Companhia Brasileira de Distribuicao SA (CBD) 2010 Q4 法說會逐字稿

Good morning and thank you for standing by. Welcome to Grupo Pao de Acucar's conference call to discuss the results of the fourth quarter of 2010. This event is also being broadcasted via webcast and can be accessed at www.grupopaodeacucar.com.br/ir/gpa and www.globex.com.br/ir where you will find the respective presentation. The slide selection will be managed by you. There will be a replay facility for this call on the website.

We inform you that the Company's press releases are also available at their IR websites. This event is being recorded and all participants will be in listen-only mode during the Company's presentation. After GPA's remarks, there will be a question-and-answer session when further instructions will be given. (Operator Instructions)

Before proceeding, let me mention that forward-looking statements are being made under the Safe Harbor of the Securities Litigation Reform Act of 1996. Forward-looking statements are based on the beliefs and assumptions of GPA's management and also information currently available to the Company. They involve risks, uncertainties and assumptions because they relate to future events and therefore they depend on circumstances that may or may not occur. Investors should understand that general economic conditions, industry conditions, and other operating factors could also affect the future results of GPA and could cause results to differ materially from those expressed in such forward-looking statements.

Now I would like to give the floor to Mr. Vitor Faga, IRO. Mr. Faga, you have the floor.

Good morning. Once again we are with you in order to tell you about our earnings results and we are going to talk about the fourth quarter of 2010 and the consolidated year of 2010. For the first time ever, we are reporting within the result the results of Nova Casas Bahia as a consequence of the association signed with this company last year.

And I would like to thank you very much for participating in this call. With us, we have Mr. Abilio Diniz, Chairman of the Board of Grupo Pao de Acucar; and Eneas Pestana, CEO of Pao de Acucar Group; Raphael Klein, CEO of Globex; Hugo Bethlem, Vice President of Grupo Pao de Acucar besides other VPs and officers of the Group.

Now I would like to give the floor to Abilio Diniz for the initial remarks, opening remarks.

Good morning. We will start our discussion with the market, the way I usually do, telling you about my view as the Chairman of the Board of Grupo Pao de Acucar and once again telling you that I'm extremely pleased not only with the results but also with everything that the Company is doing. This good moment continues and this is not by chance. It goes on because we have a great team. We have an efficient management and we are getting results which go beyond what would be expected in a conservative manner.

This is a moment when the major players in the world report negative results and they report problems and the decrease in their sales and many difficulties in their countries and including Brazil. And right now we are reporting the best EBITDA ever in our history as a percentage of our sales and also the best net income presented so far by the Company. Once again this is not by chance. This is due to the wonderful work done by this management with Eneas Pestana as our CEO and all our VPs who are gathered around this table and the whole team of the Company.

We are able to maintain our Company in a road path and all our formats, our banners even the supermarket formats or hypermarket formats that present difficulties in other places in the world, in the United States in the ways more adapted as super centers to the US market, they present difficulties. In all over Europe, there are also stumbling blocks for the players there and we have been able to grow our hypermarkets due to a consistent endeavor and sticking to the guidelines of our strategic planning.

We apologize because we have no sound. Please stand by. Please stand by. There is a problem with the sound, please stand by. Please stand by while we wait for the sound. Please stand by while we resume our connection. Please stand by while we reestablish our connection. Please stand by. You may proceed.

We are going to resume. We had a slight technical problem and -- so we are going to give the floor back to Abilio Diniz and we would like to ask you which was the last thing you heard from Abilio Diniz. We're not quite sure when we were disconnected.

Yes, the first part of Mr. Diniz presentation was aired. We would like to apologize to investors and analysts and Mr. Diniz will take the floor again.

We apologize for this occurrence because we had a problem with the access line. So now we give the floor to our speaker. So Mr. Diniz, you may proceed.

Once again, good morning to all of you and I apologize for the technical problem and I also apologize maybe for repeating and saying things that you might have heard already. But I must make this very clear as the Chairman of the Board for the Company.

And as the representative of shareholders, I am extremely pleased with the moment that we are living right now, a moment that is going on and presenting very good results always growing and this stems from the wonderful work that has been done and efficient management with Eneas as our CEO leading the Company. And this -- and at this moment when the major players in the international market report difficulties in 2010, a drop in sales, drop in net income, drop in their margins, we report exactly the opposite. Never have we reported such good results. Be it EBITDA over net sales or net income, we have a historical record.

Even in the hypermarket format, when there is a bad performance all over the world, we continue to grow with our hypermarket. And it stems from the work already done, or has been done, for many years in our strategic planning because hypermarkets, in order to be successful nowadays, they must be very good and very efficient in non-food as well, besides being very strong in food of course.

Today, it is no longer as it was at the inception of the hypermarkets because they were attracted by food, and only after that, we were able to sell the non-food. And now, hypermarkets no longer have this format. Nowadays, the attraction of non-food has to be the magnet for the clients. You must be very good in each of the departments of the hypermarket, so that the hypermarket may attract consumers. And we are able to do that because we are growing. In 2010, we opened nine new hypermarkets, very successful ones, and we continue on this growth curve with hypermarkets.

This is an extremely healthy moment for the Company, and I always tell people that companies are people processes, processes and people. We believe that we have an outstanding team. And in spite of that, we continue to build our team and we continue to invest in training our people, at the same time we improve our processes consistently. And this work done at the base of the pyramid brings about the good results, good sales, higher EBITDA, higher net income. And for 2011, we have total trust in our results.

I do not share the opinion of those who defend doomsday and say that the massive consumption will plummet because of inflation soaring and interest rates. I believe that the measures that are being taken in terms of the public deficit of the government and also in the management of the problems that lead you to have concerns with the level of inflation, and maybe with a higher interest rate, the problem is being dealt with and I place my total confidence on the government authorities, President Dilma Rousseff, and all those who are responsible for the economy of this country.

And I'm 100% sure that the country will continue to grow, will continue to have a better income distribution with a better outlook for companies and for the country. This beginning of 2011 is also a very good moment. We are going to continue to grow and GPA will continue to be a strong Company, such as it is, and bring in return to its investors.

Now I would like to give the floor to Hugo Bethlem, our VP for Corporate Affairs.

Good morning. Thank you for being with us in this call. And now I would like to give the floor to the CEO of Grupo Pao de Acucar, Eneas Pestana, to make his presentation.

