Good morning, and thank you for holding. Welcome to the earnings live for the third quarter of 2022 at Mills. I highlight that if you need simultaneous translation, that this tool is available on the platform. For that, simply click on the interpretation button on the globe item at the bottom of your screen and select the language of your preference, either Portuguese or English. For those who are listening to the conference in English, the option to mute original audio in Portuguese is by clicking Mute Original Audio. We inform that this conference call is being recorded and will be made available at the company's RI site, where the complete material of the earnings release is available. During the company's presentation, all participants will have their microphones off, and then we will start the session for questions and answers.
Note that the information contained in this presentation and statements that may be made during the conference call related to the company's perspectives and business, as well as projections, are forecasts based on the management's expectations regarding the future of Mills. Such forward-looking statements are not a guarantee of performance. They involve macroeconomic conditions, market risks, and other factors. I will turn the floor to Sérgio Kariya, Mills' CEO.
Good morning. We thank you for your presence in our earnings live for the third quarter of 2022. We begin this meeting reinforcing the message that we're very aware of our current position and where we want to get to. We celebrated this year 70 years since the company's foundation in August, and our history is a motive of pride.
We are a resilient company, both in the execution of our daily work and in the integration of new companies during this growth journey. We work in a company that is already a reference in the rental segment. We are the benchmark for elevating platforms and complete leaders in the rental of this type of equipment, holding 30% of market share in Brazil. It's also worth noting that in mid-2022, the Access 50 ranking published by Access International, a global reference in the industry, points Mills as the 24th largest elevating platform rental company in the world. We combine a robust capital structure with low indebtedness level, with a cash-generating operation. Strong financial points for us to move forward in our growth plans, as Carol will talk about next when assessing our results.
We are a listed company and have been for more than 10 years with a mature corporate governance process, a dedicated team, and experienced leadership in maintaining transparency and respect to our shareholders, employees, customers, and suppliers. Nova Mills has a robust base to consolidate the expanding market. The rental market is still very fragmented, with huge potential for growth. We started our activity in the heavy rental segment, combining Triengel's experience and relevant professionals in this industry for Mills to continue emphasizing its vocation for leadership. We also added to these points that the growth that we experience is planned and executed with discipline, without losing pace, to guarantee that our margins and returns remain attractive. As you see in our history, each of the M&As that we carried out has added learnings, know-how, and made us faster to harvest results from such investments.
Our operation is very well-structured to provide the best service as a light and heavy equipment rental provider, which sustains the ambition of being a one-stop shop company in rentals. Today, we are already partners of our more than 8,400 customers, improving security and efficiency of their activities and operations. Our expressive capillarity puts us close to various companies, and we have the appetite to serve many other Brazilian companies in all regions. Finally, it is clear that we have many drivers in our favor. Generation of value to shareholders and to other stakeholders is always in our horizon. With that said, we'll move on to the highlights of the period in the next slide.
For the highlights, I have the pleasure of announcing that our third quarter of 2022 registered a record net revenue at BRL 282 million and BRL 65 million of consolidated net profit. These numbers are 46% and 106% higher, respectively, in the year-on-year comparison. These figures reiterate our vision about the potential of the rental business in Brazil and gives us confidence in the strategy and execution capacity of our company and our team. The ROIC maintains at a high level above 20%, while adjusted EBITDA reached BRL 131 million at a margin of 46%. Considering the growth in our results, another highlight is the strong capital allocation of the company.
We have invested BRL 206 million this quarter. Representing an amount almost 13x higher than the amount registered in the third quarter of 2021. This value considers the acquisition of Triengel in the total amount of BRL 134 million, in addition to the BRL 72 million referring to the acquisition of equipment for rental, investments in technology, consumer goods and the adjustment of branches. In addition, we continue with our geographic expansion. Mills has reached the mark of 53 branches throughout Brazil, which strengthens the differential of being close to our customers, constantly seeking to increase penetration of the concept of machine and equipment rentals. Watchful of a greater profitability for our shareholders. As far as the company's share buyback program, we have acquired 1 million shares in the third quarter of 2022, with a financial disbursement of BRL 7 million.
