Marcopolo S.A. (POMO4.SA) Q2 FY2025 Earnings Call Transcript & Summary

Good morning, everyone. Welcome to the 2025 APIMEC Brazil Meeting for Marcopolo covering the second quarter 2025 results. Today's presentation and remarks on the results will be given by André Armaganija, CEO, joining us virtually; Pablo Motta, CFO and Investor Relations Officer; and Eduardo Willrich, Legal and Investor Relations Manager, both attending in person. Please note that simultaneous interpretation is available on this platform. [Operator Instructions] This meeting is being recorded and will made available on the company's Investor Relations website at ri.marcopolo.com.br, along with the presentation shared here today. [Operator Instructions] The Q&A session will be exclusive to those attending the APIMEC meeting in person. Before we begin, we would like to remind everyone that any forward-looking statements made during this presentation are based on the beliefs and assumptions of Marcopolo's management and on information currently available to the company. They involve risks and uncertainties as they relate to future events and therefore, depend on circumstances that may or may not occur. Investors, analysts and journalists should be aware that macroeconomic conditions, industry trends and other factors may cause actual results to differ materially from those expressed in the forward-looking statements. We'll now begin the presentation with Pablo Motta. Mr. Motta, you may go ahead.

Good morning, everyone. It's a pleasure to be here in person talking to you. And indeed, we are going to talk about Marcopolo numbers. In the second quarter, we had very consistent results. We are having a bit of a delay in the audio. Let's see if we can fix it. So quite consistent results where we saw we had a production mix and a sales mix with more robust vehicles, coach buses mostly and also greater expansion of our international operations that eventually contributed to a very consistent result and with very consistent margins. Highlights, I would mention the growth in our net revenue. The second quarter of '25 against the second quarter '24 was about 18% growth. In terms of net revenue in international operations, we had again substantial growth of almost 50% quarter-on-quarter. And exports from Brazil growth of 22.4%. As for return on invested capital, 26.1% this quarter, net margin 13.9% and net profit of BRL 321 million. As for production, we have brought more and more the topic that although we are delivering quite consistent results, expressive growth in terms of revenue. We still see a market not really renewing its fleet. And this is very clear in this chart. In the year of '24 compared to what we would consider the ideal level to keep the average fleet age, which is the year of 2014, we see the production under volumes in the first quarter of '24 against the first quarter '25, we see a number very similar to '24 with slight growth of 4.5%, second quarter and second quarter compared. Again, this is what we expected in the beginning of the year, a 5% growth. As for Marcopolo production itself, we see in the second quarter '24 vis-a-vis '25, we had a drop in production. This has to do with a lower volume of the Caminho da Escola program. We had lower production than last year, but at the same time, a substantial increase, 72.9% increase in exports and 12.4% increase in the production of our external units. Looking abroad, we have to highlight in Argentina with an almost 400% growth in production that is very much related to the transition of administration. Last year, we had the beginning of Milei's administration in the end of '23. It took time for the economy to understand what was going on. So in the first quarter, very low volumes. But as of the second quarter last year, we started to see growth. In Australia, a small drop in terms of production volume. But in markets in general, we have a growth in revenue because we have products with higher value added being delivered. And if you consider the Volare Models and Bus Bodies, as is what I mentioned, last year, 924 Volare units that were produced against 727 this quarter and 3,074 Bus Body against 3,073. And as we mentioned in the beginning of this call, we had a larger volume of coach buses with higher added volume. And we see they today account for 39.4% of revenues against 31.2% in Q2 '24, and we have a market share of Coach bus of 46% to almost 47% to almost 54% this quarter. And also within the context of seasonality that we have mentioned in the first months of this year, we see that in the second quarter, the Coach bus portfolio 30% -- was about 30% and now it's about 55%. And again, this makes us deliver more value in terms of revenues and bottom line. And here, talking about the numbers more consolidated total revenue, BRL 2.3 billion against BRL 1,956 million last year. About 18% growth in Brazil, growth of 4.5%, exports 22.4% and revenue from international operations growth of almost 50%. The highlight is gross margin. We are showing our consistency and this along the recent quarters, and we delivered 25.7% gross margin, EBITDA margin 17.3% and net margin of almost 14% with BRL 321 million in net income. Now I'm going to turn to André, and I'm going to stay here with you.

