Cosan S.A. (CSAN3) Earnings Call Transcript & Summary

[Interpreted] Good morning, everyone. Good morning, ladies and gentlemen. And for all of us that are keeping tabs on this event on our streaming platform, welcome to the 12th Cosan Day. For those that don't know me yet, my name is Ana Luisa Perina. I am the Head of Investor Relations with Cosan, and I'm delighted to be here and welcome you. I'm really happy that we can go back to our in-person events. This year, we still have a hybrid model to prioritize safety, but we are going to share on real time the entire content for you. And speaking on safety, I want to briefly go through the instructions for the day. There is no training scheduled for the hotel today. The alarm rings, we ask you to please follow the instructions of the team and to evacuate the vicinities. We have 3 exits here that are duly located and all the team is going to be positioned to lead us to a safe position. And so getting into the schedule for the day. We're going to have an opening session, and we're going to discuss a little bit of the messages for you today. And then we're going to have the presentation around businesses. And at the end of each presentation, we're going to have a Q&A session in which we're going to have the CEOs and CFOs of each of the companies. So we start with Compass, led by Nelson; and then we're going to hear from Moove from Filipe; and then we're going to hear from Rumo conducted by Beto Abreu but also with some contributions from Pedro Palma, Daniel Rockenbach and at the end, the CFO is going to join the Q&A. And to conclude the business session, better yet to conclude that part of the event, we're going to have a recap. And for those that were not able to watch the previous content, remember that this is all available in the RI website, in the Investor Relations website. And we're going to hear from Leo Pontes as well. After that, we have -- we're going to have a block dedicated to Cosan where we're going to have many executives. We're going to hear from financial highlights and also governance. Marcelo Martins is going to tell us about capital allocation. And finally, Luis Henrique is going to wrap it up. We're going to conclude with a Q&A session. So it's completely packed with content, this morning activities, and we hope you enjoy it. By the way, our presentations are all available for download, and we have a QR code set up on the desks on the tables here if you want to keep track on the event via your iPad. So I'm going to ask for our CEO to officially open the Cosan day.

Good morning, everyone. We just got through our schedule, and we should let you know that we have a different design here where we want to provide more exposure to different people of the group, so you can get more acquainted with them. and with the different opportunities here. I want to draw your attention to 3 important points that we're going to try and cover here. And the first one is that we want to give you some perspective for those that are paying attention to the issues that affect the world and Brazil. we have a vision for some important changes as the pandemic draws to an end, the war in Ukraine, energy security, the transformation and the importance of having renewable energy and all the geopolitical shifts that we are seeing. We don't know where this is headed, but our vision is that Brazil becomes more important on a global scenario given that we have food production, we have renewable energies and believe it or not, we know how to deal with inflation. So we're definitely going to touch on cost and inflation. So you're going to see that from a business perspective and the drivers that really make us optimistic as far as the Brazilian position and our position as a business here. And the second thing that we want to cover with you is a little bit of what we have done so far, but very much focused on the future. You're going to hear from Leo Pontes, from Beto Abreu and from Filipe as well. So what is in each business what is already hired as far as growth. This is no PPT empty content here. These are concrete projects that are going to be executed and they are very much in line with our portfolio. And the third aspect, which I believe is really important is the moment that we are experiencing it right now. Late last year, we were deeply concerned about the inflation capital cost. We actually canceled some of the businesses that we had a lot of perspective for given the new scenario. And I think we were right on the mark, and we anticipated a number of shifts. And you're going to hear that from Marcelo as well. But clearly, our team prioritizes this phenomenon, which is not new in Brazil, but a lot of you are young here, but it's a very high inflation in how to deal with the P&L impact. This is crucial. And we've been discussing that internally day in, day out, week in and week out. This is essential to the business. And if you look at it, a lot of our portfolio is well positioned with regards to the business to deal with inflation, whether it's for margin purposes, regulated businesses, even competitiveness. So we're going to cover that scope. We're going to dedicate a lot of time talking about people in each of the businesses and our holding. We're going to talk about the partners program and give you more visibility on how we are transforming that side of managing our business and the crucial aspects of managing that business. Like I said, the project is already higher. We have a good cash flow generation in the Cosan businesses that are financing that growth. A lot of the movement that we've done lately is in line with the capital markets, and this is a crucial challenge for us to grow. Last but not least, we have a bet on a profitable energy transition, and ESG is at the forefront. We want to give a little more visibility to that aspect in each of the businesses as well and focus on that perspective. And again, we are at a unique position. So it's a complex and tough world out there, but I think we have some upsides in Brazil. We are well positioned in the industry. We have quality assets. We have a management view that is developed by our partner programs and a lot of people programs, and our vision is to make it happen. This energy transition in a profitable way. It's going to be an intense day, and we want to give a lot of visibility to the team, give you a lot of room to ask make questions and at the end of the day, we hope that we get out of here convinced about what we are doing. We have a major pipeline of assets that is propelled by a team that makes the difference. And this is really favorable to our business. So without further ado, I want to call out Nelson that is going to tell you about what is coming down the road. We have a lot of novelties, right, Nelson? Come up here.

Okay, folks. So it's a pleasure to be here with you. We're going to talk about procurement. So as you recall, we started this procurement journey on our Cosan Day a little over 2 years ago, it was back in March 2022, just -- 2020, just before the pandemic. Since then, we have developed a number of opportunities in our business. We tried an IPO. We gave it a try in late 2020. It didn't move forward for a number of reasons. But beyond that, we took on many commitments with you and the market to execute a number of actions. We updated you on that back in our last Cosan Day, we did it virtually. It was still in the midst of the pandemic. So my objective here today is to share what happened. So we had some evolution. We had some developments in the market. And from a procurement perspective since the last Cosan Day. So my objective is to bring you up to speed on that. But before we get into that business conversation, let us start with something that to us is really essential, which is safety. And this year, safety is -- it's a different topic. We talk about safety based on the ESG topics we focus on at Cosan. So to speak about safety, we talk about operational safety and we talk about accidents with leave of absence. And you're going to see that we are touching on a 10-year history. We're talking about a longer period, even though all the metrics that I'm going to show you here besides operating safety. These are last year's metrics, and we had some historical records. I think it's important for us to put it into context, given this longer scope, just to show you that the concern that we call ESG today has already existed in our company for many, many years, and that's why I'm touching on this topic. The first metric that we measure all across our businesses, and this one is no different, is accidents with leave of absence. So you can see a significant drop in the last 10 years. There's been a great reduction on the number of accidents. Even though we are expanding the operation, even though we have very important construction sites taking place, we are still maintaining a very safe level and we are avoiding leave of absence accidents. This is very, very positive, and we are acknowledged once again by the American Gas Association, AGA. Among many aspects that they monitor, they monitor large-scale gas distributors, which is us. And once again, we were acknowledged by this institution as a company that is leading the way, and it's an absolute benchmark for safety. One other topic that is also important for Cosan is climate change. Right here, once again, we are giving you a longer scope, a 10-year mark. And we can see a clear reduction on the CO2 emissions. This is measured on thousands of tons of CO2 issued per year, a drop from 128,000 tons to 11,000 tons for 2021. Basically, what we are doing here is we are replacing felt it iron by polyethylene in our pipelines. When you do that, you reduce the methane leakage to the atmosphere, which, of course, it's a major greenhouse gas. When you replace those pipelines, we celebrate that. And we are sharing that with the market since the beginning of last year. And we've just finished all the replacement with our pipelines here. So given all the metrics and everything that we delivered in terms of reducing emissions, this is one of the points that were acknowledged by the external associations such as the Carbon Disclosure Program. We were graded B. So we are notches above some of the other peers we have, not only in Brazil, but also outside of Brazil. And third, we always talk about diversity and female leadership. This is something that we've been keeping track for a long time, and we have been building this journey at Comgas for many years. Also at Sulgás and also for our Compass, the holding that oversees all of these projects. So there's been a clear development. When you look at it, what you are seeing here is the female leadership percentage. But when you look at the total staff, when you look at the overall employees at Compass and all of the different companies, we have a higher female leadership percentage, which makes me confident that we are on the right track, and this is going to continue to grow. And by the way, this has been acknowledged by the gender index at Bloomberg as well. And so when you look at all the figures, when you look at that 10-year history, of course, at the same time, we have a challenge to maintain that at that level, and we continue making acquisitions. For example, just now, we incorporated employees from Sulgás. So it's a challenge to keep the number this high. But at the same time, we do have a commitment to follow on this track and to continue focusing on diversity, not only gender diversity, but idea diversity, which in my vision, is even more important. Speaking on the ESG. Let us get into the market. I can help but start this conversation in the market mentioning the volatility of the natural gas market, I mean the Ukraine war, as you know, as if the pandemic was not enough as if the supply chain disruption was not enough, everything that we have been experiencing as a society in the last couple of years, in comes the war, which creates even more volatility for this market. Obviously, you see -- you're watching the news like I am, and this has been definitely a factor, especially for Europe. But with that, considering the volatility and the war besides that impact, we also have a recognition that natural gas has a crucial role not only for a cleaner energy world, but it also shed some light on the fact that gas is important for energy security. And when you look at, when you look at that global view as far as transitional fuels, and fields that are absolutely necessary for energy security. We look at -- when you look at Brazil, you see the same scenario taking place. Last year, irrespective of the war and the pandemic, we had a water crisis. And once again, that came to show in a very explicit way. That natural gas is a crucial tool for us to move on with this energy transition without jeopardizing our energy security. Still about Brazil, there has been many evolution. I mean, many developments on regulation, both on the federal and state level. We have seen a lot of advances. I still believe that the direction that our country is going and the actions we are taking as far as natural gas, we are still on the right track with that. Obviously, there's a lot of debate and a lot of discussion whenever you open up a market anywhere in the world, as you may recall, well, you were quite young, but the opening of the electric energy market also involved a lot of discussion out of debate, but it did happen. So I am of the opinion that we are on the right track on this as well. And very clear, besides the gas law, besides the decrease regulating the gas law recently, we saw a resolution from CNPE that provides an additional layer of guidelines, so we can properly regulate the natural gas market in Brazil. From a state perspective, we had a recent experience with Southern State Rio Grande Sul and Rio Grande do Sul alongside -- along with the privatization of the distribution, we also have new regulations, and we have a state-level gas law that is very much in line with the federal law, that regulates the parameters that the state government has to follow. And what they believe is important for the development of this market and to distribute national gas across the state. We have been seeing this on a federal level as well as the state level. We've seen some progresses that are very much in tune with the perspective we shared with you back in 2021 and that we reviewed last year. Those perspectives are still valid. Of course, we have volatility on the short term. But when you look at the 5- or 10-year horizon, we still believe that the country is taking the right direction in the sense that we are opening the natural gas market. But that's the market. What about Compass, what happened since the last Cosan Day. Besides the extension of our concession with Comgas, it's really important to remember all the regulatory tendencies, all the regulatory discussions about asset bases, miscalculation, asset errors, all of that is behind us. So it's water under the bridge. When we had that concession, we completely offsetted all the regulatory disputes that we had in the past. So this concession is ready to go in its new cycle. And you're going to see that on the next slide. We're going to show you that this cycle has already begun. We also acquired Sulgás. We acquired the control of the company last year. We were deeply involved in that process. And we acquired this asset. So the exchange of control happened fourth -- was effective 4th January this year. things that have been going as planned. We actually had some positive surprises that we are going to share with you on the next slide as well. Gaspetro, still speaking about distribution. So we had Comgas, Sulgás and Gaspetro. We are still the lead buyer of this operation. We still have a couple of months until the antitrust authority here in Brazil, CADE make its final determination. But technically, we still believe that on this case, that's exactly -- what was recommended. Finally, we just started our -- the construction of our terminal in São Paulo between Santos and Cubatao. We're getting into that construction project as well. We have -- when you have large CapEx, you have 2 metrics that always have to be observed on cost and on time, if it's on time and if it's on cost. And in this case, we are both. We also did a private placement last year, which enabled us to make this substantial investment with acquiring Sulgás gas and this position with Gaspetro. We did this smoothly, without any turbulence, and we are still keeping our leverage on the level that we'd like to maintain, which is below 2. So let's get into the different stages here. Like I said, this extension of the concession opens up a new window of opportunity, and it really encourages the gas distribution process. It provides more energy security, more regional development. And obviously, we have more and more customers that are benefited by it. Here's the commitment in this new cycle with the government of São Paulo. going to add to our 93 municipalities. We are going to add an additional 41 municipalities, and we have almost 20,000 kilometers of network that we have, and we're going to add some 15,000 more and we already have 2.2 million customers at Comgas, and we are going to double that number. So here's a company that is ready for growth. It is ready to double its size in terms of the customer base and with this extension of our concession up to 2049. Still from a Comgas perspective, this is a little bit of the operating performance. It has to do with the acquisitions as well, but let's get into the Comgas performance. It's important to note that our volume is back. I think it's more than back. The volume that we delivered last year presented a 15% growth compared to 2020. This is a record volume, by the way, for Comgas. So last year, we went back to a superior level than the pre-pandemic numbers. Our customer base continues to grow. We had a record number of customers, over 130,000 new customers connected last year and also the network kilometers. We have minimal -- almost 900 kilometers, which makes us go north of 20,000 kilometers in total. So that was the operating performance. And once again, we are delivering a very robust year that is very much in line with our commitment that we took on as we extended the concession. Sulgás, we started our transformation journey. I have some features here about this distributor. This is a distributor that has 69,000 customers. It sells 2 million cubic meters per day. So roughly 6x smaller. Comgas is 6x larger than Sulgás. The network is to the tune of 1,500 kilometers. There is a huge market when you compare it to of course, Rio Grande do Sul, but it's a huge market to be tapped into from an industrial perspective as well as commercial, residential. So we have a whole lot of opportunities here. And if I may, I would like to mention a positive surprise that we had when we took control of this asset back in January this year, which is the team, the sheer technical quality that we have in the Sulgás team. Great people, very well trained, very well developed, and this staff is really ready to go. They are ready to go forward with this company. So we implemented very few changes as we took control from a technical perspective. Obviously, there's been some changes in governance. So gas is steering away from the 8666 universe. We have a lot of development as far as the safety and security levels, not only for Comgas, but for Cosan as a whole, and that includes Sulgás. All of that has happened. But again, it's just amazing the sheer knowledge, the sheer capacity that this technical step has. Moving forward, still from a distribution perspective, we have Gaspetro. Just a snapshot of the asset. Here's what Gaspetro is. It's a participation of 18 distributors, 1 of which -- one of which was sold, [indiscernible] in the state of [indiscernible]. It was sold by Petrobras and Gaspetro to a different buyer. So today, in this asset, we have participation. We have a share on 18 distributors, 1 of which is GBD,our neighbor to Comgas in São Paulo. The remaining 17, it's minor shares. So we have a network north of 10,000 kilometers, 600,000 customers. And you see the red states highlighted here on the lab, we have 18 million cubic meters per day all across the states. So it's a little bit above Comgas, which is around 14 million and Gaspetro has that footprint, 18 million cubic meters per day. So 3 important comments just so we get an understanding of where we are in the Gaspetro journey. Along with this acquisition, we gain partner and a strategic partner that is completely in line, which is Mitsui. Mitsui has been involved in the management of these assets for over a decade, and they are very well acquainted with the business dynamics in those different states, and they have a government approach that is very polished and that is completely in line with our style. We tend to be more operationally and commercially aggressive. So we believe that this is a perfect marriage -- and our expectation as well as our partners' expectation is that this is going to be very, very productive. Second point that I think we have to discuss is that we've always said that we would do a proper portfolio manager -- management, right? So 18 distributors, that's a very high number of distributors. And we'd like to keep our focus. We'd like to keep our options open as far as investment and to allocate our capital wherever we see more attractive returns. So that's why we've always said that we will do a proper portfolio management. So before concluding the transaction we actually started doing that management, and we signed some binding terms, of course, with a number of preceding conditions and terms. That also includes the approval by CADE. And with that, we have a clear direction for the market. Up to 12 distributors are not going to be a part of our portfolio on a very near future once we complete that transaction.

