Q2 2026 Dexco SA Earnings Call

August 6, 2026

Operator: Select English. You may also mute the original audio. We'd like to inform that during the presentation, all participants will have their microphones and cameras turned off, we will begin the questions and answers session when further instructions will be given. Before we continue, we would like to underscore that any statements about the future are based on the company's beliefs and assumptions and on information that is currently available to the managers. They may involve risks and uncertainties, since they refer to future events, therefore depend on circumstances that may or may not occur. Investors, analysts, and journalists should take into account that macroeconomic factors, industrial factors, and others may make these results differ materially from those expressed in these forward-looking statements. We have with us on this call the company's CEO, Raul Guaragna, and CFO, Luciana Raffaini, along with the investor relations team.

Speaker #1: Select English. You may also mute the original audio. We'd like to inform you that during the presentation, all participants will have their microphones and cameras turned off, and then we will begin the questions and answers session when further instructions will be given.

Operator 2: Bom dia, senhoras e senhores. Sejam muito bem-vindos à videoconferência da Dexco para discussão dos resultados referentes ao Q2 de 2026. Esta videoconferência está sendo gravada e o replay poderá ser acessado no site da companhia em ri.dex.co. A apresentação também está disponível para download. Esta chamada também está disponível em inglês. Para acessar, você pode pressionar o ícone de globo no canto inferior direito da tela do Zoom e depois optar por entrar na sala em inglês. Depois disso, selecione silenciar o áudio original. Informamos que durante a apresentação, todos os participantes estarão com a câmera e microfone desligados. Iniciaremos a sessão de perguntas e respostas, quando mais instruções serão fornecidas. Antes de prosseguir, aproveito para reforçar que as declarações prospectivas têm como base as crenças e suposições da administração da Dexco e as informações atuais disponíveis para a companhia.

Speaker #3: Bom dia, senhoras e senhores. Sejam bem-vindos à videoconferência da Dexco para discussão dos resultados referentes ao 2º trimestre de 2026. Esta videoconferência está sendo gravada e o replay poderá ser acessado no site da companhia.

Speaker #1: Before we continue, we would like to underscore that any statements about the future are based on the company's beliefs and assumptions, and on information that is currently available to the managers.

Speaker #3: Em re.dexco, a apresentação também está disponível para download. Esta chamada também está disponível em inglês. Para acessar, você pode pressionar o ícone de globo no canto inferior direito da tela do Zoom.

Speaker #1: They may involve risks and uncertainties, since they refer to future events. Which, therefore, depend on circumstances that may or may not occur. Investors, analysts, and journalists should take into account that macroeconomic factors, industrial factors, and other may make these results differ materially from those expressed in these forward-looking statements.

Operator: They may involve risks and uncertainties, since they refer to future events, therefore depend on circumstances that may or may not occur. Investors, analysts, and journalists should take into account that macroeconomic factors, industrial factors, and others may make these results differ materially from those expressed in these forward-looking statements.

Speaker #3: E depois, opte por entrar na sala em inglês. Depois disso, selecione "Silenciar o áudio original". Informamos que, durante a sessão, mantenha a câmera e o microfone desligados.

Speaker #3: E, em seguida, iniciaremos a sessão de perguntas e respostas, quando mais instruções serão apresentadas e todos os participantes serão informados. Antes de prosseguir, aproveito para reforçar que as declarações prospectivas têm como base as crenças e suposições da administração da Dexco e as informações atualmente disponíveis para a companhia.

Speaker #1: We have with us on this call the company's CEO, Raul Guaragna, and CFO, Luciana Rafaini, along with the investor relations team. We will now hand it over to Ms. Luciana Rafaini, who will begin the presentation.

Operator: We have with us on this call the company's CEO, Raul Guaragna, and CFO, Lucianna Raffaini, along with the investor relations team. We will now hand it over to Ms. Lucianna Raffaini, who will begin the presentation. Go ahead, ma'am.

Speaker #3: Essas declarações podem envolver riscos e incertezas. Tendo em vista que dizem respeito a eventos futuros, e, portanto, dependem de circunstâncias que podem ou não ocorrer.

Operator 2: Essas declarações podem envolver riscos e incertezas, tendo em vista que dizem respeito a eventos futuros e, portanto, dependem de circunstâncias que podem ou não ocorrer. Investidores, analistas e jornalistas devem levar em conta que eventos relacionados ao ambiente macroeconômico, aos setores de atuação e outros fatores podem fazer com que os resultados sejam materialmente diferentes daqueles expressos nas respectivas declarações prospectivas. Estão presentes nesta videoconferência o CEO da Dexco, Raul Guaragna, a CFO Lucianna Raffaini e o time de relações com investidores. Gostaria agora de passar a palavra à Lucianna Raffaini, que dará início à apresentação. Por favor, Lucianna, pode prosseguir.

