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

Good morning, and welcome to JSL's conference call to discuss the earnings regarding the third quarter 2022. With us today, we have Mr. Ramon Alcaraz, JSL's CEO; Guilherme Sampaio, CFO and Investor Relations Officer of the company. [Operator Instructions] We would like to inform you that this conference call is being recorded and simultaneously translated 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, projections, operating and financial goals are based on JSL's management assumptions and beliefs and rely on information currently available to the company. Forward-looking statements are not a guarantee of performance. They involve risks, uncertainties and assumptions since they refer to future events and, therefore, depend on circumstances that may or may not occur. General economic conditions, industry conditions and other operating factors may affect the company's future results and lead to results that will materially differ from those in the forward-looking statements. Now we are going to turn the floor to Mr. Ramon Alcaraz. Please, Mr. Alcaraz, you may go on.

Ladies and gentlemen, good morning. It's a pleasure to be here to report the earnings of the third quarter 2022. Although in the last 2 years since the IPO, I have reported a significant evolution quarter-on-quarter really excelled ourselves this quarter. Results were excellent. It has been a challenging year, but the team has really excelled, and I'm very elated to just honk my horn to the team, which is something that we do when we close a new contract or have excellent results. Here are the numbers. Gross revenues of BRL 1.9 billion, 13% higher than the third quarter '21; even better in EBITDA, 50% over the third quarter '21 and 19% quarter-on-quarter with BRL 300 million. Margin of 19%, the best margin ever, 1.8% year-on-year and 0.3% over the last quarter. ROIC in constant evolution, 13.7%, 1.4 percentage points above the third quarter '21 and 0.7% over the last quarter. We also improved our net income, 24% above the last quarter, the second half '22, over 14% of revenues. That shows our resilience even at an adverse scenario. We have a natural hedge with a diversified growth and a unique positioning with presence in the real economy and a full-service portfolio driving core selling. Financial capacity that is unique to support large projects and meets the needs of the different sectors of the economy, growing capillarity by sector and geography with the deployment of new projects. We have, again, a natural hedge with such diversified growth. Beginning to our service portfolio, dedicated operations, warehousing, urban distribution, freight transport, but also sectors, automotive, consumer goods steel and mining, food and beverage and others. I would like to highlight the growth of some of our acquired companies. Marvel with 75% growth and Rodomeu with more than 100% as we are going to see next, much due to the fleet that we acquired by means of JSL's capacity of investment. This quarter, almost all sectors grew. Automotive is the highlight to the sector that had some problems unlike inputs in previous quarters, but that this quarter really stood out. On the next slide, I showed you part of our growth. Evolution of net services revenue of 32% in acquired companies, 40% when we compare them to themselves. As I mentioned, Rodomeu more than doubled size; Marvel, with 75%; Transmoreno in the automotive sector, 90%; Fadel, 21%; TPC,16%; Truckpad, our acquisition this year, a digital company, with growth of 204%. And in sectors, many with substantial growth, 59% for food and beverage; 57% in automotive, as I mentioned before; pulp and paper, deployment of new contracts, 27%; steel and mining, 21% and so on. Very, very good. On the next slide, we highlight our differentiated positioning and our financial capacity that enables us to sign a new contract. This contract of BRL 590 million in new contracts with an average term of 46 months. Added to the other quarters already released, we have BRL 2.7 billion of new contracts in 2022. And then if you think of the breakdown, we have a good balance by segment, 73% in freight transport, most of it with contracts of specialized cargoes, and therefore, better margin; 2% in warehousing; 10% in urban distribution; and 15% in dedicated operations. And then in the breakdown of sectors, 50% food and beverage, that is a sector that has really setting out by more than 2-digit growth; steel and mining, 7%; consumer goods, 11%; automotive, 11%. That shows a balance in between sectors, as I mentioned, which gives us a natural hedge to the business. 93% of new contracts come from cross-selling, which shows that we are using opportunities that our clients have to us. Now I'm going to turn to Guilherme Sampaio, that will give us further color in the quarter. Guilherme, please?

