SIMPAR S.A. ($SIMH3)

Ladies and gentlemen, welcome to SIMPAR's conference call to discuss the results for the First Quarter 2026. This session is being recorded, and a replay will be available on the company's website, ri.simpar.com.br. The presentation is also available for download. [Operator Instructions] Before we go on, I would like to remind everyone that forward-looking statements are based on the beliefs and assumptions of Sim Power's management and on information currently available to the company. These statements are subject to risks and uncertainties as they relate to future events and therefore, depend on circumstances that may or may not investors, analysts internals should be aware that make economic conditions industry trends and other factors may cause actual results to differ materially from those in the forward-looking statements. Joining us today are Mr. Fernando Simoes, Chief Executive Officer; and Denys Ferrez, Executive Vice President of Corporate Finance and Investor Relations Officer. Now I would like to turn the floor to Mr. Simoes, who will start the presentation. Mr. Simoes, please go ahead.

Good morning, everyone. We are beginning SIMPAR's First Quarter 2026 Earnings Presentation. On behalf of our more than 56,000 employees, I would like to thank you all for joining us today. We'll start with Slide 3 with some of our main highlights for the first quarter '26. I would once again like to reinforce and remind everyone that in line with the strategic plan defined by our Board of Directors after major mission to execute and transform our businesses between '20 and '23, '24, we entered a new cycle with the mission defined by our Board of Directors, and of our subsidiaries of extracting value based on the infrastructure assets and investments built over recent years. Throughout '25, you have been following this process. And what we are seeing in the first quarter of '26 is the execution of this value extraction through improved operating efficiency, better asset turnover, fair pricing and [ dropper ] aligned with market changes and the capacity of our people to do more with less, optimizing operations and reducing costs. And you will notice, not only on Slide 3, with consolidated results, but also in the performance of our subsidiaries. And the strategy has translated in lower leverage, stronger cash generation, improved [indiscernible] and higher returns on capital. Page 3, we bring in the main financial indicators for 1Q '26. Gross revenue totaled more than BRL 12 billion, growth of more than 6% year-over-year. Adjusted EBITDA, BRL 3.2 billion, up 14% versus the same period last year with revenue growth of 6%. Net loss, BRL 13 million, BRL 5 million higher than in the first quarter '25. However, productive ROIC for the last 12 months, reaching 17.7%, 2 percentage points above the same period last year and also 2 percentage points above our third-party cost of capital. Still on Slide 3 on the right-hand side, we talk about some of the key executions of our strategic plan and value creation. Before discussing the main figures, I'd like to highlight that our companies have continued gaining market share with less CapEx and greater operating efficiency. That is even with net CapEx a lot smaller than last year, that is down 68%, we delivered 9% growth in net revenue from services and growth of more than 14% of our EBITDA. As a result, we also reduced leverage. We completed the sale of Amazonia in ints entirety for BRL 200 million. Of this amount, 45% corresponded to SIMPAR stake. That is BRL 121 million. This demonstrates the capacity of our managed team, the liquidity of our unlisted assets and a pricing benchmark that the market may not yet be fully recognizing. That's the proof of the value of our assets in line with our strategic plans. The quality of our operational execution, the efficiency of our companies, the sectors in which you operate, the resilience of our businesses the capacity of our people as well as our financial management team have continued to support our access to debt capital through long-term partnerships and also opening new funding sources. In the first quarter '26, we raised BRL 4.2 billion in funding at an average cost of CDI plus 1.9%, average maturity of 5 years. We also announced a combined capital increase of BRL 2.9 billion involving SIMPAR, Movida and Vamos is still in the subscription period. This shows the efficiency of our management, the positioning of our companies and the capacity of our people. More importantly, the quality of the investors participating in our capital increase such as BNDESPAR, for example, serves a strong endorsement of the quality of our governance. On Slide 5, we talk about Movida. Movida has been executing the strategic plan established by its Board of Directors with efficiency and excellence, whether through operating efficiency, cost reduction, anticipating customer needs. And now I would like to highlight our DNA of mission for serving which has contributed to the transformation of the industry. And this positioning does DNA have moved have helped attract new customers. Last year alone, we added more than 600,000 new customers. But as important as attracting new customers is retaining them. With Movida's loyalty program demonstrating that we are not only attract but also strengthen relationship with customers through operating efficiency, pricing improvements in both rental car and [ GTF ] optimization of resources. And with that, we improved utilization levels, increased EBITDA and earnings and delivered revenue growth with much lower CapEx. As a result, our financial indicators have continued to improve. And again, without creating any expectations, we are very pleased with everything that has been done, but we strongly believe there is still a lot more to deliver based on the infrastructure platform, everything built and the scale that we have today. Moving on to Slide 6. We have Vamos. I'd like to highlight a few points to you about Vamos and what it has consistently demonstrated over the past quarter. First, its ability to sell assets. We have been selling assets at a quarterly pace, well above any expectations due to returned assets. Asset sales that were originally expected to occur 2, 3 years, from now are happening today and are being successfully executed, demonstrating quality of access and the responsibilities of our people. Beyond that, the extension of 5-year contracts for an additional 2 years using the same asset with higher yields. This is positive for customers since [indiscernible] need for new CapEx repricing while allowing them to continue operating the same asset with a small price