Iochpe-Maxion S.A. ($MYPK3)

Good morning, everyone, and welcome to Iochpe-Maxion's First Quarter 2026 Earnings Video Conference. I'm Rodrigo Caraca, the company's Senior Investor Relations Manager, and will be conducting today's video conference. Present today and available for the question-and-answer session are Mr. Pieter Klinkers, CEO; and Mr. Renato Salum, CFO. Please be advised that this video conference is being recorded and will be made available in the company's Investor Relations website along with the presentation. Mr. Pieter will be conducting the presentation in English. For your convenience, simultaneous translation into Portuguese and English are available and can be accessed in the [indiscernible] icon called interpretation in the lower central part of your screen. [Operator Instructions] Before proceeding, we would like to clarify that any statements made during this video conference regarding the company's business prospects, projections and operational and financial targets constitute the beliefs and assumptions of Iochpe-Maxion's management as well as information currently available to the company. Forward-looking statements are not guarantee of performance because they involve risks, uncertainties and assumptions and refer to future events and circumstances that may or may not occur. I would like to pass the floor to Mr. Pieter Klinkers, CEO of Iochpe-Maxion. You may proceed, sir.

Hello to everybody, and thank you, first of all, very much for participating in this call. We've decided to start with an executive summary this time. There's a lot of things going on in the world, and we wanted to talk about a few of the highlights on the very first slide. So we believe, given all the dynamics in the world, in the automotive world and in the overall world, we believe Iochpe was able to have relatively stable sales in the first quarter of 2026 when we compare it to the same quarter 1 year earlier. A little bit down, including FX impact, a little bit up, excluding FX impact. But those numbers need to be seen in the perspective of the North American and Brazilian CV market being down versus the same quarter last year. And so even though these markets are now showing signs of recovery, especially in North America, the numbers that we had to deal with in the first quarter of 2026 were significantly below 2025 in North America truck. But in spite of that, we had relatively stable sales globally. And with that, we were able to even being modestly increase our profitability. We will come back to that in next slide. And of course, that has to do with the restructuring measures that we took in North America last year. It also has to do with our resilience that we talked about in prior calls in Europe. And more and more, it also has to do with the markets in Asia, particularly India, doing well for us and Maxion doing well in that market. We will come back to that as well. Another important to mention in today's times is also that our teams are being able to navigate very well through all the supply chain issues that could be there or are there. And so given all the challenges that we see in the world, I think we can be proud on our teams to be able to ensure flawless customer service. We have been able to manage through any supply chain issues flawlessly, and we have been able to supply our customers without any interruption, and we plan to do so going forward as well. And last but not least, on this slide, I think one important highlight also is that we are able to keep our operational discipline. Our plants are performing around the globe. It's not an easy globe sometimes, but our plans are performing in this environment. And also at the same time, we are continuing to win important new business wins and create value to the company as well. We will go to the next slide. If we look a little bit more on that market, and it's really different the way we see it, the way it's being forecasted by the official institutions between light vehicles and commercial vehicles. And let's not forget, in our company, Iochpe-Maxion, commercial vehicles is not unimportant. Today, it's about 35% of our total turnover with North America, hopefully coming back anytime soon in the commercial vehicle segment. That should be rather like 40% of our total turnover. So both pictures are important to look at. If you look at light vehicle, it's pretty stable. It's not a disaster, but it's also not very exciting, 93 million vehicles last year, this year, actually a little bit lower, 91 million is the projection and next year back to 93 million, 94 million in 2028. It's pretty stable. And it doesn't matter really if you look at those numbers, including or excluding China. So a stable market, let's say, on the pass car side. On the commercial vehicle side, though, the picture looks different, especially when you look at it, excluding China, which is for us a more relevant trend to look at than including China. Even though we are present in China with truck wheels as well, it's relatively small to what we do in the rest of the world. And so you see some more meaningful growth there already in 2026, continuing in '27 and accelerating in 2028. We will come back to that in some of the next slides. So a different picture between pass car and truck. We will go to the next slide. We come back to the highlights from Maxion of the first quarter of 2026. How do we do in this market? So from a revenue point of view, roughly BRL 3.8 billion, we would say it grew slightly, excluding FX effects, but the FX effects were meaningful. And so including those