Iochpe-Maxion Sa S/Adr

Good morning, everyone, and welcome to Your Ship, Maxion, third quarter 2025 earnings release video conference. I'm Rodrigo Carazza, Senior Investor Relations Manager, and I'll be conducting today's video conference. Present in the video conference today and available for the Q&A session are Mr. Peter Klinkers, CEO, and Mr. Renato Salon, CFO. We inform you that this video conference is being recorded and will be made available and the company's investors' relations site, along with the respective presentation. We highlight that Mr. Peter will conduct the presentation in English. For your convenience, we have available simultaneous translation into Portuguese and English, and you can access them using the icon in the form of a globe that says Interpretation, located in the bottom center of your Zoom screen. you will have three options, original audio, Portuguese and English, and you should select the one that better fits your needs. For the Q&A, we ask that you use the Q&A icon on the bottom of your Zoom screen, and the dynamic standard, we will announce your name for you to ask your question live. At that time, a request for you to open your mic will pop up on your screen. and we suggest you use the translation tool if you need. Before moving on, we would like to clarify that statements made during this video conference related to the business perspectives for the company, projections and operating goals and financial goals constitute beliefs and assumptions. from Yorkship Maxim's management based on information currently available to the company. Future considerations are not performance guarantees because they involve risks, uncertainties, and assumptions regarding events in the future that may or may not occur. I will now give the floor to Mr. Peter Klinker's CEO. Please proceed, sir.

