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

Good day, and welcome to JSL's conference call to discuss the earnings for the fourth quarter of 2022. In today's call, we have Ramon Alcaraz, the company CEO; Guilherme Sampaio, CFO and Investor Relations Officer. [Operator Instructions] This conference call is being recorded and translated simultaneously into English. Before moving on, we would like to let you know that any statements that may be made during this conference call regarding the company's business outlook, projections, and operating and financial goals are based on the beliefs and assumptions of the JSL's management and rely on information currently available to the company. Forward-looking statements are not 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 such forward-looking statements. We'll now turn the floor over to Mr. Ramon Alcaraz. Please, Mr. Alcaraz, you may proceed.

Ladies and gentlemen, good morning. It is with great satisfaction that I'm here to release the earnings for JSL in the fourth quarter 2022, which I already advanced were stellar. -- and as well as the results for 2022, starting with gross revenue, BRL 2 billion in 4Q '22, 24% in the fourth quarter '21. With this, we closed the year of '22 with BRL 7.1 billion in gross revenue, almost 40% over the year of 2022. But it was not only that. We closed with good revenue and excellent results as you are going to see further on.  EBITDA in 4Q '22 of BRL 319 million, with a margin of 19.9%, a record since 2019, 45% over the fourth quarter '21 closing the year with BRL 1.1 billion EBITDA, 62% over the year of 2021. Very good. Congratulations to all the team that made it possible. We closed the year with an EBITDA margin of 18.7%, almost 3 percentage points over the EBITDA of 2021. Net income. We closed the fourth quarter, a new record of BRL 110 million, 74% above 4Q '21. With that, we closed the year of '22 with BRL 224 million of net income. Return on invested capital of 15.1%, way above all the indicators of previous quarters.  In addition to our economic financial indicators, I highlight our improvements in ESG. We had a B rating with CDP above the industry average. On the next slide, Page 4, I highlight our sustained growth in diversification. Food and beverage, for instance, grew 38% in 4Q '22 when compared to the same quarter last year. In Automotive, we had also growth of 38% when compared to the previous year. Dedicated operations, which was driven by the pulp and paper segment with growth of 17% and still in mining of 18%. We expanded our service capacity of the acquired companies. adding BRL 200 million of gross revenues in 4Q '22 contributing to the expansion of sectors such as chemicals, consumer goods and others. We expanded international operations, reaching BRL 18 million of gross revenue in 4Q '22 alone, BRL 259 million in the year, and we are just starting in the international segment, particularly in South Africa. Despite the new projects helping some sectors in our mix, as you can see, the image that you have on Slide 4. We continue with a very good balance between asset-light and asset heavy operations.  On the next page, we show a new level for JSL organic growth that we are very proud of. We had growth of 22% when we talk about combined gross revenues comparing the fourth Q '22 and fourth Q '21 and 25% in the whole of the year, '22 vis-a-vis '21. The numbers are slightly different from what we had initially disclosed because you're talking about combined revenue from services year-on-year. And I show the growth of our acquired companies that was substantial. TruckPad, as you can see on the chart on the next, our digital arm grew 138%. Rodomeu that specialized on chemicals, 77%. Marvel specializing refrigerated goods 60%, Fadel in urban distribution, 33%; Transmoreno, 20%, JSL 20% and TPC in-house 18%, consolidating 25% altogether in our companies.  On Page 6, as we have disclosed in previous quarter, we show new contracts signed and the numbers are more and more substantial. We had disclosed until the third quarter, BRL 2.7 billion in new contracts signed. In 4Q '22 alone, we closed another 3.3 billion in contracts with an average term of 55 months. Adding up to 6 billion contracts in the year of 2022. Of this, 93% are cross-selling. That is contracts signed with existing customers. And this is important, my friends because that ensures revenue for the coming months. And the balance is quite well segmented as we like it because that is a natural hedge in adversities that you can have in one segment or another. So you can see on the chart on the left, pulp and paper with substantial growth, food and beverage, steel and mining, consumer goods, automotive and others. With this, we confirm our capacity to invest our discipline in executing investments and the quality and reliability of delivery with this confirmed by our cross-selling.  Now I'm going to turn over to Guilherme Sampaio to give you a bit more granularity on economic financial numbers. Guilherme?