effects, it was a minus 3.3%, mainly, again, due to the fact that in North America, even though we see some signs of recovery, the truck market was very, very much down versus 2025 first quarter. And now in 2026, as a contrast to 2025 when South America was able to mitigate some of that effect in North America in the first quarter of 2026, also South America was down. Now we have been able to mitigate that through better numbers around the world and some highlights there, I would say, our South America light vehicles and Asia light vehicles. And so overall, we would say a pretty stable revenue despite those impacts in truck and North and South America. We look at gross profit, the absolute number is pretty much the same as what we generated last year, but our margin did increase slightly to 11.6%. And so I think, again, this shows our resilience to global uncertainty and some markets being meaningfully down. Same is true for EBITDA, BRL 357 million in the first quarter with a margin of 9.4%, 9.5%, excluding restructuring. And so that's an increase of 0.4%. It's not huge, but it's meaningful, we believe, especially given the market dynamics that we are dealing with. And then from a leverage point of view, we'll come back to that as well. Of course, here, FX plays a positive role, but a meaningful reduction quarter-over-quarter with or without FX, if you compare the first quarter 2026 with the last quarter of 2025. If we look at the next slide, you see our revenue by product. This is pretty much the same as what we showed in the last 2 earnings calls. Since the North American truck market was declining so much, structural components, especially the heavy vehicle sales that we have in that unit is down as a percentage of our overall turnover. And so normally, I would say it should be 75% wheels and 25% components. And today, it's more like 20% components and 80% wheels. And basically, aluminum wheels for light vehicles is making up what we're losing in components in the heavy truck market in North and South America. We will go to the next slide, we can look at how that looks by customer. And of course, what you see here is if you look at the left there, a customer like Daimler that is very important for us in North America for components, it's down quarter-over-quarter compared to last year. But then you see several of the pass car accounts being up. And so that is mitigating and offsetting that impact that we see in the Americas truck market. And so overall, I would say a pretty stable picture with light vehicle outperforming and therefore, mitigating what has been happening in the last couple of quarters in North America and now also in South America truck. We will go to the next slide. We can look a little bit more on the different regions and South America, very important for our company, of course, I would say, stable revenue despite the Brazilian truck market construction that we clearly saw in the first quarter of 2026 versus prior year. And I would say we were able to offset that somehow within the commercial vehicle segment, a little bit better mix than what the overall market was showing. And then we are performing well with the market doing well on the light vehicle segment. And so overall, for our company, that meant a stable revenue in Brazil in South America versus the first quarter of 2025. We will go to the next slide, we go to North America. And so here you see a clear reduction in turnover in the first quarter of '26 versus the first quarter of '25, and that has all to do with commercial vehicles. The official numbers when you look at overall commercial vehicles, down 19.2% in the first quarter of this year versus last year. But as we talked about in the last earnings call already, we need to look a little bit more specifically on the heavy trucks, the Class 7 and Class 8, let's call. And there, what you see is more like 25%, 26% reduction, and we are aligned with that reduction. We were able also here to make it up partially. Of course, that drop us too much to make up completely. But partially, we made it up in light vehicle because that market also was a little bit down in North America, but we were having a slightly higher turnover in light vehicles. So a partial mitigation, I would say, in light vehicle compared to what was happening on the heavy vehicles, heavy truck vehicles in North America. Now one important picture here on this slide is in the middle bottom part of the slide. And you see some pretty big increases there year-over-year when you look at North American commercial vehicles. And so already this year, plus 7% and next year, plus 9% the year after, plus 17%. These are big, big increases. And so I would say we are very ready to support that kind of market. We could do even a little bit more than that. But I would say, even if we do only half of that, even if the market only grows half of that, our company, that will be very good for our company, and we would be in a very good position with those kind of increases. We will go to the next slide. Looking at Europe, EMEA, Europe and Africa, we see a slight reduction in turnover this quarter versus last year first quarter. And so I would say in the light vehicle, we did some portfolio cleanup. We've been gaining considerable market share in the last 12 to 18 months. And so that gives you the chance to do some cleaning up of your portfolio, but we were able to very much mitigate that by strong truck performance. The market is doing well in Europe from a commercial vehicle point of view in the first quarter, and Maxion was able to do even