Welcome to our video conference to discuss the results of the fourth quarter of 2024. My name is Bruno Teixeira, the Chief Investor and Relations Officer, and it's a pleasure to be here with you today. With me is Altair Silvestri, our CEO, and Henrique Fernandez, our Superintendent in Charge of IT and Communication, and the successor to Mr. Altair starting on April 1st this year. Together we will be doing this earnings call. This earnings call is being recorded and will be made available at the company's IR website along with the slide deck. The slide deck is already available and can be downloaded, and after the end of the video conference, the recording will be available for viewing.
Please choose the language by clicking in the icon "Interpretation" below. [Foreign language]
For the Q&A session, please submit your questions using the Q&A icon on the bottom of your Zoom window. Please write your name, your company, and the language you'll be asking your question in. We'll be answering them first come, first served. When called upon, please enable your mic and ask your question. The information contained in the presentation and any statements that may be made during the conference call about the business perspectives, projections, as well as operational and financial targets for Intelbras are based on the beliefs and assumptions of the company's management and on currently available information. Forward-looking statements do not guarantee performance. They involve risks, uncertainties, and assumptions as they refer to future events and therefore depend on the circumstances that may or may not unfold.
Investors should understand that general economic and market conditions, as well as other operating factors, may affect the future performance of Intelbras and lead to results that differ materially from those expressed in such forward-looking statements.
[Foreign language]
I'll get started with the presentation, and that will be followed by a Q&A session.
[Foreign language]
Let's take a look at the data for Q4. Let's begin with a financial review.
[Foreign language]
Net revenue has increased almost 11% compared to the fourth quarter of last year. At almost BRL 1.3 billion that semester. The EBITDA rate has grown about 6% compared to Q4 of 2023, at BRL 165 million. Now there's been a net income decline of about 15% because of exchange issues, and the number is about BRL 127 million. Now let's talk about return on invested capital. That has actually dropped by 3.7% compared to Q4 2023. We're still at a healthy 18%, but we really need to work to get that number back to previous levels. Now let me give you the highlights for 2024 as a whole. The company has delivered a net revenue of about BRL 4.7 billion, about 15.9% increase, and EBITDA has grown at 13.4%. Net income has grown a little less, and this has been impacted by exchange rate fluctuations over the year.
Running the numbers, it's about BRL 50 million, BRL 500 million actually in terms of exchange impact in 2024 when we compare to the same exchange rate fluctuation in 2023. So the impact of the exchange rate actually is visible in the net income of the company, but the numbers remain quite impressive. Now we always like to show you our net revenue growth trajectory. Our growth trajectory has been at about 20% every year since 2017.
[Foreign language]
This is without the Ku-band as recurring revenue in 2016, so it's about 17% revenue growth. The same assessment applies to EBITDA. Growth has been a bit lower at 18.6%, but the company continued to grow recurringly through our operational results, and our year-on-year growth is at 3.4% when we look at adjusted EBITDA without non-recurring effects. Now starting in Q4 last year, we have both margins, marginal and adjusted, with non-recurring effects and 13.4% for the operation as a whole, so the margin is 12.8% for 2024. The EBITDA rate has evolved along with our businesses. It's in close alignment with our overall history or historic levels. There's been important pressure on costs.
We notice this pressure across the different quarters, and by adjusting price and by controlling our expenses, we've been able to maintain the balance of the margin, keep it suitable for the purposes of our operation. Now let's talk about consolidated gross profit. This is a metric we often share with the market in all of our presentations. Q4 shows record revenue and record profit. Now looking at this from a broader perspective, the gross margin and the EBITDA margin tend to fluctuate from one quarter to another. And if we look at this in the longer term, we see that it remains about stable at 30.8%. It's actually 1% lower than the margin for 2023, and that was the margin we communicated to the market. We mentioned then that the numbers were above what the company usually showed. So this is what the year looks like until the end.
Now let's talk about our business highlights. These are our strategies and our different actions per market segment. This includes a security business here as the main area of business. It's about 55% of our revenue, and in the fourth quarter revenue, more specifically 55%. So the revenue mixture is rather stable. Annual growth is 17% in security with a sequential investment of 54% from third to the fourth quarter. So this means our main business highlights and business lines continue. The strategies are responding well. There's a little bit of an impact in operational margins, especially cost execution, where the gross margin was compressed to an extent. The effect of this added cost is actually shown here in the price, and that's a concern for us, which we always mention when discussing our portfolio's competitiveness rate.