Thanks, Ramon. Good morning, everyone. Before starting with the numbers, I'd like to deeply thank our people, customers, suppliers and all those that are part of JSL's ecosystem. It is very gratifying to disclose results such as this, which are a result of the work of everyone.  We closed 4Q '22 with BRL 2 billion net revenue, – which is growth of 25% over '21. In '22, we closed with BRL 7.1 billion of gross revenue, which is growth of 40% versus '21. Remember that in 2020, we were a company of BRL 3.4 billion when we had the IPO of JSL already separated. We closed the quarter with a balance of revenue of 53% in asset light, 47% in asset heavy is stable compared to '21, which shows our capacity to grow in the 2 revenue profiles, both asset light and asset heavy operations. Going to results, I would also like to highlight the challenge in '22 for the sector with an aggressive increase of input especially in the first half and interest rates that continue to pressure our results. But we still had improvement with focus on operational efficiency, reduction of costs and negotiations with customers when necessary to rebalance some contracts.  Starting with EBIT, we closed with BRL 237 million, 60% over '21 and the year with BRL 814 million, margin of BRL 14.7 million in the quarter and 14% in the year, an expansion of 3.4 percentage points quarter-on-quarter and 3 percentage points year-on-year. And to explain why we are bringing those adjusted numbers, we are excluding certain numbers, the amount of the retired of an operation in [ Huganero ], which is according to the strategy we started last year or revisiting our board housing structure and optimizing invested capital. We are talking of BRL 18 million between the impairment of assets and the cost of retirement, which are nonrecurrent and will contribute to better returns in our business.  In EBITDA, the impact was BRL 8.5 million and net income, BRL 11.9 million already of income tax. EBITDA closed the quarter in BRL 319 million with margin of 19.9%, 40% higher than 4Q '21, which is an expansion in margins and 1 percentage points better than the third quarter '22. In the year, BRL 1 billion, a growth of 62% versus 2021, a margin of BRL 18.7 million. Net income was BRL 110 million in the quarter, adjusted by the retirement of operations already explained and also the spread of operations that we adjust every quarter. This is impacted by BRL 54 million relative to tax credit because of the ICMS subsidy and also the payment of interest on equity. The numbers belong to '22. However, they were entered in the fourth quarter because of the timing of the decision. With that, the recurrent net income would be BRL 72 million. Remember, it belongs to '22. So we don't have to adjust the net income of the year that closed at BRL 294 million, even with the increase of the average CDI rate.  Return on invested capital also had evolution going for 17.5% to 15.1% in running rate. we present the running rates to normalize the effective rate in re-segment that distorted the -- and also we removed part of the CapEx in '22 because we advanced purchases for the implementation of the projects of BRL 3.3 billion mentioned by Ramon and that will start as of March 23. In the release, we showed this composition. So we are talking about double return that we had at the time of the IPO. And we want to continue improving and having operations such as the retirement of operations in [ Huganero ]. That shows that we have the right strategy in our acquisitions that gain momentum and strength in JSL and the discipline of new projects that leverage up our numbers.  On the next slide, I bring more details on the CapEx that closed the quarter at BRL 681 million net and in the year, BRL 1.4 billion. To give you a bit more color, we decided to advance the purchase of assets in '22 for projects that we start in March, as I mentioned, because of a strategy of negotiation and also because Euro 6 as of January in 2023. With the contribution, we had BRL 3.3 billion in assets of equipment. And this is a relevant base of assets that are liquid to generate future revenue in services, but also in asset sales. Other important points that prove future revenue generation. Almost 80% of CapEx was for the expansion of projects and 619 to support the capacity expansion of acquired companies in Brazil and also for South Africa in Fadel. With this level of CapEx, we should have a different mix between asset light and asset heavy operations, but that did not happen. We are up about 50-50, 40-60 as usual.  Going to the next slide, we closed with 3.7 leverage in net debt EBITDA and 2.75 when we talk about annualized EBITDA. -- we have also available revolving credit lines of BRL 876 million. And with that, we have an availability of BRL 1.7 billion, which is BRL 5.3 million our short-term debt enough to cover our debt until the first quarter 2016. Average term is 4.2 years. It's also important to highlight that in 2021, S&P had upgraded our outlook to positive. And now Fitch also upgraded our rating to AAA in the national scale and BB in the global scale above the sovereign rating. This recognition makes us very happy and confident that we are on the right track. Going on to the next slide. One of the most common questions I asked is about our acquired company and decisions to make them independent. That was one of the most certain decisions we made. It is the perfect mix of capacity of investment and scalability of JSL and independents. We see accelerated growth in all of those companies that still does not reflect all the CapEx of 2022, growth of 35% in revenue against 43% of EBITDA growth. We had more than 60 million synergies identified, 50% already captured in 2022. We are talking about 2.3% of revenues in surgeries that represent 36% in net income. Updating numbers of 2021 this year, we have a return on invested capital of BRL 18.8 million, considering acquisitions and the multiple going to 2.7x if we use the EBITDA of 2022. With that, I turn it back to Ramon, and I'm going to be here for your questions. Ramon?

