Good morning, ladies and gentlemen. Welcome to JSL's Conference Call to discuss the results for the third quarter 2024. This conference call will be recorded, and a replay will be available at the company's website, ri.jsl.com.br. The presentation will also be available for download. Please note that all participants will be only watching the conference call during the presentation. We'll then begin the Q&A session when further instructions will be provided. Before moving on, I would like to emphasize that the forward-looking statements are based on the beliefs and assumptions of JSL's management and on information currently available to the company. These statements may involve risks and uncertainties because they relate to future events and therefore depend on circumstances that may or may not occur.
Investors, analysts, and journalists are cautioned that events relating to the macroeconomic environment, the segment, and other factors could cause results to differ materially from those in the relevant forward-looking statements. Present on this call are Mr. Ramon Alcaraz, JSL CEO, and Guilherme Sampaio, the company's Chief Financial and IR Officer. I would now like to hand it over to Mr. Alcaraz that will start the presentation. Mr. Alcaraz, you can go ahead.
Ladies and gentlemen, good morning. It's a pleasure to be here to announce JSL's results for the third quarter 2024. As you can see, once again, we have demonstrated our ability to grow in a sustainable manner as our margins increase and leverage decreases.
I'll start by giving you the main highlights of the quarter: organic growth of 18% compared to the third quarter 2023, net profit reaching BRL 73 million, up 25%, an increase of 1.2 percentage points in the EBITDA margin when compared to the last quarter, the second of 2024. New contracts signed in a single quarter reaching BRL 2.2 billion. In the year, we have already reached BRL 4.5 billion in new contracts, cash flow after growth of BRL 395 million, and reduced leverage. We were awarded Best Company of the Year in the logistics sector by Exame in the well-known and consolidated annual award for the best companies. I would like to point out that we competed against all logistics companies in the most diverse modes: road, air, rail, and ship.
To close the slide, I would like to point out that we are the absolute leader in the sector and that we are growing by 18% a year. Moving on to page three, we have the main figures for the quarter: gross revenue of BRL 2.8 billion, up 17.7% from the same period last year. EBITDA of BRL 466 million, up 18.7% compared to the third quarter of the previous year. EBITDA margin of 20.4%, 0.2 percentage points than the same quarter last year. Net profit of BRL 73 million, up 25.3% compared to the same period of the previous year, and return on invested capital of 15.4%. On page four, I'd like to give you a few more highlights in terms of scale and efficiency: growth of 18% over the last 12 months, even including a reduction in IC of 11% over the same period.
Remember that in this case, it was JSL's own strategy to cut back in less practical segments. AFJ, in turn, made major contributions: growth of 31% over the same period. That's the beauty of our ecosystem. When we compare it to the second quarter of 2024, we see growth of 10% in JSL as a whole, including IC, with a growth of 17%. That demonstrates that the strategy is correct. The projects deployed in the second quarter 2024 have already started operations and contributed to more BRL 251 million to revenues and BRL 68 million to EBITDA, an increase of 1.2 percentage points in the EBITDA margin, returning to the right levels. Here we are comparing the third quarter 2024 and the second quarter of 2024.
Speaking of our management model, I would highlight the management model of the acquired companies with independence for agility and growth, combined with JSL's financial support and scale to transform size and results. People aligned with customers' values, with discipline and execution ensuring sustainable results. Focus on individualized pricing of contracts. In financial terms, I would like to highlight the quarter with the highest cash generation since the IPO, with free cash flow after growth of BRL 395 million. Reduction in leverage began to be seen in the quarter, reinforcing the company's deleveraging direction. Including the composition of debt at the end of the third quarter, the spread was reduced by 0.8 percentage points year on year. Guilherme will be able to go into more detail later. Moving on to the next page, five, we bring, like in other quarters, our management model, which ensures the quality of delivery and cross-sales.
We have individual management of each contract because projects are customized and developed for each customer, and with the appropriate pricing, cost control, and operational efficiency, autonomy, agility in our managers' decision-making, and here the mantra applies: excellence in delivery ensures customer loyalty and cross-selling, generating new contracts and, as a consequence, new customers. I say this every day to our employees so that I never forget it. At the end of the day, our customers want to benefit from JSL's size when it comes to investment capacity and the certainty of continuity of their operations, but they want it to be treated as the best, as if they were our single customer. On page six, we show how our revenue has been distributed across the various segments and services in the logistics chains.