a little bit better. And so overall, I would say, pretty resilient in Europe. And also here, if you look on the middle section on the bottom, you see that production forecast for commercial vehicles, that's pretty significant. And so again, if this happens, we are very well positioned. We are very ready to support this. But even if only half of that happens, that would be very beneficial for our company. We don't need to do any investments to supply these kind of volumes. We will go to the next slide. We look at Asia. And you may remember in some of the prior calls, I said Asia will be there, and we see that happening. Our turnover increased by roughly 10% in the first quarter of 2026 versus the same period in the prior year. And that's very helpful to mitigate some of the impacts that we talked about regarding North America and also a little bit South America. And so you know our focus in Asia is mostly on India. That market is doing well. And I would say Maxion is doing well in the market. And so we are completely enjoying the momentum in the business in Asia, particularly in India. We will go to the next slide. We look at our gross profit and our gross margin, I would say, absolute number, pretty much the same quarter-over-quarter compared to last year, first quarter. And then from a margin point of view, 0.3% up. I would say, good job on repricing as we usually do, favorable sales mix and some good operational efficiency as we talked about before. So a positive number here. Next slide. Same is true for EBITDA and EBITDA margin, slight increase in the overall number, but pretty stable, I would say. And then from a margin point of view, 0.4% or excluding restructuring, 0.5% increase, which is, again, not huge, modest, but meaningful, especially when you take into consideration that the North America truck market was still very much down in the first quarter of 2026 versus the same quarter last year. We will go to the next slide. Look at net income, not a lot of net income last year in the first quarter, also not a lot of net income in the first quarter of this year. Losing my screen. Okay. But we are confident that we will be okay for the whole year. We had some positive impact from [ mover ] in the first quarter of last year. And so our numbers are pretty much in line year-over-year if you take that out. We will go to the next slide. Looking at investments, a little bit more in the first quarter of this year compared to last year, but mainly because of good news, we have been winning new business. We are investing in that new business to make it work to supply the products that the customers nominated us for. And we believe we can be confident that we will manage the yearly numbers as we target for 2026 when we talked to you guys at the end of last year. So on track here, I would say. If you go to the next slide. Our leverage, as we saw in the second slide already, a meaningful reduction year-over-year, and I would say, quarter-over-quarter. And I would say, even if you exclude FX, there would still be a meaningful reduction quarter-over-quarter. So we are pretty happy with that reduction in debt that we saw there. And with the markets hopefully coming back as the official institutions are forecasting that long-term multiples could be a little bit more up with our debt, of course, not increasing. That's not our target. And so I would say, on track with the targets that we put to ourselves and that we talked to you about in the recent calls. We will go to the next slide, our gross debt, not a lot of change in the composition there. I think it's a fair mix. If you want from a short-term, long-term perspective, even a little bit less short-term debt. And then, of course, we have this bar in 2028, where our bonds will expire, and that's something that we will work on in the near future. If we go to the next slide. Going from numbers to people, one of the reasons why we are able to continue to show modest margin improvement even if there is not a lot of traction in the market or there are some challenges in the market is because we have a lot of people around the world working on smaller and bigger projects to get better every day. And it's not meaningful. We have an event that we call Maxion Team Awards. And last year, there was more than 1,700 projects, more than 10,000 people working on this. Wheels, people from the wheels unit, people from the components unit, 34 plants in the world, and we just congratulated the 19 team winners. This is super important in this competitive world, in this dynamic world to have all these people so engaged and coming up with so many small and big ideas for improving our business and that makes us feel confident to be competitive also going forward. We will go to the next slide. And of course, the reward for that is we cannot talk about too many new business wins that we have. Many customers don't allow to talk too early, too much about what they do with their suppliers. But I can tell you that we feel very proud about our teams receiving important new business wins with global OEMs, with local OEMs across the regions in the Americas, in Europe, and in Asia, of course. But we're also being recognized by our customers very, very much for the good quality, for the good service, for the good partnership that we have with them. And so all of the hard work that the people are doing in the plants with the support of management, I think it's paying off when you see on how many awards, how many recognition we get from our customers. And with that, I would open it for questions and answers.