Now the margin remains on the rise despite what happened in the second quarter, as discussed. Now let's talk about ICT, Information and Communication Technology. That accounted for about 23% of the revenue in Q4 and 22% in 2024 as a whole. This is as expected. So fiber optics lines and structured cabling, those are performing well. Those are the areas we were expecting to see more immediate growth, so we saw that happen over the year. Now in the growth of ICT, 2024 versus 2023, and we look at the overall revenue, ICT actually has grown, much like security, delivering 17% growth. However, in 2023, this had brought in about BRL 40 million in revenue because of the Ku-band project, which is now in its final stages, and this year accounted for about BRL 6 million in revenue only.
But if we look at these numbers and exclude the Ku-band, actually ICT has grown over 21%. So this is a business segment that's actually resumed its growth rate quite nicely, and the path ahead seems to be very interesting going forward because the foundations have already been laid. As for our costs forecasts, the same thing happens here as we saw in security with the devaluation of the real and the effect of inflation on the portfolio. We're still improving efficiency after all, so the margin has actually been brought a bit down when it comes to Information and Communication Technologies. Now let's talk about energy.
So in the fourth quarter, it was 23% of our revenue, and that's actually a drop in vis-à-vis the fourth quarter of 2023, and this is primarily because of the strong numbers from the previous year where we were selling our inventory quite aggressively at that point. So it takes a while for these costs and numbers to reflect, especially considering the evolution of PV prices. We've actually sold a lot of those last year, so in 2024, sales were much more aligned with what was happening across the year as a whole. So this number actually grew, but we were not able to achieve the numbers we got in 2023, which were quite aggressive. So this is once again on a growth path. It's growing at about 2% a year, and the focus has been on controlling expenses and increasing operational efficiency.
This has been the focus of Marcelo Pereira when he's focusing on lines and other planning issues with his team. This ultimately improves the equalization of revenue across the different business areas. So energy has had a good performance over the year. Both UPS and solar off-grid categories contributed positively throughout the year to the revenue. Now let's look at cash evolution. In this quarter, our operational cash consumption rate was closely tied to the inventory that we stepped up purchasing of during the second and third quarters. Inventory levels were quite high by late September. We consumed about BRL 118 million in terms of operational cash, and we know that as this inventory is consumed and new embeddings take place and new revenue comes in from this inventory that's already been paid for, we tend to return to normal when it comes to our working capital.
That's expected to happen over the course of 2025. From an investment perspective, we've completed our expansion cycle. It actually took a bit longer than expected, and went into the second quarter and the second half of the year, actually. And our forecasts for 2025-2026 is that the demand for new investment on expansion will be far lower than they were. This applies specifically in mobilized and intangible investments. Those are expected to go down. Now we've just payments and debt amortization, while the debt remains largely stable between 2023-2024. Now this semester we'll start to amortize our debentures. So there's a payment stream expected to happen over the course of 2025. Now let's talk about inventory. We mentioned this quite frequently in the last call. This screen shows our recent evolution over the last five quarters. There's a very high level of inventory in the third quarter.
In the fourth quarter now, with consumption going back to a still high, yes, but more reasonable rate as we expect inventories to be moving forward, we wanted to show you these numbers. They actually highlight the path we've taken that we mentioned was going to happen in late last year, and we're carrying out this strategy as expected. Inventories over the course of this year are expected to move towards the expected number of days, probably 140-150, no longer 170 or 200 as was the case in Q4. These are our CapEx numbers. We've brought in a few more equipment for the central operation here, our distribution center, and this equipment is considered to be expansion-related CapEx. We've also consolidated the investments in the new ERP system.
We've completed that particular project, and starting in January, no further CapEx will be allocated to the new ERP project. So this is going to be one less investment that's going to be recurring in 2025 because it won't be. As for maintenance CapEx, that's in line with historical numbers. Investments in maintenance are supposed or expected to remain largely unchanged. Now, before we complete our presentation and talk about our expected gains, I just wanted to talk a little bit about ERP. This was a project the company has been engaged in since April 2023. We put together a dedicated team to work on this transition. It's a very structural and important transition for us because the idea is to mitigate all the risks we are aware of in this kind of initiative.