Our contracts are long-term, with essential services in our customers' value chain and in sectors that have proven to be resilient. We have a well-balanced mix between asset-light and asset-heavy operations. See, 27% of our revenues does not involve trucks, but rather people and technology, weathering the internal movement of factories, management of our own warehouses and within our customers in the most varied sectors of the economy: pulp paper, automotive, foods, white appliances, electronics, medicines, and others. 64% in specialized dedicated operations involving trucks, including international transportation and refrigerated and frozen foods through Brazil and various South American countries, urban distribution of food, beverages, and consumer goods, transport of wood and pulp, vehicles, machinery, supply of the entire production chain of the automotive industry in the milk-run just-in-time system, transportation of chemical, liquid, and gas products, fuel, and others. 9% in what we call general cargo.
Then, yes, 100% asset-light, taking advantage of the market trading. In this segment, we are even launching a new product, which we will announce later. 91% of our revenues is concentrated in services with a high degree of specialization and essential in our customer supply and sales chains. On page seven, I'd like to point out that while it's important to celebrate what we have already achieved, even more important is to ensure the coming years. That's why every quarter we disclose the value of our contracts. At the end of the day, this is the contracted future revenue that will ensure growth with low risk of execution, increase in market share without depending on the growth of a specific sector.
In the nine months, we have already added BRL 4.5 billion new contracts with an average term of 60 months, with the addition of 27 new customers this year alone. In this quarter, the chemical sector stands out with 58% of new contracts, followed by retail with 19% and automotive with 9%. New closed contracts, if you think of the second quarter of 2024, we had a concentration in the food and beverage sector with 70%, then consumer goods with 10% in the first quarter of 2024, pulp and paper with 41%, automotive 18%, and retail 13%, which shows our capacity to grow in the most varied sectors of the economy.
Winning new customers generates, in addition to new contracts, the opportunity to grow through new services from the same customers, a capacity already demonstrated by the high level of cross-selling in the current customer base, most of them leaders in their industries. On the next page, we talk about the transformation of the acquired companies, combining their know-how with JSL's scale. If you take the third quarter of the year of acquisition of each of them, we have a CAGR that is double-digit in all of them, with the exception of IC, as already mentioned. Net revenues growth over the last 12 months since the acquisition quarter is impressive. Fadel, TPC at about 85%, Transmudança 70%, Rodomeu and Marvel 150%, FSJ, the last acquired company, flying at 35%.
While maintaining the independence of the acquired companies, they benefit from the JSL ecosystem, generating a reduction in the cost of purchasing assets and inputs and diluting administrative expenses due to the growth of companies. Synergies have generated approximately 2% of gross revenues. Growth and results are driven by the quality of our management model, added to JSL scale and access to capital. This ecosystem generates the potential for cross-selling between the companies and the addition of new customers between them. Now, I will call my friend and colleague, Guilherme Sampaio, to go into more details about figures and financial indicators. Guilherme,
thanks, Ramon. First of all, good morning, everyone. Well, I think Ramon has already covered the main points for the quarter, but I'd like to highlight a few items that are worth revisiting and exploring.
First, when compared to the second quarter this year, we added BRL 250 million in service revenues and BRL 70 million in EBITDA, already taking the benefit of the projects we talked about when we announced the second quarter results that were in the process of being implemented. Second, BRL 2.2 billion in new contracts that demonstrate our ability to increase our execution capacity and the capacity of winning new contracts with our customers, as well as bringing in new customers, as Ramon mentioned, 25, 27 since January this year. The BRL 2.2 billion also has two impacts on our results. This, there is already a small benefit from what has already been implemented in the quarter, but most of it will contribute positively in the coming quarters when these new projects mature and are fully implemented. In general, the figures show the consistency of our growth and of our execution.
The figures themselves, revenue up by 17% year- on- year. If we remove effects of FSJ that grew 31% in the comparison between the third quarter this year and last year, and of IC that reduced revenue in the strategy we have been talking about, organic growth of JSL together with the other companies that were consolidated at the time would be 18%. It's a figure that demonstrates the strengths of our business model: accelerated growth at a company level of BRL 11 billion in revenues when we look at the third quarter, 47% of revenues in cargo transportation, 33% dedicated operations within the customer's production process, 12% in warehousing, and 7% in urban distribution. Turning to operational results, we close the quarter with an EBITDA of BRL 324 million, already reflecting the ramp-up of operations and deployments that are underway.
EBITDA reached almost BRL 470 million with a margin of 20.4% and net profit of BRL 73 million in the quarter, an increase of 25% over the third quarter last year. Profit specifically is already starting to benefit from the reduction of the spread of our debt, which was 0.8% compared to the previous year, but it's still not yet benefiting from the deleveraging process, which we have already started, as we have announced, but is still not benefiting from the deleveraging process we started. Return on invested capital remains at 15.4%, which demonstrates our discipline in pricing and allocating capital. Moving on to the next slide, we break down revenues between asset-light and asset-heavy. Asset-light represented 53% of revenues and grew by 16%. This already includes the reduction of revenues in IC, which is all here because it's agribusiness related.