There is still a balance of more than 9 million shares for us to buyback until September 2023. We confirm Mills' entry in the yellow line market with the conclusion of Triengel's acquisition on September 13th. We have already received and rented the first pieces of machine, and the revenues will bring results next year. As informed, we have executives dedicated to grow in this segment. The advantages of this movement are clear. The relevant addressable market, as we had already demonstrated, of more than BRL 25 billion. Disbursement in a process of consolidation. Diversification of a product portfolio which have commercial and/or operating synergies. A greater predictability of cash flow, due to what we seek in terms of long-term contract profile and the increase of exposure to more resilient segments in the economy.
I also point out that in October and November, two relevant banks have announced they will begin covering our shares, BTG Pactual and Itaú BBA, with target prices of BRL 18 and BRL 19 respectively. We have been working actively, seeking more exposure and an increase in liquidity as our growth plans continue to develop with responsibility, guarantee and quality in the service provided. We are prepared and optimistic to enjoy all of the opportunities ahead. To highlight our operational, economic and financial performance, we have also moved forward in our sustainability journey over the last three months. I have the pleasure of announcing many important accomplishments. For example, at the end of August, our employees certified us for the second consecutive time as one of the best places to work at through the assessment process of GPTW, Great Place to Work.
As a reflection of our commitment to increase the number of women in leadership positions by 2025, Mills was listed on the top 10 female leaderships ranking for the Teva Index, an indicator that maps women leaderships in companies around Brazil. We have launched a tool that fosters environmental sustainability in our business chain, our CO2 emission calculator. I reinforce that our team is a team who works together to meet the objectives, and that's why we celebrate another quarter of accomplishments today. I turn over to our CFO and IRO, Caroline Pepe, who'll present our financial results.
Good morning. Thank you, Kariya. Let's look at Mills' performance on the third quarter of 2022 as of slide six.
Starting this quarter, we report our rental fleet following the market practices in consolidated numbers, considering the total of pieces of machinery and equipment at the business unit, including light, platforms, generators, compressors or heavy, the Yellow Line equipment. In the last quarter, the fleet increased 475 in absolute numbers, exceeding the mark of 10,000 pieces of equipment, which replacement value is higher than BRL 3 billion. These numbers are a result of our organic and inorganic investments. In our schedule, we have more than BRL 600 million in contracted orders by the end of 2023, where approximately BRL 200 million are still for the fourth quarter of 2022, which shall add 800 pieces of equipment to our fleet. As the new equipment arrives, we will evaluate the equipment rental demand to determine the number of machines to sell in the secondary market.
The company works to maximize the machinery's life cycle, purchase, rental and sale. The prices practiced in the sale of elevating platforms or used elevating platforms corresponds today to 30%-35% of the value of a new asset with an average age of 12 years-15 years. In the case of Yellow Line, the equipment life cycle and the value of the sale depends greatly on the area of activity, hour meter and intensity of use. With that, we estimate sales values between 30%-60% of the replacement price of a machine and cycles between four years and 10 years. As announced by Valor Econômico in September, only federal projects already signed or auctioned as of 2019 for investment in infrastructure add approximately to BRL 925 billion for the next 10 years, according to the Ministry of Finance.
Mills is fully prepared to make the most of this long economic expansion cycle, participating in the development of Brazil, and we have available a robust fleet of equipment for rental, expertise in the management and maintenance of assets, as well as know-how to make this operation profitable. On slide seven, we present our rental revenue per segment of activity. Our revenue's diversified base guarantees greater resilience to negative impacts of economic cycles as we serve different sectors. In addition to the 33% of revenue originated with the construction industry, 14% are from customers in the steel works and metal works sector, 9% from chemical and petrochemical industry, 8% for service, and so on, as you can see on the chart.
The entry in the Yellow Line market will contribute to increase our share as well in these and other segments that are relevant in the economy, such as agribusiness and ports. In another perspective, we highlight that as we have a diverse base of customers, with the 20 largest customers representing 16% of revenue in this quarter and the five largest customers are responsible for only 7%. This makes us resilient to face economic cycles, as we don't depend on any single customer or industry. In addition, this pulverization of rental net revenue demonstrates the evolution of equipment rental activity, greater penetration of the concept of the use of platforms in Brazil, and the success of implementation of our diversification stage, strategy for the revenue and customer base.
