Morning, everyone. Welcome to the Fras-le Mobility Video Conference for the presentations of the results for the 1st quarter of 2026. Thank you for joining us for another results video conference. Before we begin, we would like to give you some important announcements. This video conference is being recorded and after completion will be available in our website, ri.fraslemobility.com. We also have simultaneous translation into English. To access, simply click the interpretations button represented by the globe icon at the bottom of the screen. At the end of the presentation, there will be a Q&A session. Questions can be submitted in two ways: through audio, showing interest through the raise hand icon or in writing through the Q&A button.
Furthermore, we emphasize that the information discussed in this video conference is not a guarantee of performance and involves risk and uncertainties as it refers to future events and therefore depend on circumstances that may or may not occur. A quick overview of today's agenda. Anderson gives an overview of the quarter and a CEO message. Emerson details the operational performance and financial management. Later on, Anderson returns to comment the outlook. At the end, we move to a Q&A session with participation of Jessica as moderator, Davi Coin Bacichette, investor relations finance manager at Randoncorp, and Anderson and Emerson. I pass the floor to Anderson who will begin the presentation. Thank you, Monica. Once again, good morning, everyone that are here. It's great to have you in our video conference. We start 2026, a year that starts with the company getting even more ready for the future.
We have important deliveries that were planned in the quarter. We had 2 challenging projects. One was the incorporation of Nakata in our SE Praiana base. Now we can get the agile from the acquisition of Nakata. We have the milestone, the last stage of the synergy process of this acquisition that happened in 2020. In the same unit in the city of Extrema, we did the main investment of the company here that was executed in 25, finished in 26. Our four Mobility, this warehouse with 36,000 positions, 100% automated with 24 robots, changing completely the logistics concept with this profile of warehouse when the part goes to the separator. The separator does not go to the part.
This is preparing the company for the future, seeing that we have a greater fractioning of the customers with their consumption profile, a higher frequency of delivery. Driven by the level of service that is more and more demanding in the Brazilian aftermarket. The cost of capital that is high and the entire chain search to optimize as much as possible, so they don't suffer with the exchange rate on their stock. Looking at the screen, we see the guidance. We started with BRL 1.2 billion revenue, retracted a bit compared to last year. Three important points, the dollar value went down 10%. Pre-Trump tariffs, the volumes of the first quarter of 2025 have a high base.
We did not have the tariffs that retracted the economy at that market. We had a shy take off of Nakata due to the projects that I mentioned. When we look at the external market, it was very favorable. We have BRL 140 million of revenue in that quarter due to Dacomsa, very much due to Dacomsa with our first quarter that was wonderful. Shy investment. We start the year shy, usually. We're very comfortable to get close to guidance and EBITDA. We knew the first quarter would be below the guidance due to the projects I mentioned. We'll recover. We will sure it will be in the band and the drivers we have here. Monica, please, next. Here, just to emphasize the grand opening of 4 Mobility.
This year, we have the Fras-le Universe meeting so that the visit to the warehouse that is completely automated can be seen by everyone. It took over a year with the team, partnership with the vendors and suppliers. Very happy. two months and a half, more or less, three months of operation now. Acceleration, adoption, learning, and the performance are very similar to what we imagined in a business pro-case up to now. Showing our commitment to the environment. We did a technological update of three substations of water treatment in our plant, the main one in Caxias do Sul, where we have an osmosis, reverse osmosis. This allows us to qualify the treated water. It can fully return to the use by the plant. This means we will need less water from nature.
We have a loop that is closer, especially due to water. What we have in-house, this is a process for a pharmacy industry, highly complex, very technological, but allows and guarantees, shows our commitment to the environment more and more. The natural resources path must be as ecological as possible. Here, I will pass the floor to Emerson, and I will be back. Emerson, now it's with you. Thank you, Pontalti. Good morning, everyone. It's a pleasure to talk a bit about Fras-le results in the first quarter. I start talking about revenue. I must say that we're not proud, of course, that I remember since 2020, we never had a quarter where we presented a revenue that was decreasing.
