JSL S.A. (JSLG3) Earnings Call Transcript & Summary

Good morning, and welcome to the conference call of SIMPAR to discuss the earnings regarding the second quarter 2020. Today with us are Mr. Fernando Simões, CEO; and Denys Ferrez, CFO and IR Officer. [Operator Instructions] We would like to inform you that this conference call is being recorded and translated simultaneously into English. Before moving on, we would like to let you know that any statements made during this conference call relative to the company's business outlook, operating and financial goals are based on the beliefs and assumptions of SIMPAR's management and rely on information currently available for the company. Forward-looking statements are not a guarantee of performance. They involve risks, uncertainties and assumptions since they refer to future events and depend on circumstances that may or may not occur. General economic conditions and dispositions and other operating factors may affect the future results of the company and lead to results that were differ from those mentioned in the forward-looking statements. Now I'll turn the call to Mr. Fernando Simões. Please, Mr. Simões, you may go on.

Good morning, everyone. I would like to thank you all for attending. We are starting the release of SIMPAR's earnings for the second quarter of 2020. We are going to start on Page 1, when we have closed our corporate restructuring. I'd like to start by thanking deeply the work and dedication of our team. The last 4 years, we worked very hard for the restructuring to really separate the company so that we could start to this new cycle. The final move is the one that we highlight on Page 1. Again, thanks to the dedication of our team's controllership, financial, administrative and even operating teams. Thank you so much. I also would like to thank our shareholders or potential shareholders because all that started 4 years ago because some investors ask these questions and told us that we should be a bit more separate, split information, so that it would be easier to understand the company, and as a consequence, generate very simplified structure and contribute to the perpetuity of our business. By listening to you, we decided to follow the path to have the restructuring. For us, it is a unique time. We are very happy, and we believe this new organizational structure will really contribute in a differentiated manner for us to get into a new cycle of development. The structure is ready, companies are separated, independent management with clearer metrics established by the Board, clearer development goals for each one of them for the coming years, and all of them inserted in industries that have huge possibility to grow, improve margin and gain scale. Thank you so much. So now I'm going to start on Page 1. In the upper part, we show what our structure was look like, SIMPAR, Free Float and Outros as shareholders. And in the lower picture, you have JSL here, which has a role of an operational company, but also hardly controlling the other 5 companies. Just as a reminder, Movida has operated Free Floated because it's terrific. So what did we do? First, together, we put together independent committee assessing alternatives. And then the proposal was to have SIMPAR, which is a family holding, the operation part. Thus, SIMPAR would become the holding company of all others. With that, we wouldn't change control, and we would have a purely logistic company that is JSL. And now we have the largest road logistics company in Brazil, with the largest portfolio of services. This is what we did. We are going to tell you about our process, governance and everything, but this is what the structure is like. The holding of the family principal of 30% is the new -- Novo Mercado. Other shareholders, including the family, and then you have SIMPAR, that is our new listed company. That is now a purely holding company and therefore, controls the other 5 companies, plus logistics that is 100% controlled by SIMPAR, and is today the largest road logistics company in Brazil. Well, let's first talk about restructuring. We believe that we are very uniquely positioned for a new cycle of development. We believe that in the restructuring, we'll be creating value to shareholders, we are going to have more focus on -- for our customers, a simple corporate structure, transforming the company and completing the independent companies, all the companies will have clear, more transparent numbers to be understood by the market better. And with that, we can have a lot more longevity in our businesses in a more sustainable manner. Going to Page 2. I'd like to comment with you what it was like, that is why we chose the family holding to be the most natural party to become the company's holding, and in a way that minority shareholders wouldn't have dilution. But because you're talking about related party, we called a shareholder meeting. And we, controllers, announced [ close ] parts that we would follow on the votes of minority shareholders. Whatever the minority shareholders decided, we would follow. And we were very happy to know that we just had a meeting a few days ago, and unanimously, all minority shareholders approved the move. That shows the quality of our proposal, but also shows our level of governance and respect to our minority shareholders. Since we went public, we always said we would like to relate to shareholders, just the way -- like the way we relate to financial institutions and our clients in a concerned, candid objective manner and in the long term. So what changes? All the shareholders that were with JSL have become SIMPAR shareholders, that is now a purely holding company with 100% of JS Logistics, 100% of Vamos, 100% of CS Brasil, 100% of BBC, 100% of Original and 51.1% of Movida, the rest is in the market. Those has just changed. And instead of the JSLG3, SIMPAR, as of the 6th of September, will be listed as SIMG3. JSLG3 remains until the 6th of September. These are the changes. And with that, we have a pure holding