful in implementing it with practically no disruption because in this kind of project, you could face disruption. So delivering these higher volumes and at the same time implementing a new platform that certainly will give you a state-of-the-art ERP, I would say I would like to thank all our colleagues because delivering this growth, 22% or cumulated 17% growth in overall and 15% against 2019 is outstanding. So there are initiatives, of course, in e-commerce business also in optimizing with artificial intelligence, our routing of the trucks in order to save time and and decreasing the carbon footprint. We are also -- we also have an initiative on data analytics and international artificial intelligence in our plan to save energy to save water, really online. Also, we have a program in sales that do for our salesman the perfect portfolio to be sold to our consumers. And so also, we are working in technology and artificial intelligence in forecasting, which will save us a lot of inventory and out of stocks. Also working in automatization of processes through RPA, robot process automatization. So we are moving to another generation of efficiencies and while maintaining the traditional ones that always since we implemented the ExCCelencia CCU program, we are -- these are recurring recruiting program also to protect our P&L in a high inflation environment. Okay. Felipe.

I think they've switched to my line. This is Mohammed here from Foyston. So should I go ahead with my follow-up questions?

Yes, Mohammed, is my pleasure.

Okay. Just a couple of longer-term questions. One on company-wide EBITDA levels Historically, I have used 20% as your long-term target. My estimation is for this year, you'll be running pretty much at that level though the makeup is a bit different in the sense that gross margin is likely to be a bit lower than your historical levels while OpEx as a percentage of revenue is going to be substantially lower, driving the move to that target. My question here is that as we look ahead over the medium term, next 2, 3 years, would you -- given the success you've had with the Excel program, saying that your longer-term EBITDA target should be higher than that? Or given the cost pressures and maybe the market dynamics you're seeing, we should still continue to use as sort of the average target level for the company?

Mohammed. First of all, sorry to be like that, but we'll never do forward projections. You know that. We know each other for a long time, okay? But what I would like to say is that we have an exceptional cost pressure in raw materials going ahead. So -- and I think this will last -- so I was talking with shipping companies and they told me I know that this is a good discussion or not, but the international freight prices increases a lot the raw materials prices will last at least 1.5 year. So for next year, that you need to look at the futures of oil, aluminum, sugar and resins, you don't have you don't have features. But if you look at the cotton features or the oil features, do we have this or in Barley that are more linked to the Chicago, the wheat Chicago prices or the Europe prices. So we will still see further increases. So at current level for next year, we will see going up plus 10%, aluminum going up plus 20%, Barley going up 25% resins going up 18% and sugar 8%. So given my answer, I would be happy if we maintain current EBITDA margins, but the pressure is high. And I already mentioned to you what is our [ 3-leg ] strategy, enhance our revenue management efforts. This sometimes is gradual, but maybe we need to accelerate that. We will continue with the ExCCelencia CCU program and now rebump it, let's say, or reinforce it by a transformation program and also we need to keep our volumes at a scale that is key for the business and for the margin for our margins because keep scale is always a priority in this kind of businesses. So Mohammed, I give you the elements and it's you to deciding how to project such.

Yes. No, that's great. Just final question on Colombia. I realize with COVID the plans -- I mean, changes the schedule a little bit. But how far are we from a net income breakeven on that one?

Look, we have done, I would say, I don't want to be -- but we have done good progress in Colombia this year. So we are moving year-to-date EBITDA. Last year, we lost year-to-date. And this year, year-to-date, we are going to work in to wait the first quarter in order to be EBITDA do okay? And also net income, and you see in the fact that I report that is also moving in the right direction. We will need a a few more months, and it will be highly dependent on what I was talking to you in the previous question on how we transfer this cost pressure into revenue management, enterprises, also how much savings we do. But we will continue because the key in Colombia is to continue to build the scale. So we -- for example, we are practically matching 2019 volumes in the first 9 months, still a quarter ahead, and I think we will continue to grow double digit, which is very important. So scale is very important to improve margins and profitability and continue to gain share, of course.

We'll take our next question.

This is audio Falcon from Goldman Tecnogas on the results. So our question concerns the competitive landscape in beer in Chile. Could you please elaborate how you're seeing competition evolving within the traditional channel after the agreement between Andina and ABI?

Hello, Tiago has to see you. Thank you for your words about our results. We have competition continues to be the same as last quarter. And I think that what we see is more in the brand's preference. I would say we are defending ourselves reasonably good in traditional trade. We have the experience of managing the multicategory business for a long, long time. We are the experts in managing multi-category sales and multi-category distribution. And we will continue to be the most talented in doing that. So I'm not particularly concerned. I have nothing to do if they want to distribute with our nonalcoholic competition is fine, but we will defend ourselves as we are doing, okay?

And we'll move on to our next question.

Felipe, congrats on the results. Most of the questions have been answered, but I'll be -- please, if you can give us some more color on the opening of your new Renkaplant, which is an important asset of you. And if you are planning plan to absorb the -- more of the future growth or will be a migration of the actual volumes production over there? And if you can give us more -- maybe more guidance on any of the impacts or how the ramp-up of it will be very helpful.

Sorry, can you state your name. I'm not too good in identifying.

Yes. Sorry, this is Diego Guzman from BTG Pactual.

