Good morning, everyone. Thank you very much for attending our conference call.

I'm going to give an introduction using two slides before turning over to Marcos. Armac is a history of growth, in particular when my brother José and I joined my father to become entrepreneurs in 2012.

As you can see on the graph, we are lucky enough to be exposed to sectors and demands which are very important to Brazil. Infrastructure, which is very poor in Brazil—we are present in most states in the country, and on a daily basis, we face the bottlenecks of structure in Brazil.

This is a segment we are exposed to in Brazil, and regardless the government in power, for the population to have opportunities, dignity, and improve their lives, there's a lot of structure still to be built. We don't know how this is going to happen, but Armac is an enabler of this construction.

Originally, when we started operating in the sector, we identified that for the equipment to be acquired for this structure, it would become ever more expensive than if a major rental company would be there and would share the equipment among different construction works. This is part of the accelerated growth that we have experienced and which is also likely to persist along the years.

Another side is related to the movement that we had in 2015, when we went after recurring revenue from clients that use bulk products. Brazil is one of the largest producers of mineral and agricultural bulk products in the world, and they demand yellow line equipment in order to operate.

Today we are very proud to be present in all parts which are relevant to Brazil, in the north and also to the Rio Grande port, and we are working with fertilizers, soybeans, and we are strongly present in biomass, both in the industry that burn wood and in the mills of sugar and alcohol, and also in the mining sector, not in the mining activity specifically, but related to movement of products that use average-size equipment. In addition to the need for infrastructure, we are exposed to exporters with a recurring and resilient demand, and we also an enabler of all those activities offering competitive prices and specific products and services.

This is the context that made us look for capital in the market in 2019. We had the private equity fund, and in 2021, we had the IPO in order to master the sector.

Our activity is an intensive capital activity which is not regulated, and the equipment is the same for all competitors. The main entry barrier we always believed that is related to scale.

Predominant scale will lead to differentiated returns in the long term, and this is the reason why, as of 2019, 2020, we started a very accelerated expansion cycle in order to occupy the empty spaces in the yellow lines and forklifts, and become a dominant player with a scale which is multiple times bigger than the second players. We believe that this scale created a platform that will generate value to the shareholder in the long term.

The fruits will start to be gathered because the competitive advantages in relation to the competitors is very significant. This graph shows the growth history.

We started in 2021 the revenues from asset sales that use a strategy or the need for the asset. We were able to develop this channel in a very strong way.

The point is that the growth of the company was very accelerated. It's for an intensive capital company.

Because the growth was so accelerated and somehow sudden, during the process, the company was subsegmented. What do I mean by that?

As a strategy that we adopted, we went after sector with recurring revenue so that we could be protected by the volatility that we see in Brazil. Therefore, in order to go to those recurring revenue streams, we exposed ourselves to different economic sectors with different needs from the clients.

Many services were customized in order for us to operate in different segments. I believe that this was a right strategy because all the entrants of the sector that did not follow this path faced a lot of difficulties.

We had a unique operation in infrastructure. When we subsegmented the company, we managed distinct aspects without the correct visibility of the return that each business vertical was bringing.

Everybody knows the cost of all this: our margin deteriorated, and also the returns deteriorated. The correction of the strategy of management started in 2024, when we implemented a new ERP, and we had a new budget for the company bottom-up, looking at every agreement, every contract.

We studied every vertical, and we conducted a deep planning study in order to know what we would have to do to win in each segment. In 2024, we brought new leadership to those verticals that would be appropriate to each challenge.

The point is that the company is currently segmented in four verticals, all of them with high growth potential, and that they share synergies from the scale of Armac, all the four verticals. Could we move on to the next slide, please?

All the four verticals are favored. They purchase machines from the same equipment suppliers, manufacturers, and these are suppliers with whom we have a very long relationship, and we are their best purchaser, not only in Brazil, but also in Latin America for most of them.

For recurring services, rental, forklift, and Terram, they all use equipment from the same manufacturers, parts that came from the same OEM component manufacturers, technicians who have the same training. They also use the same system that Armac developed along the years in order to perform maintenance services.