Hello, everybody. Thank you for listening in to our third quarter 2025 earnings call. Before we start to share some slides and talk about some numbers as we do usually, I want to come back to something I said earlier this year during our investor day in Sao Paulo when I referred to a quote from Ayrton Senna. I think all of us know him. who said, you may remember I said this, who said, when it's sunny weather, you cannot overtake 15 cars, but when it rains, you can. And so why am I referring to that quote again? It's because I think when you look at the third quarter results, it is reflecting. some rainy weather in some regions, particularly North America. And so we cannot change the weather, of course, but we can try to adapt as fast as possible, maybe faster than others. And we can try to mitigate that rainy weather in one particular area with some more sunny weather and some more performance in other regions. And I think that's what you will see back when you look at our numbers and when we talk through the slides. So let's keep that in mind. that we can go have a look at some of those numbers if you look at the next slide and you see we used to look at global production x China so you see a little bit of contraction in lv light vehicle 0.3 this year or next year some more light contraction maybe stability but it's not it's not great that's not great growth at this moment if we look on the truck side On the right side, I think here it doesn't look too bad. It's plus 2% including China, minus 5% excluding China. But if you look, and we will talk about it more during this call, if we look particularly at North America, which is a very important market for us, especially when we talk about components, not so much when we talk about wheels, but for components it's very important. that segment and especially the heavy truck segment is very important. You've got class 4, 5, 6, 7, 8 and most of our business when we talk components in North America is actually in class 7 and by far the most is in class 8. The higher up the classes, the more contraction we've been seeing already in quarter two, but quarter three was particularly down in that area, in that segment. And we will talk about it a little bit more during the call. If we look on what it does to our net revenue, this market situation, you can see our revenue in the third quarter mounted up to 3.8 billion reais, which is slightly down, 4.5% down to the same period in 2020. last year in 2024 and so there is another slide where I will talk a little bit more in detail about it but I can guarantee you that you know if we would have had only half the drop of what we've seen in North America truck that number would have been up instead of down and so this has been impacting our overall net revenue meaningfully. Our gross profit, I would say, you know, given that situation in North America, track very healthy, remained at about 12%, 12.1% in the third quarter of 25. And, you know, we're actually pretty happy with that number. Our EBITDA amounted to 390 million reais in the third quarter, and that represents a margin of 10.3%, excluding restructuring costs, which amount to approximately 32 million reais on net income. was 35 million and with all of that our leverage ended up at 2.55 times. A little bit higher than we wanted but still a little bit lower than in the same period one year ago. We will also talk a little bit more about growth, particularly in South America. There is a dedicated slide about that in the remainder of the presentation. If we look in more detail on our revenue, you can see that in the third quarter of 2025, we were pretty much equal to the last year, same period. And if you look at the nine months 2025, we actually show some growth. But if you exclude FX, these numbers are a little bit down compared to last year, same period. And so, as I said before, you know, this North American truck market situation has impacted both markets. the nine months, but more so the third quarter of 2025. I can also tell you that when our impact was the highest in the third quarter 2025, also our mitigation was the highest in the third quarter 2025. That's one of the reasons why the numbers are pretty equal between the two quarters last year and this year. And so that means the more impact we have been having, the more we have been able to offset that in other segments, other products, other regions in the world, which is, I think, a good thing to have happening in the company. If we look on our revenue by product, as we already saw happening in the second quarter, you can see, of course, with that North America truck situation impacting components or components business very meaningfully, you can see that the percentage of wheels in the company has been growing. And so, again, that's because of components going down, but it's also because wheels going up overall in the world. And so right now, It's about an 80-20% split between wheels and components. If you go to the next slide, you see that also in our revenue by customer. Clearly, you see Tretton. Tretton is a global customer for us for wheels and for components, but we have a big business in components with Tretton. That's their international brand in the U.S., uh and they see that that revenue uh going down uh year over year uh same quarter uh same for daimler of course again this is a global business and we do a lot of wheels for them around the world we do business with them for components in south america but just the impact of northern america truck makes that bar go down in 2025 meaningfully versus 2024. you know The good thing is, again, that some of the other bars are going up. And so if you look at customers like Ford or you look at Toyota or you look at Volkswagen, we are actually gaining quarter over quarter. And so that means in total the impact of the North American truck market is there, but it's not as big as it would be if we would not have been winning in other segments with other customers in other regions. If we look more in detail in other regions, I think South America, clearly I would say we are continuing. You've been seeing that already in the first and the second quarter. We're doing it again in the third quarter. We are outperforming the market. quarter over quarter, was pretty flat from a light vehicle point of view, and it was pretty down, even though it's only 4,000 trucks, but pretty much down on the commercial vehicle side, quarter over quarter, year over year. And contrary to that, I think Maxion, clearly up in light vehicles, in a flat market, and not as much down at all, In the commercial vehicle cycle. So overall, you know, our revenue is up in the first nine months of the year, meaningfully six, seven percent. And even in that third quarter, it's still up by two point six percent versus the same quarter last year. On the other hand, if we look at North America, we see this is where the big problem is, and not so much in light vehicles, but specifically in commercial vehicles. And you look at some of the market numbers, and they say it's minus 5%, or maybe when you look at North America, it's minus 25%. But in the segment where we operate, Class 7, mostly Class 8. We've recently seen some public announcements from big customers. I talked about Tratton. They were announcing their sales were down in the third quarter at about 64%. Daimler truck said their sales were down. close to 40%. We think their production may be a little bit more down than what their sales were down because already in the second quarter they were down, so they've been slowing down production even more than their sales have been slowing down in order to build down some inventory. So, you know, overall our numbers reflect very much what is happening in the market of heavy trucks in North America. And so here's where we see the big drop. in our revenue quarter over quarter and with that third quarter also for the nine months in 2025. If we look, if we go to EMEA, this used to be Europe and now we call it EMEA. The only difference is the South African plant, which is uh i believe our smallest light vehicle aluminum uh plan that of course the comparison uh between the two quarters and the and the nine months compared to last year that's apples to apples it's the same perimeter uh but i would say i'm happy to say that you know we have a a strong performance uh stronger than the market performance uh and that's true for both light vehicles uh and commercial vehicles and it's true not only for revenue but i can tell it's also true when you look at units and so that does support our overall global results. Now, the units is clear. We're gaining share because the market in light vehicles is pretty flat. Our numbers are up. Our units are up in light vehicles. And in commercial vehicles, okay, again, it's only 10,000 trucks more, but the market has been coming back a little bit in the third quarter of 2025. Let's hope that continues into the fourth quarter and into next year. But at the same time that the market came back, also our market share keeps on growing. And so besides the units being up, we can also