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

Good afternoon, everyone. Welcome to Randoncorp Day 2024. This event is happening in a hybrid format with both in-person attendance here at B3 and in online for those with us at the Randoncorp channel in YouTube, and also we have simultaneous translation into English and sign interpretation. I'm [ Carla ] [indiscernible], a master of ceremony. It's a pleasure to be here in this event for the second year in a row. And in order for [indiscernible] building tomorrow being connected with its investors and capital market, it's very important. During this afternoon, our executives will present the part of the company change and showing how Randoncorp from a company focused on the semi tow for a full ecosystem of auto solutions. Also, we will detail the potential markets of the company, its journey of efficiency and automation and how it has generated value in its performance. So in our agenda of this day, we will have 4 panels with the following subjects: our change, our potential for the market innovation, and efficient manufacturing and value generation of our company. The panels will be presented by the CEO of Randoncorp, Sergio Carvalho; and COO, Auto parts, Ricardo Escoboza; CTIO, Cesar Augusto Ferreira; CFO, Paulo Prignolato; and Daniel Randon, Director Chairman, will do a closing and deliver the final message. Our event will have 2 sections of Q&A that will be moderated by the RI and Finance Director, Davi Bacichette. In order to attend the Q&A section is something very simple. For those here present, just access the QR code that's in your badge on the opposite, the face of it, and post your questions. I informed at the beginning about the WiFi. You can log in at [indiscernible] and record very easily and use the network, and those through the YouTube, participate using the QR code submitting your question by written. We hope you all participate. Now I will inform that our event is being record and made available in Randoncorp YouTube channel and RI website, ri.randoncorp.com. For the official opening of our event, I invite to the stage, Director of Investors, Financial Director, Esteban, and a round of applause for this director. So the stage is yours.

Thank you, Carla, and those with us. It's a pleasure to having you here presential or those remotely with us. Thank you very much for being with us, and I would like to use this opportunity for your solidarity through messages or donations to our foundation, we from the south of Brazil facing this tragedy. Briefly, what has called my attention. I always answer e-mails and questions by investors asking about the impact about an event in our operations. But last Thursday, Friday, after the rainfall, no questions were in this direction. The only one was to know how we were, our family members, and we were so touched, and I would like to thank you all for this. Now following this line, by the end of the event, Daniel will present a bit of our actions and initiatives in [indiscernible] for the tragedy. But an initiative and action that we feel today, it's regarding the gifts. We won't have gifts in this event. It would make no sense to earmark resources for gifts when people need more. So the budget for gifts was earmarked for societies and communities needing this help now. Now to start this event, I invite the APIMEC, Ricardo Martins, to deliver the [Foreign Language].

Thank you very much. So welcome all. I wanted to be brief and straightforwards. 24 years' stamp with the diversified audience aligned with the capital market, a need for information makes all sense, and it's not any company that makes this available. It's Board, directors and making available for all of you here. So 24 years is very good for us, the market. And an example for all companies that are in the market. So thank you very much.

Thank you, the partnership of APIMEC, for this long-term partnerships, 24 years, and we are hoping for many more. So thank you, Ricardo. Now starting our event, please could you help me with the disclaimer PowerPoint? You know very well our disclaimer. Pieces of information we will share with you today are based in assumptions, scenarios that administration draws up, and these assumptions and scenarios are subject to risks and uncertainties. This does not change, especially in Brazil, an ongoing situation of dealing with these risks and uncertainties. But there are 2 things that don't change in our company. First is transparency with the market. That's why we are here at any time, good or bad. And the second is our concern, commitment with value generation with our shareholders, community, society. And this is precisely what we will present, will share with you during these 3 hours: the business transformation that we left a semi tow company for a multinational company, and Sergio will show us this history. But beyond this, how did we do this change? Through a sound, sturdy growth based in 3 pillars: diversification, all the resilience that comes with diversification and innovation. And now with the last purpose of truly generating value for shareholders. This, we'll do in a practical way, bringing data from the market, because you need figures in your spreadsheets, transforming qualitative data in quantitative data and information. So we have this concern today of helping to model this in your spreadsheet. So showing you the potential of the market that the company has ahead in a way that you can translate it in your reports, figures and investment decisions. With no further ado, I pass the floor to Carla so we can start the panel. Thank you very much and enjoy your event.

Thank you for the opening, Esteban. So now we will start the first panel of our afternoon to talk about the [ background ] and by the company. I invite here to our stage CEO of the company, Sergio Carvalho. He is the CEO of the company. Round of applause as he joins us on stage.

So good afternoon, welcome those with us in presence and those with us remotely. In order that we can dialogue regarding about what we have done. Last year we were here, and our RI team gave me 5 hours in a row talking. Today, it's a bit less, just 1 hour, something similar with it. So we will be able to interact with more people and recognize the strength in our management team. The first topic is this one in the PowerPoint. Who will take care of the slides for me? So it's me. And the first point is to talk a bit about our change. Currently, this year, we celebrate 75 years of history. Just to talk about our history for certainly, no jokes, I would need at least 5 hours, but we want to share with you, a rich history made by [indiscernible] in a simple way, beginning of the company's corporate. Established by Raul and [indiscernible] cheap semi tow basic processes, business focus on a regional area in Brazil, especially the south, and this phase existed for several decades. At certain moment, during the '80s, the company changed the phase where it started a process regarding expansion, especially through joint ventures. And Master was one of the most important joint ventures with a North American company, where we started to grow in terms of process, management, industrial processes and brought a level -- a higher level of knowledge for our company, more professionalization, personal products portfolio and the company started to open -- to be listed. And then in the most -- the current phase, contemporary, [indiscernible] last 10, 8 years, we changed again the profile. Now we are growing in a faster pace, investing in new technologies and developing, as you will be seeing, technologies of [indiscernible], especially for most developed countries in the world, speeding up this process of internationalization of its company, [indiscernible] improved resilience, removing risk, to say so from our businesses. And to stress this third phase, one of the reasons, main one, by the way, we adopted Randoncorp also. So this is what we have here in a summarized way. We are one of the biggest players in the Brazilian automotive segments, leader in the main segments of business that we are present, strong brands, recognized brands, pioneering development of technologies for the future of mobility. We know technology, especially disruptive ones, take more time to materialize in terms of the business synergies captured. We always joke our [ surnames ] would be synergy. We will address more this topic. Global presence in more than 120 countries. And we are a Brazilian multinational company expanding its global footprint. Now we act in all these market segments, i.e., trucks, semi tow, railway, motors, agricultural equipment, building equipment, and you can see through the chart, the performance of each one of the units. Spare parts, trucks, buses, agricultural equipment, building equipment and so forth. You can have a general overview of the diversity of the segment, which is part of our business plan also. And we are one of the biggest players in the Brazilian automotive market. 100% of the trucks in the country have at least one of these components. And there are those that have BRL 50,000 using components of Randoncorp based on brand size. But just for you to have an idea, there's no truck in Brazil without one piece from Randoncorp, the 8th bigger manufacturer of semi tow worldwide, working basically below the Ecuador hemisphere, where the market is just 5% of the global market. We are the first player in spare parts in Brazil. We talked a lot about this during the last events as [indiscernible] Randoncorp, but we transform ourselves and we can say today, we have transformed our sales through the implementation of a strategic plan in the biggest spare parts in Brazil. Our global footprint, 32 complexes, industrial complexes; 13 distribution centers; 4 units of assembles, especially in Africa; 3 centers of tech innovations; 7 financial digital services; and 8 commercial offices. So our biggest concentration you can see through the Americas, obviously, South America is stronger concentration. But especially, we have stake in Africa, U.K., Germany, China and India. Now we have the leadership position of our main segments where we are present. We, through our auto parts, suspension and mags, Suspensys, Master, Jost, Castertech. We identified as auto parts, but our mobility, Frasle Mobility, is also spare parts, has this recognition and performance. I will call your attention for the prize recently awarded regarding [indiscernible], which is linked to quality. All companies obtained this prize. Why so relevant? Because being able to have 10 PPM, which is quality indicator, this is a worldwide indicator, so this is very good for world standards. And all companies that participate received this prize. Not one or two. All of them. This is the evidence of the level of development we have inside our