Thank you, Ramon. Good morning, everyone. Before starting with numbers, I would also like to congratulate and thank our team for the work done. This is a quarter that reflected the result of our work. We closed the quarter with BRL 1.6 billion net revenues, almost 40% higher than last year and 13% higher in the second quarter '22. In the 9 months, growth is 47%. We got to BRL 4.4 billion in net revenue, a reflex of the organic growth of all the companies that are part of JSL. But to me, even better than the growth in revenue was our EBIT, closing the quarter at BRL 230 million, 14.6% margin, 62% higher than third quarter '21 and 25% higher than the second quarter this year, an expansion of 2.3 percentage points year-on-year. EBITDA closed the quarter at BRL 299 million. Margin, 19%, the best margin ever since the IPO in September 2020. Because of our seasonality, the third quarter is always a quarter with lots of volumes, but this really excelled all expectations. Adjusted net income, BRL 42.2 million, lower than last year, mostly because of financial costs, but 23% higher than the second quarter this year. This level of margins led our ROIC to 13.7% considering the last 12 months. But if we analyze the numbers, it would be 16.9%. On the next page, we closed the quarter with net CapEx of BRL 304 million, 60% of the volume directed to expansion, which supports what Ramon mentioned, expansion of acquired companies and the deployment of new projects, especially in forestry and mining segments that have a more asset-heavy segment -- profile, I'm sorry. On the next slide, we closed the quarter with BRL 670 million in cash and another BRL 630 million in revolving credit lines undrawn. That gives us a comfort of liquidity because it represents more than 11x short-term debt. Our net debt closed at BRL 3.1 billion. EBITDA's net debt ratio [ 3.0x ] and added EBITDA, which is our reference in covenants of 2.8x. As we mentioned, we have total focus in capital discipline. We proved here, which showed deleverage just by the evolution of our cash generation. If we consider the EBITDA of the third quarter '22 annualized, we are already talking about leverage of 2.66x. Our ratings, as I mentioned, were updated, AAA by Fitch national and BB globally; S&P, AA and a positive outlook. With that, I turn the call back to Ramon. Thank you very much, and I'm going to be here for your questions.

Thanks, Guilherme. And now on the next slide, in addition to excellent financial results, I would like to highlight what we have been doing in ESG. And I'll mention the second edition of the already famous Women Behind the Wheel program and not only for vehicles, but now with machinery, the award that we received as Best Logistics Operations by Natura through TPC. Congratulations, TPC. Recognition as the Best Logistic Operation by Klabin. Thank you and congratulations on the JSL's team that support services to these customers. More than 1,500 accident-free days to our client ATVOS in the ethanol, sugar business. Congratulations. Security safety in JSL is of value. And for the third consecutive year, we are awarded the Gold Seal in the Brazilian GHG Protocol program, which proves the quality of JSL in managing carbon emissions. And to close, I would like to mention something about the evolution that we have had as the largest and most integrated Brazilian logistics operator with unique size portfolio and positioning. Our investment capacity really enables us to meet customers' growing demand and new contracts through consignment, but always with discipline in the allocation of new investments. We know that the evolution of our results will only be possible with operational efficiency, managing resources, doing more with less, generating value and profitability. We do believe in independent management of the acquired companies, but with our continuous support so that they can continue to grow at a speedy pace. Our experience in other geographies and cultures is certainly an alternative to growth. We do believe in the transformational potential of technology, in the digitalization of internal processes with more efficiency and productivity, but also with new differentiated products to our clients. The acquisition of Truckpad will certainly help us and accelerates the process. Thank you so much for joining us today. And once again, thanks to my team for the excellent result. Guilherme and I are open for your questions.

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

Congratulations on your results. I have 2 questions. The first about Truckpad. If you can please talk about how the integration processes going on, platform monetization. And the second question about international expansion. You have revisited your CapEx guidance. I would like you to give us a bit more color on what to expect with this strategy. And if in this case, international operations, for example, the South Africa operations is branded under JSL or Fadel.

