Randoncorp S.A. ($RAPT4)

Welcome to the earnings presentation of Randoncorp related to the first quarter of 2026. It's really good to have your presence here, each one of you. I must inform you that this event is being recorded, and it's going to become available in our RI website, which is ri.randoncorp.com as soon as we finish the presentation. The slides are already available for download. Our event has simultaneous translation into English and Brazilian sign language. For you to hear the audio in English you can click on the interpretation button located in the bar at the bottom of the screen and mute original audio. So you can listen only to the translation. Before we get started, I might highlight that some of the information here might contain some statements about future events, so there might be changes and uncertainty related to them. This reflects opinions and expectations for the management. There's no guarantee for performance. But we encourage you to read the full disclaimer available in our presentation and reports. Now check the schedule for the day. We're going to get started by the message from the CEO, Daniel Randon, who's going to be talking about the business environment and the main highlights of the quarter and also our perspective for this cycle. Then Esteban Angeletti, Director of RI Finance and F&A and Strategy, is going to present the operational highlights. Soon after, Paulo Prignolato, Executive Vice President, CFO and IRO of Randoncorp, is going to be giving the details on the financial management. Then Davi Coin Bacichette, Manager of IR and Finance guest is going to be conducting the question-and-answer with Hemerson De Souza participating. Now Daniel Randon is going to share a message starting our presentation for today.

Thank you very much, Caroline. Good morning, everyone. The first quarter of 2026 was marked by a business environment that is still challenging, especially in the domestic market with reflects in macroeconomical factors that impacted the demand for commercial vehicles in Brazil. On screen, as you can see, there's the data of production, sales and exportation of trucks and trailers in the first quarter of 2026 and the comparison to '25. We managed to notice that pretty much all of the volumes in this quarter presented some decrease in comparison to 2025. We know that the beginning of the year is a seasonal period that usually starts low and then it gets back to normal after March. But the fact is that our markets in general are still impacted by the high interest rate that reduced in this period, but not in a relevant way. Besides that, we had some geopolitical conflicts that generated more instability, especially in relation to the prices of fuel and shipping. In the moment, we still have the context of a lot of uncertainty. But even before this complexity, we move on generating businesses. I might share with you some important topics here. First, we have a solid portfolio in the OEM vertical with the best demand in agribusiness. Second, we can see initial signs of a possible resumption in the North American market, even though this improvement has not been converted into sales yet. And third, in the aftermarket, the demand remains resilient in Brazil, even though there was a slight retraction, especially because of the stock adjustment in the distributors considering the high capital cost. In the first quarter of 2026, we also had Move Brasil, a program that boosted the sales of trucks by releasing BRL 10 million in credit that were quickly consumed. Last week, there has been announced a new phase, expanding the resources in BRL 20 billion. So we always also included buses and highway implements. Even though it's a positive news, we want to follow up in the next few months, so we validate the real impact in the demand. In short, there is a lot of volatility in the market now, which demands a management that is even more careful for our operations and our capital. Even considering these challenges, we move forward consistently doing fundamental movements for Randoncorp. We kept the focus in optimizing the resources in the deleveraging and the sustainable value generation, and we move on executing our strategic plan. On this sense, as a highlight, I bring here the premier of the operations in Mogi Guacu with a new unit of Suspensys and a new logistics center for aftermarket for auto parts. Suspensys, for example, has added considerable revenue, compensating the drop in sales for OEM. Now the new logistics center is totally aligned with our goal of continuing to grow in aftermarket. We also have a considerable expansion of our portfolio in OEM systems that now count on robots and cutting-edge technology for manufacturing of products, and that decreases the dependency of imported products and generate more solutions made in U.S.A. In the mobility phase, we wrap up an important phase of migration for our ERP and a new system of logistics automation in the Extrema site. These structural projects bring efficiency, scalability and better operational control in medium and long range. So with this good posture, balancing strategic investments and preserving the financial health of the company that we move on, always aligned to the business moment and the conditions of the market. Now talking about the next few months, we have positive news to share with you, such as the stability of the demand in auto parts and a good portfolio for trailers along the second quarter of 2026. Also we have the beginning of supplying the railroad wagons that are going to be happening until November 2027 and the new orders for containers from the United States up to 1,200 products for the ports in the South Carolina. Also the normalization of the deliveries and the revenue in reposition and the mobility phase, also searching for synergies with Dacomsa, which might contribute to the expansion of the results in the Motion Control vertical. And the follow-up for the good development in the business, they're going to have more potential in medium and long range with our strategic partnership with Patria. In terms of investment, we're going to keep an adequate level considering the current position of the company, always looking for deleverage, this financial discipline and generating value in the long term. So our annual guidance shared in March covers all of these topics that I've just mentioned in my presentation. And now I'm going to give the microphone to Esteban, and he's going to be talking about some operational highlights in this quarter.

