MRV Engenharia e Participações S.A. (MRVE3) Earnings Call Transcript & Summary

Good morning, everyone. Thanks for joining us. We are going to have a full house probably today. But Sao Paulo is complicated. We tried to schedule a time that would be possible for everyone to get here, but I think there are lots of people to come and lots of people connected. So because of time, and we have a very full agenda today, we have the main executives of the company with us. And for us to have a fruitful day we are starting now even if we are missing some people. We are going to start with a video, and then I'm going to call Rafael Menin for his opening remarks. Thank you very much. [Presentation]

Okay, Rafael. If you can start with our opening remarks.

Let me just turn off my phone. Good morning, everyone. Thanks for coming. I'm sure that it's going to be a very profitable day. We tried to have a different MRV Day than last year. In addition to myself, Cacao and Augusto, we also have Rafael, Ronaldo, Thiago that are company's executives and that will be able to speak a bit more in depth why MRV is a unique company. And we are absolutely confident about that, that we have very unique features different from any other players in the sector. And that obviously has to do with our leadership. And we are very confident that what we have been saying to you for a long time is going to be very well executed past and that MRV in a very short while is going to be once again the star of the Brazilian real estate market. We have the presentation for you today, and we split it into macro topics. The first are the endogenous factors inside the company. That is what we did in past years and a bit also about the external CapEx. As you all know, it's very positive for the affordable market. Yesterday, indeed, more adjustments have been announced. So we have an additional headwind -- tailwind, I'm sorry, in a market that is wonderful because of demand, but also because of its funding structure and a very positive subsidy structure for the sector. So let me try and understand how I flip the slides. Okay, to the left. So this is what I said. We are going to talk about what is outside and inside the business. So we have to look into the company and also the competition, and this is what we have been doing. Very well then. So this very unique period, I would say, between '22, I would say, to today was a very hard period. I am the company CEO. I've been the CEO for 11 years, and I've been with the company for 25 years as an employee. And I have a connection to the business since I was born. So I saw this company go through good and not so good cycles. But it was the first time that I saw the business go through a very hard cycle. And [indiscernible] here, our performance was worse than the market average. Okay. We did have the pandemic. We had an inflation of 40%. But still, we did a not-so-good job. And that was hard for everyone who is here, our colleagues, very tough for me as the company's CEO. But of course, a company that goes through that comes out, I would say, wiser. I -- while we've always gone through periods of growth, we faced challenges such as the first cycle post-IPO in the period which all the companies grew a lot. Most companies had lots of problems. We went from 4 to 4,000 with some growth pains but not as much problem. Then the market went through a more depressed economy, higher interest rates and most companies again had abruptly reduced size. And at precisely at this point, we delivered excellent results, BRL 3 billion in the period in revenues, dividends payout, cash generation. So a wonderful cycle for us. So we are used to delivering. We've always been characterized as a company that delivered. We delivered either a lot but above or above average. So always very good reports, sometimes slightly below the very high expectations we had but still good. And unfortunately, this cycle, our performance was under your expectations and under our expectations. And that hurts us. And it demanded what we are calling as recalibration. The company has not been restructured. Most team is still with MRV; directors, managers. We have new people, Thiago and Reinaldo that joined MRV, not so a little ago, it was 5 years already. And -- but they have the green blood, that is, they are highly qualified and brought experiences from the companies they worked for before and our culture is very much aligned. They also brought important cultural landmarks to us. But this tougher period made us keep very important characteristics that are unique to us but also recalibrate our strategy. And by recalibration, we mean a geographic simplification. At one point, we were operating in 120 cities simultaneously, and now we are going to go down to 80, a reduction in the amount of SKUs in the cycle that started in 2019. We wanted to be very granular in providing services to the affordable market, the Minha Casa Minha Vida market. So there was an overlap of topologies that didn't prove to be the most correct strategies. So we are reducing SKUs. Rafael is going to talk about that and Reinaldo will as well. And these two factors, geographic simplification and reduction of SKUs led to also an implementation of this manufacturing rationale in MRV. We are spread in lots of companies. We have more than 200 construction sites simultaneously, and we cannot address each construction site as a manufacturing unit in its own. Imagine you close construction, you fire everyone and then a new construction site, you have an operational ramp-up. That cannot happen. So the reduction of SKUs and the concentration in less cities will make it easier, will make it possible for us to be able to be more and more efficient. I'll give you an example. The team that worked with the concrete moat in development in Goiania is not fired when it is completed. So they go to a second project, a third project and so on. So you have the first ramp up in the production line and then you gain productivity every project. Reinaldo is going to talk a bit about these indicators along the day. This is another important aspect. And I think here, we had more of an extreme change. Part of the characteristic of the family as well. We've always been entrepreneurial. We always like to create businesses. A good business to mention is LOG that is started within MRV. And then in 2018, if I am not mistaken, we had the spin-off. But it was a proprietary company inside MRV as well as Luggo, Urba, Sensia, Resia. So we've always been very creative, very entrepreneurial. And obviously, every new business demands human resources, capital, and after some time, the business demands capital and then this starts to generate capital and dividends. But given the complexity of MRV, today the mindset is simplified. It's to have a lighter balance sheet. We have excellent avenues to work with. We are not failing to work in any of our businesses. They all continue up in operation. Luggo with a smaller size, it's going to grow depending on interest rates in Brazil. Urba, also is an important company. It's very capital-light today. Sensia, that is a division with a slightly higher interest rates. We also had a bit of a reduction in the pace of growth of Sensia. Lands, we are going to talk about that. We've been very aggressive in the purchase of land bank. The mindset was growth. And that was another mistake we made in a country like Brazil with lots of bureaucracy and very high cost of capital. We cannot allocate capital in land bank. But we did this. But thinking of a half-full glass, the land bank has been paid for and now we are not going to have this catch effect in the balance sheet. And new governance. I mean, the new people that have joined us that are operating very well brought new knowledge, new characteristics. Our team is very well integrated. And the idea is to have a wonderful cycle ahead of us. Well, I talked about changes. But what has not changed? Well, the company when it goes through a cycle like the one we went through, we get too much low profile. Myself, Cacao, Augusto in our interactions, in our discussions with investors. It's a lot more about explanations, Resia portfolio. And we don't have much time to say why MRV is a company that is best in class with a fantastic team, a fantastic strategy. We continue to be the largest company in Brazil in all metrics except for market value. This is a company that had more than -- that delivered more than 500,000 keys, an important geographic footprint; 200-plus construction sites, Reinaldo's team at the front end, engineers, coordinators, production directors the backup team, architects, engineers. We are second to none. You know what, the technical density that we have is a wonderful asset for the company. When we have been talking too little about that. In the past, we used to talk a lot about that. But recently, we are not talking too much about the assets that put us in the position that we have today. And the brand, that's such an important aspect, a top of mind throughout Brazil. You measure demand for the product. We are the most desirable brand in the affordable segment. And building a brand is something that takes time. Building a brand in new market takes time. And we -- this is a given to us. We have been multi markets. Perhaps the newest market is Manaus, if I'm not mistaken. And we have been there for 8 years perhaps. So it's a long time. This is infinite looping. It takes time. It depends on presence in cities, a continuous investment in brands. And here, we talk about brand and consumer experience. In the past, some would ask me, the MRV product, isn't it too good for the affordable market? Do customers need all that? And we are sure that they do. Perhaps at the time of purchase, customers are going to go and see a decorated apartment. But in 2 years' time, they may be surprised positively or negatively. And we are sure that our product is a positive surprise. And the effect of the surprise with the perception of quality and headline and design, that brings value in the long term. It takes time to capture but it is huge value. So we are very convinced about the investments that are made in brand and products that really set us apart from the competition. Well, I'll just stay within 15 minutes. Another important aspect is that in addition to everything that was done in-house, all our history of success, team, portfolio, manufacturing, models, a new strategy, we should also reinforce that the low-income market for construction and real estate is very good. Even here in Sao Paulo, which is highly competitive, the demand is higher than supply. So there is no city in which there is an excess of supply. Maybe in the region of town, there may be. But inside the cities that Rafael will talk about our land bank strategy. So within Sao Paulo, Fortaleza, Rio, there is a lack of affordable products. Brazil, unfortunately for society, but fortunately for us, there is a suppressed demand either due to demographic issues of lack of city planning, of problems that were a result of the past. There was a huge lack of housing in Brazil. So a huge number of Brazilians, especially in large cities that live in poor housing conditions, informal housing built in inadequate places, so housing is the basis to have an organized society with dignified housing, with sanitation, safe, well-located housing. And that's what we provide for Brazilians. Well, we've talked about that. So to wrap up the topic, our mindset is very -- we are very absolutely sure that this season of projects that started to be built last year, either due to launches or construction techniques, new prices, new sales terms, sales volume will cause this new cycle to be the best cycle ever in MRV's history. If the previous cycle was the worst, this will be the best. But that's not enough. Our ambition is to once again be the best company in the market. Here, we say in-house about -- we talk about our equation. The equation of first success starts when you buy the land because you have to buy it at the right price, in the right way. Price depends on the topography, geology and what -- how much we can charge for that unit in that market. So nobody has been in the market for such a long time, except for Sao Paulo, that there are other competitors that have been in this business for long. But MRV is the long-lasting company in the markets we operate in. That brings a huge competitive advantage for us. So in execution, I talked about the Reinaldo's team, SKUs, the intellectual density and construction engineers, coordinators, officers, people who are at the back office. We were -- I was talking to Reinaldo. We're talking about 230 people working in planning and products. There's a lot of engineering intelligence in-house. We have to have an event in Belo Horizonte to show what we're doing there with -- in terms of people, with technology. There's a lot of know-hows, in-house benchmarking and repetition. So there's a lot of knowledge. Pricing, that's also important. It took us time to respond. And these are people ask me that all the time. During COVID, we are very aggressive in terms of price in the first 2 years, '20 and '21'. But it took us long to respond. As of 2022, our prices started going up too late. But after that, they've always been increased above INCC, the construction inflation rate. So our pro-soluto has increased a lot in 2022 and 2023 and it's being reduced gradually. This is something -- one of the tasks that CEOs, management and the Board gives to Thiago, to always adjust it, the pro-soluto, on a downward trend. So operation -- our pillars are operational excellence, capital allocation, profitability and people. This will help us build the best MRV in history and the best company in the market. Now going back to external factors who have a huge positive impact on the company. So it's a housing deficit, which is huge in Brazil, more demand than supply. The -- My House, My Life, MCMV affordable housing program has improved. And lately, there's -- a new good adjustment has been made to it. And in regional programs, that also make a huge difference. There are several states that have their own housing programs and there are other programs that are being studied or implemented. So we see that all the states want to keep up with this developmental trend because having a housing policy for low-income people is essential. Sierra state and Pernambuco are doing it, so Bahia wants to do it to Mato Grosso did it. Mato Grosso do Sul is now starting. Espiritu Santo did it. Rio de Janeiro is starting it. Parana was the first and Rio de Janeiro, Santa Catarina followed. So Sao Paulo state is also evolving. So these regional checks, as we call it, these subsidies from the government are a great tailwind for our business. For those who saw our operational preview, starting the middle of December until February, in three states, the program was stopped due to system issues or budget approval. So we failed to transfer 1,400 units that had some effect in net sales and more than BRL 100 million in cash generation. But this will be recovered in the second quarter. So sales will grow organically plus this new units, they will be reported and the cash generation in the second quarter will be much different. I have 7 minutes left. Okay. Now talking about the deficit. In 2016, now going back to the beginning of the MCMV program, 2009, this was the housing deficit, 5-something. After 15 years of program, the deficit has increased. So these houses that were built in Brazil every year are not enough to cover the deficit -- housing deficit. The funding granted, BRL 765 billion, 3 million is the goal for the government in terms of new houses up to 2026. I probably won't have time to build all that, but that shows the ambition of the federal government as well as state governments with their checks. And it's a very robust budget of BRL 494 billion for the year 2025 to 2028. This slide is about the development. BRL 53 billion against BRL 123 billion in the budget. And the new news, you probably heard about that yesterday, is that bracket 4 was created in MCMV program. We are highly impacted by Bracket 4 because we have an important inventory at a good funding, a good cost that will strengthen our operations. With income bracket #4, a very small amount of our business will not be covered by MCMV. In Sensia, we have a few units above 500,000. But it's a very small volume. Changes have been made in brackets 1, 2 and 3 of the program with an update on the income level with a very positive impact for MRV, either by reduction of pro-soluto or price increases or increase in the VSO. So every town there is, in the sales, oversupply. So there is a balance in each town, but the adjusted program will be even more beneficial for our company. And we are very dispersed in terms of covering all the brackets in so many states. So MRV is the company that has the greatest exposure to capture all the benefits granted by the national and state housing programs. Another change in the upper limit of smaller towns. It's 196, but it's going up. And it helps us to improve profitability in these towns. Another technical detail, that customers are now from brackets 1 and 2 can now purchase a property that's above their upper limit. They can join group -- bracket 3. So it's another tailwind. Thiago will talk about the checks, the state housing checks. See that high percentage of Brazil. Dark green are states in which government checks are already implemented. Light green, they're being discussed and approved. So a large portion of our operations will be covered, and those government checks also make a difference for our business. Now I call Rafael Albuquerque to talk about the real estate development. He's been with us for 16 years. He started in the Midwest area and increased his coverage, and now he is present in the whole country. After the presentations, there will be a Q&A session. And I reaffirm that we are absolutely sure that we have the team, the right strategy, the capacity and the will to execute our plans. And this company will deliver wonderful results from now on. Okay. I will see you shortly in the Q&A session.