Good morning, everyone. It's a pleasure to be here virtually with you. I'm going to talk a bit about the market. On the Coach bus segment, we are seeing good growth in the second quarter compared to Q1. We had already mentioned that, that Q2 would be a time of resuming sales in the market having that curve of the first quarter heavier with lighter products. The second half with heavier products, but we're already seeing results in this quarter. We see the first quarter of '25, 28% of deliveries were heavy buses, most in chartering. And in the second quarter, we see 55% of deliveries focused on heavier buses. Our vision for the future is a continued growth. So we should see more heavy buses with higher value added and good results for the company. The backlog continues very healthy. We are talking about 4x for new deliveries of products. And this, again, maintenance of heavier mix. The international market is also growing. We have had very good sales, mainly in Argentina for coach buses and Chile and other markets like Peru and other Latin American markets continue relevant for the company. For city buses, I think the highlight is the sale of electric buses. We still see electric buses not picking up as much as the market expected, but sales are happening in a growing number with a higher number of sales than '24. And Marcopolo this quarter delivered 15 electric buses, 10 full electric buses that is chassis and bus bodies of our own and 5 only with the -- only with the bus body, not the chassis. But the idea is to continue having our product in different markets. We also see a movement of other electrification solutions that I'll talk about that further on. The backlog is quite positive. We are recovering shares. If you think of the share of City buses was better than the first quarter. And if you think of the renewal of the fleet and the opportunity in the sale of heavier buses. And we're talking about City buses with back engines and electric vehicles. So we do have a positive outlook for the next quarter. Micro and Volares did have a decline in Q2. Remember that this is mostly dependent from the Caminho da Escola program. Most of the sales are for that. But we also have retail sales that were not as good in the quarter, especially because last year, we had very good sales of products for the Caminho da Escola program. So to be clear, if you see Q2 '25 against Q2 '24, you see a drop in volume, mainly influenced by the Caminho da Escola program. But when you think of the 12 months view, we see the year of '25 with volumes for the Caminho da Escola program very close to '24. And we do expect a new bidding process at the end of '25. Let's remember that the sales of this year are related to the bidding process that took place in 2023. Let's move on to the next slide. Can you move on the slide? I do not see the screen with the -- the next slide, just give me a minute. I got it now. Talking about international operations, we see South Africa continuing to deliver positive results. Remember that South Africa 1, 2 years ago, we adjusted the structure. We brought a team that was prepared to develop and grow the operation. We had several investments in plants and people to prepare the operation for a growing volume. It did take place in '24, and we see a year of '25, very close to '24, the company running at a new level with more productivity, operational efficiency and volumes very close to '24, already giving you a yearly view. Argentina, a macro scenario that's a bit more stable that brings a very good impact for us. We had mentioned that this was an operation that needed to have a fleet renewal. It's still does. We see a city bus fleet that's quite aged. Also, opportunities in the coach bus segment, see that we are producing in the plants only coach buses, but with the need of renewal, we had good sales for passengers -- for passenger buses, vacation periods and with a more stable macroeconomic scenario, we see good sales for coach buses, which influences positively not only the local operation, but also the mix of double-decker exporters from Brazil. Australia, we started the year believing that it could have a slightly lower volume than '24. The scenario has changed on a positive note. We are delivering a very close '25 -- to close volume in '25 than '24 with a restructured operation. Operational efficiency much more tuned in. And with a consistent backlog that we see for the second half, we are already talking about sales for the next year. So a very positive outlook for the operation in Australia, more and more value-added products, our operation that sells to the federal government in Perth that is showing very good sales in electric buses. So electric buses more and more inserted in the Australian scenario with good profitability and again, positive outlook for the operation in China. We