Lucianna Raffaini: We will now hand it over to Ms. Luciana Raffaini, who will begin the presentation. Go ahead, ma'am. Good morning, ladies and gentlemen. Welcome to our earnings call for Q2 2026. My name is Luciana Raffaini. I am the company's CFO, today I'm going to present the results for this quarter. As we'll see throughout the presentation, they confirm a consistent evolution in executing our transformation plan. We've made relevant advances in generating cash, margin, and de-leveraging the company. We're going through a very special moment, which is our 75th anniversary. Let us begin. Starting with the Q2 highlights. In Q2 2026, we posted a consistent performance across most of our divisions. The highlights were prices, mix, and expense controls. We are continuing to advance on everything that's under our control with discipline on execution, focusing on sustainability. We've made investments.

Speaker #1: Go ahead, ma'am.

Speaker #3: Investidores, analistas e jornalistas, devem ao ambiente macroeconômico, aos setores de atuação e outros fatores podem fazer com que os resultados sejam materialmente levar em conta que eventos relacionados diferentes daqueles expressos nas respectivas declarações prospectivas.

Speaker #3: Estão presentes nesta videoconferência o CEO da Dexco, Raul Guaranya, a CFO Luciana Raffaini, e o time de Relações com Investidores. Gostaria agora de passar a palavra à Luciana Raffaini, que dará início à apresentação.

Speaker #3: Por favor, Luciana, pode prosseguir.

Speaker #2: Good morning, ladies and gentlemen.

Lucianna Raffaini: Good morning, ladies and gentlemen. Welcome to our earnings call for Q2 2026. My name is Lucianna Raffaini. I am the company's CFO, today I'm going to present the results for this quarter. As we'll see throughout the presentation, they confirm a consistent evolution in executing our transformation plan. We've made relevant advances in generating cash, margin, and de-leveraging the company. We're going through a very special moment, which is our 75th anniversary. Let us begin. Starting with the Q2 highlights. In Q2 2026, we posted a consistent performance across most of our divisions. The highlights were prices, mix, and expense controls. We are continuing to advance on everything that's under our control with discipline on execution, focusing on sustainability. We've made investments.

Speaker #1: Welcome to our earnings call for the second quarter of 2026. My name is Luciana Rafaini. I'm the company's CFO, and today I'm going to present the results for this quarter.

Speaker #1: As we'll see throughout the presentation, they confirm a consistent evolution in executing our transformation plan. We've made relevant advances in generating cash, margin, and deleveraging the company.

Speaker #1: We're going through a very special moment, which is our 75th anniversary. Let us begin. Starting with the second quarter, highlights: in the second quarter of 2026, we posted a consistent performance across most of our divisions.

Speaker #2: Bom dia a todos e todas. Sejam muito bem-vindos à teleconferência de resultados da Dexco, referente ao 2o trimestre de 2026. Eu sou Luciana Raffaini, CFO da companhia, e hoje apresento os resultados do trimestre, que, apresentação, confirmam uma como veremos ao longo desta evolução consistente na execução do nosso plano de transformação, com avanços relevantes em geração de caixa, margem e desalavancagem.

Lucianna Raffaini: Bom dia a todos e todas. Sejam muito bem-vindos à teleconferência de resultados da Dexco, referente ao Q2 de 2026. Eu sou Lucianna Raffaini, CFO da companhia, e hoje apresento os resultados do trimestre, que, como veremos ao longo desta apresentação, confirmam uma evolução consistente na execução do nosso plano de transformação, com avanços relevantes em geração de caixa, margem e desalavancagem. Vivemos ainda um momento muito especial, a celebração dos 75 anos da Dexco. Vamos dar início. Começamos com o destaque do Q2. No Q2 de 2026, apresentamos desempenho consistente na maior parte das divisões, com destaque para preço, mix e controle de custos e despesas. Seguimos avançando naquilo que está sob nosso controle, com disciplina na execução e foco na rentabilidade sustentável.

Speaker #1: The highlights were prices, mix, and expense controls. We are continuing to advance on everything that's under our control, with discipline on execution and focusing on sustainability.

Speaker #1: We have made investments in a structurally challenging scenario. We adjusted our factory footprint by closing one plant to adapt its capacity adjust costs and reduce inventories.

