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

Welcome, everyone. We know some of your faces, very similar ones. Some people who promised to come, they have come. Today we have the opportunity to talk a little bit about our company, Valiati is here, and will be watching your presentations. Luciana, Ricardo, internal markets, quality with Goes, our kind of new here for 1 year HR Director. We're going to talk about the company. We are a little bit delayed. So this is what we're going to do today. Have your welcome. So let me go straight ahead to what I wanted to say. So thinking about 2023 when we talked about how we could see 2024. You can see it on the left side. So what happened was we needed consistent results. We needed actions to recover the last 3, 4 years. It was a positive result. It was a very consolidated result what we got here last year. So G8 was responsible for this. The new bus generation would bring good results for the business. G8 was a courageous decision during the pandemic for us. So since 2021, we have sold over 5,000 G8 sold. Over 1,000 buses sold on the external market. It's a very consolidated products in Latin America. Most of our sales, at least half of our sales are for double deckers. Some of you are here today, you can see it's a very special product. We can add value. And this is something we wanted to see how it would be on the market. So double decker has been strongly inserted in the market. I'm not going to go into detail because Goes is going to talk about it, but it brings a lot of results to the company. And in my next slide, I want to tell you about the need we have for the sales, so I'm going to be mentioning. There have been -- so you can see what happened. We have plus 11.2% of units delivered and 22% of volumes purchased. We were also talking about the electric units. What we needed in the market. São Paulo needed a renovation, one of the biggest rolled fleet. They needed 2,600 buses. We believe this would be coming to us, but slowly. And that's what has happened. We took this opportunity to show our product, we have sold an integral electric vehicle. We've been selling chassis plus body solution and also now we are delivering a full integral solution. And in this growing model, we have tested and promoted this vehicle. And Attivi, our product, has already been seen in many cities in Brazil. We have 8 units in Porto Alegre, a few in Sao Paulo as well. It's a really nice process. And we have found alternatives to compensate this lower volume in electric with other products, and this has brought us profitability. We were also talking about profitable international operations. After the pandemic, we could see that there would be a good opportunity. This opportunity has come. You're going to see when Goes starts, he's going to show you. Before we were having bad results in our international operations. And right now, they are finally profitable. This is the result of several actions we have taken and also our Caminho da Escola, the Way to School project. We had a tender of about 15,000 buses and we're going to be mentioning it soon. We were strongly in volume. We had basically half of it, 7,600 units ending 2024. We had a lower volume than what we had estimated. So with the electric buses and way to school buses came to us in lower volumes than expected, but we talked about it in our meetings. We were wondering if it would be 6,000, 5,000, 4,000, but it's going to be less than 3,000 this year. And probably part of this volume, these figures will be for the next. I guess most of you know this slide shows the evolution in bus body. Here you see can see Volare. What we have here is internal markets and then external market in Volare in blue since 2010. And you can see historical from 2010 to 2014, there was a lot of incentive. Brazil brought incentives, the government brought incentives. And there was a relevant growth in the industry. Obviously, this was an anticipation in purchase and that brought us for in the coming years lower volumes in sales because they had bought everything we've won. And in this process, we got 25,000 units in 2019, and we were expecting 2020 to be the best year in our history, but then there was the pandemic. And we know the bus industry was very affected. And now we can see the recovery. The message here is, you can see how sick work it is. We can see that there is never a continuous growth. There are complications, different populations, different urban landscape, so the needs change. We have to renew our fleet, but think about the cost of the operation that increases. And recently, we have been adding decarbonization. So there is a continued -- there is not always a continuous growth in our sector. You can see the curve, as a trend, it will be of a continuous growth now. We see that in 2024 we have a 20% growth comparing it to the previous year. And we can see we are talking about close numbers. Our numbers are close to what it was in 2019. For 2025, it's still going to be similar to 2019. So you can see our sector has not increased so much. There is still room for growth. The company result because of all of the structured actions we have taken, the results are better, they are positive. This is the opportunity we can see in the growth, in the continuous renovation of our fleet, and we will have good opportunities coming and where we find ourselves nowadays. There is a consistent demand in Brazil. There will be more growth. There is an opportunity for renovation. There will be a transition. We are talking about the transition from flying to taking buses. This brings us opportunities. Marcopolo brings a safe, comfortable vehicle. And people who use this system, they like it. It's easy to buy a bus ticket. This helps with continuous growth and the need to renew the fleet. So in our view, it is very positive for our strategies. International operations is the same. They also have been through the same process. They also had to decrease their operations. There was a decrease in the fleet internationally speaking. And when we talk about competition, our competition was really hurt in this period. During pandemic, globally speaking, many bus body manufacturers were hurt, and we have some of the big players, which used to be our competition in international markets bleeding, and we see this need in the renovation of the international fleet. It's good because we've been adjusting our international operations and we've been adjusting price. And this is the fleet renovation with our capacity to be ahead of the competition, bring something interesting on the international operations. Next is the growing volumes of electric vehicles. We've broken some of the barriers in order for the system to be renewed from diesel to electric. It is challenging. We know that paying for days, getting along more days is a challenge as well. We have problems sometimes, but the government has been incentivating it. And another barrier was the recharging infrastructure. Brazil is really big, so depending on the region, it can be challenging. But Marcopolo is bringing the solution. We've been selling like we did in Porto Alegre and Sao Paulo. And I want to highlight that we manufacture the bus body. The electric chassis is from one of our partners. It could be an European partner, for instance. We will keep on working with chassis and bus body, and we're finding solutions for an integral vehicle. This is also very positive. When we think about electric consumption, we have been consolidating the G8. Next, I want to mention the increased delivery of new products. Marcopolo has been investing in its portfolio. We are profitable. We have good cash flow. We look at what the company did in the last latest event in Sao Paulo. We brought a lot of products to the segments. We have launched Attivi of length 12, that is a bigger tech. We have renewed the interior of the electric vehicles. We have brought innovation to G8. The company has been investing in products, and we truly believe this is the way. This is the sustainable way to deliver value and then we can add it in price. This is something we bring a lot to the table. The sustainability of the results. The growth demand, for us to perform well, we need to align the price to our cost as well. The offering value we bring to the market, this makes Marcopolo stand out. Having more passengers to system, this is what we see as key. This brings value to the client. The client ends up in a winning position. I've been recently talking a lot about what we did in pricing is our investment in products and that is the result of our investment now. We have currently profitable international operations in Mexico, in Argentina, Australia. These are international operations where we've worked strongly and now we can see the results. In 2024, it's been really good. The expectations for 2025 are also really good. We'll still see an interesting opportunity of renovation of fleet in those markets and where there is competitivity, we can work on. It will be relevant when we have consolidated products in the market. We have introduced new products in Colombia a new model of G8 for Mexico and G8 in South Africa as well. So increased growing demand, consolidated product in the market, this is important for us. The Caminho da Escola, that's the school bus. We will take part of this, the standard process to 2025. We have gotten a reposition and a renegotiation in price. This government program will keep on existing, and we have to deliver this volume without too much extra work in our labor force. Marcopolo has been preparing its operations to meet the needs of this program because it is and has been really relevant for us since 2023. Now, our labor force has been trained and we are reaching for better efficiency for our results. For 2025, our vision is a bigger volume considering 2024, but with more efficiency. That's where we can gain that's where we can win. We also have investments in products and factory modernization. What we've been doing is launching products, and you'll see that in this 3-, 4-year period, you will see there will be new launches. We are structuring our team. Our engineering team is stronger and stronger, capable of delivering new products. We have a lot of development coming in the coming years and also the sustainability. One of our pillars for growth is efficiency on the sustainability. And we have an interesting idea of how we are going to grow in the market. But we see the opportunity of improving efficiency. Automation helps in this process. We have been investing and avoiding our bottlenecks, gaining competitiveness, preserving safety of our employees reducing bottlenecks, everything plays out, and this is going to bring us a gain in efficiency in the coming years. With all of these needs in the renewing of the fleet and when efficiency is low, we have this opportunity to improve it. This will help us with cost. I've talked a lot about efficiency, and consistent and sustainable results. That's what we've been talking for a long time. In the past 5 years, the actions we've taken for consolidating operations, cost reduction, preparing labor, automation, launching new products, getting into new segments, which Goes is going to show us how we got into the electric market. I'll let him comment on that. This has been bringing good opportunities to the company. I've shown this slide in other occasions. Marcopolo is a company for people and by people. Paulo Bellini back in the day when he started this company, you will see on our walls, if you come to the plant, the culture of the company's people. In our segment, we need strong labor. We employ over 15,000 people around the globe. And we need -- how we need to train people, invest in people, this is key in order to deliver with competitiveness and quality. We have been working on this culture. [ Kyle ], as HR Director, is here to help us in this process to bring this new culture. We need to work in a transparent way. Bringing the problems to the table and finding solutions, this is really important. And a company our size, we need to have a strong, strategic team and the implementation has to have follow-up. It's an open process we need to participate, so we can bring results to the company. I always mention that we are in the mobility segment. So we need to find solutions. Public transportation is really important because of the growing population. We need to be environmentally responsible. Marcopolo finds and brings the electric solution. And also, we have alternatives. We are not putting our bets in one point away. In Sao Paulo, we could see that we are on an interesting way. We have to be environmentally responsible. When public transport renews its fleet, it has already to be in an environmentally correct way. People want more comfort, more safety, and we have opportunity in here. We are focusing on people and also on engineering. We say that Marcopolo is not only bus body manufacturers, we are also an engineering company. Our engineering department has grown significantly. When you say the company is developing chassis, it means we have to develop the expertise in technology. We are very focused on research and development. So we're going to hear more about it. We're very focused. This is being a state-of-the-art company. We want to bring people together. This is our main goal and our mission, our vision. We want to be the protagonist in sustainable mobility solutions, and we want to bring it into the market. And when we talk about people, more and more, we are specializing we are bringing knowledge. And in 2025, it has to be in a sustainable way. We see that the investment in these past years is generating better results and efficiency, and we've been working for optimizing it. This is just the opening. Now our team is going to talk, and then we have time for questions. Nice to meet you, and it's a pleasure to have you here. Thank you.

