Good morning, everyone. Welcome to Marcopolo's conference call to discuss the results for the first quarter 2026. Today's presentation and remarks will be delivered by Mr. André Armaganijan, CEO, Pablo Motta, CFO and Investor Relations Officer, and Eduardo Willrich, Legal and Investor Relations Manager. Please note that simultaneous interpretation is available on this call. Click on the interpretation button at the bottom of your screen and select English. This conference is being recorded and will be made available on the company's investor relations website, ri.marcopolo.com.br, along with the presentation materials shared today. All participants will be in listen-only modes during the presentation. After that, we'll begin the Q&A session, at which point, further instructions will be provided.
Before we proceed, we would like to remind you that any forward-looking statements made during this call are based on Marcopolo's management's current beliefs and assumptions, and on information currently available to the company. These statements involve risks and uncertainties as they relate to future events, and therefore, depend on circumstances that may or may not occur. Investors, analysts, and journalists should be aware that a number of factors related to the macroeconomic environment, the industry, and other relevant conditions could cause actual results to differ from those in the forward-looking statements. We'll now begin the presentation by turning the floor over to Mr. Pablo Motta. Mr. Motta.
Good morning, everyone. We would like to thank everyone for joining Marcopolo's first quarter 2026 earnings conference call. Let's move to slide four, where we'll begin with the highlights.
In the first quarter of 2026, Marcopolo reported consolidated net revenue of BRL 1.65 billion, with a strong contribution from our international operations, which totaled BRL 596 million, up 4.6% compared to the first quarter 2025. Return on invested capital reached 24.7%, while net income totaled BRL 264 million, an increase of 8.8% compared to the first quarter 2025. Let's now move to the next slide. During the quarter, Marcopolo's production for the Brazilian market declined by 5.1%, while production for exports from Brazil increased by 7.2%, and international operations had a decrease of 33.5%. First quarter of 2026 production was impacted by longer collective vacation periods in Brazil, which extended through January 1926 at two of our three plants in the country.
As of March, we began to see a normalization in production levels. Let's go to the next slide. In the first quarter of 2026, net revenue generated from operations in Brazil totaled approximately BRL 900 million or 54.4% of the total. External operations, including exports and international operations per se, reached BRL 755 million, accounting for the remaining 45.6% of revenues. Across segments, we saw a balanced distribution between coach buses with great exposure to the Brazilian market, exports, and Argentina, and the city bus segment was more focused on deliveries in Brazil and Australia. During the quarter, Marcopolo Australia reported net revenue of BRL 372 million, an increase of 68% compared to the first quarter 2025. Let's move on to the next slide.
Consolidated gross profit in 1Q 2026 totaled BRL 373 million, with gross margin of 22.6%. The decline in volumes and revenue explains the slight reduction in gross profit and gross margin during the quarter. EBITDA totaled BRL 304 million in the quarter, with a margin of 18.4% compared to EBITDA of BRL 262 million, a margin of 15.6% in 1Q 2025. In 1Q 2026, EBITDA was positively impacted by a non-recurring effect of about BRL 45 million related to the reverse or a part of the warranty provision recorded by our Canadian affiliate, NFI. Excluding this non-recurring effect, EBITDA and EBITDA margin would have been BRL 259.8 million and 15.7% respectively.
Consolidated net income in 1Q 2026 was BRL 264 million with a margin of 16% compared to BRL 243 million and margin of 14.5% in 1Q 2025. Turn the call over to André, who will discuss the market environment and outlook for the remainder of the year.
Thanks, Pablo. Good morning, everyone. We start talking about the city coach buses that show the retraction in volume, but a better mix in the internal market in 1Q 2026, with models of more added value. Gaining mix compared to 2025. Based on our backlog, we see volume should grow as of the second quarter because of the natural seasonality of the segment. As for city buses, we started 2026 a bit more challenging against the expectation we had for the year of higher growth.