Good morning. Good morning, everybody. Thank you for participating in our call. It is a pleasure to be with you addressing you once again. And I hope you may solve any doubts that you might have, at the same time obtaining relevant information for your investment decisions and also this update about the Grupo Pao de Acucar.

We have lot of things to talk about and I do not want to take more than my share of time. However, I think that the fourth quarter results are very important always because we are closing the year, and in fact, this is the closure of 2010 with the presentation of our earnings, our performance, our growth. And I would like to say a few words more about this year because 2010 started with major challenges to be tackled. They are very well known to all of you.

And the first thing -- and, here, I'm already following the presentation, if you would like to follow the presentation on page number 2 of the slide presentation. So the first challenge that I would like to mention to you, it is not the order of importance, but the first highlight would be the exit of Claudio Galeazzi who made a great job with our team here at Grupo Pao de Acucar.

He stayed with us for two years. And of course, this only increased my share of responsibility and the responsibility of the whole team because we had to show that we had and we have the capacity to lead the Company ahead. And of course, especially to you, who track the Company on a consistent base for performance analysis in order to make your investment decisions, this is a major point.

And this was part of the scenario at the beginning of 2010. And to mention another great challenge, we have the continuity of the Casas Bahia deal and the negotiation dragged along and it lasted practically the whole half of 2010. And of course, this brings about difficulties because we have to keep focus on the company. We have to keep focus on the operation on our business at the same time as we negotiate an association of this magnitude, of this importance, and this is the way it was.

And it was extremely important for us to have this happening in 2010 because we had opportunities with the Klein Family to analyze in-depth each one of the clauses of the contract and a deep analysis of corporate governance for this new company. And with this association, we are talking about the creation of the tenth largest company in this area in the world.

And that places Grupo Pao de Acucar, GPA, as a multi-business Company, and not only multi-region and multi-format. And of course, it deserved our full attention. And at the end of June, we closed this issue, and we have the contract signed on July 1st. And from thereon, we started to work on integration, and we will go into details about that. And Raphael Klein will be talking about that.

And still about the highlights for the year, we had Pontocom, which became the Nova Pontocom, our e-commerce arm, which is controlled by Globex nowadays. And the challenge at the beginning of 2010 was to the conclude our negotiation with our managing partners so that we could have the possibility to create what today is the second largest e-commerce company in the country, a company that is ready to conquer this segment because all the fundamentals are placed at the highest level, be it regarding its management or the technology platform, be it in the better relation between the physical world and the virtual world and the brands that are extremely strong, Extra.com, Pontofrio.com, and especially, Casasbahia.com

Besides our logistics platform, the back office that has a major synergy with the platform of the Grupo Pao de Acucar and also that counts on access to important commercial conditions given the volume that we have with Bahia and with Ponto Frio in whiteline and portable appliances and appliances in general.

So this is a Company that is here to stay, to conquer the market and to be a great hit. We will be talking about this growth as well, but it's important to remind you about the installed capacity that we have in order to seek this market and seek this opportunity in a market that has no limits. This is a market that is in its inception still and has a lot of room to grow. And we -- because of this association and because of the change in our portfolio mix, of course, we had to be able to tackle all that.

And we know that all of you, due to your investment decisions, you needed to know whether this management, whether this organization would be capable to give this huge step, additional step not only being a food company, a company that manages supermarkets and hypermarkets, but also the capacity to be a distribution group with different lines of business and with the relevance that Eletro received in a well-structured manner and an in-depth manner.

We did the review of our management model in maintaining the essence of our management on a matrix base. But in each one of the businesses, we have an owner, we have a president of the business, we have a management that is fully dedicated with corporate governance, but that at the horizontal level takes advantage of the whole platform of the Pao de Acucar Group, be it back office, logistics, IT, treasury, financial capacity.

So this is a model that gives us the opportunity to keep our expertise, to keep our focus without any degree of contamination on each one of the businesses, but without losing sight of the major opportunity that we have to tap into synergies, guaranteeing the policy of the Group, compliance by the Group and all the other opportunities that stem from this fact. So we have been able to do all that.

The new model was implemented as of July and today it is fully consolidated end-to-end. It is fully connected to all the processes, collection and management tools, budget, variable compensation. And variable compensation right now, we reinforce meritocracy in this regard with relevant bonuses to our officers, our executives but totally focused on the delivery of return on capital investment, our OIC.

And so we do have a consistent model, a consistent model that is lived everyday, not because we are preaching the importance of the model everyday, but because of its consistency, because of its connection with everything that we live in our management model which is based on the principles of the Group, the principle of humility, of discipline, of the principle and value of emotional balance that was a big victory of this Group and something that is part of our DNA, something that comes from Abilio Diniz and that was created by Abilio which is determination and results which is what makes this Company different from any other company.

This was done and today it's a great joy for us to tell you this, not only promise you anything, but that this is to deliver a promise because it's already bearing fruit. And it has already been fully implemented still along these lines during the second quarter. Of course, with the challenge of the first quarter of renegotiation and a review of our management model, all that brought some stumbling blocks on our path.

And we saw a deceleration of our turnaround of Ponto Frio that was very strong at the end of 2009. And we also saw that this slowdown was really necessary because we were about to conclude our negotiation with Bahia and this changed the integration plans and the synergies because of this new context in which Casas Bahia would be participating in this integration.

So we had a necessary slowdown and there were no negatives -- there was no negative impact because we resumed this in the second half of the year. But there were other effects of the first half in the second quarter. For instance, we did not achieve good results. We accelerated some projects which caused an increase in our expenses in the second quarter. We reacted very quickly and very consistently, and already in the third quarter, we had already reversed this. And we further intensified this as of the third quarter.

So we -- efficiency gains, expenses control, we did again our ZBB between May and June -- May and July. It was implemented with a budget review as of July. And all these measures led us to recover our good results as of the third quarter, and we were able to close the third and the fourth quarters with very good earnings. And this allowed us to conclude the delivery of what we had budgeted and what we had offered you as a guidance since the beginning of the year.

It was a tough year. We did very hard work and we had many challenges. But this team has the competence and has the capacity and also the results to overcome all challenges. And this is very evident and I'm proud to say to you this as the CEO of this Company.

I think it would be worthwhile to mention acquisitions as well. At the end of the year, we concluded the acquisition of the remaining part of the same -- the part that was still in the hands of the Sendas family, and which is very good.