Good morning, everyone. Once again, thanks for being here today. It's an excellent opportunity for us to talk more about Marcopolo, to answer your questions and nothing better than that is having you around our factories, see what we've been doing, our demands, our checker products, understand the attributes of value that consequently will show our performance is based on that. Andre mentioned, made an introduction on the main points that have been bringing us profitability and growth. Something interesting to highlight is that we're delivering until September this year, at least, basically a net revenue that is very close to what we delivered in 2023, as a whole, without having as much volume. Something that we have been speaking to you since the beginning of the year. We talked about the potential of 5,000 to 6,000 units of the Caminho da Escola program buses. And in fact, we are delivering, considering the revenue, better results than we had in 2023. And we know that until September, we had already delivered as much as you can see on the screen. We are growing. It is in line with what Andre said. The level we have in the market is still under what we had seen in previous years historically speaking. So if we make an average, we are now starting to have a scenario where the fleet will be around -- will be continued from this year on. So this is something interesting. When we take a look at this horizon of long term, what is important to highlight, the company has grown in net revenue. Mainly in 2021 to 2022, we see a jump. We had an impact on inflation. We know that in that moment still that is a commodity we use a lot. We had around 160% increase, so by distributing costs, we had a huge impact, and it made us price things better considering all the impact. And also the transformation we've had internally made us more profitable. What is important to highlight is this revenue is composed basically by bus bodies. 80% means bus bodies for us, and this is interesting because as Andre mentioned, and Luciano will bring again, we have a series of things we've been working on for the integral bus, the electric options. We are releasing and circulating with our first vehicles. We have been seeing their performance is delivering what big brands have been delivering as well considering electric vehicles. It gives us a KPI that as long as Brazil is effectively growing in electrification, we have a strong potential there to aggregate revenue in this scenario we are bringing to you. Remember that electric bus costs much more than the diesel vehicle. And 80% of our net revenue is only about bus bodies. This scenario, when we see -- this is only about Brazil. About other countries, we see similar scenarios. So from the pandemic period to now, most of these entries haven't renewed their fleets highly. So we see some interesting movements coming up. If we think about resonting [indiscernible] and others in Argentina with renewal potential very strongly, Australia with the Olympic Games. So we see the scenario of potential fleet renewals not only in Brazil, but also in international markets. Goes is going to bring us some more information about it later. We'll bring our figure -- consolidated figures will bring some important results. In Brazil, it represents 70% of our revenue this year. The others come from international operations and others. We see that, in fact, when we start seeing the performance considering profitability, we start bringing international operations to the same standards of the Brazilian operation as well. We start now talking a little bit about our gross profit. I use these gross profit to understand our price as through potential. So we can understand how much we can aggregate the price considering the cost that we have that are variable and also about the direct labor. So that power we had on the pricing more because of inflation adding to the attributes that we have been bringing our products. Considering development in new technologies, it has been allowing us to effectively make our profitability to what we used to deliver in the past between 2015 and 2022. So the gross profit show us these standards to 23% last year. And what we have been seeing in the last 3 quarters is a gross product around 21% and 26%. We foresee that still it's not going to lower in the future. I always mention that this variation of mix change, this portfolio and things have also interfere, but our clients are satisfied. The client of our clients, the passenger, they have been looking for attributes of value in their choice of using the bus to commute to places. We always have the challenge to adequate our lines to produce these mixes to assemble them. So anyhow, we see some volatility, but this margin is supposed to continue to be stable, not to go down. It's important to highlight the change we have, that we have been discussing over the last 3 years. So we are effectively adding value and also charging on the same standards on a fair way with our clients. This is a turnkey point. This year, we are seeing it also in the international operations. We've spoken strongly in the Marcopolo Day of last year. We saw that in Australia and Argentina, the process we have designed for Brazil were being developed there as well. So until we could get everything ready and consistent, it would take a little time, and we also have the peculiarity of each geography. But what we see today is that the scenario in general, the orders that we see in all units are profitable. And as long as this process is going through and all are in the same standard, we will be observing more adherence not only considering revenue but also considering net revenue, net profit in 2024. We are going to see the results sooner with Goes. So this is a very positive result considering gross profit. We don't see many challenges coming upfront. Going back to what we have already mentioned with you about efficiency, the opportunities, the learning curve in here, we might have more opportunities. We have a new workforce. Most of them are here with us for 1 to 3 years. We've changed the way we organized ourselves as a factory until very little ago more specialized for Urban, for Volare, for coach buses. And what we've been doing strongly is to bring improvements to our minds in the idea of making them flexible, so we could have different mixes of products without bottlenecks. So let's imagine that we contract -- we hire new people, then we might have the older scenario where we have lower efficiency and dependence on volumes. So it challenges our operators, our assemblers, so they can work in diverse products and we can scale -- we can provide them more expertise. We've been working strongly in process. Considering EBITDA, we also see consistency of work that has been done, provides not only the price per trip, increasing costs, but also the investments we've been making. This is important when we start recognizing Marcopolo's products as a product, one of the best products that we have in the market. We see that we have value that makes these products to stand out. We have more than 5,000 G8s on the roads. It started in 2021. And the clients who bought it back then starts renewing. What justifies the maintenance of price and the appetite for more purchases versus the price that we have now is the maintenance of the sales price. We see people working in the idea of Marcopolo keeping its brands in a high price standard. And the scenario we have also helps us perform in this way. Consequently, when we take a look at EBITDA margins, we see consistency in the deliveries and the work we've been doing internally is to see these figures always better. We want to work with more efficiency. We want to work with healthy international operations, the ones that are not consolidated that are only considered -- we only consider the amount we have in your shares. They are also performing positively. We know that the challenge is mainly with the learning curve and the mix of products, as I mentioned before. When we take a look at profitability, Marcopolo is very disciplined in the idea of allocating capital. We've been working thoroughly to deliver more products more value attributes, more technology. So the passenger that uses this bus can verify, can see, that's the type of transport they feel comfortable for himself, for his family that will make him commute in a way that he doesn't miss mainly for the long road, the long commuting, anything from airlines. When we see that air has been having lots of issues over these last few years, we see the offer of tickets nowadays is sometimes even prohibited considering long distance flight for two reasons, and we know we see that the bus is an alternative solution. It aggregates value to the family, to being to places with safety and comfort. This is something that allows us to see our profitability positively and see that we have good unique selling points to provide them. So we've been focusing not only on that, but also in product and process. As we said before, Marcopolo knows that people are important, but the focus is process and products. We are an engineering company. We know how much we deliver value to our clients. Most of the times we talk about designs to compare different products with competitors. But talking about product, we have a team that analyzes all details to see how we can bring more comfort and more safety to the passenger and the driver because the driver is circulating with that capital good around for our operators. So this is something the G8 has brought the driver to a new standard of safety and comfort, and we have been working on the same thing for other products in our portfolio. We have the road map of projects that is well designed for the next few years. We know that what we deliver value in the G8, we want to replicate for micro buses, for urban buses, for chartering vehicles. The decarbonization route that we have in Brazil that we have been starting and we are going to have it coming to reality soon, will provide us the possibility of growing even more because we are effectively involved in projects that will allow us to reach and deliver value not only to the bus body, but also to the integral solution when we talk about electric buses, hybrid options and different types of alternative proportions. So our project is focused on working in the house, so we can bring these improvements. And when we talk about process, of course, we want to reduce our learning curve more and more, which is a necessity we have. The process is very -- is handmade, but we have been trying to automate things, components where possible. We have been investing highly on it. You're going to see. We have been talking about it. Our CapEx is BRL 350 million. Next year, we might have an increase on that as well. So we can keep pushing it hard considering product and process, increasing our results because we see that nowadays, what our competitive advantage to our competitors allows us for somehow push us and work extensively on the development of new solutions, so we can effectively be a protagonist in mobility solutions. So that's all. Now I'm going to call Ricardo and I'm here for your questions.