and logistics activities will stay in the company that is controlled by SIMPAR 100%, JSL -- JSL is no longer holding, but rather the largest growth logistic company in Brazil, the largest portfolio of services, focused on businesses and execution that is driven by its Board. What are the main objectives by creating the holding? What will be the main activities of the holding? Preserving the values, managed model and governance of the group, promoting sustainable value to shareholder clients on propriety, our objective is to generate value: value to societies, shareholders, employees, our people, that is the major difference of our company. We have the mission of directly and controlling execution of business plans at each controlled company and develop new businesses and segments of operations. In part, we will have a main objective to attract to train and retain people because, again, people are our major differences. We developed along the years and the transformation we went through was always possible because we have financial institutions backing us up, people working hard, focusing to make our customers loyal and treat them well and opportunities clients have given us. These are I think our mission to today. And then going to Page 3, we tell you a bit of our history. Our company was founded 64 years ago by my father. We started as a [ CRL ] company. But with the DNA of execution, development in the 70s, we bought a company that was larger than us. And then my father was a truck driver, a mechanic, a salesperson that always contributed to society within his means. As of 2006, we have the Julio Simões Institute coordinating social actions and sustainability in all companies. In 2009, we created CS Brasil. We did acquire some companies along the way, extremely complementary to our services, Schio, Movida. We had the IPO of JSL in 2010. And at the time, you will remember, this was a company in transportation and logistics with some other services, the rental of cars, trucks and machineries. And that's the one thing about transformation. We prepared the business units to become completely independent. Rental went to Movida. We created Vamos. BBC is financial services of the dealerships. And with that, in 2020, we have SIMPAR that, from now on, is going to be a pure holding, as I mentioned on previous pages, and JSL will go back to its origin, with specific focus on logistics and transportation, again, the largest road logistics company in Brazil. On Page 4, we talk about the main financial highlights for the second quarter 2020. JSL records net income of BRL 536,000 because of lower volumes hold and everything that has happened in COVID, including April. The core group has been working non-stop and has contributed to basically supplying society. In May, June, we see a recurrent net income of BRL 10 million, which already shows that our results are being recovered. We acquired Fadel, that is a company recognized by its high-quality management and with its people as its major difference as well, with a portfolio of more than 68% of its services in -- are the distribution and a bit of e-commerce. Our company is going to hold 75% of Fadel, and Fadel is going to be continued led by its founder, [ Ramon ], that has a fantastic capacity of management and built this beautiful company. Transmoreno. It is a company that ships brand-new cars on car carrier trucks. This is a market in which we can contribute to our clients, generating better services by means of innovation that can help them. I believe this is the fifth largest company in brand-new cars carrying, with strategic partners such as , and recognized by its services. But, again, shows a cycle of development is that gives logistics processes opportunity in Brazil. We have railway. We have cabotage, but road transportation is complementary to any other means of transportation. Vamos. Net income of BRL 39.3 million, EBITDA BRL 152 million, 12% higher year-on-year, a growth of 11%, showing business resilience. Again, we are not presently islanding them, but it has its development completely detached from the current economic reality, especially in terms of a pandemic. CS Brasil. Net income, BRL 19 million, EBITDA of BRL 83 million, growth of 2.3% year-on-year, and margin EBITDA of 51.8%, that is 8.2 percentage points higher year-on-year. CS Brasil continues to benefit from the Brazilian side of its business at fleet management or outsourcing that accounts for 82% of its revenue, with rate of 13.8%. And again, according to our strategic plan, more and more prevailing rental for our car, equipment and trucks for public services. Movida has already released its results yesterday, with net income of BRL 2.6 million, EBITDA of BRL 151 million, EBITDA margin of 50.7%, 10 percentage points above year-on-year and a record sales of 18,465 cars in 2Q '20, 15% above the same period last year even during the pandemic. I will use the opportunities to thank the work, dedication and commitment of the team led by Renato Horta. They're doing excellent work, agility, steps of services, measuring no efforts day and night with excellence in execution amidst the crisis. We also renewed our commitment. We're signatories of the UN Global Compact inside JSL. We committed to fight deforestation in the Amazon, signing an open later. And then when we look at SIMPAR's consolidated and now controlled companies, all together, net revenues are BRL 156,000, a growth of 120% in the same period last year. And again, here, we're happy for the swap and bond. Excluding the swap, we had net -- consolidated net revenue of BRL 13 million. Net revenue of BRL 2.2 billion and EBITDA of BRL 470 million in the second quarter 2020, with margin of 35.3%, 5.1 percentage points above year-on-year. And we kept a lean for cash, which was enough to cover amortization by 2.5x. That is BRL 5.7 billion in the end of the second quarter '20. Now I'm going to turn to Denys that is going to talk about SIMPAR's financial results, consolidated numbers. Please, Denys?