There are many synergies involved. This platform with four verticals has a very distinct economics, and today they have independent leaderships with autonomy in order to run their different and distinct strategies.

In relation to the verticals, the largest is the recurring services vertical. I annualized the results of each of them in the second quarter in order to provide the visibility of the challenges and the magnitude of each one.

Recurring services has a gross revenue of more than 1 billion, with a backlog of contracts of about 2 billion reais now. This is a vertical where several reorganization movements took place: more than 600 agreements, more than 600 P&Ls managed with autonomy by managers—they may be managers or coordinators, and they're responsible for the financial result, and they have enough autonomy to do whatever it takes to keep the clients happy and provide healthy operation for the shareholder of Armac.

The 600 managers, along two years, turned around the results of many of the agreements, and most of them have an NPS that has been growing a lot. The EBITDA margin of recurring service reached 57% this quarter, and this makes us very happy, very proud, showing that we are on the right track for a long-term journey for a company.

Two years would be little, but I still believe we still have a lot to improve as other initiatives will generate results. This recurring service has a return on invested capital of 17% in the second quarter, it's a very attractive return, especially when we consider the size of potential growth of this unit and how much the results can improve along the time.

Initiatives such as a better management of the fleet—we didn't have a structure of asset sales, but now we do, and by far it's the best in the sector, and it can manage and sell the right asset at the right time. The second vertical, which is rental, is the one which is closer to our American peers, such as United Rentals and Ashtead Group, and that rent equipment for short terms for infrastructure activity and also construction works.

It invoiced lower than 800 million on an annualized basis, considering the asset sales, and the EBITDA margin was 56% in the second quarter. As we see it, it's much lower than the potential that it has, considering that these are activities with dedicated labor.

The EBITDA margin tends to grow a lot as we apply initiatives which are similar that we applied in recurring services. The ROIC is very low still, but we believe that this is going to be something temporary.

Why is that? The company spent many years subsegmented using a consolidated number without having accuracy of where each unit of return would come from.

Now we have this accuracy, and all workshops of the companies, all the branches, all the cars, all the personnel, they are allocated in the units where they are used. From now on, we will be able to make a very assertive management of the resources that the company uses, and we'll do the pricing as accurate as possible, and there's a special leader in the company to do that together with me.

We have confidence that the results are going to improve, and we also understand that this is going to be used in Brazil—by far is the largest addressable market in Brazil. As to forklifts, it's a vertical that has been growing a lot.

The gross revenue is 270 million per year approximately, with an EBITDA margin which is quite relevant of 55% and a very favorable return. The thesis is a growth thesis by consolidation.

We have an internal formula that has been developed. We had three M&As in this vertical, all of them successfully integrated without practically no losses of clients in the process, and we also maintained the personnel, the team.

We have a formula that we hope to apply in more than dozens of initiatives along the years. We will consolidate the forklift segment.

We believe we already have enough scale to allow us differentiated returns and a management that would add value. Terram is managed by one of the son's owner, and we use the synergies that Terram has with Armac's system, and we place our bets there.

First, we are looking at the tax reform that will bring lots of benefits to the northeastern of Brazil, where Terram has the enough intelligence in order to find what's the best earthworks activity, and this is going to be done in a short term. The tax reform will be very favorable to Terram, and also e-commerce, when there is a competition for large logistic warehouse that would sustain the growth for a long time.

Another favorable wind are the data centers. This is a company that we believe will grow a lot in the future.

In consolidated terms, Armac has been improving its results. It has a growth potential which is quite extensive, and we are going to explore in the next months in a very responsible manner, without accelerated growth rates that we saw in the past, because the dominance has already been built.

The shareholders, from the future, they can expect a company that is managed with a lot of professionalism, with a lot of accountability, P&L managers, right strategy for each vertical and each business unit, and a growth that is consistent—high for Brazilian standards, but long-lasting. After this introduction, I will turn the floor to Marcos Pinheiro for him to discuss the financial results of the quarter.