We've had over 200 people dedicated to the project exclusively for the course of a year or two since the project started in April 2023. Now we aligned this transition process with our customers in our distribution channels and our main partners, and the objective was to minimize disruptions for them and the impact on the companies and partners' results. Now we decided that it was time to do the transition, and we began using the new system in early January, so starting on the 7th, we moved on to SAP. We were using Condot until then for a long time, and then we transitioned to SAP. Now, what do we expect from all this? This ERP will help support the company's growth and also its scalability because it will allow us to repeat processes that are efficient, and that could be replicated elsewhere.
It will also increase the efficiency of internal processes with world-class standards, in fact. That's what this new system has allowed us to achieve. This means greater productivity and assertiveness in consumer relationships and also internally. It will also help us achieve higher governance levels for all the company's processes, as well as improve its decision-making flows that take place on a daily basis at the company. So these are huge structural gains for moving from one ERP system to the other. We want to build a stronger foundation, a more robust foundation, so that all the new bricks we come to lay in the future can truly add value to the company's results. Now let's talk about our perspectives. The focus has been on operational efficiency. We've been focusing strongly on ROIC, R-O-I-C.
Now we want to see a resumption of that growth in terms of operational efficiency, which will lead to higher returns. We also have the new ERP, as discussed, and in order to reap all the rewards and achieve all the gains, we must continue to evolve, so this is a work in progress. We're moving from assisted operation to normal operations, and now that we're in normal operations mode, we want to achieve greater efficiency and operate in new ways that will enable us to improve our bottom line, and the entire management team is highly attentive to the cash cycle. We expect it to evolve positively starting in the second quarter. I think the first quarter of this year, we still have a few bills to pay with some of our suppliers, and we will be paying those.
But our operational cash will still be relatively under pressure during the first quarter. But starting with the second quarter, we expect those numbers to go back to suitable levels as we see them for the operation. While this brings us to the end of the presentation, I will now stop sharing my screen and give the floor now to Mr. Altair, who would like to share a few words before we move on to the Q&A session.
Good morning, everyone. It's great to be here talking to you once again. Now, before we have the Q&A, I just wanted to say that over the last few years at the company, things have been a bit busier than usual. In fact, this has led to a delay in my exit from the company because we wanted to complete a number of projects and processes before I left.
Now, after the pandemic, we've experienced a logistics crisis. There was a shortage there, which remained in place until last year. There was also an IPO. We learned a lot in that process. We had to make a number of adjustments and changes to our solar strategy, adapt to 5G, restructure ourselves internally with the board and the different superintendencies, and we also had to make investments. We invested in factories. We invested to address all the needs we had over the last two years. The process of finding the new CEO also has an impact on our internal operations. Implementing new partnerships, new product lines have to be consolidated, especially in ICT. And last but not least, we also implemented the SAP. That was a major concern of ours that required a lot of our attention. And as Bruno said, it also took a lot of investment.
We had to step up our working capital, but the investments aside because they were hefty, but now we're going back to normal, but despite all that, things went ahead according to plan. There was a bit of an impact when the transition happened, but now we're operating business as usual. Our revenue, our earnings are going back to normal, so it was a scare. We were very concerned about this transition, but these concerns have mainly been assuaged over the last two years. We expect there will be many big investments to make, like we did in the last two years when we concentrated our investment, but the adjustments have been made. Everything we planned has been achieved, so I think the path forward will be smoother for my successor, but I did want to tie up all the loose ends, and those have been tied up.
And now the horizon seems calmer, and we can once again turn our focus to productivity, to improving our productivity, to improving our relations with our channel, with our customers, and also on exploring the market. We've fully mapped out our growth trajectories for the future. Pretty much all of our product lines are in that direction. Different project areas and verticals are delivering. They're very promising. We are making the investment, but we're also reaping the rewards. We provide solutions at all levels, from the residential level, where we sell solutions and provide products that have been very well accepted, to corporate networks via our partnership, GPON, structured cabling, gate control. There are a lot of areas we'll be focusing on, also consumer products. We provide a lot of those in security and other areas. There's a lot still to be done in energy.
For example, that sector can grow quite a bit. Internationalization is also an area we've been evolving on step by step: alarms, security, fire detection. So there's a lot of room for growth there as well. CCTV, using monitoring and new technologies like artificial intelligence. This has huge, huge potential in the market. So we're convinced that that's what we must now focus on, on our potential growth trajectories, on the potential for the market. Now things are back to normal. They're settling down, and over the next few years, we'll be entering an entirely new phase.