In terms of pass-through of costs, from operators, especially because of increasing diesel prices, is gaining more and more relevance. For micro and Volare buses, Marcopolo delivered 564 micro and 170 Volares to the Caminho da Escola program in this quarter related to the beginning of 2023. The Ministry of Health received 242 micro buses, and in the Ministry of Health, delivery should increase in the second quarter. We are going to the next slide. In international operations, we see a mixed performance in the beginning of 2026. Volgren, as Pablo mentioned, it starts to have exceptional results with expansion in revenue and profitability in the quarter based on a solid order backlog and a good mix. The expectation continues positive for our operation in Australia. Metalsur, we see a retraction of production and deliveries as we have already mentioned since the fourth quarter of 2025.
High interest rates reduce the appetite of clients and decelerates the wave of renewal that started in the fourth quarter 2024. Polomex, we see a deterioration of the local market that suffers with the abrupt decline of sales and interest from renewals from clients in 2025. A very small recovery is expected for 2026 in specific orders. Even with a drop in volume, MASA continues to evolve its results and have a better delivery mix. One of the main highlights for the beginning of the year was the recovery of operating results from New Flyer, which contributed to the results of the first quarter significantly. Let's go to the next slide. In a more challenging geopolitical and macroeconomic environment, we remain paying attention to the impacts of FX and the cost dynamics in our results.
Our order backlog allows us to project an improvement compared to the first quarter, supported by the natural seasonality of our market and also the deliveries to the Ministry of Health and the renewal of orders under the Caminho da Escola program. Phase 13 bidding process of Caminho da Escola, we are pleased with the outcome, which qualifies us to deliver directly or indirectly up to 7,210 units, including 6,020 Volare units, 22,220 city buses, and 4,370 micro buses. This represents a 97% market share in the program, a significant achievement, and I thank the team for that. Now we are going to move on to the Q&A session.
Thank you. We'll now begin the Q&A session. If you would like to ask a question, please click the Raise Hand icon at the bottom of your screen. Please wait while we collect the questions.
Our first question comes from Gabriel Tinem from Santander. Mr. Tinem, your mic is clear.
Good morning. Thanks for taking my questions. My first question is for coach buses. If you could talk a bit about the segment in this quarter, it seems that you had a slightly heavier mix compared to the last year. I would like to understand your projections for the next quarter and the remainder of the year, and also the portfolio you mix, and if you really see an increase in appetite from operators. A second question, more related to government orders from the Ministry of Health and Caminho da Escola that you were recently awarded with a 97% share. Could you talk a bit more about how this works with the competition of plants in Brazil, both for micro and also city buses? Thank you very much.
Hi, Gabriel. Thanks for your question. Starting with coach buses. Well, we first have been talking about the need for fleet renewal, which is a topic that should foster new purchases and demand for the coming years. The average Brazilian fleet in coach buses is very outdated, so that generates opportunities in renewal. What we saw last year was the sales of coach buses is starting with light buses, more chartered buses and to heavier buses more towards double deck. Towards the year we did see this movement going on.
Okay, Gabriel, moving on. While André reconnects, talking about the coach buses segment, as André's mentioned, demand continues quite repressed in this segment.
I believe operators indeed see the current moment as an opportunity, given that the cost of airfares is even a more important issue in terms of price adjustments. Reflexes of the war did impact to the air segment even more than the bus segment, given the adjustments and increases in fuel prices. There is something that we still have to look into, which is the financing from the government. We see a higher demand for the fleet's demand, especially because of high costs of FINAME, but now with the inclusion of buses that can bring an opportunity for operators to make purchases at a better cost. This is important.
This is a segment that again, still needs to renew its fleet in a more material way, and the opportunity is that this can come true with a more reduced financial cost. As for the Caminho da Escola program and the orders from the Ministry of Health, again, going on, continue what we said, we see that our planned capacity and the something we mentioned before. In city buses, we are delivering this year an actual number below our expectations with regards to fleet renewing the segment. We do see a difficulty that operators are having to be able to pass through costs in their contracts and have better financial, economic, sustainability.