Thank you. Good morning. It's a pleasure to be here. I'll be talking about the Brazilian market. It is a special moment for the market and for Marcopolo. We've been celebrating 75 years of Marcopolo and we can see that along this year, we've found opportunities the market has given us. We also are using these actions as a support for the coming years for relationship in the market. I've tried to make it quick for my presentation. So first of all, I want to talk about our Brazilian bus market. This graph is very similar to what Andre has shown you at the beginning. This is just about the registered vehicles. I'm not talking about exportation yet, so just what has been registered. You can see that the curve in this graph is similar to what Andre has shown and what we have already mentioned. The oscillation in the previous years from 2015 onwards we had seen a decrease until 2019. And then in 2019, things were going well, but then the pandemic hit. This year, we are expecting about 23,000 buses. I think this is going to be the best year in the last 10 years. And we are making a diversity in segment that is different from last year. We can see the growth in each of the segments. It's going to be the highest volume in the last 3 years and a growth of around 10%. If we think November and December, which are not still in this graph, it is going to be around 10%. In the coming years, we hope we see 2025 with all dealers, and we expect at least the same results as 2024 and opportunities for 2025 in the urban sector, we have opportunities. That's the information we have up to now. That's what the market has been showing. When we talk to clients, when we talk to the players looking at 2025, we've seen a nice horizon. We can also see a perspective of volume because of what Andre has already mentioned. The average age of the fleet, and there will be also a lot of maintenance in the coming years, so we think about those segments and Andre mentioned about growth in it because there was a migration from the air sector. In 2024, it was very significant. It has happened in a continuous way. And it's really interesting for us and for the passenger. A lot of tourism travel will have changed, and maybe it's their first time they travel by bus and now they decide they will keep on doing it. Most cases, they are using better services. This has been very positive for our clients in the market. Also the post-pandemic renewal with the costs for air travel being so high, we see a trend now and for the future. So people will be doing tourism by bus, as we have seen people didn't bring in their fleet during the pandemic. So now their vehicles are older. They will have to renew it. And something else that has been important and relevant is the Euro technology. This operational cost, this is related to gas, to fuel. with Euro 6, there has been a reduction in fuel cost and we have an opportunity to reduce the operational cost. Another point is the generation 8. From generation 8, there has been change. It has raised the bar for the market. This has been [ none ] because of its attributes, the ones that are important for the road and tourism sector. And since we have had this, the market can see all the attributes and recognize it. The comfort, design, connectivity, safety, this has been a tonic for the market. Clients will have already purchased deals. They like it and keep combining the ones who haven't bought it yet, they will, for sure, despite the price increase. This is a consolidated move. We have already sold over 4,000 units just in the Brazilian market. We can see them on the roads. This is good when we think about pitching. Marcopolo is in different segments. And we have a brief part of the market share we are consolidating. Also in chartering its great relevant through that we have been growing the segment. After the pandemic, this segment has kept its normal. The agri business and mining also have been supporting it. We are finding solutions for the people who work in this, brings a selling good volumes in chartering. In urban, this is a very important segment for us, 40% to 50% of our sales in Brazil come from urban. The renewals have increased. Most large cities have already achieved financial balance in their system. So this is something that the pandemic had hurt us. We were at the bottom. And now there have been discussions, there is a necessity. And consistently being with renewing, the system has not collapsed, and we can see this consolidation and a balance in every city, there is a lag behind it. They have been evaluating costs, understanding what the passengers can pay and it's been very positive. And because of that, there has been this renewal. This movement for the renewal of fleet started mainly next year in urban buses. There will be more sales in the urban buses. And we've announced this PAC for German mobility for selection, and there will be a relation of electric compared to a lot over 5,000 units for 2025. And we are discussing this movement for the main Brazilian cities. this is a traction point for us. We know the urban segment in the coming year will grow. And for micro, this is a little smaller, 7, 8 up to 12 tons. So this is a segment that we consider the size of the vehicle. But also it goes for tourism for road, for chartering. It has a very specific segmentation. And we can sustain volumes, and the forecast is that there will be a possible growth in 2025. I am not mentioning here the micro bus for those school positive, but just for the ones that are mentioned in Andre's opening lines. I think segment has a tough strategy. One is different chassis partners, and we manufacture just the body, but we also have the whole integral product. So we have both those strategies. We have 70% of the market share in private micro buses. And then for the school bus with the program with the government has been working on since 2007, it has been a very long-term program. We've been with this program through several different governments and throughout time, we have sometimes 10% and sometimes up to 30% of the values in a consolidated segment for us in the bus world and by the end of 2023 when we had meetings for Phase 12, 7,700 units, we had two ways to do it. One was no slagging chassis, and the no bus body and that was 5,600 units and the other one was Volare for complete vehicle for 2,120 units. We have 52% with 7 items. There are 4,500 memberships and contracts that are bringing. [Technical Difficulty] We have had more memberships. And for 2025, the perspective is for a similar volume of what it was in this year. And there is a perspective of maybe being a little higher. And we've been formalized on the expansion of this minute. I also show you a photo from the government project where they say they are committed to continue with this program. Our government organizes this problem, but differently from the beginning where 100% of the sponsor is still from the government. Now they have pilots, provided it comes from Brazilian government, but most it comes from city sponsors, from city government. And in this phase of the program, we have more volume because it comes from shared investments, state, city or federal. I'm also sharing with you our sales network. We have 3 brands, Marcopolo brand, which is our bus body. We have Volare brand that we can offer integral whole solutions. And we have Neobus network, which is specific for the school buses. For Marcopolo network, we have our own representatives with 8 representatives and 7 own branches. And we are present all over Brazil. This supports with sales and aftersales. When we have these representatives all around Brazil, it works in a positive way. We are gaining market by having this service. We are guaranteeing that we are elevating Marcopolo's stand with sales and with aftersales. In Cuiabá, Central Brazil, we have a new unit now. We are also opening one in [indiscernible] with a new branch for sales and aftersales with new products. And that's an interesting location. Volare's network works close to the automobile industry, having our own dealership in Sao Paulo, 25 economic groups and 45 dealerships spread all around Brazil. This is our biggest network. Volare product is rather more retail. So that's why we have to have all of these dealership and support. That's because of selling everything in Brazil. Volare has 56% of all registered vehicles. And Neobus network has 12 representatives, some are closed with Volare network, some with Marcopolo network, and we have 16 service points, that's a strong work of aftersales. I also thought simply to share with us some marketing campaigns we had. Last year, I mentioned we had started a new moment for our marketing, for Marcopolo's marketing. We started communicating directly with the end user. We want the end user, the passenger to know our brand. They need to know our products. This is not at all a short journey. But through this program, it has brought consistent results. It can be because of the information now that people have. Passengers have information. Passengers now know what a G8 is, and they want to travel in the G8. That is very interesting for our clients. Our clients bring it to us. It brings value to our clients. These campaigns are made directly in Marcopolo or in the market and sometimes with the clients. We work with them in different channels -- different media channels. It could be social network, TV. Some of the examples are here. We are talking about the bus terminal Tietê, which is in São Paulo and it's the biggest in Brazil. We use a lot of technology, innovation. We reinforce the safety and comfort of our cars, and another one is in airports. You can see this one in Congonhas Airport, also in Sao Paulo. This was in the second semester in the year. When we people leave their airplanes in Congonhas, they can see this huge billboard from Marcopolo, also we work on the [indiscernible]. So we are doing our marketing. We added a bus from Marcopolo and one from Volare in the São Paulo, which is very popular in Brazil. And when I mentioned we work closely to the client, the one with [indiscernible] is an example. Basically, all of our clients we have worked closely with, it adds value to the clients. And we will keep on doing it next year. We already have an updated version of the company. We will keep on working on this line with different marketing channels so that we can interact and communicate with the clients from our clients. And lastly, there will be the slide and the video. I want to show you Lat.Bus, which happened from the 6th to the 8th of August this year. This is the largest bus in Latin America, and it's been consolidating. Itself been growing. We had the largest additions. There were over 22,000 people visiting Lat.Bus in Marcopolo. They had a very special moment there. We were the protagonist in the market. We have sold 472 buses just in this fair. This fair started on the same day we were celebrating Marcopolo's anniversary. It was a coincidence, but we celebrated it there. We took the opportunity. All of our clients were there. We have strengthened the relationship with the clients in this event. And we launched our product. We have shown new products. We have shown innovation, innovation on the bus body and things that were new for the market, like you can see in the videos like on the slide 12 on a any segment, it's called Super Micro. It will be something in between the bus and the micro bus. Also the hybrid Volare with ethanol. It was amazing being there in the Lat.Bus. It was productive, it was important this year with all the celebrations. We are working, struggling with our clients in relationship, 20 regional events in the main cities to celebrate with our clients, Marcopolo's history, the history of our relationship with clients. This has been touching in Marcopolo. We have always been strengthening this relationship with clients. Some people have driven 500 kilometers just to be us in the events. That shows they really like us, they want to be deal with us. And lastly, I want to share a video of our participation in Lat.Bus. Unfortunately, there has been an issue with the sound of the video. Maybe we can share it later. Thank you. I'm at your disposal, if you have any questions.