also had the restructuring process in '24. We changed a bit of the design of the operation without giant ambitions in volumes, but thinking of the operation as a strategic operation to us. But still, we developed some specific products, specifically for our operations, we were exporting to Australia, also to other markets where we operate, and that has brought positive results to the company. So China, overall, shows a positive result. Colombia also continues to deliver consistent results, positive outlook, very true in last years, we did not have a fleet renewal in mass transportation, but consistent results and again, a very positive half -- second half of the year. Mexico, this is an operation that requires a bit more careful monitoring. It's closer to the United States. We see a deceleration of the company. We launched the coach buses. We have more competitiveness in the market than other markets, but we have to take it cautiously, especially because of the slowdown due to the movements in the American market. Let's go to the next slide. talking a bit about the macro environment. We did talk about that, Pablo and myself. So seasonality is going back to track. If you think of Marcopolo's recent history because of the pandemic of incentives to sales in 2010 to '14, there was a change in the sales pattern. We would turn the year with larger volumes, but our operators work very much in vacation period. So the expectation is to have higher volumes in the second half of the year compared to the first half. And after the adjustments post pandemic and post subsidies, we see this trend again of having a strong second half of the year. This is what we expect from now on. The cost of money continues high. And what we have mentioned is that our clients will only renew what's needed, so we do not see anticipated purchases because of the cost of money. And international exports are doing very well. Heavy vehicles being exported to some markets and international operations after the restructurings of '23 and '24 start to show more sustainable operations, and we see a positive outlook for the second half of the year. Capital structure and dividends, we are going to continue with our policy. We are generating cash and with a net debt-to-EBITDA ratio more and more positive for the company. Investments, it's important to mention that our greater investment, recently investment announced was in the plant of São Mateus. We had a positive expansion of the operation. We had almost 70,000 square meters of built area. We went up to 1,000 square meters. This is an operation much more structured today with the layout that is prepared to improve results in terms of operational efficiency. We invested in our chassis line. Remember that Marcopolo is manufacturing chassis to Volare. This is combustion engines and electric products with the full solution. So this plant is also manufacturing the new chassis, always following our partnership with several chassis manufacturers, but our plant is more prepared to manufacture chassis and also a better layout to improve efficiency and [indiscernible] -- we haven't talked much about the Apolo operation. It's an important operation. For 10 years, we already have a share in this company, 2 years ago, it is 100% Marcopolo. This is a structure that is focused on polymeric materials, plastic parts, especially to agriculture, automotive, trailers and Marcopolo itself. We are increasing the level of diversification. We don't sell just to ourselves. This is an operation with recent investments, automation. It is located in [indiscernible] that is close to Caxias do Sul. It follows our social commitment. We use -- reuse water, energy. We are focused on social development. And it is also important in terms of technology innovation. More and more -- the industry requires lighter materials, more specialized parts. So an operation with this focus, not only to serve Marcopolo to others is quite important for the company, 10 years again, 2 years, 100% ours. And this is an operation that is growing and is part of our research and development area in Marcopolo. Investments in industrial automation and new products. We continue to invest. We have been talking to you about plant automation. Very true. Our product is customized. We depend on labor, but we continue to invest, especially in manufacturing. Our scale enables us to continue investment, and we are bringing more competitiveness with new investments in automation and products, which is a recurring topic in the company. We have a very R&D department in the company, and we are always looking ahead, seeking for new solutions to continue being a leader in the segment in which we operate. That's it ahead for today. I thank you very much for joining us and to be here virtually, and I am here to answer any questions you might have.