Speaker #2: Vivemos ainda momento muito especial: a celebração dos 75 anos da Dexco. Vamos dar início. Começamos com o destaque do 2o trimestre. No 2o trimestre de 2026, apresentamos desempenho consistente na maior parte das divisões, com destaque para preço, mix e controle de custos e despesas.

Lucianna Raffaini: In a structurally challenging scenario, we adjusted our factory footprint by closing one plant to adapt its capacity, adjust costs, and reduce inventories. Our priority is to preserve cash. In metals and sanitary ware, we prioritized profitability recovery through price increases, already creating an effect to our margins and contributing towards better cash generation. The wood division maintains a consistent trajectory, even with cost pressures. Forestry trading have strengthened our cash generation. In that context, the recurring net revenue went up 5.2%, finishing at BRL 2.2 billion, 5.6% in H1 2026, coming to a total of BRL 4.2 billion. Gross margins went up 1.6 percentage points in the quarter, 2.8 percentage points in H1. Our year-to-date percentage is 26%.

Speaker #1: Our priority is to preserve cash. In metals and sanitary wear, we prioritized profitability recovery through price increases, already creating an effect to our margins and contributing towards better cash generation.

Speaker #2: Seguimos avançando naquilo que está sobre nosso controle: com disciplina na execução e foco na rentabilidade sustentável. Em revestimentos, que segue operando em ambientes setorial e seturalmente desafiador, ajustamos nosso footprint fabril no trimestre, com o fechamento de uma planta para melhor adequação da capacidade; ajuste de custos, e redução de estoques, priorizando a preservação do caixa.

Speaker #1: The wood division maintains a consistent trajectory even with cost pressures. Forestry trading have strengthened our cash generation. In that context, the total net income went—excuse me, the recurring net revenue went up 5.2%, finishing at 2.2 billion.

Lucianna Raffaini: Em revestimentos, que segue operando em ambiente setorial estruturalmente desafiador, ajustamos nosso footprint fabril no trimestre com o fechamento de uma planta para melhor adequação da capacidade, ajuste de custos e redução de estoques, priorizando a preservação do caixa. Em metais e louças, priorizamos a recuperação de rentabilidade, com os reajustes de preços já surtindo efeito na margem e contribuindo para uma melhor geração de caixa. Na madeira, segue uma trajetória consistente, mesmo que diante de desafios de custo. As operações de trading florestal têm fortalecido nosso caixa. Nesse contexto, a receita líquida total cresceu 5.2% no Q2 2026, fechando em BRL 2.2 billion, e 5.6% no H1 2026, totalizando BRL 4.25 billion. A margem bruta avançou 1.6 percentage points no trimestre e 2.8 percentage points no semestre, encerrando o ano acumulado de 26%.

Speaker #1: And 5.6% in the first half of 2026, coming to a total of 4.2 billion. Gross margins went up 1.6 percentage points in the quarter, and 2.8 percentage points in the first half of the year.

Speaker #2: Em metais e louças, priorizamos a recuperação de rentabilidade, com os reajustes de preços já surtindo efeito na margem e contribuindo para uma melhor geração de caixa.

Speaker #2: Na madeira, segue uma trajetória consistente, mesmo que diante de desafios de custo, as operações de trading florestal têm fortalecido nosso caixa. Nesse contexto, a receita líquida total cresceu 5,2% no 2o trimestre de 2026, fechando em 2,2 bilhões.

Speaker #1: Our year-to-date percentage is 26%. Our adjusted recurring EBITDA, the Dexco operation, was 547 million, and the second quarter of 2026, up 20—excuse me, up 3.6% versus the second quarter of 2025.

Lucianna Raffaini: Our adjusted recurring EBITDA at the Dexco operation was BRL 547 million in Q2 2026, up 3.6% versus Q2 2025. The margin was impacted mainly by operational gains and by more operational efficiency. Considering LD Celulose, the company's total EBITDA was BRL 714 million, up 1.7 versus Q2 2025. Year-to-date, we have posted a 30.1% growth in our adjusted recurring EBITDA versus 2026, reaching BRL 1.25 billion, up 4.6 percentage points in our margin. Adding to this, the share of LD Celulose, our total EBITDA was BRL 1.73 billion. Finally, recurring net income. We had a growth of 13.3% versus Q2 2025. It's important to highlight that these results are reflecting the company's turnaround from a loss of BRL 64 million to a profit of BRL 6 million.

Speaker #2: E 5,6% no 1o semestre de 2026, totalizando 4,25 bilhões. A margem bruta avançou 1,6 ponto percentual no trimestre, e 2,8 pontos percentuais no semestre, encerrando o ano acumulado de 26%.