And lastly, you know and I mentioned that about the -- while the antitrust agency requires that period for approval, we had the recommendation because of the approval of the operation with no restriction, and the court is assessing it. It's taking the necessary time to make all the assessments and connect with their decision in a few months. So we still have a few months to go until we complete those 330 days requested by the antitrust agency. Now speaking about CSP, notice that these 3 screens where I talked about Comgás, Gaspetro, we are talking about the development of gas demand. Let us turn the page. We are talking about investment in the supply of natural gas. What is this terminal? A new supply stores that must compete we truly believe that it is a competitive source and especially a flexible one to say natural gas to the country. We are conducting that project in a complex area. That picture shows us the pillars supporting the platform that will anchor the vessels, a very complex project, but we are doing it with very positive environmental and social impact. We are hiring 90% local labor in Santos and Cubatao. And we are investing in over 20 social and environmental projects. All of those in the surrounding region. An important point of the project, which is the dredging of the area where the vessels will be was concluded successfully, a very important and critical phase. And the financial and physical evolution, as I said, on time and on cost operation that is pretty much in line with our plan. I didn't mention point number one, all contracts. The 4 important ones for this project. First is the construction project and that was signed before the war in Ukraine, before volatility. The second one, the supply contract. Also signed before this volatility period. And the other 2 are the management contract and [FSRU] contracts, all of those signed before this volatility period. And therefore, they remain competitive, considering everything we are witnessing right now. On the financial side, what are we doing at Comgás when we look at all of that together, all the investment. We have been investing CapEx. That CapEx involves the terminal. We saw that in 2021, out of the 1.4, 1.1 is Comgás and 0.4 is the terminal. We still have a little over 3 million in the terminal, a bit at Sulgás and 1.3 of Comgás, which is the regulatory CapEx expected in this new wave after the extension. EBITDA is on the rise. Year after year, we see a CAGR of 20%. So we keep on delivering solid and resilient results despite a more challenging macro situation, and our leverage remains below 2, which to us is optimum in this growth period. So in the past 2 years, we paid out BRL 1.7 billion to our shareholders. We are a company that invest, grows and generates value to shareholders. In a nutshell, 4 end points stand out in order to describe this past year. Since our last Cosan Day. Number one, the business environment evolved. To my mind, we are on the right track, and it doesn't change our mid- to long-term outlook. Number two, the performance of our businesses, Comgás and Sulgás, both in terms of operations and finance, they are robust and resilient despite more challenging macro conditions. Point number three, our execution of projects, TSP and the implementation of this new wave of investments at Comgás and Sulgás. everything Is being as planned, on time and on cost. And finally, the portfolio we are developing reinforces our focus. ESG, remember, my first slide, I spoke about safety, climate change and diversity but also growth and return to our shareholders. This is what I wanted to share with you today, and I'll be around for the Q&A. Thank you.

So we will start our Q&A on Compass. Ricardo, would you come to the stage, please. We have microphones available. [Operator Instructions] And we have a CFO not wearing a jacket, quite modern, right?

I'm Lucas from JPMorgan. You spoke about market volatility in this post-war period. How do you see that directly or indirectly impacting the company in the short and in the long run. Could that impact future expansion projects because it might be more complicated or more costly to obtain supply contracts, you said that you signed your contracts before the word. So overall, how do you see this volatility impacting the company?

Thank you for your question, Lucas. I'll try and divide my answer into 2 parts. First, I'll speak about our life in the short and long term. And how do I envisage the development of this market looking forward. As for us, as I mentioned, everything we did, all the commitments we negotiated everything was done before this volatility period. Therefore, we should expect even better competitiveness of our contracts for the beginning of the operation, while the world is volatile. Having said that, it's hard to predict the future. This war will ease out and commodity prices will go back to the pre-war period prices. So this volatility to us a short line, but we still see our contract -- or the contracts we have signed to build that terminal as being very competitive despite the current period, be it in the short or in the long term, the 10-year period of the contract. How does that impact future projects? If we were to begin all over again today, I think right now, the cost is different, not only to build, but also the cost of the molecule. But if we look at long-term gas contracts, that volatility is much lower. The short-term curve is rather different from the 10-year curve when we look at prices, irrespective of the region, be it with Europe, U.S. or Asia. Whatever the metric, whatever the index, all the cost curves are downward the cost of steel is different from the cost before the pandemic or before the war. But society or the world of power domestically or internationally. Well, today, we are much clearer about how important gas is for the energy transition and that was already being discussed in different international forum. But right now, there is another important point, energy security. Brazil and the world need gas to maintain their energy security. Even at a higher cost, that won't prevent new investments from being made, bringing more natural gas to countries overall, be it Brazil, Europe, Germany, whatever country we're talking about.

I'm Bruno from Morgan Stanley. Nelson, could you speak about your strategy to trade gas, timing, size, if volatility helps.

Thank you, Bruno. Going up the mountain. This is a project that was approved in our latest tariff revision in 2019. It was proposed for the first time when we first try to promote a tariff revision. Luis was our CEO at the time in 2014. This project was brought to the state government in 2014. It was finally approved in 2019. And last year, the national agency took a different position. The 2 regulatory agencies, the state and the federal one had different understandings, the federal agency took a different approach. From that moment, the regulatory agency in the state of São Paulo decided to discuss that with the national agency. Even if the national agency showed that discrepancy that's still being discussed between the state and the federal agency. If you ask me what the final outcome will be, I think the 2 agencies will find some common ground. Nobody argues that the gas pipeline is necessary for the country. We just need to understand from the regulatory standpoint, how we accommodate different opinions. But the state and the federal agencies are engaged to find a solution. Your second question on the trading of gas. It won't be as we imagined 2 years back in the pre-war period. The war presents a bigger challenge. And there is a bias of a greater opportunity whenever there is volatility. But volatility for a market in a preopening phase, which is our case in Brazil, it brings a bigger challenge from the customer standpoint. Customers have a harder time becoming freer in a volatile market. In volatility moments, customers want longer-term contracts. We have seen both Petrobras customers and distributors looking for midterm contracts because of this volatility. Many of the contracts that would expire in 2021 or 2020, were renewed and they will be valid until the end of 2023 or 2024. So there has been a delay in their free market, and that involves a number of aspects. I could mention regulatory aspects, access aspects, but mainly to my mind, this was due to the volatility caused by the war. And the uncertainty going from a regulated to a free world in the moment of highest volatility in the gas market. This is the highest ever. What should we expect? The market will open up gradually perhaps more slowly than we had anticipated in the pre-war period. But as I said, it is moving towards the right direction. We're increasingly movements towards a freer market yesterday we saw a very important player signing a contract with a consumer for 300,000 cubic meters a day with investments of BRL 0.5 billion. So we see that opportunity. We see people looking at that, and we will see that more and more.

I'm Thiago from BTG. Nelson, when you talk about portfolio management, when you were talking about Gaspetro, it is unclear what you understand as a requirement to maintain an asset in your portfolio? Is it scale? Is it your stake not only for Gaspetro, but also the next steps growth-wise.

Thiago, it's a bit of everything you mentioned. Unfortunately, I can't give you an answer as I like to -- as I usually like to and there is a reason for that. For this purchase and sale contract where we committed possibly transfer some assets. These precede certain conditions. These are conditions that precede certain aspects. So the portfolio management that I mentioned still depends on many things that need to be defined until the deal is finally closed with Gaspetro or Petrobras.

What are these conditions?

To exercise or not the right of preference on the part of the states. If the states exert their power of preference, some of the divestments we want to make will no longer exist. That's why -- that's one example that explains in part why are not talking much about it. First, we must look at that transaction in 2 different and independent slots. Number one, we will complete the Gaspetro deal, and we will go over all the requirements that will lead us to the completion of that contract. Once we take over that asset, we will look at everything else and assess how we will move on from that point onwards in 12 out of the 18 distribution companies. If I may add, I'll be somewhat repetitive. The main objective of those divestments is focus, focus on some distribution companies that we believe are the main targets where we should make our efforts if the sale of up to those distribution companies does not occur, we will need the work that needs to be done. But I think the main message is focus. Just as a last comment to you, Thiago, when we get to the end of this journey, Stage 1 and 2, I think it's going to be clearer to the market what we are trying to develop in terms of our portfolio, but we must go over all those steps in order to get there.

A question from Vicente Falanga from Bradesco BBI. Nelson, how do you see this breach of contract between Bolivia and Petrobras, that affect your operations in the long term.

That means that we shouldn't depend on that gas. I'm not familiar with that contract between Petrobras and Bolivia. It's not a public contract. I do not know the closes and obligations. But when we look backwards in the past 10 to 15 years, since that contract between Petrobras and Bolivia was signed in quarter periods of the year, during the winter, there is a change in gas flow from Bolivia to Argentina and to Brazil. This is no news. This has always happened. I can't tell you if it's too much or too little if it was more or less. What do I know? As a Petrobras customer, looking at Petrobras as a supplier, we've never had any supply problem. I don't think we should be concerned. If I'm not mistaken during an interview, Petrobras disclosed that this gas flow change between Bolivia and Argentina, wouldn't affect the supply to Brazil because Petrobras has different sources. Having said that, that question allows me to reinforce how important it is for us to have more supply sources for Brazil. Once again, TRS, this is not an asset that must be used mandatorily. It must compete. It must be available should anything happen. So once again, because of the changes in the market dynamics, we must have access to a reliable source of natural gas that is also competitive and flexible.

Thank you, Nelson. Thank you so much. We have no more questions to contact, and I think we can continue with our agenda. I wanted to invite Filipe Affonso Ferreira to speak about Moove.