Therefore, in this context, we are enjoying this possibility that is not being filled by city buses to provide for this need with the residual amounts of phase 12 of Caminho da Escola that we were awarded in the end of 2025. Also, with the Ministry of Health, since we have about 1,500 buses to deliver until the close of the first half of the year. Carrying on, considering everything that we mentioned before in terms of bidding processes, we believe we are going to have an installed capacity that will enable us with not a recovery that was expected in city buses, but a possibility of recovering our planned capacity during the second quarter.
We have to await the segment to really recover along 2027, so that we can understand how we're going to deal with capacity, and it, at some point, will have to revisit the number of buses produced today. But in the installed capacity we have today, we believe the demand that is not being materialized in city buses is giving us room for a more structured production of buses to Caminho da Escola and the Ministry of Health.
Very clear. Thank you very much. Have a good day.
Our next question comes from Lucas Marquiori from BTG Pactual. Mr. Marquiori?
Thanks, everyone. Good morning. I have two questions. Pablo, you did mention the Move Brasil program, finance incentives. Could you talk a bit about the characteristics of this financing? What are the conditions for operators to access credit?
How more competitive it is compared to the financing lines or credit lines we have in the market, just to understand if there is a real move in demand. Second question is to understand your take on the beginning of this year, especially the export market to Argentina. There was an expectation of strong volumes for this market this year, and I would like to understand if that's a weakness on their side, on the side of the Argentinian economy, or if there is an FX, in fact, reducing your competitiveness. To understand this lower numbers for exports to Argentina.
Excellent questions, Lucas. Talking about Move Brasil. Move is a program that has an operational scenario, at least, very similar to FINAME credit lines.
It's a line operated by the BNDES, providing resources to agents to help their clients with purchases. The greatest thing here is competitiveness in terms of rates. Today we're selling our products with a FINAME program of 19%-21% a year in Move Brasil. Here I'm talking about phase one, which is the phase that was exclusive for trucks. In phase two, the National Monetary Council is still to publish the standards. Thinking about the speech of the president and other ministers in the announcements, conditions should not be different, perhaps even better than phase one. At least that was our understanding of the government speech.
In phase one, the financial costs for operators was between 13%-14% a year, a significant reduction of 7 to 8 percentage points in financial costs a year for the financing of new products. If operators write off a bus with more than 20 years of use, they might have even further cost reductions, almost 1.5 percentage points below the 13, 14 I mentioned. That brings the level of financing costs to a much more competitive level than what we had so far. I think another important point is the resources of BRL 21.2 billion in the whole line, encompassing buses, truckers, trucks, and road equipment. BRL 2 billion exclusive for buses, which somehow enables customers to close their deals in the coming days. About Argentina, what we see is the following.
The scenario in Argentina is a market recovery scenario. When we compare Argentina to the Brazilian scenario before the Real Plan, when Brazil had a major adjustment in economic policies, we see Argentina is having some monetary, tax, and FX stability, which is a good foundation to start delivering value in the mid-long term. What we see is a credit scenario that is still very restrictive. This is also something we expected in a country that is starting to go back to see things in the mid-long term. Customers did have a significant renewal with their own resources, and along this quarter, interest rates are still high but are moving to a more suitable level for customers to consider renew, and local banks are starting to talk to customers to grant credit for mid-long-term purchases.
It's still a moment for credit stabilization in Argentina for us to really go back seeing significant renewal volumes. This is something that we understand is part of the restructuring the company's going through, as it happened in Brazil before the Real Plan. As of then, we saw that in Brazil we had a much more stable credit scenario. That's what we expect for Argentina as well.
Thank you very much. Have a good day.
Our next question comes from Lucas Laghi from XP. Mr. Laghi, your mic is clear.
Hello, good morning, everyone. Thanks for taking my questions. I have two.
You did mention a bit about inflation in the end of the day because you have jet fuels prices impacting your companies, diesel impacting the profitability of fleet owners. Also the increase of inputs, steel, aluminum, electronic, electric components. I would like to understand within this context what is the NDA of all that. On the one side, we have the perception that Marcopolo is a player that hedges itself against future inflation. How do you see your portfolio today vis-a-vis this possible inflation impact on inputs? What is the capacity of passing through prices that you have today with your clients? In the current scenario, do clients accept any price increases because of the inflation pressure that we see on also bus bodies as well?