Good morning. It's a pleasure to be with you this morning to talk about the real estate development. I'm Rafael. I've been with the company for 16 years. Today, I'm in charge of the real estate development throughout Brazil. And the next 20 minutes, 30 minutes, I will show you how real estate development impacts the equation of MRV. Because we are sure that it will be the best company ever. If you want to know what will be the future of MRV, look at the real estate development of today because while Thiago is in sales and living today's life, Reinaldo is building what was sold in previous years. At the real estate development, we're planting the company of the future, 2027, 2028. So the future of MRV is born in real estate development. I must mention this pillar that's so important and that give us confidence that we'll be delivering everything that we promise, which is people. I know the team of real estate development that I know so well that's spread along 28 operational clusters. People that have been with the company for 6 years on average, so they've been through at least 2 cycles of corporation each. This has value because this takes time to build. I know because I've been through the growth cycle of MRV opening Midwest, then Northeast. It takes time to find people, to train people. Today, I'm absolutely sure that the 7 officers of real estate development that have been with the company for 8 years and managers that have been with the company for 6 years on average, are totally focused, trained with -- in line with our strategy, our way of doing business, but also aligned with our principles and values. And that takes time. So we can never underestimate the value of people. Any company that says, "Oh, I'll grow. I'll change my area, geography," will go through the pain of growth and that's not easy. But when I look at our team today, I'm confident because we've simplified our operations, and we have a very good team that's ready and trained to work. And that team gives us support for operational excellence. Because I have a highly trained team that knows the business well, it makes it easier for us to increase sophistication to gain efficiency. The efficiency starts based on our decision to reduce our geographic coverage. We were in 7 -- or 130 cities. Today, we're talking about 80. But even 80 cities do not reflect our cities. But these are 80 regional clusters, but you can say Belo Horizonte are 7 towns. Well, it is one operational and regional core. The fact that it's been Begine, Contagem in addition to Belo Horizonte, makes it easier for operations and streamlining. So there is a gain of scale in terms of local culture, local team. So my strategy today, when we look at the next -- at this chessboard, which is Brazil, I want to be present in these 80 cities and 28 regional cores. We have a very well-trained team. And then we start looking at the sophistication of operations. So talking about this, we have, by far, the best tech system in intelligence management in Brazil. And in the United States, when it started operations, we said, how we're going to do that? Probably there is something already in the U.S. But when we looked at the options in the U.S. market, there was nothing like that. So I would say it is the best system in Brazil. But when we went abroad, we didn't find anything better. And why is the system so important to us? I'd say it over and over again. In 10 years of the system and the level of complexity and sophistication that we decided, we need to make decisions fast. We have to understand the strategy -- So this map is a map of Fortaleza, and this is the screen. So what do we do? How do we make sure we master the market? So here, we have 3 cities: Caucaia, [indiscernible] and Fortaleza. And we look at that as a regional area of Fortaleza. And then we split these into micro regions. And development has the obligation of having products available everywhere. So I take a look at the map. I'm in the office. I can see by the color of the cycles which micro regions are completely supplied, which are undersupplied, which I have to work better and also to take a look at my land banks. Greens are launched, blue is that we've had under negotiation. And then when I click at each of these flags, I instantly have a zoom in of how this micro region is operating. Inventory levels, how many competitors I have? What do they have? My funnel in terms of purchases and legal compliance? So very quickly, I can know my strategy at this very, very pinpointed regions and to make decisions on buying land. In addition to all the strategic information, I have layers of data to tell me the income of the region. And I talked about income, but I could be seeing demographic density. So many different, different layers of data that helps us make decisions fast. And my prospector that is going on site can already know what makes sense, what is within our strategy, the right product to the right income bracket. So imagine our land bank funnel. It is absurd what we have every day. And that makes us make quicker decisions, an evolution of knowing what is important to us very fast. So a degree of sophistication, that is again second to none. And I've been in the market for a long time. And this strategy of buying land is very nice. But what's the next step? It's turning land into product. And Rafael has mentioned, we made a mistake. We have a huge land bank. We have a truck load of money with our load back. Okay. So what are we going to do with that? And what we have been doing is that we created an office for the management of products, everything, with regional planners that really know the business in depth. We are working with the city administration to get permits faster. And when we look at '23, we started the year, and I said, Thiago, we are going to launch products, 32% of which we already have the permits. This year, we started at 67% with permits and, next year, with 80%. And why is that important? Because today, we are more and more in operation with a manufacturing model of development. So having the certainty, have the assurance that 80% to be launched in the year is already in legal compliance. I don't depend on city administration. I don't depend on elections. I don't depend on vacations. That said, that helps the commercial department to have a launch plan that is really fantastic and also engineering to start construction with all critical resources beforehand because I have the permit. So the project is not changing. So we can evolve with other projects, construction site, foundations because there are no uncertainties. So these feat that we achieved in recent years is fantastic. And once you have it, of course, we continue to launch. Now we are at 80%, 90% stable operation, 40,000 units. We just have to keep the pace. We did that. But after we accomplish that, we do not lose. So this is a characteristic to stay and will support our rationale to buy land because when I know what I'm going to launch, the compliance product is well structured, then I can go to the next step of our sophistication of real estate development at MRV. And that's how we look at regions. You have the map to understand the strategy. But when you're talking about the future, and the development department is always working in the future, I look at this table. So you're seeing in South, Midwest. These are the micro regions that I have in one region. Then I have divided by year. So here, I have up to '28, '29 by quarter. And what products are in my calendar to be launched in '25, '26, '27. So in '25, I had 360 units. These are the types of products. This is a region that is very much focused in essential ecoview, which is the most common product that we have for these regions. And this is '25. My work here is almost done. We almost have all the permits of the year. So this is almost just for the commercial department to work on launch. I'm working on '26, '27 and '28. For '26, I said 80% already with permits. So this is almost frozen. Very little is going to change. So we are working on future launches, and Reinaldo is already working with the launches for next year. And our department is really working on '25. So everything that you have in full color, I already have the land bank, projects are being approved and we are going to launch. What is missing for '27? I see, I want to launch 3700 units. I have 3,400. I need 300. So I say, oh, here, in this region, you have to buy one land bank to launch in the third quarter, the eco product with 300 units. So we are thinking ahead. And I would say that 70% of our team is focusing on '28. '27 is almost completed. We still have some to buy, but most of it is already purchased. So when I show you what we are doing for the purchase of land, is to show that we are working with the launches of '27 and '28. But that is a bi-dimensional view. Here, I can make sure that I'm going to have the right products every year in the micro regions that are right. So this is the guarantee of supply, guarantee that we are not going to run out of products. It's a good view but it is outdated. Today, we have this view. It is a tridimensional view. In the past, we talked micro region and products. Now I have to have micro-region, product and SKU. Is it more complex, more sophisticated? It sure is. And that's why it's so important to have a trained team, very much aligned to have the technology, to have the schemes. And that is so important to have a strategy in place and then just put together what is missing. So each dotted line is a manufacturing unit. And the concept is not only that our stores are not going to close. We cannot miss products, but not will our manufacturing units either. So we have to have the right products in the market in the right place, and our manufacturing has to continue because you cannot build, then lay off everyone. Then in 6 months' time, you hire if you want again, then you lay off. It doesn't work. So when we are buying land in the long-term strategy, I have to guarantee. I'm buying the eco product in '27 in the North America region. But with the right SKU that is going to be available for that construction when it's time to start. So today, we have a level of sophistication, a level of understanding that when we have the right strategy that starts right and then we have the enabler of our manufacturing strengths, we are going to have the best development in history. And again, at this level of sophistication with these volumes, 28 regional areas, there is no one that can do that. And then we have trained department making fast decisions with a view of the future that works with sales and production, and that helps us increase our profitability. Because when I'm negotiating and say, "Oh, I need this for '27. Now I have to buy for '28." There is no despair. You're not rushing. And the result is that when you get the land bank that we bought in '23, on average, the land cost, 11% of our ROL. Last year, it was 9.5%. This year, our forecast is to get to 9%. So that shows that we are paying land cheaper. Now, Rafael, you're paying cheaper. So you have a worst payment term. But when you take a look at the land bank of '23, 58% were purchases and swaps, the rest, money. Last year, 87%. And this year, the DI team knows that there is no discussion about that. We are getting to 90%, 90% of swaps and the 10% missing, and I'm going to talk about that, will certainly be paid after permits, after launches. We no longer have money for the DI to buy land. The money of the company is not to buy land. We did a lot in the past. Now we are going the opposite direction. And that makes me very confident because that's not a promise. We are already doing that. Last year, we did buy at 9.7 at 87% swaps. So we are ensuring the 40,000 units, very stable, but no despair. We are buying beforehand for the end of '27 or '28 and so we can negotiate. We have the time. And finally, capital allocation. Well, this, if I tell you, when I look at the DI department of MRV, I have very little concern or questions whether we are going to transform this into the company's operation. This is not a promise. Everything that I showed you is already happening. This is reality. It takes time for you to see. Of course, this is a characteristic of the business. But what makes me awake at night is not the capacity to buy land or buy land cheap or have swaps or keep 40,000 launches or to have the guarantee that the manufacturing won't stop. That is we are doing. What makes me awake at night is the biggest mistake that we had of having money in land bank. We had BRL 2.6 billion in paid inventory of land banks not launched. And this is not a promise. We are reducing this number. Last year, we reduced by BRL 230 million. This is our largest line. We have moats in capital employed, but this is the one that hurts us the most. And I assume the commitment with Rafael, Eduardo, the Board of the company, and this is a commitment that I'm bringing to you, we are going to get to the end of '29 at BRL 1 billion. We are going to reduce BRL 1.4 billion in this line. And why am I certain of that? How do I make it happen? Today, you take a look at this number. And we have an analogy, that this is our money water tank. It was up to the maximum. So how do I do this? How do I empty this water tank? First, you close the tap. No more water going in. And you saw that. We buy through swaps or very little money for a very specific land and paying after launch. So the incoming of water is closed. That's a point. Now we have to work on emptying the water tank. And for that, we can use two taps. The first, which is obvious, is to launch the inventory that has not been launched yet. So we have 40,000 units to be launched per year in the coming years. So why am I confident about this number? Because this is part of my calendar. I know when they're going to be launched, and I know how much I'm going to empty the tank in launches. And what we have to have control of is that this step is very relevant. It is the most important one. But it's not enough alone. We are going to get at BRL 1 billion in 2019. So how are we going to be able to do that? We created that department in the management of assets, and we are selling land. This is not part of our culture, of our history in 45 years. We bought land, but we would not sell land. But we changed completely our mindset. We know we have to do that and we are doing that. We divided our land back in three main groups. The first is obvious, commercial area, basically to -- we have commercial areas to be sold and in many other areas in Brazil. Also the active facade, that is something that we are working and we are selling. And as Rafael mentioned, we held some of the Sensia products. Everything is outside bracket 4. So those products that had apartment prices that were very far from our core, we are selling. And finally, land bank that is connected to Minha Casa Minha Vida, but it's too complex. There is a large queue of launches ahead that are to be launched only post '28, we are also considering sale. We believe that with the team that we have in the 28 micro regions, they can buy land with swaps and at good prices beforehand. And then we can look at this and say, well, let me think. Can I replace this land with lands that I can buy through swaps? Oh, yes, you can. Then we take to the committee. And if it's approved, we are also going to put it to sale. So it is a huge effort. So if I think of what I devote most of my time is, is this. This is a commitment that I have with you. Again, I committed myself with Eduardo, the Board, with Rafael. And in the coming years, I'm going to show you this. I have been here for 16 years and I'm going to be here for some time because I think it's very important. I'm going to close. I'm going to call Ronaldo. But again, I want to make it very clear. I am absolutely convinced that our department at MRV is the best in Brazil and we are building the best and largest company in Brazil. Thank you very much. Ronaldo now, you are going to talk a bit about our production.

