Randoncorp S.A. (RAPT4) Earnings Call Transcript & Summary

[Foreign Language] portfolio expansion of our production capacity, more efficiency, and internationalization of our companies and a strong commitment in developing our people, reinforcing our culture. Also, we will continue working strongly on innovation and technology in all the units of the group with focus on new solutions, always connected to ESG. All these movements are very important within our strategy and our growth. And talking about growth, I have talked a lot about our accelerated growth. As you can see in the last 5 years, we grew at very positive rates with a CAGR of more than 32%. We more than tripled the revenue during this period, and we did this delivering robust margins and more and more consistent margins. Our markets had an important role with strong demand in the many segments, and we will talk more about this during the conference call. But I would like to stress that this growth is above all sustainable. We have a very well-prepared strategy, and we are following and even surpassing what we committed to do. And the pillars of this strategy, which you can see here beside me are connected to what we are doing on a day-to-day basis as Randon Companies and the excellent results that we are receiving. Talking about these highlights in 2021, apart from being the best year in the history of our company, we had records in EBITDA and profitability. And another important aspect, all our units without exception, had an excellent performance. We made progress in all our units. They all help for these results. We recorded records in production in all the main production lines in all the product lines, as you can see. To give an idea with some numbers. During each minute, we delivered 190 parts of friction material and to brake systems, even semitrailers that are much larger products and take many hours to be produced, we delivered 1 unit every 15 minutes in 2021. These numbers are impressive. These achievements were only possible because we invested with a lot of focus and attention to continue growing, innovating and thus reaching our objectives in the short and long term. We did this controlling our finances and maintaining our leverage on a healthy level. And we continue delivering an excellent profitability on the capital invested. Well, as you can see with all these numbers, truly, it was a very special year for us, and we will continue working to deliver results that will be better and better. At the beginning of my speech, I mentioned many movements that we are making in our companies and how we're executing our strategy. Those who look at Randon 5 years ago and compares with the current days sees a different company, much stronger, much more resilient. Apart from organic growth in our operations, we made many movements with acquisitions, partnerships and opening of new companies. All of them added relevant aspects to our business, whether it be increase in capacity, expansion of the portfolio, internationalization and innovation in many fronts. And always, looking, trying to capture many synergies in each one of them. These movements are linked to our growth pillars and diversification pillars that are more and more important. So the company can expand at a fast step as Randon is doing. One of our strategic points is diversification with focus. We will show some graphs of the last quarter of 2021 to detail a little more about these aspects. This first graph, you can see how our revenue is distributed per division. Most of the -- comes from the Auto Parts division with 53.4% of the total and has a relevant exposure in 3 large segments: OEMs, foreign market and export market and aftermarket. This has relevance not only due to the market but for the revenues of the companies acquired in the last months and years. The OEM division represents 43.6% of the revenues and has exposure to several economic sectors being agro business, the main one. Apart from this, we are also looking for a greater participation in aftermarket parts and exports for revenue. And the financial services division and digital -- the digital services with 3% offers complete financial solutions to the ecosystem of transportation and is an important platform to finance our clients, suppliers and distribution network. When we analyze the revenue per product, we see that the most representative line in semi trailers with 36.4% than Fras-le's products with friction and materials and others reaching 26.4%. I will highlight these 2 groups because they represent dynamics that is similar to other segments. Semitrailers are products with the largest average price and also with a diversified mix for transportation for many segments. As I mentioned, the strength of the sales in this segment comes from agro business, which represented almost 70% of the demand for road equipment in the quarter. And as we know, it should continue growing at high rates in the next few years and with great opportunities for our companies. The Fras-le products make up what we call powerhouse for aftermarket in auto parts with focus on Brazil and abroad. 90% of the revenues are due to sales in the aftermarket parts, and it is a very stable market, and 40% of the total is in the export market, a very resilient profile. In exports by geographies, we see the relevance of the block in Mercosur in Chile, which represented more than half of the exports of the Randon companies in the quarter and shows the recovery of these economies with a good moment for agricultural commodities and also minerals. Another important part is sales to the North America with many opportunities for growth. When we look at our revenue, looking at the market, we see that 50% has origin in OEMs. But as we always like to highlight, within this group, we have the great diversification with semitrailers, trucks of many types and also different segments. The most relevant being agro business, apart from railway cars and vehicles for urban mobility like bus, subway and passenger cars. We also made progress in aftermarket parts abroad. These 2 markets represent 40% of our revenues, consolidated revenues in Q4 '21. This is a relevant point that I would like to stress at the end of my participation. We will expand more and more our revenue to give more resilience to our business. We have made a lot of progress in the last few years. And today, we are a company that is better prepared for the economic cycles. We know that we can make progress and accelerate even more this transformation of our companies. I would like to thank all, and I'd like to pass the floor to Paulo to begin the presentation.