Thanks for the question. I'm going to start with Truckpad. The process is just starting. We have been working a lot with efficiency and really turned the start-up company in a company per se in terms of profitability. We have grown more than 200% as we mentioned just now. And more and more, we see the huge profitability there. In addition, we have been doing a lot in terms of adapting its know-how and technology to improve our efficiency as JSL. We already have a pilot project for an app. We had talked about that before. We have JSL app, but we see it can be much improved with Truckpad technology. So we are going to have benefits with JSL, but also monetizing the Truckpad product in parallel. As for going international, the South Africa projects, specifically is a project that is being led by Fadel. And that too because indeed, it is a client that is part of their portfolio in Brazil. So it is being led by Fadel. It has to do with open distribution of beverages, very much similar to Fadel's focus in Brazil as well as Paraguay. But JSL had a fourfold increase in international operations with auto part transportation, Brazil and Argentina with some OEMs, which is an important avenue as well. What we do internationally is that we are based on closed contracts. We are not really being adventurous. But we do see potential in international freight transport with our neighboring products countries. We had Paraguay operations. South Africa had a fourfold increase in 1 year. So we see a very promising market there.

If I can have a follow up?

Sure.

About South Africa, again, thinking of the group's strategy and your acquisitions, the fact that Fadel is part of the JSL Group as a whole, gave you this opportunity to South Africa. But do you think that it would -- the opportunity would exist even if Fadel were outside the group? Or do you think that it was JSL's support that enabled that?

Well, this is an easy question to answer because I came from Fadel, so I can be really truthful about that. If it were just Fadel, we will certainly not take this step, which is a huge step. We would be concerned of making such high investment in a foreign country because even if you have a contract, it's a bit risky. But with JSL, we have the comfort to do that. And it's not only for Fadel. With Marvel, the same thing, we almost doubled the number of vehicles there, which enabled the company to have the growth it had in the last 12 months. Rodomeu is the same thing, doubled size in just 1 year. So it's easy for me to say because today, I am a JSL executive, but I was the owner of Fadel, so it's easy to talk from the perspective of the 2 hats. As JSL, this type of investment is a lot more diluted. It's a lot easier for a smaller company, this is too much of a risk to take. So it certainly was only possible because we are under JSL.

Our next question comes from Luiz Capistrano from Itau BBA.

Congratulations on your excellent results. I'd like you to talk a bit more on your margin. It was, I think, the greatest highlight. So you talked about new contracts. You talked about better return rate. You talked about the pass-through of prices. So I would like to understand from you how long do you think this margin is going to stay. And if there's anything that can change it in the short term, for instance, you have the ramp-up of the South Africa contract in the next quarter. Do you have a better return with this contract? Do you think it's going to help you with the margins? Do you think it will add to the results that you had in the third quarter? And also about CapEx, also a very positive surprise in terms of growth this year. I think even company's expectations were overcome, which sets the pace of CapEx to be deployed in the fourth quarter, thinking about the guidance and what you have had until now. And I would like you to talk about the business environment as a whole. There was a bit of fear of the macro environment to start to contaminate contracts as of this quarter. Thus, the numbers are not showing that. Your guidance is not showing that, but I would like to hear from you about this.