Thank you, Fernando. Good morning, everyone.

Thank you for attending our 2026 second quarter earnings conference call. Q2 2026 was a quarter of consistent and sustainable growth for Armac.

We delivered revenue growth, margin growth, and disciplined capital allocation. As to the highlights of 2026, we'll start with the key figures for the quarter.

Gross revenue reached 586.2 million, a growth of 19.3% when compared to the second quarter of 2025. Gross rental revenue reached 441 million, a 7.7% increase year-over-year.

Revenue from asset sales was 145.2 million, almost the double that of Q2 2025, but still far from its potential, given the ramp-up of stores and extensive and fragmented market. EBITDA from leasing and services was 217 million, a significant growth of 37.1% compared to the same period of the previous year.

Over the past 12 months, adjusted EBITDA exceeded 880 million. At the same time, we kept leverage under control.

Our expanded net debt-to-EBITDA ratio, which considers the risk of defaults and prepayments, stood at 2.6 times, a leverage ratio significantly lower than in Q2 2025 when compared to last year, as I said. The central message is clear: we grew, we expanded profitability, and we maintained financial discipline.

Moving on to slide CAPEX, in the quarter, organic CAPEX was approximately 459 million, and year-to-date, 694 million. The most notable point here, as explored in more detail in our release, is that this CAPEX, only 260 million had a cash effect.

This characteristic is the result of agreements signed with our main machine suppliers, in which, due to our scale and strategic importance, we had gained the benefit of operating with flexible payment terms aligned with the performance of our operations. Furthermore, machine acquisitions gained more momentum in the quarter precisely to take advantage of this competitive advantage, and in addition to managing the average age of the fleet and adjust our machine mix, especially in the vertical of rental.

This acceleration of investments leads to a temporary increase in our fleet, since older machines, which are no longer available for rental, are being distributed to our stores to be sold over the next few months, that will add to 31 altogether. Moving to the slide of revenue, results again demonstrate the strength of our business model in serving customers across our four verticals of business.

Total gross revenue grew from 489 million in the first quarter of 2026 to 586 million in the second quarter of 2026. In rental and services, we maintain a diverse customer base.

Revenue coming from recurring services continues to represent the largest share of our revenue, accounting for over 58% of the total. Revenues from rental vertical, or formerly spot, represented 20.1% of the total, followed by 13% from the forklift vertical and 8% from Terram.

Adjusted EBITDA for leasing and services increased from 163 million in the first quarter of 2026 to 217 million in the second quarter of 2026. The margin reached 54.1%, an increase of more than 6 percentage points compared to the previous quarter.

Adjusted consolidated ROIC was 17.3% in the second quarter of 2026, an increase of 2 percentage points compared to the second quarter of 2025. Our commitment is to grow with returns above the capital cost, protecting the balance sheet and creating value for our shareholders.

Now on the next slide, we'll discuss the operational and managerial cash flow. The operational and managerial cash flow exceeded 369 million in just the five, six months of the year.

After servicing the interest on our capital structure, we generated 105 million in cash over six months. We generated cash in both quarters of the year.

In addition to demonstrating the health of operations, this number alone is already 82% higher than what was generated in the entire year of 2025. In the second quarter, we paid approximately 29 million of dividends, we amortized 59 million in discounted risk operations, zeroing out the balance of these operations, by the way, and also we chose not to carry out the 135 million in receivables financing.

These last two moves had the beneficial effect of reducing the weight of financial expenses in our incoming statements, and specifically led to an increase in net debt of 207 million, because strictly speaking, it's not debt, but its amortization signals our comfort in making such a decision anchored in value creation. Indebtedness, moving on to the final slide, we conclude the capital structure overview.

The net debt-to-EBITDA covenant stood at 2.5 times in the second quarter of 2026. We ended the quarter with 935 million in cash, with short-term amortization comfortably covered by our current liquidity position.