Thanks, Guilherme. Now I'm going to highlight some awards and actions in ESG. We were awarded the Transporte Moderno Magazine Awards with the Maiores e Melhores Award. Also Maiores e Melhores in road freight transport. We were awarded 2 prices as the best in the segment and also the best of all the companies that released their balance sheet. We also upgraded our rating in the CDP above the market average. We also were awarded GLP for Innovation and Technology in Rodomeu and also as best logistics operation in the inbound category in the machine segment for Whirlpool with JSL.  And we also evolved in very important points that are dear to us. The one I like the most is our improvement in accident indexes. We have 20,000 employees, and we've really want to return them to their families as they get to our companies. We've reduced our excellent indicators mean our work from 0.71 to '21 to 0.49 this year. And we've reduced the number of absolute accidents, 21 to 17 because we are concerned about each one of our individuals. And we improved the diversity. We're still far from our targets, but we had substantial growth. Our segment is basically male-focused historically speaking. And we want to change the reality. We went from 99 female drivers to 161 in '22 from 53 female forklift operations in '21 to 217 '22, growth of more than 300%. And we are just starting. And now just to close on Page 12, I highlight some important points. Our CAGR in revenue in '22 was 45%, almost double of the amount that we use for our revenue guidance released on SIMPAR Day in May '21. We have structure and scale to continue to drive growth, expanding with clients, sectors and geography. Robust cash generation, evidence the strength of our business model and also with [indiscernible] from diversification, a managed model with strong strategic pillars that enables us to seize market opportunities and manage the capital structure. Balance projects between asset-light and asset heavy operations focused on profitability, operating efficiency and new technologies. Our avenues of growth have technology as base of our services.  And finally, ladies and gentlemen, I would like to highlight the unique positioning of JSL to continue the consolidation of the logistics market in Brazil and abroad with organic growth and new acquisitions. As of now, myself and Guilherme are open to any of your questions. Thank you very much.

[Operator Instructions] Our first question comes from Pedro Bruno from XP Investments.