companies. The strength of our brands, Randon brand focus on semi tow, pioneer our tech avant-garde. We carry value of higher prize. This is the result of strength of our company. Most remember the connected solutions to the megatrends of the market of centers of mobility, so controlled area of movement, that's strong performance, 90% of it. It's for spare parts, and brands in spare parts has strong, huge importance. So here, we are a house of brands. We are a powerhouse of spare parts with iconic brands and lots of synergy through distribution channels. Our auto parts, we carry a business [ cut ] stronger, strong good performance. We're generating long-term agreements for huge size up to the point that we have a business of Mercedes for front access. I think we did the [ allusion ] of this, and this was confidential at the time, but we think we mentioned we are working a big. We think we did in the Randoncorp, 10 years, [ BRL 700 million ] [indiscernible] -- [ 7 billion ]. Ricardo will address further, but one of the, reasons we won this bidding [indiscernible] multinational from North America was due to the trust they have in our name, this said by them, the fact that they trust more the work we are doing. So we won this bidding for the shafts. And the strength of our brands have a key role: the pioneering development of technologies. For mobility, we have our Composs with materials that composite and smart, entering different national trucks. Our e-Sys system, we will talk further, batteries, engines, electrical traction shafts. We will expand on this, our modernized semi tow. Certainly, in its due time, we will [ revise ] our segment, Randon Smart, a system for telemetry, but not telemetry's normal system. It's extremely rich in sensoring. And this difference, the fact that we have the sensoring, it's something that will bring value generation in a huge way. Nano technology, Randon Solar with energy that obtained through photovoltaic -- and we have autonomous vehicles we disclosed in November. You were there in the south with us. We were showing you different events in the future. And we also entered embedded electronics with systems ABS that [indiscernible] products today, and several products and manufacturers of vehicles in the market also. So this development of technology will be critical for the future of our company. Continued capture of synergy, cross-selling, corporate purchase, logistics, product development, automation and manufacturing plant efficiency in general. This is to show you some of the synergy, the interconnectivity that we have between our companies. In the dots here, you can see the vertical companies. We have the car assembler. We have auto parts. We have movement control, advanced technology and financial services, which is supported by our cooperative areas: finance, culture and people, IT, information security, legal, tax, investor relations, all our corporate areas that support those companies. But looking to the foreign market, our car manufacturer supplies 100% of the domestic market, and our auto parts is 80% to the external market. We have a movement control, 95%. So we are doing what many call, which is a spaghetti soup, because this is a relation that is strong in all of these areas. We have also advanced technology that is interrelated to all of this. I know this is a busy slide. It is complicated to see, but it's a way to show you how this model is so important to us because these synergies that we built for our units. And we have this corporate performance that supports the entire group. So this transformation and growth are supported in our expansion. I will provide you some numbers now. So we look here at 2009, we had 2017, 2023. Now we have, in 2023, we have 70 companies. We have 32 operations. Our share in capital goods is now 65%. We have reduced it. Now we have some concerns about the cycling events, but we have some operations that are based on consumer goods, and we intend to grow and provide the stability to our revenues. We have 48,000 shareholders, and we used to have 9,000 in the past. We have a market cap of BRL 4.1 billion, and now we currently have 15,000 employees. We are now near 16,000. And in 2017, we had 7,000. So this clearly shows this trend of growth of our company. We have a portfolio of company with 22 families of product compared to what we had 2009 that were 9 only. So these synergies, as I mentioned, they are powered and connected to our core business. to our business model and focused on these 4 areas that I can show you here on the screen. Internationalization, and our purpose is to get 30% of our revenues in international markets, with a strong currency development -- developed economies, and this will provide us with more robustness in our operations. And we also have spare parts, as we said in many events. We have resilience. We have the strength of our brands. So we have also a strong cash optimization of distribution channels. So we have the means in order to distribute this product. So this is a more natural development for our company. And we also have a recurring demand. Another item is innovation in services, so disruptive business efficiency, sustainability, the expansion of our manufacturing capacity, expansion of geographies, and this we will provide you more in detail next today. But one other thing that I want to talk to really is how we are allocating our capital in profitable businesses. So where you are investing your money. So we will talk about this now. This cycle between 2019, 2023, we invested BRL 2.5 billion. And how was this investment broken down? The CapEx was BRL 1.5 billion in this cycle that I mentioned, 2019 to 2023. And you can see that we have auto part that is together with the movement control. And you remind that some years ago, we used to combine these 2 businesses. They are technically auto parts. They received 65% of our capital in terms of CapEx, and approximately 30% for our car manufacturer and the remaining for digital services and financial services and also advanced technology. I have the timer in the middle of my screen. I am having trouble to see my slides. So if you can move the timer, it would be helpful for me. Thank you very much. When we talk about M&A, we have BRL 1.5 billion for CapEx, and now we have BRL 1 billion for M&A. We had many acquisitions in 2017 and 2018, but from 2019 until now, we put 17% of this capital between auto parts in our movement control, and 29% to our car manufacturing, and the remaining to financial services and advanced technology. So I hope that we are being more transparent of what has been doing over the past few years. And this is -- we have BRL 2.5 billion of investments. And this, we have carried approximately 16.4% of EBITDA. And for digital and financial services, had an average EBITDA of 22%, investing BRL 11 million in our financial services [ ahead ] of the lower EBITDA. The orange part represents an investment in M&A, and blue represents the CapEx. And you can see on the left side, the evolution in ROIC in the period from 12.3% to 14.1% now in 2023. We have an excellent track record, which is very respectful. This is our only -- these are only a few examples that I'm providing you. We have the transaction of Castertech and Usinagem. This is small, and we have tripled the EBITDA of this transaction. This is for digital and financial services. We have -- so we took from to BRL 12.5 million to 16.1% (sic) [ BRL 16.1 million ] for this area. And in February last year, we were able to improve the EBITDA in 1.6x. And for Castertech Schroeder, we were able to increase the EBITDA 8.2%, and Fremax was 2.9x of growth. And for Nakata, we were able to increase the EBITDA in 3.0x. So this is an incredible result for us. I could also mention many other transactions that we have carried out with the same setup. So we developed this expertise, and we were able to identify good businesses, create value to our shareholders. And I hope that you agree with this strategy. So we have become a more complete player in this ecosystem. So we have car parts, we have movements control, we have a car manufacturer. Within this circle here, you can see these movements that are intended for internationalization or gaining of capacity or focused on investments for the future, such as innovation, services and business expansion. On the top part, you can see we have technology, innovation, our movements that we have carried out over the past few years. So our results show that we are on the right path following our strategic plan, and we are quantifying to you a little bit here, 2009, 2017 and 2023. So you can see the net revenues to BRL 0.5 billion to BRL 2.9 million in 2017, BRL 10 billion in 2023, which is an increase of 24.4%. We have the EBITDA, we increased from BRL 300 million to BRL 1.5 billion, which is 38% (sic) [ 31.2% ] increase. We had net profits from BRL 139 million to BRL 381 million, so it's 41.9% of increase. We also had a leverage from 0.61 to 1.03. We also have dividends from BRL 39.4, and now we pay BRL 162 in 2023. This is the distribution of our revenues. As part of this transformation, you can also see here 2019, 2023 in the first quarter of this year. So in blue, you can see our car manufacturer; the black one, you can see auto parts, heavy auto parts; and in orange, you can see the mobility or light auto part. You can also see that we, into auto parts, 52% of our revenues in 2019 increased to 56% in 2023. And now this last quarter, 75% of these revenues comes from these 2 verticals, which are key in our model. I had skipped the slide, but the previous slide was about revenues, and this one is about EBITDA. So here, we had 52%, now it increased 57% our EBITDA, and we increased -- in 2023, we increased 71% of our EBITDA. In the third one, the first quarter of this year, we increased 75% of our EBITDA. So these are results that show the importance of auto parts in our business model. So we have a full-fledged solutions for agribusiness, for the manufacturing, mining, spare parts, urban mobility, construction, also logistics, retail, financial institutions, technology and other subsegments. So this is part of the entire transformation that we have conducted in our company. In the past, it was focused on some lines of product, but -- some of you still look at us that we are manufacturers of semi-trailer trucks. Yes, we do this still, but it is important to see that we have this semi-trailer truck is a smaller share of our revenues. So we want to continue to evolve our business model, so we can have a more increased growth and resilience in our revenues. And this is important to see that what we expect for our future, the potential that we have as a company, and this is what we will cover in our next topic in the next panel. This is what I had to say, so it's back to you. Thank you.