Okay, thank you, Mr. Altair. Let's go on to the Q&A session. Let's start with Maria Clara, Itaú BBA sell-side analyst.
[Foreign language]. Hello. Hello to all of you. Thank you so much for your presentation and for allowing us to talk about this.
What about your gross margin for the year? You've actually mentioned that you've allowed the price fluctuations, the exchange fluctuations, to be reflected in the price. But now we see that the dollar rate is beginning to stabilize. Are we correct in thinking that the first quarter is expected to be a tipping point in terms of earnings? And should the dollar remain under six reais, do you expect to readjust your prices in your price table? What can you tell us about that? How do you expect your gross margin to evolve over the year, especially considering exchange rate fluctuations?
Okay, Maria Clara. So we're not pricing based on the actual exchange rate on the day. We're looking at different ranges, and right now the table reflects an exchange rate of six reais, actually, per dollar.
So we're always looking very closely and monitoring the exchange rate, but we don't tend to reduce prices unless it's really necessary or unless that presents an opportunity. As for the gross margin, there are many variables at play here, and the exchange rate is just one of them. But the volume of material, for example, going into that exchange rate, and the revenue mix, and the pricing work, I mean, we do all that in order to determine the gross margin with so much detail on a quarterly basis. We tend to see the gross margin as something that fluctuates within a set interval or margin based on what we've seen in the past. As for what we expect to see in the future, we expect it to remain low, but it's important to see how this number evolves over time.
But it's always expected to fluctuate in the interval that we mentioned. We showed you the first or the last few quarters, and there have been a few peaks and troughs, yes, but it tends to fluctuate as expected. I just wanted to mention something about that, about the dollar exchange rate and how that reflects on price. In our net revenue numbers, you may have noticed our results last year. When the exchange rate goes up and the dollar becomes more expensive, it takes us a while for that to reflect on price, for us to change the prices because we have our inventories, we have our consolidated costs. Sometimes, I mean, the exchange rate fluctuates, and then you have to change the table multiple times in a row.
Usually, when the exchange rate goes up, it takes us a little bit of time to update our price table. But when it drops, we drop the prices right away. Whenever the exchange rate is favorable to the real, that's actually beneficial to the company. And when the dollar goes up, then it's harmful to the company. And that's the situation. We need to consolidate the exchange rate and allow it to play out before we make any changes to the price table. Also, Maria Clara, I just wanted to mention that an important factor we should take into account is the company's ability to pass on the price increases to its product consumers. Now, considering the fluctuations in 2024, the impact on the exchange rate was actually very little because we were able to transform that into the price and continue to sell.
Intelbras can actually do that because we have a very strong brand. We're very much well-known to both our customers, to the market, and to distributors.
Okay, thank you. I appreciate the answer.
Thank you, Maria Clara.
Next up is Bernardo, Sell-Side Analyst from XP.
Opa, bom dia. Hello. Bom dia, Sr. Altair, Henrique. Good morning, Mr. Altair, Henrique, Bruno. Thanks for the presentation. I have two questions. The first, it's about the transition to your new ERP system. This is actually news to the market, so I'd like to know more about the impact of this process. I know that most of the pressure on the working capital was because of increased inventories to avoid supply-related problems. So what can we expect going forward? When do you expect inventory levels to go back to normal?
And also, about the ERP, I wanted to know whether there were any restrictions in your earnings. Were some of the revenue perhaps delayed for a few months? And my second question is really a comment. It might be a good idea to hear a little bit about the new mandate, the new incoming CEO. Maybe Henrique could tell us a little bit about that. Now, you've had a very well-structured transition process with Mr. Altair. The company has a very solid culture. We don't expect many big changes to happen as a result of this succession. But we would like to hear from Henrique what his areas of focus will be going forward once he takes office.
Now, about the new ERP system, SAP, for sure, there's a lot of investment today in infrastructure, etc., and that has alleviated much of the pressure on the best people we have working on the processes. And we've also invested heavily in material because we wanted to have that material in-house. Can you imagine what could happen if we didn't have the raw materials available? And the inventory will settle back to normal. We're actually going to embed a lot less material than we used to. Of course, the cash flow changes slowly, depending on the payment conditions we have with the suppliers. So that change actually takes a while to be reflected. But inventory is expected to go down and to go back to normal. We expect inventory levels to be normal in the beginning of the next quarter.