Guilherme during the presentation gave a bit more granularity on the running rate. And we talked about BRL 72 million. Guilherme, if you could please revisit the information just for us to understand because the reported income was BRL 94 million. You are reshowing adjusted income of BRL 110 million, but you say that you had some impact for the whole of the year that were concentrated in the fourth quarter. So I would like to understand the breakdown. This is also for deferred credits. I understand that, yes, for ICMS, but if we think of one force linear for the fourth quarter, would we be making a mistake or not?  And also, I'd like to understand if interest on equity also had this profile that is the total amount fully concentrated in December. So was all the impact concentrated in the fourth quarter. So just a bit more color on this and the strategic speaking about interest on equity. You did change a bit of the profile of dividends vis-a-vis interest on equity. So I would like to understand the rationale. Why now that is migrating more to interest on equity than dividends? And what is your expectation of payout in interest on equity and dividends for the future '23 onwards.

Thank you very much. Pedro, -- it is what you said. So how do we put together this number of BRL 72 million? When you get the reported numbers, BRL 93.5 million, BRL 94 million that you mentioned, we are excluding from this amount we are adding, I'm sorry, to get to the BRL 110 million. The retirement of [ Papuna's ] operations with an impact of BRL 12 million on average. And also the impact of PPA of acquisitions, which is an adjustment that we have every quarter. So it's more of an accounting effect. So when you put together the BRL 12 million plus the BRL 4 million – 0.2 million, if I'm not mistaken, of the impairment amount of PPA, you get to the BRL 110 million. And it is exactly what you said. How did I get to BRL 72 million?  We had these 2 impacts that were concentrated in the fourth quarter, interest on equity and the decision of having the tax subsidies, and that gives us a BRL 54 million of impact in the quarter because this is something that refers to the whole of the year of 2022. I made the massive 9.2%, and we get to this BRL 72 million so we are just linearly making it proportional credits of tax subsidies and interest on equity and just distributing it along the year. We just did the math to give you a better reference of what the fourth quarter was all about.  Moving on. The company has the position in the last 2 years, we paid about 40%. Our dividend policy, of course, respect the regulation to pay the minimum of 25%. But in the last 2 years, we did pay 40%, which is, I think, which is reasonable considering our history. We haven't made decisions for the future, but the reference for the past was 40%. I hope I was able to answer your questions.

Yes, Guilherme. Just a quick follow-up about the decision of having a higher weight of interest and equity vis-a-vis dividend. Any specific rationale?

Well, that was a decision that was basically pet decision, but nothing more than that. Again, thinking of the mandatory dividends that we have to pay to investors.

Our next question comes from Gabriel Rezende from Itaú.

Guilherme, congratulations for once again, excellent results. Also, I have 2 questions. First, if you could explore the contracted revenue that was very strong in the last quarter. Was it something in your radar where you already carrying on negotiations? Or was it a positive surprise? Just for us to understand trends for new contracts along 2023. And also, I'd like to understand if you have any IT of the share of wallet JSL has within customers to understand the future cross-selling potential.  And second, talking about leverage. Guilherme showed the level that the company reached last quarter, which was a slight decrease compared to 3Q '22. But considering the strong pipeline of contracted revenue, what should we consider in terms of leverage evolution for the coming quarters? And also considering Euro 6 inflation in the truck segment, if that can be any concern for the company ahead? And what could be done to accommodate your covenants?

Gabriel, thanks for your question. I'm going to answer the first question and then let Guilherme answer your second question.  New contracts. We announced a BRL 6 billion revenue contracts for 2022. BRL 3.3 million in 4Q '22. For us, what's important are the BRL 6 billion. The fact that we had BRL 3.3 million in the fourth quarter is just a matter of timing of contracts. They have been negotiated throughout the year. And a good part of them just became more concrete in the fourth quarter. There is nothing specific about it being in the fourth quarter. Of course, that many of them has to do with the planning and implementation of some factories, 60% of new contracts we announced in the fourth quarter have to do with Pulp and Paper industries that are being installed, some take 2 years to be ready, and it just happened that the contracts were signed in the fourth quarter. But again, what's important to me is the BRL 6 billion number. We have been reporting new contracts since 2021. We closed good contracts in '21 at about BRL 4 billion, if I'm not mistaken, Guilherme correcting BRL 4.1 billion, BRL 6 billion in 2022, and we still have a long pathway to follow in the coming years. Our share of wallet within customers is still very low. It's important to remember that the sector is very fragmented. JSL, although we are the largest in the industry, we are 2%, 3% of the market, and that reflects within customers. And in this scenario of higher interest rates and more restricted credit, we understand and we see that contracts are more complex, which favored us in the fourth quarter, and I believe will favor us in the coming years.  So in our understanding, the scenario is very optimistic for companies that have the possibilities of offer services to our clients. We have several projects on site, not only in Brazil, but abroad and very good prospects of growth in the International segment. So we are very excited. As for the second question, I'm going to let Guilherme answer.