Thank you, Ricardo. I'm sorry. I'm not as aligned as you are. I'm joking. My voice is not so good, but I will talk a little bit about international markets and exports. As people have said, our revenue on the first 9 months, it might probably be continued by the end of the year, and we have a participation of international operations. If we consider this 33%, 81% is produced for LATAM. We produce for all Latin America, and then we divide 16%, 17% in EMEA, Middle East, Africa, Central America and Mexico. If we take a look on the other side, 72% are coming from international operations, 28% were exports from Brazil. So a positive surprise is about Australia, almost half of this revenue is coming from there, then Mexico, Argentina and Africa. We have also another purpose for China. We'll talk about that soon. About exports from Brazil, until last months, we had 45% in market share. We have 2 more months to close the year. We're considered the main body builder in Latin America and Africa. Something important. We're focused on the premium product of coach buses. So 73% of our exports volume was coaches and a lot of double backers. More than 500 double deckers have been exported from here. You're going to see it later. We also have some operations for EMEA, some countries go into political crisis, social crisis, and they are big operations, but it takes long to build these records, but we exported some important units to Kuwait, Qatar, Burkina Faso and Tanzania. We are now starting to see some new interesting operations soon there. In LATAM market, we have a lot of vehicles being sent to Chile, Peru, Uruguay. And we are also exporting to Curaçao, and Costa Rica was a very good surprise for this year, more than 100 units there. Some details about products. How important is our product? We export double deckers and I want these pictures to bring some details. Colombia started producing their G8 for the single decker. The double deckers come from Brazil. This is a market we have explored in 2024. On the right, you see from the ETN for Mexico, you will see many vehicles from this batch in the line. And we bring some concepts there that are not yet here. Their standing point is that they have -- they want to have to 2 toilets. This is something important. For example, they have a male and a female toilet. They also have some details on pets -- on having being pet-friendly. And we are also making it available. We're standing -- this is a standing point. This is something that brings more clients to this vehicle. Peru, it's a big market for double deckers, 190 units were sold there, companies that are from Canada or North America. So there's a very high level of quality and safety required. It's good to position our prices in that market. It worked really well there. Chile is another market that's important for double deckers. We're going to sell more than 200 units there. Most of them, they are like reclining seats, with massage available, individual monitors, because it makes these -- it makes people get attracted to it. We also sent to Ivory Coast. They have the nation's league, Ivory Coast 1, and they bought a double decker, so they could do the commuting of their national team. So this is a very good marketing for our products. And lastly, we have some vehicles to Argentina. Argentina has always been a very big market for double deckers. We have our local fabrication, the double deckers come from here. You're going to see some of these vehicles in the line here later on. This is a good opportunity. They like our buses. We talked about MASA. It's in South Africa, our unit in South Africa. We produced some vehicle there. But our double deckers come from here. We exported many units there. We have some more to be produced in the line. Remember that they have like a right side driver, so we had to develop these things. So we could enter with the G8 in that market. We produced these urban buses in São Mateus factory for exports as well. Logistically, we use the chassis that are produced in [indiscernible], that is easier -- it's easier to use to make these logistics from [indiscernible] that is in the Southeast of Brazil to Espirito Santo then to Caxias do Sul. Were going to have 30 more of that white one. And the yellow one, you are going to see in the line, we are sending 30 units for this market as well considering all the variations we have, not only in product, but also in things that happen over the year. So Pablo and Andre mentioned about international operations and the numbers basically tell you everything. If you compare the previous years to these three 1st quarters, you can see how different these numbers are. In Africa, we have a huge production ramp-up. They produced 20 vehicles per month. Now they have more than 40. They are producing urban buses locally, intercity buses as well. They're interconnecting a lot with China. There is a huge jump we could see at MASA. And in 2025, we expect it to be continued. In Argentina, it's a huge jump as well. It's an operation that is very lean and in adherence with us, continuing -- the factory is ready, not only to build road buses, but also to resume urban bus segment. This segment is going through a lot of problems. They need renovations and this factory is going to work on this demand. Australia, you can see it rocked this year. They've been working strongly with a good connection with China, many products being ported from China to Australia besides components. It was probably the most challenging thing we have to increase -- to have this price increase there as well. The agreements we have there are with the government. So it's even harder to discuss to -- it's 50, 60 years sometimes agreement. In China, we changed the concept we had there. We consider them an experts as well. We have huge markets for Australia. For Hong Kong, now we are starting with -- we also understand that they are a huge pillar for global sourcing. Other plants around the world have been using this source, strategic partnerships. We have a lot of body builders and chassis manufacturers there, too and having it as a technology hub to bring us -- to bring every modern modernity we have there. All buses there are electric. We use also nitrogen. They have other propulsions there. In Mexico, we can see good volumes, too. They started producing the G8 single decker there, and the double deckers we continue exporting from Brazil for ETN, that client I showed before. And now looking at Colombia and Canada, they have also shown good growth. I don't have such a close contact with the Canadian unit. But in Colombia, I have a good approach. We haven't had a renovation of Transylvania this year. But for next one, we see that's coming. It's very positive for us. And looking at our positioning all over the globe. We acquired 100% of the plant in Argentina. So that's the new thing about it. MAC is -- MAC South Africa, Australia, Argentina, they are 100% Marcopolo. Polomex is 74% ours, and Superpolo 50% and New Flyer 8.1%. That's basically it on the end. Do you have any questions? Now it's coffee break. It's a 15-min break. See you soon. [Break]

Good morning, I'm Luciano Resner. I'll talk a little bit about automated processes. But first, let's show you the Lat.Bus video now with audio. [Presentation]