Good morning. Well, thank you for being here and attending this conference. The idea is to quickly go through the engineering and production details of MRV. I hope you enjoy, maybe it will be a bit more technical, but we believe it's important to give you the technical details so you can understand everything we're doing, how this connects to the company's strategy. As Rafael said, I've been with the company for 5 years and leading this wonderful team of production for 6 months. So we are now accelerating the results we have to deliver with this team. I've been involved with the system for 2 years, but I've been leading the team for last time. I started with Rafael Albuquerque in the team. And now we are working with the engineering and production team to continue -- continuing the recovery of these materialization of the dreams we sell to our customers. So looking at the MRV equation, I'll focus my presentation on two aspects, the product development equation. And I have an observation to make here. In our ambition to industrialize our process even further, there is a product and project area that internally we call product, the process of industrializing construction. But sometimes product is seen as the development, the launch that will be made in the market -- be made in the market. But we have to understand that this is a project that's made based on items that are part of our product catalog. So you'll understand as I go through the presentation. And obviously, I will talk about the execution process that ensures that the project, the dream that is sold to the customer becomes real in the construction of our developments at our construction sites, so that at the end of the process, the customers dream may come true. We saw a video in the beginning of this event that shows that becoming true when we deliver the project to the customer. So it is a road to make the development, sales, credit, construction and delivery to the customer. So it's important to emphasize what does production area do at MRV? Our mission is to produce -- I mean, it seems obvious, but we have to produce in a safe way. That's very important. Escalating construction process in Brazil is something that must take into account safety. We have to do this production with quality because customers deserve that and we want to deliver something that's comparable to their expectations. And we have to work at a certain speed because we have to be according to -- deliver according to the deadlines we established because that reduces cost and cost reduction is the best. It's not a trade-off. We can work with safety, quality and meeting deadlines at a good cost at the same time. There's no trade-off in these dimensions. Rafael started talking about that, but we'll want to continue with the industrialization process of construction and make the scale of production into the biggest competitive advantage. So scale must be an advantage in this comparison. And we are doing this by streamlining our production chains. In the logic of product portfolio, we got that idea from the industry. We are using SKUs. SKUs, we borrowed this term from tangible products industry or manufacturing process, and we created a process we call SKU but as well as optimize macro flows. Because construction, there is a logic to it and a macro flow that must be respected. Platforms -- but today, we work in world-class platforms, both to design the projects as well as to create the budget and to keep up with the schedule for construction. So all that causes our construction teams to be focused on execution. So thinking about MRV equation, execution is what we have to enable so that our engineers, we have architects as well participating too, women are architects, so they are both women and men, engineers and the architects can be focused on execution to ensure safer construction sites, superior quality, delivering time according to the customer expectations and cost reduction. I would like to highlight three structuring projects that we are working on in the production area that give color to what I've mentioned so far. The Lego project, that does refer to the toy that you know, which is our portfolio streamlining project; the JIP, that has to do with lean manufacturing, macro flows and consolidation of platform that gives support to the construction process; as well as the reorganization and governance of our processes to streamline assets in a project that we call Transformer, which would be a Transmode and people. In purchasing, we work with around 15,000 FTEs of associates. So these are people converted into full-time equivalents, or FTEs, that we have in our construction sites that were open and in operation in Brazil. And we do that thinking about our stakeholders, but mainly in our customers. So continuing with the same logic and train of thought, we're also doing this based on these four strategic pillars that MRV works with. Obviously, people is one of them. That's the one we like to mention first. In terms of people, the MRV production team is highly engaged. Today, we have 10 officers and 22 managers working in engineering and production in MRV, working in support areas and at construction sites. In support areas, we're talking products and projects, supplies, quality and as safe -- health, safety and environment as well as the corporate areas of engineering, in which we work in operational planning, budgeting, cost management, integrated production journey, labor and off-site operations. There's a lot to talk about, I'm not going to detail about all that, but that's just for you to have an idea of the size of MRV. The average age of our officers is 48 and, managers, 39. And the tenure in the production team is above 10 years for any average that we look at, either in officers or managers. So as well as in the real estate development department, in production, we have the most experienced team in engineering and production in Brazil. That is a lot of time and accumulated experience at the company, and we are advancing in the industrialization of construction in Brazil. In the operational excellence pillar, there's a lot going on. As Rafael Albuquerque has mentioned, we've made a process of reducing the number of towns and cities we operate in. Our portfolio used to have 270 SKUs. We refer to SKUs as the typologies of our little towers, towers and blocks. We've simplified it. And today, we operate in these 80 cities with 65 SKUs. The fewer SKUs we have, more flexible we are and the greater the streamlining possibilities. We work with the best platforms. All our product and projects today works with BIM in Reckitt, which is a world-class platform. We can have our design using BIM architecture. BIM is a model in which we can have multiple layers to ensure that every aspect, since we purchased the land until the construction executives are born within this platform. And we also use SAP. We are now converting the models from SAC to go into the software in the SAP 4/HANA. And in terms of schedule, we work with PPN with projects, which is a world-class software for scheduling. There are many other software and systems we use, but there are more than 225 engineers and architects only in the areas of products and projects. We do most of our work in-house. We believe in this strategy because these specializations, this care for customers when we -- to ensure that we are making the developments in the best way possible is very important. And obviously, at the end of all that, as Rafael showed the beautiful map of the cities, we have a supply plan. And for us in production, that's the beginning of a master production schedule. We also -- we use the MPS to build a sequence of teams to manage all the resources and inputs that are needed to begin the construction and orchestrate the support for the execution of construction. All of that is done following a very robust strategy that starts in the product when the product is created with NPS and goes through an entire journey. I'm not going to go through every topic of this journey, don't worry. But it's important for you to know that there is a full process that is consistent that reaches the asset management stage. So this is divided in three major projects. The first is the LEGO one, plus TransFORMA which is mode projects. And we create a menu of parts, remembering LEGO parts. And these are pieces or parts that have to do with facade, common areas, typology, finishing requirements and other items. And we make these parts. And based on the land bank we have, on the land we have -- on the land bank and the typology and what we want to reach when we want to produce a real estate product that's more adequate for that region, we put all the pieces together to implement a project. And that transforms land into a real estate project. We believe in this strategy that we call LEGO or standardization because we want to simplify, at the same time, ensure the local teams that know the business locally to have flexibility to make the real estate development, keep efficiency. And we have this dilemma of offering flexibility and having efficiency. But it's possible to have both. And we are obsessed with standardization, including direct materials. And that involves simplifying the entire process and capturing benefits from suppliers because we offer them the possibility of producing inputs and materials that are standardized with fewer line setups so they can reduce their costs and give us benefits by reduced prices. So just an example of these parts and typologies, there could be blocks in H shape, which is very well known in our market. Towers, these were samples of guard or security areas, swimming pools, party areas. And we build all these elements together when making a real estate development. And what's interesting about this is that now you can have an idea about the possibilities of integrating all these views in the platforms. So based on this parts, we can design projects. So this is a gated community with several H-shaped blocks and the leisure areas. And then when we have the detailed design, we can join the structural design projects, the hydraulic, electrical and aluminum modes. All of them are built together so we can have the right set so the construction teams can execute them. And we have to ensure that everything is consistent. That standardizes every step. So when the people in real estate development purchases a piece of land, they are supported by the project team. By using this concept, we don't buy land without having an implementation in the BIM software to ensure that we won't have any unpleasant surprise of seeing that things do not fit in the land that we purchased. So standardization enables cost reduction and the reduction in the cycle time. So if I can use several blocks, I can repeat the structural design of this block. I do not have to do it all over again the next project. So it reduces the delivery time and the execution time of the project. At the same time, we are working on productivity. We have been working to increase the speed of our gross production, how much I produce in terms of the total number of units of that development. And we want to deliver a project in 20 months with the gain of efficiency. So we've been working to reduce the productivity rate, which measures the number of FTEs in terms of number of units produced. We want to go -- to be beyond 4 in that rate. And it's paved the way to do that. It is possible, but there is a huge engineering work to allow all that to happen in terms of planning macro flows standardization. So we would be able, for example, instead of working with 250 construction sites to produce 40,000 units per year, if we do those two things at the same time, we could work with fewer construction sites, around 200, with less pressure on labor. So we're no longer working with the scarcity model, but we're now working with qualification and making sure that we retain the best labor at the construction sites because we also need to ensure productivity for all of them. Very well then. So we start with the most important part, which is the integrated production journey. So very briefly, we have a guarantee of processes and resources through planning so that we can start the construction with all main resources qualified. So project, budgets, scheduling, construction of foundation, landfilling, labor, what we call white helmets, engineers and construction site support team; and what we call yellow helmets, which is production labor based, clearly those that are going to work in construction, per se, and produce during the work so that we can keep the pace of construction complying with our cost budget and with safety in the construction site. And that has to do with mode management, digital products that we are developing in this journey. So we have to extract quantitative data from BIM to have automatic budgeting at SAP, master data to work with the different topologies for supplier items to be able to be competitive and change manufacturers without really jeopardizing our projects. So there is lots to be done here and we are addressing it all. Bill of materials, to be able to execute construction with more than 70% of budget items complying to budget. So lots of things. MRP, which is what we call push supply to have the right product at the right time. So if I had known the budget, I have master data, I have the schedule, we can supply construction more automatically. And all that is going to enable us to better manage and sequence labor and make sure that we don't have hires and layoffs because we know that this is a giant effort to attract, qualify and keep labor at construction sites. So what Rafael Albuquerque showed is a corporate strategy of really working in line. It starts from DI but goes up to launch and even follows with commercial and production so that we can focus on the sequencing of mode and labor teams. And here is just an example of a sequence of teams. So this is something that we're also look into coming years. So you have the sequence of the line up to completion and see the lens are in every point where you see a gap. The mode can keep up for some months. It is inefficient, but we can keep it. Labor, we cannot have gaps. The gaps that we have to work are 15 days at the most, which can be considered vacation on average. So we want to fix that. We have to have gaps of at least 15 days so that we can move people from one construction site to the other immediately. And we have to work in clusters because people don't want to move without restrictions, and we have to deal with that. So the sequencing of teams is undoubtedly one of our greatest challenges and have this all in sync so that we can have maximum efficiency, retain productive teams, qualify and incentivize productivity. And this is very important to us. And we do that always having an eye in quality. So we work with NPS measures. We have been working with NPS since '17, so 8 years now. And we are working in a continuous improvement process because we do believe that our customers are our main assets. These are the ones that really sell our product. The word of mouth here really works. And so we have metrics to show that the number of problems solved by units delivered is going down. This is a sign of quality. You're talking about 3 months or 6 months. And also repeated calls is going down. So we are able to fix the root cause. And the customer journey NPS is evolving in all areas post sales, just to make sure that we are indeed making sure that our customer is an advocate of our products. Again, it is perhaps the most important purchase in the life of our customers and this is a product that they experience for many hours a day. So the level of experience, the intensity of use of our product is fantastic, so sources of loads of information. And also, we have to talk a lot to understand what the issues are and retrofit our projects in the creation of products, projects, rationale of construction, standard of quality, checking the quality of construction and make sure that we are learning with the process and we continue the learning cycle to continue deliver better products. This is also an obsession of ours. As for capital allocation, we have basically two major lines in production that we are managing. What is our asset of modes. We believe that with standardization, reducing of costs of adaptations by standardization, offshore strategies for the purchase of aluminum, global sourcing which is something that we have been exploring a lot, increase in the life cycle of the product, streamlining every -- this will enable us also to work with materials inventory. MRP, pushed supply optimization of CFO, management of metric data, compositions, everything that is part of the service, BIM interactions, bill of materials, all that enables us to use our materials inventory. Some processes upside help us a lot. Our ambition is already agreed with [ Caca ] is to have a reduction in the cycles of next year of approximately BRL 300 million of capital allocated in those two major lines of production, molds and constructed materials. And to close, in terms of profitability, which is also an important pillar, that we directly work with it in terms of cost of construction, technical assistance and other things that are part of our cost. And we are very much focused on that. And we have been able in recent years to make our price variation index in Brazil, IVP, and think of costs here. In '24, for the first time, it was below the accrued INCC as of 2019. So in '24, for the first time, we're able to reduce this level. We were worse than the INCC and now we are slightly below. And the expectation is to have this rate always below INCC from now on. We have a supply team that is highly qualified. Everything that I mentioned until now also qualifies the supply team to capture even better gains. And here, we have real data. This is not the promise. This is not a projection. It is a fact. We are having our variation of unit cost vis-a-vis the previous year go down dramatically. In '24, it was way below inflation. '23 compared to '22, still below inflation but almost even. And our expectation is with the stabilization of the IVP, we can neutralize INCC. Of course the inflation risk, and we know that in our country, it is something always present, makes us be always mindful of that. And we have to have a professional purchase area, our teams of supply to work for this not to be a problem. In normal, so to speak, conditions of market behavior, we believe we can do that. And this is going to be good news for the long term. Standardization is there to remove costs from suppliers, and with that, we can capture part of the savings for us. Streamlining MRP that I mentioned, push supply, also enables suppliers to have even further gains in IVP. And unit costs continue with a decreasing variation for 2 years now in line or below INCC. Of course, the cost of construction that we call is the main component of our total cost. So we have a very important mission in production engineering to ensure growing margins to MRV. We are hand in hands with DI and the commercial team in this ambition. And with that, I close my presentation, and I turn now to Thiago that is going to talk about the commercial area. Thank you very much.