Nice to hear you, okay. Yes, we are very happy. Finally, we are ramping up our Ranplan which was last week inaugurated by the minister of economy, the metropolitan rejoin governor and rank major, okay, Mr. Claudio Castro, the Minister of Economy, Mr. Lucas Palacios and the metropolitan region, Mr. -- We're very happy it's a very environmentally friendly plan, which is, first of all, with a lot of acceptance from the community, and we are very happy happy on this plant. It started with 2 lines, but the new line is coming. We started with a cotinine and PT line and now a Optiline is coming. So we have 3 lines in order to absorb this growth but also changes in the consumer. So we -- the plant and the capacity investment is more intended to absorb new trends -- So a huge growth in some products such as juices such as hand-watered sport drinks. So -- and replacing some old lines that we have, especially in cans. So answer your question, it's more to absorb new growth and new consumer trends. But let me make a point of that in terms of that we -- as I answered in previous questions, we will keep investing in key projects in Chile and in the region. And especially in Chile, this is for us, it was the moment to do it. We believe that many industries and also including our suppliers are investing but we believe that this is not given, and it will depend on how the country gets on track for it to continue to happen, and that leads everyone's responsibility, especially the political sector. We are very happy with the inauguration and with the ramp-up of our new plant in Renca and other CapEx are coming. Thank you, Diego.

And we'll move on to our next question.

On is Sarwat from JPMorgan. So I just wanted to touch on another issue that you mentioned in the press release related to those logistic issues on the 1 segment for the export business, obviously. So I was wondering if you can comment a little bit on any expectations that you have there, any actions that you can take to mitigate these impacts? Any color that you can provide there would be really helpful.

With this, thanks to hear about you. So Yes, we have been mentioning since I would say, may completely collapse on international freight to export buying. So it was very fast, especially in the third quarter. However, now we are seeing in Spanish process better. We are seeing -- we are a little bit more optimistic because as of October, what is the reality, I can comment on that. It was a little bit better the logistics to export line beginning October. But as I mentioned in the previous question, these shipments or these international trade prices could last. There are some experts that said to you and tell second semester next year, other shipping companies more time. So I will be cautious on that. However, in October, better.

And congratulations on the strong results.

[Operator Instructions] And we'll take our next caller.

This is Sasa Ramirez from Banchile. I just got a quick question in regards to the Chilean operation. When we see this shift to the more premium products, should we think that a cost breakdown in terms of dollar-linked cost should grow with this new mix? And how should we think that the impact would be going forward with this kind of new mix that you are getting with a more premium behavior than it was before?

Nice to hear hold you the premium portfolio has higher margins. So it's more or less protect and maintain 1 of the reasons that we had experienced a margin increases despite commodity cost increase is the higher sales in [indiscernible] Okay. You have some noise behind you.

We'll move on to our last question.

Yes. Hi, good morning. Felippe and Claudio, thanks for the call. Take -- Two questions, quick questions. What's the top from Templeton, sorry. what is the CapEx that you expect for this year? And do you have any projection for the following year that you can share with us as my first question.

A did recognize your voice. So thank you every way for stating your name. But in this -- I recognize your Argentina accent, okay? So let me hand over to question for CapEx to Niko. Please go ahead. Nicolás Novoa: Regarding CapEx, we will keep investing in line with the CapEx projection published in our annual reports. That is something around [ MXN 180,000 million ] on 2021. And probably the next year, we are going to have something figure. This level of CapEx is around 50% higher than our depreciation. And that is explained and in line with the things that Felipe has been saying with a strong volume growth, obviously, we need more capacity to cover that demand, the volume. we are going to have that level. And in the next year, we're going to have more numbers in our annual report. But that is pretty much in line the report that we already have and in line with the new capacity that we need with the level of volumes that we haven't seen.

Okay. Excellent. So -- It was not clear if we were breaking up, but essentially, it's [ MXN 180 billion ] for this year.

Yes. Yes. So for next year, we will be working a projection that will be published certainly with the annual report because as I mentioned, we approved a lot of projects, not only for being in place this year, but a lot for being operating from next season '22, '23. Nicolás Novoa: In our annual report, we have something around [ 130 ], but...

Could be higher. Nicolás Novoa: Could be higher.

But we don't have the final numbers we are in the budgeting product, okay?

And congratulations for the very strong results.

And that does conclude our question-and-answer session today. I would like to turn the conference back over to Felipe for any additional and/or closing remarks.

Thank you all for attending this conference call. I hope you find it useful. During the third quarter of 2021, CCU delivered another positive quarter, outperforming volumes and financial results versus last year and prepandemic figures. At the same time, we continue recovering our margins in a competitive and inflationary scenario. In the coming quarters, we'll keep executing a strategy with focus on our business scale and profitability, delayed through the implementation of revenue management initiatives and efficiency to face challenging external effects from a higher cost of raw material exchange rates, headwinds and inflation. And also, as I mentioned, we will keep investing in key projects as we did in the recently inaugurated rent plant in Chile and the region especially for capacity. Thank you all for attending this call and have a very good rest of the day. Thank you very much.

Thank you, and that does conclude today's teleconference. We do appreciate your participation. You may now disconnect. RECONNECT