Thank you, Sergio. Good morning. I thank you all for being us in this conference call. As mentioned previously by Sergio, 2021 had excellent results. Q4 was another period of excellent performance, especially in sales. The truck market and semitrailer market had historical levels. And contributing for these results, also a high return from our investments, capturing synergies between the businesses, reaching numbers above those plants and this made a great difference. Agro business had another positive year and gave -- benefited the sale of our products, both in semitrailers and parts, aftermarket parts or indirectly through the sale of trucks, which use our auto parts. And the demand was so high in a short space of time that we had difficulties to deliver. Therefore, during the whole year, we reorganized our plans, and we invest in an automation to expand our productivity. In spite of the positive result, we also had challenges such as the lack of raw materials and inflation, which put pressure on our margins. We worked a lot to mitigate these effects from the results, and we were successful in most of the year. But Q4 was the quarter that was most affected. Apart from this, in this period, many nonrecurring events also hurt EBITDA. I will give you more details about this during the presentation. On the screen, you can see the numbers of the truck market and semitrailers. The progress in the quarter and as -- and during the full year is very strong. In Q4 2021, we produced more than 40,000 trucks and 23,000 semitrailers, a growth of 23% and 10%, respectively, in comparison with the same period in 2020. The increase in sales also accompanied the production. Everything that was produced in Q4 2021 was to supply-demand without resulting in inventory in the retailers and distributors. This is a positive result for our sector. Looking at 2021 as a whole, we manufactured more than 150 -- we had more than 158,000 trucks and 95,000 semitrailers and with a great progress in comparison with the previous year. This production took care of not only of the demand in the Brazilian market but also abroad, which had a robust growth. In terms of the economic asset, we have the expansion of the GDP and the increase in the harvest and the favorable exchange rate, which helped exports. Also, we had strong inflation with high prices of raw materials, lack of materials and the increase in the rates for credit. For 2022, we have some challenges, and we have the uncertainties because we have elections this year. That's why we have invested to strengthen our diversified business model mitigating this exposure to the various scenarios in the Brazilian economy, increasing the resilience of the results of the company. Talking about consolidated net revenue that Sergio mentioned, we reached BRL 2.5 billion in Q4 2021. And this is the sixth quarter with a record revenues. This increase is due especially to the good scenario in the market with high demand and also higher prices to mitigate the impact of inflation. Apart from this, we had revenue from new companies that were acquired, adding BRL 71.6 million in this quarter. The export market, which already had expansion in previous months continued the sales rhythm in Q4 '21 with 53% more in comparison with the previous quarter. Mercosur in Chile were the strongest with a highlight to countries such as Paraguay because of the harvest and Chile due to the high prices of copper. The second largest region was that of the United States, Mexico and Canada, where we export specialty products from Fras-le and the brake systems of Master. The recovery of the markets also came with vaccination, which allowed us to reduce restriction for the circulation of goods and people contributing for higher economic growth in many geographies. But as in Brazil, some points also continue. We have inflation with higher freight and also lack of containers for ocean freight. We continue looking at the EBITDA and an increase of 10.7% and a drop in the quarter of 61.3% as you can see in the graph beside me. This graph is explained especially due to the revenues for the exclusion of ICMS tax from the calculation of PIS/COFINS taxes in Q4 '20 which represented BRL 