Thank you, Daniel, and good morning, everyone. Well, I want to get started explaining the performance of our net revenue in the first quarter of 2026. As you can see on screen, the indicator presents a slight retraction in comparison to the same period last year. Some of the reasons why the implementation of Mobility Frasle projects in Extrema that Daniel just mentioned ended up affecting the revenue in this part of the year, the valorization of real in comparison to dollar decreasing the revenues in some parts and the lesser demand of trailers and auto parts for trucks in comparison to the first quarter in 2025 in Brazil and U.S., the mix of products sold with a lower average ticket. But it's important to highlight that we also had positive effects in this period, such as the addition of revenues in Suspensys Mogi Guacu in the beginning of last year. The unit was still starting operation, and now it's already in full operation, in normal operation. Growth in financial services, especially in consortium, increase of trailer exportation for countries in South America that contributed to the advancement of our international revenues in dollars. I'm going to get into more detail of this in the next slide. You can see in this quarter, we kept the same level representative -- sales representative in the external market, around 33%. In the sales per region analysis, I highlight the relevance of the United States, Canada and Mexico, especially given the [indiscernible] performance, compensating the reduction of sales to the United States. In the Mercosur market in Chile, we have different dynamics between the verticals. For OEM, there was a good recovery for sales in the region. But in auto parts and aftermarket, we can see as a retraction, especially in Argentina, and they have a more competitive market given the opening for international market, compensating the prices. Now the EBITDA, there was a loss in comparison to 2025, but in most part, it's a negative for financial solutions. Other factors that this might have been highlighted, better margin EBITDA for auto parts and stabilization of the OEM vertical that even though the reduction of the volumes and mix, there was a gain of efficiency given from the equations done in the other quarters. So the current decrease in the margin given the impact that I mentioned before and also the commercial pressure in some of the lines. In terms of profitability, even though there was an improvement in operational terms, we can see some indicators here. We are still working to reduce the expenses. And with the lower interest, we expect a greater improvement ahead. So the taxes also affected the quarter, and that elevated ROE and ROIC, affected our numbers in the last 12 months. But I say it again, we are working intensively to expand our future results. And now I give the microphone to Paulo. He's going to present our financial management.

Good morning, everyone. As and Daniel and Esteban mentioned, in fact, business were still challenging in this quarter, but we have many positive milestones to celebrate, especially when we talk about our financial management. Our net leverage has been reducing, and the result is given by many initiatives. We have better performance, operational performance, also the working capital contributing to the better cash flow as lower international debt, international currency and controlling the level of investment, and I'll lay more comments about this item soon after. Besides that, we also had the contribution of the SELIC rate that reduced decreasing the cost of the international debt in national currency and having a better cash flow, giving comfort -- financial comfort and flexibility for us to cross one more challenging cycle. Now going back to working capital. On this graph on screen, we can see the variations of the accounts in the first quarter of 2026. One of the most relevant points here is that this indicator presents never seen dynamics for the first quarter with the reduction in comparison to the last year, even with the -- considering how seasonal the period is. With the highlights for this working capital in this part of the year, we have the increase of the accounts receivable, partially compensated by the advancement of suppliers end clients bounded by the contract for the wagons for celluloses. The stock level similar to the fourth quarter in '25 and is average reducing days for the first time since last year, reflecting the optimization initiatives that have been implemented from the second quarter of 2025. Now the investments done in the period, we have -- we kept prioritizing the ones with greater relevance and impact. You can see on the screen, in the first quarter of '25, we had done great acquisitions, especially for Dacomsa in Mexico. In this quarter, the greater amounts were invested in the following way: in Mogi Guacu, both in the building the new logistics center for auto parts and also machinery and equipment for Suspensys units. In the expansion of AXN and also the stocks acquisition as [indiscernible] and paying installments referring to the Dacomsa acquisition and the other values were invested majorly in maintenance and improvements for factory structure. Before wrapping up, I would like to invite you to participate in Randoncorp Day 2026. It's going to happen on June 23 in Sao Paulo. Very soon, our RI team is going to send you an invitation by e-mail, but you can enroll to that already by accessing the QR code that's on the screen. We count on your participation. Now I give the word back to Caroline. So we can start our question-and-answer session.

