Carrefour SA (CA) Earnings Call Transcript & Summary

Good day, and thank you for standing by. Welcome to the Carrefour Half Year 2026 Results Conference Call. Please note that today's conference is being recorded. I would now like to turn the conference over to your speaker, Mr. Alexandre Bompard, Chairman and CEO of Carrefour. Please go ahead.

Thank you. Good evening, everyone, Francois, and thank you for joining us today to discuss our first half of 2026. This semester was marked by the elaboration of our new strategic plan, Carrefour 2030 that we have carefully and extensively prepared with all our teams. It has also been a very active semester in terms of communication and investor engagement around the plan. We intensified our dialogue with shareholders and the broader financial community, including through the CSR Capital Market Day we held on June 16. The feedback we have received from the investment community has been very encouraging, and I'm not referring only to the share price performance since February. Investors have welcomed our sharper operational focus on our core markets, our investment program to modernize our stores and our tech road map, notably through our partnership with Vision and the broad deployment of AI. Our objectives in terms of price competitiveness, market share gains and financial performance are well understood. We also recognize that expectations have now shifted from the strategy itself to its execution, and that's exactly where our focus is today. Execution has started at a high pace. Let me share a few first examples. With the support of Concordis and the proceeds of our performance plans, we invested in our competitiveness and customers' purchasing power. We accelerated the rollout of new in-store fresh areas, fresh concessions, and we opened the first match with a distinctive fresh offer. We pursued our expansion agenda in proximity stores, particularly in France and Spain. We deployed Vion's AI technology with connected rides, cameras and real-time out-of-stock alerts, leading to added sales and productivity improvements in our first hypermarkets equipped. We also completed the disposals of Carrefour Romania as part of our geographical focus. Looking at our results, we delivered a solid performance. Sales were up, thanks to good commercial dynamics and driven by a strong e-commerce. Our club program is meeting great success with new members enhancing traffic and fueling our data lake. Our recurring operating income is growing driven by our 3 main countries. Total net free cash flow is up versus H1 2025 and EPS is up 18%. Based on these metrics and the business trends in our core markets, we confirm all our financial targets for the year. Looking at our performance by geography. In France and Spain, despite a volatile environment, markets held up well overall. In France, our sales were up across all formats, supported by our consistently improved price positioning and the increase of our Net Promoter Score. We also see a positive dynamic since the beginning of the summer. Formmer Cora stores sales were up 5% in Q2, doubling versus Q1, and we kept strong cost discipline. As a consequence, recurring operating income increased by 14% compared with the first half of 2025. In Spain, we confirmed our positive momentum in the second quarter. We continued to invest in pricing competitiveness -- we benefited from sustained growth in fresh product hypermarkets. We expanded our network of convenience stores, which continue to grow at a solid pace and confirms the relevance of the model. Profitability was up 7% in the country. In Brazil, in the macroeconomic environment that remains complex, we recorded an improvement in sales, turning back to positive territory in Q2 2026 with encouraging momentum at the beginning of the summer. Atacadao's performance improved, notably supported by the commercial initiatives launched by our new General Manager. Our other banners held up well, and we also launched a cross-banner loyalty program to strengthen our customer ecosystem. Our profitability remained resilient with recurring operating income increasing by 6%, driven by a solid cost discipline. In other countries, we confirmed our positive trajectory in Belgium with a return to market share gains. In Poland, the environment remained highly competitive, but we continue to reduce costs and reshape our footprint with a clear focus on our best performing stores. In Argentina, the consumer environment has been challenging, which weighted on our operating performance and on our banking activities. The new General Manager that I have appointed has reshuffled our commercial model with encouraging results as June recorded the first positive volumes since December 2023. Overall, we look at the second half of the year with confidence. We will reinforce our positive momentum and execute our plan with consistency in the amaguration of our price competitiveness, continued acceleration on fresh with the opening of new Match Free concept, further deployment of version on our AI road map, maintain cost discipline, acceleration in store modernization to support our format, our customer experience and our long-term growth, ACSR on food transition index at 107% -- at the same time, we will maintain a high level of dialogue with our investors. We will notably hold our third Capital Markets Day this year, which will be dedicated to hypermarkets on 17th of November. Thank you for your attention. I'll now hand over to Mathieu for more details on our financial performance.