406.6 million. In the quarterly comparison, when we look at the adjusted EBITDA, we -- with nonrecurring events, we see a growth of 5% of this indicator. But the EBITDA margin had a drop of 4 percentage points due to higher inflation and lack of some raw materials that put pressure on our costs in a strong way in the last quarter of the year. Apart from this, we had also greater seasonality effect than in the previous year. In the annual comparison, we also see the effects of nonrecurring events in EBITDA. Adjusting the EBITDA of 2021, to the nonrecurring, we would have a margin of 14.8% higher -- 14.8% higher than 2020. The strong demand also allowed us to have scale and dilute fixed costs. Apart from this, we made strategic purchases to mitigate the effects of inflation. The investments in productivity were also fundamental. You can check the nonrecurring in the quarterly comparison and yearly comparison in our material, which is on our website. With the year full of historical records in volumes and revenue in many units, our results could not be different. We had at the end of 2021, consolidated net profit of BRL 698 million an increase of 5% in comparison with 2020. In Q4 2021, the profit was BRL 153 million with a net margin of 6%. This comparison is also affected by nonrecurring events that I explained previously. As Mr. Sergio explained in his presentation, I reinforce that the profit was due to our business model with diversified revenues due to investments made and the synergies that we have in our companies. To be able to continue growing in a fast and sustainable way, as in the case of 2021, we need to have a solid financial situation. We maintained a robust cash position important not only for complex scenario, but also to give support to the growth of our business and a greater need for working capital. We arrived at the end of 2021 with a net debt without Randon Bank of BRL 1.4 billion and a leverage of 1.07x EBITDA in the last 12 months with the increase of the SELIC rate and bank spreads, the cost of debt reached 10.9% a year. But you can see on the graph beside us, the stability of the debt and the level of leverage of the company in the last few years, which shows the consistency of our finances. I would also like to comment that we had in February this year, the liquidation of our ninth issuance of debentures. So we received BRL 500 million, and these will mature in 7 years. We will use this to reinforce working capital and to have a longer debt. You have access to all the information of this issuance on our Investor Relations website. Now talking about the investments, our guidance of CapEx is BRL 320 million in 2021. But at the end of the year, we invested BRL 358 million. This increase in relation to the projection happened due to the anticipation of some investments that would be made in 2022. Thus, we began this year with a greater capacity and operations better prepared for the current demand. We invested in machines and equipment, automation, industrial automation and installations and buildings as in the case of Master expanding the plant and implementing robot processes for manufacture. In the yearly report, we give you details and other highlights about this indicator. Finally, before I pass the floor to Esteban, I would like to share some information about Randon in the capital markets. On the graph, you have the data about the shares of Randon. At the end of 2021, the base was composed of 41,000 shareholders with a free float of 60.4%. In the last quarter, we showed the cancellation of our shares in treasury. We changed the position of the shareholders. We reduced by 16 million preferential shares, the whole amount. On the same date, also, we began to repurchase shares. Please access the QR code to have more information about these operations. Now talking about the compensation to the shareholders on this graph, you can see the evolution during the last few years. For 2021, we are foreseeing the distribution of dividends and payment of JCP worth BRL 198 million. Here, we already considered the dividends to be approved in the next meeting. Now I'd like to pass the floor to Esteban, who will explain the performance by division.