Good morning, everyone. It is a pleasure to be here with you to share a bit what we have been doing together with Rafael and Ronaldo, we 3 leads the operational areas of the company and are responsible to make sure that MRV has a bright future ahead. We are building in the presence and we say that all the time, Rafael and Ronaldo showed a bit of that. But the short term has a lot to do with commercial. And we are going to bring you a bit more color on what we have been doing, what we are having be able to deliver and preparing the land for a brighter future. As Rafael mentioned, I've been with the company for 5 years. I joined the company together with Ronaldo after a long history in the market. But what's most important is that, as Rafael said, we are green bloods adhering to the culture, passionate about what we do, passionate for about the purpose of the company of having the dream of many families come true. [indiscernible] Once again, about the equation, we have been bringing the equation in our presentation. With regards to commercial, we're always looking to our profitability. We have a constant obsession of capturing all opportunities in terms of price, and we are going to talk about that and also having very close lens on commercial terms. We want to have better sales. So healthy sales that enables us to decrease delinquency, have better credit granting. But before we start, I think the mission is the most important thing. What is the mission and ambition of the commercial team? Well, it's nothing but sell more. This is the willingness. We are looking into the future to capture more and more sales opportunities. But it's not any sale. It's healthy sale connected to better, higher prices. We are always selling with our best opportunity. As I said, there is no expensive. We have to have value in what we sell. And we have been doing that with expertise inside our team. So with the least pro-soluto but also being very efficient in investments. So we have huge responsibility in investments that we have in commercial expenses and the company's G&A and what we wanted to have higher dilution in our investments. And Rafael showed a bit of the cycle of '21, '22, That was very hard. We know of the mistakes that we've made in the past. We learned and this is the most important thing. We reinforced our processes. And our cycle for '23, '24 was very important in the number of units sold. So why are we so confident? Because here, we already show what we are doing '25. And our strategy for '25 is based on two pillars. The first is a strong plan in terms of launches. Rafael talked about our improved process in terms of planning of launches and what we did in real estate development, enabled us to have a huge ambition. It's not any launch. It's quality launch, at the right place with the right product that ensures that commercial teams can work. As Ronaldo mentioned about the continuity with production teams, the continuity with brokers and sales production is very important so that everyone is engaged and active at our stores. And when we take a look at the BRL 11 billion, what is so nice is that it is broken down correctly among quarters, that is, we can bring products before the fourth quarter so that we can generate the right receivables. So we have a process of sales pass-through and recording of sales so that we have the amount coming from those units. And again, focus on our core. Rafael in the beginning said, today, we are obsessed for our core. What is our core? Brackets 1, 2 and 3. So we have no questions that our launches are very compliant to what we call our core, okay? And this is part of our strategy. The other part of our strategy -- I'm sorry. Also, we have to have our success histories. And why do we believe that? Because this is reality. We brought you three examples, three launches in different regions with different products, one in Maringá in the north of the state of Parana; one in Sao Paulo; and one in Bahia, Salvador, products completely different with different income brackets, 3, 2 and 1 in Bahia. And we are able to have a fantastic speed of sales. We boost our launches. And what is important here, for us to be coherent. We will [indiscernible] have the ambition, of course, we want to sell as much as possible from sales won. But we also want to capture price. We want to have time to use some of inventory to leverage profitability along the history of products. So launching is very important in our strategy but they also is followed by a second pillar, which is our inventory. That is when we have engineering, working with us, they are developing projects, they are developing construction. And we have approximately 55% of our sales of the year of our commercial strategy coming from this inventory, which is very important consumption. So we have been working very hard even to reduce invested capital to reduce our inventory of products under construction. And what's nice about this inventory, again going back to our strategy, is that it is very much concentrated on the company's core business, that is brackets 1, 2, 3. So it has a lot to do with cash generation and how much we want to benefit from the Minha Casa Minha Vida product. And we are going to talk about that further. So starting in-house, launches and inventory are the two relevant pillars for the deliveries in '25. But there is also an outside part and bringing greater color here. When you look at bracket 4, what is the improvement of bracket 4? And how does it behave within today's MRV? Today, we have 3,700 units, [ 1,6 ] units already in our inventory. Again, property up to 500,000. Average income, up to 12,000. And we're dependent on a specific funding or our on sending. And now it perfectly fits the new rules. So we have no questions that the new bracket 4 will bring us an even better inventory. And we have the land bank that, as we mentioned, we reduced our appetite for the land bank. But if we believe there is an opportunity, our capacity to legal comply is very important, and this inventory can come to the commercial department. And I brought this first because this is not our core business. It is important. We are going to work with it. But the main point is this change, and Rafael mentioned that in the beginning. And I'm going to give you a bit more color about income brackets. Bracket 2 by bracket 3 perhaps is a great change to us because it enables most of the population that is bracket 2 that wanted a better product but they were not able because interest rates in this context came from SBPE. And this now enables most bracket 2 customers make their dreams come true. So I'm not going to go over the impact at the top, but let's look down here. Look how nice our inventory that fits into bracket 1 is multiplied by 5. Overnight from last night's change, we now have options to use within the company -- even either to reduce pro-soluto, increase sales, oversupply or prices. So we're looking at by 5x. And when we look at bracket 2, that increases by 65%. That will transform our business. So this will highly help us in terms of sales over supply and reduction of portfolio based on these opportunities. Highly customized project by project and understanding the customers' profile in each project and will enable, using the technology available in the company, will capture the benefits of that very quickly. On bracket 3, no, because that doesn't include the number of units we can bring from bracket 4 to bracket 3. There's maybe some opportunity to capture units that are priced within bracket 4, but we didn't include it here to prevent any overlaps. Now talking about inventory launches, internal pillars of the company that we are ready to use. And this tailwind, it's very helpful for us. We're ready to capture on the benefits of it. All of that confirms that we are the company that's best positioned in terms of inventory of products and launches for brackets 2 and 3. And bracket 1, we're not constantly using it, but now it provides a great opportunity for us as well. So this is the main message that we can give about the strategy for 2025. How can we capture the benefits of all that? With our pillars that are aligned in all operational areas, and here, people always is a major component. Because sales team is usually -- sales area has a greater turnover in every company. But it's a bit different in MRV because with our model in 7 offices, 41 managers, we reduced the turnover of the sales team. So this is a highly experienced team that's able to lead all the salespeople we have spread around the country. And the average tenure and age is similar to the other areas of the company. But the sales team is formed by people. That's where we have invested -- we need to invest in 2025 because we need the strength of our sales team to be running at the level we've always used. The number of '21 is 360. We've dropped a bit because of our change in the model. In '21 and 2022, we had more than 4,000 brokers. But given the changes of the housing program -- but the good news is that it's coming back. So again, it's a benchmark in the industry. And we have invested a lot in our team. But were we waiting for things to happen during all this time? No, we developed new alternatives. And the main one was to work with real estate partners. We have served this way, but MRV is a benchmark in terms of the service and attention we give to all these teams. And we have alternatives to extract the maximum power from the market using both sales teams, independent brokers, in-house brokers and commercial partners. And we now have even more democratic access to brokers. Anyone that -- any broker that wants to sell MRV is -- can do it. And this market will grow even further. Since we're talking about productivity, we need people who are good, engaged, motivated and at the right place. And the good news is that we already have a strong benchmark. More than 50% of the company is running at benchmark levels. Because we are a very large company and spread out and regionally speaking, we want to bring all the people to the benchmark level, increasing -- raising the bar. And that's what we do with our sales team, too. We're looking in-house. So we know we have good examples, good processes, good teams in-house that show us that's possible to attain that. And that's what we seek every day with the sales team, to reach the benchmark levels we have built. And all of that is leveraged based on the obsession to train. Because I'm absolutely sure that if you go to any sales force, for real estate companies or construction companies, the brokers who may be there have been through MRV