Eve Holding, Inc. (EVEX) Q1 2023 Earnings Report, Transcript and Summary

Good morning, and welcome to the Eve Air Mobility First Quarter 2023 Earnings Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. [Operator Instructions]. As a reminder, today's conference is being recorded. I will now turn the call over to Lucio Aldworth, Head of Investor Relations. Please go ahead, sir.

Thank you, operator. Good morning, everyone. This is Lucio Aldworth, the Director of Investor Relations at Eve. And I wanted to welcome everyone to our first quarter 2023 earnings conference call. I have here with me, Co-CEO, Gerard DeMuro, André Stein as well as our CFO, Eduardo Couto. After their initial remarks, we're going to open the call for questions. We have prepared the deck with a few slides and additional information. This is available at our Investor Relations website at ir.eveairmobility.com. So please feel free to download it. Let me first start by mentioning that this presentation includes forward-looking statements or statements about events or circumstances that have not yet occurred. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends affecting our business and their future financial performance. The forward-looking statements are subject to risks, uncertainties and assumptions, including among other things, general economic, political and business conditions both in Brazil and in our market. The words believe, may, will, estimates, continues, anticipates intends, expects and similar words are intended to identify forward-looking statements. We take no obligation to update publicly or revise any forward-looking statements because of new information, future events or other factors. In light of these risks and uncertainties, the forward-looking statements and circumstances discussed in this presentation might not occur. Our actual results could differ substantially from those anticipated in our forward-looking statements. With that, I will now turn the presentation over to Jerry. Jerry?

Thanks, Lucio. Good morning and thank you to those joining in the call today. Today is actually a special day for us. It's the first anniversary of our listing on the New York Stock Exchange. We've come a long way in the past year and are progressing well with our business plan, but we know there's quite a bit more to do. And I'm certain we have the right group of people to achieve our goals and become a major player in the UAM market. Over the last quarter, we've made significant progress on the development of our aircraft as well as in other areas of our business plan related to the UAM ecosystem. As you can see on Slide 2 here, we advanced to the next step in the certification process by proposing our basis of certification to ANAC and we expect approval by the end of the year. We progressed negotiations with our suppliers on both technical and commercial terms and our expectation is to close with suppliers of critical subsystems by the end of this quarter. We continued the extensive testing program with wind tunnel tests of different configurations and components. And in our design, we are now incorporating a best-in-class baggage compartment that Stein will talk a bit more about a little later as well as how user feedback is enhancing and influencing our design. Moving to Slide 3. This illustrates our progress on the technical aspects of the program. I mentioned our wind tunnel testing, which was a three week long exercise at RUAG in Switzerland. We are also testing different motor and propeller configurations through dedicated rigs that allow us to test under different load and weather conditions. Interestingly, we have developed a truck mounted rig to validate our modeling of rotor performance during transition and forward flight. In addition, we're also employing a series of additional rigs for battery and motor as well as thermal management tests all of these will permit extensive independent testing of discrete subsystems, and this is an important aspect of our flexible approach which allows us to test systems separately and incorporate refinements into the design once we have reached a target solution. In essence, it allows for quick and efficient product development. In short, we continue to mature the aircraft within the milestones we established and forecasted earlier this year and Edu will have a little more to say on the topic later. Now I would like to ask Stein to talk about several features of our aircraft that we're very excited about. André Duarte Stein: Thanks, Jerry. We are very proud about our focus on user experience. And the result of that is to have been shortlisted for the Crystal Cabin Award this year. Being the shortlist for such prestigious award, it's a major achievement in itself and reflects all the hard work from our user experience and design teams and it's a continuous effort. We had many events and conversations with users, customers, and partners to have a more human centric, accessible and cost effective cabin, improving at the same time the user experience and economics for the operator. On that note, I'd like to highlight a few points about our cabin. And several of you might have been able to see it for yourselves, either in Melbourne last month at South by Southwest or in the Last Air Show. One of them, it's an extra wide passenger door and specially designed seats for enhanced accessibility in and out of the cabin. We also focus on multiple sensory involvement including different solutions to address different user needs. Besides that, we are using sustainable yet certifiable materials extensively in our cabin like cork, natural wool, and recyclable materials to minimize our impact on environment. As a reminder, sustainability is one of the pillars of our company, and that extends to cabin materials. Not only you will have a zero emission aircraft, but you are minimizing carbon emissions throughout the entire cycle of the aircraft. So our material choices are critical. Last, but not least, we have the best-in-class baggage capacity. Our eVTOL can fit one carry on suitcase per passenger and you can even fit larger checking luggage or even a wheelchair. We believe this adds to our passenger experience and accessibility drivers, provide capacity for ancillary revenue, as operators can charge for additional baggage, items or cargo and strengthen our offer, particular for the airport shuttle market. On to Slide 5 now. We also hosted our infrastructure summit in our Melbourne offices in April with 25 partners from operators to infrastructure and technology providers to seat representatives. This was one of the many events we sponsored throughout the last few years to integrate partners in the entire Urban Air Mobility ecosystem and help develop and scale its many components. We had four tracks of that event, sound implications for community, energy, ground service and passenger flow for a seamless experience. This type of event helped us and our partners diagnose potential pain points and yields findings for us to come up with solutions. In this experience specifically among other discussions with simulated passenger flow from boarding to the boarding using our cabin mock up. This gave participants a glimpse of what is necessary to its passenger flow and improved the overall experience. This is unique to Eve, as we do believe that beyond developing manufacturing our aircraft, it is necessary to look at all pieces in the entire ecosystem and the engagement partnership co-created. In that sense, it is uniquely positioned in the Urban Air Mobility market. Now moving to Slide 6. I'd like to mention that right after our infrastructure summit, we also hosted an Investor Day in our Melbourne offices and Florida. We hosted around 50 participants from partners to analysts and investors. We had a full afternoon of presentations by our team leaders. These are the people in charge of every aspect of the development of our program, design, engineering, and Urban Air Traffic Management, business development and customer experience. They offer some insights in their specific areas. We also opened in our U.S. offices that event. At the end of the day, we unveiled our cabin mock up should investment community over a more informal setting with our entire team. Slide 7 shows that you currently have what we believe to be the largest and most diversified backlog by number of customers and regions in the industry today. In total, we have announced LOIs for 2,770 aircraft from 26 different customers spread over to our countries and different business from main lines to regional airlines to helicopter operators, ride sharing platforms, and leasing companies. We also have LOIs to offer our Urban Air Traffic Management System in eight different markets. We believe this reflects the state of the art value proposition we bring to our partners and their clients. And there is more to come on that front. We believe that this pipeline offers strong term revenue visibility and will help Eve to smooth cash flow consumption in the years to come as we start to convert existing letters of intention into firm orders and collect pre-delivery payments known as PDPs. Beyond that, we are developing a strong network of partners in areas such as infrastructure and energy to address one of the largest challenge ahead of Urban Air Mobility, which is to create a whole new ecosystem besides simply developing our aircraft. Now, I'd like to invite Edu to talk about our financials and next milestones.