Luiz, thanks for your question. Okay. First, let me talk about the results. It was really an excellent quarter. I think that I've read in some articles that it was a mix of things. There were lots of things that helped. Volumes, very good. All our segments did very well. So even we are highlighting the automotive because it was a segment that was more affected because of the lack of inputs. But -- and it had a very good quarter. But not only that, food and beverage did very well, which is not 100% common in the third quarter. It's more common for the fourth quarter. Pulp and paper, so all our segments did very well. All of our acquired companies did very well. When you have a good volume of revenues, you dilute fixed costs and et cetera. So that helps with results. This is one thing. The other thing is that it was the third quarter in the past 3 quarters that we did not have major input variations, which helps us a lot. You don't have to spend so much time in negotiating prices and you focus on operation. And three, you yourself said that. The last contracts signed already have a new level of interest rates and margins, which help us a lot. So not to mention something that I have been saying since I joined the company 2 years ago, not myself only, but the team, a management focused on cost efficiency. So out this atypical scenario post-pandemic inputs, you can go 2 ways. You can renegotiate prices and contracts all the time, which is something that has to be done. But you also have to seek operational efficiency. And in our segment in the logistics, there is much room for that, and we are doing our homework quite modestly and working hard. And quarter-on-quarter, you do see this gradual evolution. And in a quarter where you have a less aggressive external environment, results showed. So it is really many factors working together that brought those results. As for South Africa, you were asking if the contract has better margins there. I think new contracts have better margins. I think they lean towards that in South Africa. But not only that, contracts where you have guaranteed volumes that are asset-heavy. In addition to better margins, you have this guarantee of volume or frequency. And this is essential in logistics because that ensures you massive revenues, emerging of fixed costs that enable you to have stable margins. And that is very important in logistics. Differently from a satellite, which is good for -- on the one hand, but it is -- it fluctuates more, and it can have a higher or less or lower margins. And as for CapEx, I'm going to start answering your questions, but I'm going to let Guilherme to speak next. All our guidance that we released material fact yesterday is related to the contracts that we closed, BRL 2.7 billion. Part of it is in Africa, as I mentioned, but other closed contracts. We just closed it. We are not even including in this quarter. It's just for the next quarters. I shouldn't talk much about it, but I can mention, we closed a huge contract in forestry, which again involves CapEx and assured business for 5 years. And more and more, you're going to see that. We see the opportunity. Banks are restricting credit to smaller and midsized company, which is the characteristic of the segment. You know that the segment is very fragmented and the companies have restricted credit, which saves companies like ours that have the capacity to invest, number one; access to credit, even at higher interest rates, but still lower than the market average; and third, because of the group we are part of, because we are the largest buyers of vehicles in Brazil, so the access to availability and better prices. And that makes a difference in projects like the ones I mentioned in Africa or Brazil, as I mentioned in forestry. We end up being a lot more competitive. And we are using the opportunities. Guilherme?

I think I have no additional comments. Perhaps what Luiz also asked was about the business environment as a whole. Well, I'm an optimist by nature. But I do believe the scenario is very positive for the fourth quarter. In the fourth quarter, again, the stars are to our side. We have the World Cup, Summer and some of the products that we shipped was food and beverages, just the best match possible. Then we have carnival. So we have Summer, World Cup and Carnival altogether. So we do believe that things are going to be really with a positive outlook to our business. And in addition to that, the BRL 2.7 billion that we mentioned in closed contracts will have their effect from now onwards. That is what we always say. It's not an immediate effect. You have an effect in the next 45 months. And in addition to that, we talk to clients, we talk about credit access and we are benefiting from this environment. So I do see a promising environment in the next months and year.

Just a final follow-up. So you think that the pace of new contracts from now on is going to be in line with the third quarter more, I don't know, in line with the first quarter. But other than that, your answer was very thorough.

Well, Luiz, jokes apart, well, we have no guarantees ever. But I really see a positive outlook. I cannot tell you if it's going to be the same. But I think the future is promising. Our pipeline of negotiations is very good. So again, I'm very optimistic.

Our next question comes from Igor Araujo from [indiscernible] Investments.

Congratulations on your results. Can you hear me well?

Yes.

Great. So I have one question about the last point you mentioned, new contracts. If you just do a simple math here, without adding new contracts to the base, we would think that you have 12% to 15% already contracted for next year. I would like to confirm if it makes sense. And also, if you could give a bit more color on margins, especially Transmoreno and Marvel that had higher margins and growth. I would like to know if they helped us to improve operating margins overall. And finally, if I may, the last question about your contract in South Africa. I would like to know if the contracts are priced in what currency. Is it current currency, dollar? And if it's dollar, are you thinking of having any kind of hedge instrument? So that's it that I had. But again, congratulations on your results.