because they learn in our sales school. We dedicate time, investment and effort to train these people. And we developed many partners as well. So that's why we've grown the real estate market, because we developed it and being close to partners. And we are the first option in terms of construction company when a real estate partner has a customer. So we became the benchmark for partners. Having said all that, okay. Great. There is a ramp-up of brokers. There is a very strong internal benchmark. That's a good reference for us to raise the bar on quality. But how can we even go even further. Now we only speak of sales machine at MRV. So we've joined the external -- the in-house channel with the external to make sure that every broker is well served and engaged. So our sales team is constantly thinking about how to better engage these brokers, bringing them closer to our team. By using different methods and pillars -- the IPC, which is the productivity index of brokers is very important, too. But the copilot that helps brokers to sell more, to assess their sales process, so they can use this copilot within WhatsApp and assess the sales process. And we are providing better technologies to make sure that brokers are supported for a better sales journey. So we are sure that people are the most important pillar, especially in -- when it comes to sales team. But there's a second pillar. How can we leverage our results through operational excellence in-house? In the sales area, that goes through conversion. When we look at conversion, the company is very complex, as we've seen in the sales area and production and real estate development. Imagine that we have huge number of data. We created a project with -- it's called MarTech, which is marketing and technology. It's a special area to accelerate conversion and increase the return of our investment. We went from 25 million data to 9 million single customers database. So we can extract a lot of value. We've opened more than 40 customized journey. I have a customer that is in the journey of first apartment. I sent a customized message to that customer. There is another customer who wants to buy a bigger apartment with an extra bedroom. So I can find this customer and send a customized message. There is a regional subsidy program in the Pernambuco state. I creates a special journey for those customers. So I can customize that impacts the 9 million customers we have. And going further, we were always connecting, sending messages to these customers. We reached more than 112 million messages sent by year customized messages to Rafael, to Ronaldo, to [ Caca ], so that we can bring these customers to our journey. And that caused us to double the conversion percentage. So the new lead that arrives as a conversion rate of 0.6%, the lead inside the company has a conversion rate of 1.2%. That's very nice because it increases the efficiency of our sales funnel. But that's not just that. Well, we have a customer service program, let's improve it. Then we used artificial intelligence, again, using technology to improve the service data, our obsession for service. And we haven't reached our goal yet. Our NPS improved. In the service NPS, we assess every customer served. And I serve about 120,000 customers per month. And I ask for their opinion constantly. Based on that, I give feedback to the model. And I see brokers that have -- provide better service, and I send more leads, more customers to that broker. So that caused us technology to add sophistication to our model, improving the quality of our services. But we also -- we went beyond and indexed the services using the WhatsApp of our brokers, using artificial intelligence and created models for better service that give feedback to our sales school. So our sales school base on examples of good service and bad service from brokers. So we're extracting the maximum value from technology to increase the conversion speed. What about -- what is the return of that? Oh, that's very clear. We have constantly reduced the cost of acquisition of leads, which is the CPL, and we increased the number of leads even with less investment. This has been a constant since 2023 and continues as such in 2025. We remain very efficient in allocating capital to capture new leads. We've been using a lot more of our in-house database with this journey and customization, bringing much higher-quality sales leads when we have to reach a wider customer base. We have a very promising future ahead of us. But is that all? No. Another important point is capital allocation and profitability. When we look about the curve and our commitment in terms of capital allocation, that is seen in the sales area through our pro-soluto, which is our commitment of constant deleveraging, which has reached 18% over the total sales. So this is a portfolio that we measure at the time of sale. So the fewer the credit that I gave in the beginning, the less is gross. And we are increasing or improving the rates year after year. But it's not easy because it's focused on some processes that we have reviewed and technology. Let me give you two examples. First, one of the main leverages to reduce pro-soluto is to improve assessment. The way we assess our properties with Caixa at the launch stage is very important. So we've created a project with a lot of technology and artificial intelligence to discuss current models with Caixa Economica. And we've captured a major evolution in terms of assessment of our projects. And we are reviewing credit grants. And what is the right credit that I have to give to each customer? What is the right unit for each customer? So today, every broker has a system in hand that's able to know based on the customer profile what is the best unit in town or in each development that is available for that customer. I can reduce the pro-soluto with increasing customer -- increasing the speed of sales or the sales of supply. So that's transformational for the business. As a consequence, we've reduced the average term to receive average payment term. It has to do not only with the number of installments, but the size of the portfolio, the terms -- the payment terms and how you allocate that. So talking about deleveraging, we are very confident that everything we have in place and are implementing will help in the deleveraging and reduction of capital in terms of our portfolio. When we look at profitability, this is about price increase. We've been able to increase prices constantly above inflation, inflation indexed based on 2020. That has -- there is a mix effect that we manage very carefully. So when there is a product with a lower average price, how does it -- has added price because the average cost is lower? So as Ronaldo mentioned, we want our costs to be below inflation, but price is always above inflation. And there is a series of projects that are implemented internally. Maybe one of the most robust technological processes we have is for pricing. We manage more than 41,000 prices every month. We have no problem in adjusting prices. For, example, yesterday, we did a great budget. But this table increased by BRL 20,000, and we plan BRL 15,000 price increase for tomorrow if it continues at the same rate. So we have this retail dynamics to adjust prices constantly to capture every opportunity. And the software allows us to do that quickly. I've talked about people, operational excellence, capital allocation, and now I end on talking about profitability and our commitments. But the last topic is how we have treated the future, because future is not only a financial aspect, it involves taking care of our customers, as Ronaldo mentioned, and our brand, for our brand to have a very positive exposure. We are the largest in Brazil and we have the [indiscernible] prices up and bring more customers in our obsession of buying the first property or going into the affordable bracket. So we are already a reference in what is affordable, that in Brazil, we're called popular. But we also want to be top. Because we have the identity, we have the emotional connection because we know that buying property is an emotional journey. If you focus on a financial journey, it's a lot more painful to customers and desire and engagement. And how have we done that? We all know and we all heard of the importance of Google performance investments, but we do that a lot. But whenever you go to the performance journey, you have these waves that you find within the journey. How have we changed our mindset? We want to contribute to invest in brand construction. And in the last 3 years, we had a change in perception. First, we said that it was possible to have your first apartment. Then there was an important turnkey to be made. Customers change behaviors, properties are changing behavior and the product is the center of everything. We are talking about brackets 1, 2, 3, 4, talking about the quality of delivery. Because no one has questions that MRV has the best quality in the market, and we brought this to our campaigns. And finally, to really break through, we've transformed the room of the leader at Big Brother, if you don't hold the investment. We took the risk to do something different to bring even more people together. Is this good? It is sensational. Based on the investments, we had 70% of Google searches for construction brands for MRV in the first quarter. We increased our -- in terms of leads by 60%. Customers that perhaps are not still at the time of buy, but the base of 9 million went to 10 million. That is new customers really wanting a breakthrough. And we are working with special attention on these. This is a brand that is recalled throughout Brazil. In Big Brother, we were the second most recalled brand. And MIA, our artificial intelligence doubled its capacity, so lots more people talking and making simulations. And we had a huge amount of audience even according to a global survey. And when people think of buying a property, the most considered brand is MRV. So this is very nice. So to close, and Rafael mentioned that, we are the top-of-mind brand in the market. We want to have a relevant brand to stay. This is our mission, our commitment with all financial deliveries, with all operational deliveries that we brought to you, but most, with the greatest pride that we have, more than 2,000 employees of MRV that work with these brands that is top of mind but is also top of heart. Thank you very much. This is the commitment of the commercial team together with DI engineering, closing the operational areas of having a fantastic delivery for this new cycle that Rafael announced. Thank you very much.

