Grupo Televisa - Q1 2024

Transcript

Operator (participant)

Good morning, everyone, and welcome to Grupo Televisa's First Quarter 2024 conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two. Before we begin, I would like to draw your attention to the press release, which explains the use of forward-looking statements and applies to everything we discuss in today's call and in the earnings release. Please note, this event is being recorded. I will now turn the call over to Mr. Alfonso de Angoitia, Co-Chief Executive Officer of Grupo Televisa. Please go ahead, sir.

Alfonso de Angoitia Noriega (co-CEO)

Thank you, Elsa. Good morning, everyone, and thank you for joining us. With me today are Francisco Valim, CEO of Cable and Sky, and Carlos Phillips, CFO of Grupo Televisa. As you may recall, one of the strategic pillars approved by our board of directors was to streamline Grupo Televisa's operations and simplify our asset structure. I am delighted by the progress we have achieved on this front so far this year. On February twentieth, we concluded the spin-off of Ollamani and its listing on the Mexican Stock Exchange under the ticker symbol AGUILASCPO, unlocking significant value to our shareholders. On April third, we announced that we reached an agreement with AT&T to acquire its minority stake in Sky México, subject to regulatory approvals.

Following the conclusion of these two milestones, Grupo Televisa will not only be a pure telecom company from a consolidated standpoint, with massive opportunities to take advantage of Sky's exclusive sporting content rights in our cable segment and generate significant synergies and efficiencies through the integration of these two businesses, but also the largest shareholder in TelevisaUnivision, the world's leading Spanish language media and streaming company, through our unconsolidated 44% stake, with huge potential to create value. Regarding the agreement with AT&T to acquire its minority stake in Sky México, I would like to ask Valim to walk you through the plan that we will pursue to fully merge Sky with our cable operations, materially strengthening the competitive and financial position of the combined company.

Valim's mandate, as recently appointed CEO of Sky, as well as CEO of our cable operations, is to completely integrate the two companies, benefit from Sky's exclusive sporting content to improve the competitive position of the combined company, extract as many OpEx and CapEx synergies as possible, expand free cash flow generation, and therefore increase returns on invested capital. Having said that, let me turn the call over to Valim as he will elaborate on this restructuring plan.

Francisco Valim (CEO of Cable and Sky)

Thank you, Alfonso. Good morning, everyone. We view the integration of Sky with our cable operations as a great opportunity to create value for Grupo Televisa's shareholders, as there are significant synergies and efficiencies to be achieved from the revenue, OpEx, and CapEx standpoints. The proposed merger is something that we have been analyzing for some time already. Therefore, we have done extensive work to map the integration process and execute as quickly as possible. So far, we have outlined a new organizational structure for the combined company that will allow us to retain top talent and optimize duplicated roles. We have also identified several areas to implement synergies and efficiencies, including commercial, sales commissions, programming, IT, technology, marketing, and others.

The main enablers of savings will be the economies of scale, a wider offering of products and service, reduced overlap of commercial infrastructure and call centers, as well as real estate, and redundancies of duplicated systems and functions. This integration will also allow us to standardize regions, sales channels, and commission schemes, have a better customer base management, increase productivity, achieve a cross-selling and upselling, improve penetration of triple-play services, reduce churn, and leverage on Sky's exclusive sporting content in cable, further differentiating our video packages from those of our competitors. All in all, after full implementation of our structure and integration, most of which is expected to occur in the second quarter of 2024, we estimate potential savings of around 15% of Sky's combined annual OpEx and CapEx.

We project these synergies will gradually be more evident beginning on the third quarter of 2024, when we estimate OpEx savings of approximately MXN 400 million. Moving on to the operation and financial performance of our cable operations, we ended March with a network of 19.7 million homes, after passing around 137,000 new homes during the quarter. In the first quarter, we continued to execute our strategies to focus on value customers rather than volume, while improving customer retention and satisfaction. This contributed to achieving a sequential reduction in churn of around 5%. As a result, our first quarter net adds accelerated to 10,700 in broadband and 2,800 in video, compared to 600 and 100 net adds, respectively, in the fourth quarter of 2023.