Taking this effect, we are talking about growth of 27% year on year. Asset-light closed the quarter at BRL 216 million and margin of 18%. Asset-heavy, 47% of revenues, growing 19% year- on- year, and closed the quarter with BRL 243 million EBITDA, margin of 22.4%, already showing the evolution versus the second quarter 2024, which was way down by the cost of implementing major products, which involved a significant amount of CapEx. Speaking of CapEx, and moving on to the next slide, we closed with net CapEx of BRL 87 million, already a lower average than previous quarters, but enough to deploy the volume of new contracts. For the year, we reached BRL 902 million in gross CapEx, BRL 680 million in net CapEx. Updating the numbers, I show every quarter our residual value of running assets, trucks, tractors, trailers, trucks, etc., represents 1.3 times our net debt at JSL.
Going to our capital structure on the next page, we closed the quarter with BRL 2.3 billion in cash, BRL 770 million in committed credit lines, net debt BRL 5.3 billion, already reducing versus the second quarter this year by the company's cash generation, which was a record of BRL 390 million after growth. That brought net debt EBITDA ratio to 2.9x , and net debt EBITDA added to 2.58x our covenants. I'd like to stress that the company is currently in the process of delivering due to strong cash generation and consistent execution, a comfortable cash position in relation to that, and an elongated debt profile. In addition, a reduction of spread, almost one percentage point in the last year, which will contribute to the result. I've already said it, but I'll say it again.
We are focused on translating all the operational work carried out by JSL and its subsidiaries in recent years into net margin. With that, I thank you and turn the call back to Ramon. Ramon,
thanks, Guilherme. Finally, to close, I would like to highlight the pillars of financial for a new cycle. We have solid foundations, unique positioning. JSL stands out for its ability to meet demands with customized solutions. We have a proven track record, ample scale, and the most comprehensive portfolio of logistics services in the country. With diversification in services and sectors, our managed model is based on appropriate pricing and excellence in delivery, resulting in customer loyalty. We have a high level of cross-selling and vast opportunities to win new customers and expand our business.
Our consistency in results comes from discipline and execution, with operational efficiency and cost controls, ensuring a strong balance sheet and the right profitability with the foundations prepared for the coming years. Our strategic plans are based on the diversification of services and sectors, opening up multiple avenues for organic growth, which, together with the acquisition of good companies, complete our portfolio. The consolidation of operating margins, combined with appropriate allocation of capital, provides consistency of margins and profitability. Completed implementations ensure contracted growth and a potential to decrease leverage. Our greatest differential lies in our people, who are dedicated and prepared to ensure quality and efficiency with individualized management of each contract. We even try to anticipate our customer needs, always focusing on execution and delivering results. We believe that these are the pillars for continuous cycles of growth and development.
Thank you very much for your attention, ladies and gentlemen. And now, myself and my colleague and friend Guilherme are available for your questions.
We'll now start the Q&A session for investors and analysts. If you wish to ask a question, please click on raise hand. If your question is answered, you can leave the queue by clicking on lower hand. If you want to ask a question in writing, please enter your question in the Q&A field, followed by your name and company. Please wait while we collect the questions. Our first question comes from Fernanda Recchia from BTG Pactual. Ms. Recchia, you may go on.
Hello, everyone. Good morning. Thanks for taking my question. I have two questions on my side. The first, I would like to understand that point about contracts that were implemented in the second quarter.
As you mentioned, in the third quarter, we saw already an improvement in profitability, showing the effect of revenues, but also there is this effect of the maturity of contracts. So if you could give us a bit more color, if you can quantify the amount of benefits we could have from the maturity of contracts, and also if you already see an improvement in profitability in the fourth quarter due to that? That's the first question. Second question is the restructuring of IC. As you mentioned, it's still contributing in a negative manner to your top line. So I'd like to know what you're expecting, I'm sorry, to complete the turnaround of IC, and what's your appetite for transportation of grains. So these are my two questions. Thank you very much.
Good morning, Fernanda. Thanks for your questions. Okay.
I'm going to start with the projects implemented in the second quarter. The largest is the Cerrado project, where we have the largest pulp and paper factory in the world, so a very large contract with the hiring of many people. And differently from other projects we deploy, because this is an operation in a region in which you do not have skilled labor. We had to hire 1,200 people that were not ready, so we had to train them. So it was a slightly higher operational cost than usual. So that is what impacted in a negative manner the results in the second quarter, as we mentioned during the last call. In the third quarter, this project specifically started to perform, still not in full, but we should have a benefit of that in the fourth quarter. But this is a project that is completely on track.