Just to try and understand if what I'm saying makes sense and what's your capacity to pass through costs. The second point, just to understand, especially México with the decline in production, what is related to market if there was a one-off effect, downtime, something that we haven't mapped, or was it just the market? Just for us to understand the outlook for México. These two questions. Thank you very much.
Thanks, Lucas. Thanks for your questions. I will start with inflation. When we look into the effect, as I did mention, we do have a positive impact on the coach buses segment.
Indeed, the increase of jet fuel prices was higher than diesel prices increases for the coach bus segment, and that brings higher pressure to air fares compared to bus fares. I think this effect first brings us higher potential demand in terms of number of passengers for the coach bus segment compared to the air segment. In city buses, and we did mention that before, the inflation pressure of diesel prices brings higher challenges for operators that were trying to have a financial economic balancing contract. Now, in addition to seeking adjustments relative to the inflation of the past, they have this additional pressure of this moment because of an increase in diesel prices.
In city buses, there is a higher challenge, and it is what I mentioned, that there is more room for us to occupy because of the biddings that we were awarded. If we consider the whole context, thinking from the viewpoint of our supply chain and all inflation that we have had in purchases, I think the fact that Marcopolo has a more adjusted portfolio today, especially when you talk about Brazil, we have a portfolio of two to three months, our backlog. That enables us to work with adjusted prices. We are keeping the pass-through of inflation impacts on our costs in the products that we sell.
Within Caminho da Escola or other bidding processes, we have already worked with a stress scenario in terms of inputs, at least for the first year of the contract, knowing it that in an eventual renewal of contracts for another year, we do have another possibility of adjusting prices. Again, within the context of our business, if we consider inflation impacts, we are relatively covered passing on prices to our processes. Mexico? Oh, yes. André is in a different connection. He wanted to talk about Mexico, but I will start.
The Mexican operation has suffered this first quarter, but it also suffers the consequence of tariff adjustments since Liberation Day when Trump created a tariff scenario that brought impacts to those companies that sold buses to the U.S. from foundations that were built in Mexico. Indeed, many investments that were being executed in Mexico or that were planned to be executed in Mexico were delayed and/or even stopped. The Mexican economy is being affected substantially in terms of CapEx, and when that becomes materialized, we see less mobility and less demand for fleet renewals. Okay. For now, what we see is a very challenging scenario, again, because of a lower volume of investments that were made in Mexico and a lower demand from our customers. André?
Yes, just to add, and thanks, Lucas, for your question. And thanks, Pablo. Pablo did mention that the market's quite retracted. If you take a look at the numbers for 2025, the closing of industries, numbers were very close to what we had in the pandemic. I was in Mexico in the beginning of the year. You hear the uncertainty much because of the relationship with the U.S. and tariffs and any impacts that might, that they might have. On the other side, we start to see some sales in the coach bus segment. Remember, it's smaller. You have several of our competitors closing good deals in the beginning of the year, and now we are seeing some deal closings on the side of Marcopolo.
That's why in the release we did mention that we have some sales taking place. There is still a maturing process of G8, our product launch in the market. The market is being very much affected. It should be a tight market for Mexico, a tough beginning. This is a time in which we are developing new products in G8 that was launched, also cars that we are planning for the American market. Within our international operations is the one that is most suffering in a macro scenario. We see that when the market goes back to the levels of 2023, 2024, we are going to have higher relevance in terms of deliveries to the country.
Very clear. Thank you very much, André, Pablo. Have a good day.
Our next question comes from Kiepher Kennedy from Citigroup. Mr. Kennedy.
Good morning. Just a quick follow-up about the Caminho da Escola program. On last 14, the company was awarded the phase 13. If I'm not mistaken, there was still a batch of 2,000 units. Next week we are going to complete the 30 days. I think you're going to have the certification of the auction. Do you have any update with regards to this last batch? Is it something that you think is going to be announced by next week? That would lead the company to an award of 100% of the bid. The second thing, we did see a decline in market share in terms of production this first quarter compared to the first quarter last year. Could you give us an update?