Good morning, once again. I think you all know me so I'll skip the slide. I've been here for a long time, 17 years with MRV, 9 of them directly in contact with you. So what I brought to you for our discussion, you talked about the discipline in capital allocation, our focus on people, profitability, how we are doing that, market expertise, technology we brought a lot more density in the way of our operations. But now I want to bring to you the reflexes of this operational improvement in financial indicators. And then I'm going to talk about Resia. So guidance of 2024, we reached all guidance. So ROL, BRL 8.5 billion; gross margin, 26%. Cash generation is slightly above. Leverage measured by net debt by net profit, BRL 35.7 million. And net income, BRL 274 million. Okay. So that's a check. This is what we did last year. Now when we look into the guidance of '25, what we have. First, ROL BRL 9.5 billion to BRL 10.5 billion, so 17% higher than what we had last year. We are very comfortable with this number because we sold more than BRL 10 billion last year. We are going to evolve the number of units. So if we have the production of 40,000 units and the sales of BRL 10 billion, we can get to the midpoint of the guidance from BRL 9.5 billion to BRL 10.5 billion. Gross margin continues to recover a long time, last year, 33% to 24%. It recovered by 3.7 percentage points. And our challenge is 3.1 now. So as you get rid of previous batches and we produce new batches, we are going to see a recovery of gross margin at the same pace as we observed last year. Cash generation, I'll skip now but I'll come back to that. You're very good in your math. If you do BRL 10 billion plus 29.5, we would have an increase in net income that's above that. BRL 274 million last year. With an increase of BRL 550 million this year, just with an increase of ROL and gross margin. But we also had an increase in the SELIC rate. So we had financial expenses that's higher than what we had in 2024. So that makes our final net income indicator be between BRL 650 million to BRL 750 million. The midpoint is 2x higher than the results last year. Of course, we are in a ramp-up operations is ahead of us and financial indicators have been involving for us to catch up operational indicators. Cash generation, we have two blocks, BRL 500 million to BRL 700 million. The market is always asking us. This is our estimate that the indicator is going to be met 1/3 of the midpoint, BRL 600 million midpoint. BRL 200 million comes from the granting portfolio, so a contribution that is much lower than last year. And two things. First, credit, that Thiago showed, our pro-soluto going down. And with that, we have less granting of credit for the future. And another point that is important to mention is that everything we do in terms of flex sales, that is direct financing, you have 10, 12 years. And then we are going to grant this portfolio. So we are going to have less flex credit and, therefore, we have less of a granting portfolio here. So BRL 600 million, 1/3 would come from new credit granting and portfolio granting met, already considering all amortization that we have from various operations. Resia, $207 million (sic) [ $270 million ] in cash generation. I'm going to go through the rationale, Closing at 2.1 billion of deleveraging for MRV&Co this year. You also saw this, and it is good for us to settle accounts, just for you to know what the process is like. This is our mid-term plan, the 40 million, 35%, 15%, 15%. 40,000 units a year, we are already there. Production has already past that. So we believe the indicator of volume has been met. Gross margin, 35%. Our gross margin of new sales closed last year at 34%, along this year we'll certainly capture the 1 percentage points that is missing for us to get to 35%. Are we going to stop there? No. But the commitment we had with the market was 40,000 units, 35% of gross margin in new sales. That will give us a net margin of 15% and cash generation of 15%. As we mentioned, we have several avenues to reduce the amount of capital allocated in the business. We are already today at the level of SG&A with percentage of the ROL that goes from 35% gross margin to 15% net margin. But we have an opportunity to improve with a better dilution. What is still a bit behind and it will take us 1.5 years, 2 years is financial expenses. Financial expenses will continue high. And what is consuming most of gross margin to net margin is this. This is an indicator that as we generate cash, this financial expense reduces. So I'm confident that soon we are going to have the BRL 10 billion ROL, BRL 1.5 billion gross margin, BRL 1.5 billion cash generation. When we do that, plus the BRL 1.5 billion in land bank, less credit and the BRL 300 million in construction inventory, as Ronaldo mentioned, what do we see? The guidance of '25 already shows returns above 10%. This is still not the market -- the number that the market is used to MRV showing, but shows an evolution. Both ROL and return on investment capital are good. And the planned 40 million, 35%, 15% already show ROL and return on invested capital above 20%. Another important point for MRV, it's net debt. Considering the Brazilian operation alone, we closed '24 with BRL 2.3 billion in net debt. Corporate debt, BRL 835 million, BRL 1,245 million EBITDA. Again, net debt-to-EBITDA metric at 1.84x. And corporate net debt over EBITDA, 0.67x. In '25, if we reach the guidance, and we will, we have an improvement in all indicators. Net debt, down by 26%, BRL 1,695 billion; corporate debt, 48.5% to 430; EBITDA goes up with increase of gross margin and ROL by 71% at BRL 2.1 billion. Indicator drops by half. Net debt over EBITDA from 1.84 to 0.79; and corporate net debt over EBITDA from 0.67 to 0.20 There are lots of people from the credit area. We talk to people. And you have seen that we are able to stick to the plan, and we have the deleveraging a long time. Now I'm going to talk a bit about Resia, trying again to follow the same rationale that we used in the MRV presentation. So what we see is that our market, the context, of course, we are much more distance from the market abroad. We don't experience the day-to-day. We have less information. But the idea is to bring a bit of context for you, how we see the market abroad. So first, from outside-in, very high demand for new housing, very low supply of property, multifamily mature consolidated market. So demand for new housing very, very high, above 1 million per year in the last 10 years. Another thing about demand, we have an indicator that we felt, that is the rationale of purchase vis-a-vis rental. And it's never been as favorable to rental because interest rates are very high. So this is the most favorable point for rental for lease in the North American market in the last 20 years. In the last 3 years, the volume of new construction dropped dramatically. In the first half of '26, we are going to have a huge imbalance between supply and demand. Demand continues high and supply is going to go down. So again, this opens room for the market in which we operate. Now thinking not only about demand but the North American market as a whole, what happens? The volume of multifamily business in '23, '24 was the lowest in the last 10 years and still more than $100 billion per year. So we talked to many of you and say the market is huge. There is room to sell whatever you want, whenever you want. The discussion is the right time to capture the most value. And obviously, remember that we are at an accelerating pace in the sale of assets here, but the market is there. A drop in interest rates, of course, that brings potential to increase business levels. So the gross level, so $100 billion in '23, '24. But in '21, '23, you're talking $350 billion in negotiations in business value. So the worst years are very good and the excellent years, even greater. So it's almost a limitless market. And the final impact that is more direct, a potential drop in interest rates that opens room for the reduction in cap rates in the sale of properties. Now looking inside-out. what we see is the following. Product, audience and markets are right. We really got it right. We are launching the new Resia that is asset-light, a lot leaner than the previous vision of the company with a focus that is huge on deleveraging. Now what has not changed, what we did right? First, the project is right. The product is right. We have standardized products, construction technology that was imported from Brazil and adapted fantastically in the American market. In the North American market, we can serve the entire market with the same typology, all the markets in which we operate, the same modes. And that helps a lot in reusing assets, so standardization at maximum level, and industrialization. So this is a given. It won't change. Construction continues modular with a very appealing product that has been very successful. Another thing that has not changed since the regions in which we operate. We are in Texas, in Dallas and Houston, Georgia and South Florida. A huge population, 55 million people with $5 trillion GDP. So we are in the right market with people to lease, people to buy. There was a movement of people moving there in a market with high demand and huge GDP. Another important point is the right audience. We not always have granularity on information in the American market. But I'm talking about multifamily. The demand for the workforce products is huge. So the working class from $60,000 to $100,000 a year income is very poorly served. So whenever you see an article about this in the markets in which operate with the audience that we have, there is huge demand. So it is not a niche market at all. But there were things we had to do. We had to change the strategy, that we had to have a shift. So what we are proposing is deleveraging of $800 million in 2 years' time by selling land. Our land bank was too big. We are going to sell more than half of it. Projects already stable in the lease flow, we are also selling them. So $800 million in properties, land and property. Less equity in projects. With that, we can have common equity, more investors in the project and limited partners. Then we are going to allocate less on capital in Resia. In a while, I'm going to show how does impact our return indicators. Reduction of the operation, we are limiting Resia to 2 projects a year. So we are going to have much more control on what we are doing. And we are going to be more selective because we have a larger land bank that we need, and we are going to get rid what does not interest us. What we are going to have left is what we are going to do. And we are going to be very judicious in which products to go. Simplification. So we are leaving Austin, and we are keeping Texas, Dallas and Florida. Reduction in structure, $30 million a year to $10 million a year in '25. So this is also a given. I can show you how the legacy projects used to be. Legacy projects are all those who started to be funded until yesterday. The new projects will be structured like this. So 30% of equity from Resia, 20% from equity and the rest financed by local banks. So this is a model in which Resia places money upfront. So equity Resia -- Resia equity comes before the partner returns is predetermined between 14% and 15% with no upside for investors. The new model is equity pari-passu. So 10% of equity from Resia only. So it's 1/3 less exposure for the same size of project when compared to the previous model. We increased from 20% to 30% the capital coming from investors. So common equity structure and the return for investors becomes variable. And we see a 60% funding for construction, which is back to historical values. So in this new model for funding, there are more sources of income because we charge fees for construction, for project development, and they share the profit with us as the project performs well and exceeds the profitability metrics set in the contract. So Resia is paid more than the -- only the fees that were provided for in the contract. So we go from 33% TRR, internal rate of return from 36% to 55.3% with the same construction terms, same location or same leasing term. So just by changing the capital structure of the project, we increase the IRR. And that's the model we'll use from now on. So as I told you, we build products that are very appealing. And the proof of that is we're successfully leasing the projects that are placed for lease. We have 5 projects, Dallas West, Tributary, Rayzor Ranch, Ten Oaks and Memorial. All of them have been built on our stabilization phase. In the end of last year, we changed the Resia commercial team, the process and the type of management, and we've been able to accelerate the leasing pace. March was better than February, which was better than March -- January. So the ramp-up for leasing is increased. All of them have developed positively in the recent periods. So Dallas West, we are at 96%, Rayzor Ranch 80%, Ten Oaks that are established to be sold this year are in the right pace and pave the way for the assets in this year. So these 4 at the current stage and following the pace for leasing that we expect, Dallas will be good. Dallas West will happen in June. There's a due diligence by a purchaser. And the other projects, we see a higher demand, a growing demand, more investors that are willing to discuss and bid on the projects that are for sale. In addition, there are $78 million in land bank to be sold this year. Several of them are under contract, due diligence. In the second quarter, they will start some sales of land that will increase in the third and fourth quarters. Now going back to guidance of Resia for $270 million in cash generation that is composed of [ 279 ] of sales of land, $13 million in revenue from rentals, a G&A of $10 million of production that are new investments in production in these 2 construction projects of $83 million per year with a financial result of $37 million with a cash generation of $272 million expected for this year. Today, we have a net, a corporate debt, of $319 million at Resia, $363 million at the project loans. These loans are only paid when the project is sold. We have 1 year to pay that. If we don't sell the project within a year, that is extendable for another year. So no pressure to sell the project to pay the project loan. The total debt of $682 million, $43 million in cash debt, $639 million in the net debt in the U.S. operation, data from 2024. When we allocate cash from $270 million, we end the year with a net debt of $369 in the U.S. operation for this year, which is half that we've seen in the end of 2024. But our plan is for more than a year. We also disclosed the sale of $800 million in assets with the purpose of generating $480 million in cash in '25 and '26. This is an ongoing plan, $270 million this year and $210 million next year. So sales of assets paving the way, reduction of G&A of Resia will lead us to reach the figures I've shown you here. As we're going to sell them, make the sales quickly, we do expect a loss in the last line. So the net profit from the sale of these projects is negative. We'll lose money when losing -- when selling projects and land. On the other hand, and a much lower level, then we will be able to deleverage the company. Before going to the Q&A session, I would like to go over the main messages I would like you to take home with you. We are in an industry that has a huge housing deficit. Our purpose is to help Brazilians to make their dream come true of having their home, owning a home. The affordable housing program, MCMV was good, but it's even better with this last review, and we expect this program to become even better to increase the sales over supply and reducing pro soluto. Regional programs are very good. The 3 of that had some problems have been solved. So it's a very positive trend that our more programs to become operational Bahia and Rio de Janeiro states are very important for us. The strength of MRV brand, Thiago explained so well. We are the top-of-mind brand. It's also important to remember that. And we have an absolute focus on deleveraging, not only in Brazil as well as in the United States. So our main focus is to attain 0 leverage. Our commitment is to increase returns. So the guidance for Brazil's operation, MRV real estate development is 10% of return in 2025 and the plan of 40%, 35%, 15%, we have a return above 20%. The new Resia is asset-light, is much less capital intensive. I didn't include in the slide of projects, but it's important to mention since in this model, we have less equity, we -- those who look at the balance sheet of MRV&CO, that's reduced when we started making the projects in this new model. The number 7, the best MRV in history, the best industry company in the industry and the less -- our goal is to reduce housing deficit in Brazil. Okay, let's go on to the Q&A, and feel free to start.