Thank you, Stein. Now moving to Slide 8, Eve is a pre operational company and our financial results for now reflect mostly the costs associated with the development of our EBITDA program. I would like to start with the income statement highlights. We invested almost $22 million during the first quarter 2023 in our program development versus $9 million a year ago. The majority was invested to develop our eVTOL and a portion for our service and support solutions and the development of our Urban Air Traffic Management System. In addition to the development expenses, we also deployed $6 million in SG&A during the quarter versus $1 million last year. Keep in mind that the [indiscernible] dedicated to the eVTOL development have been growing as the program evolves. Eve also reported around $4 million in financial revenues during the first quarter, mostly due to the return of our cash investments. We have a very conservative financial policy keeping our money vested in short term deposits with big banks. With that, we reported a net loss of $26 million in the first quarter of 2023. Now moving to cash flow, our operations consumed $20 million in the quarter driven by higher R&D expenses and an increase in direct indirect headcount to our master service agreement with Embraer. We had a positive impact on our cash flow coming from accounts payable that increased $6 million during the quarter. Most of this is related to the service agreement with Embraer which is typically paid after 45 days of service being rendered. With that, we ended the first quarter with around $295 million in cash but when we consider the standby credit line from the Brazilian development bank of almost $100 million that will start to access this year. Our total liquidity exceeds $390 million and it's enough to fund our operations into 2025. Finally, Slide 9 summarizes our milestones for 2023. And I wanted to reaffirm our commitments to this year's goals. We plan on defining the primary suppliers of some of the most critical components like motors, batteries and propellers. Once we define these suppliers, in detail of the specifications of each component like weight, power, size, required subsystems, we can freeze the design details. We also will start building our first full scale prototype, which we plan to start testing next year. We also plan on launching a trial software on our Urban Air Traffic Management System by the end of the year and we estimate a total cash consumption in 2023 between $130 million and $150 million. With that, we conclude our remarks and I would like to open the call for questions. Operator?