You talked about a longer downtime because of the collective vacation. You had a higher drop in market share than the competition. I would like to understand the market share retraction. Thank you very much.
Okay, thanks for your question. This is Eduardo speaking. Caminho da Escola. The legal period for certification is 60 days, so we still have some time. The process is moving on naturally. All the models possible to be won. All our models have been certified in the Caminho da Escola program. The process is moving as expected. Remember that Marcopolo indirectly was already the winner of this remaining batch. We don't think there should be a change there.
What could happen is a change on the decision that was already made and that indirectly awards Marcopolo. If there is no change, Marcopolo will continue also with the 2,000 additional units. We are working on certification, and we do not see a reason not to be the winner of this 2,000 units. This is our view, and we remain with the batch of 7,900 unit as mentioned. Everything running as expected.
Just to add to what Eduardo mentioned, I would like to congratulate the team on the results. Really fantastic. The number in terms of sales to Caminho da Escola will certainly help us in the second half of the year, first half of next year, and then we have to try and renew the package. That can be very positive for the company.
I thank the whole team for the good work and success of the program. About market share, this is a fact. We did lose market share a long time. If you take a look at the downtime in the beginning of the year, yes, that had an impact. The Ana Rech operation where we produce our coach buses resumed January 19th, which is late. You do miss a lot of volume, but we see that coach buses will gradually recover share. We see that clearly in our plant when we start to increase the number of units produced by day, we should have a recovery. Microbuses will naturally pick up with the Volare sales. We are leader where we operate, and also the sales to the Ministry of Health and Caminho da Escola.
The segment that is tighter, I would say, is city buses, which is important because the costs increase, there are no renewals. Operators are waiting for subsidies, and that affects the company because you have an industry with a huge capacity to produce but lower demand. This is a segment in which we did see a relevant loss. As Pablo mentioned, we are changing much of this production for what is happening, which is the microbuses, but we do see a drop. Now we have to use this credit programs to work with our clients and recover the segment. We see this clearly happened with coach microbuses and a bit harder in the city bus segment.
Very clear. Thank you very much.
Next question comes from Gabriel Rezende from Itaú BBA. Mr. Rezende.
Hi, André, Pablo, Edu. I'd like to go back to the discussion of margins. This quarter, when we exclude the equity line, there was a contraction year-over-year and even higher contraction quarter-over-quarter, which can be explained because of low seasonality, about 14%, and you were running at about 18%. I would like to understand what impacted the demand and should we expect this ex equity income close to 18%. I'm excluding a non-recurrent equity income, but also the amount that you booked in the first quarter. In the second point is still in margins. I did understand what you said. A disappointment in the city bus market is partially offset by numbers of units to the Ministry of Health and the Caminho da Escola.
Could you have a better margin of the segment because of these programs? Because these programs may have a margin that is above the company's consolidated margin. When you have more volumes for the Ministry of Health and Caminho da Escola and not city buses, you could have better margins. Is that correct? These are my two points.
Hi, Gabriel. Thanks for your questions. Well, in terms of margins, we do not see a reason not to pursue what we had since 2024. In terms of mix, we do see a good mix. When we compare to 2025, we even have a heavier mix with higher value added. The specific city bus segment, we see a growing volume in the Caminho da Escola program.
In the previous bids, we did not have the volumes we have now, and part of this volume is classified as city buses. When you put together the renewal of Caminho da Escola and the buses that are being delivered by Caminho da Escola and the Ministry of Health, we do have a good mix. We do not see any reason for us to review or change what we saw in 2024 and 2025. An interesting factor is exports, because then it is the company work to monitor of that. As Pablo mentioned before, talking about costs, we have to also have a constant pass-through to sales to the foreign market. This is what we are doing.
Discipline in all segments with city buses, micro buses, new bids, coach buses and exports, also passing through prices in dollar.
Thank you very much.
Our next question comes from Andressa Varotto from UBS. Ms. Varotto.