Igor, thanks for your questions. So let's just start with the first. Yes, you are right. If we get contracts signed and closed, we "ensure growth" between 10% and 15%. Of course, that in addition to contracts, you have other businesses that fluctuate. So you cannot assure that, but undoubtedly, the contracts will help us with growth for the coming months. Second question, which is related to the first, Transmoreno and Marvel. They are completely different companies. One is completely asset-light and margins are related to revenue. So if you have revenue, you have much, which is what happened, particularly in the last June and September and October. This is a company that is very much connected to the automotive sector, which is doing well and it does well. If the automotive sector does not do well, it loses revenue. We don't have much of a problem with margins because it is an asset-light company, but the absolute numbers will go down because it loses revenue. So it serves the waiver volume. The other is an asset-heavy company that has been able to enjoy the volumes of specific products, frozen refrigerated products being shipped into in Brazil and Latin America. So this is a company that provides quality services, specialized services and that has been able to really benefit from the moment with considerable EBITDA margins. So these companies, plus Fadel, plus TPC, plus Rodomeu, certainly has contributed to JSL's EBITDA and that's the idea. Smaller companies, more focus, more specialized with a trend to have even better results because of that, but it is the whole package that brings substantial results, and we count on them for that. And I would like to add something and talking about operating margins. This is Guilherme. I think in the case of Marvel and Rodomeu, these are companies that have a more variable cost profile. And therefore, these are companies that show accelerated growth and margin expansion. And why? Because in JSL, we buy on scale. We have a volume of the purchases of fuels, parts, services that really benefit these companies when they are part of the group. So I think that just to add to what Ramon said, in addition to substantial revenue growth especially those companies that are asset heavy. And even TPC that is a satellite, but it has a very diverse cost profile even more than Fadel benefits from the group. Yes. And to close your question about South Africa, this is a local contract, 100% local costs, local investments. And therefore, it is in the current currency brand, which has a behavior compared to the dollar, at least in the last 12 months, quite stable and not really with much fluctuation. So everything in the South Africa currency. And of course, when you bring this to Brazil, you do have an exchange rate effect. But again, we haven't had major problems with that, at least not in the last 12 months. It's very similar to what we have in Paraguay, with the currency [indiscernible] differently from international transportation. JSL South American countries or Marvel's, we talked about Brazil, South America, then it is priced in Brazilian reals. But sorry, just a final comment, both in Paraguay and in South Africa, the contracts do have a natural hedge because they are an open book. So if we have any fluctuation in inputs, interest rates, it is a contract that has a natural hedge.

Just to make clear, this is Guilherme again, we do not have a connection with any foreign currency, local cost, local credit, local prices. So there is no need for a currency hedge. The only thing is when we translate the currency to real to consolidate balance sheet.

Yes, my question was about that, if you're also raising credit in local currency or if you had investments in foreign currency, but that's very clear.

[Operator Instructions]

Now we are going to take the questions that were asked on the web. Hello everyone, this is Guilherme. I'm going to read the questions that we got on the webcast, some to Ramon, some to me, and we are going to answer them. The first is the Danilo from -- an individual investor. First, congratulations for the excellence results. I'm proud to follow your evolution. I'd like to know negotiations of new contracts for international expansion in Africa, Europe and the U.S. and the integration of Truckpad and the evolution of the company's digitalization. Ramon?