Hello once again. We're going to get started with our Q&A session. [Operator Instructions] Our first question for today comes from the analyst side, Gabriel Tinem from Santander. Good morning, Tinem, feel free to ask your question.

First question here more for trailers. If you can lay more comments on how we've been seeing the evolution in the past few months, both in mix and volume expectations. I know you mentioned a few things about industrial side, but I feel like the worst part is already gone. But if you can lay comments on the orders? You mentioned 1,200 units for this year. And the second question is related to the negative side, the loss that you have. If you could talk about the recurrency that we see an effective liquid. If you can comment on that, how do you expect this to happen again in the future?

Thank you Tinem for the question. For the OEM, I'm going to ask Esteban to address 2 topics. And in OEM, I think Daniel can share some information here. He's been giving lectures in international in this area. I feel like he can comment on the agribusiness side of it. And lastly, Paulo, I ask you to address the effective liquid and talk about the perspective. So let's do it.

Thank you, Davi and Tinem for the question and to follow up our results here. And in terms of trailer market, first of all, talking about Brazil, we have been seeing a margin, a slight improvement in comparison to the demand. A lot of this is coming from the need of the client in renovating their fleet. So it's the third year that we're getting into agribusiness. They have been delaying this renovation, and there is a moment in which that the product gets obsolete and the cost of operation is justifying renovating the fleet. So it is still too early, and Daniel is going to talk about that. Too early to say that this is a general recovery. So specifically about Brazil and the projection by [indiscernible] we are still working on a scenario for stable volumes versus 2025. I think the great improvement here comes from the door inside. So everything that has been done by our teams to get better operational flow, and you can see already highlighted in our results in the first quarter of Brazil. So you have to take the hats off for them because the team has been working hard and looking for opportunities in all lines of our results to get better efficiency since last year, and we were talking to you about that. It takes some time to get a mature situation and to see the results. So we are already seeing something in the first quarter. So you can see even with a less or smaller revenue, we can have a better margin. Talking about Hercules before giving the word to Daniel in the North American market as a whole. In Hercules, we had a tough first quarter, and the result of the operation in Brazil was even better, actually. And basically, that's because of the lack of order. The American market is the worst one in the last 20 years. There has been 3 years in a row since 2024 that we've been seeing the volumes are much lower than the average history -- in history. On the other side, it brings us a better perspective going ahead because the practical one for Conquering this 1,200 units for the South Carolina Ports Authority. It starts in April already. We had some units being delivered already, and it's going to keep going on until the end of the year. And the second reason is because we have been seeing a detachment in the relation between trucks and trailers in the United States. Trucks, they have been presenting a recovery in demand. This could be an indicator indicating the recovery of demand in trailers that might start happening in 2027. The good news is that our unit today is being able to get a breakeven with a minimum volume. Now with the addition of the other units, we may even get better results. And now with the improvement in the market, which is what we are expecting in the next few months, it's going to be contributing even in a more significant way for the OEMs. So now Daniel is going to talk about the agribusiness part of it.

Well, thank you very much for everyone to be here, the analysts and the investors, in our event here. And as Davi mentioned, I think it's important to highlight the situation in soy, and it shows the potential not in the past few years in which agribusiness has impacted positively the business, as you said very well in the past few years, agribusiness in buying trailers, it has been a little more stable, and it has been presenting some demands in this moment for fleet renewal. And what I highlight here is the positive aspects of agribusiness, many investments in the forestation, celluloses in the long term. And also as we've seen biofuels, there's a big investment in this area, and there's a demand to that. The investment is in area for grains, for example. So it has been showing some demand potential. And also, people have been talking about the free commerce agreement between Europe and Mercosur, and it shows us some potential for growth in exportation in our agribusiness. But on the other side, there's a concern of the volatility of diesel, oil, the geopolitical situation and also the concern for the high interest rates and the growing number of RJs that are impacting. But even so, we have a concern or careful positioning for the long term. But the investments are continuing to be strong in agribusiness. And that, for sure, puts us in a positive position to continue in this trailer market and making it grow in the medium to long term. And so that's the challenge, and we'll be very careful for the capital values in this market.