Hello, good morning. Thanks, André, Edu. I would like to approach your operations overseas. We did talk about them today, the drop in volume was quite substantial. It did draw our attention. I would like to know if there is any seasonal effect. You did talk about Mexico and Argentina, how do you see volumes for the coming quarters? Also revenues in Australia, do you think that these revenues offset at the other areas?
Also, I would like to know about FX impact and how do you think this will evolve along the year. Will deliveries to Australia continue? Did you have any other positive mix effect in overseas operations that you would like to mention? That's it. Thank you.
We're having a bit of a problem with connection. André did have some difficulties, but let me answer that. Thanks for your questions. Talking about international operations, I did talk about Argentina. This is a matter of customers assessing the better financial conditions in terms of credit availability for us to see the market coming back. It is a very significant repressed demand in Argentina. André talked about Mexico. I did mention that as well.
Out of our operations, perhaps, the México operation is the one that is the most challenging, considering the scenario of investments, all the tariffs. While we don't have more clarity between this agreement between Mexico, Canada and the U.S., the operation will have challenges to deliver value as we have delivered before. For Colombia, I think Colombia can be a positive effect in the coming months. We are resuming negotiations for the new bidding processes, which are very relevant to our operations. A significant renewal of the bus fleet. When we did have the acquisitions, we had an outlier delivery considering the day-to-day of the business. South Africa, we see a market with a demand that is still quite heated.
This quarter we are going to feel that a bit more because there are some clients that are delaying some purchases, we do not see an operation that will deliver less value. The market itself is effectively seeking renewals. China, this is a very small operation with some deliveries, especially to the Hong Kong and Australian markets. Talking about Australia, indeed this is the operation that is generating the greatest value this quarter. It is in a turnaround, a strong turnaround process that started in 2022. In 2023, we started to put together our backlog. 2024, we delivered results, it reached its peak in 2025, and now 2026 should not be any different.
We already have a quite structured backlog for Australia this year, already starting the year of 2027 indeed, considering bids that happen from time to time. That's what is very positive for the Australian operation is that now we have been able to go into other markets in the country. In the South Australian market, which is a market that we did not operate before, but in the last bids we were successful. Perhaps this is the main business for deliveries, at least this year. Australia should keep a very high level of revenues along the year, at least in the portfolio that we have today. We talk about FX. That may bring some effect in terms of consolidation of results, at least in each of the countries you operate.
We have been keeping our prices at the front end. What we see is that although at the consolidated level we control our results in Reais, we also control our results in each of the countries that we operate. I think that's the key point. The Brazilian Real appreciated compared to the U.S. dollar, also the other currencies of most of the countries in which we have investments, and also in the countries that we export to. Argentina is slightly different because of the price adjustment scenario that they are going through. In the other countries, we do see a very strong correlation to what's happening in Brazil. When we look into local currencies, we do not see a loss in value when we convert into U.S. dollars. In fact, we should have more U.S. dollars being consolidated.
Again, as we do not release guidance, this is a very short-term scenario considering what we saw in recent months, and this is what we are working with, at least internally.
Andressa, just to add to what Pablo mentioned, it's very interesting to see our market share position in our markets. With the exception of México, that we started with lower sales than the competition. In the other areas, we are keeping our market share. That shows that the beginning of the year is more aligned with the seasonality that we have in Brazil. Of course, we have TransMilenio, we have more sales packages. South Africa may be important to us, what we see is the maintenance of our market share a long time. Remember that in the post-pandemic, the volume was very low.
Several companies quit the market or were in a very bad financial situation. As the markets recovered, Marcopolo gained a room in international operations, and we have been able to keep the share a long time in the five of the six operations that we have. I'm excluding Mexico, we expect to recover along the year.
Thank you, Pablo and André. Very clear answers.
Our next question comes from Lucas Melotti from Safra. Mr. Melotti, your mic is clear.
Thanks for taking my questions. I have two. After a very tough 2025 in New Flyer, we did see a very positive recurring result. Could you give us some details about what to expect for the remaining of the year in this operation? Just as a follow-up in diesel prices, do you expect electric city buses gain momentum because of the increasing fuel?