Good morning, everyone. First of all, I would like to thank all the analysts to attending this meeting with Marcopolo. For 24 years now, Marcopolo is holding this meeting with analysts together with APIMEC, which shows the commitment of the company with information. In sadness or joy, in the pandemic or in good times, good news and recently always with good news. But this commitment is very important to us for all the analysts that follow the company to have this time in person to be able to connect to the company is very important. And for APIMEC, it's a matter of pride, and we thank your partnership for this 24 years. And here, I'm going to give Pablo this platinum seal. André, thank you very much for the partnership. And I would like to say that very few companies have the Emerald seal, and you will be Emerald next year with a select group of companies. So welcome to the Emerald Group, and thanks for your partnership. On my part, thank you very much. It's a pleasure to have this award. Okay. Now we are going to open for questions.

Congratulations on your results. I have 2 questions on my side. The first, I'd like to hear from you about the Caminho da Escola program. As you mentioned, you have an expectation for the end of this year, so if you could give us some color in terms of volumes that you were expected for the auction, if you think this is going to be as it was in '23, something that will take a 2 years' time. So this is my first point. And second, about your backlog composition. I'd like to explore a bit of your mix in the second quarter, it was much better. So Andre, if you could mention something about your backlog, what is heavy coach buses, light coach buses, it was quite impressive improvement in Q2, getting to 55%. What kind of percentage should we expect for the next half of the year? And you also said that you have a 4-month order book. If you could break down between city and coach buses?

Okay. As for the Caminho da Escola program, basically, the breakout of volumes should be similar to what we had in the past years. That is about 4,000 to 5,000 units a year. And because the bid of '23 was for 2 years' time, perhaps we are going to have 8,000 to 10,000 units. I do not have any confirmation of this volume. We had a public hearing in May, but there was no indication of volumes. They are going to see the intentions of purchases from municipalities in the next months, and we should have confirmation about 40 days before the actual bidding. And then we are going to see what volume is going to be for the bidding process. So we expect it for 4Q at any point, considering the times that we had in previous years. I believe that until November, we should have a new bidding process. Order book, especially in terms of mix, for coach buses, we should see the mix being heavier and heavier buses. You mentioned our comments that in the second quarter, we had already 55% for heavy coach buses and the remainder in light coach buses, which should evolve to something that should be natural for the second half. That is 65, 70-30 between heavy and light buses. We already see this movement in our order book. So when you see the last month of the second quarter, we are already at 65-35.

Just to add to what Eduardo mentioned, [Fernando], 2, 3 extra comments. Indeed, this is what we mentioned about seasonality. We see international market sales that are strong for the quarter, which back up the comment by Eduardo. Charging stronger in the first quarter. We already see growth of heavier coach buses. And in City buses, we also see in the order book, heavier buses articulated, electric, back engine. So we do see a positive outlook, very much in line to what Eduardo mentioned. As for the length of the order book, about 4 months, which is what we experienced since the beginning of the year. So the mix is a bit more towards heavier buses. This is both for coach and city buses and for heavier buses, almost the whole year already sold.

Two questions on my side. One more focus on city buses. You talked about coach buses. But for city buses, could you give us a bit more color about articulated electric buses and what cities have driven the results more? [Sao Paulo], you did mention that it's a bit closer to other solutions. So I would like to hear a bit about that. And second question, thinking of [indiscernible] and financial expenses, we did see that you have a huge evolution quarter-on-quarter, even year-on-year, although net debt -- net debt didn't change much a long time. So anything specific, any one-off that justifies this? I think it was BRL 36 million to BRL 101 million, just to try and understand the move.