Thank you, Alexandre, and good afternoon to everyone. It's a pleasure to be with you all to cover our 2026 first half financial results in detail. Before we get into the numbers, I would like to remind you that following completion of the divestment of Carrefour Romania at the end of June, Carrefour Romania is deconsolidated as of July 1 in our accounts. For H1 2026, Carrefour's operations in Romania are accounted for as discontinued operations in accordance with the IFRS 5 accounting standard. Let's start on Slide 5 to the presentation with the details of our Q2 sales. Total sales for the quarter reached EUR 22.7 billion. Group like-for-like sales were up 1.9% over the quarter despite high comps in Q2 '25, linked to a strong activity in France and Spain in June 2025. The scope effect had a negative contribution of minus 0.8% over the quarter, notably due to the sale of 6 hypermarkets in France as antitrust remedies following the acquisition of Cora and Match. Petrol added 1.3 percentage points to the growth and the calendar effect was a negative minus 0.6%. ForEx had a favorable impact on total sales growth of 1.1% over the quarter, essentially reflecting the appreciation of the Brazilian real. In total, reported revenue was up 2.8% in Q2. Moving on to Slide 6 with more details on the performance of France. Activity remained dynamic in the second quarter with like-for-like sales up 1% in a market where food consumption held up well, notably in volume terms with continued growth. As was the case in Q1, all formats posted positive like-for-like sales growth in Q2. Formmer Cora and Match stores are accelerating their like-for-like month after month, reflecting the success of the transformation of the commercial model. They reported plus 4.6% like-for-like in Q2 after 2.6% in Q1. Recurring operating income grew by 13.8% in the first half of the year with a margin expansion of 16 basis points, reaching 1.5% of sales. The group managed to offset its price investments as well as higher energy and transportation costs due to the crisis in the Middle East and Tx heat waves, thanks to continued optimization of operational efficiency and cost reduction initiatives. We're also satisfied with the outcome of the negotiations with Concord. Cora & Match operating profit slightly improved over the semester, benefiting from positive volumes and the end of integration costs, but was penalized versus H1 last year by the lower margin of the Carrefour commercial model, which was implemented over the summer 2025. Let's turn to Slide 7 with the impact of key operating initiatives of this first semester in France. Carrefour France continued to improve its price competitiveness with 3 new waves of price decreases in March, April and June, each covering more than 500 SKUs in different categories of products with an average price reduction of 8%. For the 50th anniversary of Carrefour branded products, a basket of 200 SKUs sold at cost price was also introduced, meeting great success with customers. As a result, Carrefour hypermarkets now hold second place in terms of price positioning in France as per Nielsen's Distri net index. These investments have been well perceived by consumers as reflected by a 2-point increase in NPS in France. At former Cora stores, NPS was up 15 points, reflecting the attractiveness of the new commercial model with lower prices, more promotions and extended private labels. Overall, Carrefour had a stable market share over this first semester. Regarding the initiatives of Carrefour 2030, the rollout is unfolding as planned. We strengthened our leadership in the convenience format with 234 new stores opened in H1. We also reinforced our market share in e-commerce, both in home delivery and Click & Collect. New commercial concepts are being deployed in hypermarkets, notably dedicated fresh areas or growth verticals like parapharmacy. Three hypermarkets and 2 supermarkets were transferred to lease management. We confirm the target for the full year, 15 hypers and 40 superers. These various operating initiatives are resonating well with customers and an additional 300,000 members joined our loyalty program. Let's move to Slide 8 with a focus on Spain, where the group experienced strong momentum in the second quarter with like-for-like sales up 2.2%. Market conditions are still supportive with positive volumes and a slight inflation. In that context, Spain delivered a solid performance in food with a 2.3% like-for-like increase in sales, notably driven by strong growth in fresh products in hypermarkets, where we maintain constant focus on quality, availability and affordability. Over the semester, Carrefour Spain continued to invest in its customers' purchasing power with several campaigns, including unbeatable pricing and dedicated operations for members of the loyalty program, which attracted close to 500,000 new members to pass the 11 million members threshold. At the same time, customer satisfaction kept improving with NPS up 4 points in Q2. In line with its expansion plan, Carrefour Spain grew its footprint in convenience stores with 78 stores opened in H1. Finally, e-commerce progressed well with an increase in GMV of plus 8.4% in Q2. The strong commercial momentum translated into an improvement in profitability, both in absolute terms and in percentage of sales. Overall, the first half -- over the first half, recurring operating income was up 7.3% at EUR 177 million with a 14 bps increase in operating margin to 3.3%. Turning to Slide 9 with the performance in Brazil. High interest rates continue to weigh on consumer purchasing power. In the still complex macro and economic environment marked by negative volumes, Carrefour outperformed its market. The group recorded an improvement in sales with like-for-like turning back to positive territory at plus 0.4% with an increase of plus 0.5% at Atacadao. The Retail segment posted a sequential improvement with hyper up plus 2.5% like-for-like. Retail like-for-like was penalized by nonfood e-commerce operations as Carrefour Brazil slowed down this activity to prioritize its profitability. The Financial Services segment performed well with a 13% increase in the credit portfolio. Carrefour Brazil increased its recurring operating income by 5.8% over the semester to reach EUR 359 million. Margin also improved in H1 and was up 9 basis points, thanks to a well-calibrated commercial equation and strict cost discipline. In the second half of 2026, we expect to see continued stabilization in our volumes and further cost optimization. Moving on to Slide 10 to mention a few key initiatives. Atacadao adapted its commercial model. It notably simplified its assortment to focus on the highest rotations and less the deeper promotions. It also launched the Buess private label brand, which now features 200 SKUs. E-commerce remained strong during the semester with a 30% increase in GMV. Consequently, Atacadao gained market share in the cash and carry