say that, you know, the recovery of higher raw material costs and other inflationary costs and a positive mix. And with that, I mean, we're supplying, for instance, on the light vehicle aluminum segment, we are supplying more and more the premium segment. That all contributes to a positive story, I would say, in Europe, EMEA. We go to the next slide. Asia, our revenue a little bit down in the third quarter of 2025, but I can assure you that we will be growing in the Asian market, which, as you know, for us is mainly, not only, but it's mainly the Indian market. We're very focused on India with our operations and with our sales. And so I wholeheartedly believe that we will be growing in this growing market, and you'll see that back in 2026. With that, what does that all do to our profit and our profit margin? As I said before, you know, a 12.1% gross profit, actually we think it's a very appropriate number given the circumstances that we talked about when we talked about the market. And so, you know, $460 million in the third quarter or $1.44 billion in the nine months from a gross profit point of view, we think those are actually very strong numbers. We go to the next slide. we see our EBITDA and our EBITDA margin and here's where we see a little bit of the contraction where we cannot fully mitigate all of that heavy rain when we talk about Ayrton Senna and his rain the heavy rain in North America from a truck market point of view and so our margin uh excluding uh non-recurring effects primarily uh restructuring costs in north america uh ended up at 10.3 percent uh in the third quarter and now uh amounts to 10.2 percent uh year to date we go to the next The net income, 35 million in the third quarter. I would say, you know, this, again, North America truck production situation impacted our results meaningfully also from a net income point of view. On top of that, we had the restructuring costs. And on top of that, of course, as we all know, financial expenses are higher simply because of the CDI, the SELIC costs. So that's what we see back here on this slide as well. When we look at investments, We always talk about disciplined capex management, and I think you see that back on this slide. Our investments are actually down year over year, and of course we do that because of some of the market slump that we see primarily in North America. So we try to manage our investments down there where appropriate, there where possible, and we think at the end of the year we will come in with the number that we have been talking about in in the prior uh pulse uh maybe a little bit lower because of the adaptive adaptations that we're doing because of the market situation you go to the next one Our leverage is a little bit higher than we were targeting. But given the market situation, we're still happy to say, even with that, we are slightly below where we were one year ago, even though we are slightly up from the prior quarter's presentation. So 2.55 was the number for our leverage at the end of quarter three. Go to the next slide. Not so much change on this slide. We think it's a healthy composition of currencies when it comes to our debt. When you look at the term, 93% is long-term debt. So that's very healthy. And if you look on the top right, also our liquidity, our cash situation seems to be very healthy with 1.6 billion cash in hand. And on top of that, 760 million of undrawn credit lines. If you look at the cost on the bottom, I don't think these costs are uncompetitive. It's actually, you know, these are pretty good numbers. I think the plus 1.2% is competitive, the 3.5% in euro is competitive, and the 5.4% in dollar is competitive. It's the CDI that is not competitive, but we all know about that situation. We go to the next one. Going away a little bit from the financials, talking about the business, we present here our third quarter 2025 SOPs, but I think it's more important. to uh mention to you guys that you know when we talk about market share gains and outperforming in some important regions for us in the world you know when we look at wheels uh you know i can tell you that our new business wins so the the amount of of of new orders of new of wins we have you know is significantly higher year-to-date 2025. And then I don't talk 5%, 7%. I talk tens of percentages significantly higher than the same period last year. And already last year was better than the prior year. And so it's another proof for me when I look at the numbers that we are having some very good traction with the company globally on winning new business at appropriate markets. We go to the next slide. You know, if you win share, especially when you win share in a growing market, and a good example of that is the South American light vehicle aluminum wheel market, you know, our wheels are wanted and cars are wanted. And so you want to service your customers correctly, you need to do something. And I think you could have seen in the press release that we have been working hard on being able to service our customers like we want and to profit, of course, from this market growth. And so besides supporting our customers temporarily from global operations, which is very important to be doing, and we can do that as a global company, Also, we are redeploying assets from entities around the world, Europe, Asia, back to Brazil, to our plants in Limera and in Santo André. And on top of that, I believe you may have all read about our recent acquisition of a majority share in Polymetal, which is an aluminum wheel factory in Argentina. And of course, the Argentinian market is growing. is doing well, and we believe it will be doing well going forward also. But, you know, the main strategic target here is to expand this factory, and it will be much more efficient for us to expand the factory here. In fact, we have equipment standing ready to be installed on adjacent land in San Luis. And so doing that in Argentina creates for us a situation where we will be able to produce wheels that we produce today in Brazil for Argentina, to produce those wheels in Argentina, which again frees up capacity in Brazil for Brazil. And so this is just an example of how we try to service a growing market where we gain share. in a very efficient way, meaning without spending a huge amount of money by building a new plant. We try to figure out a way to serve the market correctly and to profit from that market growth that we are having in that market. With that, let's go to the next slide. We talk a lot about steel components and steel wheels and aluminum wheels, but we don't talk so much about uh the two materials being merged and and you know i cannot tell you yet that uh it is happening uh but i can tell you that we have been trying for some time and i can tell you that we're making a lot of progress and we're now at a stage where we are uh involved with two oems one in asia and india one in europe for making a wheel that is made out of steel and out of aluminum and as you guys know wheel is a very important styling element but the styling you only need there where you look at it not there where you put the tire on and so we would make the rim out of steel and we make the disc out of aluminum and with that you know we save costs on the steel part and we guarantee the styling uh on the on the uh aluminum part not easy But I think if anybody will be able in the world to make it happen, to pull it off, it will be Maxim, because we are kind of the only one that is producing both steel wheels and aluminum wheels. And in many instances, by the way, we produce it at the same location or in the same region. And so, you know, this would be a true strategic advantage for our company. if we will be able to make that happen. Again, I can't guarantee it yet. We're working at it with our customers, but I hope we will be able to talk about it a little bit more in one of the following earnings calls. With that, I think let's go to the last slide, wrap it up. I think, you know, it's not what we wanted, the market that we see in North America, and it's impacting us. But we believe that is a temporary situation, and we believe we will be very strong when that market comes back. I'm not saying if that market comes back, I say when it comes back. And I think in the meantime, We're doing a good job on managing through that situation locally and mitigating that situation with our results in the rest of the world. And so that makes us, I believe, a resilient company. We continue to deliver appropriate productivity. We continue to be disciplined in our costs, and we continue to be disciplined in our pricing management. I can guarantee you that. From a growth point of view, I have given some examples on how we try to grow and what we're doing with new business wins. It's really a good story. And I think overall, very important as well, our customers remain to see us as a very reliable, stable, and high-performing partner. And I come back to Ayrton Senna. Maybe we go a little bit slower because of some heavy rain locally, but I believe we will be able to overtake. And with that, I pass it on for Q&A.