So I'll start talking about the products. And then Andre, if you want to add. We have seen urban -- city buses with a bit more attention because of the need for fleet renewal. It is what we have been saying in all segments. Operators are working with the city administrations to deliver more value added to passengers, articulated buses, low floor. They have been winners in fleet renewal processes. Rio de Janeiro, Goiania, also including at least for the expectation of more articulated vehicles. So we are seeing products with higher value added to city buses, indeed trying to bring more value and better transportation services to passengers. So it's not going to be all city administrations that will be able to do that. We need special lanes. We have to have infrastructure for that, but major capitals are more and more looking into this type of service. Financially, about your financial question, this impact was because of some reclassifications. In Argentina, for instance, we had the debt that were taken in '22 to '23 when we restructured the operation. And now we are settling them. We are exchanging intercompany debt to local debt. And now with the cash flows that are being generated, we can settle those liabilities. So both operations had this reclassification and now we are having better results. So it's more an accounting issue, but also related to the payout of debt for the future, and that is now based on the cash flows that are being generated in Argentina so that we can pay out the debts of the past and for what was invested to recover the operation. And just to add with regard to city buses, in addition to better services to passengers, as Pablo mentioned, we had mentioned that there was a need to renew the fleet in the Brazilian market overall. You know that the fleet has not been renewed in Brazil at the speed it should have. And now with support, incentives, subsidies, we can accelerate fleet renewal several markets, as Pablo very well said it, Goiania, Curitiba, Rio de Janeiro are markets that operate with articulated buses and with better subsidies, more structured, we are having this change. So this is very positive for us because these are products with higher value added. And Sao Paulo was the major flag for electrification. We see there is an even greater flag, which is decarbonization. And now they are discussing other solutions, gas-driven vehicles, biomethane is an alternative. And what is most interesting here is that it opens new fronts for Marcopolo. So the company more and more is not only through its own development, but also in partnership with OEMs, developing new solutions. So what we see is that some of the bottlenecks that we had in the electrification process, financing was settled. Now infrastructure and recharging is a bottleneck, but other solutions are coming, hybrid buses, biodiesel solutions, biomethane solutions and the greatest advantage of Marcopolo is the capacity, the flexibility to diversify and bring to the market what it needs. So more and more, we are seeing new demands for new fuels and Sao Paulo is a reference. The bottlenecks the city had in the process have been overcome. It becomes a reference to other markets. So we see other solutions coming up in the Brazilian market that meet the needs of administrations and also our capacity to deliver to the market.

Good morning, everyone. Congratulations on your results. This is Fernando from XP. Last year, when we held this event, one important point was that you mentioned that you did see some room to gain margin, especially because of improvement in operational efficiency. We understand that in recent quarters, mix was very important for your share, but I would like to understand operational efficiency, occupancy, labor training because that was a bottleneck in the past.

Very good question. We are always looking into efficiency. And it is what we always say, it is a point that Marcopolo has as its main internal project. So it will be very interesting when you do visit our plant on Marcopolo to see you're going to see our higher competitiveness. So this is something that we have been mentioning. It is resuming lean culture, working with shop floor projects to really resume everything that brought Marcopolo here in terms of having a very organized structured process and really delivering together with operators, having executions that enable us with to build capacity and deliver better. What is important is that this year, we did see difficulties with mix, a return of seasonality. This was a quarter with heavier coach buses. And from now on, the trend is that the mix becomes heavier. And because of that, we are able to show improvements in efficiency, but this is a bit more complicated because you have to work with the labor available in our plants. Practically speaking, labor has been better prepared and has been able to deliver more and with higher quality. It is very important for us. But we are not still at a time that in the next quarter, everything is stable and efficient results will show fully, and we are going to improve margins, no. Mix stability will make results show. What we see is that capacity building and training has been effective. And basically, this is something that comes top down. We are [indiscernible] all areas for this to happen. And the idea is again to retain labor. We know that our process highly depends on labor. We have a level of customization that is very high. And today, we are not having difficulties in hiring people to work at our plants. If you consider that we have quite a stable number here, but because of what we want in terms of improved efficiency because we want to deliver heavier buses, we want to retain our people. And this is our objective. We want it to be a reality. And if we do need labor for the future, if we have some sectors that are more impacted than us, there is availability of labor if we have to hire. This is a bit of our project. But again, our project is to resume our lean culture and follow the principles of efficiency in manufacturing.