We remain focused on managing our cost of capital, maintaining a sound debt profile, and preserving financial flexibility. In conclusion, the second quarter of 2026 reinforces the consistency of Armac ecosystem.

We still have a lot to do, but we are uniquely positioned in the market with enormous potential. Our commitment is to consistent growth over long and successive periods.

Thank you once again for your attention, and we'll open the Q&A session.

Hello. Good morning, everyone.

Congratulations on the new disclosure. First, what caught my attention was the separation of profitability among segments, especially forklift and Terram.

My question is where the capital allocation should focus, the marginal one, if the mix will change, and as a consequence, the consolidated. The second topic, still along the same tables, we can see the allocation productivity stand at 28%, spot.

How much was this productivity thinking about the level that can reach, how far this business can reach in the future? Thank you.

Hello, Andre. Good morning.

Thank you very much for the compliment on the new report. I'm going to answer your two questions in relation to allocation.

We have more than 600 units with their own P&L and with individualized the management, but our strategy is still centralized. We created internal governance mechanisms in order to evaluate the return of each real that is generated in the cash and the cash that's going to be used, and we also considered the investment in relation to the opportunity of repurchasing or buying back the shares of the company, or return the capital to the shareholders in a different way.

There is a governance which is ever better, and the decisions are made for all business verticals. All of them have profitable growth opportunities, and we believe that they are all going to grow.

Some of them do not require a lot of capital, such as the case of Terram. It's an asset-light growth, which is much more intensive in the experience and in the technical team than the machines themselves.

They can also use old machines that will work effectively. Forklift is a capital allocation via M&A, especially, but they are sellers finance M&As.

Recurring services and rentals, we have the method of purchasing equipment. M&A is also involved in all of them, such as Angelog and SCAD, that are not included in the numbers of this quarter.

Whether organic or inorganic, everything is deeply tested and debated, and the strategies are built after the learned lessons. I hope I answered your question.

All of them have profitable growth opportunities. It's just a matter of choice what the company would want and what it would not want.

In relation to the rental vertical, I'm going to take advantage of your question, and I'm going to say how we see it. It's a great opportunity that we see.

Most of the users of equipment in Brazil—we are talking about millions, because all those activities would require equipment, and the rental culture for this kind of service nowadays is very low in Brazil yet, because there's the point of the egg or the hen. First, the offer has to be created, distributed across the country with a seamless access, such as we do with lightweight vehicles.

This is what we expect to do with machines, and this is something which is already underway. We have a team dedicated to that purpose, and as those initiatives gain momentum, we will get closer to the economics of rentals that we see as benchmark when compared to developed countries, when the productivities are higher than 70%.

There's a long way to go yet, there are many strategies at play, and along the time, we're going to be disclosing them to the market. It started with the distribution.

The company used to be very concentrated in São Paulo. We used to have high-cost workshops in São Paulo, and we reduced the cost in order to distributed them in different places, we could distribute the offer in different clients.

What the United States did some decades ago, we're starting to do now. We already have the roadmap, and with the conditions of purchase that we have in relation to those equipment, we don't understand why we have such a gap of rentals when compared to developed countries, and this is the path we're directing ourselves to.

There was a structural block, which was the level of informality that we had in the country. Competition was even as for rentals, because if you have a service invoice, and the mechanism of lower competitors is not to declare, not to issue an formal invoice.

With the tax reform, as of next year, would end this point. I think this is going to be a very favorable wind, so that along the years, it's not something that will happen over one quarter, but rather long years ahead of us, and we're going to get close to the productive and to the margin that the short-term rental business have when compared to developed countries.

I hope I answer your question.

Yes, Fernando. That was so clear.

Thank you so much.

Hello, Fernando. Hello, Marcos.

Good morning. Let me make a follow-up on the comments you made during the presentation, especially in relation to efficiency and all the initiatives that the company have adopted in order to have higher returns and more profitability in the business from the practical perspective of EBITDA margin that moved up and reached nearly 54%.