Okay, Leverage. Well, one thing that we always say is that our deleveraging process has to do with growth in EBITDA -- so we saw successive growth in absolute numbers, which is -- reflects of company operations and implementation of new projects, even in the fourth quarter, which is historically lower than the third quarter showed expansion of margins and absolute values. So what do we see for the future? A relevant part of this CapEx invested in the fourth quarter, we'll start generating revenue in the end of the first quarter according to the deployment schedule. And obviously, we are going to benefit from this growth in cash generation.  Another important point is that we only invest CapEx when we have the contracts that are stable, long term, and we were able to prove everyone that we can rebalance contracts along the way if necessary, because of increase in good prices and et cetera. So Euro 6 can enter my base, but it will be together with the new prices of a new contract. So things are always balanced. We always use a reference a leverage of around 3x according to our plans. We don't see much difference of this level. It can be a bit more, a bit less, depending on any mismatch between EBITDA generation and the investment of CapEx. Sometimes you have longer or shorter negotiations, it will be a one-on-one negotiation. But in terms of macro level, this is what we expect no substantial changes.  Remember, always long-term contracts and whenever they need some kind of rebalancing, '22 is proof of that. We can sit down with our customers and keep the profitability of contracts a long time.

Our next question comes from Guilherme Mendes from JPMorgan.

I have 2 questions. One is CapEx. You mentioned during the presentation that the part of the fourth quarter was in advance of the year. So what is your target for net CapEx? Are you going to increase year-on-year if you compare '23 to '22? And what is the magnitude of that? And the second question is leverage. Again, I would like to understand your capital allocation. M&A has always been very strong in JSL since your IPO and how do you think IPO at the time that we have a new level of valuation for the company. So how would you consider valuation and leverage.

Okay. Thanks for your question, Guilherme. This is Ramon. CapEx. I'm going to reiterate what Guilherme said. CapEx only happens when we have a long-term contract that is we have guarantees for it to happen. What is important to note is that the contracts that we have just announced are tied to CapEx. Some have deployment more to the second, third quarters, but we did advance part of the CapEx because of the change of technology. That is, we seize the market opportunities. So in fact, for these contracts, we had already deployed CapEx. That's why it was so high in '22. In '23, part of the contracts will still have some CapEx, and we are going to have new projects, as I mentioned, both in Brazil and abroad, particularly in Africa where opportunities are coming up. So we hope we have lots of CapEx to invest, which means that we are closing new contracts. Remember, always considering the -- as for the second question, which is particularly on leverage, I'm going to let Guilherme answer.

Talking about capital allocation. Okay. So capital allocation. When we had the 5 acquisitions, well, each acquisition is unique. But the 5 acquisitions because of the profile of payment schedules that we had with sellers and the level of indebtedness that they had that was much lower than what we had in the consolidated figures and the multiples that were paid when you put together all the numbers, we helped our leverage by buying these acquired companies because we had the benefit of the last 12 months of EBITDA. And we did show that in JSL Day, how we do this math, but it did help us with that. And the question is the same for the future. That is if I find good companies with the capacity of transformation as we had with the acquired companies that can contribute to consolidated figures and generate cash for our own payout to the sellers that is with the right multiple and the right leverage.  Once again, I do not see any pressure in my leverage in the short or long term. So it's once again to pick the right companies that have capacity to grow in their business with the right profitability. If we do that, leverage is managed. Combined to our CapEx, there is a huge discussion on return on projects. So we have huge discipline. And more and more, this is going on to have the best price and the best return for the capital invested. The market as a whole, especially with higher CapEx has decreased in terms of competitors because very few players have the capacity of balance sheet and credit to invest more capital. So we use our intelligence of the sectors of the businesses to bring to table a project that will have the adequate return. And so the question is correct valuation, correct leverage, correct payment schedule and the return of projects.