That's my questions.
Hi, Lucas. Thanks for your question. I'm going to start with New Flyer. New Flyer did have a very positive quarter. Somehow we are following their releases and guidances, and what we see, at least the information we have, is that effectively the scenario for 2026 should be the beginning of the company's turnaround with a backlog that shows very good deals closed, an increase in profitability. Along the recent quarters, they have been able to increase prices. And the company also had internal changes, prioritizing execution. In the context, we see a healthier backlog, and the company focusing on restructuring itself to have less execution flaws. Therefore, we should see a New Flyer scenario more in line with what it represented in Marcopolo's results in the past.
What is important to highlight, and this is a comment made by the New Flyer management in the last release, the first quarter, within New Flyer seasonality was stronger than expected for the first quarter of 2026. This is a point for us to watch for us to understand the seasonality also happens there. Talking about EV, in practice, we do have a scenario, electrics have to do with the city buses when we talk about infrastructure, when we talk about contracts that have to be renegotiated with city administrations. It is a structured purchase that demands more subsidies and financial structuring, but this movement, we can observe in most city administrations is starting the discussion. Between discussions and materialization, there is a whole financial structuring that has to be organized.
We do not see an increase of diesel prices generating immediate demand for electric city buses. We do believe there is a natural flow in other countries, not only in Brazil, for new fuels. Here we are going to have to work on that. We have biodiesel-driven vehicles, ethanol, biomethane, all of them gain momentum and infrastructure for these buses to start being used. With the increase in diesel prices, perhaps we are going to have more discussions about new fuels. Not necessarily electric buses, but other fuels discussed by city administrations, and going back to Brazil in the restructuring of contracts and a more balanced economic financial scenario.
Very clear. Thank you very much.
Hi, Lucas. I'm just going to add to what Pablo said, because I think your question is very interesting.
This is an opportunity for us. What we see is that with electrification, because we are seeing every year the amount of electric buses is more than the previous year, but less than expected. This year we are seeing a search for diversification, biomethane, gas-driven buses, biodiesel, other fronts being developed. It is a window of opportunity for us. In Brazil, we are a, the largest, ethanol producer, biodiesel. I think for Marcopolo, a company that has diversified its portfolio in all kinds of fuels, is an opportunity. If you tell us if we are going to know exactly the volume of each fuel to be sold, we don't have that. We are prepared to have the different solutions, different fuels for whatever direction the market chooses.
Our presence in COP shows that the capacity of Brazilian industry to deliver what the market needs, available solutions that are quickly scalable. This is what we're doing. We have biomethane buses in the market. We are testing hybrid solutions. We are working with Chassis partners to have all solutions available. It is a window of opportunity, and you said it very well. The increase in diesel prices may be fuel for other solutions to be adopted by the market.
Very clear. Thank you very much.
Our next question comes from Marcelo Motta from JP Morgan. Mr. Motta?
I have two questions that you haven't approached so far. The first is capital structure. You still have low leverage. The expectation is to have a payout of 50% because of a higher select weaker market.
Are you considering having some changes in that working capital? I don't know. Do you see a possibility of increasing payout? CapEx was lower year-over-year. Nothing relevant, to understand if this is seasonality or if you want to be a bit more conservative in CapEx compared to last year.
Thanks for your question, Marcelo. Capital structure and our payout strategy, this is maintain the same rationale that we applied to until today, 50% payout. In this context we have today, this is what we have in line with our board. As for CapEx, we are keeping our level of investments in line with the BRL 350 million a year that we have been talking to you about.
In fact, the first quarter, it was a lower volume compared to last year, but that is just a matter of executional projects along the year. Throughout the year, we should see a number that is very similar to what we saw in the last two years in terms of investments.
Very clear. Thank you.
Marcopolo's Q&A session is now closed. We'll turn the call to Mr. Motta for his final remarks.
Thank you very much for joining us. Thanks for your trust. Remember, we are here together with IR team for any questions you might have. Thank you very much.
Marcopolo's conference call is now closed. We thank you very much for joining and wish you a good day