Obviously, we have many arguments here to give you examples and to detail overall. In fact, Anderson Pontalti has brought a few of the elements, and I will go deeper into them. Obviously, if you understand this plot, it explains a lot. We have very good things that happen in this period that are structuring, so we can have a company that is even better in the future. What I would like to bring also and share with you is that we have a few important things in what we define as company strategy. One of them, obviously, is to keep the growth track of two digits growth. This didn't change. We didn't lose any market share in the period where we had the adjustments made.
Second is that, yes, more and more we are a company that is more global, and this means that we have more dollar revenue or local currency exchanged into dollar. It might seem paradoxical, we cannot count on the exchange rate of the dollar or the translation of dollar to reais as a benefit, as something positive or something that will detract revenue. On the other hand, a global company must manage this as best as possible, we do this in a very good way when we compare the results we reached, mitigating risks regarding the level of imports and exports, financial instruments when necessary, seeking a balance, commercial balance and currency balance to even out. The fact we have guided our planning with a dollar of 5.6, we operate an average in the first quarter of 5.26.
I don't need to detail the exchange rate of today. This changed the company strategy. No, it doesn't, because we will continue to grow our revenue abroad, seeking the best way to equalize this. Yes, we are a company that consolidates results in Brazil, and therefore we have the currency effect. Dollar for us in this quarter compared to last year, removed in terms of currency revenue, BRL 80 million, more or less. At the same time, the Nakata effect removed from revenue of BRL 92.5 million. I will detail this later. It's a specific situation. On the positive side, we have the operation in Mexico that is increasing or growing. Obviously, there are many initiatives that I want to tell you that will allow us to have the benefits of the integration of this unit with the Frasle Mobility companies.
Here we have an overall panorama. Let's be more specific. I will get three basic elements that explain this. Here we have the performance of Nakata, the Extrema site, where we concentrated Nakata's operation. In 2025, we had an average of sales of BRL 100, and we operated January this year at 40% of the base. February, 55%. March, 93%. I would like you to know that April, we didn't get to 100%, was what we operated last year, but we are closer to March, higher than March. If we remove BRL 92 million in operation, that's very profitable, consolidated, it will impact the revenue distribution in many ways. For example, we noticed that the OEM has just twice as much as last year.
There is not a direct relationship to growth, but it has to do with the revenue gap that we created here due to having this operation in a moment of stabilization. Same way, Mexico that will present 20%-27%. It's not that 30%, 31% that we showed in the first quarter. Overall, the recomposition of the revenue was impacted due to the event. For a fact, Nakata is 27% of our revenue, and this unit is going back to normal levels. BRL 10 million revenue, additional revenue of fiscal benefits due to the integration that we did. As Francisco said, through the last step of synergies that we'll capture what we did in October 2020.
It's extremely necessary to do this movement, preparing it for a better moment in the future, as you know, due to the adequation and the distribution and how we collect the products of Nakata. This will pay for the project in three and a half to four years. There's a lot of financial return here in this investment. Going to the next chart, we talk about another return that has hindered a bit the reading of what is the recurrent revenue. We started 2025 with higher volumes in commercial. The commercial line that is more for Brazil, but an important part is exported more than the local share. We see very good movements of revamp of production, especially in the U.S. The OEs overall have reviewed their guidance. You can access this with the releases from the market, overall releases.
It's very easy to go for this information. If we analyze the first quarter, we have Class 8 going down 8%. Sorry, 25% in production compared to last year in quarter eight, a decrease of eight. In Brazil, we're talking about 13% in the first quarter in terms of production, but an increase in the 4th compared to last 4th quarter last year. Overall positive. This line, no doubt, we didn't lose position, we didn't lose market share. We had to accommodate the production to balance out the OEM replenishment. Next chart, we talk about integration of Dacomsa. This is updated data. We have mapped out $23.7 million. This is dollars of what was the business case forecasted for 2029 of $14.6 million.
Therefore, the synergies mapped out for Dacomsa are in a higher level, a lot higher of what we had forecasted when we acquired. We will see this when? In the DRE. In the DRE, we will see this in the next 12, 18-20 months. Some of them become material during this year. I will give you an example. We are bringing a consolidation of purchasing co-manufacturing combined with Nakata, especially Nakata, Frasle Mobility as a whole. Also traded in Nakata and Dacomsa of a few items that we have put the order in and will arrive in August. In August, we consume the stock 2-3 months, and we start to see in our DRE in October. There are things that arrived in February already. We have the stock for 2-3 months. We should see this in the results.