As for your question on whether there were any restrictions, actually, we planned carefully to avoid that from happening. We bought additional machinery. We hired additional people to produce more materials for more inventory to be delivered in January. This means the productivity was a bit below what it should have been because it took us a while to train everyone, to get everyone onboarded. There were products for which, despite us having the material and despite us manufacturing them, we were simply unable to meet demand. You were expecting to sell 100, but you would sell 200 and then 300 more. So it was tough. Some of the products we have, but now that we're resuming our normal operations back then in December, were tough to cater to the demand. But now things have been accelerating.
We're keeping pace because we have all these raw materials available in-house, and we're stepping up production. Like I said, we're now in normal operations mode. The factories are at their normal levels of production, and the focus here is to make up for lost time in some of these items, but for most products, there was no problem. Of course, starting in January, we had surplus production from December, which was reflected in the January numbers. As for February, well, that's a bit tougher to calculate because with the SAP, we implemented a new system in January, early January, and that was a slow process, and it ultimately affected the results from February, but in most cases, the inventory was there, had been scheduled ahead of time, and now we're going to be working to bridge any gaps we've had.
As for Henrique, well, we were expecting to have him briefly address his plans going forward at the end, after April 1st. So he'll have an opportunity to do that at the end. Is that okay? Sure, sure. No problem. We'll do that after the Q&A. Thank you for your answer. I just have a quick follow-up. We were given the impression that the transition to the new ERP may have affected your quarterly margin, increasing the number of sales with lower price at lower prices. Would that be a - would that actually lead to an impact on the margin? What do you think? Yes, of course. This is really productivity. Our productivity was largely motivated by the busy second quarter we had in terms of our factories, our workers. It was not a pleasant experience, and there was an impact, of course.
Now we need to make up for that. We have completed the transition. The new system has enabled an increase in productivity, but there was, at one point, an impact. In fact, just the other day, we were discussing and trying to put a number on the impact of all of this scramble we had to go through to avoid any shortages. So there was indeed an effect on productivity. Yeah, but the effect was on productivity, not on pricing, right? No, not on pricing, no. Sales were based on the January table, which was also in effect in December.
Okay, great. Thank you. I wish you all the success in the world, Henrique, when you take over your new position, and I wish the best for the company. Thank you.
Let's give the floor now to Andrés Sales, Sell Side Analyst from UBS. Hello, Bruno, Henrique, Mr. Altair.
I wanted to talk a little bit about ICT. Now, you mentioned how capillary your sales force is, how well spread out it is. Now, how do you expect your sales force to be going forward in 2025? Do you think it's already the right size? Is it enough for the demand you expect to have this year? And is the sales force well acquainted with the products and the new portfolio of products you're introducing in this particular ICT segment, which includes sophisticated products? And my second question is about the capital structure. You mentioned the amortization of the debentures during the presentation.
We apologize. We could not hear the question. We heard the beginning of your question, but we couldn't hear you at the end of your question. Could you repeat that question? You were talking about the debentures, but then your audio cut out. We couldn't hear you.
Okay, my apologies. So what is the company's strategy for amortization? Will you be using the cash coming from the operation, or is there some other strategy in place for that?
Okay. I'll give the floor first to Henrique, then Mr. Altair. Hello, Andrés. Good morning. Thanks for your question. As for our sales force, we believe it's the right size, and it's operating suitably. Now, there are always areas we can improve, much like any other process or area in the company. But let's separate this into two business lines. When we look at providers, for example, when we work mostly with providers and our distributors work with providers, then our structure is focused mostly on carrying out the daily routine involved in that kind of business, like visiting our customers. So this is overall a simpler process. So we do that on a daily basis.
We have our own structure. We also have our field force, and we also work with our distributors by means of what we call triangular sales, meaning our sales force is really our distributors' sales force. Now, we earn from the factory. We invoice the factory for the distribution, and the second area has to do with enterprise networks. This is a brick-by-brick construction, but we're firm believers in this project. Now, we will be implementing a new line of products to better be able to compete in that market, and we also have a team with a different outlook, which is much more project-centric. They focus on application engineering, and we're growing that structure as we capture more from the market. Now, we had an initial investment to set up the structure.