As we keep working on further churn reduction, we project to gradually deliver stronger net adds over the coming quarters. During the quarter, net revenue from our residential operations decreased by 2.3% year-on-year, as our subscriber base was 6.7% lower due to the cleanup that we did on the third quarter of 2023, and because of the ongoing negative impact from Hurricane Otis in Acapulco, given that an important amount of our customers are not paying their bills yet. On the other hand, net revenue from our enterprise operations increased by 4.1% year-on-year. To sum up, net revenue from our cable segment of MXN 11.9 billion fell by 1.8% year-on-year, while operating segment income of MXN 4.7 billion declined by 8.7%.

Our cable segment margin of 39.2% contracted by 300 basis points year-on-year, mainly driven by inflationary pressures in labor and country-related costs, but it expanded by 60 basis points sequentially, due to the ongoing efficiency measures that we have been implementing since the third quarter of 2023. Excluding the negative impact on revenue and EBITDA from Hurricane Otis in Acapulco, revenue from our cable segment would have declined by 1.3% year-on-year, while operating segment income would have been 7.6% lower. So our recurring cable segment margin would have been 39.5%.

A better subscriber mix with an increased proportion of high-value customers, price increases implemented in April to pass through inflation, and the phase out of our subscriber-based cleanup, should allow us to recoup net revenue growth at our residential operations in the third quarter of 2024, while our cable segment profitability should remain relatively stable at current levels. With regards to CapEx, our cable segment investments of MXN 1.6 billion during the first quarter fell by 47.7% year-on-year. So our cable CapEx to sales ratio of 13.7%, was 1,200 basis points lower than that of the first quarter of 2023.

Finally, operating cash flow for our cable segment, which is equivalent to EBITDA minus CapEx, was MXN 3 billion in the first quarter, increasing by 52.1% year-on-year, and accounting for 25.5% of our sales. This basically means that our cable segment operating cash flow margin increased by 1,000 basis points year-on-year. The 2024 CapEx budget for our cable segment remains unchanged at $630 million, including $30 million for the reconstruction of our network in Acapulco, which we expect to be reimbursed by the insurance company. However, a more efficient CapEx deployment focused on higher investment returns and a relatively stable profitability at current levels, led us to feel confident that our organic operating cash flow margin for 2024 will increase by around 300 basis points compared to that of 2023.

Now let me walk through Sky's operating and financial performance. During the first quarter, we lost 251,000 revenue-generating units, mostly coming from prepaid subscribers that have not been recharging their service. However, we expect integration with our cable segment to gradually contribute to reduced churn, driven by better customer base management and cross-selling and upselling opportunities, as previously discussed. Sky's first quarter revenue of MXN 4.1 billion fell by 12.3% year-on-year, slowing some from the 15.3% revenue decline experienced in the fourth quarter of 2023. Sky's operating segment income of MXN 1.2 billion decreased by 24.4% year-on-year, while its margin of 29.8% contracted by 370 basis points.

Sky's first quarter operating income continued to be affected by the cost and expenses related to the launch of Sky+, including the advertising campaign. Nevertheless, we experienced a sequential expansion of profitability of 250 basis points. Regarding CapEx deployment, Sky's investments of MXN 0.4 billion in the first quarter fell by 48.9% year-on-year. Therefore, Sky's CapEx to sales ratio of 10% was 720 basis points below that of the first quarter of 2023. Lastly, Sky's operating cash flow was flat year-on-year, at MXN 0.8 billion in the first quarter, representing 19.8% of sales. Sky's operating cash flow margin expanded by 250 basis points year-on-year. Our 2024 CapEx budget for Sky was $145 million, equivalent to over 16% of sales.

However, given our restructuring integration plan, now we think that Sky's CapEx to sales is more likely to be below 14% this year.

Alfonso de Angoitia Noriega (co-CEO)

Thank you, Valim. You're doing a great job. Given the operating and financial performance of our two consolidated businesses, Grupo Televisa's consolidated revenue reached MXN 16 billion, representing a decline of 4.8% year-on-year, while operating segment income reached MXN 5.9 billion, equivalent to a year-on-year decrease of 12.5%, mainly driven by the lower revenue and inflationary pressures. Now, let me walk you through TelevisaUnivision's first-quarter results released yesterday morning. The company delivered another solid quarter from a top-line perspective, with revenue of over $1.1 billion, growing by 7.3% year-on-year. However, EBITDA of $329 million fell by 8.9% due to continued streaming investments for ViX and the comp of a non-recurring bad debt expense reversal.