adjustment, which for us, it's better than renew the asset. In addition, we have continued leasing new contracts with returned assets that are 2, 3 years old, what we call [indiscernible]. That is the quality of our assets gives us the ability to redeploy the same assets for which CapEx has already been incurred. That requires less CapEx while continuing to grow revenue. In addition, we remain focused on cost reductions, which is part of a continuous improvement plus as well as extracting values through the allocation of everything that has been invested and through new contracts. When you look at the market with interest rates as high as they are, many companies have assets, and they do not pass through costs to clients, and that gives them difficulty in accessing new credit. This creates opportunities for leasing. At the same time, shippers, industrial companies are also increasingly looking to lease assets in order to avoid becoming overly dependent or vulnerable to suppliers, which further expenses leasing opportunities for Vamos. Also, there are, for instance, sales with potential leasing as Vamos just released. In other words, customers that want to lease assets while returning a future purchase office or even prearranging our future acquisition, new avenues, new market opportunities for Vamos to expand its leasing business. supported by its leadership position and unique market position. Very pleased with everything that has been accomplished, but we are certain that mass has much more to deliver over the coming quarters. in yield cost reduction and continued operating efficiency gains. On Page 7, we have AutoMap the largest dealership group in Brazil. We bring some of our main financial highlights across light vehicles, trucks, equipment and others. What I want to emphasize is that this is a company that continues executing its optimization process through administrative initiatives, consolidating legal entities, improving processes, operating structures, supply management and used vehicle inventory. In other words, [indiscernible] remains in a process of optimization and productivity enhancement, reducing costs increasing synergies that will still continue to see throughout '26. We'll continue to have improvements, and I believe that the full cycle should be reflected by the first quarter of '27. But there are already solid signs when you see the number of new vehicle sales per dealership, which has not only improved but continues to improve as well as performance in aftersales and used vehicles. And because of a mistake, we have to recognize of inventory supply in used vehicles, we had a number close to previous quarters. However, there is significant upside potential, which will be achieved in line with the guidance for [ '27 ]. And also the improvements in F&I. I would like to highlight this for food for thought, a potential increase in sales per dealership driven by better F&I and continue development of after sales operations. This is a combo that will certainly drive stronger financial indicators. We strongly believe it, we are fully confident in the delivery capacities of our people. When we look at the current situation of the agricultural sector, we know that it's temporary. It's important to emphasize that what we represent, what we consider to be the world's leading equipment brands in regions with a strong demand. So although the current environment has led customers to postpone replacing these machines. They remain central for future development, harvest, planting. So fleet renewal will happen. It may be delayed 1, 2, 3 years, but we are well positioned to benefit from the cycle when it resumes. Until then, the team remains focused on reducing costs, improving margins even with lower volumes in order to offset costs and pursue financial balance. In Trucks and Buses, the first quarter saw a decline due to the government program that was announced following subsequent adjustments. The government has already provided additional support. We believe the second quarter should perform even better than the first. In other words, [indiscernible] a unique positioning to benefit from the entire retail industry, individual mobility, trucks, buses and agricultural equipment. We strongly believe in the business, and this evolution should be consistent reaching full maturity in the first quarter '27, while already delivering quarter-over-quarter improvements in financial and operating indicators. On Page 8, we have CS Infra, which has continued to expand its portfolio in line with our business plans and portfolio strategy. Portfolio is consistent, resilient focus on concessions or PPP in infrastructure, highway, ports, mobility and also social infrastructure. Social Infrastructure, we recently won the concession for 40 schools in the state of [ Parana ]. We believe the segment offers substantial opportunities, particularly midsized concessions where the focus is services, require less CapEx with resilient revenue streams supported by strong guarantee structures and transparent contractor awards. Although most of these concessions are still under construction. We are already beginning to see signs of financial development through growth in EBITDA, revenue and earnings. On Slide 9, we have Ciclus [indiscernible], which comprises Ciclus Amazonia and Ciclus [indiscernible]. Ciclus [indiscernible] is a highly modern land field operation with advanced technology. fully prepared to receive waste with significant revenue potential across the municipalities around [indiscernible]. Slide 10, we have CS Brasil, a company focus on fleet services and operations for the state-owned sector, ensuring fleet availability and productivity through leasing solutions as well as passenger transportation service. Growth has been moderate but highly sustainable and resilient, and we continue to see substantial development opportunities ahead as governments increasingly seek improvements in public services supported by fee-based solutions. On Slide 11, we have DBC. Its credit portfolio has continued to grow, focus both within our ecosystem, but also on financing operations involving automobiles and trucks. The bank continues to prioritize financing structures with meaningful down payments in spreads between 10%, 12% and strong credit quality. In other words, the bank has been developing in a consistent, resilient, highly sustainable manner, always aligned with the business profile we believe in, that is there is assets with strong liquidity, high credit quality and supported by the capacity of our people. Slide 12. We have some of our main indicators. And now I'll turn to Denys that will walk you through that. Denys?