On the following slides, we can see how the operational performance translates into the financial performance of this business unit. Net revenue at rental amounted to BRL 241 million, with significant growth at 43% compared to the third quarter of 2021. This increase is mainly explained by the higher rental revenue that increased 49% in this period. The increase of BRL 72 million in revenue was due to the increase of volume rented, a reflection of the increase in the size of the fleet and the higher usage rate, and the higher average ticket, especially due to price increase. The increase in rented volume is a result both of the increase of market share in places where Mills already worked and in the opening of new branches that reflect the company's strong growth strategy, seeking to maximize capital allocation.
It's important to note that the results of this quarter consider only one month of the heavy rental results, with the conclusion of an acquisition of 100% of Triengel and the arrival of the first pieces of equipment in the Yellow Line in September. Sales revenue in the third quarter of 2022 is in line with the values presented in the third quarter of 2021. In 3Q 2022, 121 semi-new light equipments were sold, compared to 140 units in the third quarter of 2021. In addition to the increase in the average sale price, there was also a difference in the mix of equipment impacting total revenue.
When compared to the previous quarter, net revenue in the third quarter of 2022 was up 11.9%, mostly due to 11.7% increase in the rental revenue and a higher sales revenue. The increase of 22.6% in sales revenue was due to the largest sale of semi-new equipment as a result of the arrival of new platforms for rental. Compared to the previous quarter, net revenue increased 12%, also due to the greater rental revenue and greater sales revenue, driven by the sale of semi-new machines. In the quarter, adjusted EBITDA amounted to BRL 113 million, an amount 53% higher than in the third quarter of 2021, and 12% higher when compared to the second quarter of 2022. EBITDA margin reached 47% with an annual increase of 3 percentage points.
On slide 10, we now move on to the units of formwork and shoring. The third quarter of 2022, net revenue was up 72% compared to the previous year, due to the higher revenue with rentals that increased 88% in this period as a result of the higher average tickets practiced and the higher rented volume. Compared to the previous quarter, net revenue expanded 28%, a result of a higher rental revenue that was 31% above the second quarter of 2022. Adjusted EBITDA at this business unit amounted to BRL 80 million, a value that is 207% larger than what was recorded in the third quarter of 2021. An EBITDA margin of 44% due to the increase in demand from the infrastructure segment.
As we said before, the company over the last few years has reduced its capacity in formwork and shoring, and the total weight of equipment at this business unit today is of about 51,000 tons. Mills has the capacity to meet the construction sector's growing demand, both through the supply of formwork and shoring used in major engineering works and in the rental of machines and equipment used in the different activities of the segment. Looking at the consolidated results on slide 12, we see that Nova Mills continues to grow at a fast pace in a profitable way, with significant advances at each quarter. Net revenue was 46% higher year-on-year, and 14% higher compared to the second quarter of 2022, amounting to BRL 282 million.
This increase in revenue is a result of our initiatives to reach higher and higher levels of results, expanding our customer base further and expanding Mills' activities around the country. We have already opened 13 branches this year, and we have more than 8,400 customers. Consolidated adjusted EBITDA amounted to BRL 131 million, 64% above the third quarter of 2021, with a margin of 46%, which demonstrates the continuous evolution of our profitability, also driving cash generation. On slide 13, we see the evolution of net income that increased 106% compared to the third quarter of 2021, totaling BRL 65 million in the period with a net margin of 23% compared to 16% of margin in the same period of the previous year.
In the second quarter of 2022, there was a writedown on the income tax and the surplus referring to the acquisition of SK Rental, causing the deferment of BRL 14 million in income tax in the period. This benefit has not impacted the third quarter of 2022. Therefore, if we exclude this benefit, the effective rate for the second quarter of 2022 would be 26%, in line with the 25% on the third quarter of 2022. In turn, net margin without the effect would be 19% in the second quarter of 2022 compared to 23% in the third quarter of 2022.
We remain a company with a strong cash generation capacity, registering adjusted operational cash flow of BRL 97 million in the quarter and BRL 76 million of adjusted free cash flow, impacted mostly by the disbursement referring to the payment of the Triengel acquisition. Our commitment is with an efficient operation and proactive financial management to generate increasing results and maximize return to our shareholders. We have a very well-defined strategy with a clear growth roadmap both in the organic path and inorganic path. On slide 14, we show the company's debt profile on September 30th, 2022. The average duration of our debt is 2.4 years, with a spread of 2.3% per year above CDI.