The other project, well, we had projects in chemicals, dedicated services that have their natural cycles that happens every quarter, but the difference of the second quarter, again, was the concentration of a large project with the characteristics that I mentioned. Other than that, it's just a regular cycle, business as usual. The fourth quarter, as the third quarter, generally has a very good volume of businesses, so we have high expectations in terms of results. I see. Well, differently from other companies we acquired, this is a company that is going through a business transformation. Grains, as you mentioned, is an area in which freight costs are tighter, tighter margins, not to mention that we had a drop in volumes in agribusiness in Brazil as a whole. So the two things affected revenues. Our process of transformation is at full speed.
This is already going on, and we expect positive results as of the fourth quarter and the next year. As a counterpart, we have FSJ that, on the contrary, is growing even further than what we expected. As I said, it's flying, even enjoying the wave of e-commerce, you know, with Black Friday and everything. So in a way, you know, one company offsets the other, and this is the part of each company's normal cycle. This is Guilherme speaking, Fernanda. Just to add to IC, just to be clear to everyone, the thing is, as for contracts, which were a large part of IC, we haven't closed or terminated any contracts with customers. The option to reduce revenues was in grain transportation because we thought the margin was not suitable to the amount of capital demanded for the operation.
So the reduction from last year to this year is a reduction in volumes that we decided to go for, to have this volume outside the company and focus on profitability operations that have more suitable margins, just to add to the answer on IC. I hope we have answered the questions. Otherwise, we are here for you.
No, very good. Thank you very much.
Our next question comes from Victor Mizusaki from Bradesco BBI. Mr. Mizusaki, you may go on.
Hello, good morning. Congratulations on your results. I have two questions on my side as well. The first, going back to Fernanda's questions on new projects. I think you showed a slide showing revenues and EBITDA from these contracts that are being implemented.
Then looking at numbers, the EBITDA margin of these contracts would be at about 27%, which is a level which is above that reported by JSL in terms of asset-heavy margins. So the first question is, does it make sense what I'm saying? Do these contracts indeed help JSL expanding its return on invested capital? And the second question, CapEx was very much concentrated on the first quarter, a bit lower on the second quarter, but looking into 2025, if you could please give us some color in terms of what we should expect in terms of CapEx volume.
Hi, Victor. Good morning. Thanks for your question. Well, projects are different, and each one in their own, and that may affect EBITDA margin, whether they have more equipment, less equipment, more people, less people. So the EBITDA margin is very much influenced by the characteristics of each project.
So this is number one. These recent projects that were implemented have a higher EBITDA margin. Of course, we are always improving. We try in each negotiation to have a better project in terms of margins, not necessarily a worst price to customers, but rather with higher efficiency. So we always seek to have new projects with margins better than previous projects. But anyhow, the characteristics of each project do have a relevance in the margin. As for CapEx, Guilherme, please.
Yes, you're right. Because of the kind of businesses that we closed, these were projects that required more CapEx in the first half of the year. We did that. The profile of projects that we are closing now are requiring lower CapEx for implementation. So we reported the BRL 85 million now, and we believe in the fourth quarter, it should be very much close to this CapEx profile.
For 2025, well, we are still working on our budget and, you know, refining our numbers, but we should have a CapEx level close to 2024. We don't disclose the precise number, but I do not foresee any major changes from 2024 to 2025.
Thank you very much. Very clear.
Our next question comes from Julia Orsi from JP Morgan. Ms. Orsi?
Hello, everyone. Good morning. I have two questions on my side. The first about asset sales. We have been talking about that in recent quarters, that the line is underperforming is likely. In your view, how do you think asset sales will perform in the coming quarters? And second, about going international. In the last quarter, you talked about extension to Ghana. Any updates of how the operation is performing? Any other projects in terms of going international on your pipeline? Thank you.
Hi, Julia. Good morning.
Thanks for your question. Asset sales, well, we have a large volume of assets in our inventory for sale, and that's because of the very cycle of contracts that we have. We did expect to have a speed of sales that would be faster, but we are working on that. The last month was quite good, to tell you the truth. But it's a fact that new vehicles are increasing less from now on. We had a very high increase in the post-pandemic, but prices tend to get more stable, which also will lead to more stable prices at used vehicle sales. We do put together a team to improve sales, so we want to have a higher speed than the average of last month.
As for going international, we're always saying that this is a company strategy to grow our revenues in other currencies, different countries, even to have a natural hedge within the country's economy, vis-à-vis the economy of other countries. But we are not adventurous. We just don't put up a stand in a country and try to grow. We go abroad when we have guaranteed contracts. This is what happens in South Africa and in Ghana. To answer your question, Ghana is doing well, performing well, an operation that tends to grow. The country is not that large, but it's not that small. So we believe that we can double or triple revenues in the country, and we are looking into the neighboring countries to know if it makes sense to grow.