So it's good to start like this. This is a special year for Marcopolo, our 75th anniversary, 9 products and new launches we've had in this year, in this exhibition. Our hybrid bus of ethanol is going to appear in our road map now. It's been very successful and seen very positively by the market. And we believe on the future of ethanol as an option for decarbonization. So I'll talk about our journey in technology, in product and process as all the previous speakers spoke about, on the revitalization and improvement of our technologies in products and process. I brought up the last 5 years considering launches and innovations we've been having. In 2018, we had renovations, smaller ones in our portfolio like the new G7, a facelift, a new senior and the facelift of Volare. Remember, in 2018, we were working strongly with our chassis partners as a big -- the biggest body builder in the world, producing and developing body build -- bodies only. When we go to 2020, we start to diversificate this portfolio. We decided in 2018 that we wanted to develop our own solution for the Attivi chassis, developed in Brazil with Brazilian engineering, high local content and software, which is the heart of an electric vehicle being developed here in the house, which allowed us to add more disciplines into our engineering team. We also have the body from Attivi with a partner. In the middle line, we have developed many alternatives with partners, but we also have our Integra bus. In Porto Alegre, it has been performing greatly with great efficiency, much better than our competitors. We also launched the G8, and we've been expanding the Generation 8 international markets. We've been penetrating markets we didn't participate being an absolute success considering the double-decker option in all markets. In 2022, we also started with the LD option for double-deckers. It's important to highlight that in the past when we made these movements, we would do it in 2, 3 years. This one, we launched these new families in a short period. We also did the facelift of the Attack. This is a market leader in Volare. And with these revitalization, we were able to add sales, we brought more value-added contents to the vehicle, and we're able to price it better. We also launched Paradiso LD. In 2023, we renewed Viale Express and our bi-articulated buses for fleet renewal, and we needed that to somehow reduce complexity considering the platforms. In 2023, we also entered the American market with the Grand, dedicated for shuttle and transportation. It's up to 36 passengers. It's been very well accepted in the American market in the specific segment of shuttle, and it's been exported from Mexico. This year, in 2025, we are generating sales there. In 2022, we also made a move internalizing some productions of chassis. We have a team of experts in Sao Paulo with professionals from the automobilistic industry developing for the Attivi and for the diesel option, which is the RCx V8L versions and starting production. And we also opened Tecnopolo, which is engineering services, for our region here in the Northeast of [ Rio Grande do Sul ] considering simulations and other services. It has been providing revenue as well. Moving on. This year in 2024, we had some variants of chassis for micros being developed and launched. The first vehicles are being on the road now. The 3 compositions of the Aeromobile for Guarulhos. We have the opportunity of seeing it in action. Starting their operations soon with Marcopolo body. It's an interesting project that places us in a different level of certification, safety electronics. It's an autonomous vehicle. It has -- it is driven by a control area that is out of the vehicle. We also had the rear vehicle -- the rear engine of Viaggio. It's our option for chartering. It was launched this year. And then we concluded the migration of the coaches to G8 family. Chartering segment is a heated market now. And as [indiscernible] mentioned, we have Volare FLY 12, that is between the coach and the micro. It's 11.7 meters long, which is in between the road and the micro. Considering tenders, government agreements, this is a vehicle that at Lat.Bus was very well accepted. I also mentioned the [ HVE ] by ethanol. This is Volare option. We have a small engine by ethanol, 3 cylinders that works as a producer of power. And we have also the electric propulsion there. It doesn't need a recharging structure. It works only with ethanol. It has an autonomy of 450 kilometers. When it gets into the -- when the reservator is almost empty, they can just stop by a gas station. We've been working strongly on the [ Caminhos ] day scholar program, the school bus program. This is an option for them, too. All the researches show that we can reduce more than 60% emission with the use of ethanol. So we believe this is an interesting solution for Brazil. It doesn't need a recharging structure, and we have a good source of ethanol around the country. We also launched more recently our Motorhome in Expo Motorhome [indiscernible]. It was a great success. We use most of our platform from Volare with an integral version focused on the Motorhome segment that was completely developed and tested for this application. It stands for this formal markets, where many vehicles are transformed into a Motorhome. We have one that is specifically for it. We had -- we -- our engineering team post-pandemic had been restructured, and we've been working a lot in many different subjects, including the renovation of our product portfolio. All that, considering our road map of technology, it has this 5 strong times of sustainable propulsion on the idea of having a multiplicity of solutions. We're having lots of these coming strongly in capital. We are looking for the carbonization alternatives by ethanol, hydrogen. It might take a little longer time to mature. Biomethane, we are planning -- we have a Volare with that -- with biomethane on the road. It's an interesting biofuel. We have a pillar of research and development, that is trying to develop new components, new part numbers, new options. One of them is satellite communication, so -- because we know that there is not enough WiFi on the road, so they can also use satellite, many safety items, passive alternatives, passive electronics, passive safety, sorry. G8 is considered the success vehicle we have in the market. We performed -- we want to have good performance in safety because we know that there are lots of accidents, crashes on the road. And we -- on the other -- besides being the safest, we are the lightest in the market. So it also saves a good amount of fuel because the vehicle is lighter. So this is a strong reason to have a G8 in our operator's fleet. Also talking about manufacturing 4.0. I will talk a lot on efficiency, manufacturing efficiency, machinery efficiency, manufacturing equipment efficiency, execution of system for electric vehicles, the new generation that are being developed. The new interior area of Attivi has been launched. We revitalized it. We brought up more value to this. The G8 RHD as guys mentioned before and other platforms under development considering all our segments, micro, chartering, coach, bringing more technology and adding more value to our vehicles, and also talking about diversification, we have Marcopolo Rio. So besides these vehicles to Guarulhos, we are providing vehicles to Chile. They also have this Marco Additive. Volare celebrate 25 years. It was the first vehicle we had an Additive Marco there. We improved a lot in the tooling for them, and the Motorhome I have already mentioned. Important to have a strong pillar in the development of softwares, this is something strategic for us. We want to have this onboard software to support all these technology. We have been migrating these technologies over the last 2 years, bringing a lot of innovation and using artificial intelligence and our platform of the 3DX. We have been applying a lot of AI in all these pillars, not only with the product, but also in production processes. I will bring you an example very quickly about one of these innovations of research and development, the project FORMA, which changes the building way, the way we build the structure in order to make our production more flexible. So it basically have rivets on the connections, and we are now validating -- physical validation. And we're deciding over which ones we are going to start with. This brings a lot of value to manufacturing and a lot of innovation, too. Talking about automated processes. We have been working strongly in the process automation. We produce a lot of customized and personalized products. Sometimes, each unit is unique, but we need to produce in high volumes. We can produce more than 60,000 seats a month. And we have had a lot of options, a lot in our portfolio. So we need to generate more efficiency by automating things. It adds to [ connectivity ]. It reduces costs. It mitigates safety risks to our people. The high level of automation also raises quality indexes. And we've been looking carefully in the idea of also reducing the variability of process. So we can also generate a high level of customization without losing this opportunity of automation. I'm going to talk briefly about each one of the plants. This is the map of the unit where we are in a hacky. Our focus is mostly on the fabrication center that is close by here. So as you can see, we have the fabrication center, that's a few meters from here. The seat, we automated a lot of processes there. It's 95% automated in seats, pre-assemblies and also the framable center. We have been investing strongly to consolidate all the framable items and automate it to the best, so we can also control it very well. These are some examples of machinery, about tube cutting, about the cut of sheet, about the chairs and the chair welding. We can produce a very wide range of options with a single robot. it has been developed in the house, so we have more flexibility for welding. We are having more than 70% of innovation there. We've been advancing strongly on it. The flammable center, it's an important investment for the safety and the security of our plant. With this center, we can automate and control things remotely, all the parameters. Many flammable products we use nowadays are stocked there. Besides safety, we also automated processes, reduced the consumption of raw material because some of the loads and unloads were made in person. We also invested in the automation of the harness factory. We produce our electric harnesses in the house. So it's elevated to more than 60% automation. Talking to -- talking about the plants in São Cristóvão. We've been investing in robots for cutting, cutting robots with water jet. We have been improving the finishing of this internal items. The cutting used to be done manually of all the openings, and now we've implemented this robots that will improve quality and efficiency of this process and also the process of PU injection that reduces even weight on buses, on the bodies. Talking about São Mateus, our young, newest plant, we see a huge growth coming up considering hybrid vehicles, the production of chassis, the diesel chassis that we produce, they will be produced there. We have been investing in the extension of these 32,000 square meters. These lighter areas of the logistics and PDI that you can see are going to be specifically for the electric vehicles and also having a specific place for the warehouse of batteries. So it does not impact the other areas of the plant. And talking about electric vehicles, revitalizing everything needed and new technologies. There are some images of this construction that we've been building there. We expect to finish this first phase in the first quarter of 2025 by the end of the first semester to consolidate these improvements in efficiency of the plants, the new logistics and finishing center, a new chassis assembly line to produce as much as we need. Also the warehouse of batteries. It needs to have a lot of safety involved. We are using an international standard to build this area. This is a recent picture of the jigs that are ready to produce these of the Attivi electric vehicles. The state of Espirito Santo has been investing highly on electrics. And now I bring you a view of some of these processes. So you can see some of these robots working considering upholstery, as I mentioned to you, we have a lot of things in seats. Welding is another key point, bending -- tube bending. With these tools, we can substitute 3 machines to one. It's more efficient and more productive. Laser cutting of sheets, 100% of these cuts are being done by laser cutting, laser welding on stainless steel, finishing of flats, harness machines with very high efficiency, laser-cutting machines with very precise cutting. And the connection I mentioned before, considering the 3DX platform makes us connect directly to these machines. We can program off-line the design from the project directly to the production machines. So that's it on my end. Thank you very much. I'm available for your questions.