Thank you for the information. It's impressive, the potential of transformation of Randoncorp during this year. Now I want to reinforce the message regarding the questions. You can prepare yourselves. You can scan the QR code, you can also scan the QR code on your badge. You are invited to participate. So please do it. So let's continue with our schedule. So Sergio, you have the floor again. So we can start our second panel that will talk about the potential for the market for Randoncorp.

You thought I was done. I tricked you. I'm still here. Before I start to talk more specifically about our potential, I want to provide you some information on our revenues by segments in the cycle between 2019 to 2023, where we had BRL 5.1 billion [indiscernible] BRL 10.9 billion. So I will provide a breakdown to you about this. We have -- this is -- 23% of our revenue in this segment. So these are revenues in the foreign market. So this is what we export or what we manufacture in other countries. So it was 19%, and now it is 21%. And agribusiness is the third biggest element of our business. It was [ 34% ] [indiscernible], and this year is approximately 24%. But this is a diversified model, and this is very important in our pursuit because we want a model that has less risk, and not based on the seasons. But what we want to mention here is the potential of our market, how we see this in many markets in which we operate. The first element that we will talk about, we will talk about internationalization and many other things. But I want to start with agribusiness. It represented BRL 2.6 billion of our revenues, 61% in our car manufacturing of semi-trailer trucks and also 36% in our auto parts by selling brake suspensions for trucks that are used in the agribusiness, 2.9% of parts that are sold to the agriculture industry like tractors, planting machines and so on and so forth. We also have semi-trailer trucks for sugarcane, for the transportation of grains, for forestry, cellulose and also for slaughterhouses, tanks for fuel and also for juices that are associated to the agricultural field and also to agricultural machines in general. But we also have the parts for trucks, and these parts are also used in the agribusiness. So you know that the agriculture chain is very long. So you have the inputs. You have the harvesting, processing, distribution and consumption, in addition to the indirect channels like technology, research and technology, financing. So all of these things are part of the agri business. But it is important to note that all these elements, transportation and logistics, is part of the entire business. This is this where we enter. This is the agribusiness in Brazil. You know a lot of the agribusiness, you know many other companies. And we are the first producer of soybean, the first exporter of soybean. So we are also first in coffee as 30% of market share; orange juice, 75% of market share; sugar, the same thing, we are first; also for chicken and also for cattle, we are first and second, which are positions that are very robust in terms of our agribusiness. Now moving forward. Now talking about the grains and sugarcane, the bars, blue, represent harvestings during the last many years, '24-'25, you can see here we did [ 180 million tons ] for the crop, '24-'25, [indiscernible] [ 295 million tons ] for '23-'24. If you adopt the curve to -- it's ongoing growing very fast levels. The gray bar regarding the amount of tons of sugarcane, which is another product extremely important, and also here, you can see that trend curve, if you see the line, the trend, it's very positive and fully positive, in fact. And for this cycle in 8 to 10 years, 2032-'33, we will reach [ 500,000 ] tons of grains, [ 766,000 ] tons of sugarcane. Why do we believe this is possible? Because Brazil has a lot of area to plant, no deforesting needed. This area is available, prepared. Brazil has revamped itself and productivity is high. So those who today can irrigate its crops with 3 crops per year. This -- we don't have a broad -- and this makes us believe these figures are possible to obtain. But even if you think 500,000 tons, which is the forecast of experts, we just report -- even if it's 450,000, 400,000 it's a fantastic figure for us and represents a huge potential. Soybean, 422 million world tons in Brazil, representing the blue, light blue bar. Orange is USA, you can see Brazil has surpassed the Americas in terms of soybean production. Corn is 1.2 billion, where the Americans are the biggest producers worldwide, and we are very close to them in terms of our growth on lower speed overriding other Brazilian commodities, but our pace is quite reasonable. So our capacity of storage has grown also. We still have a huge deficit, and the forecast is that this deficit will keep on happening. And the outcomes of having such deficit, first is translated as a higher need for transportation. It's not healthy for the agribusiness per se in order to be healthy and productivity and performance of the business community segment to be maximized and important to have a similar pace, so we hope this will happen. But first, if we don't have the capacity to store, transactions and sales must have happened. Grains must be shipped, and this favors also our business. An idea of the [ equal ] equipment machinery demand in Brazil 60,000 of semi-trailers, this is in agricultural equipment, and 70,000 per year in trucks. 40,000 per year earmarked for mechanical horses dedicated to this transportation. In Brazil, the equivalent figures is the second -- it's another producer, 65,000 semi-trailer, 100,000 agricultural farming implements and 65,000 trucks associated to this segment. But let's think -- now follow with me, the green line representing crops in tons, looking '13, '23 and 2033 by the end of that time. The orange line represented the circulating fleet of vehicles, and the blue line representing the market of semi-trailer truck used for this transportation or shipment. So now, 2023, crop in grains reached 300 million tons, the fleet circulating of semi-trailer, 900,000 semi-trailer trucks, and the markets of semi-trailer market, 90,000. If the number, 500 million crop harvest is reached during the cycle next year, this will lead -- and there's the direct correlation you will have to ship this production, 600 million tons more, representing 550,000 for the circulating fleet equal to a sale production of 1 million semitrailer trucks currently and 700,000 trucks to work with the semi-trailers. So we are extremely positive that Brazil's agribusiness will keep on growing. And Brazil has [ this place ], you have followed the Brazilian position worldwide landscape, world population has increased, has grown a lot and increasing. U.S.A. [indiscernible], Europe production, Africa is still crawling, and Asia with its limitations. And the whole world is looking to Brazil and saying they only contribute conditions to grow and supply this world demand. That's why we have this optimism, which is huge regarding this segment. But it's not only the grains. We'll talk about sugarcane also in a few, because we are positive regarding this. Because fuels, renewable fuels, have all to do with our sugarcane production in 2025. In Europe, fuels for aircraft, they have to be renewable. And they are looking towards Brazil for the big producer for the aircraft fuel. So the potential in all aspects either for cattle raising, cattle grain, eggs, poultry, or pulp and paper or sugarcane, fuels or [ orange ], the potential is huge. It does not mean, oh, we will grow and be perfect in that journey during the next 10 years. A segment can have a better performance than others. But in the accrued way of seeds, aggregate-wise, we are very positive on the agribusiness, one of the pillars. On the other side, we would like to spend with you regarding the internationalization of the company. We'll talk about it, addressing our 3 verticals, starting with the assembling car company, the North American company, in average, 380,000 vehicles. Figures from 2023, we include the traditionals on the right-hand side, you can see the pizza chart. So the general shipment is done in closed trucks, and cold trucks is the second segment. And the second is the containers base was the one we chose to start penetrating the American market. Now we are expanding towards the platform vehicle, which is the fourth, 7%, represented in the chart. We are developing this line of products. That's under test in the American market. We reached $102 million of revenues in 2023, thinking about the American market with almost 6,000, 5,900 products, you can see in the screen. Thank you. And for the internationalization of the car assembly company, because the North American market is the biggest, worldwide speaking, we below the Ecuador line, the world markets 5%, 95% is in the north hemisphere. And within the north hemisphere, North America is the biggest market, and that's why we did so. But historically, the market in North America has a cycle. And they're [ better than ] the Brazilian market, and it has more political and economic stability. The currency obviously is strong, and a lot of opportunity for us to play the game there in a different way than Americans do. We are developing well. At some moment during the presentation, we will in the line talk further about our advancements in the U.S.A. Okay. Just for your knowledge about the market. Last year, 1.6% market share, American market, 5,800 products, and BRL 102 million (sic) [ $102 million ] revenues. If we reach 3% of the American market, we will reach $200 million in revenues. If we reach 5% of the American market, which is regarding 19,000 products there and $330 million of revenues. Even though if we transform ourselves, our journey in the vertical assembling company in the North American market of only 5%, this will bring a revenue growth which is substantial for our company. But now -- and talking about our assembly company, we have closed a contract of 3,000 units recently for our [ equities ] in the U.S.A. Just for your knowledge, there was a -- let's say the market for containers had a substantial drop, and we mentioned this the 2 last times we met, but we managed now to close certainly the biggest contract in the American history. And going beyond the traditional companies over there, so we have received the official communication. We will start to manufacture now, the next month, this production. But the auto car parts, it's the biggest focus we have regarding growth. Within this market, international market, highest focus in the American market, I stress, 380,000 semi-trailer truck, 550,000 trucks and more than 110,000 farming implements today. In this implement vertical, we have $18 million still in the quadraulic, which is disk brakes hydraulics for medium-sized trucks. And 100% of what Navistars use and Ford's manufactured trucks there use. Our products, we manufacture 110,000 units per year. 100% of this market is led by Brazil for many years now. But we are advancing in the American market for the same basic reason. It's a giant market, different cycle from us, strong currency, economic political stability. But here, we have another [indiscernible] EPA America will have a regulation with stronger regarding emissions equivalent to the [indiscernible] in Brazil, but it's a regulation that's different and different entity. So EPA 2027. This is well known that will generate a prebuying of trucks in 2025-'26. The American [indiscernible] market, they'll not buy on the spot. They'll start buying 2 years before 2025. This will be so relevant that one of the biggest manufacturers of the four that they have in the American market, this closed a new plant just to be able to have the capacity to expand and capture these opportunities. But if you look at the American market, you will think, well, pre-buy, and then accommodation, yes. But if you look in the long term, the line, it's a growing market. Very clearly, we can see it's a growing market, and we'll keep on this space strongly the prebuy, and we want to make the most of this opportunity. Of course, do we make -- as they have difficulties to supply, this will make easier for us to participate. So we have 3 growth avenues: exports from Brazil, and that, Ricardo will talk about something in this line. We can work with greenfield in the American market as long we have commitment and alignment based with American manufacturers. Ricardo has traveled a lot, talked with [ Volvo ] and Navistar and all the players in the American market. And also, we are looking at M&As, mergers and acquisition, which is a faster pace for us. Adding market capacity, creating a name, it's a cycle with a due time that's higher, but we would like to have the path through a company there. So there are several projects that are being taken into account, but the main products we are thinking about taking to the American market, disks, semi-trailers Composs material, shafts and other products. So an example, thinking about suspensions and shafts for semi-trailer, we are using the product here to describe the same thing. We have 380,000 semi-trailer in the American configuration, average more than 2 shafts by semi-trailer trucks, more than 2,000 trailers per year. So you can see these are the products in the screen. This is just an example of the potential we have in that market as we today cannot participate in an important way. We started some exports now, Ricardo, rigid shafts, mechanic suspensions, pneumatic suspensions, mechanic suspensions, you can see the PowerPoint. The third part of our internationalization, we talked about the assembly company, heavy auto parts. Now we're going to talk about control of movements, which has more industry in the North American market, $91 million in 2023, most of this through friction materials in $80 million, and $11 million with brakes, disks and drums for this more focus on the light line. This is a mix of what we already do there. But look on the right-hand side, the size of this market. Cars, just U.S.A. and Mexico, 250,000 units. If we include Canada, 10% more, approximately 300 million vehicles. Light commercial in the same way, 70 million trucks. 12.5 million fleet. In Mexico, 1.1 million. Put 10% just to include Canada, and they closed the accounts. Semi-trailer, approximately 8 million fleet. So the potential for spare parts, it's one that's huge. Now today our movement control is present in Alabama, we have an office in Michigan, and we have operations and sales in Mexico. But to tap this segment is important for us. We have a strong presence in U.S. in the heavy line, and we have the small presence in Mexico, and we have talked with mobility, as we said, and previous opportunities, we shared this, that we want to focus more in North America, Mexico, especially, focus on the light line and its spare parts, which is the model we have been doing in Brazil successfully, and likewise in U.K. through [indiscernible]. So the portfolio of products, a repetition of some fleet numbers, our intention, again, is to expand further growth in light line. Heavy lines in U.S.A., especially, we are the leaders in friction materials for a long time, many years. We have approximately 40% of the spare parts market, and 70% of American assembly cars company, they use this product. I don't know if you are aware about this leadership we have for many years now. So our intention now as mobility is to invest, grow, focus more in the light line, once the heavy line, we have the opportunity with [indiscernible]. We have gained our business. [indiscernible] keep going in the heavy line, but big opportunities for us are on the light line. So I talked about the agribusiness of Brazil, one of our pillars. I talked about internationalization, recalling our commitment to taking 30% of our revenues. We talked about also the spare parts, Brazil, not global with North America and Europe included, but only the replacement spare parts, BRL 2.5 billion revenue, 72% being [indiscernible] control development. But I don't know if you're aware of this, 15% of both of the BRL 2.5 billion is the replacement through assembly company and 13% through our auto car parts. We are present in all segments, heavy car, vehicles, heavy. We have also semitrailer, farming implements, and our purpose to keep on expanding, doing more what we have been doing successfully many years to increase our presence in different sectors. And overall, 60% to 65% of our revenues in the spare parts has to do with light lines in Brazil. So 35%, 40% has to do with heavy lines. And we want to expand those distribution channels and portfolio products as we add the fixed cost. For you to dilute the fixed cost with more product is something more palatable as long you have a name and capacity to manufacture having product. This is what our companies have been doing very successfully. We have a potential to grow spare parts, BRL 15 billion. The car manufacturing, 61 million. And you can see on the other side of the screen, the size of this fleet and also a huge potential. We have a respectful position. We are leading in spare parts in Brazil, but we still have room to grow. And finally, our final block, which is the car manufacturing in Brazil, we had revenues of BRL 5.2 billion in 2023, of which BRL 1.9 billion is auto parts for OEM, and BRL 3.3 billion for vertical car manufacturer as OEM. 73% is focused on trucks; 12% on semi-trailer trucks; others, 7%; and urban mobility, 8%. And our purpose is to expand the portfolio of products to defend our leadership and strength our relationships in the long term. We also have many opportunities in brakes, suspension and we can capture synergies in our auto parts, and this is a competitive edge for us. Some examples to you, you can see our auto-directional axis, which is a new product that has been regulated last year, which is an auto-directional shaft or axis. Our bus articulation, BRL 23 million of revenue. We also have ABS modules, which is -- represents BRL 22 million of revenues. And in particular, the main business that we were able was to go into the segment of rear axis. It's a new manufacturing facility that we are assembling, which is BRL 70 million of annual revenues that will start to materialize from 2025. And we also have many other things coming. There also electrification. We have this revolutionary system that have been saving so much for you, which is e-Sys, so you can have electrical suspension in the semi-trailer. It was impossible to think of this in the Brazilian roads, but now we started to sell this product last year. But this is a slow process of acceptance too. For people to know this technology, it is a slow curve to achieve. And something that we wanted to share is that in 2024, we have closed 26 deals. We have the potential for 50 units for this year. There is a huge manufacturer of trucks here, and they are manufacturing 5 units, and we are targeting 50. These are small numbers still, but this represents a lot for us. We are gaining momentum, and this is what we wanted to share with you. And we still have 63 that are ongoing, deals that are ongoing. And we are focus is on Brazil, in operation. We are also attending fairs and events. So we are also have negotiations. We can see the colors here, green, yellow and red. We are on Chile, Mexico. We are also in the U.S., and we will be showing these products also in Germany, we will there exhibit our products for the first time. So all these technologies, these advanced technologies, they go some phases. So the first here are the ones that value ESG, but we are going to the second phase. So we assess the economic viability of the process. So we are getting very near to achieve this economic viability. And then the third phase will be scale, because this is a very expensive product, but we are evolving very well in this point. I believe this is all on my part. And Carla, the floor is yours again.

Thank you again, Sergio. The potential of Randoncorp is impressive. So we have many segments, many lines of businesses with an infinite universe of possibilities. So now we will talk about cases to clarify this potential. And I want to invite for this the CEO of Vertical Autopeças to be part of the second panel. So Ricardo, welcome. You have the floor now.