Now we are going to start our question and answer session. We would kindly ask you to ask all your questions at once and wait for the answers from the company. Reminding you that to ask your questions, we ask you to use the Q&A and your names will be announced so you can ask your questions live. At that time, a request for you to open your mic will pop up, and our first question is from Gabriel Tinen from Santander. Gabriel, you can go ahead. Thank you. I'd like to know if the capacity has been adjusted already, if there's anything else to help, and in terms of capital allocation, if you could explain the rationale for the participation of Palo Alto and the opportunities you see in these markets. And also, still in that topic, if you could talk about the North American market and talk a little bit about how you saw cash management and how you see the leverage for 2025 and 2026 a little.

Okay, thank you very much. I believe that were three questions, so I will try to give three answers. I believe the first question was around our management of capacity in North America. And, of course, we have been adapting our capacity in the sense that we adapt headcount. And so a very significant number of people have adapted. been leaving the facility. We hope to see them back in the future. I'm sure we will see a good part of those people back in our plan, but in that way the capacity has been adapted. We are also convinced that when this market comes back, and the longer the downturn would last, the steeper that comeback would be, we believe. When it comes back, we are very well prepared with our existing operations in Mexico from a components point of view, as well as with the new plant that somewhere in 2026 will be ready to operate. And it might just be that is exactly the same time when this market comes back. So I hope that answers the question from a capacity point of view. The other question, the second question was, I think, around the rationale on polymetal in Argentina. As I said, the light vehicle market in Mercosur, particularly in Brazil, is doing well, and we are doing well in that market. if you're gaining market share in a growing market, you also need to make sure that you have the capacity. And so instead of building yet another new plant, we've come up with some other solutions that require some investment, but a lot less investment than just building a new plant. And so the redeployment of assets, getting equipment from around the world, there where we needed less than in Brazil is one pillar. The other pillar is expanding capacity in Argentina at a much lower capex number than when we would build a new plant, for instance, in Brazil. And so those actions together, we believe, will make sure that we can supply our customers, which is really what we want to do because this is a very good market for us and for our customers. The third question I think was around the market in North America. And so I think it's impossible to say what will happen to this market on the short term. I think most industry analysts would agree when we say this market will come back. But if you ask me what day, what months, exactly, that's going to be very hard to predict. But we believe that somewhere, and this would be our assumption, that somewhere during the course of 2026, which is not too far away anymore, by the way, we're having the November earnings call, somewhere during the course of 2026, this market will turn, and then we should be ready to... to supply this market with a steep increase, which is our assumption. I hope this answers the questions you ask.