And we have been, you know, contacted to grow in other countries, specifically Mexico, that became a hub of manufacturing of several products to the U.S., and that suggests a logistics demand. So we have been contacted by different customers. This is a country that is interesting to us, again, within the strategy of ours, and we hope to have growth going international. Would you like to add anything, Guilherme?
No, I think that's it.
Thank you very much. Have a good day.
Thank you, Julia.
Our next question comes from Pedro Tineo from Itaú BBA. Mr. Tineo?
Good morning. Can you hear me?
Yeah, now we can. Good morning.
Thanks. Thanks for taking my question. I have a question about the current interest policy in Brazil, thinking about 2025 with a scenario of higher interest rates.
What is your view for the market and also for leverage and possible M&As? That's my question. Thank you very much.
Hi, Pedro. Thanks for your question. This is Guilherme. I'm going to answer more towards the business, and then Ramon is going to add to the answer. I think the interest curve, well, that's part of life. We have already experienced ups and downs in interest rates, so the company already showed resilience with regards to that. So what we do is that we adjust the prices of new projects so that new projects are already in line with the interest curve, and we have to do what is up to us, an increasingly better operational result to absorb short cycles in terms of interest rates and work on the spread, which is what we have been doing in recent years.
When you think of higher interest rates as a company, as a leader in the sector, for us, it is an opportunity because when you talk about higher interest rates, you separate the competition, good and bad companies, and companies that have more access to credit have higher opportunities of being competitive. So I think Ramon did say that in an interview yesterday, that, you know, the rain is not just for us. The rain comes for everyone, and, you know, this becomes an entry barrier, especially for projects that involve CapEx. So there are two things we are working on, and we have been talking about spreads. Well, you have seen that result, and also deleveraging due to the company's cash flow. So the size of cash flow today enables us to continue growth and decrease leverage.
And this is something that we have been speaking openly, and this is what we want. So the company should reduce leverage in the coming quarters to get to a lower level, and therefore we'll see an impact on net margins. Ramon?
No, I think that's it. Financially speaking, that's what it is. And business, like, it is what you said. You know, I make a comparison to car races. You know, you never, you know, race in the rain as on dry lanes, but you don't have to. You just have to race faster than the competition. And that's what we do. You know, leverage our positioning, our financial strategy, very well led by Guilherme and his team to be more competitive on the field. So that's it. Very good. Thank you very much, everyone. Our next question comes from André Mazini from Citi. Mr. Mazini?
Good morning.
Ramon, Guilherme, thanks for taking my call. My question, if you could talk about transportation of brand new vehicles, this grew in JSL by 29% and is doing very well. I think the best level since 2014. So the transportation of new vehicles as a whole seems to be suboptimal. There is a lot to improve. Sometimes customers buy their cars and they cannot track where they are. The market has a very concentrated market share, very little change. So this is perhaps a market for disruption. Do you want to grow more in this area? Can you go organically? Would you have to grow through M&As? And do you think that you could disrupt the market?
Thank you. Hi, André. Good morning. You see, we want to grow in every market that poses good profitability, and the transportation of new vehicles is one of them.
But some important comments to make. First, we grow with Transmoreno, which is one of the acquired companies that is exclusively for the transportation of new vehicles. JSL itself does a bit for GM, especially international transportation, and we have been growing recently. You have Chinese companies coming into Brazil. There is always an opportunity to grow in this market niche. But one thing that is important is that JSL is present in the whole automotive sector chain. For example, you're right. In recent months, the volume grew a lot, which is great. Brazil is selling a lot. It should close at BRL 2.6 million vehicles sold this year. Next year, people are talking about BRL 2.7 million. So it is an ascending market. And see, the largest company to supply parts to OEMs is JSL.
Large OEMs, you know, we have exclusive supply, and we are hitting records after records in the segment. So whenever the volume of new vehicle sales grow, you increase transportation of new vehicles, but also the input chain as a whole, the supply chain as a whole. And we are very present there in Brazil, in Argentina. You know, Argentina is a manufacturing hub for OEMs. So we are benefited from both ends, inbound and outbound. That is in the segments that I mentioned.
Very clear. Thank you, Ramon.
As a reminder, if you want to ask a question, click on raise hand. If your question is in writing, use the Q&A button. Please wait while I connect the questions. We'll now move on to the questions in writing with Guilherme Sampaio. Guilherme?
Hi, everyone. I'm going to read some questions that we got on the Q&A.
First, from Alexandre Mendes, asking about the buyback program. Many companies announced both share buyback plans and then failed to follow through. Either they don't buy back anything or very little. JSL announced a buyback program of BRL 13 million shares. Is there an intention of actually carrying out this program? Is there room on your balance sheet for this? Well, I'm going to answer your question and see if Ramon has comments. We have the policy in the group of keeping buyback programs open. We do believe in the potential of valuation of our share. So initially, what we did was to open the program. What's going to happen from now on will depend on what actually is going to happen on the day-to-day of the market.