[Operator Instructions] And our first question comes from Andressa Varotto from UBS.

Can you hear me? Okay. So my first question is about the recent aluminum price increases and as well as energy price increases that we have been seeing, especially in Europe. I know that for aluminum, you have pretty straightforward pass-through clauses in contracts. So just wanted to know what are you seeing from the impact from this so far, if we already saw any impact of this on margins? And also, how are you monitoring the situation with energy prices in Europe and if we can expect any kind of impact going forward? And my next question is about the new contracts with Chinese OEMs that you mentioned in the release. I don't know how much you can share at this moment about this contract, but I think that anything that you could share would be helpful, especially if you could talk about if this is already mostly operational or if you are still in the stage of building relationship with them? Any idea about the main regions that these contracts may be in? That would be very helpful.

Okay. Thank you very much for those questions. All relevant. Let me start with aluminum price increases. As you said, yes, we have pass-through mechanisms formalized in place with all of our customers. And so usually, what happens is, there is -- when prices go up or prices go down, there is a delay in application of these new prices. And so when prices continue to go up, as you saw end of last year when we talk about aluminum and as we saw in the first quarter, that does not help margin because you only pass on these higher prices a little bit later, usually something like 3, 4 months. Of course, whenever they go down, then you see the opposite positive effect because you only adapt prices 3 or 4 months later as well. So we are not worried about that. We see some impact already end of last year when they went up, and we saw some impact in the first quarter. So that's embedded in our numbers. And there may be some impact in the second quarter based on what happened in the first quarter. But it all depends, I think, here on the geopolitics. So right now, aluminum prices are very, very high, at record levels. And so we have already embedded those impacts in our numbers. And so if anything, I think the chance is there that our first half will be negatively impacted by that, but then you should see that coming back to us in the second half of the year. For energy, it's a little bit different. As you say, we don't have this automatic pass-through with all of the customers. But we do have long-term contracts with our suppliers. And so we don't see those impacts that we now see in energy prices, for instance, in Europe, immediately impacting our numbers. By the way, it's very different than what we saw in a couple of years ago when Russia and Ukraine were at the beginning of the war. It's very less meaningful. But still, there is an impact. And to the extent that it will hold and it will then impact our cost after our contracts run out, we will talk with customers and go for recovery as we always do. And so I'm not worried about that too much. Right now, not so much impact from that. And when it will hold and it would impact us, then we would go back to customers. But let's hope that energy prices and aluminum prices will come down because the world gets a little bit more stable in the Middle East than what it is right now. When you talk about new contracts, I'm in a constant fight with our public relations department, what I can say or what I can't say. I want to say more, but I'm not allowed to say a lot. And I understand customers that don't want to talk about stuff like wheels, especially because it's a styling element, et cetera. And so I can't give a lot of details. I can just tell you that these new business wins are for sure with the incumbent OEMs, the traditional OEMs, but they're also with the dual OEMs. We are having orders with 16 Chinese OEMs all around the world in Asia, in Europe and in the Americas, including in Brazil and including with some of the largest Chinese OEMs. I hope that gives you some insight without me being in trouble with the people that tell me not to talk too much.

Our next question comes from Gabriel Tinem from Santander. Our next question comes from Gabriel Rezende from Itau BBA.