We will be talking about this acquisition, but this was done all by the book. And because of that, we have a multiple which is much lower than the multiple traded by CBD. And this is something that started way back then, many years ago. And this could have brought a concern regarding some kind of dispute that could bring about problems or even losses and this -- we have already turned this page. And the contract includes a renegotiation of rents that allows us to keep the current level of rent expenses for the Company for at least the next 10 years, which is very important and very good for us.

So it was a happy ending, both for the Sendas family and for us, and the payment will be made over the next six years. So there will be no relevant impact on our capital structure and on our indebtedness and it solves an important issue that had to be solved.

And Assai also with payment at the end of this year, then we conclude this negotiation. And I conclude this retrospective with the highlights for the period. And once again, I would like to reiterate that the team that we have here is differentiated not only by their competence but by their resolve and the heart that they put in everything that they do and the passion that they have for this Company.

Now talking about future challenges, of course, we will have other meetings with you in the future in order to establish our guidances but as Abilio said, here at GPA, we place our complete confidence on the country and if you consider the very low unemployment levels and the better income distribution that we had in the last few years, future events, be it the World Cup or the Olympics, that will surely bring a boost to the consumer market and the macro-economic fundamentals of the country continue to be very sound and the acceleration of the real estate market and the ascension of the middle class, all this has a direct impact on the consumer market.

And we should also mention the reduction of informality in our labor market and the excellent work done by this -- the agencies both federal and the state agencies regarding the decrease of informality in the labor market. And because of all these factors, we are completely sure that we will be able to grow, continue to grow and seeking even better results for the future.

If it were not for all these fundamental issues, we still have the issue of the relative position, and the Company enjoys an excellent moment right now because we have a very strong capital structure, a very sound one with IT and logistics platforms that are very well streamlined, lots of energy in its management and segments as the Pontocom, Eletro together with food.

And because of all that, we can look for better, even better results in the future. So this is what I wanted to share with you. I love this Company, I'm passionate about this Company, this -- a major part of my asset is here and I have lots of energy and lots of drive to face all the challenges in the future.

I would like to give the floor to Hugo Bethlem to continue the presentation.

Good morning once again. So now we go to slide number 5. We start to talk about our figures. We closed 2010 with BRL36.1 billion in gross sales and on an annualized basis with Nova Casas Bahia, it would be BRL44 billion.

The relevance of this date is same-store growth in 12.1%. In the fourth quarter, our sales were BRL12.6 billion, same-store 11.5%.

Consolidation of Nova Casas Bahia occurred in the last two months and they are not included in the same-store data. Gross margin the fourth quarter, 25.4%, GPA Food 26% and Globex, already with Nova Casas Bahia, 24.6% (sic - see Presentation). And it is important to say that with lots of synergy to be tapped into in 2010. The total of the gross margin was 24.5%

On slide number 6, we see that EBITDA reaches the historical level of BRL2.1 billion. In the fourth quarter of 2010, BRL770.3 million with a growth of 54.9% with a 7% consolidated margin.

And if we were to analyze specifically GPA Food, BRL567 million, 8.7%. This is the highest margin since the Company went public in 1995. And we should also mention the Globex margin BRL202 million with 4.5% which is already the floor of our guidance for 2011 which was given in our Investor Day of 2010 which makes us very happy with this delivery higher than the average for 2011.

Net income, once again reinforcing the highest in our whole history with a fourth quarter BRL447 million, 4% margin. In 2010, BRL722.4 million, 2.3% margin, and also the highest dividend payout, BRL171.6 million or BRL0.69 per share, preferred share.

On page number 7, we see that we have exceeded and we have reached all the guidances that we submitted to the market in May 2010 during our Investor's Day. Be it in sales, be it in real growth higher than inflation, be it in EBITDA, be it in CapEx, where we have the ceiling of our investments and we reached this and made BRL1.2 billion investments, be it in our debt-over-EBITDA ratio below 1.

Now, let's get into the more specific results for each one of our businesses. When we consider here on page number 8 to understand what we are talking about. The Grupo Par de Acucar is a combination of GPA Food which encompasses the banners of supermarket, cash-and-carry, hypermarkets, proximity, and fuel stations and drug stores.

Here Globex, Ponto Frio, PontoCom, Extra.com. Now, on page number 9 talking more specifically about GPA [elementar]. On page number 10, gross sales for the fourth quarter were BRL7.3 billion with a 7.9% growth which represented a growth in the quarter of 7.12% same-store sales -- 7.2%.

In the year, we grew BRL26.1 billion, a 12.0% growth which represented in same-store sales a very consistent growth by 9.5% and this represents, as Abilio mentioned himself, a growth higher than the second player which is [Cajas Food] for the 10th consecutive quarter with twice their same-store growth.

The highlights for same-stores in the fourth quarter was the Assai banner higher than 15% and the conversions, the various set of conversions to Extra Super higher than 18.5% and in the category Food 8.4% with specific focus on beverages and perishables.

On page number 11, gross income grows by 8.3% in the fourth quarter in GPA elementar, BRL1.7 billion which shows a very important consistency in spite of the fact that it seems to be smooth growth of 25.9% at the fourth quarter of 2009 to 26% in the fourth quarter of 2010. We see that cash-and-carry on Assai participate with 14% in 2010 and the participation was 10% in 2009, so a 40% growth in its share.

Also coming to new and unknown markets where you need to be very aggressive in order to become well-known in these markets. On the other hand when we see the extremely significant growth of 0.7 percentage points in food retail, it's very consistent.

And where do they come from? First, from a commercial team which is very skilled and which always aims at having a win-win situation. And (inaudible) where 60% of the sales are optimized and the work done by the government to reduce the informal labor market and our capacity to have complementary store formats that tap into the market and tap into the reduction of informality in a much better manner than our competitors.

Operating expenses BRL1.1 billion, 17.3% of the net sales and a dilution, therefore, in 2010 18%, which seems to be a slight dilution in spite of -- vis-a-vis 18.1% in 2009.

It is important to say that it was because of an increase in IT to support the expansion of our systems and also the important pre-operating expenses for 47 new stores and the conversion of 93 stores of the Sendas and CompreBen banners to Extra or to Assai.

And it is important to know that right at the beginning we had here expenses as a result in ramp-up of sales coming over time. On the other hand, very important initiatives already mentioned by Eneas were the resumption of our work teams and the matrix of management of expenses. I am in charge of the personnel expense of the Group in this matrix.