Thank you, Fernando. Good morning, everyone. I'll start on Slide 12 with our consolidated financial highlights. Net revenue in the first quarter '26 reached BRL 11 billion, of which approximately BRL 2 billion came from asset sales and BRL 9 billion from service revenue. Net revenue from services increased 9% compared to the first quarter of 2025. On the right-hand side, we have EBITDA. For the first quarter '26, it totaled BRL 3.2 billion with a margin of 29.2%, continuing -- compared to the first quarter of '25 and the previous quarter, an evolution that is continued both in margins and nominal values. It's important to note that the comparison against the fourth quarter excludes the monetization related to Ciclus asset as highlighted in the chart. On the lower left side of the slide, operating income measured by EBIT, totaled nearly BRL 2 billion with a margin of 18.1% in the first quarter '26. This represents growth of 13% compared to the same period last year along with a 1 percentage point margin expansion. Adjusted net income for the first quarter '26 million was a negative BRL 13 million an improvement versus the fourth quarter '25%. When average interest rates were equivalent to those observed in the first quarter '26 and only slightly below the results reported in the first quarter '25. However, in the first quarter '25, interest rates were approximately 2 percentage points lower than those observed in 1Q '26. This clearly demonstrates the work being done to rebalance all of our contracts and operations to the new macroeconomic environment. On the next slide, Page 13, we bring our net CapEx for the quarter, which reached BRL 222 million. I reminded this is gross investments, less procedures from asset sales. This is one of the lowest, the lowest level recorded since the first quarter 2020. Compared to the same period last year, it is a reduction of nearly 70%. And thus again, reinforce what we have been saying regarding the current phase of our long-term strategic brand. At this stage, the focus is extracting more value from the platforms built. And this approach has been broadly reflected across our companies. There are, however, some additional considerations depending on the characteristics of each business. Some companies have seasonal CapEx profiles, Movida perhaps. Others follow investment schedules tied to long-term business plans as it is the case of CS Infra. And others are changing their business models and should become more consistent in reducing capital allocation as it is the case of GA cell. Now moving on to the next slide. We talk about this relationship between cash generation measured by EBITDA and investments. First, I would like to highlight that all the growth historically delivered by the group was only possible because of the strong visibility that we have whenever we start a new contract and also because this is a group predominantly based on long-term contracts. So here we highlight that of our BRL 12 billion in cash generation before growth investment, 80% is tied to long-term contracts. I believe this is extremely important, especially considering that we operate in sectors that through different economic crisis have consistently proving to be resilient and essential to society. So looking at this chart, which goes back to 2020, we now have the best relationship between EBITDA and investments over the last 12 months. Today, EBITDA is likely more than twice the amount invested over the past 12 months. This contract sharply with periods such as '21, '22, when we were building the company's operating base and the scale we often reference, during which EBITDA was at times only half of the net investments being made. So this clearly marks this new phase, where cash generation significantly exceeds the volume of invested capital. Moving to the next slide. It brings some consolidated metrics related to liquidity, debt maturity schedule and spending activity. I would like to make an important point that these figures represent a simple aggregation of the companies. The way it's structured built around publicly traded subsidiaries, each company has its own governance and risk profile. It's important to remember that publicly traded subsidiaries cannot be negatively impacted by SIMPAR as a controlling shareholder or by any sister companies within the 8 companies controlled by SIMPAR. With that said, during the first quarter, the group raised BRL 4.2 billion with an average maturity of 5 years and an average cost of CDI plus 1.9%. Following the end of the first quarter, we also announced capital increases totaling BRL 1.8 billion at SIMPAR, BRL 750 million at Movida and BRL 529 million at Vamos so far. Combined and net of the contributions made by SIMPAR to the capital increases of Movida and Vamos, the transactions totaled BRL 2.9 billion. As a result, when we add the cash position at the end of the first quarter, approximately BRL 14 billion, together with the proceeds from the capital increase and the approximately BRL 800 million in available undrawn committed lines and the available for [ Penn ] that finance our leadership retail operations, total available liquidity for the group reached approximately BRL 18.5 billion. This corresponds to roughly 2.5x short-term debt. And regarding debtness, the average debt maturity is close to 4 years. Now I'd like to address the same topic that is indebtedness, specifically for SIMPAR as a holding company on Slide 16. SIMPAR ended the quarter with BRL 3.3 billion in cash. And again, when added to the proceeds from the capital increase already received, net of the contributions being made to the capital increases of its subsidiaries, reaches approximately BRL 5 billion in total liquidity, which is enough to cover debt amortization through 2031. On a pro forma basis, obviously, we officially report net debt at the end of the first quarter at BRL 2.8 billion. But again, if we deduct the proceeds from the capital increase I just mentioned, net of contributions to subsidiaries and also include dividends receivable already declared by the company's dividends payable, we would have on a static pro forma basis in the first quarter with all this pro forma calculation, net debt of approximately BRL 700 million, which is 74% lower than the officially reported net debt at the end of the first quarter '26. On the next slide, we bring 3 indicators is specifically related to financial leverage, which on a pro forma basis points to the lowest leverage level in the last 15 years. We showed data from 2010 through the most recent period based on the first quarter '26. When we look at interest rates in Brazil back in 2010, we're around 10%. We experienced significant volatility over the years. And today, we are operating in an environment close to 15%. Even so, we are delivering deleveraging. And this obviously is supported by capital increases, also supported by our ability to demonstrate the value of investments we made and monetized but it also reflects the behavior of our portfolio and our businesses, which are adapting to the new macroeconomic environment. So what we usually say is the following. We do not necessarily need interest rates in Brazil to decline. Stability in interest rates alone is already sufficient for us to carry out the internal work required across our contracts so that they can be properly rebalanced. At the same time, we continue to improve efficiency, reducing cost to restore profitability, and this is exactly what we are doing. I believe this is very important to highlight. We did that during the last Brazilian recession of '16, which was also driven by higher interest rates, and we are doing it again now, as I mentioned earlier when discussing net income performance. So on a pro forma basis, considering the last 12 months, leverage measured and the methodology we disclosed for the international debt market, net debt-to-EBITDA at 2.8x and the methodology we used in the local debt market, which includes net debt to added EBITDA 1.9x. That is, we continue to execute our strategic plan exactly as intended, capturing value from the investments already made, realizing value through asset monetization as we have demonstrated and focusing on operational improvements as reflected in the expansion of EBITDA margins and nominal growth of our numbers. Now to my final slide, we have productive ROIC for the quarter, reaching 17.7%, 2 percentage points above the average after-tax cost of gross debt using the same effective tax rate methodology and the highest level since we began disclosing productive return on invested capital. With that, I turn back to Fernando. Please go ahead.