Thank you. [Operator Instructions]. The first question comes from Savi Syth of Raymond James. Please go ahead.

Hey. Good morning, everyone. As you kind of work through the supplier selection here, I was wondering if you're able to share any kind of early indications on how some of these agreements might be structured in terms of kind of guaranteed supply or escalators? Or just kind of any early indications as you've had these conversations?

Good morning, Savi. And thanks for joining the call. Good question. As we mentioned, we're working through both the technical aspects obviously as we look to refine the final design of the aircraft as well as the terms and conditions and all of the top aspects you mentioned are relevant, right? And it really depends on the particular product offering combined with how unique that offering is for our application. If you look on the spectrum of things, motors will be very unique and require quite a bit of development to evolve electric motors for aviation applications versus something maybe a little more mature on the spectrum, which would be avionics. So each of those conditions kind of varies depending on the product offering. Stein, do you want to add anything to that? André Duarte Stein: Not much. I think that's the point. As you said, Savi, we are in the final stage, so much you can actually disclose at this point. But I think we’re on a good track. And as Jerry said, there are different challenge throughout the selection process. And as we've learning in further programs, we go by the big blocks first and the primary suppliers first, the ones that really move the needle. And you move along throughout the year with the whole selection process.

That that makes sense and helpful. If I might along those lines, just any kind of early thoughts on how many of the full scale prototypes you plan on building in 2023 and 2024. And just curious, I'm guessing there's going to be some nonrecurring engineering costs related to that. I'm guessing that's probably picks up in the second half and then kind of maybe build into 2024, but any color on that really appreciate it.

Yes, Savi. I'll turn it over to Stein, but you're exactly right. Our cash consumption on the non-recurring side will increase as we go through the year. And it's not just for the development of the full scale prototypes or the build of those, it also will have to do with really launching now with the supplier side, both of those things will accelerate. Stein, you want to talk a little bit about plans for the prototype? André Duarte Stein: Yeah. As Jerry said, it increased. That actually is the very reason why we focus on the building blocks and really define and mature the solution overall engineering project before moving to full scale prototypes. So we don't go back this -- the further we go down the program, more expensive it becomes not only because of the prototypes, but the amount of labor becomes more intensive as we move along the project. So we are planning like a handful of prototypes throughout the development as we've done with other programs. That means that we expect to increase the expanding layers to come, but within our business plan. So far, we have been able to keep a good track of expanding the development. And we do plan to increase that falling on the maturing of the project.

Yeah. Just to add one point here in time, its Edu here, Savi. I think that’s already reflected in our projections for the year, right? We burn $20 million in the first quarter. And if you look to full year expect the $130 million to $150 million. So there will be a pickup in our expenses throughout the year and part of that comes from this no returns as well.

Makes sense. Alright. Thank you.

Thank you. The next question comes from Cai von Rumohr of Cowen. Please go ahead.

Good morning and excuse me for the cold I've got. So, Jerry, as you know, Billy Nolan of the FAA is about to retire and sometimes it takes a while to get another administrator into the seat. And while you're basically going to certify first with ANAC, what impact do you think that might have in terms of coordination with the FAA?

So the Biden administration has already floated some names as potential replacements. We haven't seen any indication at the level that we're working with FAA through the bilateral agreement with ANAC. We haven't seen any indication that they're going slow the emphasis on moving forward with eVTOL certification. So, government organizations or government organizations and the tops, the administration nominees change from time to time, that's kind of routine. But the working population basically stays in place and continues to do the work that that we ask them to do as civil servants. So I think that case will be the same here. And in terms of the FAA's stated objective to move forward with eVTOL certification as a priority. We haven't seen any change yet, but stay tuned if it will affect all of us equally. Us, maybe a little bit less as you mentioned because we're going through ANAC, but we certainly do hope to continue the dialogue with FAA and do the concurrent certification process. Stein, in the detailed discussions, have we seen any change at all? I'm not aware of any. André Duarte Stein: No, not really. I think the concept and the push award advancing their mobility remains there. We through Embraer have a long standing relation with FAA that goes beyond particular demonstrations. So, I don't foresee any particular change. But you are right when you said that any small bump because we need to realign with [Fin FAA] (ph) affects us a bit less as our primary certification organization, [ZNAC] (ph).