Good morning, everyone. I'm going to help José Luiz. I'm also recovering from a sore throat. So we're going to go really quick today because then we have the questions and answers and lunch. The good thing is I'm just here to reinforce all the messages you have already heard today, especially when we talk about the evolution of our strategy, we are talking about electrification and more and more, we are talking about decarbonization. And I'm going to talk about it. This is part of the evolution of our road map for innovation and for the diversification of our business. I like this slide a lot, and I need to say very little about it, but it is nice because it shows what the decarbonization is. When we look at the transition moment of the energy, we have been talking about all of these elements, and that's different because it is different from the impact of what we have. So I'm going to talk a little bit about it. But the main message here is that Marcopolo understands this transition, this is different from what we used to, and we have initiatives using partnerships. We are well positioned in all of them. When we talk about electrical vehicles, we have to extend it to the hybrid with ethanol. It has electric traction or hydrogen for future. When we talk about fuels, we can think about battery. The battery technology is very important. So in order for it to work, we need a combination of all of these factors. I need to have sustainable mobility, being economically doable and everything has been evolving well. We need to have a better energetic efficiency and life cycles. We have an experience with thousands and thousands of electric buses in the world, but we need to consider the autonomy of the battery. The life cycle of the battery is from 8 to 10 years. And with an electric vehicle and combined with other solutions, our challenge is looking at the life cycle of 15 years, 12 to 15 years. That's a challenge for us. And here, we want to face new challenges. We have the first use of the battery and more and more companies in this ecosystem, they want to think about the correct waste destination of this material. We will have this need in the future. The second point I want to talk about is the expectation of the fleet renewal. Sao Paulo has the ambition of renewing 14,000 buses until 2037, and the technology for every vehicle should be safe. We have domain of our technology. So we're planning in investments. And currently, we see that most part of cities in there -- in our clients' operations, they have low tension energy and to transform the low tension to high tension energy, it involves the public power, the energy companies, and we have to work preventively because we need time, and investments. The chargers and the charging stations, they have to be available for the end user. We know about the technology, but it has to be available. So when talking about the planning. And when you think about how this transition in going to happen in a quick way. And we are starting to see happening in Sao Paulo City. The third element in brink are the financing models because it's already been set to electric vehicle or the hydrogen vehicle or ethanol vehicle. It has an acquisition cost that can be 3 to 5x higher when I compare I compare it to diesel. But I have to finalize the life cycle. And the role of the financing model is really important. What we see when we talk about investment funds, we check how the Brazilian government is thinking about decarbonization. Our government has had an effective participation with strong policies to finance in our vehicles. At the bottom, you can see a lot of technology that goes on board. We are talking not only about the mechanical parts, but the software that comes to mature these technologies in the market and with all makers. The logic is behind what we see in our daily lives, and this makes the difference for us to keep on providing as Marcopolo the best offer -- the best deal for this product life cycle. Next, I believe everyone follows the segment. Everyone understands there is not one technology only. We cannot have sustainable solutions for mobility with one solution only. So here in a simple way, I'm showing you in a practical way how Marcopolo really works their strategy for decarbonization. So the products we have been presenting to you, they are all here. They all bring greener solutions. We don't believe in one solution for electric only. This is just some of the examples I have. Here, it can be through our partners or our own. We are developing and we are well positioned being a protagonist in finding the solution. I would like to highlight the platform we presented [indiscernible] with the ethanol that is hybrid. And we showed it in [indiscernible] potentially in the future, we can have derivations for the rest of the portfolio. I guess I showed you this slide last year. This is our strategy. And we talk about propulsion. The Importance of the segment is Volare. Volare is the division of the company that has a different business from Marcopolo. Marcopolo is more focused on the bus side, but this has a great participation in volume in the market. We have around 60% for micro buses, 60% market share makes it really important. Our portfolio is really big. Maybe it is a more executive vehicle, different sizes and capacity, and our integral platform it is initially diesel propulsion with Euro 6, but we also have hybrid and hybrid ethanol and we have other technologies in our manufacturing. And I want to highlight that this complements the current chassis portfolio we have and we will keep on having with our current partners. And if I think about the time line, we have been in the final part of the development of the product and we aligned market -- aligned with the market, and we have very positive results. The product is very effective in the market, and it shows the same behavior or a superior behavior of what is currently in the market. And starting next year, we start the first phase with the attack in the diesel lines. We will start bringing the first decarbonated vehicle, flight and electric, and then we'll be migrating in the next years for the second and third phase. Luciano also mentioned Marcopolo Rail. We have 3 projects, and I would like to highlight this 5 years. Marcopolo Rail turns 5 years now in December, and it's been 3 main projects here that show the evolution of this company. Our first project shows and it is operating. And that's what we call Pampa. It's a region in Rio Grande do Sul state. It connects a touristic area. People visit vineyards in the area of [indiscernible]. Our second train project was -- we were in a tender, and we delivered 3 compositions to Guarulhos Airport. That's the biggest airport in Brazil. In this segment, they call it just box. They don't call it a body. They call it a box. So we delivered these, and Marcopolo has its brand in the biggest logistic hub in Latin America. And our -- the project we are about to deliver now is the Prosper Intercity. It's for EFE trains in Chile. There is a lot of technology in it. There is a continuous evolution here. I think the main message here is that this is a great opportunity for diversification. Marcopolo has been growing with this business slowly and steadily as it makes sense for us to have evolution. So I really would like to highlight that the learning curve we need to have here regarding technology is really a lot of work. And we have been learning the differences between these and bus processes. Also I would like to mention Nomade. I'm not sure if everyone has seen the news on media. But before presenting Nomade, I would like to mention how it was created and thought of. Last year, I talked about MVP. This is a community. They are all volunteer members. They are from all parts of the company. Andre mentioned Marcopolo has a value of bringing people together. This is a company made by people and for people. So we need to find solutions for people. And it's nice because we started this MVP during the pandemic in a hard moment for us. And now we have over 750 volunteer members. They are all very engaged in one or another initiative. And this represents 7% of all of our employees in Brazil. We have several initiatives in this program. I would like to highlight that this year a program we call Academy where there is an exchange, we brought [indiscernible] clients and they were inserted in our business and we were immersed in their business so we can develop and learn how to develop solutions for whatever pain our client has. And these people, they keep on promoting connections with the startups and we are going to open innovation through orders. And through the MVP program, we had the idea to develop and it was approved. And it's a great satisfaction because it was in a record time. The engineering team in less than a year, Marcopolo's engineering team developed this really innovative product. This was presented on November 13. We had -- and we were part of a tender, and we have found new opportunities. This is opening doors for Marcopolo. There is an opportunity for diversification, which is really interesting. There are synergies to our core business. It's a small market in Brazil, but we see opportunities in Marcopolo to make this market bigger. Then I'll give you the opportunity to ask questions.

I'll invite the Board of Directors, including Valiati to come and we will have questions and answers.

When Pablo spoke and Luciano as well, there is something about the factory processes and the portfolio mix. There are issues, mostly in fabrications, it goes to assembly, and it's a very complex process. Sometimes it's not possible to automate things. What is the competitive advantage of the company thinking about products? Is it engineering, market research, people training process?

I'll start. Thank you for your question. The main standing point is what the market requests, customized product with robustness level that's very high and all the variability that the client needs, Marcopolo offers to this client, [indiscernible] and factory and people to deliver that. Marcopolo is one of our main unique selling points. Its capacity of customization, understanding what clients need and our aftersales service. When we see eventual competitors entering the Brazilian market, we see how difficult that is to have a robust product to this market with the variability requested and having an after sales that can support and care for this market. This is not something we can build quickly. It takes time for you to be prepared considering a factory to meet these demands, besides investment, you need people. So hiring people is complex. It's always harder to have people. Competitors finalize they would have higher and they weren't able to meet because it's very hard to train --hire and train these people -- these new people. You have seen some jumps we have had with these automated processes.

I would also highlight 2 things. First, Marcopolo 75 years of experience developing in the Brazil -- for the Brazilian market and international markets. We have huge expertise of regulations of all these markets, about tenders and agreements, so we can answer and meet demands very quickly and constantly for most of these tenders. So our engineering expertise is strong. So we can answer quickly all these customization needs. We've been improving in technology, considering engineering to develop things faster -- the solutions faster to all the markets, adding more subjects and more like softwares and chassis and other things. So for sure, we are a huge power from design, concept, development, prototyping, the capability of quick prototypes to be validated, structure of tests in [indiscernible], validation tests, our internal lab has been certified by [indiscernible] recently. So we can do that in the house without having partners working for us. It provides us a lot of quick response. So our production processes also are another point to highlight because these solutions we showed you, they were customized for us, from a seat cell with 35 different models, some machinery, we could see that we couldn't find these solutions in the market. So we started developing processes in here that we can replicate not only in Brazil, but also in our international operations. So these 2 pillars and these 75 years of experience place us ahead of others. Our -- we have the safest products in the market and the client knows that. They see that and they pay for it -- for this different product.

My second question is about international operations. You had some cases that didn't work well. So you had centralized engineering here, not in these international operations. I could say WEG is a great example of internationalization. As I could understand, you want to do differently to use China as a hub, not as an assembly plant to provide tooling and also reduce costs abroad. What does it mean to do everything in the house here from Brazil and have this exponential position in the international market?

Marcopolo has a good level of local suppliers, products and verticalizations in each one of these plants. We talk a lot about Brazil, but we have learned that for you to produce what you need with volumes compared to other segments, you need to have solutions locally. We also send kits abroad if necessary. You're going to see our fabrication center. It's impressive, the structure that meet not only the needs from Brazil, but also Colombia, South Africa, Mexico and Argentina. But our composition is very balanced between having a local thus need in each one of these operations. And also as Marcopolo, we need to be robust considering structure and engineering. We need to be certified to have physical tests and have global certifications. So there are lots of developments we do from Brazil and one of the advantages, and consequences among others for our international growth is exactly this integration among these teams. When you look at finance strategy or engineering, these teams, they are very well integrated between the plant in Brazil and each one of the geographies we operate. It wouldn't be good to have 75 years of experience here, but not good results in other operations abroad. In practice, processes are verticalized. What we don't have as strongly as we have from here are research and development hubs. In Australia, we have vehicles with different characteristics, made in aluminum, where you have a high level of possible oxidation where Australia is inserted. In all the other markets we operate, we have verticalized processes. Something that we can highlight and something we stand out for is our supply chain, local supply chain that provide us agility and producing our orders quickly -- quick enough, bringing solutions to our clients in the best way. This is a premise we have. And something we've been saying about models that have worked or haven't worked, what we see is that the models that didn't work out were business models that were connected to volume and low cost. And what we see that the product we deliver with all the customized items we give our -- in our buses, they are related to a business model where we focus on profitability. So when we think of this investment, it's connected to companies that didn't get into the business model that is focused on profitability, but to volume. And this is what took us to make the decision of leaving Egypt and also leaving India.