Just to add to what Pablo mentioned, that was the success formula for the company, and Pablo said it very well. Lean manufacturing is very important, especially for a labor-intensive customized company. We do believe a lot in our program. We have incentives. We adjusted our organization structure to support the program. And we see that it was successful in the past to improve our results and operational efficiency. And we see an even more mature developed company with competitiveness and interesting solutions. We are focusing on culture. Let's say that Paulo Bellini in his history always said that people are the most important thing, and we have to develop a good environment, positive that is challenging that is of growth, but this is what the program provides. We did have some changes in the leadership structure at the plant. We also worked with segments to have an either more prepared team. And another thing, the bus market is growing and is being renewed gradually, avoiding peaks that we had in less than years because of pandemic, [depression] or specific subsidies and cheap money, low interest rates. With that, we have more stability. We have gradual renewal. You see this year with growth of 5%. That's what OEMs are talking about. So this higher stability enables us to resume the lean culture and at the same time, keep our labor, qualify our labor to bring in new levels of efficiency. It's a gradual process. Training of labor is important for all players in the market, but gradual growth in volumes for Marcopolo and other bus manufacturers enable us to be better prepared to train our labor.

I'm [indiscernible] a student from polytechnic. I would like you to comment on the company's leverage, which is very low. Aren't you missing opportunities with that? And in the company's view, what would be an optimal leverage?

Thanks, [indiscernible], for your question. What we have been working on is the following. Marcopolo has always been very conservative in terms of cash generation. We've always been a company that had a significant cash position because it uses subsidized lines of credit to run its operation. So in terms of capital raising, we have reduced financial costs, especially connected to the [indiscernible] and BNDES lines. And what we have seen in recent years is cash generation above previous years. We were able to develop good work in terms of margin recovery. And today, we have a scenario possibly in the coming quarters should get a net cash position. So in our internal discussions, we do not have any significant projects that will lead us to burn cash right now. And the idea is to keep the payout of dividends at 50%, which indeed makes the company to work with a leverage position that's slightly lower than in the past. But I think this is something that is the track record of Marcopolo. Unless there is a very significant demand, this is what is going to be. If it happens, we know that our operation demands working capital. And if there is an increase in fleet in Brazil and Argentina because we know that the fleet is quite aged. So if a stronger renewal is needed, then we will need cash. And now more recently, the Caminho da Escola program, for example, was a demand that would stay at 7,500 buses. This is a lower level now. But if were to materialize because the Caminho da Escola program has a very long term, the cash would be important in this project. So we are keeping the cash to be prepared for future operations.

Congratulations on your results. Very few companies are delivering what Marcopolo has been delivering in recent years. So congratulations for the entire team for extraordinary results. My question -- well, it seems that '25 is already certain to be a very good year. What about '26? What do you think will be the demand and the expectations, the outlook for next year? My second question more for the long term. The company's strategic plan. What do you expect for the next 5 years? We know lots has changed. We read in the media that new players are coming for different segments in Brazil. So we would like to hear your view about the competitive scenario for the next years. What is your strategic plan from '26 to '31?