Then we brought in people from the market, from major manufacturers, and now we've reached the right size for the company. Building a consensus among integrators, among the industry, the sector, so that when we improve our earnings, we can also improve our structure. About cash and the amortization of the ventures, which is going to be starting. We've also gotten credit from BNDES to finance providers, which will improve our working capital. The term is actually through BNDES. They have to wait for the money, but we get that money upfront, so that's going to help us. Now, our main source of funding to recover is actually coming from the capital we've invested in inventory.
Now that we've closed the gates for embedding material, things will tend to go back to normal vis-à-vis the inventory, and our cash can actually withstand amortization and fluctuations in exchange rate, and we'll largely be going back to business as usual. I just wanted to mention that we're always mindful of potential credit that may make sense to our development projects, so long as we get the funding at competitive rates. So we're always looking for that at our treasury, and that will continue going forward into 2025.
Okay, thank you for your answers, everyone. Thank you. Next up is Livia. Livia from JP. Hello, Livia. Can you hear us? A gente não está ouvindo. [Foreign language] . We can't hear you, Livia. Maybe there's a problem with the microphone.
[Foreign language] . Okay, let's keep going. Let's give the floor now to Vítor Tomita while we wait for Livia to come back. So, Vítor from Goldman Sachs, sell-side analyst. Welcome, Vítor. Okay, thank you. [Foreign language]
Good morning. Thanks for taking our questions. Two quick questions from us. [ Foreign language] Could you give us a bit more detail? [Foreign language] . About your ICT revenue trends and also your sales strategy, but can you also, generally speaking, tell us about the evolution of your new portfolio in Brazil and. [Foreign language] . How your production structure is evolving internally to produce and distribute the new portfolio in Brazil. Can you tell us about productivity, margin trends, etc.?
And second, well, it's about energy. Can you tell us about solar, non-solar numbers this quarter? What's your view on the potential? What do you expect to see from that segment for this year of 2025? Thank you.
Good morning. Vítor. Now, regarding new items, most of these items are produced nationally, domestically, especially the larger volume items. Those are produced in Brazil. Now, as we've transitioned to SAP, and now that we're resuming production, we have been resuming production in a staggered way. Now, production is at the same level as it was before we transitioned to SAP. So production is happening, and whenever we find new items that may be of interest to our customer, we will also be internalizing those.
So long as productivity is good and so long as the demand is enough to make production in our factories efficient and effective, we won't be producing just one or two items of something. In that case, whenever that's the case, we follow a different business format. We're highly focused on productivity in our factories, as Mr. Altair just mentioned. Now, let's talk about the trends for our ICT margin. In our plans for 2025, we expect to return to the margins from 2023. That has been the idea. Okay. Now, about solar power. There was so much that's happened since 2023, right? So your strategy, we're actually being very careful. We're paying close attention to small projects, integrating them. We're highly focused on operations. It doesn't matter if we have lots and lots of customers who want to buy and they're holding auctions, that kind of thing. No.
Our strategy is to build customer loyalty, work through resales, and provide reliable products and services. We're doing well because we're being very careful, very meticulous. Customer feasibility today is much, much better than it used to be a number of years ago. We expect that trend to continue in the market. This operation requires a lot of care because even though we've largely consolidated and we've seen a reduction in the number of players who have actually gone bankrupt and provided their products almost free of charge, we must still be careful because there's still room for the number of players to go down. We're proceeding very carefully, and that's what we've been doing. So far, results have been quite strong.
Thank you.
Thank you, Vítor. My staff is César, Sell-Side Analyst from Santander.
[Foreign language]. Good morning, everyone.
Thanks for taking my question. Congratulations on your results. I have a quick question. Now, your expenses were largely kept under control over the last few months. Now, we mentioned that earlier, that was going to be an issue, expense control, keeping expenses under control. So that's good. Now, what's your take on this in 2025? Do you see the same potential to do the same in 2025? Now, for the EBITDA and for the margin, I mean, the gross margin is expected to fluctuate within a range, right, like Bruno said. But do you expect it to go beyond or to be higher than what we've seen of late? Can you provide us more detail on what you expect to see? Well, I'm always the optimist in the room. People actually tell me not to be so optimistic sometimes.