The first chart shows that net debt comes from a gross debt of BRL 478 million, where BRL 468 million is the principal with BRL 10 million referring to interest. Excluding our BRL 417 million in cash registered in the third quarter of 2022, we have a net debt position of BRL 61 million and indebtedness of 0.1x net debt over EBITDA. We have 21% of the debt planned for payment in the short term and 79% for payment in upwards of 12 months by 2027, according to the timeline you can see in the chart below. 85% of the debt refers to the three debentures issued in 2020 and 2022. As mentioned before, the company's efforts have been recognized and S&P rated the company with brAA- in August 2022.
Our strong balance sheet, a strong cash generation and financial responsibility have also enabled an improvement on Mills' rating as released by Fitch Ratings in September 2022, and it is now a higher level from it's A versus A-. The low level of indebtedness makes us comfortable and gives us opportunity to continue with our growth strategy, both organic and inorganic. We maintained our discipline in the capital structure management and are prepared to grow and make the most of the opportunities in the market. Finally, on slide 15, I would like to point out that the company's consolidated ROIC is at 23.2%, a value that is higher than our average cost of debt, showing resilience and profitability even in a scenario with high interest rates.
Our ROE was at 15.9% in the quarter, compared to 6% in the third quarter of 2021. Please note that the company presented growth of seventy-six percent in the value of its shares in the first nine months of 2022, and 110% until yesterday's market close, a result of the market's positive perception of the good businesses and good results released by the company in the last periods, and of what's to come in the future. To finalize, I would like to reinforce that we are a company that is constantly seeking to generate value towards its stakeholders through a business model that fosters sustainability through the use of asset optimization and efficient, profitable, and responsible operations. We remain motivated in our path towards becoming a one-stop shop rental company.
We already provide a wide range of machines and equipment, and keep a close eye on products, new products that can add synergy to our portfolio, always offering our customers operational excellence, reliability, and differentiated service. We remain available to our shareholders and investors, and reinforce our commitment with the delivery of positive results to all of those who believe in Mills. We're now available to clarify any of your doubts. Thank you.
We will now begin the questions and answer session. In order to ask a question, you can click on the Q&A icon at the bottom of the screen and write down your name, company, and language. Once announced, a request to activate your microphone will pop up on the screen, and that's when you turn your microphone on to ask questions, and your camera, if you'd like.
Our first question, Fernanda Recchia, Sell-side Analyst, BTG Pactual. Fernanda, we're going to enable your audio for you to ask your question. You may go ahead, please.
Good morning. Can you all hear me?
Good morning, Fernanda. We're hearing.
Thank you, and thank you for taking my question. Congratulations on the results. Two points that I'd like to talk about, first about Yellow Line. If you can tell us, we know you still have the 225% of organic CapEx. I understand it's not a representative share was done in Q3, so how much should we think about in terms of allocation in fourth quarter and first quarter of 2023? Thinking about coming years, how should we expect this recurrence of investments in Yellow Line? Could we assume a level close to BRL 400 million per year?
Does it make sense to think about an annual investment along these lines? The other question is about productivity. This quarter, you stopped releasing the usage rate. Trying to get a proxy for rental rate, what would be the average? We would use the revenue divided by replacement cost, getting to a level of 2.5% per month, and that remained flat, right? I'd like to understand how much of this flat performance was impacted by mix, especially Yellow Line, that I understand the yield is still slightly lower than the average you were achieving. Looking forward, what we should expect in terms of productivity. Thank you.
Thank you, Fernanda, for your questions. Let me start with the first one.
We have already started receiving some pieces of equipment in this fourth quarter of this year, but this equipment will start generating revenue in the first quarter of next year. Most of the investment made, BRL 235 million, will be received by the middle of next year. I would not expect a lot of revenue realized yet in the fourth quarter. We'll start in the first quarter of next year onwards. As for CapEx recurrence, we're not opening this information. Being conservative, we're only seeking long-term contracts. There's a lot of demand with the terms that are shorter than one year, so we're declining. We're focusing on long-term contracts. The idea is that as soon as we are more comfortable, allocated with all the pieces of equipment we acquired, we will seek new investments.