Got it. And, excuse me, last one, what still has to be defined in terms of operating requirements? I know that the FAA basically is I think it's getting closer in terms of what they're going to require for type cert. But what for operating what key issues that you think they still have to define to kind of get the operating requirements set.

You are absolutely correct on that assumption. It's something that we’ve been worked very closely as well with both operators and regulatory authorities. As we come from -- what was the experience of certifying airplanes for the highest standards of operations with not only part 25 aircraft, but part [2121] (ph) operators. That helps, that helps understanding where it could go. The other aspect that helps is that the focus we have on safety requirements. That applies for operations as much as for the development of the aircraft itself. So we are planning for the highest standards. That definitely helps for future requirements. And we have been following that very closely as our operators.

Thank you. The next question comes from Sheila Kahyaoglu of Jefferies. Please go ahead.

Thank you, and good morning, everyone. So just on the supplier point as you guys are picking your suppliers, can you give us sort of an update on your prototype build later this year? Have there been findings from wind tunnel or truck mount testing, how is the design progressing as we think about first flight in 2024?

Yes, as we've talked about, we are refining the final details of the design based on the technical information from suppliers on size, weight, volume, that sort of thing. So we're making minor refinements there. We expect after this major supplier selections are done to return to the wind tunnel testing again later this year at least once to validate any refinements that we put in there. Stein, you want to talk about the next few steps, few months? André Duarte Stein: Yeah. When you're talking about the next development phase, things like joint definition phase where we go together with select suppliers and really refine -- it's really about refinement. We have been engaged with suppliers for years by now. That's exactly why we believe you are mature enough to select not only the right supplier, but with the right specs. And that helps the next stage. So going back to the whole philosophy of building blocks, we don't expect to find new supplies as you are developing the details and integration between systems mainly, right, things like the motors, or the batteries, with the flight control computer, we have a good understanding already or know where the options are and how we're going to be able to integrate that. So it's really about the tailing and fine tuning the product.

And then how are you working with your suppliers in terms of just the development funding. Is that some of your cash usage and how does those agreements work out?

Well, we as I'm sure -- we cannot disclose the commercial conditions of different suppliers. We are in the final process of selecting suppliers right now. What I can say though is that we've worked on both ways and previous programs of receiving funds from the suppliers as well. So it is something that we are using to so it's in the table as well. It it's all about what is the best combination between funding and recurring costs and that actual costs of the other product later on. So it's a balance. It will be a different balance with different suppliers. But I think it's progressing well at this point.

Okay. Great. Thank you so much.

They are excited, right, about the Urban Air Mobility similar to the OEMs, the suppliers, they also want to be in that business. And they understand that there are some needs that the OEMs have and I think they are going to be willing to put [skin in the game as well] (ph). Okay.

Yes. Just to reinforce that point that Edu makes, you'll note that we have a number technology partners who are already investors in the business and that will color perhaps the contractual arrangements that we have. We have unique products now being added such as the energy source being the battery. That provides an opportunity for different business models as you look forward. So again, Stein has said, each of these is kind of a unique situation, including the aftermarket arrangements which again because we have new products like batteries that may have a second life. Each of these has to be negotiated uniquely and that's taking a little bit of time, and we're investing that with each of the major suppliers.

Great. Thank you, guys.

Yeah.

Thank you. [Operator Instructions]. Our next question comes from Andres Sheppard of Cantor Fitzgerald. Please go ahead.

Hey, good morning, everyone. Congratulations on the quarter, and thanks for taking our question. A lot of our questions have been answered, but maybe a quick question on the backlog. I recall from the cabin mock up event that a lot of the emphasis this year was going to be placed on converting that order pipeline of the 2,770 LOIs into firm orders. So I'm just wondering maybe you can comment on that? Any progress there? When do you anticipate maybe making some announcements there? Just wanted to maybe better understand what that time line might look like. Thank you.