format over the semester and its volumes have been stable since the beginning of the summer. Carrefour Retail also gained market share. B2B customers keep buying more and now represents 9% of sales. In H1, we progressively deployed new concept in nonfood in the Brazilian hypermarkets, including home decor, home textile and DIY with encouraging initial impact on sales. Sam's Club also grew volumes, thanks to more active members. As announced during our Carrefour 2030 strategic plan presentation in February, we launched our new loyalty program, -- no Clube in Brazil. With this new unified loyalty programs aimed at maximizing the ecosystem value and encouraging cross-shopping among all our formats. Moving to the other country segment on Slide 11. Performance for the half reflects mixed situations in each market. Belgium confirmed its positive commercial momentum with a sequential acceleration in sales at plus 1.3% like-for-like in Q2 versus 0.8% in Q1, driven by positive volumes. Market share was stable in Q2. ROI was broadly stable in Belgium. In Poland, sales were down minus 5.8% like-for-like. The environment remained competitive and consumption sluggish. The local team has implemented strict cost control and well optimized the store portfolio with the sale or closure of underperforming stores. As a result, ROI slightly improved in Poland. In Argentina, market conditions were challenging with significant pressure on consumers' purchasing power and negative food volumes in the market. In that context, the initiatives implemented by the new management team supported a positive sales dynamic with like-for-like up by 23.5% and gradually improving volumes. Volumes eventually turned positive in June for the first time since December '23. In this context of pressure on purchasing power, negative volumes and higher cost of risk at the bank pushed ROI down in H1 in Argentina. Moving to the top part of our global P&L on Slide 12. Gross margin was down 28 basis points in H1 due to more investment in competitiveness and the structural shift of our operating model towards franchise. SG&A expenses stood at 14.7% of sales with an improvement of 30 basis points compared to last year. The group delivered well on its cost savings plan with EUR 490 million achieved in H1. This is in line with the objective of EUR 1 billion for the full year. All this leads to a small increase in the group's operating margin to 1.9%, driven by the 3 core countries, France, Spain and Brazil, where ROI was up plus 9% in H1. Together, they offset the decline in ROI in Argentina and a negative comparison basis in global functions. Indeed, in H1 2025, Global functions recorded a provision reversal from long-term incentive expenses and variable compensation than initially planned. This did not recur in H1 2026, where global functions is back to a level close to 2024. Turning to Slide 13. Let's walk through the P&L items below the operating line. Nonrecurring expenses increased to EUR 165 million, a more usual level than the 2025 number, which reflected capital gains on the disposal of the stake in Carmila and real estate assets. Net cost of debt decreased significantly to EUR 121 million, reflecting the refinancing of all external debt at Carrefour Brazil, which was implemented in H2 '25. Other financial income and expenses were a negative EUR 38 million against a high 2025 basis linked to exceptional income in Brazil as monetary adjustments on tax credits were recognized following favorable court decisions. an effect that did not recur this year. So bottom line, adjusted net income group share strongly increased by 26.8% to reach EUR 345 million. This translates into an adjusted EPS of EUR 0.49 for the first semester, up by 18.3%. Let's now move to the key moving parts of the net free cash flow. As you can see on the right-hand side of the page, which excludes Italy, net free cash flow is slightly down versus last year, which was minus EUR 1.922 billion in H1, excluding Italy. ForEx was a headwind of EUR 53 million linked to Brazil, explained by a stronger real against the euro on a negative free cash flow during the first half of the year. Real estate net free cash flow is also lower than last year in H1 with less divestments in H1 versus last year. Excluding these 2 technical and calendar effects, net free cash flow is up EUR 64 million. Please note that these 2 items should reverse in full year 2026 net free cash flow. Full year ForEx is expected to be a positive on a full year positive cash flow. Real estate net free cash flow is expected to reach EUR 200 million to EUR 300 million as guided at the beginning of the year as more disposals will happen in H2. We are notably advanced on 2 sale and leaseback operations that could be announced in Q3. Moving on to Slide 15. As you can see, we now detail the net free cash flow generation by distinguishing between cash flow generated by retail operations and that stemming from the real estate activity. Let me highlight the key moving parts of the retail operating net free cash flow. EBITDA increased by EUR 45 million. The financial result was EUR 71 million lower against a high basis of comparison linked to the recognition of tax credits in Brazil in H1 '25. Change in working capital was down by EUR 90 million, impacted by higher inventory levels at the end of June in France. Retail CapEx were broadly stable. This results in operating -- in retail operating net free cash flow at minus EUR 1.825 billion compared to minus EUR 1.757 billion in H1 '25. It's roughly stable if we exclude a negative currency effect from Brazil of minus EUR 46 million. Real estate net free cash flow standing at minus EUR 41 million, down versus last year due to different calendarization of real estate divestments and investments versus last year. The decrease is mainly linked to a EUR 99 million decrease in real estate disposals at EUR 39 million in H1 as 2026 divestments will happen more in H2 this year versus last year. Finally, as already mentioned, the net cost of financial debt decreased by EUR 81 million in H1, mainly linked to the refinancing of Carrefour Brazil debt carried out in H2 '25. I will now complete this H1 financial review with a few words on net financial debt, which decreased by EUR 1.1 billion. Net debt amounts to EUR 5.8 billion on June 30, 2026. The page being straightforward, I will just detail acquisitions and disposals that represent a positive net impact of EUR 260 million. They notably include the disposal of Carrefour Romania for approximately EUR 500 million. The group also sold stores, including 6 hypermarkets linked to the French Competition Authorities decision. These positive impacts are partly offset by the effect from the sale of Carrefour Italy for minus EUR 181 million already mentioned in February as well as other small acquisitions. This concludes my presentation. I thank you for your attention. Alexandre and I are now available to take your questions.