I would like to understand how the company sees the recurrence of this level, especially considering the seasonality effect along the years. I understand that there is a new level that the company is aiming at, but obviously we can imagine a fluctuation as a result of the seasonality in the next months.

I would like to know how you see this dynamic down the road.

Gabriel, good morning. Thank you very much for the questions.

I'm sorry, we had a technical problem. Gabriel, good morning.

Thank you very much for the questions. Gabriel, let's try once again.

We had a number of initiatives adopted along the way, and they are clear if you look at the explanatory notes. If I'm not mistaken, I'm referring to Note 26.

It's clear the size of the reengineering activity, which is very focused on the accountability and focused on the management method that would make this level of fixed costs very sustainable at the company, and also with high efficiency as a result of the scale captured in variable costs. This is to say that the seasonality would contribute to some volatility in the results, very focused on the rental vertical, and the vertical of recurring service and forklift are work like a clock, almost.

I imagine that there's some room for this margin to move upwards, but we are not to expect any surprises. I hope I answered your question.

It's clear, Marcos. Thank you.

Good morning, everyone. Thank you for the opportunity of asking questions.

I have two on my side. First, I would like talk about the rental growth dynamics.

The revenue grew 8%, and you said an integration of 30 million for business integration. Considering that there was a growth of the previous quarter, how much was the organic and inorganic growth?

You mentioned some expectations for 2026, so that would lead to a growth of 9%, could you break down of what would be organic, what would be inorganic? My second question is about accounts receivable.

We are in a very relevant moment in the quarter, both when we talk about nominal terms and also in terms of number of days, and what was the dynamic behind this? Was it deadline or was it something related to the company's integration, and is this the level we should expect for the future or should we expect some level of normalization?

On my side, these are the question.

Perfect, Lucas. Thank you for the question.

I'm going to start answering your question. Here we go.

Growth dynamics. In this quarter, in fact, we'd had a share related to the integration of the M&As with 35% of the growth, and most part coming from the organic capacity from the higher number of agreements and also in the improvement of the quality of our revenues.

We had been very disciplined in preserving our agreement readjustments dynamics, we have been very disciplined in collecting auxiliary expenses or revenues so we don't miss any opportunity, for example collect for damage that was made. The management model has become more mature and it will continue contributing so that we can have a satisfactory and healthy result for the future quarters.

The second quarter, in fact, has a weight that had the contribution from SCAD. SCAD has come in in July.

If I have to break down the results for the next quarter for 2026, I would say that M&A will continue contributing with a, let's say, one share of about 30% of our total growth, even though we had made lots of operations, none of them has a side that would make the business move individually in a not proportional way. Our business is recurring services and rental, which are the protagonists that will have a better seasonality and we'll have better distribution in the country and we also have another pricing list for the next months.

Now answering your second question, accounts receivable. This is where I would like to be very transparent.

The move of accounts receivable does not come from the acquisition of those companies. Rather, they come from a very assertive decision that we made, and that we made in a very tranquil way to end a practice that would have a supply chain finance transaction.

We no longer have the 135 of anticipated performed receivables, considering that the capacity of cash generation of our operations naturally would already offer the liquidity comfort that would be large enough so that we would have to stop recurring or resorting to those financial instruments whose cost would burden the income result of the company. We are getting the benefits of having done our homework along the quarters, gaining more predictability and more cash generation volume, so that we can now stop spending our resources on interests without any need.

I hope I answered.

Yes, that was very clear. Thank you.

Good morning. Good morning, Fernando.

Good morning, Marcos. Here on our side, we have two questions.

First, in relation to CAPEX, CAPEX increased a lot this quarter, probably related to the line of fleet renewal, probably as a result of the strategy that you had for newer fleet in a more assertive way. At what level do you expect to reach next year?

In terms of net CAPEX, could you disclose what would be the level that you aim at, taking into consideration both this dynamics with suppliers, which is very positive with longer payment terms and good purchase conditions, and also in relation to the footprint of asset sales stores? You said that up to the end of the year, you expect to have more than 30 stores already open.