Good morning, everyone. It's such a pleasure to be in person here and be able to speak about Moove. In the past few years as we saw in the video, we laid the foundation of our infrastructure the way we work. Coming to our culture and our strategy, where we have all our teams knowing where we want to go, what our priorities are, where we want to invest. We invested heavily in our assets, in our people, in international experiences in the creation of intelligence. We are clear about how we have to work together. We have a pack on how to work together to get the most of our business. And we created a purpose to do things the right way to benefit all stakeholders. With that, all those investments to sophisticate our approach in an international lubricant market. This led to undeniable continuous improvement. We are very proud of the track record we have developed. All our teams are very confident in our future looking forward. So first, excellent track record in the past 5 years. We developed our culture, our strategy. If we look at the market moving forward because of a bad year for the market, because of the beginning of the pandemic, the market is expected to grow both in volume and in value. But our growth goes way beyond market growth because we understand how the market operates. Lubricants are additives plus basic oils. But the secret doesn't lie in mixing those 2 elements that account for 88% of all the lubricant costs, but rather the supply intelligence, the pricing intelligence, having a clear commercial strategy tied to our supply strategy, and we invested a lot in that intelligence in our business, which is leading to our results. We have learned a lot in the past 5 years with all that track record. First, we wanted to be initially resilient industry. Our industry is still very fragmented. Technology allows us to improve our margins constantly. But you must be connected on the supply. And on the commercial side, investments do make a difference, investments in assets in our human resources and intelligence. That will make a tremendous difference. And customers want the service. Lubricants are not a relevant cost for the operation of an organization, but having the lubricants is key, service and product quality is key. All those lessons make us confident besides the fact that lubricants are everywhere. This category is present in every type of vehicle in every industry. We have a classic B2B, you have engineering teams working on applications and convincing customers, understanding customer pains. And we also have B2C where you deal with consumers, where trade marketing becomes very important. So this is a business full of specificities and definitions. It's quite different from the classic oil and gas industry, you need a certain level of sophistication. And this is an industry where that investment historically, it was modest in terms of understanding the market and sophisticating it. And as far as lubricants, this is a positive agent for ESG. We have teams that are working on it around the clock because we want to potentiate that element because lubricants, what they do is if you have a well-lubricated equipment or vehicle, you have more efficiency, you have more productivity, and what you do is you reduce the cost of the operation. And lubricant itself, they have a material cost, just like any other thing in the operation, such as machinery and such. So if something is well lubricated, your maintenance cost is going to be capped at Bay as well as you having a safer operation. So this is a very important category. It's also a positive agent when it comes to ESG. It's a clear sophisticated business model, a well-designed strategy. We have a track record in our results. So today, we are very, very confident about expanding our business in this way and to do some acquisitions that are a little bolder, just like we have announced and such and so on. So we are very happy with those developments. And all of our process, all the execution and inorganic growth. All of that has a clear direction. The level of opportunity that we have is very important. And if we have a clear direction, we must have an ability to capitalize on the culture and the strategy that we've designed. Also to use our competence network, it has to be possible to replicate the management systems that we created. We chose the Americas and Europe as our focus while we don't exhaust the opportunities that are in sync in these regions, we are not leaving those regions. And the business portfolio for lubricants, most certainly, the core of it is comprised by lubricants. But inside this chain, we want to -- we are talking about supply, manufacturing, sales, marketing and distribution, and we wanted develop raw materials and develop technology, which is a different sort of investment. So it's really important for us to have the right partners to work on this endeavor. But yes, we work in [indiscernible] as a reseller, so we can be close to that industry. The additive industry once again is a crucial aspect of our cost. You've got to have the intelligence in this market. You've got to have a strong connection and be close with your suppliers. We even have a basic specialty distribution business to be even closer to those raw materials that are so essential for us. And again, lubricants further down the road, we also have some specialties that are -- specialties where it's not as robust. It doesn't require as much specialization. It's more scattered and they add on to our lubricant portfolio. But again, that has to be done the right way. We must have focus, so we don't distract from our core business, which is lubricants. And once again, we got to work on the entire market segmentation. Well, that being said, this month is a very important month. We are doing some acquisitions that we are very happy about. These are well selected, we cherry picked each and every one of those businesses, and we are very confident about integrating those businesses in our main portfolio. In Brazil, we bought a company called Terreno We're going to close that at the end of the month. Terreno is a specialty company. It's a very, very traditional company in the Brazilian market. they have connections with great OEMs. They have major industrial accounts, very good capitalization. The company's revenue is roughly BRL 250 million. And they have a staff. They have a team which is very , very skilled, very knowledgeable. I mean this is a team that has a lot of experience in the business. So there's bound to be a lot of opportunity for us. We also have commercial synergies. There's going to be a lot of cross-selling. But most importantly, we're going to maintain this company segregate it because we're talking about a different kind of play. It's a more detailed play. It's more tailor-made, it's not as massive just like we have it with our lubricant business. So it's very important to keep our focus. Clearly, we have to establish the leadership strategy and how to connect with the remainder of the business in Brazil, so we can potentiate that. I mean there is a synergy that is really amazing between the different businesses. They have the industrial side, you have the automotive side. There are many possibilities in our portfolio. I mean it's really endless possibilities. There's a lot of complementarity with what we have, connection with our indirect channels. It's a great synergy. We're really excited about it. Very well, second acquisition that we just announced this Monday with a lot of pride, we had our eye in this company for over 5 years. It's U.S.' PetroChoice, which is a major player in the United States. Before we get into that, I just want to explain you why, and how relevant we are going to become in the U.S. market. We are going to reach a whole another level. In the middle of 2018, we did a minor acquisition in the U.S. and precisely the objective was to learn a little bit about the dynamics in that market, to learn the ropes. There was also a distributor that was very focused, very specific. So we wanted to learn the business in the U.S. Companies are big. Each region has a different way to operate. They have different ways of doing business out there. So we had this process. Considering the 5 years that passed, we had that share in the global market, and that was just a seed that we planted in the United States. But this movement right here, it nearly doubles our share. The United States is the second largest lubricant market in the world, very important for ExxonMobil, which is a major partner. It's really a strategic alliance that we have with this company. So we are in 2 of the 3 largest markets. This is a transition that makes complete sense to us. PetroChoice, like I said, we had our eyes in the company for over 5 years. We started touching base. Back then, it wasn't the right time. And it was prepandemic. And then during the pandemic, we still had our eyes on them. I mean we kept track on this business for a long time. And in the last year, we had a great negotiation process that was just concluded this Monday. This business has a volume that is very similar to the Latin American volume. Everything related to Mobil that goes to the market -- that goes to the U.S. market, 20% of it goes through PetroChoice in some capacity, in some way, shape or form. The number of staff is very similar to the number of staff we have in Brazil, a little less. Two plants, over 50 distribution centers and a great capillarity as far as their customer base. So this is a great asset. And like I said, is a pure play. I mean, it's a unique lubricant player. They have a focus on this industry. It's one of the largest ones in the U.S. So it's a bold step, but we are very, very confident about it because that makes us relevant in the second largest market in the world. And we have a clear sight. If we establish a strategy and an execution process that is in line with commercial and operations, we stand to have a lot of opportunity to the point that we're going to have to be confuse how to sell, how to invest, so we can maintain our focus on that execution. Since the beginning, we're going to be working with a complete portfolio. We work the premium market. We work the entry market with our own brands. This is a national scale company, lots of capillarity for distribution. There's going to be a strong ability to capitalize on the global relationships we have with major additive suppliers and with major basic oil suppliers, including our partners on the lubricant space. And from the supply and manufacturing point of view, there's going to be, I mean, so many opportunities considering the factories that they have out there in the U.S., plus you're operating in the largest market in the world. I mean there's going to be a lot of opportunities related to the core business and also new inorganic advances and things of that nature. But obviously, our focus is going to be on improving the business before expanding the business. So we're very confident with all of that. When you look at the reach that PetroChoice has, this company is located on 25 American states. If you think about the market as a whole, you are reaching 70% of it. They are more focused on the East Coast where you have more presence, all the way to the Midwest. So there is a focus on this region. You see on the map. Roughly half of the business is Mobil. Half of the business is different brands, their own brands. So this business is really in line with our European business, where you have the Mobil distribution, and we also have distribution and sale of our own brands. There are some tools that were already developed. So again, today, players in the United States, and we're going to be able to do a great job out there. We have the experience to be able to deal with that, clearly. We are moving our -- we are setting up our position in there, and we'll be up and running with all the staff, the tools and the system, everything, ready to go. Okay. Let's get into our global scale, just so we give you an idea because we changed size since yesterday. We're coming from a market of 3 billion liters to 9 billion liters. Our sales volume. And again, these are all projected numbers. But we are expecting an increase of roughly 50% overnight. Our revenue is going to jump to BRL 10 billion, and half of that is going to be in strong currency. Great EBITDA. Our staff is going to nearly double and we go from 2 to 5 plants, and we're going to jump to 100 distribution centers. So we are reaching a whole another level that puts us near a great future. I'm very proud of all of that. I'm really happy with that acquisition. It was done at the right time, and this is the right acquisition as far as we are concerned. Speaking about our future and our focus from now on, our focus is to do a good onboarding, to do a good transition with PetroChoice and to [ Reno ], to execute on the synergy opportunities with a lot of clarity, knowing what comes first, knowing what the priorities are and knowing where the real juice is to be extracted and still potentiating our continuous improvement. Today, we have a very clear mindset in the company. People like to see us raising the bar and they like to raise that bar even further once it gets up there. And we're going to continue doing this. We work with purpose, and we have built that value for the stakeholders at large. And again, that's what the business does because that's what creates retention, more so than any other element in the organization. So that's what I had. Thank you. So [ Leno ] is going to come up here, right?

Yes. Thank you, Filipe. [ Leno ], come up on stage, please. And we'll now move on to the Q&A session for Moove. Just as a reminder, you -- all you have to do is raise your hand. Our staff is here at your service. Please state your name, company and please refrain from asking more than two questions.

My name is [ Mateos ]. I have two questions. As far as the Moove expansion as a whole. In the past, a lot was said about the capacity for additional capital for acquisitions. And we saw some comments on the media that this movement is going to be funded with the current company cash. Are you trying to save room for an additional acquisition with contribution from the partners or -- going public? I mean, I just want to understand that decision about the funding of that acquisition. And I want to understand if that's the moment to focus in-house, or if you are still taking a look at other markets?

Well, our capital structure was not as efficient as it could be. So the company had room to take more debt. We've accessed the market. We had an acquisition in the U.S. market. And in the context of distribution, they have a much bigger scope. So we were able to take on this debt, and we were able to get a very competitive debt, very in line with our profile as far as working capital and short-term conditions. We were able to extend that and we became very competitive with that. And we had room for it. Now we have different options. The terms that we attained are very good terms, and they are in line with that dimension of the business as far as what the company expects to create and execute. So we still have different options on the table. Just like Filipe said, I think the focus now is to operate. It's what we have been doing, and we've been doing quite well in the last 5 years. And from then on, I mean, we still keep an eye on the different dynamics of the market and stay tuned for opportunities. And just to add on to your question. Yes, we're going to continue to look at the market. We have opportunities to reinforce our businesses on other fronts. So that's an essential exercise.

This is Lucas from JPMorgan. Filipe about PetroChoice, I imagine that the United States is a more mature market. It's a large market, but I imagine it's more mature than other ones. I just want to understand your strategy a little bit more. In terms of what you intend to deliver as value, is that as far as operating the asset and perhaps closing a margin gap? Or is the value on expanding that asset and increasing the customer base volume? I think it's both, but just quantitative -- from a quantitative perspective, I just want to understand what is your driver? What comes first for you? And down the road, what is the future? Are you going to grow with other assets that you can acquire? I mean it's a very fragmented market. Can you talk about the market as a whole? And what opportunities are up for grabs on the long term for you?

Good one, Lucas. Last week I was there, and the model for the team is get better, to get bigger. So in other words, we have an opportunity here. Before we continue to add on to the business and before we enhance the way we operate and before cherry picking, the opportunities we can have a very clear commercial strategy because it's a huge market, very diverse. The landscape of the business on the different states and the micro and macro regions is completely different in the U.S. You have a different offering. So again, there is a gigantic opportunity to create intelligence for our commercial strategy and to create an intelligence from the supply side before you start adding on to it, right? Just adding on for adding on sake, that's not the point. To us, the major asset is we have created a gigantic portfolio. Now let's boost it. Let's improve the portfolio and increase it. And obviously, we're going to keep an eye on it constantly. And we're going to assess when is the right moment to make a move. But there is a clear benefit here to be had as far as improving our supply strategy and our market presence. This is known. It's very aligned with the team. It's very in line with what we are prioritizing. We are creating a team that understands exactly where we are headed and what comes first, and we just had to execute.

This is Bruno from Morgan Stanley. Yesterday, you were talking about marketing and services, and you talked about the margin differential in Brazil compared to other countries. Brazil has very lower margins. Does that apply to lubricants as well? I want to understand the market -- the U.S. market versus the Brazilian market. Can you just shed some light on that differential, whether it's in ROIC or margins? What is the delta behind this new expansion?

I'll start, and [ Leno ] is going to add on to it. Well, in the last few years, we improved our margins quite a bit. And to your statement, 5 years ago, we put something on the table, and we were working quite hard on the margins. We were building those margins and creating -- carving out what we call revenue management as a process in the organization. So we were -- we had our eyes on supply and manufacturing with a lot of care and we grew our margins quite a bit. Today, we are not that far removed from what once was a far distant number. So we don't necessarily agree with that statement that the margins are that lower here. To your comments, this is a market of millions of SKUs. And this customer profile, that portfolio and that way of reaching the market can offer some very different margin possibilities. The challenge up to a short time ago was to work in the dimension of the Brazilian market and what we could extract as far as that -- those margins. And I think we were able to get a very high grade portfolio, and we were able to provide quality service. So with that, we've been able to get a good growth rhythm. And that also tends to happen in the U.S. market. We are understanding the value opportunities. On lubricants, you need to have a quality sale. You need to have a quality staff, you need to enter the market the right way. That can put you on a different margin level. And that's the job we are doing, day in and day out. We work with our partners once that appreciate that additional value we are trying to give. So we have major opportunities to continue to expand the margin in any geography that we operate because the market is out there.

So this is it folks. Filipe and [ Leno ], thank you so much. Moving forward, I would like to start the Rumo block as well. Thank you.

Good morning, everyone. Very happy to be here with all of you. I want to start the conversation about Rumo by reminding you of Luis' introduction and just a period that we are experiencing right now. He touched a lot on energy security and food security. We talked a lot about energy. And in the last 2 presentations, we saw that. We saw that with Raízen yesterday. So just to remind you that at Rumo, we are at the forefront. We are at the center of that supply chain to the entire world. We cannot fail to mention that in our presentation. To be very objective, there are three questions that I would like to answer at this point during our conversation. The first one is how solid is our investment case? How solid is our investment thesis at Rumo? And how does that look considering the shifts that all of us are experiencing and watching every day, not only in Brazil, but all over the world? When it comes to our investment thesis, we always think long term, but I need to touch on the short-term aspect as well. I got to be very objective about it because there are two other questions that we want to answer here in this presentation. And for this much, [ Rocky and Pedro ] are going to help us out. So the first 1 of the 2 is, what is our capability to deliver on this volume? How is Rumo going to break the barrier of the 100 billion TKUs in 2025, which is in our sights? What is in writing? What have we delivered so far? And how are we going to enhance our operating capabilities? And the third question, which has everything to do with profitability is, what is the commercial strategy? How is Rumo going to price its products? How are we going to make use of the variables, harness them? And how do they influence our pricing strategy? These are the three topics that we would like to touch on with you and discuss that today. When it comes to the global supply balance, we have to share some data with you. Some data that is related to supply and demand. What is the situation in Brazil when it comes to our potential to meet that growing food demand? Well, these are some data that I consider to be very important. The first one is in 2021, Brazil has completely taken over as far as being the leading food supplier in the world. Today, Brazil accounts for 36% of the world's grains trade, and this number tends to grow. Why is it going to grow? Well, first of all, the United States, which is second in the ranking is pretty much stable for the last 8 years. The United States operates at a 350 million, 380 million tons. I'm talking more specifically about corn and soybeans. They have been at this level for 8 years. And it's only natural that it should happen. I mean the United States already has 80% of their acreage used. So I mean production is stable and the internal consumption continues to grow, which is unlike the Brazilian situation. Now Brazil, on the other hand, is only using only 1/4 of its acreage for growing crops. And we have a huge potential for growth. And we have many opportunities. As you can see here on the slide, we can definitely increase that global share for -- to 40% by 2031. So it's just an amazing potential. I mean, the role and the agency that our country has is really off the charts. And I'll give you an example. In the state of Mato Grosso, Midwestern Brazil, that you know quite well, in that state, we have roughly 11 million hectares and just pastures alone, an additional 14 million hectares to be explored and tapped into. So we're talking about 10% of the entire state. So -- and I'm talking about the area but as far as yield. The potential is even greater. And we are at the center of that process. The question is what is the demand looking like? The supply is quite clear, but we can definitely increase our role. Right here, I want to give you some additional information, some numbers that are really interesting, speaking of demand. So the first one, which I think is a very relevant piece of information, 80% of countries in the world has a food deficit. So they are net importers of food. We are talking about 80% of the countries in the world. And this is no different when it comes to the countries where the global population is concentrated. So you see that small area in the map there. This is where the major demand for food is at. And this is where over half of the global population is located. And this is where a great deal of our production goes to. So the news, which is not that promising. It's not great news for 2022 for the world, is that unfortunately, the demand for food this year is way, way past the supply. That's why we had this price spike that is historical. And almost every single agricultural commodity saw an increase in prices. So the world is facing a huge challenge to increase yield and Brazil has to, and it's going to be a major player in bed to feed that population, which is demanding more than the world is able to produce today. In China specifically, I always like to touch on China because, I mean, here's a country that deals with any sector and every supply chain in the world. There's been an uptake. And you can remember, a few years ago, we were talking about swine flu, the crisis that could be -- that could ensue in the supply. And the truth is, in 2 years, they were able to resume the same level that they had in 2017. And that demand -- I mean, last year, for the very first time, China became short in corn, which is a product that they've always neutral at. So a slight change in animal protein consumption in China will bear an import impact on food supply. So if in China, the consumption is equivalent to that of Brazil, I'm not comparing to any other country, that will represent an additional 15 million tons. What I'm trying to say is that there is an imbalance and Brazil must accelerate its ability to deliver more. And nobody here questions are theory of investments. We made investments to face this new situation. Back in 2019, we wanted to make sure that the company portfolio was ready to cope with this growing demand. From a strategic standpoint, going back to 2019 again, no plan was more important than to make sure that we would have a robust portfolio, making sure that for 30 years, we would be able to serve the market. So the São Paulo network in 2020 came along in that context. The central network also followed that rationale. The signature of our contract to move towards Northern Mato Grosso followed the same rationale. What I can tell you is that in 2025, 90% of our EBITDA will come from those concessions by 2025. So this is what the company had to do in order to cope with this new market. Now the question is, we made bids. We are investing. We are developing a greenfield project in record time. The question is, is this new portfolio at the right place? I give you some more information first. The six largest producing states in Brazil, Mato Grosso, Sergipe, São Paulo, Paraná, Rio Grande, and Mato Grosso do Sul, account for over 80% of the Brazilian production. And incidentally, they are growing exactly where our network is present serving this growing market. Moreover, we are connecting farmers to the main parts in the country. 2/3 of our exports, we'll go through the ports where we are well positioned. So strategically, we are consolidated in order to cope with this new situation. There are two projects I'd like to allude to. The first of which is the central network. By the way, 2022 is the first year where we are operating [ San Simon ] and Rio Verde. The bid tender specified that the potential was for 5 million tons. In the first quarter of 2022, we made 3.5 million. So we're going to make 40% more than what we expected for 2025 according to the bid tender. What's nice about this operation is the diversity of cargo besides grains, especially in [ southern Goiás ] we have sugar. Our fertilizer plant was just opened in Rio Verde. We're going to ship fertilizer from the Port of Santos to [ state of Goiás ] as we also ship to Rondonópolis. The fertilizer market has an enormous potential. Since Brazil is the #1 importer of fertilizers. The Goiás market is supplied through the port of Paranaguá via the highway network. So it's a new business that is the result of concession. Containers have an enormous potential. In the state of Goiás, we will have new volume because of the domestic market. We have major industrial centers close to the city of Anápolis. We don't see that on the screen, but we are about to sell fuel, no different from Mato Grosso shipping ethanol and biodiesel to the southern states and shipping fertilizer to the northern states. We love fuel operations. I usually tell Pedro that we don't need to be in Santos. We can work out of Paulínia using the idle stretch of our network. There is more to come that unfortunately, I can't share with you at this point, but the potential of our network makes us very optimistic about the future of our business. And we estimate to have an estimated volume of 20 million tons by 2025. Undoubtedly, I should also speak about Lucas do Rio Verde. In the past 2 years, during our Cosan Days, that was always a promise, expectation. There were always discussions on regulatory, environmental and engineering challenges. And the good news is the engineering project is ready. The regulatory permit was signed last year. As you know, it's a 45-year contract renewable for another 45 and the license is ready to start our construction. We expect that to happen soon. I'm quite optimistic. Not in the next few months, but in the next few weeks. So we will see in a very short period of time, the first kilometers of railways from Rondonópolis to Campo Grande. The first stretches of train tracks. We all know that this project is enormous. But so far, we want to segment that project. It is as if it were to be implemented in modules. The first one is in Campo Verde, 220 kilometers away from Rondonópolis. That's where we will concentrate our project engineering teams interfacing with many areas. What's nice about it is that it was built along with the Mato Grosso state highway plan. So the highways are being built -- 2,000 kilometers of highways being built by Governor Mauro Mendes who has BRL 6 billion in cash. The fiscal situation 2 years ago was rather different. So states are now making the necessary investments. This is the portfolio we will have in 2025 in order to cope with the demand. And I would like to end this session with ESG before I turn it over to Pedro. So what is our operating efficiency like? How are we going to cope with all that global supply and demand for the products that we ship? And how will our commercial team make the most of these investments being made in a world with a different inflation situation and also cost of capital above what we like to operate? We expect that to go back to normal levels, but we know we must always be ready for rough waters. A dose of paranoia is always nice so that we can cope with the unexpected. Let me go back to Cosan's presentation. We make it clear that ESG is part of our strategy in our group. ESG is not a marketing plan or a communication plan. It is part of our strategy, of our culture. And it is embedded in our values. That's how we see the sustainability of our business in the long run. And there is a business case for ESG. All the activities will bring profitability. When we say that we reduce by 45% by 2035, the level of emissions. We are talking about one of the main cost lines of the company. So fewer emissions translates into more profitability. And I want to share something with you. In May, the Northern operation at Rumo, and I'm speaking to some Board members, the Rumo operation became the second safest operation in the world, the railway operation, in the number of accidents per kilometer per ton shipped. So safety is an endless journey. But numbers already show that we are achieving results. And safety once again, has a business case because nobody operates well, a company that is unsafe. Nobody operates efficiently an unsafe company. So once again, this is a key item in our strategy. We are the first logistics company receiving the B3 Sustainability Index, a very important achievement. We created the Rumo institutes last year. We already have the first group of children receiving supplementary education, some of them having their first job at Rumo, who will extend that institute to [ Cubaton ]. We are not doing so well as Nelson with diversity, 34% of Nelson's leadership are ladies, and we'll close 2022 with 23%. One more ESG element that is a business case because you ensure you have access to a larger talent pool to bring the necessary competencies to the company. So that's the story behind supply and demand. Our portfolio is consolidated at the right place. There is a market. So the first question to be answered by the group. [ Daniel ], our Operations VP, he's been working with railways for 30 years. He will explain why he believes that our capacity is ready to break the barriers of BRL 100 billion.