Thank you, Daniel. And now, Paulo, I'll give you the microphone to talk a little bit about the effective tax rate.

Thank you for your question. And actually, we have always been saying that, well, of course, we have [ our policy ] that is very conservative in relation to the constitution of the tax, the income tax. So there is a situation for the results that are under pressure by the high interest rate and also -- but the operational side of it that as Daniel and Esteban mentioned, it has been recovering. So we -- in fact, we do have this effect of the effective tax rate that is greater now by the non-constitution of the income tax in Randon. So we are working on it actively to -- in assessing opportunities for recovery in this area, always keeping in mind that this has not been lost. It's just off balance. And when we have a better horizon of projections, for sure, we're going to be doing this again. So we're going to keep the market informed on that, on these updates so that you are able to update your projections. But basically, that is the effect.

Thank you, Paulo. And now to wrap it up, I'll give it back to Esteban to mention other details.

So we noticed the equivalence in the results comes from 3 bridges, the lower pricing of the equipment, of course, going a step back now, the main reason here for the loss in Addiante is the result of a great client that was representing a great share of the portfolio. And now this loss is the sum up of 3 sources. First one is the lower pricing of the equipment. The other one is the financial expenses due to the acquisition of this equipment and the installments of these equipments. And the third one, just as is Randon and the taxes. And it's important to mention that excluding the result from this client, the operational. Addiante is standing on its feet. So the result is positive. And us and the partners, we are working to solve the situation alongside with Addiante, and we continue believing in the business. This leasing business in Brazil that has little penetration, especially when we compare with other markets like the U.S.A., but we believe that there's a lot of opportunity here in Brazil, whether with trucks or trailers or the yellow and green lines.

So let's move on to the next question. It comes from Lucas Laghi, sell-side analyst in XP.

I have a follow-up on the previous question in the agribusiness. But first, I'd like to understand better how much today, agribusiness has represented in the consolidated revenue of the company? We know that's around 50% in the OEMs, right? But now thinking about -- if you have an estimate, I know it's hard to have the final demand for auto parts. But if you have an estimate of how much agribusiness represents in the consolidated revenue today? And as Daniel mentioned, there's the cellulose business expansion for Mato Grosso do Sul. There's ethanol business going better. But thinking about the dynamics, more traditional dynamics in the agribusiness, what do you see that is weighing in the decision-making of the client because this context is tough. You have the interest -- the inflation of fertilizers and then the scenario, there's some uncertainty. But now thinking -- trying to have a better reading of the turning point of the sector from March on, then April, it was a little worse. So how do you think that is the first -- the most important metrics for us to think about this turning point of agribusiness, credits, interest, elections? So how can we better monitor this turning point? Well, just to understand the relevance of agribusiness in our revenue and how you see the time line of this turning point of the sector moving forward.

As you mentioned, there are many moving parts for us to consider in these evaluations when we look into business, especially connected to agribusiness and to the transportation in Brazil. So I'm going to give the word to Esteban so he can address both topics. And Daniel, also if you could add something, feel free to do so.

Thank you Lucas for your presentation...

Yes, Esteban had a little problem with his connection, but I think he's getting back already. [Technical Difficulty].

Just a second. Yes, need to unmute. Do you hear me well, just to confirm? I have a problem with the equipment here, but Lucas, thank you for your question. It is complicated, yes. So the percentage of the revenue it represents today, 15%. It has been something like 35% in the past. So it's a huge decrease that is relevant for our business. We believe that is going back to the -- will go back to the historical high at some point. There are some factors that can unlock this demand in every business we have. Our hands are full of actions that can unlock this demand here. Is it the harvest and the prices of commodity and the cost for the producer of fertilizers and inputs, credit, the exchange and the freight prices. All of these things are a combination of factors that end up delaying or speeding up the decision of investments by our clients. But if I could point 3 main factors, I would say that first one, the SELIC rate. As long as we have interest rates in this level, it's important. And the second one is elections. We have elections this year, and this could lead to a delaying of this scenario. So the client wants to take a decision afterwards. And third one is exchange with a better value, it affects the margin of the client. So there's a combination of factors that lead to a decision. And the other thing that I mentioned in the previous answer that at some point, the equipment needs to be replaced. Otherwise, it costs more than buying a new equipment for operation. So because of maintenance of losses, trailers are used for grain transportation and the most -- the older the equipment, it is tougher to use in transportation that affects the margin of the client. So those are the main factors. So I highlighted the 3 ones that I think that are most important.