Today you have 19 stores open. Could you share with us on how the schedule of opening the stores will take place along the half of the year, and what's the level of sales that we can expect for this year, for next year, and how everything is likely to reflect on the net CAPEX, please?

João, thank you. I'm going to answer your question.

As we wrote in the letter, at this moment, CAPEX has a lot of assets that are being sold. We are using this favorable moment.

I've been purchasing machines since I was 15 years old with my father in auctions and everything else, we know how to identify good machines, and this is part of our DNA. This is what I get from my father, we can identify the special moments in order to purchase equipment.

This is one of the moments, considering everything that is happening in Brazil and across the world. Armac is a special company because it's among many equipment manufacturers, which is different from trucks, for example, where you only have two or three major manufacturers, or green line equipment.

There are many options and also manufacturers coming from China and also from India. We know how to identify how to approach and how to become a distribution channel to a distributor that is interested in growing in Brazil.

This is a very good moment for this purpose. The rental vertical has been using for many years part of the recurring services fleet, and the CAPEX strategy of the company was to think about the consolidated terms.

What I would expect to observe in consolidated terms, and oftentimes would purchase for the consolidated, but it wouldn't be the right mix for the rental. For many years, we could not offer to our clients what they really needed or wanted.

We had this challenge ahead of us. We are using this favorable moment in order to face this challenge without leveraging the company.

The CAPEX is high for what would be necessary for the short term, because the machines that are being replaced are going to be sold in the next 18 months. There should be a reduction of the capital employed that would contribute to the increase of returns.

An assumption that we have for the company is the following: competence is when there is a month when the machines are invoiced, and since we have this condition, we have been favored by the payment conditions, which are differentiated. Our assumption has been: we want to have more asset sales into the cash than what we're going to be using for purchasing new equipment.

Net cash CAPEX is going to be negative. More capital will come in from the asset sales than to the manufacturers.

This is what we have been doing, and this is how we have been projecting our internal cash flow. I'm not going to provide the guidance in accurate terms, but you will see this in the results.

You will see that asset sales will bring in more revenue than coming out. What happens in the short term?

As the stores will become more mature, we have been using those asset sales stores as a distribution channel for short-term rental, and this is the great way of generating revenue in those verticals. As the stores mature, they are aligned with what the clients need, and we are going to continue selling assets.

Cash net CAPEX will always be negative. In relation to the level for the next year, I'm not going to provide this guidance either, but in relation to the cash for the shareholder, which is very important to understand whether the company is going to become more leveraged or less, yes, considering the CAPEX, it's going to deleverage in the future.

In terms of the number of stores, which was your last question, we are going to end the year with 32 operational stores that would sell and also rent equipment. The team has been doing a very good job, and the service level has been very good.

The team for the rentals and for the sales are very well-trained, well-qualified. We are inspired what happened in other companies, and we are adjusting our processes.

32 stores up to the end of the year, this is the footprint expansion that we expect. It's not going to stop there.

The growth thesis is to expand our footprint. As we understand the economics of each store, how long it will take for each store to mature, what would be the risks involved, what would be the ideal mix and the capital required, when all those variables get together, we become more comfortable in order to start sustainable growth by means of the footprint expansion.

I hope I answered your question. Is there anything you would like to add, Marcos?

No, thank you.

Thank you, Fernando. Good morning, everyone.

Hello. Good morning.

Thank you very much for the space for questions. I would like to delve into two questions.

One is related to the depreciation and residual value. You're going through this moment of ramp-up of asset sales, and the asset sales margins were positive, close to zero, and this is what is expected from normal asset sales.

The depreciation, however, continues at higher levels. I would like to understand how do you see the evolution of this residual item, if the depreciation is likely to continue growing and if it's incorporating any item of difficult conditions for sale, or is there anything that is happening in this turnaround, considering that now you sell equipment with lower life cycle?

My second question, going back to turnaround of rental, you mentioned that it's a turnaround that's going to take time. It will be some years till we come to a steady state.