Thank you, [ Berto ]. I will begin my presentation speaking a little about this revolution of the railway system that we are promoting in the company. I'll divide my presentation into parts. First, I will speak about the northern operation only. And on this first screen, I will speak about the status of our operations. And then I will speak about how we will achieve those indicators by 2025, meaning with our monthly capacity. This month, we are close to 6 million in TKUs, 50% growth if compared to 2018. What's more interesting is that we are increasing our capacity and executing that volume with reducing transit time from 94 hours to 78 hours. The challenge for you to understand that type of delivery, think of a major avenue in São Paulo. If you place 50% more cars on a main avenue anywhere while reducing the time it takes by 17%. That's the type of delivery we are offering in 2022. What does -- and when our reduction in transit time means? It means that we don't need to invest BRL 100 million. What can you buy with BRL 100 million? You buy three locomotives, 120 cars, that is. Today, a typical train has 120 wagons, 1 locomotive and 120 cars. We are saying that the company, because of improved transit time, didn't spend BRL 2 billion in the purchase of assets. That's the result of everything we have been doing in the past few years. In terms of fuel consumption, every 0.1% that you see here means that we eliminate BRL 33 million costs in variable cost. So if we achieve our target of reducing fuel consumption by 10% by 2025, that means that our variable costs will come down BRL 100 billion a year. As [ Berto ] said, we must be somewhat paranoid and in our operations. I'm not saying it's paranoia, but we are obsessed about these four indicators Time, time is money; capacity generation; saturation increased volume with time reduction, that's the mission and our obsession. So we have a company that looks at transit. We don't accept idle trains. We are representing here 8,000 people that day in and day out, think about how we can reduce transit time by 1 second. What are we going to do moving forward? The 120-car train is already operating with imports and exports. Obviously, there are some engineering improvements to be made, but we are at a different phase. We want to deliver a train. As of the end of 2024, a train with 135 cars, and every car carrying 120 tons today, or 130 today, we ship 127 tons per car that increases our capacity by 15%, going from 15,000 tons to 17,000 tons. So that's the first new obsession that we have for 2025. Now I'll speak about a technology package, and we are speaking about connectivity, planning and digitization. And a train licensing system, I'll explain each front. But the main point I'd like to emphasize is how are we transforming the company culture as far as planning is concerned? Usually in the railway system, planning is just a matter of allocating the availability of assets in order to make the best use of what the commercial area demands. And in that planning area, we implemented what we call efficiency workshop or value generation workshops. So today, the planning area rather than making asset allocation to meet the demand, we have the obligation of looking for efficiency in our terminals and in our operations in order to reduce transit time and to reduce the possibility of having idle trains. We are doing all that by integrating several technologies so that by 2025, and let me tell you that this front, the technology front, will most likely bring us for -- our improvement in our transit time because two of our tools are at a very advanced stage, and the third one is likely to come in, in 2024. Speaking about trip optimizer. So the engineer will have to operate a train. When the train gets to 19 kilometers an hour, the computer takes over, no longer the engineer. And that is done following all these parameters, train length, weight. So all that information is already in the system, and the engineer becomes just the supervisor of the asset, not only the train, but also those surrounding. The engineer can enter new information into the system and through AI, the computer will improve everything that has been digitized. Our utilization rate today is 76% in this world. We are leaders as far as the use of this tool is concerned. Why? Because culturally, engineers in the company accepted this would be important that they wouldn't lose their jobs, but we are maximizing the use of our trains. In other railway systems, in other parts of the world, train engineers are somewhat resistant to adopting that automation. When the train is on the move, there will be a better energy efficiency, fuel efficiency. The train will break or accelerate in such a way that we preserve all the gears connecting the cars. In other words, we take better use of our assets. When there is too much supply in the Port of Santos and Rondonópolis, you push a button and you say trains can operate at a moderate speed and that will give us energy efficiency provided, we meet the customers' needs. Circulation optimizer, what's -- who's our controller? This controller decides what goes where. The controller decides the train that will be parked, the trains that we'll keep on moving, and that creates the circulation dynamic. A highly qualified controller takes about 30 minutes to plan for the next 12 hours. That's the time it takes a human being to make a circulation decision. What is the optimizer, which is the graph on the right? It's a processor using AI. And whenever a decision is made, it learns and it processes that in 10 seconds, and it offers the controller a suggestion, will offer a menu saying, you can use this type of crossing because this type of crossing will give you benefits not only for the next 12 hours, but for the next 2 days. So it has high potential. We are still at an early stage. And I think that the use we make of that recommendation is at around 25% to 30%. We believe in it so much that as the tool learns, it will offer us a better menu of options, and we need more sophisticated recommendations. Response time is very important. If there is rain too much, if there was power outage, if traffic lights stop, the train will stop. If the train stopped, all the circulation you had planned goes south. So we need that all to tell us in order to resume circulation, what will generate more value. And the system makes that recommendation even before we restore train circulation. It's a very powerful tool. One more tool is the positive train control. Most of you must have heard about it. You know that we will invest in that type of system. Just to tell you the gain that will bring to our operation, I give you a graph -- an animation, rather. On the left, we have the current system. There is a train and a space in between trains because should there be a problem, the train will have enough time to break without crashing. What will this new system offer? The possibility of having a larger number of trains at a shorter distance and the system itself will break the train according to the communication conducted among the different train units. And this is an obligation we have because of our new contract, but we would do it anyway. How about electric engines? We have already made a decision. We have already bought two hybrid locomotives. It's just like a hybrid car, you have a combustion and an electric engine. The only difference is that in the locomotive, you cannot recharge it using an outlet. When it's circulating, you use its battery. It depends on the stretch, but you use that engine for about an hour. In the next hour, the combustion engine will charge the other battery. The only thing is where the energy will come from. On the right, we see another technology. New locomotives now have more sophisticated engines and better materials with lighter weight. Even though it's 100% utilization as far as diesel, you still have savings to the tune of 6.6% compared to the previous engine. This is what we see on new cars. You have new cars that generate 170 HP. And when you compare the HP that was produced by a 1.0 car 10 years ago, you notice there's been a significant development. And therefore, this is proven technology. And we already have some locomotives in this model. So this is a great deal of the package here to where we should have a significant gain and we should try to reduce the variable cost of the company. And I mean, of course, we have our commitment to have less emissions and that has been said before. This is a specific chart to illustrate the Port of Santos because anywhere we go there's always the same question, is the Port of Santos ready for the growth, for you guys' growth to be able to cater to your offloading necessities? And the answer is yes, the port is ready. If you look at graph, this year, we already unloaded, on average, 276 cars per day. I mean this is fact. This is the volume that we offloaded in March. And what do we have to do as far as capacity for 2025? We need to reach 1,711. And the question is, what is the current capacity of the port? The current capacity is 2,100 cars a day. So today, we have a 60% occupation of that capacity. We have to increase those 500 cars, which is definitely a challenge. And even though this is not really a bottleneck, it's definitely an attention point because we have to focus on our management. Otherwise, we're going to lose that benefit of the cars that I showed you on the previous slide. But again, we are very, very confident. And we have a package here that is -- that was put together by the efficiency workshop we have to continue to increase the volume on the Port of Santos while maintaining the handling of the cars. We also have construction work. You have a center of operation control. We don't have any problem to be licensed or not. I mean, this is not an issue anymore. And we have a lot of structural benefits. And we're going to be quicker on capturing that value. We also have the [ COFCO ] investment, which significantly increases the capacity, the static capacity, the receiving capacity. You also have projects of expanding the 39 to improve those static storage capacity at Rumo. We have to do our storage #14. And we have some programs that are coming as far as infrastructure. But again, these are projects that are going to be delivered. But what doesn't show up on this slide is this. Today, as we go to the Port of Santos, we go to an area which is the very end of the horseshoe of the [ RMERS ]. And we have one loaded car in there that is waiting to -- for the offloading to take place. So we can have an empty car run and this train will be offered to the terminals. So this offering capacity for the terminals, we are increasing that capacity fivefold because MRS is going to have an additional line so we can bring on loaded cars. We are already building. We are already building the lines at [ Perica ], where we were going to have two trains that are capable and very close to the port. So what I can tell you is this, you know that -- you remember that little soldier that we had like one train with a shotgun of 80 cars. Now we're going to have five soldiers that we'll probably have 135 cars. And whenever a pit is available for offloading, our train is going to be first one in the door because we cannot sit idle. So this is a little bit of what we have been doing to make sure that the Port of Santos is not a bottleneck. And I'm just giving you some illustrations so you get an idea of the railroad dynamics, not only the cars. In any case, folks, that is it from me. This is just a conclusion. But again, my area we're about supporting terminals from the origin to the port and their maintenance and operation. We are talking about 8,000 staff, think about it every day trying to reduce the transit time and trying to reduce the hours that they are idle. That's our spirit in the team. And the railroad team is a team that is passionate by the company. And more than passionate by the company, but we are passionate about what we are building as far as the Brazilian infrastructure. So thank you so much. That's my take-home message. And I'll hand it over to Pedro.