Thank you, Carla. Good afternoon, everyone, people who are online and who are here at the venue. I will continue with the presentation. Sergio talked about the potential. I will give you some examples, some cases, how we are conducting these cases and making that the growth of vertical auto parts will be sustainable in our strategic model. So these are practical examples that I will provide to you right now. So this is Mogi Guaçu Site. This is a strategic site for Randoncorp. It was purchased in November 2022. It was some facilities that were not operating. There was the building in the area, and it was our sixth acquisition in 2022. So in 2022, we had 6 acquisitions, and this is what is increasing our revenues that we showed in the last slide. So why is this site so strategic? Because it is near to some clients, some customers, OEM and also Araraquara. So we have the opportunity to expand the 2 sites of Castertech and Suspensys. And around those sites we have a huge area of 80,000 square meters, so we can expand our business. So this is a diversification of a location. So the climate change agenda is not what we will do in terms of climate change. So we see the events going on in the state of Rio Grande do Sul here in Brazil, all the tragedy there. We are now looking in advance to this event so we can serve our customers. And this is what we are trying to do with the Mogi Guaçu Site. And these new manufacturing facilities, they are fully automated. So these are new lines. And I will demonstrate to you what we are doing in terms of automation as well. So now first, Castertech Mogi Guaçu. We started production last month. So we are now a ramp-up this month. We want to go and have 22,000 of iron and more than 350,000 units of brake drums. And we have acquired in the market a potential of consumption of our most 130 tons, and should rather Caxias and [ Cuiabá ] facilities were able to produce 22,000 tons. So this is not enough for us, but no doubt, we are capturing new opportunities with this optimization of results and we are bringing this with a more competitive line of products, and we can defend our position in the market and expand through new businesses. This is fully automated production. In the new molding line, we had an old line. We sold that line and now we have purchased a new line and it was 2023 was being used in Denmark, and now it's being used here in Castertech Mogi Guaçu. And only 2 people will be working from the furnaces and all the other areas we will have 13 people. Of course, this is a different part, but we have the efficiency, the automation is very important to these new facilities. And 1 of the opportunities are the exports to the U.S., we have a support that we have from Castertech in Caxias and we want to transform the site in a hub for exports. So this the potential for revenues for Castertech on Phase 1, it will be BRL 2.5 billion. We have invested BRL 90 million to rebuild this building, but you can see that the building already existed, and it was conceived. You can see the furnaces on the back and each 1 is for a molding line. So we provide the possibility of building a second line. And this is why we have a Phase II, and we also can purchase parts from the market, so we can add more 20,000 tons. So this is our plan. We are looking to this unit and how we want to transform Castertech with this new facility, a more strategic site that is near the customers -- increasing our capacity production and our results. We also have some new technologies. We are using AI to improve our results. So you can see here that in Caxias and Schroeder, we are using AI with more than 30 million combinations for the programming of our manufacturing setups. So 30 million increase of productivity. So we have 50% to 70% of programming time. So we optimize which products go into the line, so we are able to have a savings of BRL 1 million per year. So these are things that we are expanding and we are introducing in the new site in Mogi Guaçu. So we are also using some melted components using niobium. We are also using traceability using blockchain technology. So this is an important point. We want to reduce the mass of our products. As I mentioned, we are using traceability with blockchain. We have the QR codes in our products but we can record them in a way that nobody can change it. So we are using blockchain for this, and we tend to use these technologies and this will be helpful for us to be more competitive and defend our business and expand the company as well. Now we talk about Suspensys Mogi Guaçu as well, a facility that we have in the city of Mogi Guaçu. So we purchased that unit. There were 5 players participating in this bidding. And we needed to have the availability to have this company. So it was critical for us to purchase this facility in Mogi Guaçu. And on this side, we were able to demonstrate to Mercedes-Benz that we were able to conduct the business. So we had the best results with this new business, BRL 7 billion in 10 years. So we have the front axle is very important. We can increase the size of the opportunities that we have. So this is a new business for Suspensys. So this is state-of-the-art technology in this plant. We have automated items for this line of production. And it will start in the first half of 2025 the production in that site. On this side for Suspensys, we are investing BRL 150 million. They will not be made on year 0. The first investments are intended for infrastructure. We have 85% of the infrastructure completed both internally and externally. And we will purchase these assets from Mercedes-Benz, and we will transfer to this plant. So we have the entire cycle of payment, and we will demonstrate these results that we are doing this deal with Mercedes-Benz. So this is an opportunity to verticalize some process. But another thing that is very important, and this is 1 of the factors because Mogi Guaçu is important for us. And 60% of front axles are already provided by the domestic market. Not necessarily the Mercedes access, but when we see the cube and the drum and the brakes, all these parts, all the ends of the front axles, these parts are being delivered in the domestic market. So this will help in the capture of synergies in order to maximize our results. And also this transition, we have this mirror plan with Mercedes-Benz. So we will have a backup to do all this transition and not to turn off one and turn on the other one. So we are transitioning in a safe way so we can ensure the security and safety of this project. This is not that simple. You can see Mercedes-Benz, Daimler Group to provide exclusivity of front axles to a company. So they trust us. This is assurance that we can do this. We can make those deliveries. We have a robust planning and we will be able to achieve this product for that company, Mercedes-Benz. In manufacturing, we also have state-of-the-art items. So we have smart manufacturing. We have autonomous, robots. We have advanced automation and we also have real-time management. So what does this mean? We have some pictures here to you. How the Mercedes production is being done there. So these robots that I'm showing here, they do all the production. They take the components, they go inside with the robots, they do the machining, they go to the next step, and so on and so forth. So they optimize the resources and the results within the manufacturing facility. So this is a state-of-the-art line of production, and this is what we are purchasing for the production of front axle. And we are entering this new market, expanding our opportunities. And this is what we are doing to increase our portfolio so we can go into other levels of product. So close this -- these 2 cases. Mogi Guaçu is very important for us, for Vertical Autopeças, and this will represent our growth over the next few years for our project. Now we will talk about Master. It's a 38-year partnership that we have. So how can we do this so long partnerships? So sustainable partnerships? Of course, transparency is 1 thing. Trust, mutual trust between the shareholders, the partners, but no doubt we create value in this joint venture. We take the items that come from our joint venture, which is the break in automatic shift. So it increased this joint venture, so we ensure the sustainability of this joint venture. So we are increasing the partnership. So we are strengthening our participation in spare parts, and we are adding BRL 250,000 in revenues, which are cylinders and drums for brakes, the valves of the Pneumatic system, all the Pneumatic brake, Master will be doing this, and we could have made other decisions. But we put Master within our joint venture, so we can create value to this joint venture, and we intend to have another 40 years with this partnership. Sergio talked about Quadraulic. We have the first step in this expansion to the United States. So we have SOP with 3,000 parts in 2005, but now we have in 2013, 70,000 units, and in 2023, we increased to 210,000 hydraulic brake disks to the U.S. market. And more than 2 million disc brakes that have been exported. So we know the level of quality in the U.S. market, we know the requirements, we know about these applications, and we have this expertise in the U.S. market. So the hydraulic brake disc there, some points, do record as a yellow buses. 100% of the [Technical Difficulty] disc brakes manufacture in Caxias do Sul by our company. So what's new regarding expansion towards the United States? We exported indirectly those chambers we mentioned that we post in the JV. We exported more than 14,000 chambers in 2023 directly through Randon Assembly company, the container bases that went there. And through this we have developed products that are reliable when we manage this breakthrough, as we name it, which is the first time ever we manage through JV. We can export the brake chamber. This is not part of JV, but we assess a market of USD 250 million. So we are now starting the planning to act with the brake chambers in U.S.A. with -- through JV Master with production manufacturing expertise. Now talking about these cases I mentioned in a nutshell. What did we do through this cycle? In 1920, invoicing year, and while 2 years or year, there's the most lesions amongst years, but an important the other range of both years we can check how we are evolving from 1 cycle to the next. So invoice vertical parts, BRL 1.9 billion, a big start with BRL 225 million in 8 units. 2022-'23 dropped a bit, but the average between both cycles run rate yearly. So it's -- you can see BRL 3.7 billion. So we're almost double of -- double our revenues in both cycles. We increased our EBITDA to average BRL 590 million, 2022, higher, '23 less, but the average BRL 590 million of run rate currently, and now we have 15 industrial units. Our next cycle is the increase of portfolio. I mentioned, increase the size of the pie, how to enter with new products greater the market capture synergies. Synergies optimize results serve through competitiveness of our clients. Graphic growth through products and manufacturing from Mogi Guaçu, Caxias and mergers and acquisitions, as Sergio mentioned, mobility and agribusiness -- electromobility and agribusiness. So this is for the next cycle, and we want to double again our revenues during the next cycle with these projects I just listed. It's the first point regarding these cases. That was it. Thank you very much.

I thank you Ricardo for your presentation. All the information conveyed, so we wrap up and end the second panel of today. But now we start the first Q&A section recalling those who have not yet submitted comments, question, you still have time to participate. Just access the QR code on the screen you find in your bench. So I invite to join me on stage, Ricardo, Esteban, who will be the moderator of this panel. So we're just organizing everyone taking their seats. So Esteban, you can take the floor.

Thank you, Carla. Well, I would say we have received lots of information. I have complied with what I said at the beginning so for you to fill our market potential. Now the questions we have, Lucas Marquiori, please. Lucas needs a microphone. So Lucas, your question.

Thank you for the event. The information so useful for us to be able to quantify things to consolidate all the topics you shared with us. When we talk about potential market being auto parts, being agricultural, farming implement, I would like to know how the counterpoint of the argument of capital allocation seems the opportunity in the different segments. So auto parts, assembly company, farming implements, what should the company give priority in terms of opportunities, merger and acquisition, auto parts, foreign markets. So now the strategy of the group and where it's going this capital for the group to match business opportunities and capital allocation?

So thank you, Lucas. So we just received a question by Marcelo Motta regarding which is what related to your question, which values we can wait regarding the next cycle capital allocation. So following this line, Sergio and Ricardo, we can answer our view for the next years.

Well, perfect, thank you Lucas and Marcelo for the question and presence. Intention, as I said, is to keep on growing at a pace, that's a fast pace. Therefore, our intention to keep on investments between CapEx for products portfolio growth manufacturing capability and keep on investing in acquisitions. If we have to talk about values, we can see the average of the last cycles and keep in the same pace, which is our intention. So we have projects in the sense of giving priority as you saw the units with higher margin. And we will keep on doing this. So the allocation of capital, either being CapEx or capital for investment, spare parts headed by Ricardo or movement control will receive priority as it has been in our capital allocation.

Thank you, Sergio. I'd like just to add an answer to Marcelo Motta. Regarding values, we have guidance between BRL 430 million to BRL 490 million. Every year we disclosed the expectation of organic investment guidelines and also the financial discipline to be addressed by Paulo. But our assumptions regarding nonorganic and organic investments just to have a healthy leverage to face any volatility. Next question, Gabriel Tinem from Santander.

Regarding the question, the first year mark to the assembly car and trucks company. As it has been the North American market a bit weaker in the first semester, I would like to understand this new order 3,000 units. And regarding the expansion of market share you shared with us today, how do you intend to reach this? I know you mentioned some product lines, but what's the base for this more earmark for regarding Mogi's 1 phase, the first phase of project BRL 2 million of potential revenues. And the second phase, the second phase includes the value previously mentioned or it will be an additional volume?

Well, perfect. Sergio, do you want to answer about the U.S.A. and then Ricardo can add with Castertech in Mogi Guaçu.

Well, thank you, Gabriel, for the question. Our purpose is to grow in the semitrailer U.S.A. market, as mentioned, but we now chose not to pursue the acquisitions there. It has a lot to do with the previous question regarding market allocation. We have several projects, a sturdy pipeline for acquisitions linked to our spare parts and movement control, but we want to focus there for investment. But what are we doing? We are now expanding the product portfolio and capacity of production. So currently, 2023, we invested a lot in [indiscernible] in the sense of improving productivity, which was good, but we improved further. We have 4 new lines more automated, says under processing -- going there by ship in 2 months, it will be operational. So we will have capacity to manufacture more with the site, with investments. The organic investments we made also is expanding products portfolio. We created our first platform for this market. And now we are -- it's under test, product manufactured basically with steel, but the North American market has a hybrid -- have still have aluminum and 100% manufactured with aluminum, so the second semester, we will launch the version steel plus aluminum and the second moment one version in aluminum. So intention to grow there? Yes, at least at 5%, but in a way, more organic to say. So an acquisition being coherent with what we have been doing, we will focus more in the other verticals. Thank you.

Thank you for the question. Regarding Castertech. Now we have 130,000 tons we consume currently. So it's not an additional volume order. This is -- today is 130,000 tons. Installed capacity we have. This is the record regarding performance of Caxias, Schroeder and Cuiabá units, 80,000 tons installed capacity. Mogi Guaçu to additionally 22,000. Even adding the second line, more let's say, [ 22,000 tons ]. So it's additional incremental, but it's business we have in our house. And obviously, we capture this results in-house regarding vertical.