Thank you, Fernando. Good morning, everyone. So we are going to start on Slide 5, talking about the group's financials SIMPAR consolidated numbers. Net revenues, the last of months accounted for BRL 9.6 billion. Quarter-on-quarter, even if we think of the pandemic, the company still had a total net revenue of BRL 2.2 billion, with a reduction of only 8% compared with the same period last year. EBITDA and margin EBITDA to your right, EBITDA margin was 35% above the same period last year and also above the average of the last 12 months. And also above, say, year of '19 and '18, even in development. Nominal amount, BRL 460 million for EBITDA, a reduction of only 9% compared to the previous period despite this pandemic. EBIT BRL 199 million, with a reduction of 36%. The reduction of more than 9% of EBITDA, which explains the increased depreciation of assets in Movida. Now going to the last piece of information in the slide, on the bottom right part, we have net income and net margin. We had the highest income in our history, approximate BRL 157 million. That shows the positive effects of our restructuring. We had to close some negative contracts, and we opened them with the recognition of gains and also lower some tax credits. So the net effect really drove to the record net income margin of 7.1%. And excluding this one-off effect, we would still have a net income of BRL 13 million with margin of 0.6% despite the pandemic. On the next slide, Slide #6, we talk about our investments for the second quarter 2020. So in the center, you can see that we had BRL 648 million investments, sales of BRL 851 million. And with that, we've had a net CapEx in investment. I do not remember in the last 12 years of seeing that, but shows our discipline and reaction before the uncertainty of academics. So in line with our strategy and thanks to a very dynamic management, mainly driven by Movida, we had record sales of cars in the period and validated the theory that our assets are liquid. And when necessary, we can always monetize them even in adverse environment. In detail, what happens to each one of the companies. That also shows the profile of our business. Starting with Vamos. Net CapEx of BRL 206 million. And along the quarter, we have said that the company continues its path of development despite the pandemic. Closing and this proves that you did net CapEx of BRL 206 million in the period. JSL, as we have mentioned, because of its profile, it is asset-light in operations, but we have had recurrent volumes of investments at lower levels when we didn't have the company separate. So investments of BRL 24 million. And it's the company today that has 65% of its revenues, a strong asset-light contract. CS Brasil depends on opportunities from the public sector, did make the investments that were already connected to bids that were won, a net value of FX and most is uses that was responsible for the execution of sales, benefit a negative net CapEx of BRL 427 million. Now I'm going to go to the next slide, where when we talk about indebtedness for SIMPAR, consolidated markets. Well, during the crisis, the pandemic, we would say we that, that we're being conservative. All disclosures you saw, our balance in terms of cash availabilities going up. And it's not different today. So I draw your attention. Company cash due to the end of the second quarter, BRL 5.7 billion, which is enough to cover 2.5 tax amortization in the next 12 months. And when we look at our indications in terms of covenants, we are really quite comfortable despite the turmoil we are going through. That is going to show the diversification activities, client industries and the quality of credit that the company has is resilient in long-term context. So objectively speaking, we announced for the first rate net debt added EBITDA, 1.7. The covenant cap would be 3.5x. [ We have requesters ] what we use locally in terms of maintenance. The next indicator is added EBITDA over net interest, 10.8%, and the minimum would be 2x. Again, that's a huge growth in operations in the concept of maintenance. The rate that we use in the foreign market is net debt-over-EBITDA, 3.9x, and our cash for covenants would be 4.4x. Just as a reminder, this has [ been curved ], which means that after this limit, you still have some flexibility to simplify almost one time. So again, quite comfortable. Just for you to note, net debt, BRL 8.5 billion. And then all in-debt business is -- in dollar is 100% ahead and the average cost after tax is 3.6% average cost. With that, I go to the next slide, where we show the breakdown of profitability of SIMPAR. So starting with the top left. We have what comes from Vamos, net income of BRL 39 million. ROIC in the last 12 months of 11%; Movida, BRL 3 million, ROIC less 12 months, 9%; CS Brasil, net income of BRL 19 million, ROIC, 8.9%; JSL Logistic, net income BRL 1 million ROIC 7.4%; Original, negative EBITDA of BRL 2 million; and BBC, net income of BRL 1 million with ROIC of 23%. All together, all of the net income, we have BRL 60 million, again, driven by the one-off events of the mark-to-market and swaps because of the restructuring, net of credit over of -- FX credit. Record income with BRL 157 million, 100% above for the previous year, and what we can say is recurrent even excluding the effect, would be BRL 13 million. Going to the next page. We have a summary of all results broken down by company and closed at SIMPAR. What's interesting to highlight here is that if you take a look in the quarter, I can say that all of our companies were positive and with outstanding profitability. And as a summary of the performance of all our companies, you can see some companies were just not affected because of their business, like CS Brasil and Vamos. In consolidated results of SIMPAR, we had BRL 2.2 billion net revenue, but BRL 200 million in EBIT. BRL 470 million EBITDA was a small impact vis-à-vis the crisis caused by the pandemic and record net income of 157%, 120% above as the previous year. And knowing that here, we have legitimate, but one-off effect of the mark-to-market operation. Swaps and the write-off of tax credits because of the operation. But even if we exclude the factors in a challenging scenario, we would have had net income of BRL 13 million, with leverage of 3.9x. The leverage of the control and we understand. Based on the data that we have we are gradually recovering to our deleveraging companies. With that, I go back to Fernando.