Thank you, Denys. On the final slide, we highlight a few points that we believe may contribute to your reflections. The result of all the work that has been carried out: focus on operational efficiency, pricing improvements and cost adjustments with the objective of extracting value from everything that has been bet over the past years can be seen in our key indicators, which demonstrates the potential value extraction embedded in the platform is built. We have 9% growth in net revenue from services, alongside 14% growth in adjusted EBITDA while reducing consolidated net CapEx by 68% in the first quarter '26. This clearly demonstrates value extractor from the platforms developed over recent years. When we look at EBITDA per employee, which increased 14% compared to the same period last year, we see value extraction through operating efficiency. When we discuss pricing trends, our [indiscernible] has always been centered on serving our customers. but also having fair pricing that can reflect our cost structure and provides us the necessary returns to continue developing in a very sustainable manner. So we are mainly focused on recovering prices, passing through costs whenever necessary, driven by greater efficiency in the use of [indiscernible] with higher utilization level, faster deployments and the commissioning process and stronger asset sales, we achieved a 2.3 percentage point increase, 26.7% annualized EBITDA from services. The result of everything we have built on a solid and sustainable manner enabled us not only to raise BRL 4.2 billion in funds during the first quarter '26, but also to complete a BRL 2.9 billion capital increase. For us, this is a [indiscernible] of recognition of the quality of our governance, the positioning of our companies and above all, the capacity of our people to execute and develop in an extremely sustainable way within resilient sectors that are essential to Brazil's economy. Once again, on behalf of our people, more than 56,000 employees, I would like to open the floor for questions so that we can answer any of your doubts. Thank you very much, everyone.

[Operator Instructions] Our first company -- question comes from [indiscernible].

I have two. The first, I would like to talk about the potential value creation of nonlisted companies. What are the levers that you see? What is the market not seeing in those companies? And second question, I would like to touch, again, value creation, but with some units of listed companies such as [indiscernible], and JSL third-party operations. What do you see that is important in terms of value creation for these companies?

This is Denys speaking. I'm going to start answering your first question, potential value of unlisted companies. In all the businesses that we join we always think of a long-term relationship. We like the safety, the stability of long-term contracts. Remember, 80% of our cash generation pumps from long-term contracts, which gives us security to continue investing because of visibility. So we are building this portfolio of unlisted company with a lot of responsibility within an environment of high interest rates. And because of that, you always have to take this into consideration. And if we have a more normal situation, the implied value creation will be much higher than what we already see as fair in the macroeconomic situation. So we see contracts and businesses of long-term that are very resilient because of, again, their characteristics, because of the legal framework. And I'm sure that we are building this in a time that is extremely right. And again, there is an accommodation of macroeconomic assumptions, especially real interest rates value creation will be even higher. But I'm going to let Fernando answer the question as well.

Well, value creation, [indiscernible]. What I would like to say is that Ciclus, for example, was executed by our team. It started from 0, from scratch, and it became the largest waste treatment center of Brazil, one of the largest of the world. Generating through gas, biomethane, 60% of the volume of biomethane generated in Brazil from waste comes from and the return of our capital monetization after 3, 4 years of our acquisition. And again, SIMPAR acquired the business from related parties and the other shareholders, we said we are going to follow the votes of the minority shareholders. And they decided to approve the transaction we approved, and it was acquired from the family holding. That shows the level of governance and with a return of 27% a year. That shows our capacity to do the capacity to divest and monetization of assets in addition to governance, which is a consequence of the business. In CS Infra, which is not listed, I'd like just to make a comment. We just completed the entire investment in the beginning of this year, December, January this year. of the construction and modernization of the 2 ports, 8 to 12 and 18 that are starting now to go into full operation. So this is a business that has not yet generated value in our ecosystem. I'm not even talking about general value. Now when you go to [ Transerados ], we completed last year, [indiscernible] which is the road of 300 kilometers, but we had a renewal and extension of the road in which we doubled with a much higher revenue and CapEx was invested. No one saw the results already of its full operation. So I have to answer you in twofold. You have the creation of value of everything that has already been built. In these 2 cases, I'm talking about BRL 1.3 billion and revenues are not there yet. So you're going to start seeing as of now in 2026. So these are 2 points that have to be considered. And I have another comment to make. You have CS Brasil that is also not listed. And it's a logistics company, leasing with labor in the public sector. And you see the improvement of the indicators step by step. So again, unlisted companies that we understand that are ready to be seen with CS Infra and CS Brasil. So these are the 2 points that I think are worth highlighting. [ Matthias ], sorry, I took a long time to answer my question, but I think it's very important. There is a lot that we understand. First is not perceived and others that are already built, and now we are going to enjoy that. With JSL and I really like your question. You have interlock. It starts with revenues of more than BRL 2 billion with no transportation almost whatsoever, and EBITDA of BRL 450 million to BRL 500 million, 22%, 23% margins. So this is [indiscernible] within JSL. And within JSL, you see in the release, 73% of revenues. Most of it, you're talking about third-party independent drivers that provide services to us and its strategic services. So you have another company within our asset-light operations. So we have been growing a lot through JSL [ Dgital ] and we have been doing ex work. So Victor has really made the difference, the people in the company. So we are now trying to communicate better. So this is important for our operations, our businesses are more seen and we have more focus to bring more value-added to customers. In [ Infralog ] now, we have a new CEO that is very experienced in the area. So again, a new company, completely independent, focused on continuous renewing contracts and providing even more excellent works to our customers. I don't know if Denys has anything else. I'm sorry, I took a long time to answer the question, but I think it's very important to tell you what we are doing, both in terms of creation of value of everything that is not listed, but also in listed companies, we still have a lot more to grow.