Danilo, first of all, thank you so much for your question and for your incentive to our work. South Africa, the good thing about having a contract with a large client is the opportunities that we have with the contract, but also with the expansions. This is a client that is in the whole of Africa. You know that we have several countries on the continent. Countries that have a shortage of logistics, so we see huge opportunities. We have several opportunities to grow in Africa. Some countries are more complicated than others, but we do see significant expansion other than what we already have contracted, and the same client is based in the U.S., in Europe. So there are no guarantees, but we believe that if we cross the ocean and you adapt to a new culture, which is different than working with neighboring countries that do have their challenges, but they are close, you get used to working in other cultures, countries and continents, not only with this client, but with other clients. And that is clear by the contracts that we are having. And the evolution of Truckpad and digitalization of the company, Danilo, I always say, whenever possible, is that technology is the way for us to reach a whole other level. We need efficiency, productivity and this is something relatively new in digitalization. But the gains that you have in scale are huge. We have opportunities, and technology can help. To give you a simple example, just to translate what I'm saying. You see what happened with taxis, Uber. Due to technology, we left to a transportation system that was deficient. We had idleness. And now with Uber, you use much more of the time. And I'm not defending one mode or the other, but I'm saying that technology brings things to a different level. This is one thing. And another thing is to bring to clients some more tech product. Customers want us to have more high-tech warehouse. We talk about transportation, but JSL also has a huge volume of inbound logistics, warehousing, where these activities have to be present and closer to us in terms of investments. So we do see a huge evolution there. And Truckpad, in addition to be a very interesting company and product and we can make it profitable. Its know-how, we'll really speed up this journey. And it's happening already. We have several projects, several integrations. So in a little time, I think we are going to be releasing good gains along this line.

Thank you very much, Ramon. I'm going to the next question that comes from Luisa Cruz. Congratulations on the results on growth and profitability. I'd like to know your negotiations in recent years for new contracts. If the customers are holding back or if they continue accelerating contracts and also what happened in recent months because of the volatility of fuel prices.

Luisa, thanks for the question. In the last 3, 4 years, everyone had challenges. The pandemic, war, lack of inputs, overpricing have been in those markets ever. I lift the time of inflation, but it had been a while since we did not experience that. So in the last 20 months, specifically, it came as a surprise, and it's always a problem negotiating with customers, but it also brings opportunities. And I thought that JSL really sees the opportunity as well. So if you're sitting with clients, renegotiating prices, but sometimes you have the opportunities there. And it pays off sometimes. So these new contracts came from there, from the opportunities of sitting down with our clients. Proof of that, 93% of new contracts came from cross-selling. Another thing that you asked, and I think this is also to our benefit, is the scenario of high interest rates, shortage of credit, especially in our segments in which you have loads of the small and medium-sized companies. So what we see, companies that in the past perhaps would not grant us 100% of the contracts are doing now. I just mentioned that we closed our largest contract in forestry. Because of that, because the client knows that there are only few companies have our capacity to execute. So what am I getting to? Clients are thinking, it's much better to be together with JSL, a company that has good structure than finding someone that can be cheaper, but that gives me no guarantee. So this is the opportunity that we see and that's what we want to see as much as possible.

Thanks, Ramon. One more question from Pedro Bruno from XP. With the evolution of the regulation from Euro 5 to 6, we see a movement of clients optimizing invested capital. Can you talk a bit more about how JSL is managing this topic and how you're using it as perhaps a competitive advantage?

Pedro, you're right. Whenever there is a change in technology, it did happen that from Euro 3 to 5, you have a window of opportunity or a window of challenges depending on what you're saying. It's hard to tell you what is going to happen because it hasn't happened yet. But I'm going to tell you what happened from Euro 3 to 5. We should have a window from this year to next year with lack of vehicles because if we do have problems with parts today, imagine for a vehicle that needs more parts. But whenever there is a challenge, you have an opportunity and that's what you have to seize. So what do we see? Not only that same, but we are really experiencing that because we have terms with the largest buyer of trucks in the whole of Brazil. And there, JSL in the same group. With this, we have availability of Euro 5 vehicles that is higher than our competitors. So we can be more competitive. Our Euro 5 probably has a lower cost than Euro 6. We don't know how much cheaper, but we know it's cheaper. And so with this availability, we can close contracts with Euro 5. And when it turns to Euro 6, we are also going to have a competitive advantage because we are going to have more availability of these vehicles. And therefore, we probably are going to have a better price than our competitors.