Excluding the bad debt expense reversal, TelevisaUnivision's EBITDA would have only declined by 5%.... It is important to highlight that TelevisaUnivision's direct-to-consumer losses continued to decline this quarter, and that we are on track to deliver our goal of profitability in the second half of this year. During the quarter, revenue growth at TelevisaUnivision was driven by solid increases in consolidated advertising and subscription and licensing revenue of 7% and 9%, respectively. While consolidated advertising revenue increased by 7% year-on-year, in the U.S., advertising revenue was flat, as growth in direct-to-consumer was offset by some softness in our linear networks. In DTC, we delivered exceptional growth as we were very effective in monetizing the increased engagement on ViX, with strong sell-through rates of over 80% and significant CPM premiums to linear. At our linear networks business, our results were mixed.

We saw strength in sports and certain categories where we have traditionally had low penetration, such as financial and pharma, that contributed to solid scatter volume. However, we experienced softness in the CPG, retail, and tech categories, along with some pressure from ratings declines that were not fully offset by price. In Mexico, advertising revenue growth of 19% year-on-year was driven by the appreciation of the Mexican peso, and because starting this quarter, we acquired some third-party ad inventory, which contributed with 500 basis points of growth that will be accretive to bottom line. In Mexico, the public sector was impacted by advertising restrictions ahead of presidential elections in June. Still, this was offset by strength of private sector advertising as we kept adding new clients through the scatter market. In addition, we experienced strong advertising growth in our DTC business.

FX neutral advertising revenue in Mexico increased by 9% year-over-year. Consolidated subscription and licensing revenue increased by 9%, primarily driven by ViX's premium subscription streaming tier. In the US, revenue was flat as growth from ViX was offset by linear subscription revenue declines. In Mexico, growth of 34% was driven by the appreciation of the Mexican peso and by solid revenue increases from ViX and content licensing. FX neutral subscription and licensing revenue in Mexico grew by 24% year-over-year. Looking ahead, we're very well positioned to deliver a record political year from an ad sales perspective and a profitable streaming business in the second half of the year. This should then return our company back to overall EBITDA growth for the full year and allow us to continue to focus on strengthening our balance sheet through organic deleveraging and by extending and smoothing our maturities.

To wrap up, Bernardo and I are confident that the strategy to streamline our operations and simplify our asset structure at Grupo Televisa and the execution of our digital transformation strategy at TelevisaUnivision will allow us to improve our operating and financial performance in 2024. At Grupo Televisa, we're putting a lot of effort into rethinking our corporate structure to unlock value, including the integration and restructuring of our consolidated businesses, to come out stronger from the current environment. This strategy is focused on strengthening our competitive position, extracting as many OpEx and CapEx synergies as possible, and enhancing free cash flow generation. The preliminary assessment of the Sky integration with our cable operations looks promising and is expected to be concluded very quickly to start benefiting from significant synergies during the second half of this year.

And at TelevisaUnivision, we continue to be very excited about the prospects for 2024. Our DTC business is growing and scaling, and our most important metrics kept trending in the right direction. We added users, grew engagement, reduced churn, and generated significant marketing savings as a result of our efficient customer acquisition funnel through our free tier. Looking forward, we have very clear objectives in place: a profitable DTC business in the second half of the year and to end 2024 with an organic reduction in leverage. Now we are ready to take your questions. Elsa, could you please provide instructions for the Q&A?

Operator (participant)

We will now begin the question-and-answer session. To ask a question, you may press star, then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. Our first question today comes from Marcelo Santos with JPMorgan. Please go ahead.

Marcelo Santos (Analyst)

Hi, good morning. Thanks for the opportunity for making questions. I have two. The first one is to Valim regarding cable. What was the average price increase that you executed in April, and to how much of the base? And do you expect a spike in churn because of that? That's the first question. The second question is to Alfonso, regarding TelevisaUnivision. Alfonso, you had the biggest decline in EBITDA at TelevisaUnivision and the highest leverage since the merger. Would you please tell us what you expect going forward? Give a little bit more detail. Thank you very much.

Alfonso de Angoitia Noriega (co-CEO)

Thank you, Marcelo. So, Valim will take your first question.