Sure, Andres. Stein has talked about this at some length in various forms in our approach. The short answer is, I wouldn't expect any announcement in the near-term because we're working with our partners, including operators in some cases, ride share providers looking at the optimum locations and a holistic plan for launch before we announce the initial conversions. Stein you want to talk about that team process? André Duarte Stein: Sure. So the whole focus right now, it's moved beyond any hype and really nailed down where the cities will be, where the operators want to start, bring in the partners, events like this infrastructure summit that you just came out of last month, it's exactly about that. What the network that makes sense for is the [all in] (ph) destination from passengers even, so we can build up the network and understand the number of aircraft of eVTOL that are necessary to comply with network. So we can plan that, align that with our industrialization strategy as well so we can assure that you have slots with this certification strategy, what goes after a non-GAAP, what's the sequence, where you're going to be deploying the aircraft. So we have been through this process since the beginning of the year. And to your point, there are quite a bit of progress. We don't expect an announcement of converting that necessarily soon exactly because we are doing the aircraft development actually, we're going to mature the decision we want to work together to figure out even the support we need to starting the plan for investment and in support where you can leverage Embraer infrastructure as well. And put all of that together. So that's the development that's happening this year and quite a bit of progress. We do have good visibility on quite a few potential on cities of the respective network, respective combination of potential partners in terms infrastructure, energy and so on and also what the solution for service and support might be for that particular location.

Got it. Thanks, Jerry, and André. Thanks so much. Maybe one last question for Edu. I know this was covered previously, but just help me better understand. So the cash spent for the quarter was below $20 million. And you're reaffirming a $130 million to $150 million, so just again, sorry if I know this was covered before, but just help me to better understand that higher cash spend in the later quarters, what is the primary reason for that? Thanks.

Yes. As we're discussing right, Andres. So we continue to ramp up our engagement. We are concluding now the supply selection. On the second half, we're going to start the works related to be a symbol of the first prototype. So the level of activity will continue to go up throughout the year. In the first quarter, we consumed $20 million a little bit less than $20 million, but definitely even if you look some of the accrued expenses, if you look the master service agreement we have in Embraer now, we're going to have a $60 million to pay now in the mid of May. So there will be higher payments in the upcoming quarters. And that's the reason we're anticipating this $20 million which would annualize $80 million ready to grow throughout the year and be between $130 million and $150 million.

Got it. Okay. Thanks very much everyone. Congrats again on the quarter and I'll pass it on. Thank you.

Thank you. [Operator Instructions] The next question is a follow-up from Savi Syth of Raymond James. Please go ahead.

Hey, thanks for the follow-up. Just actually two. First, just following up on Andres question, I realized that you're going to -- have good ideas on kind of partners and needs and things like that. When do you think some of those would be kind of formalized and maybe announced kind of in conjunction with your certification. Is that more like a second half 2024 type timing or just curious as to when some of those get more finalized. I'm guessing you had to wait till some of your specs are finalized with the prototype.

Yes. Savi, good question. We've said all along this year that the first tranche major supplier. So if you recall that's propellers, electric motors, both the rotor and the pusher, pushers and the battery really the energy solution, we consider them G0. That should be announced at the end of this quarter right behind that, you'll have the flight control computer. Stein will help me out here, avionics, etcetera, which will follow shortly thereafter So we really expect here within the next 30 to 45 days to nail down most of those and we'll be prepared to announce who they are, Stein, anything you want to add to that? André Duarte Stein: Yes. It's pretty much the vast majority, the main ones we are getting to the final stage of the selection process, like as Jerry said, batteries and so on. But we do expect pretty much everything should be select throughout this year for next year, just some smaller items, things like interiors as well, cabins, airframes and so on. So we have the vast majority of our aircraft covered and selected this year.

And sadly again getting back to Andres question in yours earlier, once we get those selections done and we launch into what Stein talked about this final joint development working out the systems of systems issues. That's why we really anticipate along with the accrued expenses and the prototypes and the supplier costs, that's why we expect the expenditures to ramp up as we go through the last two quarters of this year.

Makes sense. Yeah. That was actually super helpful answer. I was curious more on the first cities and the launch partners when it is, this is super helpful as well.

Okay. No, these I think as I said, we are in good shape. We do have a few cities that are likely to be the early ones. And when I say that, it because both the operator by the end of the day, we are not the operator. So it is our customers. It's up to our customers to select in which market they will start but we are able to bring together the customer, the community representatives of the city, energy providers and infrastructure providers that we will be looking at the verticals, for example, to the same discussion. And we do have a few series in the pipeline. Stay tuned that we will probably will be able to disclose before the final agreement with customers.