The fact is, we have had good results in Dacomsa in March. March was wonderful. April is not part of the quarter, is a wonderful month, and Dacomsa grew in the first quarter, 23.3% compared to the same quarter last year. We don't see this reflected in the consolidates due to what I mentioned, but in fact, it's a very good moment of. We grew quickly in lines that we would take longer. We're introducing heavy vehicle line in Mexico and the exit of a competitor. I can say the name here, no problem. First, as a market, and we can reach in blocks to maintain searching for the same levels that we have a market positioning in Brazil, which is more or less above 50%. The expansion in products also will be paced. It's not easy to implement a product line.
We can detail this later. Regarding Dacomsa as a whole, remember, we don't see this in Dacomsa DRE. 85% is Dacomsa, but the rest is distributed with the synergies that we have in the other units. For example, we do a savings for friction material that impacts all Frasle Mobility units in the world. Going to the next chart, we have just an information this quarter we evolved our model to present the revenue break to the market, consolidating three big blocks: braking, the driving and comfort, and powertrain. This is the update that we have in the product lines due to the importance they take. We're gonna talk a lot this forum. We want to change the dynamics that we present and the growth possibility in the markets where we are with the three product lines.
This includes to launch these product lines in all relevant geographies that we have, currently have. The next chart, we talk about the performance of the three units overall. Here we see, for example, braking with a decrease of 0.28 and a drop in the internal market. It might seem expressive, but it's not the results of the sales we did. Here we have the recognition of revenue that stayed out the last quarter. The market is heated. Obviously, we have different competition in each line. The market is heated. We continue to grow. At least keep market share. Ride and Comfort, the Nakata explanation is obvious. Obviously, this is seen here in foreign market, the highest destination of this line, which is 23% of revenue goes to Argentina, that also had their sales impact. Going to powertrain, we grew a little bit.
We have the in-house items here, Nakata items overall. We grew or at least stable. The biggest growth is abroad, with good performance in Mexico. Going to the chart that talks a bit about EBITDA. We had a margin of 18.8% this quarter, BRL 210 million, more or less, a reflex of the revenue. Surely, here we did the math. There is BRL 80 million, guys here, is a good margin that Nakata brings to us and gives us at least one percentage point more. Other factor like heavies, like the performance in Argentina could contribute as much to have a level closer to our guidance. It's not a promise, but where we are guiding the company and where we want to perform, obviously. Here is an explanation regarding last year that the drop in revenue, it's counting positive here.
We got to good levels in our gross margin. The expenses in sales were lower. Overall expenses were lower also, despite the fact we had other revenues and expenses in a different level here because we didn't have the one-off impact here. This is why we have a difference. The next chart talks about the cash generation and working capital. It's important that we had a reduction in the operational cash around almost BRL 100 million positive and the cash flow, free cash flow of BRL 27.5 million, highlighting the reduction of working capital. We paid a high level of dividends also. It shows this in detail and it's open in the results release and/or notices. The next chart, we detail debt that is very stable. There is a reduction in proportional debt. It continues to be stable. The net debt versus EBITDA, 1.6x .
We see the amortization of the debt. That's well distributed next years. Nothing that can hinder the performance of the company. The growth agenda, it will help the growth for the next quarters. The ratio cash net is very balanced considering foreign exchange and the domestic exchange. Very balanced in debt in Brazil and Mexico due to the in-house acquiring last year. Return to Anderson Pontalti, and I will be back to the Q&A session. Thank you. Thank you so much, Emerson. Nothing changes what I can tell you regarding our outlook, our plan. We showed what would be the priorities for 2026. As you all know, I talk constantly, and the Dacomsa continues to be a priority. It's a relevant acquisition with a lot of possibility to capture.