Thank you, Paulo. I would like to thank you all for participating in this conference call. I begin my presentation with the performance of the OEM division, which received a revenue of BRL 1.1 billion in this quarter, an increase of 46% in relation to Q4 '20. Of this revenue, $35 million came from abroad due to exports from Brazilian plants. EBITDA totaled BRL 83 million with a margin of 7.5% in Q4 2021. Now analyzing these numbers, I would like to highlight the following points in Q4 '21. We delivered approximately 8,000 semitrailers, around 7,000 in Brazil and the rest abroad. These numbers reflect an average daily production of 139 products. Also, we sent good volumes to abroad, one of the best quarters in the year. And this was one of the reasons for reducing our market share in the domestic market, which reached 28%. If we added the export volumes to the volumes in the domestic market, our market share would have been 4% higher. Another important factor for the revenue of this division was the delivery of railway cars. In this quarter, we sold 147 units. But as we have been saying in previous meetings that inflation would raise costs and reduce margins. This happened truly in a stronger way in the last months of the year. The nonrecurring of this division added to BRL 1.3 million. You can see the details in our website. Going to the auto parts division, it closed 2021 with the best net revenue of its history with good volumes for OEMs and also aftermarket and a higher price in the market. I would like to highlight some indicators, BRL 1.4 billion in net revenue. Revenue from export market, $56 million and EBITDA of BRL 175 million with 12.9% margin. Now explanations of this number. We have very positive demand from OEMs, which -- and we see a continuity of this at the beginning of this year, after market, which has grown, especially in commercial vehicles and also progress in the export market, where we had an increase in the sales of the controlled companies of Fras-le, at companies that are more exposed to international markets and a growth of exports of Master and Suspensys with products sold, especially to the U.S. and Latin America. Also, we would like to highlight the increase in revenue coming from companies acquired recently by Castertech. In this quarter, represented BRL 60 million. A point of attention is for the aftermarket for light vehicles, which is being hurt due to the earning -- lower earnings of the population and higher inflation. I would like to also mention the synergies especially with Fras-le and its controlled company Nakata, also inflationary pressure on cost, which had an effect on auto parts and the gross margin due to discount given to a client of Fras-le worth BRL 30.5 million. Apart from this, we had nonrecurring events, which penalized the EBITDA by approximately BRL 32 million. I remind you that these details are available in our release. Finally, let's look at the financial services and digital services division. This division had a quarter of growth in business in line with the progress in industrial operations and reached a net revenue of BRL 75 million. In Q4 2021, we had 23% more sales in pool purchases due to a good performance in the agriculture and many operations in the Randon Bank reaching BRL 1 billion in assets with a client -- or qualified client base. EBITDA was BRL 300,000 with a margin of 0.4%. In the second semester of 2021, we made important movements to reorganize this division with the objective of making it a more complete solution for our clients, distributors and vendors. With this, we had additional expenses that affected its profitability. We also have another 2 points to highlight that had an impact on EBITDA. The first was the increase in the costs of loans in the Randon Bank due to higher interest rates. Second, with the growth of pool sales, we also increased the commissions on sales, and this impacts the results in the short term because there is a difference between expense and revenue, while the revenue that originated the commission will be received in the medium term, the commission is paid in the margin, putting pressure on margins. Now Randon Ventures at the end of 2021 reached BRL 18.9 million in capital invested in start-ups. Reminding you that all these start-ups have synergies with the business of Randon Companies. Now I'd like to pass the floor to Paulo. He will talk about the guidance for 2021 and guidance 2022.