Hello, can you hear me? Just a quick disclaimer. Rafael Pires is not here because he had to go to Curitiba. The company doesn't stop and he had a meeting scheduled at the city hall. That's very important. So out of the 5 people in the presentation, only him will not be present for the Q&A. Okay. Your turn to ask now.

Marcelo Motta from JPMorgan. I have 2 questions. Starting with Resia. You mentioned the plan to have only 2 projects and thinking about the size of MRV, 40,000 units, BRL 10 billion in revenue, is the plan to always be small? But if the market improves, will you grow the operation or make it stable then forget about U.S. altogether? Just to understand your strategy? Or given that the market is very dynamic, and we've seen the improvement in My House My Life, if you have all the projects approved for 2026 and a change comes, will there be a cost in obtaining new permits? How do you calculate this trade-off of anticipating everything or doing things in advance and then adapting to possible changes?

I'll start answering Resia, and then Thiago will talk about the adherence of the fit of the portfolio to MCMV. So Resia, as Kaka said, the Resia model has been tested. The Resia thesis is something we absolutely believe in. It's a gigantic market, and it certainly has the capacity to absorb a company that's much bigger than the company proposed in today's presentation. And this is a short-term view for Resia. Resia will reach 2,000, 3,000, 4,000 units per year, depends on a series of factors. What we do not negotiate is that the company must be asset-light. It has to bring very high return rates. We'll only build projects that have high return rates. And another topic that is always asked how this vehicle will fit within MRV&CO. Well, looking at the family that has a very long-term view with a different timing when compared to investors. The family strongly believes in the Resia thesis. So as we have made with LOG in 2018, we may do it with Resia some movement in terms of changing the capital structure as a controller shareholders -- controlling shareholders. Rubens and I, we are very keen on the Resia thesis. It's an important market, but we know that Resia under MRV brings some short-term inconveniences. And at the right time, we'll address that dilemma. So it's always debated either with the sell side or short-term investors, long-term investors, Brazilian investors, foreign investors. So we must maintain the discussion open and it certainly will be addressed in a timely manner. Thiago will talk about the portfolio to possible changes in MCMV housing program.

Well, thank you for the question. As you've seen presentation, the main -- the sequence that the store must not close, the plant does not stop. That is essential for the continuation of the company. Everything we discussed about land is how to ensure that sequence in linear, streamlined processes. And considering our model to obtain permits and legal compliance, there are points in which we -- that we validate the deed of the project. So we are making sure that we are making the right decisions at certain steps. Although we're very confident in the process with the land bank we have and the projects we have assigned for each land, we still have validation points among the partners and the executive team. But we're confident that the program is steady, and we are investing in land that will increase the speed of deleveraging and sales.

This is André from Citi. Well, first question is about the reduction in SKUs that you were 270, now it's 65 and you still want to continue reducing. What's the goal for additional reduction of SKUs? And can you keep all the current menu of products? You have MCMV, Sensia, Luggo, Urba, et cetera. Reducing the SKUs, can EBITDA trade-off, meaning to continue to reduce SKUs, you may have to discontinue one line, and if not, how can you maintain all these products with fewer SKUs? And the second question is about the cash burn or not on Resia. The holding at Resia burned $7.3 million. Is this cash burn pace -- does it match the guidance for G&A at Resia? Or do you have to reduce that? Are there other things in the holding company that are not G&A only?

Thank you for the question, André. I'll address the first one, and then Kaka will answer the second question. We don't have a quantitative goal to pursue in terms of additional reduction in SKUs. But we do know that the fewer the SKUs the stronger the possibility of streamlining. Let me give you an example. If we operated a single company with one single type of SKUs, we could have plants all over the country producing the same product. So the -- it would be much easier to interchange those according to the most convenient sequencing for teams and sales, et cetera. But it's not possible because we have different regulatory frameworks. So we operate in different cities and the rules are different. So we must -- we try to find a balance between exploring the most of local city laws with the efficiencies and the products that customers want to buy. We reached the number of 65 [Technical Difficulty] MRV and Luggo operations. For Urba, that doesn't make so much sense because Urba is more about gated communities and land subdivisions. So that doesn't apply so much to it. So -- but this reduction doesn't mean reducing the number of lines, reducing the menu can allow me to have less -- fewer lines or more lines with less variation amongst them so that I can allocate one plant to a certain construction sites to have more flexibility. I hope I have answered your question.

And regarding the question about Resia, the $7.3 million in the holding company, it includes SG&A and financial expenses, $4 million in financial expenses and $3-point-something million in G&A. There are a series of restructuring processes that have gone under -- we did that.

This is Pedro Lobato from Bradesco. I would like to understand in further detail the development of gross margin in Brazil. At this point in the cycle, how would you break down the legacy projects that have margins lower than new projects? At the current POC, how much each launches represents in the current margin? And how much in the margin for the rest of the year, how much comes from these projects that have an internal cost below INCC and how much that comes from price just for us to have a reference in terms of breakdown of margins?

Pedro, the guidance is given, and it will be attained. Of course, every quarter that goes on, the worst seasons are being removed from the operations. So we are in 2025. So sales from 2021 are no longer in the operation that -- those are sales with the worst margin from the company. Those launched in 2022 and started the construction in that period, there is still something in execution. So as the quarters move on, 2022 will be removed from the operations. There will be a mix of 2023, '24 and '25. Naturally, the more we sell in 2025, Thiago showed that an important portion of sales comes from inventory units. We did very well in launches in 2024 and not so -- and didn't do so well in sales from inventory units. So the growth in sales in terms of volume came more from new launches rather than finished units in inventory. With the house productivity of managers, or brokers, or productivity of our sales funnel, we expect to have stronger sales from finished units. So the average POC will improve and the revenue stream and amounts paid and receipts on the accounting margin will increase. We are very optimistic that the guidance that was given will be met. Unfortunately, we've lost a bit of the goodwill we had with all of you. For many years, MRV surprised you positively or delivered on its promise, and that was not true in the last 3 or 4 years. We surprised you negatively. So the current position of the company is more conservative in terms of communication. But when we look in-house and the external factors, we are absolutely sure that today's message of making the best MRV in history, not only in gross margin indicators, but in any of the KPIs proposed today, but also being the best company in the industry we'll soon be there. I cannot give any further information in addition to what's in the guidance. We just reaffirm the guidance saying that it will be attained, and we are absolutely sure about that.

This is Fanny from Santander. My question is about Resia. I have 2 questions. First, could you give us some more color about the yield on cost you intend to sell the properties that are in the pipeline for this year? Dallas West and Tributary, they are more advanced in terms of leasing. And what level of cap rate do you find feasible considering your perception of the U.S. market? I think there are some uncertainties in the market. And the second question is about when we think about selling land bank, there's some sales being negotiated. What is the book value of average negotiations?

In terms of cap, what we see is a development in the margin, although shy, but the quality of the funds in the market has greatly increased. So there are technical details such as contract types, but the transactions that are being made today will be made in much more advantageous conditions than in 2024. If the cap will go from 5-low to -- [ 5-high ] to [ 5-low ], it depends on external factors, treasury, it varies. There are so many factors in that equation. So nobody has that answer. But what we noticed is that the quality of buyers has improved a lot, which is very important. As for yield on cost, we cannot quantify or qualify because that would be giving guidance that's not been published. But the older projects have a lower yield on cost. So at every sales season, we can see a growing yield on cost. And that is due to the time or the moment in time in which that project started. And the second important aspect is that these would be the second or third projects in each new area we enter. So it has to do a little bit with the peak of inflation as in Brazil, it happened in the U.S. as [Technical Difficulty] efficiency of Resia in the second and third cycle of each project. As for the haircut, we mentioned that today, we're looking a lot more to the balance sheet than to income statement. If the same package of projects remains the same in terms of land bank and projects up until 2027, we would achieve a considerably better result. And the volatility of land price when the management mandate is to sell quickly, of course, you don't make the best deals. But that also applies to projects. Projects done at the cap rate, their NOI improves with time. Prices increase, other items drop. So as we postpone sales, the NOI goes up. But that's a balance. And we are more focused now on the balance sheet and less on the income statement. So the management of Resia legacy will be very positive and with $0.5 billion, and that's very specific, but there will be a cost. But we'll have a poor income statement. And we know that the speed at this time causes transactions to be less profitable.

I just would like to hear your opinion. You showed a very interesting slide in terms of operations, engineering. I'd like to talk about people and alignment structures. Could you tell us what you thought about the new cycle considering the previous cycle, considering leadership and employees and what has changed? Because you're saying that those are probably going to be the best years of the company. What are you doing to have people aligned throughout the cycle?

Gasparete, it's a pleasure to be talking to you. Well, people is a central part of the company. It has always been so. We always tell the story that our partner program started 20 -- I'm sorry, 30 years ago in '96. So at that time, 10 executives became partners with MRV. When we had the IPO 18 years ago, we had 30 partners. So this long-term alignment, this feeling of ownership is a must, and it is really a very important part of MRV's culture. And the fact is that in the cycle that closed, we started a series of initiatives, Urba, Luggo, Sensia, Resia, and that coincided with the change in top management and with COVID. So a lot happening at the same time, bringing complexity to our business. The team that has been with us -- well, the newest have been with us for 5 years now. So the team is very much aligned, very much engaged in the long term. In the level down Thiago, Kaka, we have 50 directors together with CEO, VPs and officers, 50 people, very low turnover. Ronaldo saw the seniority of his team. Thiago, I don't know if he showed this in his slide, he did. Rafael did as well. So a team that has been with us a long time, very much engaged, very much aligned. And I don't know if we committed a strategic error, if you can say that. But the company for many years, got everything right. And then 6 years ago, back in 2019, we imposed an important change for the company of starting several initiatives at the same time. And then we have [Technical Difficulty] the upper management and then we had [Technical Difficulty] and it was not a good cycle. But it was not a good cycle because of the quality of people. I would say that 80% of the team stays with the company and really knowledge about the business and willing to do things. And as a CEO, I'm perfectly convinced that we have a top team that knows the market, knows the teams, the regions, the economy, how to buy and sell, Kaka representing back office, Júnia here that has been with us, I don't know, 20 years together with Kaka. So I'm very, very confident that we have a stellar team, very much aligned to the long term. And sometimes you say '22, '23 were not good years. So why is the same team going to do differently? Because it is the same team that did differently from 4,000 units to 40,000 units, then we generated BRL 3 billion cash. This team remains with the company. And I've been with the company for 20-plus years. I see that it is a mature team with mature processes. So again, I will say it with absolute confidence. This is a superstar team that will have a fantastic cycle that started in '24. And for the next 3, 4 years, we are going to deliver stellar results. I have no questions. They are really going to positively surprise the market.

Can I say something?

Sure.

I think Rafael mentioned the quality and competence of the team, and you talked about alignment. And today, we have the concept of regional partners. We have owners of regions, both commercial production, they are owners and the variable compensation, the main -- the 2 main indicators are gross margin and operational results of the operation they are responsible for. So that ensures that they are aligned and seeking the same objectives within their day-to-day. And we are constantly talking to these people, and they also want to bring improvements in the different areas to extract maximum value. So compensation incentives are also very much aligned to these indicators that have to do with better operations. And stock option is connected to the compensation model. So it's not only a short-term incentive, I'm sorry, these 2 indicators, but also long-term incentives connected to the impact of these indicators on the stock price.