We have declined favorable numbers above the business case because as time goes by and we incorporate, we see this in the results. We had a great quarter in the consolidated. We have a strong year ahead of us. The valuation of the Mexican peso will bring more cash or more dollars, as you like, for the corporation. Brazil continues resilience despite some default that happens more in the end, not in our business, despite delays when the ticket is higher. We understand and monitor our products with the customers, and we're very happy with the performance in the first quarter. This is guaranteed to future sales as the demand is there. Commercial line, despite having a quarter in 25 that's very favorable, it deteriorated in the second semester. We see some signs of recovery. You might ask about the market dynamics. It's not just that.
The delay or backlog to repair, they go to a limit where you cannot delay anymore and the volumes start to be seen gradually. Better than what we imagined, and we can have here a surprise, a positive surprise compared to what we planned. The growth strategy continues strong and the organic issue, obviously, as we take market positions in terms of market share, the moment that we are, we need to open new fronts to unlock organic growth. The M&A agenda continues active. We are evaluating opportunities as we always did. We never hid that we have an area dedicated to this that's always prospecting. Since Braskem is not searching for assets that are for sale, we look for assets that interest us, that are strategic for the long term, our agenda. This is always looking into this and we consolidate the concept and the concept synergy.
Our appetite with this will increase in this direction. We continue happy with what we did at Nakata. Despite the result, we had to go through this. We planned for this. We knew we would re-deliver the results that we did. This is courage to make this decision to prepare the company for the future. As Emerson said, we didn't lose customers, we didn't lose position. Everything was well planned. It affects the quarter, but it's already the past. Let's not talk about this in the next quarter. Now I will go back to Monica. It's with you now.
Jessica.
Morning, everyone. Thank you for being us in another results video conference. Let's start the Q&A session now. First, a question from Gabriel Simoes from Santander Bank. Let's open up your mic. You can go ahead. Well, thank you for the space. First, I wanna understand more the transition movement, SAP from mobility. Understand it was completely addressed or it is something left for the rest of the year. I would like to understand if besides the lower leverage, operational leverage that is on the quarter, it impacted the recurring SG&A. It's higher to understand the progression of margin during that year.
The second point, if you can share more about the main factors and opportunities that you see inside guidance, the visibility that you have until now, if you can detail more the evolution of the North American market and if you see the co-manufacturing level due to the lower value of the dollar. Thank you, Gabrielle, for your question. I'll talk briefly about G&A, then I'll go to Emerson and Anderson. The difference in the comparison is especially due to the reduction of operational revenue. In our release, we highlighted the effect. If you remove the effects of the first quarter of 2025, our G&A would be aligned. These are operational effects specific for the first quarter last year. We don't have anything structural of increments in our G&A. In absolute value, they are lower than the quarter compared to the previous year.
In revenue comparison, it is similar due to the revenue decrease, the impacts were in the line of others, this is due to the one-off. Emerson will mention SAP Nakata, the stabilization of this during the year, Anderson talking about our factors related to guidance. Thank you for your questions, for participating in our call. We finished the transition of SAP and Nakata. The process of the new distribution center that's fully automated is already working. We do have a few adjustments that are happening, yes. As I mentioned, April, we're increasing the sales that we have planned for Nakata due to the adjustments. We are very close to this. We're almost at 100%. We prepared for this. The end of last year, we reinforced the stock for some distributors. We brought this so we wouldn't lose shelf space.
We know how painful it is to lose share. The fact is that Nakata especially left market participation that was less expressive when we acquired in 2020. I will give you the example of shock absorbers that is iconic for us of 16%-17% to 32%-33% at the end of 2025. A bit more here we've worked on. Soon, this indicator will be above this, potentially being market leader with this product. Nothing changes. We're preparing the company to expand, evolve, grow. Obviously, it went through this transition. We don't have any more big impacts here that can bring any impact in the perception of the revenue as a whole. Besides this, Nakata continues to be our benchmark to be able to implement this in other units also.
We have looked in a clear way, for mobility will be implemented in other places so we can be more competitive, efficient, and connected with the level of service that the market demands and a readiness for business. Thank you for your questions. Talking a bit about the growth vectors, we believe that the heavy line can improve its performance. The U.S., there is an expectation in the second semester. Sales of trucks can speed up the pre-buys that can happen due to the legislation. Not a pre-buy that was imagined free, but a pre-buy that can help us to traction volumes better. Internal market being resilient. We are using the exchange rate in terms of cost. We can improve margins when we look at the domestic market, be it importing more manufactured or importing more raw material for the productive base.