And now just to confirm the 15% in the end, the type of trailers, but you're also considering your estimate for auto parts that go directly to agro, just for us to understand.

It, well, together with the other parts, they go to agro as well, Lucas.

All right. So you got answers to your questions, Laghi?

Yes? It's good to me now. Thank you.

Alright, very good. So thank you very much for participating here. So let's move on to the next question today. It comes from Kiepher Kennedy, analyst sell side, Citibank. Can you hear me? Okay. Yes, now we can hear you.

And you mentioned something about [indiscernible]. You put a stability of the demand for auto parts, a good portfolio for trailers as well. I know that you mentioned a few things about these topics along the presentation, but we see -- do we see any improvement in auto parts in the cycle in this first quarter in '26 that is positive. It's even quicker than we predicted last year. So I'd like to understand that if this improvement, if we should expect a volatility level of this division, given that it has been a great improvement of -- or if this stability in demand brings us a greater level of confidence moving forward. And also for a good portfolio of orders for trailers, if this better portfolio means in some way better profitability for the division along this year. I think work has been done internally, as I said. Very well done considering the lower volume. So having a good order portfolio, I think we could expect a better margin given again the internal work that has been done adding up to the better portfolio. So these comments that you made in relation to auto parts and trailers, I'm trying to break the impact between 2 divisions here along the remaining of the year.

Thank you, Kiepher. Well, now moving on with the -- continuing the previous answer. I think we can merge both topics together, auto parts and portfolio for OEM. I think we managed along the first quarter having orders, we could guarantee a portfolio of almost 90 days gives us some comfort, but I think we can lay some comments on the drivers that has helped. And the auto parts, indeed, they have been recovering very well in the last few quarters. And right next week, we can talk about the Move Brasil program. It has been making the news. And then we can answer some questions that could be asked about this program related to demand. So yes, we can lay those comments.

Thank you Laghi, thank you Kiepher as well for your question. Now talking a little bit about auto parts. I think there's a combination of factors that justifies this improvement. The first one is the comparison. The fourth quarter was very low in the numbers. Usually, it's already low, but in 2025, it was specifically very low comparison to the historic average. And because the OEMs were also trying to decrease the working capital and their stocks because of the SELIC rate as well. So the stocks get more expensive in this situation, and that translated into the volumes for our auto parts and the recovery in the first quarter, it comes partially from this replenishment of stocks and partially from Brazil. I'm going to give you more details about this program. And from the ramp-up in our site in Mogi Guacu that we premiered along the first quarter of this year. So this combination of factors leads us to have better volumes and tied to all the adjustments that have been done last year that I mentioned briefly in the opening. It allows us to have better margins, go after these margins in better levels for us. And now moving forward, I'd say that we do have -- yes, we are looking for efficiency internally, but I'd say that there's an expectation of at least stability of these volumes in comparison to first quarter. So another detail here, along this year, we're going to also have FENATRAN. And traditionally, this also brings us some improvement in the volumes. Even before FENATRAN, there is this effect of preorder in comparison to the event. And then after the event as well, some negotiations that got started in the event are closed after the event. So we have this expectation that at least we can maintain the volumes and potentially some upside in the third and fourth quarters. Now talking specifically about OEMs. In our operations here, in our industrial activities, OEM might be the one that relies on operational leverage the most. So even though we have been doing all of these adjustments in the structure, especially focusing in fixed cost decrease, the margin improvement from now on, it also depends on better volumes and mix, especially that we managed to see the market in this type of trucks going back to the historical highs. So that helps us to boost the margin for OEMs. For this year, specifically, given that it's still too early to talk about the improvement in the agribusiness. On the other side, we have the rail cart -- wagons production with a relevant order that has been signed in the beginning of the year and they started being delivered in the second semester. These products is more in a serious way with a cost amount -- a fixed cost that will give you a nice value. With the volume of wagons coming in and the adjustments done this year, it helps us to get the margin -- to keep the margin from OEMs from now on. Now the Move Brasil program -- so everybody is on the same page, we had a first stage in the program that the President gave BRL 10 billion of investment for trucks. And recently, they have been releasing the second phase, increasing the program for BRL 20 billion, including which is more interesting for us, the trailers and buses as well. So in all the sectors in Move Brasil, we have some exposition here, whether with trucks, given that we provide the auto parts or more directly to [ implements ] and for buses as well ones that we supply parts for buses. We cannot identify how much -- how big is the improvement in the trailers and other items will be affected in this program, but we have an expectation for better numbers moving forward.