Okay. Interesting. And then just one last question, I was curious regarding the Urban ATM solution. The evolution of kind of FA's initial blueprint for [air taxi] (ph) operations. And how does that compare to your expectations on the kind of the timing and need for that Urban ATM kind solution that you're providing?

I think it's pretty inline. We're not talking about the overnight traffic management software, it applies for both the navigation service providers, the PSUs, but also the [red boards] (ph), the operators. So all of them have applications. Some of them need to be certified. Some of them they are more optimization software solutions really that do not require certification necessarily. So that ones we do expect to have earlier on, one of the things we mentioned that we will have some deployment this year. Right? That in terms of trials, we are in the second half of this year. We're going to apply and have trials with parts of the software that will be in conditions for that already. We've done that last year in Chicago as well, had trials there, used at our Urban traffic management software too for trials and so on. So some of the blocks, the building blocks and the functionalities of the software might come even before what's going to be a final certified solution. But to your point, yeah, we are not seeing anything different either on that side. There was a question -- early question on operations. Same operations, actually FAA is supposed to issue the startup, the conditions end of this summer just to clarify a bit more on my last comment. They have already published the conops last week. So far, it has been in line with the discussions we had before. That's not by coincidence. It's exactly this early engagement process that we keep track of everything that's going, we keep discussing. So when it comes, it doesn't come as a surprise.

Makes sense. Thank you very much.

Thank you. The next question comes from the line of [Marcelo Mata] (ph) of JPMorgan. Please go ahead.

Hi, everyone. Thank you very much for taking my question. A couple of follow ups in a sense, I mean, first if there is anything that you guys would like to comment about sales campaign. I mean, I know that the focus is more on getting the prototype open running, select the supplies, but just wondering if there is a possibility of seeing new orders or new partners maybe on the supply and selection that will come up with to be added to the backlog. And the second question is regarding liquidity. I mean, as I do mention in all the company, you have very comfortable position until 2025, there is [BNBS] (ph) standby line, but just wondering if you guys have been looking for maybe another sources of cheap funding, funds related to renewables to [indiscernible]. So if we could expect you guys continue to add more standby lines just to take advantage of the ramp up of the company. Thank you.

On the first one, let me get the first one and then pass to Jerry and Edu. The short answer is yes, we even though the big focus it is on getting a backlog we have and really streamlined operation, how it would be and so on. We might expect to see a few more orders that are strategic customers that we are working throughout this year. We don't expect but a lot of focus on just pure increase in the backlog, so it's more about strategic orders, strategic partners that can come along. Edu you want to? Yes, go ahead. André Duarte Stein: Yeah. With regard to funding, as we've talked about before, and Edu you can talk in detail. This year, we put ourselves in a very comfortable position. We can be as you suggest opportunistic and frankly, if you have a source of cheap funding as you're suggesting, we're certainly always open to brilliant ideas there. But our plan really is to consolidate where we're going with launch cities and launch customers and examine the pre delivery payments that we talked about before PDPs and looking at the timing and the value of that cash flow, which can be fairly substantial. And when we get a good handle on that after the end of this year, we have a number of very significant options open to us with a pretty clean balance sheet and the ability with a $2 billion market cap to also leverage the capital markets if we'd like to. So Edu, you want to talk about that a little bit?

Just to add, I think Jerry. The short term focus is really the standby facility with the [Brazil Development Bank], we still need to open. To access that, we have $100 million there available for us. We are working to make sure we start to withdraw this money now in the beginning of the second half. So the big focus is to make sure we access the Brazilian Development Bank money that we already have available.

No. Perfect. Super clear. Thank you very much.

Thank you. Our next question comes from Marvin Fong of BTIG. Please go ahead.

Thank you. All of my questions were answered, actually. Thank you.

Thanks, Marvin.

Thank you. That was an end of our questions. I'll turn the callback over to our speakers for any closing remarks.

All right. Well, thank you all for attending. And as always, you can reach out to Lucio Aldworth, he'll be available for any follow-up questions you may have or any detailed information you may require. And we look forward to talking to you again in the not too distant future.

Thank you. This does conclude the conference. André Duarte Stein: That's alright. Thank you. Just to say goodbye then. But thanks for joining us today.

Thank you. This does conclude the conference for today. We thank you for your participation and ask that you please disconnect your lines. Thank you, and have a good day.