Good morning, everyone. Very happy to be here with you today. I'll share a little bit about the commercial vision at Rumo and what we have been doing to further appreciate our assets and to further expand a wonderful basis that we just heard about. First point, getting right into it, what are the main objectives of the commercial department? We already talked about the infrastructure. So with the installed asset base, our commercial team needs to maximize and optimize the contribution margin all throughout the cycle and throughout our life span. So that is to say that we are not looking specifically at the price indicator or the volume and market share. We have to maximize the contribution and margin of our asset base in this company that we are so passionate about. And when you look at the system, obviously, we are facing a number of challenges, and we control for these challenges, and we work with some structural topics and some more short-term aspects. So when it comes to the structural aspects, --- Berto said it very well, there is one element which is critical, that is our geographical positioning, to have our railroad network in the right places in Brazil. I'm not getting into that. ---- Beto already said it very well. But the other element is to have the capacity to cater to the markets that we are trying to have a stance on. [ Rocke ] already showed you that in his presentation. So all the capacity gains and all the evolution we had gives us the confidence and the certainty that we are going to reach our long-term goals. So right here, I am going to focus my conversation with you on some structural elements, especially the structural competition and how we work with our customers when it comes to partnerships and long-term objectives. And I'm also going to give you some details on some structural elements, which is one of the main topics that we have been discussing, right, when it comes to the short-term pricing and our pricing model at Rumo. So the idea here is to give you a little bit of our vision and tell you how we deal with those elements in our business. Getting straight to it. When you look at Rumo's structure as far as the railroad networks and our structure as it relates to Brazil as an agricultural commodity supplier to Asia and the Middle East, which accounts for over 80% of the Brazilian products demand, we can tell you straight up that Rumo is the best logistics solution to cater to this market. And I tell you this based on some data. When you look at the heart of the agri business in Brazil, and as an example, we take the city of Sorriso in the very heart of the Midwestern state of Mato Grosso, you can see that the distance from Sorriso to a poor terminal today, Rondonópolis, I mean, I'm not even going to get into the Lucas do Rio Verde extension, but this is a distance that is 40% less than the distance between Sorriso and the closest competitive solution in Miritituba. When it comes to the transfer, we take that load all the way to the Santos port. The Port of Santos is nothing more, nothing less than the best port for all the cargo that originates in the Midwest in Brazil. We have the most terminals in Santos. We have the most ships available in Santos. So in other words, you have the lowest cost to deal with those ships, and you have more availability for that region. So when it comes to taking this load to our main market in Brazil, which is China, you can see here on the graph the distance that a ship has to go from the Port of Santos all the way to the North here. That's a lower distance. So when you put together all of these elements, the level of competition for our corridor simply cannot be beaten. And you don't have to take my word for it, right? At this point, you can just look at it, look what China did through [ COFCO ] with an investment on [ STS11 ]. They are going to have to invest over BRL 1.3 billion to install that capacity in the Port of Santos, thus demonstrating that this is the place where China has its sights on, and they see this as the best logistics solution to receive the cargo in Brazil. But it does not suffice to have that competitive solution if you cannot work with your customer and really create a trust level and relationship so that they can be more connected to the business. We have seen some examples in the past, where customers were actually expelled from systems due to an incoherent attitude, and that brought about different logistics solutions. We make a huge effort on the commercial department to create long-term partnerships with our customers to where we share the investment in the logistics system, where customers make investment, whether it's for cars or locomotives or even terminals, whether it's transfer terminals or port terminals. And with that, we are able to have a joint capacity. Our joint capacity is bigger and bigger. So we have less CapEx for our assets. And even more, we create a sort of a natural take or pay. This is the best take or pay you can speak of because you have a true alignment of interest between us, as Rumo, and the market. Just to give you a few very quick examples. We are not getting into it in detail. But just as an example, we work with [ Suzano ], and we're going to make an investment on Rio Pardo in their new plants. This is a project you know quite well. And also FS Bioenergia in the ethanol market in Mato Grosso, they are growing in a very fast pace. And us, as Rumo, we are also making the most of this process with a partnership with FS as well as other players that are coming into the market. Another comment, Beto alluded to that, but we also have to mention the field base in Rio Verde, where you have a logistics supplier for us to take oil derivatives, and we can get biofuels in there. These are just a few examples of our mentality, our mindset, and how we work with our customers to generate future business. And also, when it comes to the capacity to create relationships with our customers and the structural ability, this is an example from the grain side. In the first quarter, we advanced 10% on the Mato Grosso market share. And we have now achieved a level that we feel is fit, is suitable to our operation and our size. In the first year of operation in our central network, we achieved 30% in Goias. And just like Beto said, we made good strides according to our business plan. And in the Port of Santos, that is reflected in a 60% market share. So in other words, out of everything that comes out of the Port of Santos, 60% arrives through our railroads. So that gives -- that puts us in a position to be major players in the ports. And with that, we can make partnerships with the players in there, and we have a better ability to make sure Santos is not a bottleneck. But like I told you before, market share is not a goal in and of itself, it's just a means for us to create a platform to generate value. And that takes me to one other point, which is, I think, one of the most interesting points for this audience, which is our pricing. I'll give you some examples, and I'll mention the grain market from Mato Grosso, which is our main market, and you know that quite well. This is the leading agricultural producing state. So I just want to give you some quick messages to make it clear. When you look at our position and our efforts here, from a commercial perspective, we don't have Mato Grosso integrated, so to say. Our management is super specific. To me, there is no Mato Grosso. To me, there is Rondonópolis and Sorriso, Sinop, Sapezal, Campo Novo do Parecis. Each one of these locations in the state we have a very specific knowledge about. We know the production potential. We know where the cargo can be taken. We know what are the alternative corridors, what are the brand producers, corn ethanol, what are the storage players, everything that is out there. So we have a deep knowledge about the region. And we can do a specific pricing for that region. We know exactly what the best situation is, so we can achieve our objectives as far as contribution margins and, therefore, the bottom line that we are expecting. As you can see, based on the slide and the map here, and I think that's a point that maybe we didn't make as clear, there is competition in that location. So in each one of those regions, you have different logistics alternatives. And a lot of the work that we have been doing for the last few months at Rumo is to strengthen our market intelligence and to boost our pricing intelligence to make sure that we can hit the mark every time and that we can be more precise at it. And with that, we can extract as much value as we possibly can with our company. With that backdrop, as the map shows you, I think that the closer you are to a transfer terminal from Rumo, the better is your ability to price it. And the more distant you are, the more railroads you have to use. And with that, we can work specifically on each of the hubs here. And again, once we are able to do the extensions that we are planning, this market is going to be added to our portfolio, and we are going to have some additional profitability in the company. When you consider our pricing strategy, this has been an ongoing journey. Obviously, when you look at what happened last year with the crop failure, there was a huge impact on our numbers. So we had to make progress on a lot of geographies that are further away. We had a lot of learnings as well. We have to acknowledge and recognize that some decisions could be made -- could have been made differently. But without question, these are learnings that we carry with us, and they are going to factor in on our future planning. Changing gears a little bit, keeping an eye to the future. In the first quarter, you saw the results. I think our main focus now is the second semester or the second crop, which is corn. We have a very productive scenario for that second semester. The production for this year is going to stay at some very healthy levels. Even though there is a slight drop in productivity, when you compare to what was planned in December since you didn't have too much rain, yield, of course, dropped a little bit. But if you look at the export graph, there wasn't any variation because, as a citizen of the world, unfortunately, the citizen -- the situation in Ukraine creates a very strong demand for Brazilian corn. So there is going to be a demand for Brazilian exports. And even with that slight drop in yield compared to our potential, the level of expectation in Brazil is going to still be very healthy. So that's not really of our concern. And the volume that we carried for the second semester, coupled with the current scenario, where we have an increase in the diesel price, an increase in the inflation overall, that makes us confident that we are going to have a better pricing outlook from now on, especially now as of the second semester. And I want to draw your attention to one point, one thing here on this slide. On the left side, you can see the highway spread considering the load that goes from Sorriso to Rondonópolis and the cost of this highway freight, minus the cost from Sorriso to Miritituba. So that's the difference, right? That's the roadway margin that is left that we can use as a pricing power for this system. Now if you look at this trend, from '19 all the way to '21, you can see that the graph has a lot of fluctuation. And that fluctuation at the end of the day, what it does is it reflects the inbound and the outbound, the seasonalities of the season, of the crop year. This is that logic supply and demand. This is as clear as it gets. But if you look at the trend all the way to 2021, there is a slight downward trend. So how did that happen? Why is this trend looking down? A highway -- a very important highway was paved. And of course, you have to consider the tolls. So that reduced the time of cycle in that highway for the trucks. And the highway cost changed as well for Miritituba. And I want to draw your attention to the fourth quarter of 2021. Look at the impact of the crop failure -- of the corn crop failure. When you look at the fourth quarter last year, we had a lower highway spread, the lowest one since 2019. Even though -- now I draw your attention to the right side, even though the price of diesel is in a record high considering this process, so on this graph, you can see and compare both operations. And again, it's that law supply and demand in full force. But when you look forward, when you look ahead, as the crop goes back to normal, as you see the inflation not only in diesel but, unfortunately, in all the input lines and when you look at the highway market, you have an inflation on the asset cost, tires, fuel, lubricants, maintenance, everything increases. So with that, the railroad freight, of course, stays at a higher level. And when you look at the tolls on that highway, now it's just a matter of time, I mean they finally sign a concession contract. So work is underway. Construction is underway. And in the next few months, we're going to see that. There's going to be a toll implemented in the road that is not here right now, so that is going to have an impact, definitely. And that makes us confident enough to see that the margin scenario as we go on the market share positioning, the market share that we have already attained based on the relationship with the customers that we've already developed, we see this as a recovery scenario for pricing and to recover our margins from now on. In a nutshell, these are the main points. This is the summary of my presentation, and then we can move on to Q&A. I just want to stress that we have complete confidence that Rumo is the most competitive solution for the Brazilian agri business. We are positioned at the right locations with the right team, with the right commercial strategy to be able to capture those opportunities. And the commercial strategy is about maximizing the contribution to the business across the whole cycle and across the whole work horizon that we have. So again, this is a long-term vision. We are going to be together, and we are going to capitalize on all the investment that was made on our company. And we do that working with our customers and focusing on the long-term relationship. And we are absolutely confident that in this competitive environment, after the crop failure and after the cost price period in a very symmetrical way, we can recover from that. This is already behind us. And the scenario from now on is definitely more positive and more promising. So in closing, I thank you for your attention, and Beto is going to come up here to deliver his final comments, and then we can get to Q&A.

[Interpreted] Very well, Pedro. I think it was very clear. I think we painted a clear picture. The focus of our team is 100% dedicated on 2022. You can see the numbers. So before we actually close, I just want to mention that the whole team and the Board of Rumo is sitting here. So besides [ Rocke ] and Pedro, who just presented, Rafael is going to join us for the Q&A in a second. He is our CFO. We have [indiscernible], who is our Market Intelligence and Pricing Executive. We also have [ Fernanda ], who heads people and culture. We also have Walter, our Legal Executive focusing on Compliance; and our VP, Guilherme Penin, who is in charge of the Institutional and Regulative Aspects, Government Relations and also Projects. So just to mention that the team is sitting here together in this very special day for us. So in a nutshell, just to close the presentation that we just delivered, let's get to it, let's see it. So first, we have a strengthened thesis. And I think there's no discussion here. I mean the numbers speak for themselves. The data shows that our investment thesis is very valid and very robust even moving forward. And in 2022, our expectation is that 30% of everything that Brazil is going to export in terms of corn, meal and soybean is going to go through Rumo's solutions. So that's a constant process. This is a variable that we do measure. So our thesis is very robust considering the role of the country, not only in the scenario that we had, but also moving forward. And we are strategically positioned to be able to offer the very best logistics solution and the most competitive solution in the markets that we operate. So our assets are here, they are renewed, they are looking strong. At least for the next 30 years, we have concessions to 2079 and in the right places. So this is a very clear message from us. And [ Rocke ] showed you, and I think we showed you with facts and data that there is an ongoing operational transformation to meet the growing demand. So what we have to do is make sure that the efficiency and the intensive technology used can play the necessary role to make sure that this growth is not exclusively via CapEx. So there is going to -- we're going to have a huge growth due to the efficiency gain. So that's the third aspect. And Pedro has said it very well. He said that the vision and the pricing of the company respects the company's cycles. This is not -- this is no retail business to where you can increase the price and on the next day, you see a reduce in demand -- a reduction in demand or an increase in demand. Now we take a look at the structural variables. We take a look at the different situation in every cycle, and the objective is to maximize value. The objective is to make more money to be able to make those assets profitable. So that's the vision for pricing in a company that has a proper infrastructure. And you do that by looking at the market and looking at the variables that we discussed. Third point, with a lot of capital discipline, this has always been a practice of ours. But again, we're going to focus even more brain work on allocating our assets. And the moment that we are going through are great for us to be able to get to the right -- to the very detail. So we know if there is any sense, any real being applied outside of the profitability gain goals. So crisis moments are also moments for us to take a look in-house and see if we have any missed opportunities. So on this level, that's what we focus on. And this is a company that invests on a very high CapEx level. And with all of that being considered, we have ESG at the core of our strategy. The concern with people, the need of having the very best team, our concern to be always retaining and developing the necessary talent to meet all of that demand to make do on all of the good investment we are making. And beyond that, we have a cause and [ Rocke ] said it very well, and he reminded me why this staff is so passionate, because we have a business that is able to generate a whole lot of value and, at the same time, is able to transform the infrastructure in Brazil. That is our main cause. We are talking about projects that are not only disruptive for Rumo, but they are disruptive for the state of Mato Grosso and disruptive for our country from an infrastructure standpoint and the ability that our country has to continue to compete in the value chains that we are operating, especially the agri business. And so it is very good news and it's great to be part of a company that is transforming Brazilian logistics, and we are going to see that down the road. We're going to take a look back in a few years and see the difference that we made, not only on the cost chain, but also in the balance of the country. So that's it in a nutshell, and I'm going to call Pedro and [ Rocke ] to the stage; and Rafael, our CFO. They're going to join me on answering your questions.

[Interpreted] Okay. We have a lot of questions. Let us start on the right.

[Interpreted] Good morning, everyone. My name is Alberto from BSBB. I heard from Daniel and from Pedro, and I have 2 questions. The first one is about what has changed since the guidance that you provided us with in the fourth quarter. I think the volume is very much in line, but the commodity price has changed quite a bit. Transport rates also have changed quite a bit, so if you can please give us an updated vision of what changed since the fourth quarter. And my second point is about the [ STS11 ] terminal in Santos. This is a partnership that is definitely a factor for your relationship with COFCO. What can we expect?

[Interpreted] Thank you for your question. I'll start with the first part of your question, which is around the guidance. We released the guidance for 2022 in February. And when we released the guidance -- we already had an idea of many of the factors that are becoming a reality at this moment. So overall, we have an efficient operation. This is what we delivered in the first quarter with a record capacity delivered on March. We already had some expectation as far as the impact of the [ drying ] of the Southern operation that is going to be more of a factor, no surprises there. And also, we are trying to rebuild our margins for the second semester, and that is very much in line with the expectation of a regular crop year and a proper exportation. So our guidance, I think, is very well balanced. Of course, our team has to always aim higher, but the guidance is the guidance, and it's well balanced for this moment. So about STS11, we worked very closely with COFCO on the pre-auction. They share their business plan with us, their investment plan with us. So from that perspective, this is an asset that is 100% theirs. Most certainly, they're going to have our support on the engineering behind the terminal. This is something that we do. And also, the allocation of loads, COFCO has a growth plan. I think it's no secret, but they are leveraging their own volumes on this terminal. But they are also more than happy to receive load from other players to be able to optimize their operation in this new port asset. So we're talking about 14 million tons that will be made available to the system. And we're also going to work closely with them to optimize the situation. I mean there is no way of giving you exact figures, of course. But yes, our guidance is in line. And what I can tell you is that at the end of the day, we have a very close connection with them. And our vision is to build something together here in a great future, not only for our COFCO's volumes, but also to optimize the Santos asset.

[Interpreted] If I may just add, in all these discussions with COFCO, it became clear how food security is a priority in the agenda of the Chinese government. Their strategy is to make sure that 95% of the calories consumed coming from corn, wheat and rice should be supplied by China itself. What is happening right now is that this is no longer balanced for corn. So the government now has certain concerns. That's why this investment is being made. And that's why on Tuesday, you must have seen that the Chinese government formally allowed for the imports of Brazilian corn. This is a clear demonstration that Brazil becomes even more strategic to this commercial strategy because they need commodities to supply the domestic market.

[Interpreted] Good morning. I'm Lucas from Santander. I would like to discuss tariffs post BR-163. Pre- and post Lucas, could you speak about tariff dynamics, I think, that are different forces at stake -- at play, rather. We do have an issue with the world availability of grains. And post Lucas, at the Rondonopolis port, you had an incentive tariff-wise, and you have an advantage as compared to road transportation. If you could speak pre and post Lucas and post Highway 163.