I would say that where we have inflations and we know that the oil and products and freight shipping can impact, impose inflation as a global factor that we cannot measure. We operate aftermarket, and it's a little bit easier to have understanding of the market when these things happen more than original or OEM. That also has been an important growth factor. It is part of the plan. Anderson has talked about some issues in the market. The economy has a relationship with the U.S. that's higher. These are the factors that are being addressed. Remember, we have a higher capacity at Extrema all year round. Last year was partial. We made an important investment at a substation. It's a growth factor for this year. Of course, we don't know where the dollar will be. We have opinions, but we're not sure.
Depending on the macro and micro factors, the U.S. dollar that we dream of is stable. Fras-le is better protected with the exchange rates. Obviously, when you consolidate in Brazil, we have international exposure. The revenue is impacted. I don't see any risk in conversion. Revenue might not bring the growth that we would love due to a weaker U.S. dollar. The company will continue to be very solid. Our products are in the streets running. We continue very sure regarding the business resilience and the potential growth that it brings, not just for this year, for future years also. Pontalti, allow me to add. We have businesses here that we have discussed here, how the risk can impact in emerging way. During the second semester, collaborating for better dynamics.
Obviously, as I mentioned to Anderson Pontalti, and I've said this, we have the effect of seeking market positions with products and co-manufacturing at Dacomsa. We have a lot of space to grow, and we are focused on these spaces. I mentioned here the case of the brake lining, no doubt. It's not relevant for the whole, but it's important for this operation. Gaining share that we wish for two, three years already into year 26. Perfect, guys. Very clear. Have a great day. Thank you, Gabriel Simoes. Have a great day. Our next question is from Gabriel Simoes of Bank of America. Gabriel Simoes, we're gonna open your mic, and you can ask. Good morning, guys. Thank you for this opportunity in the results call. It's about the replenishing or aftermarket revenue. Understanding our side with information that Emerson shared in the beginning of the call.
Even if we analyze the revenue of Sabina, excluding Nakata, revenue would decrease year-over-year. We wanna hear from you, what are the product lines that had the highest retraction or growth in this first semester? Second point, how is the evolution of the competitive environment, especially with braking, that you said is more competitive for the rest of the year? These are the questions I had. Thank you for your questions. We go to Emerson. He talked about this in the call. Anderson, feel free to add also. Gabriel, thank you for your questions. We have a dynamics, a perception of the market evolution perception that's very good. We can see the customers sell out. A good sales evolution, moderate growth around 8%-9% this year, the first quarter, with the numbers we have within.
I mentioned today there were sales we did in the first order that were not recognized in the quarter. It could change the braking dynamics, especially in the closure of the order. We have maintained very good growth in the light line and the brake disc line in Brazil, specifically talking about Brazil before capacity in Fremax. We continue with the tractors in sales overall. I would say that in control, we have kept stability, though we are seeking growth. The market position that we had two years ago, control was affected by the floods in the state. In that period, it couldn't support the market, and we opened the market for the competitors to grow. We have not got back to the levels we used to have two years ago in this segment.
In fact, the lines that didn't bring a growth benefit were the lines connected to Nakata. Heavy line the benefit, the highest benefit light line grew. Disc brake grew. We have a positive perception of the continuity of sales in the next quarters due to the fact that the market shows a robust sellout here. In this moment, we have levels of competition that is moderate, I would put it. We didn't lose, and we don't foresee in our front any space to lose position in the customer shelves. On the contrary, the structure we have with the brands we have, with the level of service we have, it strengthens us to occupy more space in the shelves and the warehouses of our customers. We continue in this direction. It's a fortress.