Thank you, Ramon. Our next question comes from [ Tito Laila from Lease Capitals ]. Congratulations on the results. The cost of debt seems to have a spread on CDI that is a bit high. Are you working to reduce the spread? Or are you going to keep this level of credit? I'm going to answer the question. We expect to lower that, yes. We just had the upgrade of our rating by Fitch. We are AAA now nationally and BB internationally; and undoubtedly, raising credit now is something that we are going to add to this piece of information, and we'll certainly try and reduce the spread that we have today. So for any renegotiation or rebalancing of that or for new credit, this is something that is being taken to discussions. So to answer your question, yes, of course, there is a time to mature, but we'll try and reduce the spread of the cost of debt in the coming months, okay? Next question comes from Carlos Herrera from Condor Insider. How do you see the market for '23 in your conversations with clients? Do you see any strategic change because of Lula's election for President?

Carlos, I'm talking based on my conversations with clients alone. Regardless of the election, everybody is optimistic about next year. Everybody is expecting volumes that will grow as much as in '22. So I'm also very optimistic about '23. And I believe the strength of our industry, of our clients, the most -- the vast majority as private-owned companies. So I think we are going to have a promising year regardless of candidate selections or whatever.

The next question comes from Nicholas from GTI. I'd like to know how long your deployment takes to understand how much CapEx turns into revenue. And if there is a difference between asset-light and asset-heavy? And how are the [ era of ] negotiations given a more challenging scenario? And what was the main driver for the organic growth of the acquired companies?

Deployment time of projects on average, if there is a difference between asset-light and asset-heavy and conversations on contracts giving a more challenging macro scenario. Okay, thanks. I'll give you an average deployment time. I don't like average because average is never right. But anyway, the subcontracts are faster, others are slower. But anyway, overall, asset-heavy, between 3 to 6 months to be deployed depending on the business. It has to do with the deployment of vehicles, but also of the project. In asset-light, it's almost immediate. You have less demands for the machinery or equipment to arrive. So if I were to give you an average time from 3 to 6 months. And the second, if there is a difference between asset-light and heavy, you already mentioned that, current contracts given a more challenging macro environment. Okay. Contracts, no change. Our contracts are always long term, always based on our client's core businesses in the long term. So contracts had no interference or renegotiation due to elections or any macro change in the mid- to long term. Contracts are as they were signed. And the final question. The main driver of growth, 40% organic growth in acquired company and again, 40% average growth. Okay, Nicholas. It is what I mentioned in the beginning, a lot of positive factors getting together. Five companies, different segments, one in car shipment, other inbound operations, the other refrigerated and frozen foods and beverage, but they all grew because they were able to seize the opportunities. I think the market is positive, especially food and beverage, a primary industry, pulp and paper, mining and even automotive, which is a bit more challenging. It's more affected by fluctuations. But regardless of the market, companies knew how to seize the moment because it's no use to have a good moment if you cannot seize the opportunity. And I think that's it. And now we have the World Cup, as I mentioned, Summer, Carnival. But this is for everyone. What makes us different is our capacity to seize that.