If we believe there is room in our balance sheet, the BRL 3 million share, if we are going to use the average price, the BRL 13 million shares, if we use the amounts today, it would be an impact on average of 0.2. So a very low volume. So we have room, but again, the main intention is just to keep the program open. Okay? I hope I have answered your question. Next question, we have a question from our international investor, Karen. I'm going to read it in English, and I'm going to add in Portuguese, and I'll ask for simultaneous translation. Congrats on the great quarter. Two questions. Provide an update on current expectations for 2025 and the implementation of the backlog of contracts and how we are thinking the evolution of the run rate return on invested capital and the drivers to increase it.
Karen, Ramon is going to answer, and then I'm going to talk on the return on invested capital.
Hi, Karen. Thanks for your questions. It's always hard to predict the future. It's increasingly harder to tell you the truth. But what we can say is that the year of 2024 started a bit more lukewarm than expected, but the second half really started to pick up. The third quarter, you saw the numbers were very good. Fourth quarter is starting more or less at the same pace, and we believe that 2025 is going to continue so. I see no reasons for us to have a change in prospects. So we are very optimistic about 2025, thinking about the economy as a whole. JSL, these, you know, complementation of contracts, this addition of contracts, as we say, is really important for growth.
Remember that we closed 2023 with BRL 4 billion contracts. In 2024, we are already at BRL 4.5 billion in nine months, so it's still three months to go in the last quarter. Very important backlog, and these guarantee our future revenues. Again, dedicated operations, take and pay contracts, so it gives us a growth that is almost assured, so it's the two things together in an economy that is thriving in the segments in which we are present, plus the contract signing shows that 2025 should be very good to us. Okay?
And this is Guilherme speaking, Karen. I'm going to talk a bit about what we are expecting in terms of return on invested capital. Two very important points. Perhaps one of the things Ramon and myself must focus on, which is pricing discipline.
So to make sure that we are bringing in good revenues with the right profitability and the right capital required for each project. Also, we have some internal initiatives to improve our working capital, which somehow has to do with working with suppliers, receivables to really target at an optimal working capital to have levers to improve our balance sheet structure. Certainly, the exposure of operating margins. We are always trying to correct projects that are off track faster to ensure that we'll always keep margins or even improve margins constantly. And also dilution due to our scale. This is very important. A company that grows at this pace, we have to take efficiency from our SG&A, and that helps us to bring better returns to the company and capital invested.
That is to have assets deployed faster, retire assets faster from our balance sheet because this flow will help us to have a better balance sheet structure and therefore better return on invested capital. So five levers, and for each one of them, we have a set of initiatives to address. Okay? Next question. Next question comes from Pedro Mattos from HSI. Some questions. BRL 2.2 billion in contracts added for 64 months correspond to a monthly additional revenues of BRL 34 million. Considering the average invested capital from 11%-13% of monthly revenues, should we expect an expansion of CapEx between BRL 206 million and BRL 310 million to make these contracts feasible, or is there a difference in the need or timing of CapEx for these contracts? Second, any target in terms of indebtedness for JSL for you to reach the intended leverage?
Third, if you can talk a bit more inorganic growth opportunities for the new cycle of increased interest rates, and if you intend to have a JSL Day in 2024. Okay, I'm going to start with new contracts vis-à-vis our CapEx. Pedro.
The answer is no. We do not expect a CapEx level of BRL 300 million in the fourth quarter. Your calculation is correct, historically speaking, but the profile of contracts closed in recent months will not require that because there are lots of contracts that are asset-light, so they will not demand this amount of CapEx. So the CapEx expectation is much closer to the numbers of the third quarter than the second quarter. Second question. Target in terms of indebtedness level. Well, we are very much focused on leverage ratio. We do not have a number to give you.
We do not provide any guidance, but we expect to deleverage the company continuously over the coming quarters. The other question. Third question. Just a comment about deleveraging. If you can break down how you can reach the objective. Cash generation is our main trump. Someone made a comment the other day. This is the first quarter that we are reducing net debt since the IPO. This is important and shows the strength of our cash generation. Undoubtedly, cash generation will be the leading driver. Ramon is going to talk about inorganic growth, and then I'm going to talk about the JSL Day. Inorganic growth. One important thing is that we do not have a specific strategy for the acquisition of companies. As a fund, for example. We run our business as if there were no acquisitions.