In the release, you talk about higher costs, higher capital allocation for the next quarters. I would like to understand what's the path like?

How do you see it? How long, what are the higher costs, and how this process is likely to evolve?

Thank you.

Filipe, thank you very much for the question. I'm going to start talking about depreciation, and then I'll turn to Fernando so that he will discuss the turnaround.

You probably noticed that the depreciation was very much in line with the previous quarter. Now I would reinforce our commitment to update our estimates at all times so that we can recover the cost of those fleet.

We still have some way to go. This is something that we do from time to time.

We involve external specialists, and we also involve our independent auditors. With the new network of stores of asset sales, we have a precise capture what would be the market value of the fleet, as the ones we have available for sales.

This brought a lot of richness to the process, and will decrease the volatility of this indicator—a quality indicator—in the next quarters. Having said all this, I believe that there is another element which shows the size of our challenge and how important it is to have precise data.

When we look at our results release, and we consider the business verticals, we can clearly identify that the assets in each of the verticals would command distinct margins when they are sold. Of course, we are talking about a fleet of more than 10,000 pieces of equipment that require more studies in an individualized way.

There's a pathway to be followed still, but this is a constant analysis that we make. The current level that we are at now is adequate to the level of wear and tear that we have in the fleet as a whole.

However, I would like to be ever more accurate. I believe this is what I had to say about depreciation.

The difficulties we face when selling our assets, of course, assets are competence that are being developed since 2024. We started back then with more consistency.

Last year and this year, we created a work method where our sales consultant and our sales managers develop their markets, they look at the sales funnels, they also see how they are going to activate the clients, and we standardized the pricing information, observing regional characteristics. All this to say that selling is always difficult, but we are well-equipped, well-prepared in order to face this challenge.

If not, we would not have doubled our numbers year-on-year. We'll continue investing in this, and I'll turn the floor to Fernando.

Filipe, in relation to depreciation, as you can see in the release, and we can see the breakdown that is provided to our shareholders, we really want to look at them as our own business partners, and we want to provide the transparency to the shareholders. Depreciation is going to be treated in a very conservative manner.

Today, if you look at the numbers, there is a press of an estimated depreciation which is very low along the years. We accelerated this because the value estimate were adjusted or better priced as the company became more organized and as the company became more able to control the data.

Part of the current depreciation is an adjustment of the recoverable value of the assets that were a little bit higher and there was a reduction. In the long term, maybe the company will have a depreciation level lower than the current one after this cycle of turnaround of the fleet finishes.

We are in this process. When the first cycle is over, we are going to start another cycle with much more capacity to estimate the recoverable values.

We also will opt for being more conservative, even if it generates profits when we sell the assets. These the general lines that we are following.

In relation to the rental turnaround that you mentioned, this vertical will have more capital than it requires for some time, because also overlapping some new assets and with the sales that have a certain rate. The capital employed is higher for some time.

In relation to costs, part of the initiative would involve efficiency or synergies between rentals and asset sales, synergies among consultants, and also work as the Americans do, where the rental agencies do both activities: more capital, but maybe the costs will have an efficiency journey that we are following, and so the results are likely to be improved. In relation to sales, we are very proud of the work that has been done with asset sales by the team.

We employed all the knowledge that we have about forklifts and yellow line products, and we created single network with unique attributes that would understand the need of each client. We see that the sales capacity is growing and very positive, and we are getting surprised with the potential of this market.

There used to be a repressed demand of assets, as I said. We're talking about millions of Brazilians that decide to become entrepreneurs by purchasing an used asset, because do not have capital for a new purchase.

This is the choice for many people, and we are able to provide this service to those people with the asset sales structure. We have had good surprises, but we're not saying that all the fleet is going to be sold every two years.

What I'm saying is that the asset sales values have been growing, and they are likely to continue growing because we want to make this adjustment in the strategy so that we can offer the right mix so that it's going to meet the demands of the client, and we want to do it as soon as possible, because when we go to the other side, the figures and numbers of the company will be different. We are accelerating as much as we possibly can.