Then potentially, we may start opening some of the volume to the market of what we expect. At this time, we're not releasing this. As for productivity, I think your math is right. The rental rates, what you need to watch is that it's always based on gross revenue. I don't know if you looked at gross revenue or net revenue. What has been varying, the Triengel impact is very small at this time. We had half a month, just over half a month consolidated in our balance sheet. Effectively, when you look at our business, we have been increasing volume a lot, not only in the number of machines that we rent, but also our use is going up. I'd say rental rate prices remained practically stable.
There's a slight improvement upwards, there was no big impact from the second to the third quarter of 2022. Our expectation for next year is to continue transferring inflation adjustments as well as price increases, or if there is, in the case of elevating platforms, how this impact will be from the U.S. dollar. As I like to remind you, we always look at replacement prices, the prices we pay for at acquisition, not historical price. We adjust our pricing levels according to prices practiced in the market. We do expect a price adjustment for 2023. I think I answered it all right?
Yes, you did. Thank you. Have a good day.
Our next question, Luiz Capistrano, Sell-side Analyst, Itaú BBA. Luiz, we will enable your microphone for you to ask your question. Please go ahead.
Carol, Kariya, good morning.
Do you hear me?
Yes. Good morning, Luiz.
Excellent. Thank you for this opportunity. Congratulations on the results, they're quite strong. I have some doubts. To start with something straight to the point, specific and interesting information that Carol mentioned of 600 million orders of equipment by the end of the year. Can you say if those 225 of Yellow Line are part of the 600 or not? And the 600, do they also include more Yellow Line in addition to the 225? I understand that 225 was for the first quarter and 600 is longer, until 2023. So if you can give us more details, that'd be great. Another point is that you talked about this ambition of becoming a one-stop shop rental company, and that you're always looking at new products.
Of course, the company has just entered Yellow Line. There's still a way to start to ramp up in the segment, but what do you look at that would have a similar rationale with the Yellow Line that is a large, attractive market and that is a complement to your business? What types of other brands or machines you don't sell today that could fit into this description?
Okay, Luiz. I'll start answering your first question about the orders. Those BRL 600 million are orders we have contracted and will be delivered between this year and next year. For this year, we'll receive BRL 200 million in equipment, so that's about 800 pieces of equipment from our fleet, including both Yellow Line and elevating platforms. The second question, I'll take it.
Luiz, when you look at our portfolio, starting with lights, we have not only platforms, generators, compressors and lighting towers, we are expanding this portfolio as a whole. In heavy, there's adjacent areas that complement the Yellow Line equipment. Since we're seeking to enter the customers' intralogistics market, seeking longer term contracts, service provision in terms of, customers' production, other needs end up arising that are very close, for example, trucks or forklifts in some cases. It makes sense for us to look at it in the near future to extend the portfolio. In the long term, the idea is once we're within the customer's factory, we're inside, considering you have more than 8,400 customers, seeing what their main needs are, we'll be able to provide them with a complete product portfolio. That's always how we look at it.
We look at the core product, seek the adjacent products, what makes sense. With that, we increase our product portfolio.
Excellent, Kariya. Just a follow-up question. I understand that you see or you envision this expansion to trucks and forklifts, but I think there's no timeline, right? You have just entered in Yellow Line. You have a strong focus on that, right?
We're not saying it's a remote possibility that you would make any movement in these two products next year or not. Luiz, some of the pricing quotes that we're getting on the market, trucks are very integrated with Yellow Line. It's very close. The customer enters the market quoting equipment for, like, ground movements, Yellow Line equipment. In the majority of cases, they also quote trucks. We are participating on bids with different types of product lines.
Just to make it clear, this type of truck we're talking about is a highway truck for logistics, outbound logistics, or it's more specific on-site for mining?
Yes, Luiz, it's all inbound that we're seeking. It's these types of trucks. When you join Yellow Line, you also need a water truck, water tank trucks and other types of trucks that the customer ends up needing. We supply this fleet. You have this Yellow Line equipment and the trucks for the inbound logistics. We're not looking at anything outside of this. It's all to meet the needs of the core of the Yellow Line.
Excellent. Very clear. Thank you.