We have seen this effect last year, Ricardo, with the truck market reduced truck 40%, but we maintain stable auto parts revenues because internal production and manufacturing.

So a substantial drop, yes, in our revenues, but performance, EBITDA and cash generation was something very good comparing the percentage. We optimize our fixed costs with the result -- optimization results, bringing in-house the in-sourcing of auto parts.

Thank you, Ricardo. And Victor from Bradesco BBI. Victor, thank you very much for being with us.

Thank you for the presentation. 2 questions. One regarding -- as a bit of the previous question. Now how to think about profitability and market share. There is a huge potential of growth. But given the verticalization increase in the industrial side of things, how is the market check looking forward? And also thinking about the last stage regarding the financial arm, what's its way to sustain Randon growth thinking ahead?

Thank you, Victor. Sergio, I will share it with you regarding the point of view of market share. We always say the balance between markets and profitability -- market share and profitability. We see market share differently regarding value of product -- added value higher than the competition. So this is a point perhaps we could address in the sensor to Victor.

When you ask about market share, you mentioned the assembly company on an overall. Well, perfect. We have this leadership position in our assembly company with semitrailer -- the total intention of keeping this leadership position. We are leader in the main lines that Ricardo has in this auto parts being suspensions, helps rotating elements and positions regarding leadership. And the fifth wheel coupling and overall, we have leadership position in our Master system for brakes, all the main products we have a leadership position. There are some product lines where we have 90% of market share here for the fifth wheel. We ask ourselves many times. How can you keep 90% of the market share. But we have done this for many years, and we know it's a huge challenge. We invest then in productivity, invest in technology, [indiscernible] also reliability. So our clients like to work with someone that they trust and can forecast know when natural disasters or acts of God or difficulties of relationships, it will work out and render prestige and keep up the operation running. And this thing that Ricardo managed for the front access has to do with all. We are competing with a huge [ mutual centers ]. So the choice was made by us, a good technical proposal and competitive commercial proposal, but said by them, the differential was our history. They see us as a sound and serious company that they can trust. We will not be changing direction. So what we want to do with Mercosur, the same thing, keep doing this expanding -- let's say, excluding and removing limitations of the chain in order to be pari passu and creating value for these clients. So our vision is, we have 1 of our guiding line strategically wise says that we create value for our clients as being the main differential in our site. Solving their problems as we can solve it like the front axles for decades -- the messages wanted to leave exits somewhere now to [ camp ]. Now an important part of their production is migrating to us. So solving clients' problems and clients clients' problems is the best way to perpetuate our view on market share, providing solutions that involve technology, productivity, financial solutions. It could be liaison, liability, it's a mix of many things. And also on our side, moving towards our side, we have integrates, connections of capital, so the bank, our financial size can keep on following our growth in-house and also focus on the external growth. So we have -- I hope I have answered your question.

The next question is by [ Matthew Hecht, Arctic ] Investments. Before -- a piece of note is we have an extend list of questions. I'm just before hand saying we will not be able to answer all, but the investment -- Investor Relationship team will be answering it. Matthews is asking, as you mentioned, Sergio, deal transaction with Mercedes for the front axles, the biggest 1 in the history of Randoncorp. And he is asking about the profitability of this business. So Ricardo will be able to talk a bit according to information he has Mercedes's treasury, more Brazil's operation for more profitability, that's why Mercedes came, try to outsource this product. And how do we believe that it can be more competitive or provide more margin? I think part of the answer, you have answered in our panel regarding the unit that state of the art, but could you drill more on this?

Thank you for the question. I will not comment on the outsourcing on the decision of Mercedes, the process -- this is their decision. We were invited to participate in this bidding and we participated. So what is it that we have different that we can see profitability that we can make a difference. So there are 3 elements in our vision. So in Mogi Guaçu, we have direct labor and the costs are lower than Sao Bernardo do Campo and also the union problems that we have in Sao Bernardo do Campo. And as I mentioned, 60% of front axles are produced by auto parts, not necessarily the Mercedes axles, but we have the components and know-how and expertise to supply to Mercedes. And the third part that I see is a competitive edge is that we have this capacity to develop other items that are related to front axles. So there are many items that we do not manufacture like this leaf and the arm. We do not manufacture them right now but we can see the feasibility studies and we can manufacture those parts. And another 1 is spare part. So when you go into other components, so you have the possibility to sell those spare parts and those things were not part of our portfolio until now. So these are our competitive edges. And as I mentioned, 60% of the axles is already manufactured. So this ensured Mercedes that we are the right partner. So there is no doubt about it. There is no vulnerability in this process.

So let's move on with our questions. We have Gabriel Rezende from Itau. You can ask your questions.

It's only a question. Sergio talked about the opportunities of the group to explore the car manufacturers in the U.S. So I want to understand what are the main challenges to grow in the U.S. market? I know that you know this is an opportunity to smooth the revenues, so this is a bad cycle in the market there. But this is not to grow inorganically. So I want to understand what would be the challenge of growing organically? Or is it about improving profitability, improving ROIC before improving the market share?

Thank you for the question. We were talking about this and the challenges of labor in the U.S., it's difficult to find labor there, but it is a great opportunity for us to advance in automation. So in addition to labor, what are the challenges you can see in the market so we can advance?

We have to focus on niche products for a number of reasons. We have products with more simple technological items. So we can make our organization to get familiar with the U.S. way of selling, managing operations. So this is an adaptation for us as well. So we are expanding our product portfolio for products that do not require distribution network. So we mentioned this on the previous question on automation, modernization, we are already doing those things, and we are reaping the fruits of this investments. So winning this bidding is a certification of all of this. But we also show you the pie graph that we have 60% of the U.S. market is spare parts, and you have to have a distribution network in the entire country. And this is a long process. So we are choosing the right segments, so we can operate those that are regional segments. So those that do not require a network, so we are trying to expand. But at some point, we will start to work on this network on a regional basis. And then we will let the purpose of transforming a domestic operations to the future a little bit more long term.

So if you allow me, I will ask a question. This is insider information. This is the analogy that you like to use that crawl, walk and run in the U.S. market. So how do you see our operations there?

We are crawling there. We have the first operations there for more than 1 year now. We are investing a lot of money there to have these facilities. So when we started this journey, I mentioned that the U.S. industry of semi-trailer trucks in terms of industrial technology, it is a node industry. It is very, very old. So we are investing to modernize and have the Hercules operation to a higher level, a more modern level, which is more related to Randoncorp. And this level already exists. And when we are producing the new sales, we will be in a very good position there. But again, it's a huge market there. So we have 5% of market share, and we believe that we have the potential to advance to grow and achieve more significant numbers in the future. So our step from crawling to walking to be more adapted to the U.S. market. So we will try to verticalize this. So we try to introduce our auto parts in the U.S. market. And another thing is that we want to introduce more advanced technologies to the products like compound materials, for instance, use nanotechnology. So we have the ability to manufacture products that can create value to the U.S. market in a different way, in a distinct way. This market of semitrailers, they are buying the same bricks, the same suspension and the upper part is different, but the components, they are buying these components from the same player. So the ability of being different in the market is residing in the cargo box, the remaining parts are the same. So our purpose is not being the same. It's to be different. But if we talk about relationship, if we had Renato Franco, our officer here, so the fact that he looks for customers and enter into this relationship, this is different. They are going to the market in a certain way that they acknowledge our competitive edge even in our business approach. So this is how we operate, not doing the same things that the Americans do. We are doing these things with our standard of doing things.

So it's so nice to hear those words. In particular, these are important words. So we only have time for 1 last question. Andressa from UBS.

I also have a question about the U.S. market in terms of nationalization. You mentioned you will become a prebuy company in this market. So my question is what are the main initiatives that you are approaching in order to operate on this prebuy that will start next year, in particular in auto parts. But if you can also see that the car manufacturer can also benefit from this movement.

Thank you, Andressa. Yes, we see the potential for all business verticals including technology services. But Marcelo (sic) [ Sergio ], if you want to talk about the car manufacturer, and Ricardo can also talk about auto parts and also movement control, please?

I see that you are mentioning prebuy, right? The impact of prebuy will affect more our auto parts and less our car manufacturing. There will be no prebuy for semi-trailer truck, but only for trucks. And it can have a positive impact to the extent that you can buy trucks. And if you don't have the semi-trailer you cannot do anything. So you will have a positive impact for semi-trailer truckers as well. But the bigger impact will be in the manufacturing of trucks. The U.S. market had a peak 1 year ago, the vulnerability were very clear during that period. And all manufacturers are preparing, they are developing alternatives, so they will not suffer. They will not struggle again because they know that the volumes will increase in 2025 and 2026. And for us, this is a huge opportunity. Ricardo has made a contact with Navistar, the American Volvo and some others because those are the biggest manufacturers of trucks in that country. So we are dealing with many different products. So this alignment -- because the struggles of the manufacturer can be like drums and maybe another manufacturer can be in needs of the access. So the solutions will be specific as a result of the struggles of any of these manufacturers. Ricardo, if you want to add something?

Thank you, Andressa, for the question. We have a Volvo in North America to Brazil. They are here with Volvo Brazil. They visit their customers they matters, and they ask us to go there in Greensburg to demonstrate our potential. And then we go in there, we can -- we said that we can provide here, supply from Brazil and also from Mexico, and this is the strategy that we are conducting. Master tech is improving capacity to export. Master is also qualifying new components to operate in the U.S. market. So we also have the restriction of the joint venture for the territory, but through these initiatives, we can supply some components. This is how we are operating, anticipating our operation and adapting products to the U.S. market and improving our capacity to visualize these new deals. There are many things that we cannot disclose right now because of confidentiality, but we are doing many things in those segments. So these are only some spoilers in terms of auto parts.

Ricardo, Sergio, thank you for the answers. We have run out of time. You cannot ask any questions to me. So Carla, you have the floor again now.

Thank you, Esteban, Sergio, Ricardo, it's good when we have many questions, so people are engaging. Again -- now we have a short break. We can take some coffee and some conversations. So thank you for the questions. And we'll be back in a few minutes. See you soon. For those who are here on the venue, we have a coffee break here behind the scenes. [Break]

We are back resuming our Randoncorp Day 2024, and now we will start the third panel of our afternoon, talking about innovation and efficient plans. I invite now to the stage, our CTIO, César Augusto Ferreira. Please a round of applause. Welcome, César.