Thank you, Esteban. Well, after all these presentations where we detailed the results, we have now on the screen the numbers of our guidance for 2021 with what was done. All the indicators had a performance above our projections, especially due to the better market already mentioned in the presentation. Now the guidance for 2022, I begin to explain the changes that we made to expand the quality of information and that reflect in a better way the performance of the company. We made 3 main changes. We added a margin -- EBITDA margin indicator. We substituted the absolute number by a range of values, and we qualified each indicator informed, giving more details about the assumptions used to have these projections. In general, the expectations concerning 2022 are positive because we have the continuity of a good market for our products with -- and this is shown by the associations and more revenue from exports. Some challenges continue. For example, competition which is an attention and also inflation and lack of raw materials. Investments will be made to support the growth of the companies, expanding productivity and efficiency. To access details of these indicators, please access the relevant fact that is available -- the material fact that is available on our website. I would like to invite you to participate in our survey, which is important to evaluate our IR practices. You can participate with -- through the QR code. Now I pass the floor to Davi to begin our Q&A session.

Thank you, Paulo. I would like to thank the other directors. We would like to begin our Q&A session. [Operator Instructions] Our first question comes from Lucas Marquiori, BTG Pactual.

2 issues. CapEx. I'd like to understand the new projects I understand there's a little from on composites . Can you give us more details, the breakdown of the investments in the new projects? The market would like to know this to know the upside and the relevance of these projects in CapEx. And the second point. The disclosure that you gave of the margin for guidance, I thought it was very interesting to use this new way of informing. You mentioned in the material fact, costs margin for next year. I'd like to understand the thermometers you're looking at to increase prices. We have a global conflict, price of commodities. So I'd like to understand what helps you to increase prices? Is it the backlog? So these are the questions. And congratulations.

Thank you for the question. I would like to begin answering the issue of CapEx. We began with a new range. This range Lucas includes many factors. The first point, why higher range due to the size of our operations. If we compare Randon in 2018 with Randon 2021, 2022 we added 18 new companies that were new companies and companies acquired. And we doubled our revenue, and this requires additional investments apart from also remembering inflation and a higher exchange rate so that the main. So that the main -- so we know that CapEx will be higher than in previous periods. For our depreciation, it is around BRL 250 million. So the maintenance of our capacity would consume most of this CapEx. Of course, we're telling the market that it's difficult to say what is CapEx for maintenance and expansion. Because every time we have to change machines or maintenance on machines, we evolve to new machines that have more efficiency with market solutions and also through RTS that we have inside the company. I can comment that it's around BRL 340 million, BRL 370 million. So 30% is for OEM division, 68% auto parts and 2% for services. Now concerning another point in auto parts, this CapEx is for Fras-le, the guidance was informed this week and also new operations of Castertech. This was mentioned in the last 12 months, Castertech doubled. It's casting capacity through the acquisition of Fundituba. So since they are assets that are in the ramp up -- that are on a ramp-up situation. This explains why we're investing more in auto parts. And to close this issue of CapEx, I'd like to remind you that we have financial expenses and we always maintain leverage close to one. And this happened at the time that we decided to have this guidance, BRL 340 million, BRL 370 million. We're comfortable with this -- with these values to continue our objective of maintaining leverage under control.

Esteban, I'd like to supplement your good explanation within this CapEx for 2022, Lucas. Apart from maintenance, as Esteban mentioned, productivity, automation, capacity expansion. We have investments linked to clean energy as part of our commitment with ESG. So this year, for the first time, it's a long journey, we know, but we included investments linked to decrease greenhouse effect gases and also other commitments. I'd like to supplement. We have something new here linked to ESG. Sorry, Esteban.

Fine, Sergio, thank you. And Lucas, now going to margin, talking about market dynamics for Q4. As we have been anticipating, it was more difficult in terms of costs, not only raw materials, but also labor. For this year, we're expecting a more challenging environment than in last year. I'd like to remind you we see challenging scenarios as opportunities. From the beginning of the pandemic, we have had record results in 2020 during the pandemic 2021/'22. And in 2022, we hope to continue this way. Within the components of margin, I would say that if last year, the best greatest problem was in cost, this year, the greatest problem will be price. Of course, we look at cost, it's on the radar, inflation of raw materials and labor and especially availability of materials. But with the conversations we have had, they are more stable than last year. This year, they are more stable. Last year was difficult in terms of cost for purchasing. And as mentioned, on one hand, cost is more stable, but price will be something we will have to monitor every month. The new orders has shown a healthy average in line with what we saw last year, but price has to be negotiated frequently. And this is for many factors due to demand may be a lower demand in terms of semitrailers and also with higher interest rates, this makes the cost of financing go up and also a lower GDP than last year or all of this brings uncertainties. And this year, we will also have elections. So in the second semester, we should have more turbulence.

Well, our next question is from Pedro Santana, Bradesco BBI Pedro.