Let's move to the next question today. It comes from Andressa Varotto, sell-side analyst, UBS. [Operator Instructions]

I have 2 things that I'd like to mention. And the first one is working capital and also leverage. In this quarter, we have stability of working capital, keeping all the gains that the company managed to get in the past few quarters. So I'd like to know in this point, what we could expect for the remainder of the year? And also in relation to leveraging, what do you see? And the second thing would be about the financial services vertical after the partnership with Patria for consortiums. So what do you see that can be shared with us already? And what do you expect to see along the year for this vertical, depending as well on the changes that has been happening.

Thank you, Andressa, for your questions. Well, 3 topics, working capital, leveraging and the consortium given the partnership with Patria. And for these 3 topics, I'm going to ask Paulo to address. And we had a working capital that was indeed even reduced a little in the first quarter, which is a little different from the historic average in the company. And I think that Paulo can lay some comments in the actions that we have been taking, not only now, but a long time, long history to get better results here and the benefits of leverage here too. And lastly, Paulo, afterwards, we can talk a little bit about Patria and how much the conversations are advanced now in terms of our partnership with them.

Andressa, thank you very much for your questions. And since the beginning of last year, we have been talking again and again about the importance -- of the importance of this team, working capital. So last year, we started with an amount that was quite elevated. We reached almost 3 months equivalent of revenue in our cycle of cash flow conversion. And with some actions that started in June last year, we managed to reduce this working capital considerably until December last year. And the challenge now is for us to maintain the stability in this indicator with a cycle of cash flow conversion around 60 to 65 days. We don't see now great variations in this working capital. Our idea here for your projection is to maintain this to this level from here to the end of the year. Why? Because in reality, we need to take care. So we have enough stock to meet the market demand. That is extremely important to have discipline in the accounts receivable. As we mentioned, last year, we relieved our [indiscernible] alongside with Randon Bank, which has helped us to keep this plateau under control and a series of initiatives to extend the deadlines for our accounts payable with our suppliers with the main suppliers in Brazil and also with our external suppliers abroad. So our commitment here from now to the end of the year to keep this under stability. Without a doubt, leverage -- financial leveraging is a fundamental point for us. We managed to reduce this leverage a little bit from December to now March 31. And we move on with this journey and this discipline, and we expect to reach by the end of the year a leverage between 2 point -- 2.5x the net debt EBITDA. We are working so that it happens by the end of this year already, and that is the level in which we like to work with. If we have the level of 1x to 2x EBITDA, that's the level that we understand that is adequate for us to go back to thinking in new investments, new expansions. So first, we get to this plateau so then we start thinking of going back to a new cycle of growth. So the focus for this year is having financial discipline all the way. Regarding the Patria subject, we are very happy with this partnership with them. We have been mapping a series of opportunities and our partner here with their knowledge, they have been supporting us on this matter. And we have a plan that is quite ambitious for organic growth, inorganic growth as well. This market is very important, extremely profitable with a level of growth that is quite elevated. So we expect that we can take the next steps on this business, and we're going to be able to share with you guys as soon as they happen.

Thank you very much Paulo. We appreciate your participation Andressa. And now we're going to move on to our next question today. It comes from Gabriel Rezende, sell side analyst from Itau. [Operator Instructions].

Well, Andressa mentioned the Patria partnership. And now in the current context, I'd like to investigate how the company has been seeing capital allocation portfolio management when we see Randon as well as a holding. So we understand that there are big segments that dominate the revenue dynamics, the EBITDA dynamics, but unknown, they have many other boxes that eventually they can generate results. And maybe they're delivering numbers that are lower than what the company expected when doing these businesses and acquisitions. I'd like to understand if the company -- if they have something in the radar in the pipeline to rethink this current portfolio of companies below Randon as a holding. So is there any segment that the company understands that there's not as much synergy as expected, has it been challenging? Just would like to be nice to understand how the company sees that.