Next question comes from Gabriel Rezende from Itaú BBA. Gabriel, you can proceed. Thank you, Rodrigo. Good morning, everyone. I would just like to follow up regarding North America. I understand Peter's comment that should expect some return in summer 2026, but I'd like to confirm how you have been filling the body language of the OEMs in terms of orders for the next two or three months. I understand that a short time before we had a report deterioration of the market I would like to understand that if this is continuing to happen or if they have stabilized now in the third quarter mainly if the volumes have started to stabilize and also would like to confirm the matter of the restructuring now for the third quarter should we expect Anything in other markets considering 2026 with volumes, with the performance not as good as 2025, especially for commercial vehicles? Is that the expectations of the company? Do you expect any impact on other geographies also?

Hey, Gabriel, thank you for the good questions. And so, you know, North American market, I think the visibility from our customers is very low. That's unfortunately something that, you know, we need to admit. That being said, you know, volumes are not only stabilizing, we see an increase of volumes, but we only see it for November and December. So we like it. And we will make it happen. And it's a good thing to happen. But we're not sure if this is the start of a structural recovery or it's just a temporary impact in 2018. in the end of 2025. And so, you know, I hope it's more structural and it's the beginning of a strong recovery. But right now we see that happening in the last two months of the years, but we don't have that visibility yet for the first quarter of 2026. So some good news, but let's see if that's structural or just temporary, but we'll take it. When you talk about us seeing any potential auto restructuring, particularly in CV in 2026, I would say Europe not. The market should come back to some extent. And we are gaining market share. So I think 2026 will be a good year for us when it comes to Europe. The same in Asia. I think we'll have a good year in Asia next year with growing volumes in both India and China for us from a commercial vehicle point of view. and uh north america you know my take would be that you know what we lost in 2025 particularly in the second half you know hopefully we will gain it back over the year 2026 maybe a little bit more towards the second half of the year than than the first half of the year but let's see how this situation in november december that we see right now develops into 2026. When you talk about South America, you know, interest rates are too high. And so I would say we don't expect a major downturn, but we also don't expect, you know, a major upside in South America. So I would say we're not particularly worried about that market. We're also not particularly excited about that market. But, you know, it's an adequate level for us. We don't believe we need to do a lot of restructuring in any as we see it right now. Does that answer your question?