Congratulations for the results. I have 2 questions. Can you comment on the M&A strategy. what market segments are you looking at, time line? Can we expect M&A in 2022 and also railway cars. What do you expect for 2022 in terms of volume for railway cars and the new investments, should they -- will they represent greater volumes with the investments?

I will share this with Sergio. Sergio, if you wish to comment on the first part, our strategy for M&A, and then I will talk about railway cars.

Yes, Pedro, thank you for the question. Yes, Pedro. When we look at our recent performance, as you saw, we tripled the size of the company in the last 5 years following a strategic plan that we had defined. Of course, the market in some segments recovered and this helped this fantastic growth that we had. We also know that more recently, inflation, the recovery of inflation in raw materials resulted in higher prices, but there is also an organic growth and acquisitions that we made that had an important role in this accelerated growth. And our intention, as we mentioned, is to continue this way, continue with this accelerated growth. And within the spirit, we have intention to continue with M&As also -- also with M&As. In the last few years, we focused a little more our units, especially forming a powerhouse in the aftermarket was at Fras-le. This allowed us to grow revenue 23% and our total revenue. Our objective now is to grow a little more the revenue coming from in strong currency in dollars. So in the next cycle we will focus, not that we will not acquire in Brazil, but we would like to give priority to revenue coming from other markets in strong currency in U.S. dollars. This should happen in many of our units. Since its M&A, as you know, we have difficulty in giving a lot of details. But yes, we have the intention to continue focusing on revenue from other markets in strong currency in dollars, so focusing on strong currencies, revenue abroad.

Thank you, Sergio. Going back to railway cars this year 2021 was a more positive year than in the last 2 years. And our expectation for 2022 is to continue with this growth. In 2020, we had the renewal of important concessions, clients. And this had an effect on railway cars delivered last year. This year, we expect 1,500 to 2,000 railway cars. We want to maintain our market share of 20%, 30%. With these parameters, we can expect at least a repetition of the volumes we had last year. and in 2020 and maybe with the possibility of an upside may be more sales than in 2021. Apart from the renewal of concessions in the country, we had also the private investments and now new railways, new private railways are beginning. So we expect investments in the last few years. In the short term, in the main operators, we -- most of the CapEx is on railway lines, and that's why we haven't reached our full potential. As of 2023, we should have a greater demand for railway cars, increasing the average going to 3,000 to 4,000 per year [ make ] Randon with 20% to 30% market share. It's important to remind you that we made an investment recently in our plant in Araraquara last year. It was a binary plant. It manufactured either semi-trailers or railway cars. With the investment we made last year, they can produce railway cars and semitrailers at the same time. We believe that 2 markets will be booming, and it's a plant that is close to a railway line with access to other railway lines, which helps the delivery and also the receiving of raw materials to manufacture railway cars. It is a strategic -- it is located in a strategic position.

Well, our next question comes from Igor [indiscernible].

Congratulations for the results. One of my questions was answered, railway cars. But the second, I'd like to talk about the backlog for [ Randon ] equipment. Can you mention how much it grew in comparison with last year?

Concerning the backlog of orders, if we compare with the same period last year, we have a smaller portfolio, 90 days. While last year, we had a portfolio for 120, 150 days because there were 2 factors. The market grew much more than we expected. We worked with a projection of 10% and the market grew 30%. So neither us nor other players had capacity to deliver this demand. Consequently, the portfolio became longer. And the second point, we noticed a rush for products as a way to -- as a way to anticipate purchases and avoid inflation. So clients tried and we don't see the same thing at least not as strongly this year.

Well, our next question comes from Andressa Varotto from UBS.

I have 2 questions. First, competition, competition in semitrailers. It became clear that the pressure on market share was due to export. So please comment on this trade-off between domestic market and export market. and whether it's positive in terms of price for the company. And do you see any pressure on prices in the segment? My second question I'd like to understand better the increase in SG&A, which happened in the quarter and what we can expect for 2022 and also the impact of BRL 30 million in the auto parts division due to a discount in a contract. I'd like to understand this effect and to know if there are other discounts like this one and how you negotiate?