On slide number 13, the EBITDA margin reaches the historic level of 8.7% in the fourth quarter, being the highest ever since we went public in 1995 and even more so it is relevant to say that the EBITDA margin of the food retail reaches the world benchmark of 9.6%. [Omex] has 9.8%, but they have more than 55% market share, and in Brazil, we have around 10%. Assai, 40% higher share and generates 3.1% margin.

It is important to say that in the stores that are more mature more than three years of existence, the EBITDA is already higher than 5.3%. When we check the financial earnings, it is also important to analyze that in this case every expansion cost and mergers and acquisitions and associations have an impact on GPA food which is also the controlling company of the Group.

Therefore, it looks very heavy, but actually it isn't. The acquisition of Ponto Frio and the association with Casas Bahia doubled the Company size over the last year and that was a very intelligent and leverage strategy that will generate very good results as of 2011.

As for financial expenses, despite the increase in SELIC rate and receivables discount with a slight increase of 0.5 over the quarter, we increased from 1.8% to 2% on sales over sales.

Now moving to slide 15, you will have all the investments made, BRL1.200 billion broken down BRL1.151 billion, a year of the major decisions, a year in which we focused on the association with Casas Bahia and also the conversion of 93 CompreBem and Sendas stores and despite all that we expansion even further something like 20 or something equivalent to 20 soccer fields on our selling area.

Now let us show our business for Globex. But now I'd like to give the floor to Raphael Klein, President, CEO of Globex.

On behalf of Globex and the Klein family, just a couple of words. We are very excited right now. We're very happy and increasingly more united to this main group.

In 2010, that was a year when we started to put together negotiations with our suppliers. Always respecting the APRO, we also started the operating command of approximately 1,000 stores and also training at Ponto Frio stores.

We always try to keep our focus on operations focusing on our customers. And our DNA for service is becoming increasingly healthier. And with this integration both for operations and marketing, we'll have a more solid brand for Casas Bahia and we're very confident that Ponto Frio is in the right direction.

In order to do that, we created the PMO which is a group of people divided into operations and strategy. We hired what we believe to be the best consulting companies to support us. Company in helping us with logistics, Price is also supporting us at front and back office with our financial area.

Accenture is supporting us. So we can revisit our store model both for Bahia and Ponto Frio and CSC which is a shared service center with the group Galeazzi and specific projects such as Bartira Furniture Company.

2010 was unprecedented for Ponto Frio and Casas Bahia. We closed the year very successfully with an association with Pao de Acucar. As Eneas stated it, we created the tenth largest company for Eletro electronics in the world and we also had major achievements.

We converted 44 Extra Ponto Frio stores at a record time. We also captured our FIDC BRL1.4 billon with AAA rating and a highlight to us is that we also had our kickoff for our credit model and the valuation of our loan model.

Over the last Board Meeting, we created a committee and four Board Members will be actually involved to discuss our loan model to see the best model for this big Globex Company.

Board Member Gustavo Franco, member Jose Luiz Majolo, Eneas Pestana and Antonio Ramatis are actually being engaged and will be engaged in this new committee which also counts on the support of in order to make sure our understanding on a short-, mid- and long-term basis be aligned both with the management decisions and also with our shareholders.

In short, we believe that was a good year. As I said before, we're excited, happy, and increasingly more united for 2011. We also expect to have a very good disciplined year and we also have to be cautious. But we are very confident for this year, for 2010.

Now I'd like to give the floor to Hugo to get into more details and we can discuss that even further.

It's important to follow on page 19, a couple of words on consolidated results for Globex. The chart that was introduced to Globex Board of Directors shows the breakdown of results.

Globex puts together Nova Pontocom and Nova Casas Bahia results and also the companies that are at the bottom and also corresponding months. Now on the next page, on page 20, we will see that we're speaking of gross sales, BRL2.3 billion in the fourth quarter, excluding Nova Casas Bahia.

So what we had before which was Ponto Frio and e-commerce which is not the Nova protocol, e-commerce but Ponto Frio Pontocom and Extra Pontocom. In this case, we grew by 46% on the fourth quarter of 2009 to the fourth quarter of 2010.

That's an outstanding growth, excellent results, much higher than the market results. Even though that in the fourth quarter of 2010 we no longer had the excise tax exemption that we had on the same period of 2009 for whiteline and considering that the World Cup had come to an end.

Another highlight has to do with e-commerce that grows over the period gaining more market share, 63% more specifically. Now another highlight for the year is that we gave a guidance in May to achieve in the Electra business without Nova Casas Bahia of BRL7 billion and we did it.

Adding 47% in the year and the same-stores growing by 42%, Globex including consolidated at two months Nova Casas Bahia in 2010 had BRL7 billion in revenues. Now moving to page 21, gross income, therefore, BRL391 million in the fourth quarter, generating a margin of 19% excluding Nova Casas Bahia.

And it shows significant leverage vis-a-vis the fourth quarter of 2009 growing by 116%. Adjusted gross income would be BRL419 million giving margin greater than 20% net of BRL27 million especially related to the tax effect from September 2009 up to March 2010.

Please note that that was the best result ever achieved ever since the acquisition of Ponto Frio, and undoubtedly, it is very significant right in the beginning of the integration process with Nova Casas Bahia to capture this synergy.

On page 22, we can see that 13.9% expense from the fourth quarter, excluding Nova Casas Bahia. This is the best expense. However, we have to be very cautious with this figure.

Once there is a significant dilution considering the integration with Nova Casas Bahia and we have to understand as well that a lot of the synergies have already occurred.

However, some expenses are still being taken by Nova Casas Bahia and what we'll see in the future is adjustment of expenses as of the third -- of the first quarter of 2011.

On page 23, EBITDA, BRL106 million in the fourth quarter and a record margin of 5.2% excluding Nova Casas Bahia. Undoubtedly that's the best margin ever since the acquisition. Please know that there is tremendous leap of minus 2.4% in the fourth quarter of 2009, grows more than 2.5% when we closed the second quarter of 2010. And that's thanks to a series of turnaround actions basically focused on expenses taken by the team that led Ponto Frio. However, from 2.5 positive to 5.2 positive, that's basically thanks to the beginning of the integration with Nova Casas Bahia. So the highlights come mainly from the amazing increase in sales, thanks to assortment adjustments and a new commercial policy adopted at Ponto Frio.