Francisco Valim (CEO of Cable and Sky)

So Marcelo, on average, we have increased around 4%, and it will impact almost all the customer base. There are quite a few exceptions, people that have joined the subscriber base later, so they're still under some sort of a promotion, so obviously those are not going to have a – but that that's the exception, that's not the rule. In terms of churn, obviously, we started announcing because of regulation here in Mexico, we announced the price increase early in March, and so we had some fluctuation around March, early April time frame, but we think that it's still under control.

It's churn is at historical levels, so we don't see that being a big negative impact.

Alfonso de Angoitia Noriega (co-CEO)

And as to your second question, Marcelo, can you hear us clearly? Because apparently there's an echo.

Marcelo Santos (Analyst)

I can hear you. Thank you.

Alfonso de Angoitia Noriega (co-CEO)

Okay. So, as to your second question, that has to do with the decline in EBITDA at TelevisaUnivision. I would say, first of all, there's an accounting issue in the first quarter because we are comparing a bad debt reversal that we had a year ago. So, excluding that benefit that took place in the first quarter of 2023, our EBITDA declined 5% and improved from 7% decline that we had in the fourth quarter of 2023. So this is really a function of continued narrowing of our direct-to-consumer losses as we move forward that business towards profitability. So I can say that in 2024, EBITDA and therefore leverage will really be a tale of two halves.

For us, the second half should be dramatically better than the first half. Going into this year, we planned for this, so we saw it. In the first half, we expect EBITDA to remain under pressure, against a year ago, which contributes to higher leverage, of course. In the second half, and particularly the fourth quarter, we expect EBITDA growth and leverage reduction to below 6x.

Marcelo Santos (Analyst)

Perfect. Thank you very much.

Francisco Valim (CEO of Cable and Sky)

Thank you, Marcelo.

Operator (participant)

The next question is from Carlos de Legarreta with Itaú. Please go ahead.

Carlos de Legarreta (Analyst)

Thank you, Alfonso and team. Two quick questions on my side. The first one is, if you can please go over your revisited CapEx guidance. I understood the allocation guide can decrease, but it missed the amount by how much. And then the second, I would love to hear firsthand the opportunities to reap with the Sky acquisition, and the timeline for those. Thank you.

Alfonso de Angoitia Noriega (co-CEO)

Yeah, thank you, Carlos. As to our CapEx for 2024, we reiterate basically investments of $600 million in cable. This is including the reconstruction of our network in Acapulco, that basically was destroyed as a result of Hurricane Otis. We expect to be reimbursed by the insurance company in respect to that reconstruction. So, excluding this reconstruction, our cable CapEx will be closer to $600 million. As you know, most of our CapEx is sales-related, and therefore, if we are able to keep subscriber growth additions at a reasonable level, which we expect, and we further reduce churn, we should be in a position to have low single-digit subscriber base growth in the medium term with less CapEx intensity.

So, we believe CapEx to sales should be in the low 20s going forward, and in 2023, CapEx to sales already declined to 23% from almost 27% in 2022. As to your second question, that has to do with Sky, with the CapEx of Sky, and its deployment. Sky's investment of basically MXN 400 million in the first quarter fell 48, almost 49% year-on-year. Therefore, Sky's CapEx to sales ratio was 10%, and it was 720 basis points below that of the first quarter of 2023. So, our CapEx for 2024 budget for Sky was $145 million. This is equivalent to over 16% of sales.

However, Valim can touch on the details, but given our restructuring and integration plan, now we think that Sky's CapEx to sales is more likely to be below 14% this year. As to your second question, I'm sorry, as to your second question, it has to do with the acquisition of AT&T. Valim, can you just talk about this?

Francisco Valim (CEO of Cable and Sky)

So, it also adds to what Alfonso just said. There are several systems, for example, that are now duplicated that we can optimize, and that reduces CapEx in terms of licenses and operating costs. We see lots of opportunities.

We see a big opportunity in revenue increase, so we can now match the two subscriber bases and be more aggressive and at the same time, more targeted in how we approach the market with both technologies in areas where we have a network, in areas where we do not have a network, so we can optimize our efforts in terms of approaching the market. We see a great value in still in the DTH product, especially the prepaid product that we have here in Mexico that has a big take rate.

So, and obviously there are back office synergies, because there's a lot of overlap and we think that when you compound that, we think that we should come closer to, you know, the second half to MXN 400 million of savings of synergy.