The first question comes from William W.

William, can you talking to us...

Yes, we hear you.

The first one is on France. I suppose when you look at your market share performance versus what you set out in the CMD, -- what are you doing in order to drive more market share gains over the next couple of years? And are you happy with that performance in the last couple of months? And then the second one is on your H1 margins are flat year-over-year. In order to get to the more than 25 bps of margin expansion, what do you see as the main drivers of the acceleration in operating profit in H2?

Thank you, William. So your first question is on the market share in France. In a nutshell, in H1, we have a stable market share. positive in Q1. And in Q2, the market share was stable. If we exclude the disposals of remedies of the acquisition of Cora. As you maybe know, we have to sell 6 hypermarkets, which were remedies from the Cora Match and Casino acquisition in 2024. And of course, it has had an effect on our market share around 14 points. We remain very confident in our trajectory to reach our 25% market share target by 2030. Our market share is already positive in volume. We have made great improvements in our commercial offering. The strength of our loyalty program is constantly being reinforced. We continue and we have invested a lot in prices, which actively drives our volumes grow. You've probably seen that we are now positioned as the #2 in the French market. And the former Cora stores are ramping up well. Following the deployment of Carrefour's commercial equation last year, these stores are now growing faster than the historical footprint and the pace of like-for-like has doubled between Q1 and Q2. So we are very confident we will be able to continue to leverage Carrefour's commercial proposition to our customer and grow organically in the next quarters. Concerning your question on the margin. So as you understood, we are very satisfied with the performance we delivered in H1, notably driven by the steady 9% growth in recurring operating income in our 3 core country, which is consistent with our full year guidance as well with consensus for the full year. This puts us in the right position to deliver on our full year objectives and mainly the 25 bps increase in operating margin, I would say, from a business standpoint and from a financial standpoint. From a business standpoint, I would start and Mathieu will continue. In France and Spain, the markets are positive and even dynamic in Spain. And we see this trend continuing in H2. And additionally, we had a good commercial operating dynamic, and we see it accelerate further in H2. In Brazil, in H1, we posted a good profit growth despite weak volumes this semester. And things look better for H2 with volume trends at Atacadao improving, food inflation turning a little more positive and more cost savings ahead of us. Last, Argentina, you see was difficult in H1. We had negative volumes and increased cost of risk, but we think the worst is behind us. We are sure about that. And the new commercial policy is performing well. Volumes are back in positive territory and cost of risk stabilized. From a financial standpoint, Mathieu?