Improved gross margin, also thanks to the integration and undoubtedly continuous management for this expense control. Financial earnings, once again now we're moving into what Abilio mentioned before. That's an absolutely -- well, the market absolutely overreacted. 11.75% is SELIC rate right now and the worst trend or estimate made by the market for the moment for December of 12.80% is lower than the average for the last 12 years of 16.3% for the SELIC rate. And this did not prevent us from selling and growing over the years when it comes to our finance and also our finance sales.

In addition, FIDC obtained AAA as mentioned by Raphael for Ponto Frio. In short, the receivables discount at absolutely controlled rates. Our commitment with the market in order to further reduce the average term of non-interest bearing sales as well as the weight behind our deals without affecting sales, these challenges have been met and keep on being so constantly.

We move from 76% of non-interest bearing sales in Ponto Frio and 56% for Casas Bahia in the third quarter of 2010 to 62% and 52% respectively in the fourth quarter. And currently these shares are lower. That shows that our drop in the third quarter to 4.8% as we had aligned with the market before. Financial expense is BRL105 million, gross rate BRL87 million if we exclude non-recurring effects and a last share of BRL18 million was posted over the third quarter. As a result, receivable discount is 3% of net sales which is already lower than the guidance that we offered for 2011.

Now what about consolidated data? On page 25, we show that Grupo Pao de Acucar is the summation of two areas. From the net income on page 26, our income moved from BRL247 million to BRL447 million in the fourth quarter growing by 81% from a share of 3.3% over net sales up to 4% of net sales. In the fourth quarter of 2010 if we adjust non-recurring effects, then our income was at BRL254 million with a margin of 2.3%. It's important to notice that the adjusted net income for Globex excluding Nova Casas Bahia is already positive at BRL40 million with 2% margin compared to net losses last year of BRL112 million or minus 8% of net sales. And with that, we already delivering value for the Company which will be our conclusion for 2012.

On page 27, net debt evolves positively and we move from the third quarter of BRL1.1 fold to 0.6 fold with 1.2% -- BRL1.2 billion actually. Investment over the fourth quarter was BRL509 million and some initiatives that do not have a direct impact on debt but directly affect the working capital and financial expense have to do with increase share of non-interest bearing or interest bearing sales, lower participation of non-interest bearing and also turnover.

On page 28, very consistent figures, our partnership with FIC. Equity income compared to last year grows by 23% and we acknowledge our share of BRL3 million to BRL11.4 million. Some important figures from FIC. It already has 14% stake in total sales in the Group. And 18% for Extra Hypermarket and 27% at Ponto Frio. And for e-commerce close to 14%, growing -- where one year ago it was lower than 4%. For GPA Food, we already have BRL8 million and for Globex BRL3 million.

FIC in 2010, the main figures are 50% of the customers already contracting insurance, 50% of the limit is already used outside GPA. And as a result, the card become a creditor that is in the client's pocket all the time. And we currently have 7.8 million active customers.

On page 29, we can see significant increase with higher distribution of dividends in our history. BRL171.6 or BRL0.69 of share per preferred nominal share and advance we have BRL0.08 for the quarter and we propose for next year a significant increase of 12.5% for advance at BRL0.09.

Now before we open the floor for the Q-and-A, I'd just like to give special thanks on behalf of Grupo Pao de Acucar in direct and Globex. All our teams for their efforts, thank you so much for the results achieved this year. And from now on we want to come with the same dynamism, sticking to our values of stamina, discipline, balance, humility, emotional balance. Thank you very much. And now we open the floor for the Q-and-A.

Thank you. We're opening now the Q-and-A session. We kindly ask you to ask all your questions at once, and wait for the Company's answer. (Operator Instructions)

Marcel Moraes, Credit Suisse.

Good morning, everyone. Congratulations on the earnings. My first question has to do with synergies. Hugo mentioned that EBITDA margin of Globex operation moving from 2.5 to 5.2 already shows synergies. And if I work on the maths, I come to BRL55 million. I'd like to have a better understanding. How much do you believe has already been absorbed in 2010? Not necessarily in the results, but I was thinking of initiative that might lead you to reach that level. And how much do you think will still be absorbed in 2011? That's my first question. Thank you.

Thank you for your question. As I said before, we are right in the beginning of the synergy capture curve as we showed in our guidance. Our term, well, we have a forecast of at least 18 months down the road and what we have already started with the integration some areas are growing faster than others. For instance, the commercial area. Because it's part of the core business, the daily business, synergies are more solid. However, we still have to work with inventory turnover in order to ensure capture of 100% synergy. We don't have a specific forecast how much is still missing. But we believe that over the first quarter, we're about to have better figures to capture synergies in the commercial area.

I would just like to remind you that the gross margin figure -- I'm sorry, this is Padilha, CFO for Globex. Just to add to Raphael's answer, we showed the guidance in September for the gross margin for this year of 25.50%, slightly higher compared to what we had in the fourth quarter on a consolidated basis, which was 24.50%, excluding non-recurring, 25% in '10.

So we still have a long way to go for gross margin. The model year that we introduced in the same meeting, expected one point higher. So this year it should be greater than 25%, 25.50%, and next year we will keep on growing at 26.50%.

Thank you. My second question has to do with CapEx for 2011. Can you anticipate any figures for Globex -- for the Company as a whole?

Well, this Vitor Faga. We'll be announcing the guidance of the Company, including CapEx and other parameters, during the GPA Day, which is scheduled for May this year. And then we will get into details and break down the investments to be made and also the expectations, vis-a-vis the main parameters for the guidance. Okay.

Thank you. Third question -- my question has to do - well, maybe you can give us an update on partnerships with the bank, the retail bank, and also the financial services at Casas Bahia? Could you give us an update in terms of timing, expectation for these things to happen?

Once again, this is Raphael. We created a committee within the Board specifically focusing, not only on the management's view, but also a more global view for the creation of bank A, B or C. We have partnerships, existing healthy partnerships between Ponto Frio and Itau, and also Casas Bahia with Bradesco. These partnerships are improving on a daily basis, each one for its own formats.

So far, we cannot say when we will have an answer for the financial area or what the new bank will be. But we what we can say for the moment is that, with the implementation of this group of Board Members, that will help us to better align our view on a short-, mid- and long-term basis. So for the moment, I wouldn't like to make any comments or any forecasts.

Thank you.

Felipe Oliveira, JPMorgan.

I have two questions. The first one has to do with GPA elementaro, GPA Foods. Could you please tell me how you see the competition in this area, especially for 2012, when we will see Wal-Mart with a new strategy with the integration here in Brazil, and maybe recovery in the Acucar food operations, and also about the CADE? Could you update us about the approval of the Casas Bahia deal?