I have 2 actually from Itau BBA side. So we went through the press release as well as the presentation, and we are seeing this somewhat optimistic stance for vehicles growth or production growth into 2026. But talking specifically about the commercial vehicle side, just trying to understand whether you believe that the current forecast for the market are incorporating the big inflation we are seeing into fuel prices that could perhaps impact end user demand for trucks. Just trying to understand whether we could anticipate some volatility in terms of demand at least in the short term as the complex still goes on and we are seeing this big volatility in fuel prices. So that's the first question. And on a second topic here, you mentioned that the mix was a positive factor into the margins for the first quarter of the year. Just trying to understand how you're seeing mix behaving in the quarters ahead and what this should translate into margins as well.

Gabriel, thank you for the question. So from a CV point of view, I think I share some of your thoughts because you heard me say even if these numbers will only become true for half of it, right? And so I think the numbers that are being forecasted officially are very optimistic, and we can hope that they will materialize. What we believe is that we will need a little bit more time to see how things develop in the world. Will they de-escalate or will they further escalate, that can change a lot, including inflation and including impact on overall economy, which has always a big impact on truck sales and truck production. And so I'm cautious to say we are counting on all these increases to happen as they are projected. But I'm also optimistic enough to say that there should be growth because right now, especially North American market is at an absolute record low level. And I think there's many, many more reasons to say that market will go up meaningfully than it will stay at these low levels. And that's, in fact, also what we see happening in our releases. And so it may not be as optimistic as the official numbers show, but we do believe there will be meaningful growth. It all depends a little bit on how things play out in a part of the world where we are not now. From a mix point of view, that's difficult to say. I think in the second quarter, we will see a similar pattern. But of course, mix is difficult to project longer term. And so we will work on that. I think we will count on that in the second quarter, but I'm not sure if that positive mix effect will be something that we can count on forever. Is that okay?

Yes.

Our next question now comes from Gabriel Tinem from Santander.

My first question has more to do with restructuring and capacity. I would like to comment on what stage we are at, at this point. And I would also talk a little bit more about other initiatives. And the second point has to do with the notification on the trust in Germany, if there has been any development compared to the last quarter and how we could see this event, how you're dealing with it? Any information you might share would be useful for us.

Thank you, Gabriel. So from a restructuring point of view, if you mean operational restructuring, we had some meaningful restructuring going on last year in North America, a little bit in Brazil, but that was more a shift management. And so right now, we're not counting on any meaningful restructuring going forward because if the markets develop as they are being projected and as we see them, which means increase in truck and flat in pass car, we think we have the right structuring. So if your question is, are you going to spend a lot of money on restructuring beyond what we have done, I would say that's not our plan on the contrary. When we talk about the German antitrust case, I think we talked about it in the last earnings call because there was some news, but there is no update since then. I think this will take a little bit longer time. We continue to work with the authorities through the process, but there is not a formal update between last quarter and this quarter. Is that okay?

Yes, it is. And just a quick follow-up. If you can comment a bit more on the working capital dynamics for this quarter and what we could expect exactly for the remainder of the year, that would be quite helpful.