Our budget for 2025, we are negotiating with the board of directors, does not take into consideration acquisitions. And our objective, as we have been saying since the IPO, is accelerated growth in joint opportunities that the market brings. In a scenario we already talked about, high interest rates, and etc. Inorganic growth sometimes is a shortcut for us to get to our objective of growth. Why do I say shortcut? Because in parallel to that, we have a board of directors within SIMPAR analyzing a large pipeline of companies that come up, and they start negotiations. If they find that company in the profile that we like, average revenues, great potential of growth within a segment that makes sense to our business, good management at a fair price, well, then you know it is a shortcut. A shortcut for us to reach growth and results.
But it is something that runs on a parallel road. We can have a match or not. The doors are always open. We continue with our pipeline that is completely active. As for JSL day, Guilherme, well, the idea is to have a JSL day. I don't think that we are going to hold an event this year, but we are considering some things. There are some subjects that when we are ready to announce as the digital JSL, which is an evolution of the work that we are developing with TruckPad and other issues that we are working internally, then we are going to schedule a meeting with investors to be able to give you more details on our projects and the specificities of each one of them. So it is in our radar. I don't know if it's going to be for 2024.
Our next question comes from Alicia Andre. I'm going to read your question, but I think I answered that. The question is, could you please comment on the pace of deleveraging expected by the company despite the increase of interest rates in Brazil? I think that we have already answered the questions. If not, just let us know. Okay? We are always here available for you.
Next question comes from Lucas from Soma Investimentos.
Good morning, everyone. Could you talk about the speed of deleveraging of the company, even looking into recent M&As and the buyback program? In addition, driving the Asset Light segment, is it a strategy that can drive deleveraging for 2025?
Well, I'm going to start, and perhaps Ramon can add to that.
When we're looking to M&As, and we had eight M&As in the last three years, none put our leverage into check based on the M&A itself. Given the cash flow of the company's structure, the growth of these companies after acquisitions, they did benefit our leverage ratio and not pressure it. When we think of acquisitions today, we are talking about a company that is much larger. An acquisition of 100 million EBITDA, if you think of our EBITDA in the quarter, you're talking about 5%-7% of JSL's consolidated EBITDA, so the impact of an acquisition in our leverage ratio today is even lower because it is diluted by the size of the company. The buyback program, I already talked about that, so today, the buyback program is not something that I see as a pressure to our leverage ratio.
Ramon can talk about growth in asset light.
Hi, Lucas. Our strategy for growth in asset light and asset-heavy operations has nothing to do with leverage ratio. It has to do with operational results, if it makes sense for the company. We like both asset-light and asset-heavy operations. These are just different in asset-heavy. I have more investments. I pressure leverage ratios, but I have long-term contracts. I have certainty of revenues. I have resilience in economic fluctuations. The entry barrier is much higher. So there is a series of things that are appealing to us if you can close the project with the right margins. Asset light, the advantage is that you do not pressure leverage ratio, but it is, you know, a much lower entry barrier.
so we have, you know, to pay attention to where we want to go, which segments, and this is done in a thorough analysis. You cannot just think about leverage ratios.
Hi, Lucas. I hope we have answered your questions. Otherwise, we are always here for a follow-up. A final question from Pedro Ferreira that I'm going to ask, but the objective of the JSL day can perhaps bring more light to that, but this is a question on innovation. What innovations is JSL adopting that can be shared? I'm going to mention some. Ramon, you can too. How do we face innovation? You have technology-based innovation, so new tools, new technologies to improve the business, but one thing that we are always concerned about is improving processes, using innovation to do different and to address critical issues, and I'll give you some examples. Ramon can give you others.
And certainly, this is a topic that we could explore in a meeting such as the JSL day. So today, we have a large warehousing operation. 13% of revenues come from warehouses. When you talk about intralogistics in dedicated operations, also a high value. So bring tools that will enable us to use less labor and more efficiency to our customers is paramount. So how can I put it? We have a large work front to improve WMS, which is our warehousing system. We have been using and testing AI tools in specific topics. That is communication with truckers, freight analysis, freight price analysis, comparing prices in asset light based on the dynamics of the months, maintenance services, how we can tune up trucks in a more preventive than corrective way. How do we plan maintenance services? So we are always using things in a pragmatic manner.
This is part of our culture. We don't like technology per se. We want to use technology to address a business issue. That's important, and another size of innovation that perhaps Ramon can mention, which is a program that he sponsors, which is very nice. We have a challenge of increasingly bringing people, professionals to work in some positions in our company. We have to be differentiating and attract talent. We already have 35,000 direct employees, but we created a program called Women on the Wheel, which was unthinkable a few years ago, but today it's a hit. In terms of technology, it seems that is not something that is innovation, but it is a different way of attracting and retaining talent and also increase the base of people that can be hired.