I wouldn't like to evaluate the strategy on the part of competitors, namely Wal-Mart. I can tell you how we see the market and what we're doing about it.

We are paying keen attention to all changes in consumer behavior and, of course, the moves by our competitors. Of course, we do know that the two major players in the market have not had a great 2010. We gained share and most from them. And their policy didn't really have very good results. And of course, they're going to change course, and they will try to change this course.

In our view, this just reaffirms how right our strategy has been. And what we're doing, we're reinforcing our strategy. We are not changing anything because we believe that, based on all the data that we have from consumers, from the moves of the competition that we are on the right track.

And for many months we have been gaining share. And right now, we're just fine tuning our strategy, as Abilio said, and he was talking specifically about hypermarkets. We know that this model has been suffering all over the world, and Brazil included, and this is not what is happening to us.

We still believe that there is a growth potential for this model of store, and we're working on that. We're reinforcing what we do, and we're going more in-depth in the strategy of making the hypermarket the best place for consumers to make their purchases in general.

Excellent. Thank you very much. And what about the CADE process, could you update us on that?

About the CADE process, we are working today with three different law firms that are helping us and they're specialized in CADE issues. We also have a consultancy company helping us, and our case is with the [CI]. There were some positive signals during the process, and we have already said that we had authorization about the APRO regarding the change in the banners of (inaudible) to Ponto Frio but also (inaudible) for the closing of (inaudible) stores - a small store concept of Ponto Frio in the state of Bahia.

And it was authorized, and we closed these stores in January. And we received, during this period, the approval for the Casas Bahia (inaudible) process, which was a local chain in Bahia that was -- had been acquired by Casa Bahia and it had been authorized with no restriction whatsoever by CADE.

So these are very positive points, and they show goodwill. And we are following the APRO very strictly, and it was submitted right at the beginning of the process. And today, our view is that CI is already at the final phase of preparation for their opinion, and it will most probably be published in the first or the second half of April. And after that, it is going to be submitted to the CADE, and our expectation is that the decision will be published as of the second half of 2011.

Thank you very much.

Fabio Monteiro, BTG Pactual.

My question is about gross margin for the non-food. It drew my attention you had already communicated that the gross margin of Casas Bahia was higher; it's around 29% whereas, Ponto Frio, all by itself, has a gross margin of 20.4% for the fourth quarter, all by itself.

Can you tell us, individually, which of the weight, if we remove the furniture of Casas Bahia, that may be has a heavier weight and a bigger margin maybe, I believe, what would be the difference or the advantage of Casas Bahia in terms of gross margin vis-a-vis the other products, mainly appliances, electronics in general?

When we talk about margin, it's important to stress a few points. First, margin for Ponto Frio is not exactly the reality of margin that Ponto Frio could have already. So we have to take into account that there was an operation regard assortment that was very significant, and we had to place part of the line outside.

And when we added to Eletro, it goes through a new adaptation of assortment. So we can expect a better margin for Ponto Frio than the one that we had in the last quarter.

The second point is that there is a difference regarding the assortment of products. However, when we talk about the Ponto Frio assortment, we are also adding other products that add more margin. And there is a big difference of Casas Bahia vis-a-vis furniture, portables, importables. We have already intensified for Ponto Frio, bringing it to a level similar to Casas Bahia and in furniture, we still have room to grow, about five points in share, which is the size of -- which has to do with the size of the story, it is what we can add in terms of furniture.

So measuring the difference in margin will be easier in the first quarter of this year and in the second quarter of this year when we will totally remove the effect of the adaptation of lines, and I believe that the end of this story will be between three and four points of difference when we already have a full assortment for the two banners.

Okay, thank you very much. One other question, working capital, we have already seen some signs and what you have been doing in terms of promotions and more installments, and non-interest bearing sales, and part of the competition also following suit, especially in the month before Christmas. But I would like to know which kind of receivables discount you're having in the new Globex and which signs of improvement do you see, and that will be seen as of January and February of 2011, in terms of improvement for your working capital?

This is Roberto once again. I will share this answer with Padilha . All the commercial intelligence led us to tap into an improvement in the non-interest bearing sales, and we saw a significant reduction in the last quarter, and now we see an even better scenario already as you can see, with no sacrifices at all regarding our sales. So this intelligence gives us this result on a daily basis, and gives us an evaluation per product. We can assure you that there is a trend of continuity the downward trend of the non-interest bearing operations, and a decrease also in the average term of payment. So this is our commercial strategy. And it will continue consistently and effectively.

Now, I'm going to give the phone to Padilha, and he will be able to tell you -- well, I would like to add something, what we have been doing has been followed by the competition. We are opinion-makers and our competition saw that it was very healthy for the segment. So they are following us in this move in the implementation of this kind of strategy. So Padilha will be talking about the receivables discount.

Thank you very much for the question. I would like to add Roberto has been doing a great job for the Company. January and February we had the non-interest sales being dropping consistently besides what Herzog has already mentioned in terms of the average term, we have already saved one month in the average term.

And in terms of working capital, we're using our cap that the receivables discount fund allows us, with the AAA since October, since the beginning of the quarter, and the rates have been reduced, from 113 to 107.75, almost exclusively for Globex. And in fact, this level, this rate level ultimately brought about the commercial area of the banks to another level of negotiation.

So Nova Casas Bahia was able to get discount rates close to the level of the FIDC, the receivables discount fund, and I think this is what you were asking. So do you have any other question?

No, just a follow-up. Is there an outlook for the improvement of the average term over this year?

Yes, yes.

How many days?

Receivables from clients, for Ponto Frio in January and February, 8.4 months at average term, and up to December it was around 9.2. So you can see there is a major reduction there, 0.8 in Casas Bahia, 7.8 to 7.1 as well CADE only, almost 60% of our sales. We saw an increase also in these first two months, January and February this year of cash sales. The selling process with the offering of January allowed us to do that.

Just to reinforce on GPA day we also share what happened up to May, and also the effective guidance for the year.

Thank you, thank you Fulcherberguer, Herzog and Padilha.

Thank you, Fabio.

Tobias Stingelin, Santander Bank.

My first question just as a follow-on on finance. If we think about specific costs on financial expenses in Bahia was around 5% of sales and adjusted eliminating recurrent in Ponto Frio was 3.9. Considering the answers that this improvement is already happening, could we assume that Bahia's result was even worse, greater than 5% and is going down, or actually nothing specifically has been made at Bahia and things will change in the future.