It's a principle for work that we have, that we not only use in Brazil, but all geographies. Pontalti, you wanna talk about the competitive environment? You spoke to a customer recently. It's a bit of this. The environment certainly is more competitive with this dollar. There's a higher import appetite and price retraction. We continue with sell out the main indicator, very positive growth compared to the previous quarter. Workshops are stable. It doesn't increase, but it continues stable. Stable post pandemic. Very positive. And we have the business days issue. We have lower recognition. We install our transport. We have a higher decision of what goes to the customer, what is being shipped from the north to the south, from the south to the north. What is in transit that we're not recognizing revenue. We're being more conservative in accounting, but it's an effect in the quarter also.
There's no relevant factor, mainly. On the other hand, we have gained position. Competition, we're used to it. We have 40% of co-manufacturing benefiting from imports. It benefits cost. We have the conditions to fight equally for those that want to go into a place where we are already installed. Okay. This sounds super clear. Thank you. Thank you, Gabriel. Our next question comes from Fernanda, analyst from XP. Your mic is open. You may ask. Good morning. Thank you for this space. In the previous question, it was clear the company mission to go back in middle term to the levels. I wanna understand the timing of this trajectory, to what extent it will depend more capturing the Dacomsa synergies. From what I understood are in this intense process of mapping. They should come to the DRE in 12-18 months.
What are the other factors that could help this trajectory, if it's a external market recovery? A follow-up, talking about external markets. When we look at the U.S. data, we see already some better signs, especially orders of new Class eight trucks. I understand there is a delay until it is translated to sales, be it in OEM or aftermarket segment. I want to understand the timing of the trajectory by the end of the year. When do you expect an acceleration, meaningful acceleration, if we're thinking about the second semester or more next year? Thank you. Thank you, Fernanda, for your questions. Anderson, you can start the answer. Anderson, you can add also. Thank you very much. Thank you for your participation and question.
We have a monthly revenue report, so you can have a good idea of how the curve behaves in the first month, and I can tell you the curve continues to behave this way. The timing of when the company will have the growth sprint. We have three big blocks here of revenues that are relevant. First, to give maintenance of the space that we already have and we already occupy with current customers. Absolutely hasn't changed. It's structural, it's our business. On the other hand, we gained market position in a few lines. Even in the more competitive ones like heavies, we gained market position, so it's very much protected. There's nothing that concerns us that this won't happen. Second, we have the Dacomsa. Dacomsa, we're already capturing some synergies.
As we show the data analyzed, you start to have a synergy that we'll be seeing in October from here to October next year, 18 months. We can say by the end of 2027, not that many months, we will have this materialized. It doesn't mean that Dacomsa and Visa or Frasle Mobility has this possibility to grow as a whole. A part comes from revenue growth. Revenue growth is a bit more modulated because in some lines go down with new sales. We're gaining traction with new sales. We have planned out for next year new product lines like suspension, steering, shock absorbers this year accelerated the growth in heavies, $2 million-$3 million additional dollars. It's important, another $1 million for hydraulic products during the year there. Things, small things add up. The Consa is relevant. It's en route. It's en route, it's happening.
More competitiveness for new products, combined products. I mentioned a few examples. We were expecting 10%-15% gain combining co-manufacturing, and we're having 30%-35%, in some cases 100%. It doesn't make sense. With this, I have to increase price to have market share. This is the second block. Third block, new businesses and market participation. We have market participation consolidating Fras-le. It's harder to gain position here. Powertrain, shock absorber, suspension, driving, steering, just continue to be zones that we seek to have a more relevant market participation. Besides the possibilities that we have with new businesses, especially with OE in braking. We gain relevant business in Europe that start to add up this year. Relevant business with OEM in Brazil that is increasing in terms of ramp with new businesses, with OEM and disc brake that starts this year.
Many things that compose the revenue for this year that are material in our guidance. What is not material in our guidance? We don't have materialized in the guidance to have a USD at 4.9. It's not. This has a translate impact, how much we bring our USD to convert to BRL. It does. It does not change the dynamics of our business, the way we do business and our market position. The strategies that we have for the future, we want to continue and we have designed to continue to be a more global company with space abroad, increasing revenues abroad, and we have to live with this. The dynamics of exchange were very quick and adequate to equalize. We always say it's harder to equalize your cost when the USD increases than the USD decreases.