Yes. Well, from a financial standpoint, so we grew 9% recurring operating income in our 3 core countries. This pace of growth is consistent with the full year guidance and where the market consensus is for the full year. There are maybe 3 additional points. The first one is that & Match will have an acceleration of earnings in the second half. You know that the commercial model was implemented for the first time in this H1. So it did weigh on profitability. But last -- in H2, we will lap over the implementation, which occurred in the summer of '25, and we won't have any more one-offs. Then Argentina, where we expect a better performance. And then the global functions, we had a technical element in H1, which is not expected to recur in H2. So that would be a positive factor versus the H1 dynamic.

We will now take the next question from the line of Manjari Dhar from RBC.

I just had 2, if I may. My first question is on France. I think you talked about your pricing, your 3 ways of pricing initiatives. I was just wondering how much work is there still to do on pricing in France? And are there further investments planned? And so how quickly do you think that the price perception is improving in France for the consumer? Do you think that there is still more work to do in sort of getting the consumer to understand the work you've done on pricing? And then my second question was on digital and AI. I just wondered if you could give some color on the learnings so far from the new technology you've deployed, the new vision technology. And any other insights you could give on that would be really helpful.

Thank you for your question. Your first question is about price competitiveness and the initiative we have continued to deploy. So in this semester, we continue as we are now committed to invest in our price competitiveness and to reinforce and to improve our price competitiveness. 2 main mechanics. The first is the 3 waves of investment in national brands of 500 products each by around 10%. And the second is an operation on our private brands on 200 products at the beginning of -- at the end of February. All that on all the other initiatives we have been taken reinforced by all we are doing in terms of promotion has enabled us to improve our positioning and to improve the index that we have communicated. We are #2 now in the French market. The conviction we have is that we are capable to fuel this price positioning and this price investment through our cost savings and the cost savings is EUR 419 million for the group on finances taken its fair share. And we will continue to do that while protecting in the same time our margin. But the elasticity of this investment is very positive and the transformation of this price positioning into a good volume dynamic in terms of volume is very strong. Concerning Vion, your question is very relevant because it's a very important project for us, and we are going per plan with first hypermarket equipped as of today. We have an objective this year of 50 hypermarkets with V. We are now at 8 stores already being deployed with Vion solution. Initial feedback from the stores are extremely positive. This is, of course, a very important productivity issue for us, but it is also a data-driven model, allowing us to both exploit and monitor customer behavior both internally and externally with our suppliers, which can become a new source of income for the group. So it's a very important project. We are fully mobilized on that. And the level of conviction and the confidence we have today in this project is very strong, and we will reach our objective of 50 stores this year.

We will now take the next question from the line of Sreedhar Mahamakali from UBS.

Can I just go with 3, please? First one, it seems to me just backing out from what you're saying on France ex Kora and the Match that Cora Match losses were EUR 75 million, clearly worse than I thought and certainly a lot of other colleagues are thinking. Can you explain that a bit more? And do you still think Cora & Match achieves breakeven this year, given the slightly bigger loss than one. Secondly, Argentina, can you give us a sense of losses here in the first half? And what is the phasing? How should we think about Argentina contribution on a full year basis? And third one, I think, Mathieu, you might have said it, I probably didn't hear very well. But are you saying you're comfortable with consensus expectations of just over EUR 2.3 billion for the full year?