I would just like to have a better understanding, how Bahia will converge to figures closer to Globex for the future, that's my first question.

Casas Bahia before the association had a different policy compared to the new company. We believe we'll be successful in bringing the receivables or the cost of receivables discount to similar levels or close to what we have in the guidance. We are confident. We are speaking of 3.5 and 4.5. We believe that in 2011, we'll be within that range. We don't foresee any risks of greater expenses.

So, just to have a better understanding, as I see it, at Globex you are comfortable that you could have lower figures. What about Bahia, 4.5, 5, so for any reason the commercial policy more specifically at Bahia will be different. Is that because you don't have a FIDC or due to a different mix, it won't converge?

It will converge, but I would just like to draw your attention -- well you only have two months for comparison for Bahia. November and December are not good for comparison. We have the higher sales volume, more purchases. So when we think about the early balance -- the early balance sheet in October, that carry effects. So November and December for Bahia are not good on a comparative basis, but we do believe that we can lower over the period, from 2011 on a gradual basis, so we can converge both companies for the guidance previously given to you.

Great. Two additional questions, first question has to do with finance. You made it clear that you hired a consulting company, and you created a committee. In the past, you believe that -- well the market believe you would be having a deal with Bradesco, Itau, or even another bank, or maybe have a similar structure to what you had at FIC. Could we assume that everything is on hold? You're revisiting everything, you might decide to stay at 100% or anything is possible for the future. Am I right?

The consulting company, well, they will help us in the evaluation of the business, but the process is continuing now as we improve the process with a new vision. But we're keeping an eye on all the options. You can be a partner to partners, financial partners, or we can have everything in-house. We are still checking each and every option. It's too early to come to any conclusion right now.

Great, fair enough. The last question, I don't Tambasco or to Hugo. What happened Assai over the quarter 140 drop in basis point over the quarter. Does this show that there is a structural problem or just because you opened a lot of stores? I'd like to better understand what happens with Assai?

As I mentioned, it is important to understand that 3.1% of EBITDA is driven by opening new stores. As I said before, we opened 17 stores this year and the majority were in markets in which Assai is fully unknown. So there is very significant investment in the beginning so the brand and the motto be acknowledged.

Obviously, we also have another important component to revisit this approach in other markets outside Sao Paulo and Rio. Be it when it comes to serving the transformer and also maybe addressing the motto of the reseller. However, the stores that are mature, or stores that have been on for more than three years now, have more than 5% as EBITDA. So that has to do with a curve, stores that already open are taking more results from existing stores.

And as soon as they come to the proper ramp-up and now that we are changing the management, with a series of adjustments, they will be fully in line. So there will be no surprises, no outliers, nothing outside what we had effectively planned for Assai in the forecast. But Tambasco can add on to my comments.

Just to make it clear what Hugo mentioned about new stores. Over the quarter, over the last quarter, we had a very strong concentration of new stores. Obviously, these new stores have less and less impact on results. However, right now more specifically year-end, there was a lot of concentration and that's why the impact was stronger.

What about the future? Could we assume that margins will be up again as of the third -- the first quarter? So not 3.5% even though you're opening new stores, you have a larger base. Stores will become more mature and they'll come back to normal?

Well, we do have some time for these stores to be mature. But naturally you should go for improvement and as Hugo mentioned, considering older stores, and that's when you already have EBITDA greater than 5% or 5.5%.

Thank you and congratulations to all of you.

Juliana Rozenbaum, Itaú BBA.

I would like to be sure that as of now, we will only see the data for Casas Bahia and Ponto Frio separately. Is this what will happen or are you going to consolidate that? How do you intend to disclose from now on?

Thank you for the question. This is Hugo. Continuing to what Jorge explained about the CADE, We are waiting for the authorization by CADE and only after that we will be consolidated. As it stands now, they are separate. One of them is a publicly traded company and the other one is a corporation.

So we are reporting them separately. We wouldn't have to do that but we prefer to have a more transparent attitude and separate the data for each one of the companies because we know that it facilitates things to everybody. And after the approval, we will have the two brands consolidated.

And as we wait for the CADE and the segments are separate, what about the SG&A because during the initial presentation, you were talking about some cuts that could be done with Globex or Casas Bahia or Ponto Frio and then you could use these people for another company. So you have a certain degree of freedom there. So I would like to know the structural level of SG&A that we would expect for the two companies and how this figure could be polluted, so to say, by these allocations.

This is a very good question. It is important to separate two things. The Nova Pontocom is a separate company. So Nova Pontocom is another company, and we will be having an Investor's Day at the end of March showing the figures for the first time separately. And this will surely not be contaminated or -- neither in volume nor on information.

Regarding the other companies I would recommend, and this is what we are doing internally, you should always look at the consolidated in the physical world. In terms of SG&A, for margins and for all the other answers from now on, we will be considering Ponto Frio and Casas Bahia physical world consolidated.

When you were discussing the differences between the gross margin vis-a-vis the mix, the conclusion was that after you have fine-tuned everything, and you would still have a difference of 3% or 4% having to do mostly with furniture and financial services. But there is the other side or the flip side of the coin because you will have higher expenses as well. So could you give me the same parameter for the SG&A? Would you say 3% or 4% more for Casas Bahia in margin? And what about the SG&A?

It's a little bit premature because we're still -- we have work under way. Raphael was quite clear in the presentation that he made. The principle has always been respect to our customers, to our clients. So whatever has to do with expenses that don't have anything to do with our clients is being put under the synergy. For instance, the setting up of furniture or the assembly of furniture is being studied very cautiously.

This is being done be it in his model or in the specs for Casa Bahia or Ponto Frio and the implementation of the volume of furniture or furniture assembly at Ponto Frio in principle because these are different clients. This is another profile, will not reach the same share that it reaches at Casas Bahia. Now how much it will be in terms of SG&A depends on the structural review that will go on along 2011.

And changing gear a little bit now, if you consider what we imagined as increase in selling area at the end, it was similar but the characteristics were a little bit different. It was more conversion, more store expansion, more hypermarket. And I would like to understand what has changed in the way of thinking about the expansion and from now on could we go back to consider smaller formats or for some reason, it should be more similar to 2010.