Thank you, Denys. So we are on Page 10. We are going to talk about our announced acquisitions. Acquisitions that worked across by our controlled company, JSL. JSL acquires 75% of Fadel for BRL 159 million. So that was founded in 2001 by [ Ramon ] and now we are pertinent and management is going to be completely independent and led by Fadel's founder. This company has a huge share in urban distribution, particularly beverage and food, with important and relevant customers and recognized by their higher level of demand. And Fadel really stands out because of governance, efficiency, quality and no-cost execution. And we reserves compatible to investments, even in such a difficult market. The strategic rationale for both Fadel and JSL is synergy in imports, better management for both companies and also the possibility of having new clients in cross-talent. All that, important to say, we are still waiting for approval from the CAB. JSL also acquired 100% of Transmoreno, a company founded in '78, with main activity is the transportation of brand new cars. And it has had, for many years, a commercial partnership with Moreno and JSL at about 100% of Transmoreno's share for BRL 310 million. Again, it was our strategy to start the shipping revenue costs. It was less than 2% of our revenues, but now it is more relevant in our services. Together with Transmoreno Transporte e Logistica, we may develop innovations that will contribute furthermore to customer loyalty and also cross-selling opportunities for other services in the auto industry. These acquisitions by JSL are in line with our strategic plans. The idea is more and more to be in different industries offering other logistics services and being able to have cross-selling to current and future customers. Remember that the acquisitions the company, as being made, are one-off strategic and complementary, printing people, important customers and quality in execution. Now I'm going to Page 11, where I talk about the strategic opportunities for each company that is controlled by SIMPAR. JSL. After the restructuring, this is a company that is ready to discuss a new cycle of growth organically or inorganically. Acquisition will definitely contribute for us to grow into new industries, or to offer complementary services to what we have so that we can have good people and clients so that we can contribute with more services and to make them more lower. Our Board has also been looking into, together with JSL, the possibility of having an IPO with investors that want to be part of this investment. What we believe is that Brazil in logistics offers huge opportunities for development, and JSL has a unique platform in terms of services and diversification of factors, with really different people that contribute to its history of leadership in the last 19 years. CS Brasil is a company that today has more than 80% revenues from fees management and outsourcing. These services offer to public sector and mixed capital company. CS Brasil has a level of governance that is really parallel and transparency. It has a monitoring room when they take part in this, but also our transparency website showing all contracts signed period client and more and more, we have to focus on the excellence of other services. And in CS Brasil that, more and more results in the better quality of services in the public sector as a whole by means of availability of fleet, and we believe we have a huge potential of growth improving management in public services by means of fleet. And this is a way to provide services assistance in transportation in health. Then BBC, a leading company, will have a digital account in which we pay truckers, and we also finance cars and trucks. BBC is a financial service company that helps us to develop customer loyalty and develop all the companies that are controlled by SIMPAR. Vamos, a company that rents truck material and equipment, most of our contracts more than 90% of our equipment, with or without maintenance, but our operations are long term and clients more and more want this alternative. They don't have any debt CapEx or OpEx, and they can develop in their business. There, we have a unique positioning because of its dealership for trucks and machinery. And today, it has more than 15,000 assets and is the largest buyer of trucks in Brazil. And consequently, it has the scale and is very competitive and offer competitive advantages to customers. Movida continues growing, replacing property for use. We believe that Movida and Vamos segments are still bearing the gift. They have a huge potential to grow. And the major difference is to have the growth as a whole with our DNA to provide services. More and more, I believe, that assets will -- less or less deficient. What is different is the service to provide what their customer wants, not only to deliver service, but also to make them happy. And Original, our car dealership are completely independent and complementary business to the other companies of the group. So we talked about each company controlled by SIMPAR, our different businesses and our opportunities. Nothing makes us happier than having this restructuring. We are sure that we are starting a new cycle with completely independent company, with huge potential to grow and improve its margins and returns. Again, thank you very much on behalf of our team, and now we are going to open for your questions. Thank you very much.