Our next question comes from Victor Mizusaki from Bradesco BBI.

Congratulations on your results. I have 2 questions. First, a follow-up on Guilherme's question talking about capital allocation. In the fourth quarter, you mentioned a running rate for return on invested capital of 15%. And Ramon mentioned that in the scenario that we see of higher cost JSL benefits for being the market leader and having access to capital. So first question, thinking of new contracts that you have announced -- how can we compare compared to the 15% running rate? And the second question, we have seen margin expansions in EBITDA, both for asset light and asset heavy operations. Is there anything material in contract renegotiation for you to pass through costs of '22?

Okay, Victor. Yesterday, I did say that in one of the interviews that we are providing. JSL is not a bracket that just flies at the speed of light, but can fall in between the ocean. We compare ourselves as a plane. -- that takes off until it reaches cruise line. So it's gradual. Since the IPO, we have evolutions quarter-on-quarter, always better at consistent steps, which is what we want. We really do not want extreme results, but rather perennial results. So that said, in each contract we signed, we learn from the past and try to ensure things that perhaps were not important in the past. For example, the new contracts have parametric formulas that are much more consistent thinking of input price oscillations and -- because this is a reality for now. It wasn't a reality 2 years ago. So we do have this concern of including this formula now. Also, contracts are priced at higher interest rates because this is the reality for Brazil now, which did not happen 2 years ago. So every negotiation we make, we learn and adapt to a new reality. The growth changed from 2 years ago to today. We are in a post pandemic world that lacks components that is at war scenarios that we did not see 2, 3 years ago. So this new contract have to try and protect against all that.  All that said, our expectation is that this will contribute to our return on invested capital. The idea is to keep our return on invested capital growing, not like a rocket, but as a plane that is taking off gradually and sustainably. I hope I have answered your question.

[Operator Instructions] Our next question comes from Ygor Araujo from Genial Investments.

Congratulations on your results. Congratulations on the year. I'd like to ask a follow-up on ICMS tax credits. I understand that this has to do with the sale of assets. And I would like to understand if you had any expectations about your reduction in tax brackets for 2023? And if you can measure the impact from now onwards.

This is Guilherme. Well, the subsidy is interstate, interstate transport operations, okay? So for the next year, we are doing the best to understand any kind of impact. We are following the decisions on the topic. And as soon as we have a bit more color, we are going to consider a normal income tax rate from on. But for now, I still don't feel comfortable to share any number because the studies are still ongoing.

Okay. I understand. Just one more thing. Regarding the disclosure back to head with regards of revenue broken down by segments of operation. Can you have a breakdown that is retroactive -- just for us to do our math, you're talking about dedicated operations, freight transport and others. Yes.

I think we have from 2020 onwards. It is something that I can share with you. But it is available. From 2020 onwards, it's available.

Congratulations on your results.

[Operator Instructions] Our next question comes on the webcast, and it's going to be read by our speakers.

This is Guilherme. I'm going to read the question and then Ramon is going to answer. I can add if necessary. The first question comes from [ Claudio Moran ], an investor. I'm going to read the question.  Congratulations on your excellent results. I were impressed with the new contract signed in 2022. That would give you additional revenue of BRL 1.3 billion, almost 90% the revenue of the second largest company in the sector. Congratulations. I see that return on invested capital is about 32% for JSL considering that interest paid is about 16%. JSL could accelerate to the acquisition of companies increasing margins and indebtedness. Correct?