I can begin answering about competition in the domestic market and in the export market. Paulo, you can comment on SG&A, and then I will comment on the discount we gave to the Fras-le client. In terms of competition, we have seen a more challenging scenario, more competition. Last year, as I mentioned, the market was booming and the production capacity of the market was not enough to supply the demand. And during the year, we added capacity. We saw consolidation, partnerships between competitors, which increase the production capacity. When you have an increase in capacity and a year with less demand. This will generate pressure on price. Our challenge will be to maintain this market share and the market leadership with a price that the market is willing to pay. This price has already reached a ceiling. It will be difficult to increase prices from now on. Our mission now we have to have gains in scale and internal efficiency. The other competitors, as far as we know, our main competitors that lead the market with Randon, they have -- they are doing the same. They have to be careful with price. And last year, as I mentioned with Igor, our backlog was guaranteed for almost 5 months. This year, we will have to review our strategy in terms of competition and also our price every month. We will have to we will have to feel the market and use moderation. Paulo, can you talk about SG&A, and then I will talk about price?

Andressa, thank you for the questions. In fact, SG&A First, when we compare Q4 2020, it had a strong impact by nonrecurring events BRL 490 million. That had a positive effect due to the recognition of the PIS/COFINS tax lawsuit. We also had in Q4 2021, some -- nonrecurring revenues and nonrecurring expenses. So nonrecurring revenues we had the reversal of impairments in the auto parts division, more than BRL 20 million. And this due to the better projections due to what happened in 2021. So we were happy to do the reversal of these impairments. Also, some nonrecurring expenses and highlighting some contingencies on labor lawsuits in the auto parts division, also compensation and also expenses with labor lawsuits expenses and the business especially the acquisition of Nakata by Fras-le and also the acquisitions we made of Fundituba and Castertech. When we make these acquisitions, we recognize this combination of business with the best projections we have at the time. And since the market improved substantially after the acquisition. These acquisitions are giving us better results. They're contributing a lot for our results. This is good, but right now, we have to recognize the greater participations.

Thank you, Paulo. And to close concerning discounts given by Fras-le. This has to do with the long-term client at Fras-le. We have a long-term contract that included price increases with indicators. This was not noticed neither by us nor by the client, and we had to give this discount. And this was noticed only in Q4. And we recognized everything in Q4. But part of this effect has to do with the previous quarters and another part in Q4. And as I mentioned, it's a long-term contract. It will be reviewed during this year.

I remind you -- I thank you all. We are now -- we have another 2 questions, but I'd like to remind you that many questions that we received in writing most of them were answered. And those that we are not able to answer, we will answer them after the conference call. Marcelo Motta, JPMorgan.

Two quick questions. The first comment on electric trailer trucks. I believe it's revolutionarily all you have. How is the development of the e-trailer, and how will you sell this? And also the financial part, you issued a debenture. You have a stronger amortization this year, BRL 1.7 billion. So what is -- what else are you planning to do? How is your cash position?

I will share the answer with Sergio and Paulo, Sergio can comment on our initiatives in -- we have [ e-axle ], the electric axle. We also have other initiatives in progress, and then Paulo can comment the financial position. This is in the consolidated. We have part of this that belongs to Randon Bank, it is leveraged. This is foreseen to lengthen these debts and the other part from industrial positions that were covered by the issuance. So Sergio, if you wish to comment on the e-axle?