Alfonso de Angoitia Noriega (co-CEO)

Yeah, so that's more or less the number that we're anticipating by the end of the year. Per quarter. Per quarter. As I mentioned, Valim's mandate is to completely integrate the two companies. And, of course, we're going to benefit on the easy side from Sky's exclusive sporting content to improve the competitive position of the combined company. He will, as he has demonstrated at Izzi in the very short term, extract as many OpEx and CapEx synergies as possible, and this will mean an expansion of free cash flow generation, and of course, that will result in increases in returns on invested capital.

Carlos de Legarreta (Analyst)

Thank you both for the feedback.

Operator (participant)

The next question is from Vitor Tomita, with Goldman Sachs. Please go ahead.

Vitor Tomita (Analyst)

Hello, good morning, all, and thanks for taking our questions. We have two questions from our side. The first one, you touched on it a bit, but if you could give us some more color on how you are seeing commercial dynamics and sales performance in cable under your new strategy. That would be our first question. And our second question would be on TelevisaUnivision. How are you seeing the evolution in profitability for streaming at TelevisaUnivision streaming business? And how confident are you in the streaming business reaching profitability in the second half of this year? Thank you.

Alfonso de Angoitia Noriega (co-CEO)

Victor, thank you for your question. Valim will take the first one as to the commercial dynamics in cable, and I'll take the second one.

Francisco Valim (CEO of Cable and Sky)

So Victor, in the back in those days when we had the very aggressive promotions, we were selling between four hundred and fifty thousand new RGUs per quarter. We are already at the 400,000 rate, so that is has not obviously, we had to retrain the sales force, and that has had some little, let's say, step down that majorly took place in the fourth quarter of last year.

So as we've seen this quarter and the and the coming quarter, we are seeing our sales activity in the 400-450 gross adds per quarter, as we were even with a very aggressive promotion. So we see the market is still active in that regard, and we see no deterioration of the volume, other than the one I've just mentioned. But the flip side to that is we, because we have shorter promotions, our ARPU has been increasing consistently. And we have seen a retention of the clients that we have been selling now, much higher than the ones we used to sell in the past. So when you combine the two, we are very optimistic about, in terms of how we should be growing the subscriber base here in Mexico.

Despite the fact that we do not understand exactly when we add up some of the numbers that we have seen published, we have a hard time understanding some of the numbers we have seen given the very high volumes. We are still working around to see where those net adds come from to some of our competitors.

Alfonso de Angoitia Noriega (co-CEO)

Yeah, to that point, we don't know is there net additions or they're just a consequence of transferring old network subscribers to the new networks in their cases. But numbers don't really add up if you sum all the net additions of all the companies. So that's an interesting thing we need to focus on.

Francisco Valim (CEO of Cable and Sky)

And in my mind, if we do the math, we would come up with 2.4-2.5 million net adds in 2024, which is higher than what the industry had during the pandemic, which was the highest ever, you know, in terms of net adds in telephone worldwide. So that's why, you know, once you're saying, what he's saying is just, it gives us some food for thought, if I may.

Alfonso de Angoitia Noriega (co-CEO)

Yes. And as to your second question, it has to do with our streaming service with ViX. What I can say is that we feel great about it. With a quarter of the year having passed, we see continued narrowing of direct-to-consumer losses, and we remain confident in our ability to reach profitability in the second half of this year. Our DTC business had a great start of the year. All major KPIs and the trends are moving in the right direction, many of which exceeded our expectations. I can say some of them on users; we continue to grow both MAUs and subscribers. On engagement, I can say that in the free tier, where it directly correlates with monetization, total streaming hours grew more than 50% versus the prior year to a new record high.

On monetization in the US, our ad sales team is doing a fantastic job, basically maintaining significant CPM premiums to linear, with sellouts above 80%. Churn also reduced significantly in the quarter to a record low. So, with more data as the service age, ages, we are doing a better job at creating content that resonates with our audience. This quarter, we saw an increase in terms of engagement among our audience, which led us to a better retention and lower churn. We're also seeing the benefits from our two-tier ecosystem, and this is bearing fruit in terms of both churn and SAC.

About a quarter of our gross net subscribers were reacquired users, and the free tier contributed a record high percentage of our gross net subscribers at nearly 70% in the quarter. So as you can imagine, this translates into significant marketing savings as we're using that funnel, and allowed us to again narrow our DTC losses. So, what I can say, we feel great about ViX. We're moving towards a profitable scale streaming service.