To ask a question, click on the Q&A icon at the bottom of your screen and write down your name, company, and language.
When announced, there will be a request to activate a microphone and you should turn your microphone on to ask questions, and your camera if you wish to. Our next question, Carlos Alberto, investor, TC. We will open your microphone so you can ask your question. Please go ahead.
Is it enabled?
Yes, Carlos, we can hear you.
Oh, it's a pleasure to be here with you as all quarters we meet. Now, I'd like to congratulate the company. The EBITDA was very expressive and this entry of Yellow Line as well. Now I have a bit of a more complex question. What do you see in terms of the next administration? How can that impact the company?
It's quite easy.
Yeah, always with an easy question, right?
Okay, Carlos, of course, we're watching.
There was some indication yesterday with Lula's speech, and I think there's a tax hike for us to look at in Brazil and how it's going to behave in terms of foreign exchange interest. Long-term interest rate went up yesterday, and this is very important and significant. Still, we're very optimistic. As Carol said about the auctions and concessions pipelines which have already been done, we have almost BRL 1 trillion to be invested in the country. Which will be the driver, that it will be very important to our business, the rental business in general, not only light equipment, but heavy as well. What we're seeking. When you look at the rental market itself, it has an opportunity in terms of penetration and consolidation that is not dependent on the government administration.
The cycle of equipment, considering the volumes and the market becoming more professionalized, various important players coming up to support customers in rental and outsourcing of fleets. It's always also going to be an important lever. We are optimistic with what we see for the future. Of course, cautious as regards to the tax policy and all the impacts or potential impacts in interest rates, foreign exchange rates, increase of the GDP and so on. Of course, we are paying attention.
Thank you for your answer. I think all of us, all investors. Can you hear me? All investors are a little apprehensive, but a lot of what it saw yesterday is just white noise. You saw it. This always comes so that there's with many billions and then it starts to dehydrate and reduce as our country usually sees.
We expect fiscal responsibility from the coming administration. Otherwise, there will be impacts in interest rates, foreign exchange, everything. I know for FX, the company is prepared today. The company bought equipment, the equipment is dollarized. Congratulations on your results, and we always expect a lot more from you. You're great. Thank you.
Next question, Pedro Martins, Buy-s ide Analyst. Pedro, we're going to enable your audio for you to ask your question. You may go ahead, please.
Good morning. Thank you for taking my question. Congratulations on the results. Carol, I just wanted to ask you about leverage with this CapEx. What can we expect in terms of leverage for next year? I think this year is quite clear with CapEx and everything, but for next year, what you expect to close the year in terms of leverage.
I know it depends on how you're going to accelerate the CapEx or not, but do you have a plan today? What can we expect? Thank you.
Pedro, thank you for your question. About leverage, I think we need to be cautious at this time. We have some uncertainties in terms of the political-economic scenario. Today, we have a comfortable balance and the company generates a lot of cash. We have an important expectation of cash generation for next year. This year has been relevant as well. We're going to use both sources, both funding and loans and our cash generation to be able to take on the following organic and inorganic opportunities that the market may come to present and that we may win. I don't imagine for the next year a high leverage scenario.
If I had to give you a number, I'd say we would not get to anything higher than two, maybe 1.5, in the net debt over EBITDA ratio, precisely due to the caution of this time, as well as our cash generation capacity.
Excellent. If I can add another question, combining it with the previous question about the macro scenario. Your M&A pace with us, that you're looking at a lot of things, for a long time. Are you going to take a break now to watch how the tech scenario is going to be, or is it independent and there's going to be room to breathe in the balance? Are you going to use this room to breathe and keep a limited leverage, or just wait and see what happens to decide whether to make bigger movements or smaller movements?
Well, Pedro, talking about M&A, we haven't stopped. We still have traction. We're talking to the market, looking at opportunities. Of course, we have to look at pricing of each one of these companies, considering the possible higher interest rates for the future. We see M&A, in many cases, as a lower risk somehow, because you acquire the company. Of course, there's all the challenge of integration. Since we have a very well-structured integration process, the post-merger integration, we see this risk as quite mitigated, and we make acquisitions of contracts that are already running. It's different from organic growth and increasing equipment with all the execution risk. We see this balance at this time where a little bit more of uncertainty.