[Operator Instructions] Our first question comes from Gabriel Rezende from Bradesco BBI.

I have 2 questions, quick questions about the M&A. I would like to know if you have other acquisitions in your pipeline in addition to Fadel and Transmoreno. And in the case of Transmoreno, can you think that you have the expectations to increase market share in the freight shipping of brand new cars?

Okay. It's part of our company's strategy to look into M&A opportunities. It has been so for many years. All the companies control pricing parts. We're never focused on developing through M&A and on, but also looking at opportunities. We have always done that, and we have been doing that in recent years. But first, there is a natural time of maturity because we want quality acquisitions in terms of industry clients and management. And also we were restructuring the company. Now that the restructuring is finished and now that we have a pure holding, we have JSL clearly focused on logistics. And the 2 are positioned. We were looking at them for some time, and there are others that we are looking at. We have basically a unit that is focused on M&A, and we might have other M&A. We are not selling expectations. We are counting on growing organically with the relationship and for selling and the new services, but logistics is an area that has huge opportunities of consolidation. So I have been in logistics for 4 years. I am 53, but I started at [ 40 ]. And think that the industry trusts data. Just to give an example, the first time I saw Transmoreno was 4 years ago. And as there was empathy between myself and [ Ramon ], but still, we talked for a long time, with 18 months. So this is a market that has changed, but we cannot say that this is going to happen. But I think that we have credibility in the market, and we always keep an eye in opportunities. And also the other side has to want to sell as well. In terms of market share of Transmoreno, I'm going to be very honest. I know that Transmoreno has a contract relationship with JSL and provides quality services and this is the opportunity that we saw, and this is what we focus on. Of course, that in terms of market share, well, versus our fate, it's destiny. But of course, we always try to have marked up sales and improve services provider. We hope that through Transmoreno, we are going to offer more quality and services in the segment, and with that, have more loyal customers and even attract the clients of our clients, soft sales. OEMs sell costs to dealer to -- or whatever. By means of Transmoreno, we want to attract the clients of the OEMs, and this is our focus. Market share, well that's the future. Of course, we want the company to grow. But if we do right, I think this is just a consequence. And Gabriel, I hope I have answered your question.

Our next question comes from Werner Roger from Trigono Capital.