Perfect. Marcelo, thank you for the questions. We continue in an optimistic way concerning this development in Brazil of a semitrailer that is electric using our [indiscernible] system that involves an electric axle inverter and motor in -- with our battery and the software that controls this product. We announced this 2 years ago, we have worked a lot in optimizing the system, the durability. And now we're in a phase where we have test and evaluations at clients in fleets. We had 30 days ago, an important step that was completed linked to the ex authority formalizing legalizing this configuration, which was unknown. We are pioneers in this area. So an electric semitrailer does not exist in the legislation. Now it will exist, and we're very optimistic. We made all the development. And we continue, we believe this year, we will begin to sell, as every product with advanced technology, there are many phases. The first, those who adopt the product, the early adopters. This is -- has to do with the image of their companies. ESG companies that are willing to honor their commitments with ESG, and we'll adopt this type of solution. Then later on, we see the company working on a business case the costs of this type of technology, especially the batteries, the cost should drop and many fleet owners will use them, improving their results. And finally, a combination of greater volume and with lower prices than adoption by all. So we have also had projects apart from semitrailers on trucks. We have a large manufacturer of trucks that has worked with us to use our technology. So that we continue optimistic in this year, we will begin the sale.

Thank you, Sergio.

The second part, Marcelo, thank you for the question. In fact, Esteban already answered part of it. Our strategy was to anticipate with this debenture, BRL 500 million. The maturity date we had at Randon for the whole year 2022. And saying we have shown in our report BRL 1.7 billion in debts that will mature this year. Half of this debt has to do with Randon Bank. And this amount increased, especially because the bank has an important role with suppliers but they are short-term debts and most of them were paid in January. So when we remove from this the part from Randon Bank, with this operation of debentures, the rest are debts in U.S. dollars with amortization and prepayment. And our strategy is to continue lengthening. So we're very comfortable with these debentures for the payments during this year.

Well, our last question. Before then, I'd like to thank the participants that sent questions via chat. [Foreign Language] individual investor. So our last question from Cardinal Partners. Marcelo?

Can you hear me? I have 3 questions. First, on Nione. Do you intend to give us more disclosure about last year? Entering this year, do you intend to increase the level of disclosure on this operation?

Marcelo, thank you for the question. About [ Nione ], our company that works with nano niobium on a large scale. Last year, we announced a product in partnership with a strategic supplier. It's paint that includes [ Nione ] compound. And this year, as we have new products, more products, we will inform the market, yes. But it's still an operation that has potential, but it's small. So we will be informing the market as we have new products. Yes, certainly, as we have something new, we will inform the market.

Second question, you showed during the last 4, 5 years, an important evolution in relation to governance. But there is one step that is very important, the migration to Novo Mercado in the stock market. You were never closer to be -- you have a very strong financial condition. So I'd like to ask you, do you intend to consider a migration to Novo Mercado in the stock market?

Paulo will answer this question.

Marcelo, thank you for the question. We're happy that you have followed this evolution of our governance. This is very important for us. And you must have noticed that in July, we were able, both Fras-le and Randon to have an adherence that is even higher than those companies in Novo Mercado and the stock market. At Fras-le, we have a level that is a little higher because there, we only have one class of shares. So in reality, this is a topic where we have a commitment to continue with this evolution. So as was mentioned, to have Sergio now as the CEO, a professional with a lot of experience in the market. This shows this continuous improvement. Second, of course, we follow the market. We monitor this. This is a topic that we discuss. But right now, we have no plans to do this migration to Novo Mercado in the stock market. We want to continue with this continuous evolution and continue monitoring the market.

Thank you, Paulo.

Marcelo, you had a last question?

My last question has to do with repurchase of shares. What is the plan for 2022 to buy back shares?

Paulo can answer this question. Last year, we announced the cancellation of treasury shares and a new program for buyback of shares, 5 million shares in the next 18 months. Paulo, if you wish to comment.

Yes. In fact, we have an authorization from the management council to buy 5 million shares wrapped for. This plan is open. It's valid for 18 months. And of course, Marcelo, we cannot anticipate our our strategy. The point is during this period, we will be following the market, and why do we have this plan? We understand that today, the market value does not reflect the real potential of our company. So with the evolution of this plan, we will inform.

Well, we'd like to thank you all for participating. We would like to close this conference call, reminding you that all the questions that were not answered we will get in touch and we will answer each one of them. Thank you very much, and we hope to meet you in the next meeting.

Thank you.

Thank you.

Thank you. [Statements in English on this transcript were spoken by an interpreter present on the live call.]