Yes. What I would like to say about this reorganization, something that was already in JSL, Intralog. This is a business with a very good return, 24%, asset light, and that has been growing about 20% a year without receiving so much visibility and highlights, as Fernando mentioned. So certainly, this will favor the development of the different avenues of growth of JSL, Digital, Intralog and dedicated services. Thanks, for your question.

The next question comes from Guilherme Mendes from JPMorgan.

First question on strategy. thinking more in the mid long term. And the short term, the maturation of the company's operational efficiency is very clear. thinking of a bit of a longer horizon, what would be the optimal structure of the company? And when do you want to reaccelerate that CapEx of the company that has reduced in recent quarters? And second question, Chinese companies. Do you have any concern about depreciation risk, especially at Movida in the short term?

Well, capital structure, and Fernando is going to talk about the business a home. We used to say -- and we are getting to our objective. We said that we had 2 objectives. First, we wanted -- with regards to SIMPAR as a holding company, we want to bring its net debt to 0, and we are working on that and why that? Because the debt we had was a result of building the platform. It was not our objective. It was a consequence of us after we built the platform. So we wanted to get to 0. And in the group as a whole, we said that we wanted to deleverage the companies getting to below net debt EBITDA, 3x ratio. Pro forma, we are getting at 2.8%. Companies are following the same behavior as we accelerate in SIMPAR's growth, but that was the objective to be below 3x. Sometimes, you can have something that justifies something different than that. But for now, we don't have anything. This is the line that the Board of Directors have established. And this is how we want to work with it. Fernando?

Well, blame first, I would like to highlight the following. We did not come here by surprise. It's not that we woke up and this is what we have. That was part of our strategic plan to build everything we have built. That's part of our history to raise debt to raise funding then build and bring value on what was built. And now we are at this pace. We are extracting value. And we went to 0 the net debt of the holding. And with what we have now is to manage our debt as we have always done. So what I want to tell you is that reaccelerating net CapEx is not for us a reacceleration because we continue gaining market share and what we need to invest now is much more for renewals. So the recurrence of new CapEx is just natural for the company. First, we built now we are extracting what was built. That was the mission of the Board, built build scale, have everything with you, and then we are going to improve and to have our continuous improvements. And we believe that this is going to go up to the end of; 27 because there is a lot to be extracted. And the consequence of that is basically decreased our investments. In this period, we see that there are things that can bring us opportunities. We are going to continue growing. Now growth, you can see that revenue is growing and EBITDA, for instance, has been growing above revenue. So we are not not occupying our space in the market in company in our companies because of CapEx spike the opposite. We are gaining market share in all the businesses in which we operate. So that was part of our planning. With the Chinese, we do not see any danger in terms of transformation of value by the Chinese, by the opposite, we see an opportunity cars that were not treated by renal car company that cost [ BRL 350,000 ]. And now you have cars that can offer the same and costs [ BRL 200,000 ]. So this is what is being brought by the companies. And we are going to have more debt. Now can they get to more affordable cars. If they do, it's going to be good because you're going to have more alternatives to buy, is that going to lower used car prices. I don't see the risk because our used cars are above -- 2 years out, the turnover of the fleet is very fast. And so you can do things fast. So we are seeing the Chinese cars as an opportunity for ramp [indiscernible] Movida to make the customer experience even better and bring more people to the market. If you think the Chinese are risk for residual values, I'm sorry, I do not agree. I think they will contribute to the segment, especially for used vehicles to bring more clients to the business and for a better yield. I think that this is really going to the transformation of the business.

Our next question comes from Pedro Tineo from Itau BBA.

I have two. In fact, I would like to start one approaching JSL. In the results the company showed to us in terms of cash flow generation, which was very strong. And I would like to ask you if this is going to continue from now on. if there is a new way in terms of CapEx over leasing vis-a-vis purchases. So I would like to understand your prospects for cash generation for the future and also the possibility of paying more dividends. Another thing we see the scenario of fuel prices and companies of the group are very much related to this input. So I would like to know what we can have in terms of good practices and resolutions for fuels. That would be interesting to hear from you?

Pedro, this is Denys speaking. About JSL, we do believe that this is more structural. We did make the comment when you go through the net CapEx of the first quarter of the group BRL 222 million, the lowest since the first quarter 2020 within the basis that Fernando mentioned. That is the construction period has ended just to compare to the previous year. We are talking about a cap reduction of 70%, but if you look at each one of the companies, they have different behaviors, for example, that also had more sales than purchases this quarter as higher seasonality in its cycle purchases. At JSL, we did make this comment. This is a continuous trend that is assessed the possibility of leasing instead of buying assets. And this, we believe, could contribute to positive cash generation, and that should last for some time now.

