And in some cases such as SAS, for example we saw retention rate increasing. In regards to, yes, the other Supplemental segment, actually there €“ those are mostly tax services and to some extent some communication tools that we were offering to other players, okay. So to customers outside our base of schools, we decided to only offer those services in-house to our base of clients. So we interrupted to sell those services to clients that do not belong to our base of schools. Okay, so that €“ it was literally a business decision to reduce complexity and focus on what moves the needle? So we decided to keep those services in-house and stop selling them to schools outside our base of clients, okay.
Marcelo Santos: Okay. Perfect. Thank you very much.
Operator: The next question comes with Javier Martinez with Morgan Stanley. Please go ahead.
Javier Martinez: Yes, thank you. I have four questions if I may. The first one is on margins. You are guiding for a range of flat to 200 basis points, increasing margins from 36.5% to 38.5%. And I was trying to do math, the back of envelope maths, math on those numbers, and you are increasing prices 9%. So this is more than inflation. You have a churn of 9%. I guess, that logically you are probably losing some of the less profitable guidance. Paper was price pressure last year. So hopefully this year at least should be similar or improve. Printing, you mentioned in the call is going to improve because of scale. Operating leverage, you have the negative impact of around R$30 million from Isaac, but still margins should be increasing. No. Have you been conservative in that guidance? So why €“ what is behind that flat to small increase in margins? That’s number one.
Roberto Otero: Hey, Javier, Otero here. Good to speak to you. So on margins, the effect that we saw on paper prices last year affected the negotiations that we established for this year, Javier. Remember that we start producing and printing the content quite early in the process. So we start this process sometime around July last year. So those negotiations actually happened during 2022 when the level of paper prices was still quite high. And those contracts, they remain in place for the majority of 2023, okay. We are already in the process of negotiating prices for the 2024 cycle with a completely different price level, okay, for printing. So we should not see this effect next year based on the negotiations that we have in place.
And there are quite advanced actually. But for the, I’d say, at least half of 2023, we’ll still deal with a higher price to print our content, okay? So that’s the single reason why we are not increasing the EBITDA margin range. But you’re right, I mean, when you look at the other component of profitability, they would contribute to a higher margin. But I mean, we still see some gross margin pressure, especially in the first half of the year.
Javier Martinez: Understood. Very clear. Thank you, Otero. If I may go for the second is only Isaac. So you are growing pretty fast. No, just go to double or more than double in €“ it’s already reaching quite a reasonable scale. So why €“ when do you think that you’re going to be in breakeven or maybe the strategy is not to go into breakeven, it is just to use this as a distribution or marketing cost to subsidize the growth in Core or what is the strategy in prices? Because I guess, the reason why you are still expecting negative margin is because of prices, you have already quite a reasonable scale not to be profitable.