Thank you, Sreedhar. On your Cora question, we -- you're right. We are expected -- we are where we expected to be with an improvement of EUR 5 million compared to the reported figure of H1 2025, that was minus EUR 80 million. So it means that we are minus EUR 75 million. This semester was balanced between the positive effect of the end of the one-off costs related to the integration and the negative effect of the alignment of the commercial equation to the one of -- what we have left the impact of the rollout of the commercial model and the one-off integration costs will be behind us, and we benefit from the continued improvement in sales and market share that you have seen in this quarter this quarter, 2.3% at the first quarter, 4.6% at the second quarter. So there is a clear acceleration in terms of like-for-like, in terms of debit, in terms of customer satisfaction. So the dynamic is very positive. So we expect a material turnaround to complete where we see at the end of the year Argentina, as you've seen, we have been suffering from 2 effects related to the macroeconomic situation. First is the decline of volume, which has been quite strong. And the second is the cost of risk, which has increased with a one-off provision. The good news, I've decided to modify the management there. We have made a reshuffle of our commercial equation. And the good news is that we have seen very quickly the first results. We are back in positive territory in terms of volume since the beginning of June. We gained market share. The relevancy of our commercial equation is now very strong. So we see H2 as an opportunity to improve the situation and the level of confidence we have is good.

And on the -- your third question, Sreedhar, so indeed, we confirm our guidance today and the recurring operating income guidance is very consistent with where the consensus is and very consistent in terms of full year growth with the growth that we deliver on our 3 core countries in H1.

Sorry, Mathieu, just to follow up on what Alexandre said. Are you still expecting Color and Match to achieve breakeven because that's clearly...

Driver.

Again, very close to breakeven. We had these 6 stores that we have divested. There were a little bit of profit. So we'll see. But clearly, the trend is very solid. I'm not going to say again what Alexander said very clearly, and we have a number of negatives last year that are not replicating as we are lapping over the commercial model. So significant benefits to come in the second half.

We will now take the next question from the line of Monique Pollard from Citi.

The first question I had was just on Poland. So obviously, you've managed to slightly improve the ROI in the first half despite the negative like-for-likes. Obviously, the like-for-likes also took a step down there in the 2Q. So just trying to understand if the like-for-likes continue to be disappointing for the second half of the year, whether there's enough in, I don't know, cost control, et cetera, you can do to maintain or slightly improve your ROI in that country still? And the second question I had was on Brazil. So you obviously slowed your nonfood e-commerce to prioritize profitability sort of similar to what you had talked about in the first quarter. Just trying to understand how your online profitability now is for nonfood versus food in Brazil and whether there's still more SKU optimization that needs to be done on the nonfood side? And then just on Argentina ROI, thank you for the comments you made earlier. But I guess what I'm trying to understand is what's the biggest driver there? Is the biggest driver of the improvement of the ROI from here, just a return to volume growth? Or how material is that sort of cost of risk starting to stabilize for the Financial Services business as well?

Thank you very much, Monique. So first question on Poland. So clearly, we're not satisfied with the like-for-like over there. The market is competitive. The market has been complex in Q2, but we are clearly below our objectives in terms of like-for-like. The good news is that as we did in H1, we have cost savings initiatives that can be implemented, including store closures that are loss-making. So we implemented some in H1, and we have further initiatives to come in the second half. Brazil, so nonfood e-commerce was really a small business. Profitability was not good. It's clearly not strategic. Strategic for us is food e-commerce in Brazil, where we have a very good pace. So we decided to scale down this activity and to preserve the profitability. So it negatively impacts the like-for-like, but it's positive from a bottom line perspective. I think we commented on that in the previous quarter, and we'll probably have the same statement in Q3 as we are scaling down this business. In Brazil, in Argentina, your third question. So first, there's really 2 dynamics. The first one is volumes that have been negative in H1. And Alexandre said, they are back to positive in June, beginning of July is very satisfactory. And we think that it relies on the new commercial approach, which is here to stay and to amplify. So we are confident in the volume -- in the retail volume dynamic in the second half, and that has negatively impacted the profitability in H1, so more confident in the second half. Then on the cost of risk, clearly, we've had a weakening of the portfolio due to the consumption environment in Argentina. We implemented the necessary provisions as our rules require. We see no further degradation of the cost of risk of the portfolio in Argentina. So this is to be monitored, but we think that we've taken the hit, and we are not expecting anything significant in the second half.