Pedro, this is Fernando speaking. And just to contribute to the answer. Thank you for your question, first of all. But Pedro, just to add to what Denys mentioned. Cash generation at JSL. If you take a look at its history, it's very strong. Now when we start focusing on leasing assets, if you compare it to peer companies abroad, we have operational leasing. So all companies have operational leasing. In Brazil, we don't have that. So what we see is the operational reason. So -- I'm sorry, broad companies have financial reason here, we have operational leasing, which generates more cash, not only now but in the different areas. And we have also an important part of the company without much CapEx. So it's very interesting. We can propose to customers to work with independent drivers. So you have a great change because sometimes you have a fleet, and it began a third-party operation. We start with the customer for a year or 2, and then we transfer the operation to third parties. And very often just the trailer for you not to be in the hands of independent drivers, but you have a much more controlled operation. So that's part of it. Now when you talk about the past assessment, every now, we have increases in fuel, tires, things that are important for the composition of price. But you have to think that prices of trucks from '20 to '25 increased by 50%, 60% and JSL has as its policy, and this is for the whole of the group. The best way to respect customers is to pass through prices so that you can cope with the cost you have, even financial costs and this is what we do. We pass through cost. We do not do away with that. So you just do not see greater growth for JSL because it is recycling some contracts, and it is still adjusting prices. This is part of our strategy. And this is what makes us healthy. Unfortunately, there are many competitors that don't do the same, quite opposite. You start having more extensive money, then you have less credit, and this is good for JSL, Vamos and the others because people become more responsible in pricing and customers understand what it's okay and that brings huge possibility for organic growth for JSL. And in the last 3, 4 years, we had substantial price increases and many logistic companies are dependent on some sectors and segments. And they cannot pass through costs and our customers are replacing them because they cannot replace their assets. So again, I apologize it took a long time, but this becomes a huge opportunity for JSL and Vamos, because their customer shipper [indiscernible] this high, it makes more sense leasing than investing CapEx. So this is an opportunity for Vamos, for Movida outsourcing for even individuals that prefer to rent a car than buying one. So for all companies, it's an opportunity, especially for JSL, which has its cost very much based on fuel prices, but again, with very good pass-through triggers.

Just a quick follow-up. Just for me to understand because JSL indeed for a period of low liquid net CapEx because of leasing -- so we should expect a higher dividend payout for the future. That is as the company becomes more asset-light, Well, in our businesses, we can have higher dividends in the future. But we want to first to improve indicators to correct our capital [indiscernible]. And remember, we -- JSL has still a 2% market share in its segment. So dividends, okay, SIMPAR is not here to increase the dividends of the companies. It wants to develop companies naturally. Dividends may happen, but not necessarily. What's important is to develop companies better.

Our next question comes from [ Andre Heidecke ] from Caixa.

My first question is related to EBITDA. We see that there was a growth of 14% when we compare quarter-on-quarter, but net profit was negative. When do you want to revert that considering the high interest rates. So we see an important impact on financial results and also the raising of private capital, BRL 1.8 billion from SIMPAR. You did talk about that before. But I'd just like to have a bit more color. Is this capital increase going to be directed to any specific operation or to deleverage the group?

Andre, this is Denys speaking. I'm going to start with the negative result of the first quarter. I cannot give you guidance, but I am sure that we are on the way of changing results. And why is that? Because when you look at the first quarter of '25, CDI rates that were reported, and we reported BRL 8 million on the same comparison base of this minus 13%. And you look at the CGI of the first quarter of '26, you have a difference of almost 2 percentage points. So you see that this is exactly what we had described before. When you start a process of increasing interest rates in our business portfolio, you will start to work to do all the balance that Fernando mentioned. And this is happening. So now with 2 percentage points of interest rates, we are very close to the results of '25. So I do believe in the execution of the work that was done before as we are -- and things are going to better once you have the stability. So I would say that IFRS rates go down, it's going to be easier. But even if they don't, I think that we are going to deliver positive results for the future. Amounts and dates, I cannot give you because that's [indiscernible], but we work very much for that, and we assure you to happen. In terms of capital increase a SIMPAR level, and we do have a question here about debt. What is the time for the capital increase. The resources are already in company. It was certified [indiscernible]. We just have some bureaucracy. We have a total of BRL 1.86 billion to be more precise. With that until today, we could not make any movement in the capital market on behalf of the company, because you have this period. But now the Board of Directors have told us to reduce our gross debt in the short term, up to BRL 1 billion. That is to buy back some of SIMPAR's indebtedness. So this is a clear recommendation, and we are not allocating for any type of expansion. This is the first part. This is a clear recommendation of the Board. I don't know if I -- did I answer all your questions?

And Andre, just to add to what Denys mentioned, is that the cost of money interest, we are not complaining. This is not it, but there are things that we cannot control. So financial costs are the costs that we have as we have costs with fuels and tires. So we have to pass through prices. Sometimes it takes some time to really pass through prices in full. So every now and then, you can have a loss for a month, 6 months, a year. that's the time we take to balance the company, but that's our focus. We are not a company that looks only at the present. We look into the future. We want our businesses to survive in the long time. So if there are one-off situations, we need time to improve indicators and that's what we are working on, very strong to reverse losses. And we are not frustrated because of that because this is something that we cannot control. It takes time for us to pass through and we have to improve operational efficiency. You have to anticipate needs. And all that leads us to go back to better results very soon. So when you see the capital increase in SIMPAR, we are very happy with what happened I would like to make it clear that the development of investments, CapEx of the company, the growth of our companies will continue to happen. And you will see that we did not meet a partner. That was not something that we needed we have the strategy for a long term. And this is an obligation that we have, not even as shareholders but as executives to continue developing growing and supporting the development of our companies. And therefore, they automatically contribute to development of our ecosystem as they have been doing so far and we'll continue to do. And again, we have never been a follow-up in the 16 years for the companies of SIMPAR -- the shareholders of SIMPAR that derived from JSL. So we wanted to do this at some point and we were very fortunate to have been this part. And I think this is an endorsement of our governance. For us, it is an honor to have the Inspire in the ecosystem and the others that followed. So this is very much part of our plans, and we are going to continue developing.