There's a new element here also, which is the issue of the oil price that impacts a bit our raw materials that we are able to equalize fast during the first months here, looking at how it can impact in the future. The timing, very quickly, happens during the year. It will happen. The only exception that we cannot control, we don't know how it will happen, is the dollar value. To guide the company in the short term, the long term, the company will continue to be global, continue to grow. Obviously, Anderson Pontalti mentioned, we have projects to acquire that increase. We can see things that can bring to us the dimension of growing a lot more, like the case, for example, of motors. We can operate in other geographies.
A lot of good things to position ourselves. We do this as we implement new projects. Many are en route. The dollar, we cannot control. You can talk a bit about external market. DeNanda, thank you for your question. What you said is true. We do believe that the pre-buy comes in next semester. It changes the original volume. The economy must go forward so the goods circulate. Transportation, which is more road-based, will start to run in the U.S. Tariffs decrease. We have a better flow of imports in Brazil, not very relevant like pre-tariff period. It moves the port. We have more shipping of merchandise. There is unemployment in the U.S.
There is a perception of lower consumption power, and this can delay a bit the restart of American consumption, which is the main economy traction, which is pulled by trucks and which is relevant for us. We see with better eyes the aftermarket line for the 2nd semester. Volumes should happen by the 2nd to 3rd quarter. We can have a hangover next year due to original vehicles. If there's a pre-buy, there is also a hangover in the 3rd quarter for 2027 for original vehicles. We will confirm this in the releases, but the numbers haven't shown this.
Thank you. Thank you, Fernanda. Next question by analyst Luisa Mussi from Banco Safra. Luisa, we are gonna open your mic, and you can go ahead and ask. Morning. First, about working capital. Nakata, how we can think about this during the year? Second one, you mentioned that the passage to work trucks is stable. How do you see the average ticket as being spent by the customer? If you can give us reading about the decrease in tariffs in Section 232, what do you think about it?
Thank you for your questions, Luiza Mussi. Anderson, wanna talk about working capital and the U.S. market and Section 232 tariffs? Yes. We did very good work in 2025. There are still things we can improve even more during this year. The quarter shows this. Very diligent payment plan to vendors, combined with sourcing improvement through intelligence, the qualification of our stock, the level of adherence to demand is better. We went through a difficult moment last moment. High stocks and tariffs. The market in Argentina. All of this will bring benefits, allows us to be financed by the supply chain using important financial tools in Mexico. Structuring projects were last year, but we still have things to come. We have targets to improve by the end of the year. The need for working capital.
U.S., Section 232, it remains active for our product line. It doesn't impact directly our business because what is submitted to it is a small part. The tariff is reciprocal, is 10% for all countries. For us, it's good because it puts everyone in with the same rule. China had 25, will have 35. Our exports to the U.S. are not in this. The beauty of all of this is we have a neighboring plant, Mexico, that still doesn't have enough capacity to explore quickly. We're exploring in a shy way due to the installed capacity. We have very ambitious plan to navigate that market in a different way the following years. We're starting with motors, with good perspective, great market acceptance, but we need to qualify ourselves. We need to work on information, capital availability, future of the parts.
We still have a journey, but I see with excellent eyes ahead of us. Luiza, thank you for your question. I'm not sure I missed anything. I believe not.
I had asked about the average ticket.
Oh, yes. Tires. Guys, if you have contact with tire guys, they suffered a lot. Those that have high added value items have a delay of maintenance. Yes. Instead of replacing, "Oh, I can run 1,000 kilometers, 2,000 kilometers," some items you can do this, and some you cannot. We always say that shock absorber you can delay, but when the shock absorber is delayed you have 2,000 kilometers, 3,000 kilometers, 5,000 kilometers, you can replace. The ticket will be higher. You might have to change a bushing, a tray because it's damaged due to the bad condition of the component. You see the tire guys are doing this and happily, but at the same time, this generates a backlog in the future. This behavior we see since last year. What is most important to us really is to measure the sellout.
Sellout of our items with our customers is positive in the quarter. This is great, very favorable. Our brands are desired. Those that are unsettled with a part that's not guaranteed is installer. He won't suggest a lower quality, lower reputation brand because it's his surface. He has another he has importance for the chain. We're talking about a small difference between an item that is the quality of our brands versus lower quality. Sometimes it doesn't add up a lot. The reinforcement of the brand, the position of the brand is day-to-day. We go from workshop to shop, workshop to workshop explaining this. We spend on media and years of high repetition. It's an important legacy in our strategy as a whole.