[Interpreted] Thank you for your question, Lucas. As I showed in my presentation, speaking about the pre Lucas process, we see a positive scenario, road freights going up and the spread becoming more expensive going to the North, rather than the volume being shipped South. We're always on the lookout monitoring the system, Castelo dos Sonhos and Novo Progresso. If you have a chance to drive along highway 163, you will see the situation of the highway going up to Miritituba. That's why the road spread is going up. In our pricing model, we incorporate that information. That provides us with more information. We want our customers to remain competitive, but we want to understand alternatives and how can we capture the fair share of that value. Our pricing model, following up to the previous question, is not a cost-plus model. We price and optimize margin. Even in today's scenario, we can bring cargoes from Sinop because we can have very good margins, even if they are not the best as compared to the cargo we pick up close to Rondonópolis. When we have the extension up until Lucas, part of the money being spent in diesel for trucks will become margin to us because the market will be working with us. We will be the early arrivers with our commercial operation. But when we provide our railway efficiency, it will be much better for our end customer. We must study the volume alternatives, obviously, and the main drivers and the margin generation that we want to have, but the pricing power is on our hands.

[Interpreted] Let me speak about the investment the Mato Grosso estate is making on the highway network. Fortunately, they have a very comfortable [ CAF ] position, and they will invest 5x what the federal government is making. The state government is building 2,500 kilometers of highways in 5 years. So what happens? A truck going from Sorriso to our terminal, riding 600 kilometers, when we get to Campo Verde, 200 kilometers away from Rondonópolis, they will be only 200 kilometers away from Sorriso. So what math is this? You go from 600 to 400, a new highway network, new roads, the way it's been built, and that will have an impact not only because of the growth in the highway system, but also the expansion of the highway system.

[Interpreted] There is a question in the back.

[Interpreted] I'm Regis from Credit Suisse. First question about inflation and CapEx. Could you give us an update about the investment yet to be made in the Sao Paulo network? We already know the extension project to Lucas. And how has inflation affected the necessary investments? How about your leverage? How can you maintain your leverage under a check because their growth depends on EBITDA growth? And one last point, if you could comment on the first terminal of expansion will be Campo Verde, right? Do you know the volume capture that will be possible?

[Interpreted] Thank you very much for the 3 questions. I will answer the first 2 about cost and leverage, and then Beto who will speak about Campo Verde. Cost is a concern. This puts pressure on CapEx, and it requires better management, management in terms of engineering so that we can choose better our projects, determine the right scope with the use of technology, the best routes and also the investments to be made over time. As we mentioned in our February release earnings call, we said that besides testing the operation with less asset, we would hold our investments where interest rates are not attractive, obviously, considering that we do have obligations tied to capacity growth. PTC, positive train control, is an important investment that will generate capacity. This is what we need to do. But it's only natural that we selectively have the necessary conversations to make those investments in phases in a scenario with higher interest rates. As for cost, as Pedro mentioned, we must price well our services because if we price well, obviously, margins are being preserved. That's another element of the equation. That's a strong focus on that for the second half of the year. But also in the future, if we have enough production and enough exports, when there is cost pressure, we can enter 2023 more healthily. As for leverage, discipline is key. We ended 2021 with a leverage above what would be desirable, 2.8x. It's high considering the current interest rates before starting the investments in the expansion to Lucas. So 2022 will be a key year for us to deliver the results we committed to. The increase in the nominator also helps that leverage but also CapEx, not to mention the partnerships, because investments can be made by partners. That's another way to look at leverage. So we will get to the end of 2020 with a healthier leverage that allows us to look forward. I'd like to remind you that despite the grand number that was announced in 2021, Lucas is a place, a project that will be implemented in phases in order to preserve our financial health. I'll turn it over to Beto.

[Interpreted] The first module is Campo Verde. I know there is a lot of Verde, right, Rio Verde, Campo Verde, Lucas do Rio Verde, but it's 220 kilometers north of Rondonopolis. The other day, I watched an interview and somebody was asking the economist what the interest rate would be like. And he said between 3% and 6%. So between 8 million and 15 million tons, there will be the right time to make that decision. That type of terminal is built in modules. As we did in Rondonopolis, you'll begin with a given capacity and you bring that up over time. It's very well designed. Obviously, we use commercial variables. Thinking about the long term, it also involves the highway network, growth in production areas. There is a market study that will help us choose the ideal place. At the end of the day it's the net present value that is important, where does the terminal needs to be located to generate a good NPV.

[Interpreted] That was the last one. We have some questions from the online audience that will be answered by e-mail. I want to thank everyone for joining us today. And I'd like to turn it over to Mussa for a quick summary of our Raizen Day.

[Interpreted] You thought you wouldn't see me anymore. I'll be brief. Most of you saw in my presentation yesterday. Yesterday was a very good day. We had the first Raizen Day. It was really fantastic, and the feedback was great. This is the slide of our IPO. Raizen is already a green champion today. We have a super track record of execution. And most importantly, we have an unchallengeable growth plan. I start speaking about the past. These are the records. Record sales, almost BRL 200 billion record profit, the largest net profit record EBITDA. The best year in terms of safety, largest number of stores, over 46 records, record market share in Brazil. In Argentina, we achieved top line, bottom line. Even in terms of talent attraction, the best year ever, best evolution in diversity. So it's record after record. Last year was very good to Raizen. We conducted our IPO. We acquired Biosev. During our IPO, we -- a number of promises were made. And I have to talk what did we promise during the IPO and what are we delivering. We talked about the expansion of our renewables portfolio. We have 3 plants of second-generation ethanol being built. Yesterday, I talked live to the Piracicaba plant. We made a live introduction of the plant. We already have the second biogas plant being built, the integration of Biosev and the acquisition of [ JERA ], an asset that has small hydro plants. So we built 3 plants, 3 under construction, the biogas plant. Second point, sugar. I don't know if you remember but Raizen sold 100% of our sugar to trading companies. We committed to having 40% of our sugar to the end consumer. We sold over 50% to the final destination. So check, we delivered what we promised. We always said that the price of sugar would be structurally higher, and it is the case, so we are living up to the expectation. Another important point here was the productivity journey. That was the Achilles' tendon for us. This is our first sugarcane. We were benchmarked in the sector. We were the best company, first year harvest. We have to correct a lot for the future years. We said that there is more than BRL 1.3 billion of bottom line results in recovering productivity. This is the promise being delivered in the first year. We are better than the competition. And the second harvest, cane is doing very well. Now the evolution of our profitability in marketing and services, Brazil, Argentinian and Paraguay. If you look at our returns in the last 6 months of the last year's crop were spectacular. We began this year very well, better structure of our service business besides gaining market share. We did everything we had to. And in Paraguay, we also grew our business. So once again, we have margins above expected during the IPO. The same thing applies to our return. Another point, we made 2 major acquisitions. We said we would grow. And finally, Shell Lubricants is now supplementing our portfolio. It was a lengthy discussion with the shareholders, but we brought Shell Lubricants. We intended to convert the almost 400 stations in Paraguay in 2 years. We made all the conversion last week in 4 months, what we promised to do in 4 years. So once again, over delivering what we promised. I'm coming to an end. Proximity, you saw the OXXO store. You must have seen some memes. If you spend too long away from home, when you go back, you see an OXXO store. So we are growing a lot in that market. We have more -- 100 stores, OXXO stores, more than 1,300 Shell Select stores. And lastly, Shell Box, and this is our major digital platform, our growth driver in the services market. 2 points stand out. Yesterday, 4,100 stations with Shell Box in Argentina, 70% adherence, more than BRL 6 billion transacted at Shell Box. So it grows exponentially. And once again, we are more than on track. That's it. This was what I had promised during the IPO. If you want to watch that video again, we are walking the talk, everything we promised. You saw a lot of Raizen today. I'd like to turn it over to Leo. He has COVID, so he couldn't be here today. He will make his presentation online. All right. Leo, over to you.

[Interpreted] Thank you, Mussa. I hope you can hear me well. Good morning. I head, of course, Investimentos. Let me give you some color on our latest announcement, a new vehicle. I will speak about it. Can I see my slides? Thank you. You must have seen what we call permanent portfolio at Cosan. Each vertical has a determined strategic plan, but looking at the future, we saw a growth opportunity with so much happening. And obviously, we always want to adopt a value-generation model, looking at the midterm, looking for at least historical returns. And at the same time, we must understand what is happening and preempt and predict the future. Obviously, we must think of our strengths, our areas of expertise. Having said that, next. Out of the 4 verticals, Cosan is the fifth one. It is our objective to capture opportunities beyond the current portfolio. Here, you can see the 5 companies under management, BRL 2.5 billion invested are committed. I will speak about each one of them. Radar, I think you know our history. In crop land management, Luis Henrique spoke about the macro scenario and Beto who spoke about ESG and how relevant Brazil is geopolitically. So we benefited from the perfect window of opportunity pre-increase in interest rate. So Radar is supplementary to our portfolio. There is a lot we can grow with. It's almost BRL 4 billion under management, almost 92,000 hectares. Looking forward, we look at carbon sequestration, reforestation growing a lot and Brazil being the epicenter of all that. The next investment pillar is what we call Ligga. Ligga is a joint venture being formed with our mineral shareholders. There are 2 steps towards that JV. The first was made, which was our acquisition of the Sao Luis Port. The license has already been approved. The idea is to create an integrated project, and the port is an integral part of that. But besides being an important iron ore player, high-quality iron ore, we are also looking at decarbonization. That is so important in the steel and the iron ore market. It is a greenfield, but our expertise, as Mussa said, in bioenergy, we will be able to work on decarbonization and rise above the pack because this sector needs many solutions that are too many targets, but very few solutions. And so to manage iron ore, we are talking about HBI, we're talking about very high value-added products. And this is a factor. This is the strategic vision behind that play. And of course, it's always a play that involves options and value added. And today, this is a very substantial business. We are talking about a potential that is very characterized. I mean that should unravel in the next 18 months. And we are talking about 50 million to 60 million tons of quality iron ore being produced. That's the potential. So moving forward here, one of the investment that we made was we became closer and we signed up to a VC fund on Silicon Valley called Fifth Wall. You might have heard about it. It's a proptech really. But within the proptech space, of course, you look for energy efficiency and real estate management. And with that, we have another fund, which we are subscribing to. It's an early stage climate tech fund. They are looking at hydrogen cases as well as battery cases. And of course, our objective here is to be ahead of the curve, ahead of the game in terms of screening the opportunities not only from an ROI perspective, but also looking at our portfolio, our current portfolio, and trying to anticipate the next few steps in the future. So our commitment is to invest $25 million in this fund. I'm just back from California over the weekend, and unfortunately, I tested positive for COVID. But in any case, in the next couple of weeks, there's going to be an announcement there of a deal that we are going to step into. It's a co-investment for H2, for hydrogen. So if you think about it, if you think about what we have in our route portfolio, we already have biomethane production. We have the deals that were recently announced with [ Yara ]. We are working on biomethane reform and hydrogen production. And we are now getting into the hydrogen market. We are focusing on the technologies to produce hydrogen. This is a complementary aspect to our portfolio. And I also touched on our iron ore play. So again, this is also a very relevant topic. And I think we are very, very close to developing this sector. So right here, bit by bit, we are going to bring to Brazil some technologies. And also, we're going to keep an eye out for opportunities abroad. Moving forward. Well, that's Payly, our fintech. I think you've heard about it maybe 3 years ago when it was founded. That was created with a B2C vocation, and we pivoted that company to focus on a B2B space. And I think the best example that we even mentioned before is that for those that know Shell Box, which is an app, B2B2C, what is behind that financial flow is that, for example, if you work with Shell Gas stations, you can tap into that start-up. So you have billions of reals that go through Shell Box, and that also is related to Payly. So Payly is behind Shell Box. And it doesn't stop there. Obviously, the great objective of this fintech is to tap into the BRL 250 billion in revenue of the ecosystem, to tap into that potential. And of course, we are already making some anticipated products. We, already have some receivables, and we are postponing some deadlines and working with Comgas. So our focus in the inauguration is to focus on working capital solutions. And we can also consider to expand that on new applications for financial services. So more and more, you're going to hear from this vertical. And just to illustrate something extra to you, besides the BRL 250 billion present in the ecosystem, when you segment that, you have over 40,000 small- and medium-sized businesses. I think that's the key target. That's the key audience for that fintech. And of course, the perspective is always to add value with financial solutions, but also to make partners in the value chain, both on the supplier side as well as the customer side. And finally, the last one. Recently, we did an announcement around Trizy as well. Trizy is the outcome of a partnership that we had as well. It's a marketplace. We combine the freight players, and we combine autonomous freelance drivers, and we work on the Cosan ecosystem. We have over 115,000 freelance truck drivers that are active in our database. This is a walking, living, breathing database that is growing and, of course, in a universe of over BRL 400 billion in revenue. And of course, because of it, it didn't take long for a strategic player, such as nstech to come in the horizon. You saw that announcement recently. Even though it's a smaller scale, we are again showing you the sheer power of that ecosystem and the ability that we have to look forward to produce and to execute new possibilities for business. And that is really going to unlock amazing value. This player, we are taking the first step. We still have some additional steps. nstech is an aggregator, for those that don't know, so they work closely in the logistics space and the digital space. So we're really, really happy to have this business come to fruition. Well, given the time restriction that we have, that's just the first opportunity for us to get into that landscape. So that's just the final slide that you are seeing on the screen. Basically, that's what we had to share with you. We are adding to our permanent portfolio, and we are including this new tool to add additional value. And we already have some new business verticals involved. And obviously, we are looking at our ecosystem as a primary source always. And the focus is always to expand. And we are also looking at disruptive businesses, things that can maybe threaten or maybe even complement our business as it currently stands. And of course, we are always getting in closer with the VCs, where you also have additional value opportunities. That is it for me. I am now going to hand it over to Ricardo Lewin. Lewin, take it away my friend. Thank you.