We'll now start the questions in writing. Mr. Denys, could you read them?

So I'm going to get the questions that we got in writing. Some of them have already been addressed. There is a question on [ Filipe ] about prospects to returning to profitability. We just answered that. Gustavo Camargo asks about the timing of the capital increase, which approvals are pending before the company receives the proceeds? Well, the proceeds are -- in SIMPAR are -- in SIMPAR and Movida are already one company. SIMPAR BRL 1.8 billion, Movida BRL 750 million. The certification of the capital increase is going to follow the calendar, but this is already in company. For Vamos, we already have the amount of BRL 530 million but it's still in the period where the remaining shares are being subscribed. But this is a matter of time, again until we have the ratification of this capital increase. So this is the outlook. Remember that we had a floor of at least BRL 2.1 billion at a maximum BRL 3.2 billion, and we are reaching BRL 2.9 billion. So that shows the support of the shareholder base in the belief of the development of the group and what has been done so far. So I think this is very important to highlight. We have a question by Thiago. How are you working with AI in the group?

Thiago, this is Fernando speaking. I think that this is something that is very nice to see. All our countries can live without our companies, but not without the services we provide. So AI is helping us to optimize processes administrative, peracetic processes. And we are working it vary out, not that all our businesses are going to be transformed, but we don't have the risk of a to replace this. And so we are going to work very much, and we are working with strategic fronts that we cannot share with you, but that will highly contribute for the alliance with our clients. So that -- not that the clients are going to depend on us, but it's going to be easier for them to access our services through AI. So we are very optimistic. It started very soon. I think that this is something that is continuous work. It's here to stay, and it will still yield very good results for the future, really transforming our processes and the relationship with our clients.

We have some more questions that are coming. I'm going to read them. Daniel Marcato asks. Could you comment on the [indiscernible] process? Are you comfortable with the company's leverage level and guidance? Yes. Thank you for your question. [indiscernible] is still in a period of integration. It's integrating not only a back office, but all the whole logistics supply to [indiscernible] of light vehicles, new concessions that are not even 1 year old, not mature, but the mature stores already reaching our guidance of number of sales per location. F&I have taken a look of what it was in the past and how much it changed in the coming quarters. BRL 500, BRL 600 per car in F&I. It went from BRL 2.7 billion to BRL 3.4 billion. So real improvements happening by car, by F&I. So AutoMap integrating its stores. There was a strategic mistake because of lack of experience of supplying used cars to our stores. There was demand. We had no cars. That was an error. And now logistics is really working to supply the stores. So you're going to see the transformation that. So when you take a look at the Agribusiness segment, I would like you to understand the following. In addition to the Agribusiness caring inventory, we are working with the best machines in the road in the best region in the world with the largest volume. It happened, what has happened, but very soon, the agri business will have to renew its machinery, its equipment. So I believe the agri business will contribute to the results of the company. So until this comes back, we are still working very much at [indiscernible] to avoid losses at the segment. So we are very optimistic with the guidance for '27. I think it's a huge opportunity that we are going to have in the dealership business. And I think it's going to follow what happened in the rental car segment. Our team helped change the whole market because of a unique relationship to our customers. The relationship was completely different before Movida joined the market. And this is going to happen with [indiscernible] with higher sales per location, f&I after sales. I'm very happy with the deliveries that are starting to be made by the company. Rafael. Thank you. a file with a more optimized capital structure, how does the company view share buybacks? And what are you expecting regarding dividend payout? What is this exactly for you? We have plans of incentive for executives. We have always opened buyback plans. This is a policy. It's not a onetime announcement. This is a policy of our Board to have this always open, but it's not in our plan now. And dividend payout, it's what Fernando mentioned. It is an opportunity of development. Fernando mentioned that the increase of private capital has more to do with the long than the short term. So in the future, if there is an opportunity we'll continue prioritizing the development of the group. This is how we bought here. And if this is going to be done with more dividend payout, this is something to discuss in the future. And the other thing is that what you do you do with the short term. So the focus will continue to develop the group. There was another question from Thiago, the monetization of assets. Does it continue and the rather as prior bringing the holding company to thanks for the question. And once again, I'd like to enjoy the opportunity of talking to you. We have more than 150 participants. And it's very nice to say that. you very much for your question for us really to clarify any doubts you may have. I would like to reinforce again that we do not have a need to 0 debt overnight because it was not created overnight.

I'd like to make a comment. You see that you see interest rates going up, you see, oh, this is a one-off experience. I have been working for -- since I was 14 years old. And this has always been like that. What we cannot control, we are going to work with our executives to get better. So we do not have the need to 0 that overnight. At people said that we had to do the last mile, last mile, last mile, and I said I'm not going to do that because value creation is completely different. Now we have Intra-Lock. So those that went to the last mile probably did not develop that much. People said that Movida was not going to work out. And we started with Hyundai. People said it was not going to work. And you see what Movida did. That was thanks to our people, execution, discipline, anticipating customer needs. So again, this now thinks that the 0 debt is good. No. We wake up every day in our business to do better and more of what we do, anticipating customer needs, developing our group. This is the objective. We sold Ciclus because the value creation was much higher. It made sense for those that bought it rather than staying our portfolio. And along this line, we decided to go for that. If you take a look at the sale in [indiscernible], it's a small business. But again, it is more than what the company invested 3, 4x our PL. So we have the obligation when we see this opportunity. Something that is not going to be a gap in our portfolio, we will monetize and focus on more to create more value, and the more value we can create executing our services will do. If creation value is through monetization, we are going to that. And I would like to say that sale on SIMPAR with the capital increase somehow is monetization. You are monetizing your shares. You increase the capital, you make the company stronger and ready to develop. So this is the policy and this is what we are going to do. On the other side, we are growing. We just finished the concession -- won the concession of 40 schools. Again, this shows that we are recycling assets, we are recycling our portfolio, and that can happen. We are doing and looking into that every day at SIMPAR, JSL, Movida, [ Vemuzotumab ], and we are going to continue with this focus. And I think many of you can be very positively surprised through monetization or delivery of results that you still haven't seen in some assets, especially with [indiscernible].