However, I wouldn't say that this acceleration will last in perpetuity, because after the adjustment that we're making, as I said, since 2012, we were purchasing machines and operating in the market. We had never sold assets, but once we did, this first adjustment to the fleet, we're going to use the fleet as long as they can serve the clients with the adequate economic return.

What's going to be the average term? I cannot provide the precise number, but it's longer than that of a car.

Along the times, all the variables will be adjusted, and the company will manage the data and will be using the equipment as long as the client would like to use it, as long as value is generated, and as long as the choice is good. This number will not grow indefinitely, what I mean is the sale value.

Thank you very much for the question.

That was very clear. Thank you.

Carlos, thank you for the question. In relation to the reduction of scope, we're exposed to segments that are very resilient.

Infrastructure has a growing demand. Many new concessions are happening in several segments: sanitation, roads, trains, even railways.

There are a number of segments where the CAPEX will need to be performed. We do not have seen any opposite result in this infrastructure area.

In terms of the agribusiness, it's exposed to agroindustrial chain, and also in the processing and exports. Agroindustry, in spite of the negative period for the grower, the industries are operating well, and the logistics of the agribusiness hasn't changed, and the demand hasn't changed because volumes remain high.

There has been no reduction in volumes. I would say that there's just one segment we are exposed to where we saw some adjustments in the client demands, but this is not material, which is that of fertilizers, because of the increase in the price of sulfur.

Many plants in Brazil that used to use sulfur as an input, as a feedstock in order to produce the final product to the grower, all those plants are facing difficulty to access the sulfur because of price and because of the access itself. Those plants who had sulfur as the main input are facing difficulties.

However, they are not a relevant share in our revenue stream. One of the major benefits of the platform that we developed, as I said, it was expensive to build, but it has already been built, and it's very diversified and in exporting and resilient sectors.

The only talk about reducing the scope are those plants who use sulfur as inputs. The vertical of recurring services is still growing, and all the other verticals are very well-positioned in terms of demand.

In relation to equipment from China, in the past, there used to be a material discount in the machines coming from China in relation to local machines. This is for the leader who buys individually.

Like if you go to a dealer of Caterpillar or XCMG, you would see that the discount was very material. That happened in the past.

Plants evolved so much in China, and they are much more automated, and they have a quality control that is even higher than the other parts of the country where the automation has not been implemented, where they do not have enough robots. Chinese equipment is recognized as good products.

All the welding is made by robots, and the assembly also. We do not see a lot of failures.

You're more likely to see any failures from equipment coming from different regions when people are doing that, those kinds of activities. This is something that the market has been recognizing, and this is something we can see with your own eyes when you go to China.

At the dealers today, there is a discount still. Chinese are likely to gain scale, and they offer higher volume when compared to other places where the manufacturers exert a pricing power by reducing the volume, which is different the way China works.

There is a discount, a certain level of discount, when China wants to have market share leadership, but it's not as material as it used to be. The dynamics is very similar it was to what it has always been when we purchase from American, Korean, European, American manufacturers, and they offer different prices.

What matters to us is the discount in the retail area, which is the investment that manufacturers will do so that Armac could help build the distribution of those products or the brand in Brazil. This investment in brand construction is the relationship we have with manufacturers, and we are going to look at the same manufacturer and at the same equipment.

We are going to see how much is it being sold to an individual purchaser, and how much can we purchase the same equipment, and we consider that delta, and that would be a safety margin that we are going to be looking at. I hope I answered your question in relation to the dynamics.

Thank you very much, everyone, for this meeting. For the future, we are going to report the four verticals, and we are also going to talk about the variations of performance among them with the purpose of helping the partners to remodel the company, and together with the management, to understand what's happening to the numbers and figures and which is the direction we're going to take.

There will be corrections of the route at all times. Adverse events may come up at any time, but our commitment for the future is to provide transparency of all the events and of the strategy of each vertical so that you can follow our execution in a very transparent manner.

With this, we end the video conference, and I would once again thank you for participating.