And all these regional partners are partners of MRV. And they are very much buttered at the ridiculous amount that we are being traded to do. When we see projections ahead of us, both in the mid- to long term, we have almost 80 partners and all 80 partners are absolutely sure that the stock is going to be much -- many times higher than the current amount.

Well, first, congratulations on your presentation. I'm Victor from SmallCaps. First, I'd like to thank the IR team. They are always very supportive. My question is a follow-up on Brazil. When we attended the Investor Day last year, you're talking about corporate changes. You didn't go into a lot of detail, but part of the market thought of a spin-off that you did mention today. Could you talk a bit more about that and use the opportunity. Why didn't you move on with this idea of the spin-off? Is there a technical issue, indebtedness? Or is it more a strategic choice? And as a matter, I'll give you my opinion. You talked about the stock price. And I think most of the market believes that the sum of the parts that is if you spin-off Resia, you can unlock value to the operation. And eventually, if you think Resia is not valued at the right price because I think that you as controlling shareholders, you would think so, perhaps you decide not to sell or buy more. So please, if you could comment on the spin-off? And when do you think you can consider the idea again?

Okay. Thanks for the question. Okay. This is not out of our agenda. It's not a simple transaction, and it will have its right time because if the objective were for Resia, let's stop it, put it aside. But that's not the mindset. We think 2 very good businesses. One is at an excellent point. The other is a midpoint, but it will come to an excellent point. So we still have things that we can guarantee in terms of leverage with the plan that we showed, the financials are going to be balanced. And then there is an important tax issue that we have to overcome, and that takes time, the creation of a holding abroad. I'm not going to go into the complexity, but there are steps to be taken, and it makes sense tax-wise. So we are preparing the journey so that when deleveraging happen and we have the best strategic moment, then we can go for that. So Resia today has very high leverage, and we have guarantees from MRV operations. So that would not be an ideal time. And other thing people ask me is that you thought of having an investor for Resia in the past. Well, the investors we talked to recently, they wanted to pay such a higher discount compared to book value that it didn't make sense. So it makes sense, sell the assets, deleverage, return capital, deleverage the capital totally. And then perhaps this is a way out, a spin-off and a strategic investor. But for now, the mindset is not think about that. It's just focused on the deleverage plan as fast as possible.

I'm Jorel Guilloty from Goldman Sachs. I have 2. I don't know if I missed it, but in the beginning, you said 55% of sales from '25 comes from inventory. But I didn't see your guidance number for sales. I don't know if you gave it, I missed it. If you can share that. So could you give a bit of color in terms of this point for the company? And second, is your area of operation. You are in 80 cities now. You announced some changes of prices for Minha Casa Minha Vida that were announced. Does that change in terms of area of operation going to smaller towns other than capitals or different -- anything different than where you are today? That's it.

I'm going to ask (sic) [ answer ] the first question on guidance, and then Thiago will talk about regions. This is not a guidance of launch. In the presentation, we had the estimate, which is BRL 11 billion. Sales should be slightly above that. This is what we have been observing. We are performing in terms of sales above that. It was BRL 10 billion last year, a small growth. So we should expect net sales above what we showed in terms of launches, but this is not part of our official guidance, official guidance on margin, ROL and the ones that you saw, you didn't miss anything.

As for the strategy, I think Rafael Albuquerque mentioned that. The more we concentrate metropolitan regions, the more we benefit from 2 levers. First, the ceilings that we can work in, the caps are better because these are cities with higher densities, so we can have a higher cap, and that gives us a bit more elastic in terms of portfolio and commercialization. So we benefit from the capacity of pricing in this region. So this has been a very relevant decision because we can have supply in sequence. So these are cities that have a higher addressable population. So it's cheaper to capture leads potential customers to our base. And the same applies to our sales force and our production force. You concentrate your teams at a single region, keeping quality and recurrence. So that's why we have been able to prioritize metropolitan areas, looking at this elasticity in terms of cap of programs, especially in bracket 2 and also out of the 130 cities that we migrated to 80. Many of the cities we no longer operate are because were cities with lower potential that were even distracting for the operation. In, I don't know, real estate development, sometimes you had to drive 400 kilometers for one land bank to talk to one city administration. And so we simplified and left the cities that were less relevant to the business as a whole.

And we don't rule out reduce even more. 28 regions can go to 27, 26. We could have a much larger volume with a lower footprint, and we have a potential to grow the operation with a lower footprint that we have given today as our objective.

And finally, when we have the 28 regions, most are metropolitan regions. So what we have today in the England (sic) [ interior ] of states, we have Minas Gerais, basically the cities of Uberlândia, Uberaba, Maringá, and Londrina England (sic) [ interior ] state of Paraná and something in Sao Paulo. In Sao Paulo, perhaps 20 cities, not more than that. A lot in the surrounding area of Campinas that is almost considered the metropolitan regions, but all the others are based on capitals. Smaller cities, other states, we left. It's very important to understand the concept. Metropolitan regions bring this flexibility of operation and this elasticity that we talked about.

This is [indiscernible] from [indiscernible]. First, congratulations on assuming your mistakes, changing strategy and giving the visibility to the market with guidance and results delivered. So my question is related to timing and long-term views. If you take a look at what Brazilian operations are selling and delivering in margins, you take a look at Resia deleverage plan, we see 2 years of results improving until you get to optimal 2 years of negative results in Resia. So does it make sense to consider consolidated results of MRV for '27, very close to your long-term view?

[indiscernible], yes, you're right. Financials have a delay of 1.5 years, considering operations in Brazil. So we talked about 35% gross margin that will lead to $1.5 billion cash and $1.5 billion net income. Operations are very close to this to these indicators. As for Resia, it is precisely what you said, '26 -- '25, '26, we have to look at the balance sheet. We want cash generation of $0.5 billion coming from Resia, much lower balance sheet, much lighter company and with very low leverage. But this movement had the company's balance sheet. For the future, as of '27, Resia will have no legacy. It will sell projects with a yield on cost of approximately 7% and very, very light company. The size of positive contribution for the balance sheet will be based on the size of the operation. If we continue to do in '27, '28, 2 projects a year, we are not going to leverage the company. It's going to be a light company with cash generation and less contribution to the balance sheet if Resia is still under MRV at the time. So in the cycle of '25, '26, a very positive factor that is deleveraging and a negative aspect, which is the accounting results of the company that will still be negative. Further on, what we expect, and we are going to work very hard on that is for Resia to deliver. And again, perhaps Resia is not going to be under MRV, but it will deliver in terms of its balance sheet and the company's balance sheet as a whole. Anything to add, Kaka?

I think that you know it is a given. It's going to be positive, and we are on the path to reach our results.

Tainan, UBS. I would like to talk a bit what you talked about the reduction of land bank in Brazil. Why now? What was turnkey for you to start looking into our land bank and given the capital of the company, what do you want to do? And then what are you expecting in terms of monetization? And in the guidance of cash generation, 1/3 coming from portfolio, 2/3 of operation. What do you expect of land bank in terms of a contribution to these numbers?

I speak about the land and then Kaka will answer the second question. Okay. Land. The strategy didn't start this year. It started last year, and it gained speed this year. There's an important component because Selic interest rate was 9% and now we reached 15%. So of course, our sense of urgency has increased. And this development of MCMV and bracket 4 that had been communicated some time ago caused us to increase the focus of the company even further. So land that used to be important when they were purchased and are no longer important, we decided to sell quickly. And as for prices, there are no transactions being made in a very speedy way. They are intelligent, well thought of. There may be losses in a few transactions and others not, but that won't cause a significant impact on the income statement. On the other hand, they have an impact on balance sheet. Differently from Resia in which speed is mandatory at MRV, of course, we want to do things at a good pace, but without sacrificing the company's bottom line.

As for the guidance, we said -- you said sales of trade receivables and land, there is some contribution of land in those figures. There are land that we purchased a long time ago that we have to pay. And one of the ways we have to balance in addition to increasing swaps is to sell land. If I have to pay [ 100 ] I have [ 20 ] to sell, then I have to pay [ 80 ]. So we are using this leverage of selling land. And what's important, it's not simple to sell land, to sell land and be paid cash is almost impossible. So we can expect a reduction of allocated capital, but the return of this cash to the company takes 5 to 24 months, depending on the case.

We -- participation in [indiscernible] program is part of that. It's when we participated in the bidding process. In 2023, we had that mindset of having the land bank circulating faster. It gained strength in 2024 and 2025, but this is something we've been doing for 2 years now.

This is Rafael from Safra. I have one question. I would like to explore the changes that were announced for MCMV and that -- how that will affect your mix of launches? How many do you expect to have gain in terms of gain for bracket 1? And how much do you expect to have increase in bracket 4?

We would like to show the slide.

That's a good support. If we could go back to that slide. Can you show the slide of the distribution? But being very straightforward, the main point is we concentrate our operations in brackets 2 and 3. That's where most of our sales and launches will be concentrated in here in Brazil. That's not -- It's a slide about launches. But there are some specific areas or regions in which we are more appealing for bracket 1, given the cost of the land or the type of product located there. Usually, the block in [ H ] shaped, as Ronaldo mentioned, is more appealing to bracket 1. It's smaller. It fits 15% to 20% of our portfolio, it can be increased with changes, but it's also a mix. We also use changes to add profitability to looking at sales over supply pro soluto and prices. So we take -- we analyze each project carefully to see what we can capture in each one to bring a better MRV in terms of profitability and operating profit. So most of the building permits for the launches that will be made this year are already designed, are in place, and we continue with that plan. Speaking of Bracket 4, this year, we defined in our budget for the year to reduce the -- our appetite for SBPE because we didn't have bracket 4 back then. So we're revisiting the projects. Most of the projects that we plan to launch with SBPE funding can fit bracket 4. But right now, we're not adding any new projects. So we're not going to launch specific products looking at bracket 4. What could happen is that projects that were bracket 3, very close to the upper limit of [ 350 ] could migrate to bracket 4, especially in products in which we funded. We provided credit under Flex. And so that doesn't change our strategy. We're trying to find a slide go back. So first, the launch strategy at the top, just to remind you about the breakdown, bracket 1, 2 and 3, this is our strategy. And in terms of impact on bracket 4, this is how much we have in stock, BRL 1.6 billion. And here, yes, we do have a land bank available that we're working on that we could use as specific opportunities arise in cities. Now this is the one. And this is our strategy for the new MCMV that increases by 5x our inventory that fits bracket 1 without changing prices or reducing pro soluto. There are opportunities to be captured. And the same is within bracket 2 because with the reduction of interest rates, that helps customer affordability. Did I answer your question?

Yes.

Is that it? Okay.

So thank you very much for your presence, both those who are present in person and those who are attending online. More than 300 people attended online and 100 people in person. So thank you very much for listening to us for your time. And I would like to wrap up by reaffirming what we said in the morning. We are sure that we'll have a golden cycle in coming years. So if you have any further questions, Kaka, Augusto and our Investor Relations team is available. Good afternoon to everyone. Goodbye. [Statements in English on this transcript were spoken by an interpreter present on the live call.]