Last year, I was told that we had an opportunity to improve and curb our expenses, and we've been doing that. However, we've implemented new products. We've made partnerships in the fiber sector with H3C, and the SAP system also had a significant negative impact on our expenditures. We had to continue to invest, tweak, fine-tune everything. At the end of the day, there was an impact on revenue and on company costs. Now, however, that the dust has largely settled, the entire company knows that we can continue to operate much more productively. Right, let's strive for productivity. César, you mentioned the EBITDA margin. The company is always expected to deliver some level of growth and is expected to remain largely stable. For example, we know that numbers revolve around 13, but they may be higher or lower depending on when you look at the data.
But beyond all that, we need to be aware of the fact that we can deliver an increased revenue and improve our margin. That's the idea. Last year, for example, we had an opportunity to operate higher than the margin range, but at the end of the day, we remained within historical levels. But this year, differently from last year, we don't see, we don't envision the possibility of going beyond the upper threshold of that range, but I do believe we will remain within that range. Okay. I believe you have an average inventory, right? You work with average inventory, and most of your inventory had been rebought at lower exchange rate levels. So the question is, let's look at the first quarter. The dollar rate, the dollar exchange rate has actually gone down vis-à-vis the previous month.
So I wanted to hear from you how that's going to affect the margin, especially for the first quarter. How do you think that will affect the margin?
Okay, well, the margin at the beginning of February, we believe, was suitable, and inventory has been evolving. There have been inflows that are now driving the cost of raw materials down. Once again, it's the same answer we provided to Maria Clara earlier. The evolution of the margin in the short term will vary depending on multiple variables. The mix, the price, the cost, all play a role. Industrial costs, raw material costs. All those variables come together before we can calculate the margin for the quarter. So we really need to wait a little bit for things to be more final before we know what the margin's going to be.
Now, we expect the exchange rate to remain largely stable now that we're opening up our process, now that we're opening up our system to SAP. We expect things to improve. Now, things could play out differently. The exchange rate could once again go up, and in that case, we would be subject to entirely new pressures.
Okay, thank you. That was a clear answer. Thank you so much, and congratulations on the results.
Now, we only have five more minutes for our conference, so let's give the floor now to Marcelo from JP. He's going to be asking the question instead of Livia, and then we also have two more questions in writing, which I would like to issue a few comments on.
Hello, can you hear me? Yeah, we can hear you. Oh, I apologize. I don't know what happened with Livia.
A [Foreign language] . The first question is whether you can give us an overview of the competitive scenario, what your expectations are for this year, and also, can you tell us a bit more about your capital structure? What would you view it as optimal? What is the debt versus cash balance that you believe to be optimal for the company?
You asked first about competitiveness. [Foreign language] , we were spread thin across many projects, many initiatives, many investments over the last year. [Foreign language] , we haven't lost any market share.
And now that the dust has settled and things are quieter, we know that if we have lost any market, we actually are set to not only gain it back, but actually exceed what we've lost. Because now the company is laser-focused, we're customer-centric, we've got an improved system, our inventory levels are good, we're looking for even better market performance and results. Could you answer the other question, Bruno?
He was asking about the capital structure. Sorry, I was reading another question about that very issue, the ratio between debt and owned capital. So that's what the question was about.
Okay. Now, we had our share of problems last year. So we're actually quite nervous when cash levels go down. Now it has gone down, and because of the payments we need to make, it's expected to dip a bit further over the next few months.
But we know for sure that it's just a matter of time before levels go back to normal. I won't be paying suppliers later on because incoming raw materials will be much, much lower. So that's been our policy. O [Foreign language] a zero, neither in the blue or in the red. [Foreign language] all right, we've got, I mean, we can cover up to two invoicing cycles, so to speak. That's been our strategy when it comes to capital.
Okay, great. Thanks for the answer.
Great, thanks, Marcelo. We have two more questions in writing. One is about the evolution of working capital. I mentioned this briefly during the presentation.
I just wanted to reiterate the fact that we expect to continue to consume some of our operational cash flow, and we expect that to actually increase starting with Q3. We will no longer be paying our suppliers later on in the year, so that's going to help bring those costs down. There was also a question about supplier accounts. Okay, well, we paid a lot of our suppliers in Q4. We're expecting to do the same in Q1 because those are the terms. But we've had nothing else embedded, so this means there were no further debts. So our payments for suppliers will tend to go down. And as purchasing goes up and once our inventory goes back to normal, we expect to be matching our inventory levels closer to reality because right now they're a bit ahead, a bit above.