Thank you, Gabriel, for your question. I'm going to give the word to Paulo so he can address that. And also, Daniel, feel free to lay some comments talking about capital allocation and seeing Randoncorp also portfolio managers. So Paulo, please.

Thank you for your question. It's a very important question, and it is closely related to the matter that I mentioned previously about financial discipline. Without a doubt, we look in each and every project, a ROIC minimum of 15%. And that means that we look into the new projects, but we also see the entire portfolio, the current portfolio. So that is what we have been doing. Especially looking into all of our verticals, looking into our companies, how is the creation of value in each one of them. And that means that we, at some point, we may take other decisions involving this portfolio in a way that those decisions will help us achieving this minimum ROIC of 15%. So we are talking about portfolio. So portfolio means you get in and out of business or to think specifically in some of the assets as not movable. So we could think of monetizing them. Since last year, we set a crisis committee and the squads and looking into the entire organization. So we can take decisions based on that, as I mentioned, that can take us to a minimum ROIC of 15%. We are also evaluating new partnerships. So the partnership with Patria has been one of them. We are also evaluating partnerships with other projects, other businesses, especially those business projects that demand a lot of capital and that we could, for instance, decrease this necessity, this need and also split the risk. So at a given moment with the opportunity, we're going to share with you guys. And Daniel, if there is something else that you would like to add, feel free to do so.

Thank you very much in the first place. And just to add to it, I thank you for the question. If you look into the past few years, especially the 2 big projects, Dacomsa in Mexico and [ EBS ] in Europe, so those acquisitions in the auto parts area that Randoncorp historically has allocated most of its capital. So this reinforces it. So with this external market now being 1/3 and 45% of the market in aftermarket gives us more resilience in the commercial side of it and less volatility in the net revenue of Randoncorp. So that's what Randoncorp has been doing, just to reinforce what the company has been doing. And as Paulo said, we're going to be looking for projects that we can have a minimum return on investment of 15% and projects that put Randoncorp in a more resilient position in terms of revenue and margin as well.

Thank you Daniel. Now we'll move on to the last question that comes written here, Jonathan, JPMorgan. He's asking about the American market, especially what is -- how is the outlook for the second quarter about Hercules and AXN. And now just getting back to the topic that Daniel and Esteban mentioned already, Jonathan, what we see here in the American market, we can see some new orders that increased a lot for trucks, especially in March and April. But when we see the production, it's not translated in biggest production now. We're going to be needing more months, recurrent months with low -- with high increase. So the production is affected considerably. So the trend is getting better now, but we still need a little bit more time to watch that. And in traders, we still don't see the same trend or at least not the same level. As Esteban mentioned, there is a delay, there is a gap, and we need to do the follow-up and see how it translates into the market. In the operations perspective, we have a closed order for up to 1,200 units, started production in April and it's going into September. So we have 2 full quarters of production guaranteed. And we recently premiered a new business, a new pavilion, new building to help us to take orders from America. So to avoid dumping in the market, getting very competitive with a good capacity to take advantage of this recovery in the American market that we know that's going to happen. It's going to be -- it has been low in 3 years for trailers and 2.5 years for trucks, and we know that this is very low in comparison to the history in the American market. So we are getting ready for this recovery and to deal with the market along the next few months and quarters. So now I'll give the word back to Caroline so she can do the wrap-up of our conference here.

And now we wrap up our session of questions and answers. We appreciate everyone that participated. Now I give the word to Daniel Randon, our CEO, for the final message.

So now we wrap up our results conference. I appreciate once again, the presence and the interest of everyone. We move on strong with our operational discipline with strong focus in execution, control and efficiency, always aligned to our long-term strategy, the consistent sustainable value generation. The results presented today reflect not only the resilience of the company, but also its capacity to execute discipline consistently even in a challenging business environment like this under constant transformation. We're going to move on, paying attention to the movements in the market, prioritizing the initiatives that reinforce our operational efficiency, boosting innovation and sustaining growth with profitability and generation of cash. I appreciate the trust and patience as always, and our relation with investors, team is always at your disposal for further clarification. I wish everyone a fantastic afternoon. Thank you, guys. Thank you very much. See you the next time. [Statements in English on this transcript were spoken by an interpreter present on the live call.]