One more question from Nicolas. Follow on the question regarding the use of procedures from the equity raise at SIMPAR. Is it going to reduce gross debt by BRL 1 billion or reduce grow at BRL 1 billion. Very good that you asked that. The capital increase with the structure benefit is to develop the business and the use of these funds to make the best allocation possible is partially. And again, not only coming from the capital increase. We also have the monetization that Fernando mentioned over and over again. So you have 2 events that are bringing cash to the company in a total of BRL 5 billion, as we mentioned. So for the cash not to be in our hands, in the short period, we are going to reduce our gross indebtedness by at least BRL 1 billion. So reduction of gross debt with net debt, it already occurs naturally because you have the pro forma calculation that we show to at the end of the first quarter. that takes us to -- from 2.8 million to BRL 700 million. So we always have a situation of liquidity that's quite comfortable in the group. This is a practice of ours at SIMPAR. It's no different. But now this is even better with the possibility of monetization of assets and the capital increase. So the idea is to make the better use of this money which is to work at our gross debt. So the first number is the reduction of our gross debt by BRL 1 billion. And with net debt, we already have that automatically. All that said, I think we have a last question from Leandro. What is the expectation for you to start operating the [indiscernible] schools? And what should we expect in terms of revenue? Well, without creating expectations, the idea is to start revenues in the end of '27. And when we get to the end of revenues, about BRL 29 million to BRL 30 million a month. This -- again, I'm not giving you any guidance, but that was the result of the [indiscernible] process. We are very much excited and that shows that CS Infra is going into the Social Infrastructure segment, in education, which I believe has a giant opportunity, less CapEx and more focus on providing services. And remember, CS Infra has no obligation in providing educational services. That is educational material, teachers, everything, that's the responsibility of the government of Parana. We have to build schools, standardized buildings and keep the buildings. That is the business, ensure the quality of assets available as we ensure the quality of all assets that we deliver. And we are certainly -- this is going to be a huge opportunity in Brazil. And just to add to that, we truly believe in infrastructure in the security sector, which can really improve security indicators nationwide, long-term concessions in the building of police stations, in the building of better fleet. We think, again, this is service evented and we do believe that this is very important. We already work with some of the fleet, but I think it's a huge opportunity for Brazil. Well, with that, we close our Q&A session. I'm going to turn you back to you, Fernando, for your final remarks.

Well, once again, on behalf of our team, more than 56,000 direct employees, I'd like to thank you very much for attending. We are very happy with what we have done but we believe we still have a lot more to be done in all our companies. Again, I'd like to highlight the improvement of indicators of all of our companies. Some more, some less. The ones that are less, we are going to adjust whenever -- whatever we need if an organizational structures for us to deliver what has to be delivered. SIMPAR is holding that is not passive. We are close to companies enough, not to impair their day-to-day, but to make sure that our plans are going to be executed. This is our focus, improving indicators. And once again, I'd like to talk about the growth of the companies, but a lot more growth is coming with less CapEx. In Movida, for instance, more than 600,000 new customers. That is Movida is being chosen more by more customers and it is growing. I think that it's growing market share. CS Infra, again, remember that there are lots of things that are still not bringing return from CapEx made, many things that you're going to see from now on, in addition to improving operational efficiency, and the sales of Ciclus Amazonia so the evaluation of unlisted assets that are inside companies like [indiscernibl, inside JSL and -- it is very much asset-light. I think now people start seeing opportunities and understand our assets and our work better. We do believe in the opportunities of difficult times, when we have the market volatility, increased interest rates, this is when management makes a difference. And we do believe that our team is very much grounded on providing the best execution possible, and that will make the difference that our competitor segments that are going through more difficulties, and this, I think, is going to make a real difference, which is our management model, our way of doing things. And we think that this is the major difference. [ AutoMap ] I mentioned, again, huge opportunities at the company. And without further delayed myself, the final message I wanted to leave with you is that what has been going on in our ecosystem as a whole is in line with our strategic plans defined by our Board. And when I say that it's in line with our strategic plans aligned with the Board, everything that you see was planned, is being planned. We have huge governance and very much disciplined. We defined a transformation of scale infrastructure from '19 to '24. That was part of our plan. And as of '24, focus on extracting value of the companies that have been built. And this is our mission now. Our obligation defined by the Board as executives is to continuously improving our results by extracting the best value from our business of everything that was built, growing revenues, growing EBITDA more than we grow revenues, improve margins and as a consequence, improving all our financial indicators. And the consequence of that is better leverage ratio with more customer loyalty and surprising you every time we need to discuss our results. Again, continuous development and extremely sustainable. This is our mission. On behalf of everyone, I'd like to thank you for your time, more than 250 participants. Thanks for your time for attending and I wish you a wonderful weekend. Thank you very much.

SIMPAR's conference call is now closed. We thank you very much and wish you a very good day.