I'm Lucas Marquiori. Thank you for the reception. I have just one question. It is related to the mindset of the team, which was presenting today. Andres's speech, Pablo's speech spoke about the mindset change about positioning our prices in the market. I remember coming here, visiting Marcopolo in different events. 2014, 2015, we could see that it had shown how much they wanted as a target in ROIC, and now I can see it's a lot more. So my question is how do you explain to the investor that we are not getting there at the end of the party that we -- why do you want to see -- what is the reference from the past? How is this differently structured? I would like to hear from you, how you see it.

It's been a mindset change for real. What I have been using in my speech is that we've been innovating -- innovating, bringing technology solutions. We have been creating and generating value, and we weren't translating this value into pricing. And what happened before the pandemic in all those years of investments was an increase in capacity, volumes, but then the market shrank. Several competitors couldn't keep up and they had to close their companies. During the pandemic, there was also a huge increase in price, and we had to take it to the client. So we saw an opportunity to readjust to the capacity. It was very hard for us to hire labor. So it's hard to offer the products. And we have been delivering a product with value. This is part of the discussion, right? We are talking about automation, research and development. Everything we add to the product had to be reflected in pricing, and we did this movement, and we had something in mind. It was the need to recover results. We were one of the businesses, the sectors that suffered the most with the pandemic. People didn't want to be together in a bus during the pandemic. So there was a need. There was an internal change, a strong one. Ricardo mentioned this before. We understood it was needed to translate it into price, that's for the financial health of our company. What happened through time was that we had to make choices. And we opted for keeping the clients who were willing to pay for G8 when I talk about road, for example. This way, we got a distribution, a better distribution in our production, different companies have bought from us. Some of the clients who at first were refusing to pay for this increasing price, they could see the value of our products just a few months or a year later. And clients who hadn't bought from us, Ricardo showed us, now they are with us again anyways. So it's been a necessary change. The market dynamic has changed. The positive part of it, Lucas, is that we create more and more solutions for our clients. We have the recognition of the value because they are paying more, and we can reinvest in our business to keep on aggregating value. We want to bring more people to the system. When we launched BioSafe -- BioSafe, now we know that passengers want to be with us. The company is working differently. We can see efficiency as a growth pillar, international operations as a pillar. This growth, this continuous growth in volume. Let me share the mic with my colleagues. Also, I would complement that this process is choosing not to go on with projects that were not bringing us revenue. Also, we've been working more and more on bringing in a structured way to the clients to find a way for them to see the value of our product. We worked on TCO on the attributes. I mentioned how we worked directly with the client to reach the end user to reach our clients' client. This is part of the value that we are intensifying for the client. What we see is that the clients, most of them, they have valued it. The ones that hadn't valued it immediately, they did it later. Everyone has been back with us. Most clients are with us or about to come on negotiating. We didn't have any impact in market share. We have really changed this mindset that when there was no impact in market share, we knew we were on the right way with this change. When we look at -- look into the future, the way we're doing, we understand that we are on the right way, aggregating value, reinforcing everything our product has, being close to the client and the end user, that's the way we see for the future when we think about business that were not so profitable. We turned it around and now they are becoming more profitable. We can't keep on working with things that are not profitable for the company. And this way with this recent changes and this consolidation, we see we are on the right way, on the right path. Also, our market is a market of recurrent purchases. Clients buy a bus once, sometimes twice a year. So having this relationship with the client, being really close to them, we have been intensifying these relations. We are coding this relationship. What brings value to my clients? Is it the product? Is it something we do together? We've been looking forward to being closer and closer to the client. And this way, our partners, the ones that are really close to us, they effectively get ready for better benefits -- to keep on being present in this relationship, we want to be close to them. We want to look at us and look at them and their clients so that they can benefit from this partnership.

I have 2 questions. First one is about Chinese people in Brazil. When we talk about integral product, this integral product was not really good for Brazil. So with BYD, they went into just chassis. We have other big names trying to work with integral solutions. So what is your view about the Chinese? Is it a complement with China redoing their chassis? Who is your main competition? And my second question is about the electric bus. This is really interesting. Could you please talk a little more about the electric bus chain? The first [ATV] that were being manufactured maybe had some battery questions -- battery life questions. I would like to know more about the challenge in price, which I believe is the biggest challenge in the electric. How can we reduce price from here onwards? How can you see these changes in the chain to make the price go down?

I believe everyone can contribute. It's not -- I would like to highlight the Brazilian market. We have a barrier -- a technical barrier. Every time we talk to a Chinese manufacturer, you see we have a good relationship with the Chinese manufacturer. And with this transformation in the integral electric car, but it's really complicated for some Asian manufacturers to provide to Brazil. When we have a national brand and then we have some challenges in norms because we may have a national norm that is different from a state norm from a city norm. The city of Curitiba in Brazil has a very specific norm. So this makes it difficult for the Chinese competitors. They can't really understand the differences in the market in Brazil because in China, everything is different. The government decides and there is one purchase. So it's a different business model. We have private businesses working. I believe this is one aspect. And the second is that currently, Marcopolo is very respected. We are among the 3 or 5 best manufacturers in world. So it beings respect. People want to be close to Marcopolo. We have great technology. We have a good portfolio with several products developed with big names. And even with international brands of chassis, they love us. They want to be close to us. They want to bring their chassis so that we can work together. We want to be alert. As we've been mentioning, 75 years in the market in Brazil, we are really strong. [indiscernible] Clients recognize us and this make the Chinese also look at us, they look at us as a partner not as a competitor. I'm going to let the other people speak as well. But we have a very mature technology and a good chain. We have room for electric vehicle in Brazil for producing it more and more. But we need to find solutions for a long life cycle. We have TCO calculations that show the cost reduction, maintenance, warranty. This company will be more expensive at first, but cheaper when I think long term. We have been offering products with several manufacturers. We have powertrain for engines, we have solutions for many things. And also when we think about decarbonization, we have the best partners globally speaking in order to keep the best offer. Volume here is still not that big, but slowly, we are sure it is going to increase. I'd like to complement [indiscernible] vehicles. The reason why they come for us is our know-how. Joao mentioned that the Brazilian norms are very specific, and this is really hard for the Chinese. The specifications, the local norms make it hard for them, how they can apply the product. Some things are really hard because we're talking about different quality of road. So we have been building it throughout the last decade. It is really hard for them. Also, this parts distribution is also hard for them, and we have ways to do it. We have developed parts with local chain all over Brazil, the parts and maintenance of this. The reposition parts for them, it would take like 4 months to bring something to Brazil, and we have there on spot. So yes, that makes us better. And when I talk about electric, we see the evolution. Our car, our electric vehicle has 60% of local content. The operator can easily have their maintenance done, suspension drivability, doors, [indiscernible], everything I mentioned it's very important for the operator. They need to find on the spot solutions. We still have opportunities to improve even more [indiscernible] is our partner, they've been developing, battery packs locally. There is evolution for high-tension items. We currently have European international solutions, but we are already nationalizing it. Batteries is still our challenge, importing it from Asia. But we see the movement for local assembly for customization. We are creating customized packs. We can do it in very different ways. This is a trend. The trend is to grow in local content. OEMs are requesting this one.

I am [indiscernible]. My question is -- We have seen that Marcopolo [indiscernible] all the space -- you have talked about [indiscernible] buses, new technologies. How do you see [indiscernible] and what relevance can have in the future?

I'll let Pablo answer first.

As Luciano said this -- the most modern factory is this one. We have road, the urban, heavy rare engine [indiscernible] manufactured here. The other one across the street, [indiscernible] you're going to see the light urban and micro buses. And in [indiscernible], we're talking about light urban and micro buses and we start having the electrification and chassis because of the investments. Part of the investment was not only for the extension and changing layout for performance and efficiency, but also to know how we are going to have the electric bus. Our structure here is not big enough. So we are working -- it's important for us, we are working on that. We need to be able to have a factory which when there is a low volume of electric buses, they will be able to manufacture something else. We need to have bus body, chassis electric everything being made in one plant only. So this factory is going in this direction, being an alternative. Of course, this portfolio can be expanded. But we are starting this way thinking exactly about future demand, and how we can be flexible. So we don't stop having qualified employees. We need to have a good rhythm. We need to have buses being manufactured. What we have to try is know about future demands.

Thank you for your question. I think it's interesting São Mateus is really big. We will soon be finishing another building there. We have 75 hectares of land there. This is a strategic asset we have when we talk about risk management. If we have everything concentrated on one plant only, it is not sustainable. This is a way for us to have a factory, which allows us under any circumstances, we can expand. It's not the plan right now. Now we're talking about improvements so that we are more productive and as the manufacturing of chassis and electric vehicles, we are structuring the line, thinking about employee safety. We see these assets as a strategic one. We know that we have the potential if needed to expand lines. But we're not adding it to our investment road map, it's strategic. I would like to mention that in [indiscernible] okay, as he said, São Mateus is strategic. But I mentioned about the flammable center here. This helps manage all of our flammables strategy. If you go there, you can see the transformation just to use the -- we thought we cannot build extra. The example I gave was substituting 3 machines for 1. You were opening up space for efficiency or improving for having a better square meter productivity. We need to take advantage of everything we have because here we deal with heavy vehicles. Our main focus has to be in investments that will improve efficiency.