Vitor Tomita (Analyst)

Very clear. Thank you very much for the replies.

Alfonso de Angoitia Noriega (co-CEO)

Thank you.

Operator (participant)

The next question is from Alejandro Azar with GBM. Please go ahead.

Alejandro Azar (Analyst)

Hi, good morning, and thank you for taking my questions. Three quick ones. The first one is, Valim, if you can talk about more about the synergies on Sky, on the CapEx side. If you could elaborate on those. And just to clarify, you mentioned 15%, savings on the OpEx. That would be the other one. And how does profitability looks like when you merge both companies, let's say in 2025 or in the third quarter? And the last one would be on your asset sale, if you can elaborate on which assets did you sell, you know, the gain about MXN 2 billion? Thank you.

Alfonso de Angoitia Noriega (co-CEO)

Thank you, Alejandro. Well, Valim will take your first question, and then Carlos Phillips will take your question that has to do with asset sales.

Francisco Valim (CEO of Cable and Sky)

So we are anticipating, you know, Sky from 16%-14% CapEx to sales ratio, okay? And that's our estimate at this point. It may be higher than that, but we are being conservative at this point. In terms of profitability, we are estimating high thirties, the combined entities, to be at high thirties by then, when we finalize the synergies, which should be toward the end of the year and the beginning of next year. So we think we can. Like I mentioned before, there are lots of things that we can synergize, both on the cost side, CapEx side, but also on the revenue side, which we are addressing all, as soon as we have regulatory approval. And Carlos?

Carlos Phillips Margain (CFO)

Hey, Alex, on the gain you saw from property sales, it was. This is related to the Ollamani spinoff. As we were organizing the company to execute the spinoff, we had to do some asset sales from companies that were gonna remain in Grupo Televisa, from companies that were gonna be spun off after Ollamani. So, since the date when the spinoff became effective was the thirty-first of January, that's when these gains became accounted for, no? But it's a non-cash gain on movement of properties from Ollamani companies and Grupo companies.

Alejandro Azar (Analyst)

Okay. Thank you, Carlos and Valim.

Operator (participant)

The next question is from Lucca Brendim with Bank of America. Please go ahead.

Lucca Brendim (Analyst)

Hi, good morning. Thank you for taking my questions. I have two on my side. First, on Sky, on the operational front, you said you also expect to see some improvements. How can we think about the level of net disconnections? Should they continue to increase, sorry, to diminish? And then when should it normalize or come close to zero? How are you thinking about that? And then second, for cable, do you still see much room for an improvement in churn, or are you already close to the target you have? And if there is some room, what initiatives and what you still have to do to get closer to this target? Thank you.

Alfonso de Angoitia Noriega (co-CEO)

Yeah, Valim?

Francisco Valim (CEO of Cable and Sky)

So in terms of disconnection at DTH, which is basically the technology you're referring to, we think that there is with more emphasis on that product, in areas where DTH is basically the only solution, and understanding that in terms of entertainment, DTH is the cheapest opportunity that people have in Mexico, especially in areas where they do not have access to other technologies. So we think with more focused sales efforts and marketing efforts, we'll be able to reduce the speed of cancellations in both prepaid and postpaid. As to how much, we are still in the making of those understandings, and we will be launching new campaigns very soon.

Regarding how low can churn go, I think that we are towards the mid-range, if I may, of the churn, in terms of how low it can go. Obviously, having a subscriber base as large as ours, churn is always a factor, and, despite the fact sometimes the number percent-wise is a smaller number, it is a significant number of subscribers. But we think that with the many things that we are doing and some of the additional things that we can do, we think we can still work towards lowering the churn and seeing that moving forward. We have already done that.

We have brought down churn from, you know, numbers that were very high to historical numbers already, but we still think we can, we can work around churn, especially with some of the things that we have in the pipeline in terms of products and services that we will be launching between now and the end of the year.

Lucca Brendim (Analyst)

Perfect. Very clear. Thank you for the answer.

Operator (participant)

This concludes our question-and-answer session. I would like to turn the conference back over to Alfonso de Angoitia for any closing remarks.

Alfonso de Angoitia Noriega (co-CEO)

Thank you, everyone, for participating in our call, and if you have any additional questions, give us a call. Have a great weekend.

Operator (participant)

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.