All right, Claudio, thanks for your question. It is true. We are very happy about our results. And you're right. With the growth of JSL alone comparing '22 to '21, which is about BRL 1.4 billion. If we got this, we would already being listed upon the 10 largest company in the segment. Just with growth, if you get the BRL 6 billion of new contracts onwards, that would be additional revenue, you're right, of BRL 1.3 billion. That's not exactly the math because some contracts do not start exactly in January. But anyway, if you think linearly that is it. And again, we would be one of the 10 largest. So -- and we understand that this is because of the scenario that we mentioned, consistent delivery services executed, which promotes cross-selling with existing customers. It's nothing by chance that 93% of the contracts are in cross-selling and also our resilience related to all the scenario I mentioned, pandemic, post pandemic interest rates, inflation, our capacity to invest compared to other companies that are a bit more affected because of credit and interest rates and all that favors the company to increase revenues in our existing clients and new customers. And that's why we are very optimistic about the coming years.  As for M&A and acquisitions, we do have a positive scenario because of everything I said, mid-sized companies are more willing to negotiate because of all the difficulties. So I would say that it is a positive outlook for us. But for things to happen, there are a myriad of factors. What I can tell you is that our pipeline has loads of options, and we are very hopeful that things happen in 2023, and we can have very good surprises and news to share with you all.

Thank you, Ramon. Second question also from Claudio. What is the expectation for TruckPad? I view that in the fourth quarter, the company is already contributing to the company's net income.

TruckPad, as we mentioned, since its acquisition has 2 main objectives. The first is for the company to monetize itself. Truck pads, all startups start with a good idea, a good project, a good product, but quite the founders do not have the mindset of traditional entrepreneurs of monetizing products. So the first step is to make the company profitable. And as you very well put it, in the beginning of this year, we had very good results, and we have high hopes for coming years.  The second objective for the purchase of TruckPad is to use the company's know-how, technology, to accelerate the company's digitalization process. And when I talk about digitalization, I'm talking about 2 things. One is the internal processes, automate our processes to make them faster to move us from a logic to the digital scenario, but also products to our customers. Transport in Brazil is very methanologic. I always like to make the comparison. It is very much similar to a taxi. -- someone at the taxi's stop, then someone calls and then they go and we estimate that about 30% of vehicles in freight transport in Brazil are idle. And Uber, and I'm not talking about an analogy with Uber, but the thinking of the concept, Uber optimize the use of vehicles. And this is what we want to do, optimize the use of our vehicles, our own fleet and also fleet from independent drivers and contractors.  With that, we gain agility, efficiency, productivity for our partners. And with that, they become more loyal to us at a better price to our customers. We can improve revenues, have better profitability, and we just have a more femtocycle. This is the expectation from our wonders.

Thank you, Ramon. Next question, [ Danilo Camusu ], also an investor and shareholders.  Congratulations on your results. I'm very happy to see robust growth with better margins. It's good to note that we have still more opportunities and synergies with the acquired companies. And if you have a pipeline of new acquisitions.

Thanks for your question, and thank you for being a shareholder and believing our work. As I mentioned in the previous question, we do believe in consistency. It's no use coming here and telling you that we had a fantastic quarter, but then not have anything for the future. We believe in consistent actions and processes. This is what we have been doing since the IPO. So managing costs, efficiencies, services, engagement of our employees. It's important to remember that we provide services and services are made out of people and people only provide good services if they are engaged. Little by little, we can evolve and grow this way.  All that said, we believe we have huge opportunities organically more and more we see opportunities to grow within our customers. And customers that are not still our customers in markets that we are still not inserted or with incipient operations and talking about acquired companies that you mentioned -- we have Marvel, for instance, growing 60%. Fadel, 30%, Rodomeu almost doubling its size. So what happened? Are the companies better after we acquired them. Not really. They were already good companies specialized, but today we're a bit shier in terms of investments. And I can say that because I came from an acquired company. So you have more obstacles to make investments with the capacity to invest of JSL. This company took the courage of doing what they did, but better. And so we focus on these acquired companies, and we believe this is the pathway to follow in new acquisitions.