I am from Banco [Santander]. I would like to ask about the backlog for the external orders. Do you still have something to deliver about the scenario? Could you please explain?

Yes. Thank you for your question. Exportation and internal market. We are already looking into models for April next year for chartering in the internal market. And we are programming the sequencing. We will stop for 3 weeks from Christmas break until the 13th and then on the 13th full speed because the OEMs also stop. So we have to be aligned with them. We need on the 13th of January to be working full speed. And talking about exportation, it's well structured. A lot of road buses, that's not our normal exportation, but it's been the orders we got. And we expect ' 25 as a better year exportation-wise than '24 was. We may have special projects, 80% of Latin America and also in the Emirates or Africa, there has been a lot of opportunities, and there will be more. This helps the production because we can start playing the game in a better way. We understand where to place the products inside the factory, and they will bring better value to the company. All of our factories will stop. Argentina won't stop actually because they will stop in February only. But most of our units stop on the Christmas break. For next year, we think that Argentina will be our biggest surprise. We have some vehicles that start being manufactured here, and they finish manufacturing in Argentina. Our international operations are stable. There are opportunities in efficiency for having more production, but we see that in 2025, international operations will be very positive. The backlog we have has been delivered, especially in Australia. New Flyer has still some details, but all are clean.

My name is [indiscernible]. Congratulations on your performance. My question is about the impact that whatever change Brazil's finance is bringing.

Thanks for your question. We've been following everything very closely. What we can see is that there will be 132 and everything in the tax reform is being well worked in the Brazilian Congress. They are bringing transportation as a necessity in the original tax. The lower the tax, and along the Congress discussions, we can see that the law project that brought this tax reform was extended in the tax that they are bringing and showing. They are extending it for the road as well, not only public transportation. They are receiving collaborators, they are receiving a better care. And if they keep this in the tax reform text in the Brazilian Senate, we will see the Brazilian transportation system improving. And when we talk about manufacturers, we see that there has been approved as a basic right. Transportation is a basic right for Brazilians approved by law. This is an interesting scenario for us. We may have less tax, but it is still not decided. We were hoping that there would have been a decision made by the government yesterday, but it was not. So probably next Monday, we are expecting how our Brazilian Senate is going to vote. Up to now, we are following up closely their discussions. It looks like it's favorable to all employees to have it as a basic right.

I would like you to mention more about the growth pillars, efficiency, international operations. I would like to understand when you know about your pillars, what would you consider for 2025?

Thank you, Andre. I think this morning, we discussed the opportunities we face and challenges we face. The sustainability of the business is always a challenge. So we would like to effectively -- to really complete and fulfill the projects we mentioned. We see the potential. In international operations, our challenge is in Argentina. It has always been a traditional market. Many years, they were the main market. They have 37,000 buses in Argentina on the roads. Urban buses, about 30,000 buses just in Buenos Aires, they need a huge fleet renewal. So we can see this potential. It seems that there is more credit in Argentina. The market is recovering, but if we look short term, what can bring results to us is Argentina, then we will have different challenges. Efficiencies one, something related to new products, and we will have a construction that has been happening, and we are working hard on that. We've been investing to improve our assembly and production lines, but it's not something that happens overnight. We have issues with customization. So sometimes numbers can fluctuate. We are thinking short term, what can bring us results, Argentina and a more stable scenario.

I come from XP. Quick question. You talked about Nomade, it's brand new, but I would like to understand how you want to commercialize it? Is it mass sales or customization? How do you see this market? Are you selling it to end users? Yes, how did you study this Motorhome market?

I believe, first of all, it's a learning curve for us. We see it. Nomade, looks like a bus. It reminds us of the Volaris. We use the concept for building a bus, but it's a house. So it's a house on wheels. So we had to bring different assets, and we have to understand the clients' need. When we talk about capital goods, Motorhome is not only a capital good, it's also something people dream of, people really wish. So the structuring of this project was something that we were careful. It has to make sense for the client to reinforce our position in the market. So we have references, especially in the U.S. for Motorhome. The reality is different. In the U.S., they are even in the stock market, and they are billion-dollars companies. We have a very niche market. It's for people who like adventure, off-road, 4x4. And we would like to bring through Marcopolo this competitiveness in a very formal business. We really studied this to understand the potential. And I would say with Marcopolo, we can grow in this market. After the pandemic, a lot of people wanted to connect to nature to change, wanted to change their lifestyle, and remember this is our first step to understand the expectations of clients, and we want to help this market grow. We want to bring more people to the public transportation. And also here, we have this opportunity to bring more people to the Motorhome segment. And maybe we will also see different opportunities in the future, I don't want to speculate about the future. I'd like to complement currently, the companies which manufacture Motorhome take 1.5 years. So we see there is a market and people cannot fulfill it. And I would like to highlight Volare and Marcopolo. You can see this one I'm pointing. This vehicle created something that didn't exist before. We brought new ways of mobility. And now 60% of this market and we have years and years of history. So we see a diversification. We are not reinventing the wheel, of course, not. But we have the knowledge. Most of our competition have to buy a bus and transform it into a Motorhome. We can create a Motorhome from scratch with the knowledge of creating buses. Our challenge here is in price. What's the size of this market? We still don't know. It's hard to say, but we know we can do it well. We can manufacture it. And we have endless possibilities because we have all kinds of buses. We have double deckers. Rail also have this role. This role has shown us it is small [growing] company. We are not fighting with high-speed trains, for example. It's an in-the-house project. We have a lot of knowledge already. We understand the needs that are specific. We understand about mobility, the restrictions for rails. I can go a step further with a lower investment and I learn more. And then I can also bring the best practice from rail to the bus. If you think long term, train can be a competition for the bus. Some people talk that people in Brazil want to change buses for train like it happens in Europe. We have the knowledge. If we talk about price, we are promoting solutions. We are being protagonist. We are being sustainable and all of our steps are related to the previous one. We are not creating flying cars. We are doing something that is related to our business. We see opportunities. Time will tell the size of this business. Last question now.

I'm from Santander. I have a question about electric. I would like to focus on 2025 and thinking about the discussions we have with the government. What is the infrastructure? Who is responsible and the differentiation. Tell us about this electric engine.

Thank you. As I mentioned briefly, one positive aspect is that the planning of infrastructure, the investments, while we do not have the advancements in this, we will see small but important volumes. And soon we will see the maturity in this market. This is the main topic. As Marcopolo, we are looking at the whole system, developing partnerships, alliances supporting and getting support on what's possible, and we keep our eyes open for new technologies. We look at bio ethanol. We need to find a more competitive, a cheaper solution, maybe with less batteries, something that becomes cheaper, and we don't depend so much on infrastructure. So we are -- it's still going to take a while, but it's growing. We see higher volumes starting in 2025 and a forecast for growth from '25 onwards. And we see that the competition has not been that advanced in their solutions. So we need to also just keep in mind decarbonization. I would like to mention the financing of this. What we have seen is that the operator wants it, but he/she has to go slowly. And they need a project where they need to look at it long term. The recovery of this investment is long. So we need the help of the government, the public power. We need to work with this [wave ] of green fuels, new propulsions and the operator is our agent because they get subsidies for their operations or when the governments buys the electric buses for public transport. When we talk internationally and in Brazil, our main market is here. We see the Brazilian bank, BNDES, helping financing with electrification, the Rural Bank and the City Ministry as well, they are supporting. They've already published something mentioning all the cities that would have interest. And in this context, when the government talks to the operators, they are drawing the ideal scenario. What we can see is São Paulo created a very well structured model. They have the help of the BNDES Bank. Buses are purchased by the operator and the operator has to pay 1/3 of the investment and the government 2/3. In this context, the operator is spending the same amount as he would spend for a diesel vehicle. And they will have a reduction in operational cost and make the money back compared to the diesel. It's not a definite solution. We don't know what's going to happen in each of the cities here, but it's what has been working. People were pleased with this [way option] now. They also want to own an electric vehicle. They have their on maintenance. They know about the life cycle. We need to guarantee that there won't be a lot of problems for them in this life cycle. So we need to have this draw model and accepted by operators. There will be a lot of possibilities, especially from the federal government. As I was saying last Friday, they were signing the contract between the bank, the Government and munis to get 1,300 electric buses for São Paulo City. And you can see that there is an alignment. And in this drawing, things have to flow. And then automatically in the government world, what they say they want is to use the lease they have created from all the cities that are interested in electrifying their fleet. So financing lines, we have solutions, and we just have to align the operator and the local government to have this electrification process be sustainable, especially for the operator.

Thank you. This is the end of questions and answers. Thanks again. [Statements in English on this transcript were spoken by an interpreter present on the live call.]