Fernando, congratulations on your results. We were very happy with the results. And Denys congratulations on the financial management, difficult times, being able to raise funds, good job. I have 2 questions. First, for the mentions that businesses are dependent. For instance, the group -- are independent, sorry, but the group is the largest buyer of trucks. When you are negotiating trucks, you negotiate a package, including several companies. So in an independent manner, such as discussing volumes to everyone. Everyone, of course, with their own businesses. But with a price that is the same for all the companies. And that's what happens. And the second question about Vamos. Recently, opportunities in sanitation and infrastructure, the growth of Brazil and it's an agro business? My question is whether Vamos can grow in the segment in the rental of machine equipment. Because we know that in Brazil, compared to Argentina, we are still very sticky. We are just starting. And even infrastructure work, that can increase its share in the business, obviously, thinking about the trucks and other assets.

Thanks for your question, Werner. This is Denys. While we own our business, again, the companies are controlled. They have independent management, 100%, completely separate. But there is always one that stands up. When you're talking about buying cars, it will be to buy cars at a highest third party. CS Brasil also buy a lot of cars. So how does it work? Movida negotiates. If this is interesting for Movida, it will offer CS Brasil. And when CS Brasil gets a contract, it will negotiate and it can use, so what is a price, if Movida wants it or it will have a direct negotiation with the OEM and they offer it to Movida. So completely independent, but at the time of buying, we instruct. In the different management, they can scale. And this happens. And answering how it works in terms of related parties. Again, all companies are completely independent. They may decide, yes or no. I'll answer your questions about Vamos, to give you an example. Today, there is no doubt that Vamos buys more truck than any other company. Logistics has lots of assets. Well, we have assets that had an asset-light operations. But most of our assets in logistics are trailers. That is the best part of the trucks, and we work with lots of contractors. And also, you have lots of inbound operations. We have, again, the largest logistics portfolio in Brazil, so we have it. Where we are going to buy assets? In logistics, which the number is much lower compared to Vamos. Of course, it can enjoy the practice of Vamos because this is a benefit that Vamos has. We'll just continue to develop strongly. The first quarter was -- the first half was better and more than the first half, it has been continues with closing contracts with customers. Just now, for example, so you have an idea, Vamos closed more than 1,500 trucks that was out a month ago to be received in the next 6 months. That is the largest purchase in volumes in Brazil a year, which probably to be received in 6 months. In addition to what is brought in the first half of the year, so the expectations that we had is that more and more companies are going to enjoy from scale. And in the negotiation, we will have an open window for other companies in the group to be interested in also placing an order to buy. So this has been developing very well. As for the rental of equipment, Vamos has a unique positioning. You have a dealership with both trucks and tractors, independent management generating new businesses and also a new rental business. Last half year, it has knocked the sales of the machines and tractors in the Midwest Brazil, also offering rental businesses. So the companies has been realizing the potential and are enjoying from the scale and unique platform that is dealership of trucks, farming machines, and it's made on of rental being the largest buyer of trucks in Brazil by far. And also having alliances with important OEMs at that time because in the midst of a pandemic, a purchase excellence value, of course, gives you much better conditions. I'm sorry if I took long for the answer, but just for you to have a snapshot that we do respect related parties' businesses, but also about the possibility of them.

[Operator Instructions] Our next question comes from [ James Nicholson ].

Can you tell me a little bit about the credit implications of your reorganization? And in particular, S&P has you on watched negative for possible downgrade. What are your recent discussions with the credit rating agencies? And what risk of a downgrade do you see?

Okay. The question was our conversation about ACG's rating because logistics was a negative watch at JSL Logistics. It's just reducing the opportunity to make it clear. When we had the corporate restructuring and SIMPAR took over the holding of all the other companies, what accelerates the consolidated banking of the group, but starting from JSL, is now at the SIMPAR level. And so the rating of the conversation we had with them and some already released has not changed in consolidated numbers. There, we have not changed the ratings in the international classification or in the domestic classification. Very well then, when you look at JSL S.A., specifically, now the pure logistics operation, then you have the situation and confirmation of rating at Fitch. So in terms of consolidated rating, it's -- nothing has changed. But now they are issuing rating at SIMPAR at the consolidating company.

Okay. Do you think that there's a risk of a downgrade of the JSL bond? And for what reason would S&P downgrade the company or maintain a rating?

Yes. And I'm saying that I don't think so. I think these ratings will also be kept.