And if I can add to that, Ramon. If you get to -- and by working with these companies, we had -- we were able to identify 2.3% of these companies and synergies connected to scale and et cetera of JSL, what we have in terms of consolidated numbers. And one thing that is worth mentioning that when you get to the multiple of what we acquired because we set 4.9x average multiple. If we get the multiple to the EBITDA of '21, you are talking about 3.6x. When you carry on to 22, 2.7x. So you see the benefit of capturing the synergies.  As Ramon mentioned, we don't have a silver bullet to double, triple companies at the same time, but synergies are identified and little by little, they transfer to our results. So 2.3% of net revenue was what we were able to identify in the acquired companies.  Next question. How do you see -- you see the impact of EVA and future.

We already worked with EVA in Paraguay and other countries that use the battle. And we do not choose what taxes we are going to have, what interest rates we are going to have. What we do is to adapt to them. So any change in law, we try to be better than the competition in adapting to the new reality.

We have a question from [ Nicolas ] -- we have one more question I think, is the last one. I'd like to know how much of TIR is used to price new contracts? And what is the acceptance of negotiation with customers.

The number is a secret to us. We don't disclose that. It depends on a project-by-project basis. We try to involve on TIR, -- and you can see the results of this on an increasing return of capital that we have quarter-on-quarter -- and based on customers' acceptance. So of 6 billion contracts signed last year, I think that brings you the answer that we have been very successful in pricing. So we discuss operational efficiency. We want to do more with less. Everybody talks about that. We want to have more technology need projects that we have. And obviously, we want the right returns to keep the company's profitability, okay?  I'm sorry I did not give you the absolute amount of the TIR. [ Renewable ] TIR is the internal rate of return, but this is our secret.

[Operator Instructions] Since there are no further questions, I'm going to turn the call back to Mr. Ramon Alcaraz for his final remarks. Please, Mr. Alcaraz you can go on.

Well, ladies and gentlemen, first of all, I'd like to thank you very much for your questions for joining us and for the whole interactive session. That helps us show you what we are doing and explain our plans. One thing that is important. That most of you have been with us along those 2 years. But it's important to say that we have plans for those that are from the outside, sometimes you look at the results of one quarter and you were surprised. But this is all part of long-term plans. We want consistent improvements to be sustainable and for long.  We believe 3 important pillars: people, customers and results. That is referring to what Nicolas said. Customers want the best as possible at the best price possible. And how do we do that with efficiency, good negotiations and providing the best services. And services are provided by people. So we went to have engaged happy people and that reflects a better turnover, less accidents, better satisfaction surveys. I just received a message in Paraguay for the second year in a row, we are being chosen as one of the best companies to work for amongst the 5 largest companies in the country. So this is something that makes us increasingly motivated and makes us believe that we are on the right path.  And finally, results. I have to have balanced results, engage people and satisfied customers. We believe we are in a very promising time for this. Our commercial strategies are starting to fit together. We never choose the scenario. This is not something that we can do. But once again, we believe that we are better prepared than most of the competition. One thing that is very important is that we have several segments. Our resilience does not come only from what I said. It comes from the more than 17 segments in which we are present with different services in the different sectors. So we seize all opportunities when one segment is not doing so well. The other is, and in these 2 years that we have been reporting our results, you have seen that. So seizing the opportunities. That's the name of the game.  If we were suffers, I would say that we don't choose our planned waves, but we have to serve them well whenever they come to us, and this is what we are trying to do. We believe in synergies of acquired companies, as Guilherme mentioned, many opportunities are long the line we believe opportunities in new acquisitions, and we are very optimistic about what is to come in 2022. Anything else, Guilherme?

No.

So thank you very much. I wish you our good day, a good week, and we are here for 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.]