Yes, Peter. Thank you very much. Have a good day. Our next question comes from Fernando Urbano from XP. Fernando, please go ahead. Good morning, everyone. Thank you for hearing my question. We have two questions. The first regards Europe. What got our attention was the good performance, especially for light vehicles in the region. And you have mentioned the possibility of gaining share in that area. If you could give us a current view of the competitive scenario in that area. and if you expect any growth in the region higher than the consolidated one for the company. And the other regards supply chain, we have heard many news in the media regarding semiconductors, some OEMs have mentioned possible stopping production, but it seems that in Brazil it is under control with the guarantees from Chinese. suppliers, and I'd like to know if that has impacted you and if you see any risks in the supply chain, talking about automotive production globally for 2026.

Thank you, Fernanda. So let's start with the European market. I think from a market point of view, I believe next year there will not be a lot of growth. I don't know if it's going to be 1% or 2% contraction or 1% or 2% growth, but I think it's pretty flat, which is not a disaster. I think we need to do something more if we want to grow and our plan is to continue to grow in Europe both from an LV point of view as well as from a CV point of view. I think the CV actually the market is this time to grow back a little bit next year so that would be a combination of market growth and market share growth which is We would be looking forward to that. It's our target. It's our assumption that this is going to happen next year. When we talk about market share growth in our business, if you win something or also if you lose something, you don't lose it if you won it. You don't lose it the next year. Or if you lost it, it will take you a little time to regain it. Once you're on this trend of gaining market share, I'm not saying it's there forever. But it's there for longer than just the current year. And so what we see happening this year in Europe, to some extent, maybe even a little bit more, maybe a little bit less, but I think the trend should be continuing into 2026. And so even though the market is kind of flattish on LV, I think we will be able to grow. And in CV, I am very, very convinced that we will grow and actually grow more than the market next year. um talking about supply chain and nexperia coming from holland it's all over the news as you can imagine uh you know uh i think people were very worried and rightfully so uh until recently when there was some relaxation as you mentioned already so we are not uh you know out of the woods i would say But it seems that it's going in the right direction. I can tell you that to date we've had no or negligible effects in our customer releases because of this situation. So let's hope it stays like that. And as you say, it looks like there is some relaxation compared to just one or two weeks ago. Fair enough?

Yes, thank you. Have a good day. Our next question comes from Andressa Varoto from UBS. Andressa, please proceed. Good morning. Thank you for hearing our questions. There are some items I'd like to mention. First, regarding margins, thinking about the trajectory of margin and thinking of the recovery of the North American market. The third trimester's recovery, could you consider a normalized level until the volume recovers, or can the company expand the margin considering the explanation you have given, although there is a consensus that the market will take a while to recover. Another item also regarding North America, regarding structural components, that influences even more for commercial vehicle, and I'd like to understand what is the exposition of these two segments in commercial vehicles and understand the difference.

I don't know if you can hear me.

Thank you. I've noted three questions for myself here. First of all, talking about margin and maybe normalized margin. Let me put it like this. If the North American truck market would have been similar this third quarter than what it was in the third quarter of 2024, I think our margin would have been a solid 11%. So when that market comes back, that would be my minimum expectation to be reached. And as you know, Every year, all of the things equal, you know, we will be targeting some volume increase, so some top line increase and also some bottom line increase. And so that was our target and that will remain our target. And I feel confident we can make that happen next year based on how I see things today. I hope that answers the question on margin. On the truck market, there is, within the truck market in North America, there is large differences. The smaller trucks that we, for instance, supply with wheels, there is not such impact as what we see on the heavy trucks. And the heavier the truck gets, the more impact we see. And so I said, you know, Tratton and Daimler on their heavy trucks, the Class 8 trucks, the biggest trucks, you know, they really see big drops, 40%, 60%. And, you know, that is what we are seeing as well for the products that we supply to that segment. But not for the smaller trucks, the Class 4, 5, 6 trucks. Actually, it's pretty stable. And you see that back in the wheels numbers in our company because that's the segment that we supply from a wheels point of view. And those numbers are actually slightly up in our company. So it's a big difference within the North American truck segment between smaller trucks, medium trucks on the one hand and heavy trucks on the other hand. Does that answer your question?