Good morning, everyone. So good to be back here once again with our investors and our analysts on a personal level. Now with Leo's presentation, we are going to conclude our business presentation, and now I want to get into the results and the financial management of our portfolio. I want to start by getting into the consistent development outlook. This year, we should close the year at an EBITDA under management to the tune of BRL 22 billion, which accounts for a fivefold growth in the last 10 years, from 2012 to 2022. We are growing at fivefold. And it's not growing in one business. We are not hiding lower growth from other businesses. All of our businesses are growing consistently. One other optics, one other lens that we can look through and one word that you heard quite a bit is resilience, right? We have a very resilient portfolio. And right here, you can look at the graph, even in the toughest period such as 2015 and 2016 where we had a significant drop in our GDP, even with that, we were able to grow. And even during COVID, we went almost unscathed through that pandemic period. And as the pandemic sort of dwindles away, we have some substantial recovery proof here. And that shows not only how strong our portfolio is, but also it goes to show just the ability of Cosan and also the ability of our other businesses to be able to weather those storms, always with a focus on growth and managing risk, and with a focus not only on risk management, but also on generating value for the portfolio. And speaking on value generation, look at this graph. This is the appreciation of our stock and we are way above the market average in the last 10 years. And like I said before, there is a risk management involved. I mean it does not suffice to grow locally. It does not suffice to try to generate value indiscriminately, but we have to take on adequate risk in the market with a financial discipline and good credit. So right here, we can see the growth that we had and the growth is always keeping the leverage at reasonable state, at a reasonable level. And we always tell we are always in line with the market. So now let's get into what is behind this track record a little bit. What is behind that growth? Well, what is behind it is that we have a high return on each and every one of our businesses. And right here, we have 3 main pillars. First, we have operational resiliency. You heard from our CEOs, our executives, and these are words that echo quite true: synergy, resilience, discipline. It's very important to have operational efficiency. The second pillar is our strategic management of the portfolio, which Marcelo is going to talk about soon. And the third pillar is the financial management, which is excellent. And our financial management, as you can see on the graph, is an ongoing search. We are always looking for the best capital structure and the ability that we have to access the market whenever the capital is available. In each one of those graphs, you can see that there is a support for that financial management. There is a support for the high returns of each company. So you can see IPOs, you see OPay, you see private placement, you have liability management happening all the time with a better debt profile to sustain growth, potential partnerships and long-term partnerships. And also I want to dive in a little deeper on the financial management side with more focus on the short term. And right here, it's very clear that we have a good capacity to work. What happened in the last 2 years in the pandemic, we had a major slowdown in the economy, a lot of volatility in the market. Inflation tension was quite high, especially in the last few months. And as a consequence, we had an increase on the cost of capital. And once again, in the last 2 years, our group, our holding, Cosan and its different businesses in the group, we took action. We were in a position to act and react. Here's how. First, with a focus on the performance of the operation, which puts us in a position to generate a lot of cash in all companies and guarantee of liquidity. In the turbulent times, we increased the liquidity in a way for us to not stop any growth plans. In discipline or being conservative, I'd rather say that we are disciplined in our investment and also being agile to optimize our capital structure. And right here, I'll give you an example of the different actions. BRL 14 billion in allocation, BRL 6.4 billion for Rumo, of which BRL 4 billion was for third parties and BRL 2 billion was allocated by Cosan itself, BRL 6.9 billion from the Raizen IPO and BRL 2.3 billion from the private placement of Compass. So we are talking about BRL 21 billion on debt and capitation that we took on the last 2 years and BRL 15 billion of cash flow generation. So just like I said, that's what enabled us to go into this different side of the slide, as you can see here on the screen. And here's what we did in the last 2 years. We are talking about BRL 4 billion invested in our own portfolio, either through rebuying stocks or swap tools. We are talking about BRL 11 billion in acquisitions in our business. BRL 2.5 billion on investment at Cosan Investimentos. And besides all of that, to add on to all of this, we still gave returns to the tune of BRL 2 billion in dividends. I'm going to conclude my presentation. It's a very brief contribution. But basically, I want to leave you with 3 messages, one of which is our focus on growth with value generation. Second message is a message of resilience in our portfolio. And the third message is about our capacity, our sophistication and our discipline in financial management. So thank you so much, and I call on Maria Rita, our legal VP. Thank you.

Good morning. Thank you, [indiscernible]. I'm going to do a brief presentation that is going to deal with a very long journey and a continuous journey, which is our governance. Well, last year, we concluded our partnership simplification, which was really the highlight of our governance change. But we didn't stop there. We are always very attentive to the best practices in the market when it comes to governance. And we are always focusing on our internal maturing. You have some indexes and labels that we became a part of or that we improved our score on. You see those on screen. Getting into ESG, just like everyone said before, this is a priority for Cosan. In our holding, we created a senior team for ESG. And the focus is not only for the holding, but also for the other businesses is on ESG. ESG is the focus of the recently created Sustainability Committee, which is presided by a Board member, an external Board member. And we define exactly what we are going to do in the future in this community and what are the current initiatives. And in that same line, we created a strategic vice presidency, which has everything to do with the holding in our vocation to allocate capital and manage our portfolio. So a little bit about the Auditing Committee. We revisited all the committees. The Auditing Committee has a very strong focus on information security. That's why we created one area on our holding, in the same line, focused on information security and cybersecurity. And this committee has done outstanding work to inform the Board which is a different side of the agenda and it's definitely a priority that impacts all the businesses. And the People Committee also became the Committee of People and Nomination, which has a focus on analyzing all the different boards independency, what are the skills that each company needs and diversity. And diversity like it was said before, we have 2 journeys here: The racial journey, which is taking its early steps. We still have some very early results. And we have the gender journey, which I'm very proud to say we have a natural grow on. Women that are outstanding, they have been getting more share. You have women on key levels, even as yours truly, the first Vice President here. Not only that but also in areas that were tougher for women like technology, engineering. Yesterday at Raizen, you saw [indiscernible] leadership. And also the People Committee today deals with the group talent map. So in this pipeline, you have retention, succession and everything is discussed in that committee. Along the same lines, we included ESG on the assessment KPIs for all the executives of our holding and our group, and we have been working on the transparency of that information. And with that, we created our partners program. Our partners program is one that we hired a consultancy for to analyze what exists in the market and to hear from the main leaders and execs and also to hear from some outstanding shareholders to see what is the best suited model for us with what we want for the future, and we aligned not only the retention efforts but also the management efforts. So this is a group that is a restricted group, but it is a part of the decision-making process today. So they have a voice. We have a voice on the Sustainability Committee in that strategy. And this regimen makes it a point for this group of partners to be consulted for everything, just like we saw from a culture point of view, all the way to new businesses, strategic positioning. So we can -- we see this as a major revolution. And in practical terms, it's good to point out. In practice, we had a difficulty with the pandemic, but we created a very tight group. And in practice, this works out great. So in a nutshell, governance is essential. It's crucial for us to make decisions. But in our case, since this is a very large and complex group, governance needs to provide that security without loose in agility, which is the milestone here, the hallmark of our group. I hand it over to Marcelo Martins now. Thank you.

My role here is to make a comparison between what we have been doing and where we are at in our direction, where we are trying to go. I think we have made some very relevant deliveries in the last few months. And by the way, once again, the first acquisition to diversify our portfolio happened in December 2008. So it's 13 years down the road. Just like [indiscernible] and just like all the other businesses presented, actually, we transformed our group substantially. But our challenge has only increased through time and we are probably sitting at the top of our challenge today. I'm going to get into that, and I'm going to propose a reflection with you. I'll tell you why I believe we are sitting at the very top of our challenge. If you look at what we have done in the last few years, we attained a very diversified portfolio with a focus on businesses that Brazil is competitive at. We have exposure to the demand of the Brazilian market and also world demand, strong currency, decarbonization topics that are very important as well. And also something that is not here, but that penetrates all of our businesses, is to be a leader on any business that we are involved in. I think this is a very relevant point that even though it's not mentioned here, clearly, I think it's constantly being pushed in our minds whenever we make a decision to step into a business or diversify our portfolio. We want to be present in some very relevant businesses where we are prominent players. With time, we learn to add value. I think we learned to improve our governance, to improve our communication with the market. But what I believe we are held accountable to and what we hold ourselves accountable to in a great deal is that we have to continue to grow our deliveries and make better deliveries and to really continue our diversification process based on the strengths that we built. And I'm going to get into that in a second. Well, speaking about the higher growth for the next cycle. We know that Raizen, just like it was said before, Raizen is a growing player that is extremely well positioned in the market of renewable energies, E2G and biogas most prominently. And there is a very important geographical expansion at Compass. We are getting into some new distribution businesses with the Compass portfolio as well. So Compass goes way beyond Comgas and even beyond the portfolio of state distribution companies. We have an international expansion with Moove, which is crucial for us to have more exposure to strong currencies. This is something that we are still lacking on. We want to focus more on that. Obviously, for a company that has a focus on the domestic market and leveraging opportunities in Brazil, I mean, there is always a trade-off discussion. In other words, to what extent is it worthwhile for us to look at those assets in Brazil and grow our assets here and at the same time improve our exposure on strong currencies abroad? This is something that it's more and more of our concern. It's more in our sites, and it's a desire of ours. Because Brazil, recently, I mean always, but recently, we saw this even strongly -- more strongly. It's a proof of how we behave as an economy. Brazil has been experiencing some volatility and some political uncertainty that really prompts us to diversify our portfolio in different currency. Obviously, the world has grown more complex, but it doesn't really matter. I mean, the global complexity and the opportunities that come on different markets can give us maybe more of a position than we had in the past. And Rumo, with the expansion to the north and the growth of the business and all the deliveries that Roberto was talking about, the security aspect of Rumo is one that we are very proud of, just like Roberto said, that goes for the entire portfolio. But Rumo is very emblematic. As you all know, the challenge that we -- you know the challenges that we had before we got into it. So we've been at it for 7 years and the development was outstanding. It was really great. And it was done with great discipline. So I think that everything that we were able to build so far and everything that we are planning for our business in the future makes us confident that this portfolio is going to continue to deliver. Well, in a nutshell, this is our investment thesis. We have a very strong strategy, a very clear one. We have a diversified platform with irreplicable assets that are very well positioned in their respective markets. We have risk management with capital discipline and, one point that is very relevant, which is an efficient capital allocation with different options. I was actually having a conversation the other day with a group of investors. And I was thinking to myself, what is our major competence? And I think Cosan has been able to build what we built because we learned to take a good position on our businesses, to leverage on top of high-quality assets that perhaps were not as well managed before, but we are a financial player. Our decisions, they are always based on a financial rationale. So I think that makes all the difference in the world, because if we didn't have that as our guiding star we would not be where we stand today. So what I want to tell you here is that having different options is very valuable to us. What we have today is a very well-positioned portfolio that gives us the opportunity and puts us in a position that a lot of times it's not obvious. I can tell you very clearly, the mining business, even though in December didn't seem obvious for a lot of folks, it made us very clear that at this moment in Brazil, there was an opportunity to create opportunities in that sector. And on our side, we understand that in order for us to make the most and seize this moment we had to have relevant assets. And again, logistics is part of our core. When we found that asset, we understood that we had a contribution that was quite valuable for this business. And we believe that this can put us in a position to add even further value. And the creation of Cosan Investimentos means that we are looking for opportunities and options that at some point can turn into core businesses or not for us. We are not concerned with that. The most important is for us to look for those opportunities and to make sure we are making the better use of the options. So that's the message that I want to leave you with. Right now, we have a capital restriction moment. We have a very elevated capital cost. And obviously, this is a very relevant aspect as we make our investment decisions. We have rationalized capital allocation, trying to optimize our returns but also generate resources that will give us options, that can bring more value to our shareholders. That's what we have considered strategically and we intend to continue that moving forward. This is a moment, as I said, of major challenges. We had substantial deliveries, but we want even more. Luis, over to you.

Well, we are drawing to the end. The easiest part is this: to tie everything that was mentioned so far and just try to summarize it all so that it all becomes clearer to us. And we can move on to our final Q&A, and I'll invite our partners to come to this stage. To conclude, [indiscernible] this is what you heard from all CEOs, a very strong journey at Rumo, Raizen, Compass. [indiscernible] talked about Cosan Investimentos beginning with port -- the building of the pilot plant with a very good track record at Moove. People management, as we saw, major evolution in diversity. We have challenges in race, but we are doing well in gender. We are growing our business and reducing emissions, which is important. We are improving on the indicator and we are learning from other companies on adjusted EBITDA. We won every new business to have fewer emissions while growing. And usually, when you grow, you increase total emissions, but we want to reduce relative emissions. And on governance, major evolution with all executives with 100% of ESG in variable compensation. And Rita mentioned Sustainability Committee, led by someone from the Board, including all phases of our decisions, capital allocation, people development, et cetera. Moving forward, we are highly optimistic, as you heard from all CEOs, and I think Marcelo put it very well. We believe that Brazil has many complexities, elections, et cetera, but near shoring and friendly shoring, Brazil once again is well positioned due to everything we have: raw material, people, technology and infrastructure. A lot better if compared to other options, other countries would have, besides commodities and minerals. So we're very positive about it. We're also looking at opportunities to nonlocal demand. 45% of our EBITDA doesn't depend on local demand. We will keep on looking consolidation opportunities that are key to the Brazilian economy. So we are working with logistics and energy that are key to the future of the country. And Leo talked about 2 topics: transport and finance. But there are so many opportunities. In procurement, for instance, companies are buying together a number of common materials, like security or cleaning services. Almost BRL 4 billion in a procurement pool opportunity of giant purchases, [indiscernible]. Without creating a Chief Procurement Officer at the holding, it would only be natural for a large holding company. We have decentralized teams working together and sharing task to deliver a common objective. Somebody from Moove is dealing with a given purchase category. Somebody from Compass is doing the same. Rita also mentioned cybersecurity, a small area, but we have experts making sure we are protected in this cyber world. We want to have a very lean holding company and the different businesses cooperating. With that, in all our businesses, we are well positioned to capture opportunities profitably. All our businesses are well positioned in order to capture on those geopolitical and environmental changes, each with their vocation very focused and being competitive in the sectors where they operate. That takes us to the key factor I'd like to spend some time on: people. If you ask me what's our biggest challenge. It's not to have a well-positioned business, not to have good governance, but the continuous supply of qualified staff, that's our challenge. We have been working a lot at our companies, at the holding company, for the continuous development of our people, attraction, training, exposure through projects, et cetera. That's why it's important for you to understand that Cosan Investimentos is not only important to tap on market opportunities but also to develop people. We must create opportunities for people to be trained and be better prepared to move on to other businesses. We must create room for these people. [indiscernible], for instance, mentioned a challenge. Nelson, with geographic expansion, he has to supply new CEOs, new financial people. Our ability to generate human resources is our #1 challenge where we have to spend more time. We need to attract talented people. We spend a lot of time interviewing market people with trainee, with an intern program. That's how we can unlock value. Otherwise, we won't be able to accelerate our journey. This is a make-or-break deal. Our growth pipeline is fine. There is a new Rumo beginning within Rumo. There are another Comgas starting at Compass. So many opportunities at Raizen. Now we have to supply all these businesses with quality people, giving them an opportunity to grow, develop and be happy. It's a culture of cooperation. We created a new Partner Program, a group working in line with the Board, supporting decisions. He works as a model. We share our dramas, our pains and opportunities. It's a mechanism of exposure and development. There will be more participants over time. And this is the reference group that works with the Board and with the reference shareholder to make sure that we're making the best decisions. When you are in a project, you are normally in love with it. But when you have 6 or 7 people criticizing it, sharing experience, you stand a better chance of doing the right thing. So the partner program is key for our future, and we are spending energy on it. We are learning, it's new. We do not know any operating company that has true partners apart from financial and legal firms. We're going to be sharing benefits, but we're all focusing on our business in order to accelerate our growth. To make a long story short, ending with my first slide, we are very happy with the portfolio we created. I think it is well positioned and it's unique in many segments that are strategic to Brazil and to the world. A fantastic execution track record. We have been learning. Not always do we deliver 100%, not always at the right speed, but we are correcting our course. Pipeline management key for this group, an enormous focus of ours. And lastly, an ESG strategy that is part of our DNA. This is no news. We began with renewable energy sources focusing on safety, making sure that we work efficiently with fewer emissions and now incorporating ESG in our decisions. We believe this energy transition is an enormous opportunity, a very important vertical for our group. When I speak to other CEOs and analysts like yourselves, we discuss about ESG risks. We look at opportunities. That's a difference of ours vis-a-vis other business groups, we are well positioned in this business. And I wanted to end my presentation and invite our partners so that together we can answer your questions, whatever you want to raise that was not clear during our presentations. Nelson, [indiscernible].