It is more interesting to look at mergers and acquisitions, inorganic movements, especially on Yellow Line, that we're growing and learning more about the market. We're in the learning curve.
Excellent. Thank you again. Congratulations.
Next question, Eduardo Flores, UBS BB. We're going to enable your audio so you can ask your question. Eduardo, you may go ahead, please.
Good morning. Can you hear me? Good morning. Oh, it's a pleasure to be here with you. Congratulations on the results. A result of a financial and operational strategy that has been very well-developed. It's quite impressive to see the results you've been presenting. My question is about the synergies in this one-stop shop concept.
The entry of Yellow Line, combined with the fact that you have multiple points of sale, points of distribution, makes me think that within the one-stop-shop concept, maybe you could also expand rental, for example, for heavy vehicles or maybe even fleet management. How do you see this in the short- to medium-term horizon, considering that fleet management is a market that is becoming consolidated, it is up. If there may be interest from the company in this segment. Thank you.
Eduardo, thank you for your question. Let me talk about the synergies a little bit. We have 53 branches today, still opening four other branches by the end of the year. We'll finish the year with almost 60 addresses.
The idea of synergies with the heavies, it's over time to train and develop so that all branches have the capacity to provide maintenance for 100% of our fleet. We don't have that yet. We're in this learning curve process to train and prepare our technicians, our mechanics at the points. What we're already using is all this commercial strength, because in 100% of the locations, we have not only the technical team, not only mechanics, but commercial teams as well. We are already using this force. Synergy that maybe we've been talking a little less about with the formwork and shoring people as well. We have an extremely long-term relationship with 100% of construction development companies, and we're also using that to come closer with the Yellow Line equipment to the construction infrastructure market.
That's the idea. I don't know exactly what you mean about outsourcing or fleets. We're not focusing on cars. Yes, no, that was a little bit on this point. If you could maybe use this commercial force that you have in a one-stop-shop concept and not use customers to manage fleets. That would be cars, yes. Light vehicles or even heavy vehicles, a little bit closer to Yellow Line. Yes, heavy vehicles make sense. That's what we're looking at on the Yellow Line side. I'd say that in this space, we have a lot of room to continue growing and expanding. Diversification or diversifying too widely and too fast brings execution risk.
We are moving forward at a pace that we understand isn't conservative because we always seek to serve customers in a differentiated way, offering the best product, best service, best quality and uptime of equipment with premium equipment. Not offering price, offering quality. That's the difference we want to seek. Yes, using the branches for synergies, but in the adjacent areas. This first time with Yellow Line, we need to capture this synergy conversion and then the adjacent products to the Yellow Line.
Excellent. Thank you. Congratulations again.
Our next question is Maurício Patini, a Buy-side Analyst.
Congratulations on the results. The results of formwork and shoring have improved greatly this quarter. What are the perspectives for the segment? Thank you.
Maurício, thank you for your question. We're also obviously very optimistic with this unit.
As we said, the auctions/concessions that have already been realized amounting to almost BRL 1 trillion will pull not only light and heavy vehicles, but of course, formwork and shoring as well. We have been negotiating. I think in terms of a timeline, we go in way ahead or way before any infrastructure works with formwork and shoring. We participate in the design of the project execution, the drawing or the outline of the design. We help the customer solve that. Then later, maybe the Yellow Line and trucks will go in, elevating platforms, generators, compressors. We're participating in many discussions with customers for these infrastructure works. Our contracted backlog today for formwork and shoring is very robust. As you can also see, the price is being adjusted.
It was quite compressed in 2014 until recently, but now we're starting to rebalance this business economically. Also a result of the new prices of steel, aluminum, that obviously affect our equipment. We've been increasing prices a lot, and this will be harvested in coming quarters, as well as the volume expansion. Our formwork and shoring business is still compressed in terms of use because the heavier works in Brazil, and we have a lot of equipment for the construction of bridges and tunnels and so on, are still not occurring at a high volume. We expect that over coming years, this will start to converge and improve.
If there are no further questions, we close the Q&A session at this time. I would like to turn the floor to Mr. Sérgio Kariya for his final remarks. Please, you may go ahead.
Thank you everyone for your presence here at our third quarter 2022 earnings live. Our investor relations team will be available here. Thank you everyone. Have a good day.