To tell you the truth, we believe that our strategic decision in no moment whatsoever has hindered the results that we were able to deliver for the year. And this was an outstanding year by all means. And we devoted ourselves to two things during this year; to tap into the synergies of the association. And 2011 we will be very much focused on that as well.

And from all the conversions that we made, CompreBem and Sendas, with outstanding results and the best investments because the growth is higher than 20%, I only did 60 for Extra Super and I still have 130 stores to do the same this year. And I believe that this motto has been showing very positive result.

Undoubtedly, our continuation, as Abilio said, the hypermarket motto for Brazil in still unexplored; reasons is the big hit for Extra. We opened at Palmares, Mato Grosso, [Doradus], (inaudible) and Goiânia and so many other areas, so many other places with outstanding results. And we will continue to unveil new stores as of fast right now is being reanalyzed in terms of its motto, readapting it to the taste of Brazilians and we are adapting the urban model.

And we already have a pilot, and as soon as it is totally approved, we will continue the rollout. So this is not what affects expansion. I repeat, organic growth is very important. We live in a country in which we only have 10% of the market with incredible opportunities.

We are present in 19 states of Brazil, Brazil has 27 states. So the opportunities are there and whatever comes in the future we will be conquering. There is a huge opportunity.

Tambasco also mentioned the market share gains that we are achieving not only from the big players but also with the end of informality by means of tax substitution. So we are very flexible and we adapt ourselves to the reality that we see and we always seek the best return on our invested capital, better ROI. Thank you very much.

Carlos Albano, Citibank.

Hugo, could you give us some more details and elaborate on GPA's EBITDA margin, GPA Food?

And from what I understood when I talked to you is that part of this increased margin that would happen comes basically from the store conversion from CompreBem and Sendas to Extra Super. Could you elaborate on that please about the conversions, if you're really having a better outcome?

I assume that would be related to a better assortment in Extra Super compared to Ponto -- CompreBem and Sendas. Am I right?

I'd like to give the phone to Tambasco; he is heading the operation and maybe he can give you more details. Thank you.

Albano? This is Tambasco. You are right, from the moment you make changes into a store, Sendas and CompreBem stores, let's face it we were in debt particularly in the real market.

The stores had to be more up-to-date considering consumers' demand today. The stores and perishables, for instance, had less products supplied and when you remodel these stores you take, for instance, a better-equipped store and therefore you can provide a better assortment to consumers.

In other words, you're adjusting, you're better meeting consumers needs, therefore providing an assortment that leads to a more interesting sales mix.

So when it comes to the average ticket you have in a store like this because you offer an improved assortment and also when it comes to the added value behind each one of the average tickets because you have products with better margin.

So undoubtedly the impact on the stores result be it in sales, margin mix, product mix, in the end it does favor the result from each one of these stores.

Tambasco, could you give us an order of magnitude or percentage terms or the difference today in the average ticket of an Extra Super store compared to Sendas or Ponto Bem or in terms of margins?

I cannot give you accurate figures right now, but what I can tell you right away is that such a store used to have for perishables, for instance, the stake was around 40% in the store and this goes up to nearly 50%.

And these are categories that have a double effect, more frequent visits to the store because perishables you have to buy them more often and also the indicators in the survey show that when customers buy perishables they always have a more robust ticket.

In other words, you have 800 gain of shares in these categories because they have a higher frequency and also bring in more added value to the store.

Now, when we convert a store that's always our expectation. You have a percentage of my expectation for growth in the ticket, frequent visits at the store and also an increase in the ticket, per se.

I could have -- is half and half. Well, I'm just guessing, but as a reference that's a good number for you to have in mind.

Great. And now in the release you mentioned that one of the factors that improved GPA Food margin has to do with better deals with suppliers and also the pricing managements who I'd like to have a better understanding what happened in this case.

There was no merger so how did you manage to have better deals with suppliers? What was different? And for the pricing management tools is that [de Montague]? Are you using it more effectively? So what led to this improvement?

When it comes with deals with suppliers our point of uniqueness has been the consistent win-win strategy with our suppliers. Naturally whenever we manage to increase our market share we become the ideal partner to grow sales with suppliers.

In addition when it comes to sales growth we in the market today are the best partner for you to sell, mix and assortment. As a result the growth sales is very profitable, both for us and to suppliers. So that's our uniqueness. And with that we do leverage our trading volume because our competitors are losing market.

So the volume is taken by us and we are very stronger now. An that's why we have a higher profitability not only for us but to suppliers as well.

As to de Montague we have already deployed the tool in virtually 60% of our sales. Why 60%? That's exactly where we have categories that can be optimized by de Montague.

When you think about Eletro electronics or even commodities -- for Eletro electronics, for instance, you have price related to installments and that generates opportunities lest you work in on some adjustments on the two and for commodities you have a lot of price oscillation.

So we've seen significant gains in margin, thanks to the implementation of the de Montague tool and this is seen as a better price structure with our products, and as a result you no longer have a vertical effect and you don't have a negative impact on assortments.

Just one last thing, Tambasco. Let me see if I got that right. Hugo said, we still had additional 130 stores to convert from CompreBem to Sendas. Is that figure right considering that you have a significant area or space, 70, if I'm not mistaken? Can you still work on the retail operations?

Absolutely. Please bear in mind that in the conversions that we still have to do, some of these stores will be converted into Pao de Acucar whereas others as it's already taken place will be transformed not in Extra Supermercado, but Sendas for instance, or CompreBem into a hypercompact.

So you can further increase your ability to grow in the average ticket and provide a more appealing mix or assortment to customers. But we still have additional 130 stores. Will that happen over the year? Yes. That will happen over this year, 2011.

Thank you.

There are no more questions, and I would like to give the phone back to the Company for their final remarks.

This is Hugo on behalf of Globex, on behalf of Abilio Diniz, Chairman of the Board, and Eneas Pestana, our CEO of Grupo Pao de Acucar, Raphael Klein, CEO of Globex, I would like to thank you very much for your presence, for your interest in our call. Thank you very much for all the questions asked and we stay here at your disposal.

And we can guarantee to you that we will always make our best endeavors to deliver the best results to deserve the trust that you place on us by means of the investments that you make in our Company.

So thank you very much and have a very nice day.

Thank you very much and the Grupo Pao de Acucar conference call is closed and the Investor Relations Department of the Group will continue to be available to you in order to answer any questions that you might have. Thank you very much.

Statements in English on this transcript were spoken by an interpreter present on the live call. The interpreter was provided by the Company sponsoring this Event.