Great. Thank you, guys.
Thank you, Luiza. Our last question comes from the analyst Marcelo Motta from JPMorgan.
Marcelo, your mic is open. You can ask.
Thank you. Good morning, everyone. Two points. First one, a clarification in domestic OEM. The number is quite strong. You mentioned in the release there's parts of the OEMs that are restocking. I would like to understand if it's just this or we can expect revenue level with the new contracts, something that will help to maintain this level closer to BRL 100 million than the average that we were running around BRL 50 million. It draws my attention. I would like to understand if there's something behind. The part of margin, there's a lot of moving parts, but I want to understand how the exchange rates impacts your margin, what can be done to mitigate and understand.
In the guidance you were talking about exchange rates of dollar BRL 5.6 and the price that we have at this level below BRL five will remain. Understand how it can impact the margin you were thinking about and how to mitigate. Thank you, Motta, for your questions. We go to Emerson to talk about market OE and the impact in our margin. Motta, thank you for the participation, for the presence, and for your question. Let's start with margin. One of the things that is most distinct when we designed the strategy and defined the day-to-day, how we manage so that nothing drops. Exchange rate is always one of these. We have had success of having big balance between what we import and export. Exports are higher. That's why the dollar gives us trips us when it changes values so quickly.
On the other hand, we balance it out with cost. I would say that we wouldn't have anything to say that would change the margin dynamics due to exchange rate. We negotiate, we discuss the contracts we have that can be impacted. They have a dynamics of revisiting them every six months. That could have something. On the other hand, we can buy raw materials we procure globally. In two, three months, we can have the margin at an adequate level. As Anderson Pontalti said, sometimes you have some, an adventure that brings more imports. This is the regular market. You have many things and the exchange rate is one factor.
You have the distribution, market appreciation, reputation, things that we have very much protected in terms of level of service, recognized brand, market presence, financial capacity to have promotions to leverage sales, not just with price, but with promos, creating elements that can attract more sales. Really margin, the level that we designed as guidance is very strong. Revenue revamp can bring the margin to a level inside the range we set. Revenue is harder to forecast. We can increase due to being more competitive with this exchange rate, accelerating what we talked about in shock absorber line, where we can attract more with competitiveness that the exchange rate will bring us. It's a bit of this when we talk about exchange rates overall. The position of the company is to grow abroad.
It's one of the elements that we have. It's one of the plates that we have to balance out to continue to be competitive. It's not one of the things that takes us out of our sleep. Regarding OE, we had higher sales this quarter, specific for a few lines. We have added new businesses, as I mentioned. We have new businesses here. Stellantis, we have a important customer in Europe, new business with a medium customer in the U.S. New things that composes our ideas of having factors that allow us to grow at a two digit level, as we always mention to the market. There's a more favorable dynamics. Overall position, 13% sales there is basically due to have BRL 90 million less in sales in the market. When you put this back, you go back to 7%, 8% of the company level.
There isn't any dynamics that changes a lot what is the company. On the other hand, our strategy is leveraged on re- growth strongly in aftermarket. Do you wanna mention anything about exchange rate and competition?
No, I think it's perfect. You mentioned everything. Thank you, Marcelo Motta, for it. Thank you, Anderson Pontalti. Thank you, everyone. Thank you, Marcelo Motta. We close the Q&A session, and I pass the floor to Anderson for the closing. Thank you so much, investors. It's great to see you again. Thank you for your questions. Thank you, Fras-le team, for another meeting to show the results. Our channel are always available. If you have any questions, we are always active. Mariana is coming back to the team after a maternity leave. Fras-le continues strong. We have important structuring projects. We have the courage to face these moments.
We understood it was the right moment to have this project. We did it, executed it. Strong quarters ahead of us, no doubt. Resilient, growing. We didn't change. We're convinced for the project for 26 will be delivered. Thank you once again, everyone. Have a great day. Thank you from the translation also.