So thank you for your presence and those here in person and those with us through the internet. So some of you already have followed us here. Traditionally, I comment to you about product. But within the advanced technology, we have an important manufacturing arm. And today, during the few minutes I gained this time, I will try to focus further in what we are doing regarding manufacturing, which I find extremely relevant in technology. Ricardo mentioned a lot, Sergio talked about in a nutshell. But I will present in a more consolidated fashion and a reading about impact and amendments, we will talk about some figures, bringing more technology for this young lady of 75 years old, which is Randon, not long ago, it were 58 today, we have 32 manufacturing units. So we need prioritization, organization to keep the manufacturing complex productive, efficient and connected with trends. We have [Technical Difficulty] what we want from our plants in the future to be connected where we can access, we're going to make the most of the information, data collection, working on data. We go and we have a journey that will embrace AI a bit more complex. I will drill down on this. So we have a huge opportunity, huge journey to make production more automated, more linkage flow, we use several tools for these gains, and I will talk about it. And when we put all this in the cake working together, we start having a smart plant. Perhaps in a distant future, we can think about an autonomous manufacturer. Perhaps we might be able to reach this as a vision, it's a dream, but we are paving the path that will allow us to see how to make the most of all the structures we have. We are clear regarding challenges today. We know they are ordinary to the Brazilian industry on an overall. And I think we are not different from many, but I think we are superior in many cases, we have no labor cost is challenged -- challenging, important logistics, challenging, cost regarding quality, laws are more strict, controls assembling companies and clients are demanding. We are searching and evolving [indiscernible] operational efficiency gain, and we are not excellent. We know what we want and we are running after it, how much we're going to invest, what we are thinking about dedicated energy for different technologies. Looking for optimization, excellence, operation, reduction of manufacturing costs using more intelligence in our manufacturing. There is concept of smart manufacturing, fully installed AI. This route is well designed in our mind. And there's the models operation, we know how to reach this. As for operational excellence, it's a wide talk ongoing work and it's -- all the time, we talked about TPS, Toyota Production System, several things that provide substantial gain, but we have to keep on following these trends, bringing more and be sure that each process, new product, its place in the most efficient way in our plants with all the lean implemented, installed in any machine production lines and so forth. Clearly, of course, fast implementation robotization, I'm going to talk a bit more about updating. We cannot think about future without fully automated plant, connected, linked and very efficient with no losses currently. The industry in an overall and I admit not only the Brazilian industry, but I had more time to dedicate the manufacturing complex of Brazil. We have basic fields in lines, linkage, inter-logistic losses, the handle of spare parts inside plants that is special for efficiency and people don't see this. When you drill down and try to show these problems, you see a huge development. And we have an alternate in our umbrella, it's a window of opportunity. We embedded since 2019 with the project structuring more traction on having [ a mesh law ], which is a manufacturing proprietary system, which easy met, faster tech project demand, Carlos mentioned, we are absolutely prepared a good planning for CE strategy, prepares 1 to be at the right time under the right conditions to meet new challenges. So the plant we are establishing, machine will be state of the art. I will -- I said we're going to name it our lighthouse because I see a huge potential placing all these technologies. And we started to work on some a few years, so we are more prepared to embrace it. We have to have organized data AI, and we will be a point, we must say we will have a digitalized manufacture. This is our pet and route. Now I will share with you an example, which is very symbolic for me and interesting. We talk about digital teen, it's a 2 challenge. You get industrial complex like [indiscernible] from overnight, 100% digitalized is more almost it thought be, but it can be done in chunks, in parts. So 3 examples I share with you to show the symbol is that all simulations made with expert team are part of our productive process parts, an example here. I think it's a point -- the upper 1, improvement in flow in Araraquara, in [ Lagarto ] plant assembly [indiscernible] improvement. Oven, open furnace supply, millions of Real put on some gain in efficiency and productivity. Perhaps a more symbolic example we have here. We have dedicated Randon implements. We have a huge bottleneck, which is painting. Currently, it's a challenge. We use this type of technology with highly skilled people, we have a road map with games on form of 21% with the potential reaching 33% efficiency gain in that operation, which is a bottleneck. If we can do a simple parallel gaining this type of position, the hope -- plan, technologies, not buying sensors and saying you're connected, being able to use everything available. And this type of concept is a journey. We know this is a part in a puzzle, small pieces of puzzle representing millions of Real in efficiency, but we have a potential of doing a puzzle of several little pieces because we have a huge potential in our plans, home plants. And when we talk about this puzzle, then you have a digitalized plant and you can see and you can simulate any change in variation, processes and products and imitate, that will impact the results. And this is a reality inside Randoncorp. When you talk about plant, you have to talk about automation. You know we follow this journey. We have accrued -- in the last 5 years, more than 350 robots acquired. We delivered 79 projects, Sergio mentioned some. Hercules also, we have deliverable clients in U.S.A. Currently, approximately 20%, 25% of the forecasted revenues of auto today will come from businesses, industrial automation solutions abroad, especially U.S.A., where they have a combination that's positive on our side. We know all the strategies regarding bringing the internationalized production in that geography or the debate regarding Made in U.S.A. And we know also the gap or lag behind these manufacturing groups have because they had not much demand there, outpaced and we see a huge universe of opportunities, but I would like to make clear to all here of the other 80%, we are obviously working on the domestic market, and I think half of this -- all solutions and negotiations done within Randoncorp, we are investing substantially in the installation of this technology in our manufacturing complex. We have huge in-house projects that will further increase efficiency and productivity. In this journey, we gave another step. We have our own aim there. We develop with apart synergy in our intra-logistic transportation shipment transport [indiscernible] plans, different from the car with the line that follow this is 100% autonomous. So this gains productivity. And this will become a product within auto in the portfolio solutions. In reality, these projects have enabled 59% of productivity gain, those be installed the solutions, automated sales, linked sales and many of them robotized sales. I mentioned also that we have the easy mass a journey that is start back then. And it's moving forward in a fast pace. We are growing expressively regard development of the solution to date identified 1 of the main projects, the strategic wise within our main factory structure. In fact, it's a huge platform that will make the whole management of manufacturer units. Our clear road map, we started the journey in 2019, and there's no day to end. But we are following our evolvement plan. Next year, we dive more complex algorithms to embed more strong, clean taste [ MES ] intelligence technology, which are solutions heavily aligned with this trend. And this platform is a reality. It was thought mainly earmarked for centralizing data and cybersecurity guarantee, but it's delivering more. Today, we have more than 18 million growth daily regarding records in our own platform. And the reason because I'm filling up my lake, we are clear that Randon will only be able to make the most of all its assets when it has all the available information, the different systems absolutely organized and why this, of course, for us to meet our journey to introduce our AI and complex algorithms in a steady, organized way in our organization. This is a more recent journey we started in 2020 with the first in cases. Today, we have established Governance Committee who engage in partnerships. And tech partnerships are being made for this protection. Next year, we will open and trigger with a higher speed, deep penetration of this type of technology in our operation. I'm talking just about plants, all inside the operation that can be cared by this type of support technology that will be supported by it. And we started. It's not because in 2020, we were thinking we started to test. But Ricardo mentioned during his presentation, I also bought this backup Castertech, blockchain, no ties. Every productivity gain, complex algorithm was built, and we are searching for creating an excellent concept in the setup and sequencing of production of Castertech furnace with significative gains. And this is like Fras-le with the preoperational research. In raising AI, we reduced 80% leftovers or regarding the printing that do the plates, all again with gains of 1, 2, 3 million. But we're talking about, up to now, when we were still building our part, we already have approximately 30 projects in place. This journey is coming fast -- in a fast pace. That's why I stress it. And we are inside this and gains are being harvest. When we get and try to see why the viewed impact of the introduction of these technologies and concepts, we start to measure values more tangible. We have gains beyond 150 million accounted for in productivity gains in the past. And to see, we hope to further grow in this figure. So this is a journey that may not only align with trends and making us prepared to receive new demands and be recognized, and a tech-capable company in product, as we have been saying, but also regarding manufacturing efficiency. Perhaps it will answer a bit what was asked by one of the attendees, that would make sense to manufacturing Mercedes-Benz front axis where they are trying -- Mercedes is trying to improve their efficiency, but we can see we can be more efficient and pave this path in a sturdy way. But I say, if I don't talk about products, you are going to say something is missing. So I could not share -- not share with you the NIONE subject. First thing to share with you, we had to change NIONE from site. It has grown a bit, and it's now in a new building in Santa Catarina. We developed the whole ecosystem. Even our employees are well adapted and keep on their journey in life. The NIONE has a unit, which is built bigger and more organized. Inside this journey that we're building, tackling the market, presenting technology and business gain. We did a presentation of a solution with partnership, which is Nanopoxy, is more company that epoxy resins we presented the solution at French trade fair, the biggest fair in polymeric materials worldwide, I would say. With huge presence from air -- sky aerospace people, automotive, and we call it -- they called the attention on us. We are harvesting some international fruits based on what we presented. And I'm showing you why these are technical characteristics. But those who know this type of gains, they are expressive. Regarding for 23% more tenacity, 55% UV resistance and hydrophobicity are important characteristics. There's a huge aircraft European company, well-known. Everybody must have flown during the last days in one of its aircrafts, and they are interested in what we are doing. And of course, in addition to this, we have all the products being launched. And unfortunately, the last one, we are doing the event a few weeks before. We will have a new product launch surface with a partner. We have Klintex launched a product that was strongly impacted by the flooding in Rio Grande do Sul. These are things that happen, but we have some products that are entering the market with our solutions. There's a road map, very important for growth with international exposure. We have fostered the big ones, and they are inviting, and thus, we are presenting these solutions in the headquarters, U.S.A., Europe. So we are in an important path of growth to build and consolidate our NIONE strategy. Always, I talk about nanotechnologies. Sérgio mentioned here, have more capillarity. We have evolved also to improve or to bring competitive differential for our own products, and I stress here, development of cast-iron alloy. And I want to show it's more competitive, and it's close to be shared with the market. These values, figures here are the size orders that we -- finally, Sérgio did a small spoiler. The market, we will focus first. So obviously, there is a huge potential to tackle the American -- North American market with these stack differentials. So the journey of NIONE, it's coming in a good path, pace based in our expectation. Obviously, we earned a judge at some moments, the market perception about new. We feel some movements across, there's new people pose more questions. So the convincing path is higher. But each day that goes by attraction is higher than high. So it's been quite positive. And of course, if we talk about technology, some of you had the opportunity when you rank our shift to see the first working there, but we are investing in developing our own solution for the autonomous technology. So we search in this development to understand technology and develop our teams and to know this type of solution. And of course, we have some strategical ambitions. And I think this solution will be a mean for us to start also, as an example, to bring to some markets indoor a bit of what Randon can do, not only as for trucks and auto parts, but also technology by our product. So the technology is advanced. The algorithms are more advanced. We may put the first units to circulate in our truck manufacturing plant in Rio Grande do Sul. We have some trucks that make this movement. And this handling within the company, we will try to replace by this type of the solution. And this is to show that we are investing in technology. We are preparing ourselves, all these universe that Sérgio and Ricardo showed us, this new game that we are playing. So we are on the premier leagues. We are playing with big players, and we have the capacity to be at the same level when we talk about state-of-the-art technology. And almost on time, I thank you, I finished my presentation. Carla, back to you.

No, you were precisely on time. Thank you very much. AI is, you know, there's no turning back. So it's important for Randoncorp to be aware to the new technologies, which are critical for the growth and valuation of the company and businesses. So it's time for our last panel. So I would like to say, again, so you send your questions. So use the QR code. So to tell us a little bit more how Randon is creating value to investors. We invite Paulo Prignolato. Paulo, you have the floor. Welcome. Do you have the mic? The floor is yours.