Yes, yes. Thank you, Peter. Okay.

You're welcome.

Our next question comes from Luisa Mussi from Safra. Luisa, you can proceed. Good morning, everyone. Could you give us a little bit more details about the difference you saw from light vehicles in North America with steel wheels growing up and aluminum wheels going down? And we would like to understand what led to the difference in performance in that sector. Thank you.

Thank you for the question. I'm going to answer this one as well. So North American Steel Wheels, it is a good story for us and I think you will see that actually expanding the situation into 2026 with one very significant business that has just started up in the second half of this year with a big North American EV manufacturer and believe it or not those are steel wheels and not aluminum wheels and so that is a big win, that was a big win for several of our factories around the world, but the first one to start up is our plant in Mexico, and that's what you see happening on steel wheels in this case in San Luis Potosi in Mexico. So that's explaining the steel wheels story. On the aluminum side, we're changing programs between customers, and I'm very convinced next year we will see a very meaningful growth beyond the market. in our plant in Mexico from a wheels point of view at Chihuahua. And so even though we have a little bit of a decline right now, we're gearing up the plant for SOPs starting now in the fourth quarter of 2025, as soon as we can. And as soon as we're ready with the tools and we can supply, that will continue throughout 2026 and going into 2027, 2028. So it will be a good story also from an aluminum point of view in North America.

I hope that answers. Okay. Thank you.

Our next question is from André Mazini from Citi. André, you can proceed.

Yes, thanks, Peter, Renato, Rodrigo. I wanted to ask about the Ford aluminum factory fire in New York State that happened in September 16th, so kind of recent. It seems you have impacted the F-150 production. So, of course, Ford is the second biggest client of Yoship. If we should expect any impact from that on the Ford quarter, this is question number one. Question number two would be, any comments you could have on the Section 232 tariffs, which are, of course, on steel and aluminum? You guys have production of wheels both in the U.S. and Mexico. So maybe those two production hubs could be affected by the tariffs. So any comments on that? Thank you.

Thank you, André. So the Novell Inspire, of course, we've all notified that. And even though we see a little bit of impact, so it's not that we don't have impact, we see some impact, but it's more than compensated by the good news that I just talked about in the prior question from Louisa. So I think we see some impact, but we have more good news than bad news. Bottom line, it's still a growth story for us. When you talk about tariffs, it's still the same mantra as we have been saying the last couple of calls. And so, yes, there is indirect impacts. that we see, for instance, North America truck is related to terrorists, we believe, but we don't foresee major direct impacts for our production in Mexico, for our wheel or components production and sales in Mexico or from Mexico to the U.S. Still the same story. Very little direct impact, but of course we see some indirect impacts. Hopefully that answers your question.

It does.

Thank you, Peter. Thank you.

With that, we are closing the question and answer session, and we would like to give the floor to Mr. Peter Kinkas for his final considerations.

Thank you, Rodrigo. So all in all, I would say a third quarter that is a little bit weaker than what we would have wanted and then what we would have expected. But if you look at the macroeconomic environment, if you look at the North American track market, I can say bottom line, the teams have been doing a good job on both mitigating regionally, there where the issue is, was and is, as well as mitigating the impact from a global point of view. And I believe going forward, I've mentioned it a few times. We cannot change the market, but we will try to continue to do better than the market, where possible, where appropriate, and you can count on us to give it our all to make that happen. on the midterm, short-term, midterm, the market in North America will come back. We will be very well positioned to serve that market then appropriately. And then the rest of the market, we're doing good anyway. And our plan is to continue to do that also in the fourth quarter and in 2026. Thank you very much. Bye-bye.

The earnings meeting, video conference is closed.

Yashik Maxim's Industrial Relations Department is available to answer any other questions. Thank you very much and have a good day.