Thank you for your question. Your observation is very interesting. In your first question, if you're talking about effective rate, here, we can analyze in 2 ways. The accounting rate and what was actually paid. When you look at indirect cash flow, we see an increase in the payment of taxes of about BRL 98 million when you compare to the last quarter. And this effect is explained mainly by 2 specific effects related to our controlled companies in Turkey. We have today what we call global minimum tax, which is 15% with the initiative from the OECD created to prevent multinational companies from paying too low tax. So we should pay at least -- companies should pay at least 15% tax, if the company pays less than that in a specific jurisdiction. And if the company pays less, we have that top-up tax. And compared to that, we have made payment of BRL 35 million in January, which were forecast for December 2025 and was not realized due to the unavailability of the local Turkish tax system. And so the local authorities postponed the payment deadline to January 30, and we made that payment in January. Also, until 2024, the Turkish tax authority accepted the inflation accounting, which would be the correction of financial statements according to the inflation. And if you look at Turkey, it is a company with high inflation, and that is why you have the inflation accounting. And every time you do that, it affects your tax base. In 2025, there was a decision made by the government in Turkey with immediate effect for 2025 that caused the accounting impact that was acknowledged in December 2025 with a value of BRL 45 million with the adjustment of the taxes due to this inflation. And then we did have a payment of BRL 45 million in the first quarter. So when you add these 2 events, we explained that basically BRL 80 million of the BRL 90 million that you see in the cash flow are explained by that. And what happens with that? Since your effective rate is closer to 15%, it means the global minimum tax that will be paid for December 2025 should compensate for what we paid in excess already in the first quarter. So this would be basically your first question. When we talk a little bit about working capital, I think our industry knows that the first quarter is seasonally weaker for Iochpe. It reflects the normalization of demand of the last quarters, we have less working days and all that. And I bring all this context. So to say that it's important to evaluate properly our working capital. When you look at the indirect cash flow that excludes the impact of exchange variations and comparing apples with apples, we see a working capital compared to 12.7% for the first quarter of 2026, finishing the month of March in 11.8%, the lowest best level in our last 10 years comparing to our history. And when we compare the last 3 years, this is the working capital ratio level that we have delivered. And the dynamics is compensated by the indirect cash flow. When you look at stocks, accounts paid receivable and that, you see that the working capital used BRL 312 million last year. And this year, we are only at BRL 45 million. And it's worth mentioning that we had in the first quarter of 2025, you had operations that were much higher than the first quarter of 2026. So if I am to normalize my operating cash flow, we see in the indirect cash flow of BRL 337 million compared to BRL 100 million in the last same period, this BRL 337 million should be adjusted by this BRL 62 million in our operational cash flow. In the investment activities, you see this BRL 45 million of CapEx, which is BRL 6 million higher than the first quarter. But at the end of the day, this is not an indication of 4x the value. So at the end of the day, this is not a trend that should be multiplied by 4, but we are still aligned with what we have done last year. And finally, just to close the dynamics of cash flow, when we look at the financing activity, we see an addition of cash of BRL 145 million, and this is explained by the release of 137 lines in that FINEP line with related to the strategic innovation plan that was approved last year with a value of BRL 357 million, and we still have BRL 126 million to be released in the next years, but it has a TR cost of 2.3%. So considering the entire dynamics of cash flow that I have just explained and aligned to the increased value of the reais compared to dollars, this has contributed to what Pieter had commented in the increase of our leverage despite all the challenges of the sector that we see in some regions where we have seen the best results in the last quarter.

Our next question comes from Fernanda Urbano from XP.

Just wanted to follow up on the question about commercial vehicles and the forecasts. Looking at recent new orders data in the North America, we have seen some better data points in the past recent months, even in a volatile macro and volatile fuel environment. So I just wanted to understand how tangible do you see the recovery in North America, if you are already seeing some better signals from OEMs? Just to understand the timing, if you can think about volumes improving already in the second quarter or if it's going to happen more towards the second half of the year? And maybe if you could comment on this outlook for Brazil as well, it would be very helpful from a timing perspective.

Yes. Fernanda, thank you very much for the question. If you look on the sales numbers of trucks in North America, there are some pretty meaningful increases there, pretty steep increases there that have been reported recently. And so whatever is being sold, we don't see that directly lagging what we are selling because, of course, then the trucks need to be produced and the production volumes need to go up. But of course, that's a good indication of what will probably happen to production because ultimately, what you sell, you need to produce it. So that gives us an optimistic view on what's going to happen over the next coming months. And we already see that happening. Now keep in mind, that at the beginning of 2025, let's say, the first half was pretty good. It was pretty good numbers. And then this market tanked in the third quarter with about 50% and then the fourth quarter, quarter-over-quarter, right, quarter -- fourth quarter 2025 to fourth quarter 2024, another 25%, 30% negative. So if we say that the year 2026 overall should be the same or slightly increase versus 2025, that means for that to happen that the second half of the year needs to be pretty strong because you have this U curve, you come from a high level, you go way down. And so it means if you want to have the same number at the end of the year, you need to go way up as well. And so that's what we are seeing is starting to happen, and it's happening already in the second quarter. That's true. But the bulk of that still needs to come. Our only indication there is that the sales are up indeed to these kind of levels. And so again, if the sales are there, then the production should follow. And therefore, our estimate is that, yes, the year 2026 should be pretty close, maybe even a little bit better than 2025. But that means the second half needs to be pretty strong because that's what the first half of 2025 was as well. For Brazil, it's a little bit more difficult for us to predict. We were actually thinking initially that the first quarter would be better than what it resulted in. We are still hopeful that the rest of the year will be better than what we saw in the first quarter. But of course, the whole macroeconomics, the interest rates, et cetera, it's not helping the overall situation. So hopefully, because of some of the government measures, the market will be better than what we saw in the first quarter, but it's more difficult to predict. And I would say some of the positive factors that we were counting on in 2026, for instance, reduced interest rates, that's not happening, at least not to the extent that people were expecting it. And so very hopeful on North America, but it needs to be happening. And then South America, we need to watch a little bit more before we can make more realistic comments. Is that okay?