Good afternoon. Thank you for attending this event here today, those here at the venue and those online. Thank you very much. And now I will wrap up and tell a little bit more to you about value creation. What is our value generation journey? So it's important to create this virtuous cycle of what happened, what is going on and what will go on in the future. So I want to mention allocation of capital in profitable businesses. So this is a growth path. But when we talk about creation of value, we have to look carefully to those businesses that are not profitable right now. And over the past years, as you know, we have invested a lot of money, but we made some difficult divestment of decision. So this is our day-to-day activity to review the businesses, challenge the units. But if we feel that the business will not be profitable in the future, we have to make some difficult decisions as we have. So two is accelerated growth; three, capture of synergies. So you have seen our track records, all the M&As that we have carried out over the past years, so we are capturing this; and four, we can have more resilient results; five, Construction of Tomorrow by investing in R&D. So we have many things on our pipeline, and we are investing year after year on this. And we are keeping our financial health. And financial discipline is key to us, and it will continue to be in our upcoming growth cycles. So growing remuneration to investors an inclusive safe work environment, focusing on people respect above all, continued search for evolution in our governance. So we are proud of what we have done over the past years. So our governance level are even superior than those companies listed in the market, and we have this commitment to keep evolving year after year on this subject, positive impact on the community. So this is our funding strategy that I will talk about now. So we are trying to diversify our financing sources. We are also working on the reduction of the average cost of our debt, that's increasing indebtedness terms, discipline in terms of costs and investments and also cash flow. And for those who are near us, there are -- they know that we have divested our cash flow. That is entering our cash. So we have this discipline to do this. So this is a very robust cash flow management. In particular, inventory, supply chain and so on and so forth. So this is capital that has been released for further investment. Opportunities, this is the best thing that we have. We are a vertical group, and so we are growing, and we'll continue to grow. Credibility with the financial markets, which is a consequence of all of this, and continuous control of leverage and foreign exchange rate exposure. And now we have S&P Global rating, which is BrAA+ with a positive perspective. So this rating agency has confirmed our evolution in terms of debt management growth, and this is the evolution of our rating as well. And this is about financial leverage. So over this past 5 years, we had a strong pace of growth, and we continue with the financial leverage that is near the EBITDA. It is important to highlight, which is our liquidity management program. So we are working on a volatile environment, where interest rate has varied over the past few years. On the other hand, it is important to keep this high level of liquidity. This is a tradition for some of the Brazilian companies. And for us, we think this is a safe thing to do. So we have been able to manage our finance, in particular, because we have good liquidity, and this gives us comfort to go to the market and can capture the best windows of costs and terms. So our financial liquidity give us comfort to manage our debt over the next 3 years. We have some new important funding in order to diversify our sources of financing. We had, this year, the first sustainable funding, it's half Randon, half Fras-le, which is BRL 500 million. And we had a discount that can be 0.15%, in particular, because of some KPIs related to sustainability, with debt term of 9 years. And this will leverage our sustainability initiatives. So we will continue in that journey. Also, recently, we had a liability management transaction. So we are prepared -- so rearranged some debts that were expensive. And we were able to achieve the market in the amount of BRL 600 million and was the first time we could carry out a bullet transaction of 7 years. And this shows that diversification of financing sources is beneficial to the company, in particular, regarding the market perception. And this also caused us to have a reduction in the terms of the debt in 9 months. Now we also took this 5-year period, and it's important to stress that RAPT4 has valued more than 71%; and the CDI index, 48%; and Ibovespa is 45% of valuation. Of course, the market is volatile, but looking to the long term, it was an excellent investment for us. It is also important to highlight the flow of remuneration to shareholders. So we have paid almost BRL 800 million in dividends to shareholders and BRL 7.42 of profit per share over the past 5 years, 31.5% of average payout and 21.2% of dividend yield. And so you can see here on the right, year-to-year. And in capital allocation, we are aware. So we have to stock purchase that we had -- and repurchase programs that we had in this period. So now Carla, you have the floor again. This was my presentation, so we will resume to the next panel. Is that right?

Yes. Thank you, Paulo, for your presentation. So now a round of applause to him. We have talked about value creation by Randoncorp because of soundness and consistent results of the company. So Paulo will remain here on the stage. And meanwhile, I invite here to the stage, Sérgio, again, please come to the stage. Also, César and also Davi, who will be the moderator of this Q&A session. So take this opportunity to pose your questions. This is our last Q&A. So you have the floor now.

Thank you. Now this is the second Q&A session. Thank you once again for the questions. People who were on the list of the first Q&A, and they wanted to remain on the list. And the first that was on the previous list, and now is on this new list is -- is someone on the third row here? Manuel from Citi.

Thank you for this excellent event here at B3. Two questions. Thinking on the long term, in terms of autonomy, so this is high tech. And the autonomous trucks as well, the truck will change, in particular, the cockpit will no longer exist. And then the truck and the back of the truck can be one single thing. So you are going to OEM, and OEM getting into you. So do you think that truck of the future, the cockpit and the back of the truck will be only one thing, one single thing? So this is an opportunity or a risk to you? And the second question is about geopolitics being on the light vehicle industry. It's a very politicized market in the U.S. So Trump is saying that he will tax light vehicles that are manufacturing -- manufacturer. So we also have some struggle between the -- from the Chinese, and the East, worse. So how is that question regarding the heavy vehicle industry?

Regarding autonomous vehicle, I would like to talk this subject together with Sérgio and César because we have the product and the technology. So Sérgio, I want you to talk about the product, this interconnection with OEM on autonomous vehicles. And César, how can we explore this technology? So where do these ideas come from? And how can we develop this internally? So I think this is a very good thing for us here. So technology are being created in-house. So Sérgio, the first question is to you. And César, if you can talk about geopolitics, and you have great experience on North America on this, so please.

Regarding the future, the potential future between the cabin of the truck and the same trailer truck, it was frankly, the real reason why we started this journey. We are now -- we have a diversified portfolio. We have our auto parts that are -- we provide truck parts to the suppliers, but we have no intention to compete with the big manufacturers of trucks of our customers. So this is not part of our intention. But thinking of the long distant future, yes, there is a possibility where the cockpit and the semitrailer truck will be one single product. And if this happened in 20, 30 or 40 years, we can have a significant impact on this. So in a scenario where truck manufacturers can operate in our segment because the cargo is carried in the semitrailer trucks, so we must be prepared to this reality. So this is a defense strategy. We didn't have the intention. But I think these would take 10, 15 years to get there, but they were able to do this in 2 or 3 years. So our intention with this development of this new technology to enter diverse applications. There is a world of applications that is not conflicting with our customers. Again, we will not compete with our customers. We will explore all these possibilities in agriculture, confined environment, plant industry, manufacturing facilities, ports and many other applications of this type. So your observation of this possibility is real, and this is the real reason why we went that way. Do you want to say something?

No, I think this is it. I have the mic here. Okay. No, it's working. No doubt what Sérgio said is right. We are focusing on the future. All these technologies, these are parts of deep strategic discussions, and we got to this conclusion. So we must go into this autonomous vehicle technology. One thing that we have learned, if they are one single thing or if they are separated, the cabin and the same trailer truck, the truck has an important role. So think about the future. So it's -- you have to think how you can drive those trucks, and I'm talking about autonomous vehicles. So this is an important part of this development in order to make this technology feasible. And I say to you, because I know this, if you research all the demonstrations that we see, the autonomous vehicles, they are being driven in the U.S. They only go to the front, but they cannot drive to the back. So we are improving our technology. Considering 1 or even 2 semitrailer trucks, they can participate. They can act in a specific way. They will be active in this method, in this heavy-duty vehicle market. So this is something that is related to us as well. And also, we have our clarity. We have been discussing. We have the technological path very clear in our mind. So when we talk about materials, connectivity, when we talk about technologies like autonomous vehicles, this has been discussed, and we are always revisiting these discussions for some time. So we have a strategic clarity of what technologies we need to enable in order for Randon in 10 or 15 years can be the company that we intended to be. Thank you.

The other part of the question is related to the American market of heavy trucks when compared to Brazil. Yes, President Biden, he imposed 100% of tariffs for not, only vehicles, but other products for electric vehicles, but this is related to antidumping because we know that Brazil vehicles are sold here in Brazil for the prices they are being. So these are numbers that are very difficult to be achieved if you have a subsidy. You cannot compare with the Chinese in this. And we were not able to purchase those vehicles for $520. Only Chinese can purchase those vehicles on that price. The batteries, all the investments, these are part of a master plan. So this is important for China to protect their country. So -- but for the rest of the world, this is a competition that can be questioned, whether it's fair or not fair. So we have antidumping activity that is going on, and this also involves other products, but there is -- this is not related to trucks, in particular, heavy trucks. I don't think they will be in the same category. For small trucks, they are able -- they were able to enter the American market. But in terms of the structure, the USMCA, the new NAFTA, maybe it is the best way, the most complete way for us to bring some type of protection for this economic group of these 3 nations. So you can have the local content of raw material, which is 70% or 75%. You must have labor, direct labor, and I believe it's a $16 per hour. So even the production in Mexico with cheaper labor is also being questioned because the average labor has to be higher than that. So everything in terms of cost can be imposed by the U.S. protecting the block, but thinking to increase the content, the American share, the U.S. share in that market. So big manufacturers of trucks like Navistar, they went to Mexico a few years ago. They are manufacturing heavy trucks in the Monterrey facilities. Daimler has also been in Mexico for some time. He manufactures, I think, maybe 50% of heavy trucks that are being manufactured in Mexico. And also, Volvo has announced a new truck manufacturing facility that will also be in Mexico. So Mexico is an important country in this scenario. And I think the U.S., as we mentioned before, before the break, they are struggling with also. You cannot produce internally because you cannot find labor in the American market.

Thank you, Sérgio. I hope we have answered the wide questions you made. Now Fernanda Urbano on the right-hand side, please pose your question.

Congratulations for the event. My question is 2 questions for Sérgio. Gain of efficiency initiatives you mentioned, and you even mentioned the potential 200 million of productivity gain forecasted for the current year. I would like to understand, among the initiatives you mentioned, digital twin, AI automation, do you think there's any that stands out for productivity gain to -- can you explain this to us? And the second part of the question. In the long term, we see differentials of Randon regarding technology. So I would like to understand the productivity gain is amongst the initiatives among the manufacturing. What's stressing Randon compared to the other players in the market?

I think you have called César to answer your question. So César, could you address both questions? And we also stress, I think you have noticed that in addition to have the ecosystem of products connected with the auto sector, we also consider ourselves as a tech company based on what we shared with you regarding technology. So now César, take the floor.

Thank you for the question. Well, I will answer 2 ways. The first you don't want, but I will explain these technologies. They have synergy. When they look together, they make sense. No sense automate or robotize a sale if you haven't applied the concept of lean, assess if the flows optimizes. Otherwise, you do what you do. I'm sorry to say, this a dumb optimization. So there's a need of being [indiscernible]. Of course, when we have the digital twin, it's strategical riding, and there's this journey to reach this. But there's no doubt what we are -- where we are seeing the main gains and a short-term point of view. Automatization, they're standing. Robotization, the same package, is where we are gaining the biggest events on efficiency. I will not disregard all the projects of lean manufacture that are -- is key for the business. I'm not disregarding this, all the other unfolding. But today, we have placed more energy, as I saw, to more than 70 installed automated sales in the cycles in our units is to believe in automatization and robotization. Sérgio, would you like to add?

