Release Date: August 02, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Marcopolo SA (BSP:POMO3, Financial) reported a 43% growth in net revenue quarter on quarter, driven by a significant volume of microbuses.
- The company achieved an EBITDA of BRL382 million with a gross margin of 26.1%, indicating strong operational leverage.
- International operations contributed significantly to profitability, with a 25% increase in revenue from these operations.
- The company is making strategic investments in electric buses and chassis, preparing for future demand in urban electric vehicle renewal.
- Marcopolo SA (BSP:POMO3) is celebrating its 75th anniversary with new product launches, showcasing its commitment to innovation and market leadership.
Negative Points
- The Brazilian bus production levels remain below historical averages, indicating a challenging domestic market environment.
- Exports in the second quarter were below last year's levels, with no major projects contributing to international sales.
- The company faces challenges in maintaining fleet renewal rates, with current production not meeting historical averages necessary for fleet age maintenance.
- There is a delay in the bus-to-school program, affecting the expected volume distribution and impacting planning.
- The volatility in exchange rates poses challenges in negotiating commodity prices, potentially affecting cost structures.
Q & A Highlights
Q: Can you quantify the expected margin increase from efficiency gains for next year? Also, how much investment is still needed to complete the São Mateus plant?
A: We anticipate a potential margin improvement of 4% to 5% through enhanced efficiency, particularly in labor and material costs. Regarding São Mateus, 60% of the investments are still pending. The plant is being prepared for increased demand, especially for electric buses and chassis, with a capacity of producing five to six electric buses per day.
Q: How much efficiency can still be gained from international markets, and what is the timeline for achieving parity with Brazilian operations?
A: We aim to align international operations with the profitability levels of our Brazilian operations. This involves restructuring and price adjustments, particularly in Argentina and New Flyer. Efficiency improvements are ongoing, with a focus on operational performance and profitability.
Q: Could you elaborate on the product mix's impact on margins and the share of higher value-added products?
A: We are seeing an interesting mix of heavier vehicles, such as double-deckers, and microbuses. While mix is relevant, the profitability gap between product lines is narrowing. We aim for similar profitability levels across all segments, driven by increased demand.
Q: What is the rationale behind the deceleration of orders in the bus-to-school program, and what are the opportunities for electric buses under the PAC?
A: The bus-to-school program's distribution timeline has been extended, allowing better planning and visibility for 2025. Regarding the PAC, we anticipate 2,000 to 2,500 electric buses, contingent on government initiatives and infrastructure readiness.
Q: How has ESG impacted your costs, and what measures are you implementing in Brazil and abroad?
A: ESG initiatives focus on decarbonization, using lighter and recyclable materials, and renewable energy sources. We are also investing in social programs and governance improvements. The recent climate catastrophe in Rio Grande do Sul had minimal impact on production, thanks to proactive crisis management.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