Now, in Lucas's question, he asked about ICT, so I believe that question has been answered already in a previous occurrence. So I'd like to take this opportunity to give the floor now to Mr. Altair. Now, unfortunately, we don't have time to answer all the questions. If you have any questions for us, please get in touch with us later on, and we'll be happy to answer them. Let me give the floor now to Mr. Altair for his thoughts. Okay.
I just wanted to say that now, today, the company is well positioned. We've had a tough couple of years, but now the dust has finally settled. We've sorted out a lot of things. This quarter will most likely feel the brunt of this change. Going forward, however, we expect normality to return. In January, we were a bit weaker than expected because of that change.
For 45 years, I've been with the company, and in my 25 years that I've been a CEO, we've grown on average 12.1% in terms of our bottom line, our revenue. We've also strengthened our brand. We've strengthened and built loyalty in our channels. We've actually improved the NPS scores of our customers quite significantly. We have a motivated and strong team that's based on a culture of principles shared in common that unites us as a company, and it is like that that we will continue to focus on working in the future. We expect to see productivity to go up. Our succession process took place very carefully over the last few years. We looked at a number of candidates. We had a number of ideas, and I'm absolutely sure that Henrique is the right person for the job.
He's well aligned with the culture, and hopefully, with the team we have in place today, he will be able to work closely and rely on them and they on him. Paulo was also a candidate. These are wonderful people working at the company. Our entire board is top-notch. It's a very strong team. [Foreign language] . Sorry, I got a bit emotional. [Foreign language] . So yeah, we want to continue with yet another 20 years of growth for the company. [Foreign language] . I'll be joining the board and I hope to be able to continue to assist in the committee with the team. I'll have an office in addition to my office for the board.
I'll also have an office close by, so I'll always be available to the entire team, to the entire board, the C-level, and I'm very grateful to everyone for your help, for your support. This has been very important to the company, to making it stronger since the moment we went public in 2021. We opened our capital and became publicly listed in 2021. Any closing thoughts, Henrique?
Yes, thank you so much for remaining with us to the end of our earnings call. Now, this is a special juncture for us and also for you. You know just how quickly we've grown, and this has been a very intense trajectory. We're admired by our company, by our customers, and we help build Brazil, and Mr. Altair has been at the forefront of all this.
He took the company from zero revenue to almost BRL 5 billion net revenue in 2024. He has led the company, admirably brought in himself many of the C-level individuals. He helped disseminate our culture, and he was our biggest partner and also our shield because many of the... He helped us in many of the challenges we faced along this journey. Achieving such impressive growth rates is no easy task. Now, I'm not going to say he's on his way out. Instead, he's transitioning to the board. But he is saying goodbye to this part of his routine. So, Mr. Altair, thank you so much for your leadership, for everything you've taught us. And I can speak for the team when I say that we will do our best to resume our growth trajectory so that we can continue to increase our profit, our revenue levels, our EBITDA.
The idea is to always improve the company and to maintain our culture. So, on behalf of everyone, Mr. Altair, thank you. Now, I don't want to take too much more of your time, but if you'd like to learn more about my work here at the company, please schedule a call with me, and I'll tell you a bit more about that. Now, to answer Bernardo's question, I'm looking to the future. The objectives here are very clear: sustainable growth, professional operations, and a happy workforce. People are everything. People are responsible for everything, and we need to invest them. We need to foster innovation, and we need to strengthen our culture. It is only by doing that that we can improve performance and deliver long-term value for our customers and for the company. Our focus is to grow revenue and profit with discipline and with efficiency.
Those are the two keywords, and we're working diligently to bring our inventory to acceptable levels as we used to in the past by ensuring healthy operational flows and a return to our normal cash flows. We will keep a close eye on ROIC, and we will continue to focus on business areas that are part of our core business, and we want to do things that will improve our ROIC rather than make it lower. I see an opportunity to grow all the company's business areas, and all of this will be done alongside our customers, our resellers, installers, integrators who have taken us to where we are today. They are the offshoots of Intelbras. I refer to them as such. They are distributors. I'm very excited with this journey, and I'm convinced that with our team, we will achieve the results we are planning to achieve.
Thank you so much, everyone. Mr. Altair, thank you, Bruno, and I count on you. With support from the company's board of directors, you can count on us. You can count on me and my team.
Thank you, Henrique. Thank you, everyone. Have a good day. This concludes.