So I would say that expanding, based on what César mentioned, we know that our future -- the environment we act, it's highly complex. It shifts in a high speed in several segments we are present. There's a cutthroat competition. And the way for us to be able to keep on, well, performing well, improving our results and earnings, it has to be ongoing and productivity gains are the base of all this. And how to obtain these gains? Sérgio (sic) [ César ] mentioned several forms, productivity, raw material, management of people, our -- in our manufacturing complex using AI to manage several topics in our organization. But this concern regarding productivity is key. Our -- the traditional Brazilian culture, especially the older one here will remember this, is one based on inflation, increase of raw material, labor costs increase. I accrue for some time, then I pass through to the clients under the process of negotiation. But this dynamic is not true worldwide. And we have talked, we are doing this. We want to see our company more and more globalized. So the way of having cost and passing through to the next link of the chain. It's not effective abroad. So we have to change the mindset in order to have actual gains in productivity. Of course, we are not fighting to pass through. Yes, we will pass through everything we can. But to be successful abroad, productivity, culture must be stronger than what it had been for us some time. So the managers that are not here with us all have fantastic projects for us to gain productivity. So I will say, it's something that it's becoming part of our DNA in our company, looking for productivity gains and, obviously, automation, AI processes sales -- our manufacturing process to be more differentiated, it's vital.

Thank you, Sérgio, for the question and the answer. We have time for 1 more question. I don't want to use more time than the given. So the question is by [ Flavio Vega ].

Thank you, Davi, and the opportunity to be here asking. The first question, Paulo Prignolato talked about the investment that the company does with -- from -- as time goes by. Could you give some examples of what went wrong in-house? And it's good to know that the company is recognizing changes. And how the company approaches this? And if possible, with some examples. The second question is regarding the climate disaster in the south of Brazil, Rio Grande do Sul. And if this has generated any brainstorming on your side, looking ahead regarding the side of the company where it is. Please share with this event was something that was a huge impact.

Thank you, [ Flavio ]. Well, the first question, Paulo, I'll ask you to talk a bit -- well, it's regarding maturity of a company, not only to be able to invest, bringing value, but also know when to de-invest. So Paulo, could you drill down on this? And following, Sérgio, regarding Rio Grande do Sul, it has been something that was terrible. I talked with the market about it. But could you give us more details how we faced what happened with our company during this time? I think it's important to share with all.

Thank you for the question. Well, I made a point of mentioning and even in the material, as I said, our drive is to grow, but as management of the company, to analyze the performance of all units and business. With this, I didn't quote, but I will mention the 3 cases that took -- that happened during this time. Randon, they closed manufacturing of yellow line. And our target, in addition to be financially wise, it's also to have a focus in the other verticals. It was a business where we had to compete with big multinational companies, believing our need is in R&D and development. So we decided to allocate these resources of the selling in other verticals. Additionally, we have a manufacturing complex in Peru. And because of economical, political stability, we also became concerned with the business, and we decided to close. And last, what happened this year was the closing of our plant Fras-le in Uruguay. According to our analysis, and also resulting from the dependency of this country on the specific business with Argentina, especially the flow of resources, was starting to be compromised. So we shift the production to Brazil in a more competitive way. Systematically, we are analyzing all operations. These are difficult decisions, but we are those who have to propose to the Board of Administration.

Sérgio now will have the floor for the second question.

Well, I will say, in a more superficial way, I think Daniel will touch this subject, but we were impacted. Yes, we had 3 different situations. Regarding the rain situation, with heavy rains, we stopped the operations for some days. We have approximately 4 families that lost their homes in the region of São Leopoldo, where we are present. We have 450 collaborators there, whereupon 200-and-something families lost their homes. And the water there and the paralyzation took several weeks, not some days, and we resumed only by the end of May that we started operate again. We have almost 30 centimeters of water level in our plant. Losses were not total, but we had impacts, but the operation is running again now. I would say, 90% of the working force is there. And in Porto Alegre region, where we have the distribution center, and we had an interruption. But because of the nature is not a manufacturing unit, people could keep on working from their homes. So this has really impacted directly our manufacturing and production at different levels, I stress this. But truth is that an actual impact that we will know in this next month, let's say. Small business men and companies, they are facing difficulties. The economy of the state, and Daniel will drill down on all this, I will not expand. But the impact for us happened. Our company has supported a lot of communities and our employees. We have statements that touched us, and situations, extremely difficult. And I can say the following. We have visited all the 300, now it's 290 companies. There was psychologists, professionals, engineers team, legal department, financial support, substantial for our employees. And there are those that statements of thank you and recognition for the effort by the company are fantastic. So it's a very touching moment, long days. Lots -- many flooding, donation and crisis committees. We have then, again, working on the support rendered to our employees, including those communities where we're present, donating, in all natures you can think about, manufacturing bridge, remodeling schools. We are trying to remodel the school, donation of bed mattress, pellets, fuel for civil defense, drones for the fire brigade, Red Cross, we donated money. Every day, we have -- let's say, we are involved in this. So it's a strong movement of people from Rio Grande do Sul. They are highly resilient. And the level of support of all Brazilian societies was fantastic. No doubt, it will be a long journey, but Rio Grande do Sul is going to recover.

Thank you, Sérgio. So now we end. Thank you, Paulo, Sérgio and César for the second panel of Q&A and your participation. I'll now pass to Carla so she can help us to go to the next panel. A round of applause.

Congratulations, Davi, as you debut as a moderator. So thank you very much for your participation and the questions. Now following the closing, I would like to -- I was touched hearing about the support and everything you're doing with teams, collaborators. And we cannot wait more than this from a big company. Now for the closing, with golden keys, I invite to join me on stage, the Chairman of Randoncorp, Daniel Randon. So a round of applause to Daniel Randon.

Thank you, Carla. So good afternoon. I hope you have enjoyed this afternoon, those of you with us, but also those online with us. And I would like to, first, thank you the RI -- or IR organizers, team, B3 and [ Ricardo Martins ], Chairman of [indiscernible] and also the work -- special work by our leader of Randoncorp, Sérgio Carvalho, with [ COMEX ]. And so the opportunity of coming here talking about Randoncorp, what we are doing our growth projects, our commitment with stakeholders, especially investors, analysts who are here, also understanding our commitment, and what's the value generation regarding sustainable growth. Therefore, we would like to talk further about what we are working on. And I think it's important to stress that, yesterday, we launched the new Sustainability Report 2023. It was launched yesterday, strengthened the work of ESG of Randoncorp, materiality included commitments and stressing 2025. We presented the main ambitions of Randoncorp, looking in the planet, people, business view. So here, we have a strong commitment of keeping working all units so we can reach 40% reduction of greenhouse. Yes, emissions by 2030, and also industrial landfill and treated effluents by 2025, 100%. We can double the women leadership positions by 2025 and zero serious accidents, and increased net revenues yearly generated by new opportunities, we see as an opportunity of sustainable growth and value generated for stakeholders as it has presented. Lots of our tech innovations at a value that we conquered together with our clients. And just stressing last year, Randoncorp, together with [ ANPI ] and also with Elisabetha Randon Institute, you see that we have -- and see Randoncorp is a sponsor. We required 58 patents just behind Petrobras, but the budget compared for investments was quite higher and sturdy sales. So congratulations to César, all the teams. So we are introducing disruptive technology. In these disruptive technologies, with the leadership of Randoncorp, with these projects, they will help us to achieve this target. And even for some car manufacturers today, they are not only trying to achieve this net zero by 2030, and some of them not only 2050, but they are committing to 2040. So this is the commitment of suppliers, so we can develop those technologies, and we can serve as a supplier to those clients that will demand. So we will have the COP30 in Brazil. Brazil's commitment will be disclosed there. And Brazil is one of the cleanest countries in terms of energy, more than 80% of clean energy in our grid. And this makes us in a different position, in a higher level. And for carbon credits, this is an incredible opportunity for us. We also presented the footprint last year. We have a footprint in some of our products. So this positions us in some business opportunities from the consumer to the delivery. So we are confident that we can have a qualified leader so we can generate value, in particular, to our shareholders. And this is so important that Monday night, we had the acknowledgment by the Exame magazine. And Randoncorp was awarded as the winner in the industry of capital goods and electronic and electric products. So this is an acknowledgment of our efforts, 16,000 workers. This reinforces that we are winners for the third year in a row in this category, this award, so reinforces our work. And so thank you to the Investor Relations department for this report, and we have here all the efforts and all the results that we want to achieve. Sérgio talked about what we have done over the past few years. And we are saying that 95% of the municipalities of Rio Grande do Sul had some type of impact. So it's about 200 people that, some people are missing and the authorities are working to locate those people who may be dead. So many people have been affected in this tragedy. And we are talking about 400,000 people that are without their homes. They are living in shelters because they have no friends or family. So this is a disaster never seen before, and the state of Rio Grande do Sul is working hard. And this is a humanitarian crisis that will extend for some time. We still have some rains going on. Some places have been flooded. And we see that this will be a long journey of reconstruction of the state. As we have seen in Katrina, in the U.S., New Orleans, and we also -- some countries, where part of the country is below the sea level. We see those climate events going on all over the world, but we see the solidarity of the people. In particular, here in Brazil, we saw people all over Brazil helping the state of Rio Grande do Sul. So people are concerned to send us a message as if we are doing well, if we are safe. So at times of crisis, we have our principles. So we value people. We respect people. And this is what we did in the first stage of this tragedy. We tried to help people. So we stopped our activities and stopped manufacturing because we were concerned how people would travel, how people could go to work. So they were concerned about their family. So it's not fair to ask them to go to work. So this is something that we did in this emergency situation on the first days of the tragedy. So we tried to provide equipment, machinery to release the roads. So we provided a few to some communities. So we also donated some items, materials. We still have a campaign from distributors from all over Brazil. They have delivered their products to the state of Rio Grande do Sul. We also have some trucks that will be traveling for 60 days, and they will be delivering all the donations in addition to the partners and customers that are also involved. The second phase was the sustainability. So financial support to our workers that have been affected by the tragedy, so they can start to rebuild their lives, because 306 people of our company have been directly affected. And we are also donating some technology to the communities, like this drone here with a heat detection to locate people, because we had some landslides on the mountains in the Rio Grande do Sul area of mountains. And the third phase is the reconstruction of the state, all the support, social impact, support to the industry, entrepreneurship and road infrastructure. We built some bridges together with some partners and suppliers. This is a long journey. We still have the support of all the civil society and the fire departments all over Brazil to rebuild the state, to have a more sustainable state, to review some concepts so people can invest again work again in the state. And the state of Rio Grande do Sul and the federal government are helping, and this is not only a part of the society, but also part of the government to take care of this. So as I am part of the Board of reconstruction there, so we are trying to help the community. I only have to thank you, everybody, who are helping us, people who are caring for us, sending messages, sending donations and helping us to rebuild the state. So I hope that you all enjoyed this event, and you can also look for our sustainability report. It is available on the social media, on our website. If you have questions, you can also pose those questions to our Investor Relations department. And we will be working in our purpose to connect people to promote sustainable impact to the society and create value to our stakeholders. So again, thank you all, and success to everyone. This is a long journey. Thank you very much.

Congratulations, Daniel. Thank you for your presence, your information, your words. So on behalf of Randoncorp, I would like to thank you so much, each one of you who were here at the venue. I would like also to thank everybody who were attending the event online. And you guys who are here on the venue, I would like to hold on a little bit more so you can take a picture of our leaders. Experiences like these, that we had here together with you, that reinforce our purpose of connecting people and wealth and to create prosperity, so let's walk together to build tomorrow. Thank you very much. Good evening to everybody. Bye-bye. [Statements in English on this transcript were spoken by an interpreter present on the live call.]