Ramon, I think you did very well, but I would like to add three points to technology that I think are very important. This is a topic that we evolved a lot through technology, which is safety. We reduced accidents or severe accidents by 80%. We run almost a billion kilometers a year, so it is clear to see the number of JSL trucks on the roads, and we reduced accidents highly through safety tools. We have fatigue systems. I can control if it is an aggressive driver or not with risk brakes if the vehicle is coming out of the curve. We use technology to verify if the driver is apt to drive the truck, so that, to me, is perhaps the greatest advantage of technology.
We are saving lives, not only of our own people, but also third parties involved in accidents.
Another variant of technology that Guilherme did mention. We are now implementing a software technology in a large warehouse. We worked with lots of people, and the idea is to reduce the need for basic labor, and with that, the technology is paid up into two and a half years, so it's what Guilherme said. It's not technology per se, but technology that brings benefits to the business, and another variable, and this is something that we are really better on, and it has to do with Lucas' question on asset light. If asset light has less entry barriers and less margins and more players, how can I set apart? Technology is the answer. We are very close to launch our Digital JSL system, which will connect customers and JSL digitally with the need of less people, less processes, and therefore less costs in rates that are possible, especially commodities.
And with that, we are going to be able to work with lower margins at a lower cost, with benefits to my customers, increasing revenues in asset light through technology with the right profitability. So I think these are the lines we are working with. But Pedro, undoubtedly, this is one of the major topics that we want to explore in an interaction with investors in person. That is our next JSL day. Just to close the topic, technology is huge, but one topic that is very important is not only for us, but for everyone. The world, in recent years, invested in technology. Perhaps we have even an excess of technology, but it's focused on a loop. JSL has technology, customers have technology, and customers have technology, but not really connected. That is, technologies are not necessarily talking to one another because that's not simple to connect systems.
With AI, that becomes more and more possible. So I think that perhaps the next leap for the coming years is to put together things. To give you a simple example, in logistics, you have Uber. What has Uber done differently? It puts together the cell phone technology and demand, and it changed the way that society behaves in the world. This is disruption. So bringing the small example to our world, you know, this is what I believe in. When we can connect, of course, it is more difficult than Uber. Uber is a B2C, a C2C, but when we can do that on B2B, we'll really transform the business. Well, that's it, everyone. Thanks very much for attending. I will turn back to the operator so that we can see if we have any final questions before we close.
The Q&A session is now closed.
We'll now turn to Mr. Ramon Alcaraz to make the company's closing remarks.
Well, ladies and gentlemen, first of all, thank you for your attention, your questions. It's always an opportunity for us to talk about topics that we missed in our summary. Technology is one of them, so it's always good to talk about our strategy. I'd like to highlight the points that we talked about. That is our capacity to grow, even already being the largest in the market. We are growing at two digits. We are mentioned 18%. In services, this is so important to say, in services executed in the most varied segments and sectors of the economy. It's the only company that can do that. We have competition in several sectors, but we do not have competition in all sectors.
So I think that is the greatest differentiator, and together with our people, our capacity to make people do things in several segments with excellence. This is what I believe in, and this is what we bet on. We are very pleased with the results of the third quarter. We believe that the coming quarters will follow the same trends. So not only Guilherme, myself, but all this wonderful team is really engaged in improving all the opportunities, in drawing all the opportunities that the market throws. We are decreasing our leverage ratios. These are questions that you always ask. And we have been showing indication that this is actually happening. We are going to new segments. This is another important thing to say. E-commerce, for instance, which is an important channel of economy and is growing.
We have that not only with FSJ, which is an acquired company that was more specialized in the segment, but we have contracts closed with JSL itself, Fadel, that just started last mile in the last month, already taking part in Black Friday with dedicated services. Tons of opportunities. We are going into the most diverse segment. We closed a very important contract with chemicals, already expanding the segment. We are always looking into opportunities, not to miss them, always managing costs and focusing on efficiency because this is how we believe we are going to be more and more competitive with the right margins and lower leverage. That's it. We believe that this is what is going on. We have been saying that since the IPO, and we have been delivering what you're saying.
I would like to draw the attention of those who did not see that. EBITDA BRL 460 million is higher than the whole of the year of the IPO. So at the time of IPO, we had EBITDA of BRL 400 million in the year. In this quarter, we had BRL 466 million, which proves we are on the right path. You hear me? I think that's it, Ramon.
One thing that is always worth noting, given the macroeconomic scenario, especially with interest rates, is that our focus is to keep the company return on invested capital healthy. We already have a very interesting spread today. We want to keep it. And remember, this is a company that is growing. This is a company that continues at accelerated growth. And undoubtedly, you should all pay attention to our pace of growth and capacity to keep profitability even beyond whatever interest curve is coming.
That would be my final comment. Thank you very much. Have a good day. And if you have any further questions, just contact us.
Thank you, everyone. JSL's conference call is now closed. We thank you very much for joining us and wish you a good day.