Yes, very clear.

The next question comes from Luiza Mussi from Safra.

Could you please comment on the noncontrolling interest line? We kind of saw a meaningful year-over-year increase in this quarter. And maybe if you could help us think about how to kind of model the size versus the demand scenario and profitability you're expecting for the year would be very helpful. And another one is, how is the ramp-up of commercial aluminum wheels production in Europe was part of the strong performance in the quarter driven by this ramp-up somehow?

Thank you for the question. I can comment here that the noncontrolling shareholders, we have 2 main areas, Turkey that has 40% of profits and India. These are the main highlights. This is a dynamic when you compare to last year, they have a higher profit, I think, resulting also from tariffs issues that we have all over the world. This is a region where until now we could export directly from there to Europe and other countries in the region. And with that, they had better profits. Every time they have better profits, I have to highlight here the 40% of the profit that are not belong to us. That is why you see the increase in the noncontrolling shareholders. As for the second question, could you repeat it?

Second question was around the CVA ramp-up, the commercial vehicle aluminum wheels ramp-up, if I understood correctly. And so no, that's not part of the increase that you see in Europe. That is totally based on our commercial vehicle steel wheels. And so that's not being supported artificially by aluminum wheels for commercial vehicles ramping up. That is still to come, and it will come. We are homologating products. We are getting first orders. But of course, as you can imagine, when you ramp up, this is very, very minimal volume at this stage. And so that has not been one of the reasons why we have been outperforming the market in Europe in the first quarter, but it will come.

As a follow-up question. There is a tariff issue related to the increase. Is that something that we could expect to continue this dynamic for the rest of the year?

We can't know what's going to happen in the second semester, the second half of the year. But I believe not. I think this is a thing for the first quarter that resulted in higher profit. That's why you see this BRL 9 million when you exclude noncontrolling shareholders.

Our next question comes from Andre Mazini from Citi.

In a sense to follow up on the prior question, if you guys can talk about the health of your OEM clients, probably separating between commercial and light vehicles. The light vehicles OEMs, everyone saw they had huge impairments last year as they discontinued some EV models. But now with oil at triple digits, it seems that consumers are more keen on buying EVs. So really hard to understand the demand there for EVs, right, with all this volatility. I know you guys are agnostic to the powertrain. You have both aluminum and steel wheels. But how do you see this scenario impacting the health of the OEMs?

Yes, that's a valid question. Now first of all, when we talk about the health of our customers, we are kind of lucky that 95% plus of our sales is to OEMs. And usually, the financial health of the OEMs is a lot better than what you see in many of the aftermarket in automotive. And so from that point of view, we are in a very favorable position. Now of course, as you say, the OEMs have been writing off a lot recently and the combination of having to invest -- continue to invest in ICE and having to invest in electrification and having to invest in autonomous driving, et cetera, et cetera, this has been a burden for our customers. We do not believe there is a risk for us in that aspect, a risk meaning they will not be able to continue or pay their bills. But of course, this is putting pressure on the profitability of our customers. And when customers are under pressure, then, of course, they will look for cost savings, et cetera. So this is not new. This has been happening, I would say, for the last 100 years, but it is happening in the last couple of years and now as well. But I believe our company has a very, very good track record in being able to recover in a fair way from a pricing point of view, what we need to recover. So yes, it's something that we see, but we believe we are in a good position when it comes to the financial health of our customers and their ability to do business with us and pay for that. When you talk about indeed about our products relevant, given new mobility, et cetera, we talked about that in prior presentations and calls, and we believe we are in a fortunate position there, too, that it doesn't really matter what propulsion the vehicle has. As long as it stays on the ground, and we believe for many, many, many, many years, all of that will stay on the ground, wheels and also chassis are very relevant. So it's certainly things that we monitor, but it's not things that we worry explicitly about.