Thanks for your question. As for '26, there is not much we can say right now. We don't have a guidance already ready. It would be too early. We are analyzing the market to put together our budget for '26. But there was a point that is something that we mentioned in the previous question, which is the volume of renewals. We believe there is going to be growth in the renewal of the fleet and the substantial growth is very important, not only for Brazil, but other international operations. In Australia, for instance, is very good. Argentina is also going on and the idea is for this to continue. So in Brazil and international operations, we should see a good year for '26. What is important is that in practice, this value generation in the end of the day has to do with serving the client as they deserve. And [indiscernible] here, I mean our passengers. We see alternatives to buses today are more and more distance. So those [indiscernible] and buying their own cars for people is getting more and more difficult. So public transportation is here to stay. And remember, it is one of the most important items of expense of families. So I think that we have to change mindset for the industry in manufacturing products and operators in delivering the services. With that, we are going to have better services. And this is what we see in the conversation with operators and also a political environment seeing transportation as a social right. We are going to have the tax reform and this is going really to affect the transportation segment in terms of exemptions, reductions of the tax load. So this will strengthen the segment. And the sum of initiatives will enable us more and more to see the sustainability of the business. And Marcopolo is preparing for that. I would say that the financing of the [indiscernible] was a major change in the level of value delivery. And what was the demand in the market, what it showed at the time really changed. And now we are -- and Marcopolo has been working in solutions, specifically to be able to deliver more value technologies, materials. It is what Andre mentioned, the investment in Apollo. So more and more, we are trying to bring technology to reduce costs, but also to have vehicles that are more recyclable and also keeping the financial efficiency and productivity of our products. So when we look at the scale of Marcopolo, the potential of development, we are going to have better results. We know that it's not easy to run operation of large scale, and it's making each process to -- it makes competitors even difficult to run at the processes we were running. So we have to continue to deliver solutions that are more and more differentiated to the market. And we are talking about '27, '28, '29. Automation to make more efficient the product as a whole. And this is what we are delivering for the future in a structured focus. And if we implement now, we are going to be able to reap the fruit in the future, as we did in '23 and '24, '25. When we look at Marcopolo's cycle, the market says the company has a cycle with a specific characteristics. This is what it is. But we think that today, it's different, especially because in the last 10 years, the cycle had very important events. First, the subsidies that substantially increased volumes and then there was a negative offset, a growth of 50% and then a drop of 50% and the pandemic, we had a recovery in '18, '19 of 50% and then the pandemic a drop of 50%. We don't think we are going to have such marked cycles. So growth for the future should be constant volumes to reach fleet sustainability, a fleet age closer to 10 years. Now we are more at 11 years and getting to volumes at least 2014. So '27, '28, '29 should have growth, but not 20%, 25% in volumes as we saw in '24. But this makes the cycle not also to be a drop in 20%, 25% if the drop comes, constant growth and some accommodation of the market, which is very positive for us.

Just to complement what Pablo and Eduardo mentioned, populations are growing. We have the flag of decarbonization -- we are talking about Latin America and Africa. So it is a solution and the cities, administrations are noticing that. We see that the level of subsidy in Brazil is growing to support public transportation. This is a common practice in Europe. So the level of subsidy for public transportation in Brazil are lower than in Europe. So the solution of buses for the long term is low investment, fast investment for infrastructure, improvement of transportation, improvement of the economic level of cities, you avoid waste of time. Population is growing. And again, decarbonization is very strong as an alternative. We always say that public transportation alone, even diesel pollutes less than cars. If you have bi-articulated buses in Colombia, you have 200 people. That's the capacity of a bus like this. So we manage the low investment that you have to put together the system and the gains in mobility and pollution. So the history is positive and what we see in the market is that governments are incentivizing the system. Also, interest rates today are very high. So with the drop in the future, we are going to improve fleet renewal. And there's another point. When we take a look at the global bus scenario, the large amount of chassis manufacturers changed a lot. The pandemic really made companies with a tighter cash position and lots of companies left the market. So the global bus market scenario in the U.S., Europe and Latin America, the amount of players that are in the market is lower, and that's why we have a consolidation. And Marcopolo, a healthy company that is looking into its cash, is paying attention to its indebtedness, and we are looking to the future alternatives and expansion. We are not talking about plant investment right now, but we are looking into the global market and seeing where we have opportunities for our product. It is in our release. We talked about Europe. We are going to show a product of ours in the European market. So for Marcopolo, the global scenario is positive. We are investing in people, culture, investments, plant optimization. So we see a very positive scenario for the future.

Well, gentlemen, I think our time is up. I would like to thank you very much for joining us. Thanks, Marcopolo, once again for this presentation, again, for being here every year for 24 years. And next year, you're going to have the Emerald seal. Very few companies have achieved that. Thank you. Have a good day. Thanks for attending.

Thanks, [Mara]. Thanks, everyone. Next year, we are going to close the 25 years for the Emerald [indiscernible]. Thank you very much for attending. We continue open for any questions and comments that you might have in our IR channels. Thank you very much, everyone.

The conference call is now closed. We thank you for your attendance and wish you a good day. [Statements in English on this transcript were spoken by an interpreter present on the live call.]