Let us begin our Q&A session. [Operator Instructions]

I'm from Bank of America. I don't know how my question can go to on the capital allocation decision process. Investments now have a different time horizon and also an important decision on the type of investment allocation. What do you take into account? Are there return thresholds that you take into account? Potential growth? Could you give us a bit more color in terms of you most take into account? I know you don't have anything specific in the short term because of the current scenario but looking forward. Marcelo, you talked about diversification out of Brazil. How mature is that process? Do you have anything in mind abroad? Is it supplementary to what you do, but elsewhere?

I'll go first, and I'd like to ask the others to weigh in. What's more important in our decision process, our competencies, what can do well. We were looking at BRF, and we had to take a position that was not one of our competencies. So we came to the conclusion that we had nothing to add. We looked at more mature assets or in consolidated sectors. We always look where we can attract the best pool of people in order to leverage our competencies and build value. So we are talking about a broad spectrum. Obviously, there is capital restriction in what we intend to do for our business in the future. After all, we cannot generate conflict or competition among our businesses, but our core competencies are key. We are agile. We are able to attract quality people. And we love to operate in areas where we have a relevant presence. That's important because we want to spend energy and focus in things that are truly valuable. So the size of value generation is very important. So there is no manual for that. But these are the opportunities that are discussed by this group, and that's an enormous difference from the past, where we had a more concentrated decision-making model. And today, this partnership becomes key for us to be convinced that something makes sense. Because after all, these are the people that have the competencies of the group. when I talk about strong currencies, not necessarily outside Brazil. We must see an opportunity where we can create a lot of value. Moove is quite obvious. That acquisition was obvious to us. Market position. Major partner of ours, ExxonMobil, willing to do more with us, giving us better options. It's not obvious that we will buy more assets abroad with the same opportunity of value generation. We have very good competencies that have more value here. We will always look at opportunities here. Well, some of our businesses have greater exposure to strong currencies and we want to improve that mix. But there is nothing I can tell you about those opportunities. But we are constantly monitoring them. Thiago in the first row.

I'm Thiago from BTG. I have two questions. First, I'm rather curious with this partnership -- about this partnership model. It would be helpful because a similar program already existed at Cosan Limited. So how different is it now? From what I understand, it also involves executives of the invested companies, the companies you invest in. And the second question, perhaps to Luis. We heard this several times, the world is experiencing a shortage of molecules. And it's unclear to me if you see that as an opportunity or a risk to your business. So how do you see that shortage of molecules? You spoke a lot about inflation as a cost issue, but somehow it also helps your different businesses because you can transfer their price.

I'll begin, Luis. Thiago, it's rather different. As Luis said, we are learning. What we had in 2017 when we made that announcement, well, this program is totally different. And that's why in my presentation, I emphasized the process. We involved a consultancy company. We heard people internally, externally, shareholders to come up with our design. Today, it is a bigger model that places more emphasis on decision-making, the participation in decision-making of the different partners. So more people, Luis can explain. Then we have levels, and it puts a lot of weight on management.

There are 2 important elements. First is management. And second, is the longevity of the company's management model created over the years. Several people were part of it in the past. Not including the founder. So the first model was pretty focused on this second component. And this one is more encompassing. And it's becoming -- it's an evolution. It's becoming truly a management model, sharing risk decisions, allocation risk. Yesterday, we spent 2 hours analyzing our watch list in every company. What needs to be developed or what needs to be done. Rita may ask, didn't you do that before? We did more modestly. Nelson gave us a list of everyone he spoke to in the past 30 days trying to understand all their competencies. Everyone being mentored by our group. That's key. It's truly a management program. Obviously, there are implications on compensation, retention. Since we are a company of external partners, how do we align that with our partners? So we discussed but Shell, within the Rumo committee, with CVC. We want to do it for the good of the companies. It's not for us to defend Cosan. We control several businesses and we co-control other ones, but we want to share that with our partners. And we are -- at the company, we are there to defend the company. That discussion with the partner was very productive. We want incentives to be appropriate at the company level and at Cosan level. Again, it's not perfect. We are discussing things that are not working properly. [indiscernible] is spearheading that evolution. We have to look at our portfolio as a whole and how to drive the Partner Program to be more effective. Marcelo and I have been talking about it. This is the main product we must develop and grow over the years to promote the longevity of the group. I don't know if you want to add, Marcelo? To your second point on the shortage of molecules. I don't think this is something endless. The world has already experienced that human beings are incredibly able to reinvent themselves. I'm rather optimistic about where the world is heading. We can have other molecules that can create a balance in the market. While we had COVID, war, supply chain, suffering many problems, in the short term, you're able to reposition yourselves. Other global players will have more problems because they might not be as prepared. So opportunities might arise along the way because managing in a volatile period is not easy. That is an advantage of a Brazilian management. Two weeks ago, Marcelo and I were talking to partners and foreign investors. And it's interesting how difficult it is to some people. To us, it's only natural, especially if you're older than 45. I apologize to the younger ones. You have other advantages. If you're over 45, it is an advantage, not a risk. I think Brazil will be well positioned. When [indiscernible] announces investments, I tell them, it's so little compared to the world energy volume. If [indiscernible] builds 20 plants by 2030, it's a gigantic volume, but nothing compared to the whole world. It's a gigantic opportunity. 1.6 billion liters, considering the world energy pool, is nothing. We could do the math, how many cars and how many consumption days? It should represent a few hours. A few hours of consumption. I'm very optimistic. Like the contract Nelson signed before the pandemic. If we were a trading company, Nelson would have leased that vessel to Germany. We have a long-term agenda. I'm very optimistic.

I think [indiscernible] wanted to say something.

[indiscernible] from UBS. In the short to medium term, the 4 businesses are self-funded without requiring capital. Will that continue until something unexpected comes up? Value to shareholders via dividends, via buyback. And a more philosophical question. What keeps you awake at night? Where would you like to dedicate your time as the CEO of the holding company and as the CEO of Cosan? Where would you like to allocate your time?

I'll speak about the first one and Marcelo will talk about capital allocation. Safety keeps me awake at night. We are increasingly exposed to natural risks because of the project -- the products we work with. When I say safely, I talk about safety. Our Chief Information and Security Officer, if he calls me at 6 in the morning, it might have been a hacker attack or a CEO calling me saying that there was an accident. So safety and security, I would say. I don't believe you can have an efficient company if you're not safe and secure. As for time, there is a large institutional agenda for the group. So Brazil today is undergoing regulatory and legislative instability because of market opening, high interest rates, high inflation. We must understand everything that is happening. And as a group, we should contribute. In energy and infrastructure, we have a robust agenda as well as people. First, about buyback. That's a rule. We are always open. We are constantly monitoring all the group shares. Our concern might be timing, we spoke about Raizen. If Raizen has a buyback program, we don't go in. We must have coordinated movements and the information must be public. But the best opportunities over the years have been in-house. As a portfolio manager, as a risk manager, constantly you must keep your eyes open. We understand -- if we understand the variables, we reap the best results. There are certain subtleties the market doesn't understand and that allows us to buy certain shares. When we did it, we generated value. That doesn't change. Apart from that, we will be looking at other opportunities. Moove from -- well, Radar, that on day 0 didn't see much, but during high inflation periods, it would be a spectacular asset to have in-house. I spoke about the port as well. We must be convinced that it is an opportunity that we will generate value. We are constantly looking at capital opportunities. Capital investimento is giving us more flexibility to raise capital and that became relevant. It is a peculiar moment. We have to be extra careful. But most likely, there are opportunities today that didn't exist in the past. So we have to be even more careful right now because something will come up that might make sense to us. We have an eye on many things, but far from having anything concrete.

We have time for one additional question.

Luis, Marcelo, executives, two questions on my side. First, a follow-up when it comes to capital allocation. I want to touch on the holding leverage aspect because that tends to cause some fiscal inefficiencies. Maybe relatively, this is not of your concern, but on absolute levels, I mean, there could be an efficiency gain to be had. So how would you comment in terms of the priority? Or how would that factor in on the potential uses for your money? And also, what is your take on capitations on the business vis a vis the holding to support the growth plans that are quite ambitious all across the different businesses? And one other discussion that I think it's important to have with all of you being here is the intersection between the different businesses. For example, Moove and Raizen, both of them now have lubricant businesses. Raizen and Compass have gas and energy businesses. And also mining and Rumo, they can also operate railroad. So how do you manage that in terms of competition conflicts, resource allocation, even human resources allocation between the different businesses?

I'll answer the first one. The thing about funding today is really a priority, perhaps the most important item on our list. Obviously, we always want the businesses to bank roll their own growth, and that has been the case, either by debt or by equity. And I'll tell you about one other peculiarity we have here. I don't know if you remember, but when the pandemic started, we tried to reinforce the cash of the different companies. And we took a bidding really because a great deal of that debt had a fixed spread. And that turned into an exceptional opportunity for the company's debt. We didn't know that was going to happen, but it did happen. And as much as possible, we try to leverage that opportunity. So we have a very close eye in the market. As a matter of fact, all of our fundraising happened in good timing in the market, not according to our needs. The equity fundraising we did in 2020 and 2021 is a part of it. So whenever possible, we try to address the funding internally. Obviously, the businesses have to bank roll their fundraising to -- I mean, to fund their growth. I don't know -- I don't know if Filipe and [indiscernible] talked about it, but the funding that we did for this acquisition was extremely competitive. I mean, very competitive. Very few Brazilian companies have access to that funding structure. And that was really crucial for us to make this transaction possible because this is a very bold move. Our capital cost today in this company is a fraction of the ones that are out there today. So when it comes to the financial equation, this is really relevant. All the same, I would like to have our debt not concentrated in the holding. We haven't gotten to that point yet because we are seeing the opportunity to build value in a very expressive way, even though we have an inefficient funding at the holding. And this bar has been raised. But considering everything that is possible, we're going to try and be as efficient as possible. But historically, we made the most out of this inefficiency as well. That's right. We always look for opportunities. Well, in the second question, I'm just going to briefly comment on it, but I want my colleagues to say something as well. First of all, competition is competition. So Moove is a competitor to Shell lubricants. And there is a whole governance in place. [indiscernible] an agreement with Shell and Exxon. This is being controlled and supervised by Rita. So there's no conversation. There's no 2 ways about it. They are competitors. And with regards to energy, yes, there is a possibility for interconnection. But I want to hand it over to my colleagues so they can comment a little bit on those 2 sides because we do have cooperation and competition. And we make that very clear to CADE, and we are going to abide by it. We're going to do proper segregation of people and systems. But I think my colleagues can say something about energy. Would you like to start, Filipe?

Yes, I can. All the process that came before that was created with the partners, both ExxonMobil as well as Shell, and they are rivals all over the world and they want this rivalry to keep going. And just like Luis said, we created some very clear agreements as far as how big the wall is, and it goes from segregating systems, segregating people in different offices. And the competition carries on. I mean, I think it's clear in our governance model and structure, when we present to one, the other one is not present and vice versa. This has been working out perfectly because our team out in the streets, I mean they are competing every day. Definitely, it's a dog-eat-dog market out there.

Yes. Filipe talked about a competition example. So let me touch on the cooperation side. And for this much, I'm going to use natural gas as an example, and renewable natural gas, which is biogas. So we are not producers of renewable biogas. We are rather distributors and, in some cases, we are sellers. So Raizen is a natural renewable gas producer. But Raizen doesn't have the ability of delivering molecules of natural gas in the same amount throughout the year, in the same volume throughout the year. So the season might interfere. If you have downtime, that can interfere in the process. So collaboratively, Compass and Raizen may offer a mix of net of renewable gas molecules throughout the year to where -- when natural gas is not available, maybe due to in-season, off-season downtime. Natural gas can occupy that space. And we have been talking a lot with the Raizen folks to see how we can create an offering, starting with the customers' needs, adding on to the offering that we are able to create together. And we can do that with the distribution network. In this case, Comgas and maybe GasBrasiliano or Gas Natural Sao Paulo Sul or any other distribution gas networks in Brazil.

Just one interesting comment here to your comment. We have relationships in different sectors. We have relationships where Rumo is the customer, where Rumo is the supplier, and we have situations where we are competing for a certain asset. So [indiscernible] -- I mean, Rumo decided to migrate a lot of assets to the free energy market. We had a bit of a competition and Raizen. And we did so very tight margins on that one. And we were able to put up the best price. So we have a lot of the assets of the company in the free market just through the energy generation of Raizen. And on the same token, we provide services on transportation, especially for sugar. We have fought for common assets at some given moment. I mean there is no 2 ways about it. It's competition. And I think it's very -- I think you know about a book launched 10 years that is called [indiscernible]. I mean there is competition and there is [indiscernible] that, that speaks to our philosophy. But it doesn't prevent us from seizing some synergies that our businesses have. I'll give you an example. We have a common supply and procurement department for the organization. So [indiscernible] has a fleet of vehicles that he needs for his operation. We do as well. Nelson and Filipe, the same thing. So why should we have poor call for tenders? Why should we not get out in the market and lease a fleet for the entire group? So in these cases, we used the group's scale to be able to access the market. And this is just one example. I mean, there are many others like it. Cybersecurity is the same thing. The hiring process, the management process is the same one for each company. So I mean, this is almost part of the philosophy. I don't think I have a lot to add on to that. Competition is competition, and it's out there in the market and it happens. But the example that he said about Piracicaba, we are connecting to the Comgas network on that project. So we have 9 to 10 plants of ours that are going to be connected with different sources of gas. So yes.

Okay, folks, I just want to add on to the first question that you asked, Regis, which is about the inefficiency, right? What you call inefficiency, which is something that we have been making the most of has been a factor for the last few years. So if your analysts want some models, we can definitely supply them. And we also have inventory. We also have the inventory, yes. So I want to say thanks to everyone and call Luis up here to make his final remarks.

I'm going to speak from where I'm sitting. First of all, folks, thank you so much. Thank you for your patience. It's been a long morning. We're going to have some lunch and then we have the individual sections with the different companies. I want to say a special thanks to Ana for the excellent coordination effort. You did a great job. Thanks to the entire team that is back there, helping us out. And once again, I want to thank you for your trust. Thanks for being with us in this journey. Thanks for your opinions, criticism. And, of course, we are here to deliver. And I want to thank my partners, Leo, get better soon, so you can be with us the next time. And see you soon, folks. And have a great day.

I just have one message because Luis said so very well, we thank you for your participation, which I echo. And thank you so much for making our lives easier. Now just to let you know, the Cosan meetings in the afternoon had a bit of a schedule change. So for those that were in the third slot, you're now in the first. And those that were in the fourth one are now in the second. We had to adjust the schedule here. But thank you so much. Lunch is outside. I hope you enjoy it. And please be sure to answer our survey. So #13 is going to be even better. Thank you. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]