Our next question comes from Marcelo Motta from JPMorgan.

Renato mentioned that this 10% increase year-over-year cannot be annualized, but just wanted to understand if there was maybe some seasonality, some special items that kind of weighted on the CapEx during this quarter, especially because I guess, like the FX have helped the CapEx to be lower in BRL terms. So just wondering what happened here. And regarding restructuring costs, Pieter said that nothing relevant to come. But on the release, you say that there was some expenses this quarter, like this line was around BRL 14 million. So just wondering here, it was like overall different regions or there was some specifics here worth to mention. So just 2 quick follow-ups.

Yes, Marcelo, thank you very much for the question. So on the CapEx, I would say it's more positive news. Normally, we have a little bit more CapEx at the end of the year. But when we need to make investments for new business, right? That's not something that you can manage from a timing point of view, et cetera. And we knew that. And so this was planned, budgeted, known. And therefore, we don't think it's something that should worry us and that should hinder reaching our target for 2026. But sometimes you can postpone things or manage things from a timing point of view. But when you have to manage an SOP start of production or new business, then you just need to make it happen at the right moment. That's the main reason for that. And so on the restructuring, yes, there was some -- still some stuff to be done rolling over, let me say, from 2025 into 2026. But as I said, we do not have any meaningful plans for this to continue during the rest of this year, of course, given the markets stay as they are being projected right now.

We have time for one more question. There is a question from Declan Hanlon from Santander. And he asks about the strategy for refinancing bonuses for 2028.

Thank you Declan for the question. I think in general, the company has a very solid liquidity, BRL 1.9 billion in cash plus the lines that are already compromised. And when we look at the term profile, when you look at our justification, we see the amount for the next BRL 12 million and the BRL 287 million for 2027 volumes that are fully manageable and that we hope to cover with our liquidity and our cash flow for 2026 and 2027. Addressing directly your question, most of our debts are concentrated in 2028, especially considering the term of the bonds. But the point is that we still have time, flexibility and access to the market to address that efficiently at the proper time, we will review either structure, funding alternatives, always seeking the best way to optimize things and provide the best results for the company. It is prudent that the company will start analyzing with enough time in advance and analyzing alternatives to try to address this term. And in a summary, we have a comfortable structure with investment profile that is well managed, which bring us [indiscernible] to do our liability management that is to come in the future.

With that, we are closing the Q&A session, and we will now like to give the floor to Mr. Pieter Klinkers for the company's final remarks.

Okay. Thank you once again for participating in the call. I hope it was helpful. We think that Maxion had a decent quarter 1, especially given the global circumstances, market circumstances, we believe we managed through very well. And so with all the information that we have about some of the markets coming back that are relevant for us, we believe we are on the right track to have a year as we targeted in 2026. And so of course, there are certain things that can still impact this year. It's only the first quarter call, not the third quarter call or the fourth quarter call, so a lot can still happen. But let's hope that some of those things will actually stabilize more than what they have done in the first quarter. And when that happens, we believe we are well positioned to be on track with our targets in 2026. So thank you very much for participating and looking forward to talk to you in a few months. Bye-bye.

Iochpe-Maxion's first quarter earnings video conference is now ended. The Investor Relations department is available to answer any further questions. Thank you all participants. [Statements in English on this transcript were spoken by an interpreter present on the live call.]