And just to add, this is Guilherme speaking. In the case of the acquired companies, Nicholas, we had heavy investments in the renewal and expansion of Marvel and Rodomeu fleets. And Fadel as well, we cannot leave Fadel out. So all the investments in operational capacity, almost doubling the fleet of Marvel and Rodomeu, gives us the benefit of these companies growing. Rodomeu, more than 100%; and Marvel, 70% year-on-year. Marvel, a bit more stable. This is already a larger company. So it starts at a different level, but also with fleet expansion. And just as a reminder, this is very important so far. The contract that we announced in South Africa in the second quarter has not yet entered the company's numbers because it started operations as of October 1. So we are going to see that as of the fourth quarter, and mostly as of next year because then we are going to enjoy the full year. Next question from [ Gila Nikos from the Quest ]. Quick question. Have roadblocks affected your business? Fortunately, the demonstration was short. It started at the end of the 31st on Monday, the whole for the 1st of November and 2nd. But yesterday, it was a bit better. On the 2nd, we had a holiday in Brazil, so not as much. The 1st is generally a day with lesser volume, so it was a lesser impact than what it could have been. And two, it depends on the product. Some industries were very much impacted. The automotive industry does not work with inventory, so the auto parts that were not shipped made line stock. Other industries are a bit more, a bit less. So I would say that some clients suffered more, others less. JSL was not really much affected because it is what I said. The first is already not a very strong day and the second was the holiday. And remember, our business that has to do with long hauling, that will be affected by manifestations, by demonstrations that accounts for a small part of our whole. Okay. Next question, Gabriel Batista from [ Gucci ]. How does the company see the political scenario, the election of new project? And do you think there will be an impact with the demonstrations of the roads? I think we answered the question already. Okay. I'm going to start with the second. I do not see any financial impact because of the demonstrations in the fourth quarter. Very short, I don't see any problem. As for elections, anything I'd say is just futurology. We will see as of next year. And based on the past, I always trust an orthodox policy -- economic policy. I do not see changes in our business, but that's just my personal opinion. Next question from Alexandre. What is this prospect for the use of natural gas in heavy fleet? And are you considering the fuel? Very good question, Alexandre. There is a high demand from customers and the world because of the whole sustainability confidence to have less carbon emissions. So we are pressured to work with alternative fuels. And in Brazil, we have 2 main strategies: one, electric vehicles, and we are already using some in urban distribution where they are possible. In fact, the first electric vehicle in urban distribution started in Paraguay with Fadel. But that just solves part of the issue. If you're talking about long hauling, the fuel that is going to be most used is natural gas, and natural gas is not necessarily a benefit in cost, but it is a benefit in the emission of carbon. And then if we can do that with biomethane in addition to natural gas, I think it's going to be a win-win. You know that the holding has one of the largest land fields that generates biomethane. So this is something that we can take huge opportunities up. Okay. Next question comes from [ Naver ], an individual investor. He would like to know if new acquisitions are on our pipeline for '23. Now we have been mentioning since the IPO that we do have a very bold strategy of growth, which combines organic growth that we have been showing that has been very active, but also inorganic growth. Now SIMPAR treats us independently, but the holding has a very important pipeline of acquisitions and several negotiations are underway. So I hope we have good news for 2023. Okay. These are all the questions I have here. I don't know if anyone has an extra question. Otherwise, I'm going to turn back to the operator. Since there are no further questions, I'm going to turn the call to Mr. Alcaraz for his final remarks. Mr. Alcaraz, you have the floor.

Well, everyone, I thank for your time and for the opportunity to talk to you and give more clarity in -- about our business. I think I've mentioned a few important things. But I would like to just make a point in the end to say that we are starting the fourth quarter. The third quarter is already gone, and we have a very positive expectation. We never lose focus on operating efficiency. I truly believe that we cannot just wait to be helped by external factors. You have to do your part. Truckpad is going to be transformational for us to gain efficiency, productivity and offer differentiated products to our clients. We have 2023 with high hopes. And in between that, in the end of November and December, as I mentioned, we have so many things that will help us out with this Triad Summer, World Cup and Carnival. And that's it. We are always here for you. We are very confident in the future, but at the same time, with our 2 feet on the ground, we are not going to be just led by an over optimism based on the third quarter. We know that results come from hard work and this is what we are engaged in doing. Thank you very much. And remember that we are always here for you with our press team, IR and all other channels to answer any questions that you need or just to provide further clarification. Thank you very much for your time. Have a wonderful end of year. Happy holidays, Christmas, New Year's and we will soon be together with good news for the closing of the fourth quarter. Thank you.

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