[Operator Instructions] We have a question on the webcast. Our question comes from [indiscernible] from Itau BBA.

I have one question to Fernando. If you look at JSL Logistics, can you talk about the competitive advantages of the company in 3 points or at least in main points?

I think there are many. I always joke around that nothing goes right for one reason, and nothing grows growth for one reason. But I think that, first, we are a company with a very strong history of very clear values than DNA. We have a history of 6 years. The past does not determine the future. But it sets to build the foundations of our presence. I'll give you some examples. First, providing services in logistics is an art. We don't sell a product, a piece of clothing, a car. We sell a service and for that, you have to have a history of delivery, which we have. If you go back anyway, an idea, the 10 market customers of us our -- has been our customers for more than 25 years. All the companies we acquired are our companies until today. And we have a history of cross-selling, that is we provide even more services to these customers. You have a history of logistics companies with development and there's capacity to deliver. That is when we ensure our delivery nationwide. This is, I think, what is most valuable in our company. Because whenever you have one contract, you want to have more. Our corporate managers are compensated for that. And there's another item that is very important. We have a unit to study each one of the businesses for us to have this structure of this content in terms of price and in terms of what is needed. So understanding customer needs and giving them the right price. And sometimes, the truck is not the best, but it is the best cost-effectiveness. We always want to attract the clients of our clients because with that, you have loyalty. So these are some of dollar points. And how can we do that? I always joke around, if you want to invite 10 people for a barbecue, it's hard that they will all come. We have people who are committed. I'll give you a number that is interesting for us to look at. 114 managers that we have in the company, managers that take care of our company. On average, they have been with the company for 13 years. And you have -- you know that [indiscernible] are 35, 36 years old. And you have new people coming in. So this makes our people more or less experienced, makes our vision. Again, as I always say, our [indiscernible] is our people. So I think it's the resilience of ours that makes the difference in our development and recognition in the market. And unfortunately, when you look at the market, then you see what happens to some of district companies because they must become more professional because it is not a covered because they do not have a history. Unfortunately, they cannot develop. The logistics sector is just sector. And just by means of a history, you can understand how some companies prosper and others don't. And more and more large companies want to work with those that have governance and sustainability. And then I think this is something that very few companies can talk about. Sorry, it is a long question. So these are some [indiscernible] that lead us to our unique positioning in terms of service. And we are in more than 16 sectors in the economy. And I don't know if I answered your question, but that's it.

Our next question come from Lucas from Santander.

I have a question about Vamos. Service revenues even picked up in the second quarter. I'd like to understand the dynamics of services and contracts that you have, for instance, when you have the return of Vamos, also going up the second quarter? Are you accelerating contracts with maintenance that is with higher margin? Are you increasing their share? Just to understand what's going on with Vamos.

This is Denys. So it's variable in terms of returns on improvement. Yes, it's current. We have more contracts with services. This year, we started with a contract with services in the agri business, which was the first, but also there is very good performance of our dealership network, both for heavy assets and heavy truck. And because you need little working capital, it becomes a positive lever to drive the return of the business as a whole. I'll let Fernando complement.

Yes. Lucas, this is a business that is developing. And the more customers realize the value of renting vis-a-vis buying, we get better. Vamos is a company that is developing long-term rental, providing services and even in sharing availability to customers.

We have a question on the webcast. I will read it to us so that we can know. The question comes from Fernando from Santander. And the question is, "What is going to be the policy of the companies that are under SIMPAR and SIMPAR's indebtedness strategy?"

Well, after the restructuring, the companies are completely separate and independent. So we do not have the granting of cost guarantees, and even when we think of SIMPAR. What we have been is as things mature and develop, they move on with each one of the companies. Whenever we have companies being developed, we are going to be there as we followed. As for the indebtedness of SIMPAR, this is BRL 1.6 billion of net debt and our intention is to reduce that gradually. A common question that we take. And I see that on the web, is the tax benefits. We have the option of 2 tax systems. One of them, we can use for tax-related issues when you have a partial monetization of investments. And remember, we want to keep all the investments that we have under control, that's first. Just to make it clear. But I'll give you a number. Remember, we had within the group in terms of net indebtedness as [indiscernible], then it's a reality now with SIMPAR. In days of '18, it was about BRL 3 billion, relative to BRL 1.6 billion. So that shows our capacity to reduce debt, much of it to gain from organic growth from whatever was produced by our company. But also, we have also enjoyed the market in the case of Movida. Just as a reminder, some point Movida, we supported it, the market didn't come along, and with that, our net debt was up to BRL 3 billion. But then, at the next stage, Movida has already delivered for many of its issues that we refund the capital. And with that, we contribute to the development of our company. So the idea is to reduce leverage proactively. Again, focus on organic growth. So if the opportunity happens in the capital market, it can be better. That's -- as a purpose of information, SIMPAR has a cash position of BRL 2.2 billion, with its maturity up to [ 24 ].

[Operator Instructions] Since there are no further questions, we'll turn the call back to Mr. Simões for his final remarks. Please, Mr. Simões.

Well, once again, on behalf of our team, I would like to thank you today. It's a historical day to us. We have record participants, more than 200 people attending the call, which should give us great satisfaction. It is, I think, a landmark of our history today. We believe that this is a strategic move that started to be built 4 or 5 years ago. Thank you, investors, financial institutions that always ask us for the best information possible. That improves our governance and I think that this result is proof of sales dynamics. I thank very much all our employees that were very bright. And now we have a purely holding company. And JSL that is only focused on logistics. I like the businesses that we have. And I myself have been working in the company for 4 years. I'm best friend of the founder. I know the DNA of the company. But it's today, if you gave me all the money in the world, I would never be able to build another day of that. It's the company that has a history. It's been serving the manufacturers and companies in Brazil. It has resilience in commercial relationships and revenue. So JSL is very important. So again, also, JSL has a capital structure that was part of our strategy to separate companies to have capital JSL's structure as is. We have definitely said, but this is what we are going to do. This is a unique time, and we believe that logistics, just like all our other companies, can go into a new cycle of development. Now we can focus on its operations. And remember the start of the situation, the more companies went to our ports because they want to focus on their core business. Movida released its results yesterday, again, it's market excellence, [indiscernible] congratulations for your agility, determination, and you see, the company is already recovering to its normal cash in a solid, constructive manner. Vamos, unique timing, positioning the market, a fantastic business. CS Brasil, the more public management improves, the more people demand services, the more they need mobility by means of cars, trucks and buses. And that has helped our sustainable development and again, with reference governance in the segment. And BBC and Original, smaller businesses but extremely complementary. So we always say, though we were successful that we believe in signs of happiness, and SIMPAR and the controlled companies all have huge opportunities with separate management, and we are leaving signs of happiness. And we have a strong value culture and that some of our main objectives is to preserve our guidance, our management model, seeking the best government practices for all our companies, controls and holding and generates value with sustainability to all our stakeholders. This is what we want. We only believe in development when it is sustainable. We want and will spare no efforts to control the execution of the business plan of each company. Again, independent, each company have the obligation of representing its shareholders, contributing and supporting controlled companies where needed, but also directing a fair direction without execution. They have autonomy for execution and 3-year targets and goals. And again, remember that our greatest asset is our people. So developing, training people and also learning from our people because these are the ones in the front line, talking to our customers. When I talk to investors, I learn from them. People are our difference. It is people that make our business. And to close, I would like to say that we are a service company. We want to take care of people. We want to be simple, to have focus regardless of our sites, to have the agility of a small company. And we have to work regardless of our size, with focus, sustainability and, of course, to have profit as well. Because without profit, there is no development, no sustainability. And we are proud to say that we were to have a fair return of this work. Well, once again, I would like to tell you that today, we are starting a new cycle of development in all our businesses for us to enjoy the foundations we built in the past. With your health, as we are -- your support, and we are going to not only improve our leverage, but the idea is to keep it until the end of the year, similar to what it was last year, even with the pandemic and the CapEx invested for us to continue our development. Once again, I would like to tell you that we are going to continue working hard to preserve your trust. This is what you want, that you trust us. On behalf of all of us, employees of SIMPAR, our controlled company -- controlling companies, we thank you for your trust. And thank you for listening to us. Thank you. Have a good day and a good weekend.

SIMPAR's conference call is now closed. We thank you very much for joining us and wish you a good afternoon. [Statements in English on this transcript were spoken by an interpreter present on the live call.]