Speaker #1: The margin was impacted mainly by operational gains, and by more operational efficiency. Considering LD cellulose, the company's total EBITDA was 714 million, up 1.7 versus the second half—excuse me, second quarter of 2025.

Speaker #2: O EBITDA ajustado e recorrente da operação Dexco foi de R$ 547 milhões no 2º trimestre de 2026, crescimento de 23,6% frente ao ano anterior, com ganho de 3,6 pontos percentuais de margem, impactado principalmente pelos ganhos operacionais e pela melhor eficiência nas operações.

Lucianna Raffaini: O EBITDA ajustado e recorrente da operação Dexco foi de BRL 547 million no Q2 2026. Crescimento de 23.6% frente ao ano anterior, com ganho de 3.6 percentage points de margem, impactado principalmente pelos ganhos operacionais e pela melhor eficiência nas operações. Considerando a participação da LD Celulose, o EBITDA total somou BRL 714 million, avanço de 1.7 em relação ao Q2 2025. No acumulado do semestre, a operação da Dexco consolida crescimento de 30.1% no EBITDA ajustado e recorrente frente ao ano anterior, atingindo BRL 1.025 billion, com melhora de 4.5 percentage points de margem. Somando a participação da LD Celulose, o EBITDA total do semestre foi de BRL 1.372 billion. Por fim, o lucro líquido recorrente totalizou BRL 34 million, crescimento de 13.3% em relação ao Q2 2025.

Speaker #1: Year-to-date, we have posted a 30.1% growth in our adjusted recurring EBITDA, versus 2026, reaching 1.25 billion. Up 4.6 percentage points in our margin. Adding to this, the share of LD cellulose—our total EBITDA was 1.73 billion.

Speaker #2: Considerando a participação da LDC Celulose, o EBITDA total somou R$ 714.000.000, avanço de 1,7 em relação ao 2o trimestre de 2025. No acumulado do semestre, a operação da Dexco consolida crescimento de 30,1% no EBITDA ajustado e recorrente, frente ao ano anterior, atingindo 1,025 bilhão, com melhora de 4,5 pontos percentuais de margem.

Speaker #1: Finally, recurring net income: we had a growth of 13.3% versus the second quarter of 2025. It's important to highlight that these results are reflecting the company's turnaround from a loss of 64 million to a profit of 6 million.

Speaker #1: And this shows the lower contribution from LD cellulose, which was impacted mainly by reduction in DWD prices and the depreciation of the US dollar.

Lucianna Raffaini: This shows the lower contribution from LD Celulose, which was impacted mainly by reduction in DWP prices and the depreciation of the US dollar. We will now continue with our cash flow results. The second quarter confirms the company's trajectory of improved operating cash generation, with contributions from all three divisions: resilience and cost management in wood, profitability recovery in sanitary ware and metals, and adjusted productive capacity in ceramic tiles, all converging toward a lower working capital consumption. The graph on the left-hand side shows the company's free cash flow evolution. We went from consuming BRL 262 million in Q1 2025 to a +BRL 158 million generation in cash in Q1 2026. The project line also reduced from BRL 267 million to BRL 109 million in H1 2026.

Speaker #2: Somando a participação da LDC Celulose, o EBITDA total do semestre foi de R$ 1.372 bilhão. Por fim, o lucro líquido, recorrente, totalizou R$ 34.000.000, crescimento de 13,3% em relação ao 2o trimestre de 2025.

Speaker #1: We will now continue with our cash flow results. The second quarter confirms the company's trajectory of improved operating cash generation, with contributions from all three divisions.

Speaker #2: Vale destacar que esse resultado reflete a virada da operação da Dexco, que saiu de prejuízo de R$ 64.000.000 para lucro de R$ 6.000.000, compensando a menor contribuição da LDC Celulose que recuou de 94.000.000 para 28.000.000, impactada principalmente pela queda do preço do WP e pela depreciação do dólar.

Lucianna Raffaini: Vale destacar que esse resultado reflete a virada da operação da Dexco, que saiu de um prejuízo de BRL 64 million para um lucro de BRL 6 million, compensando a menor contribuição da LD Celulose, que recuou de BRL 94 million para BRL 28 million, impactada principalmente pela queda do preço do DWP e pela depreciação do US dollar. Passo agora ao resultado do nosso fluxo de caixa. O Q2 confirma a trajetória de melhora na geração de caixa operacional, com contribuição das três divisões: resiliência e gestão de custos em madeira, retomada de rentabilidade em metais e louças e capacidade produtiva ajustada em revestimentos cerâmicos, todas convergindo para um menor uso de capital de giro. No gráfico à esquerda, vemos a evolução do capital de giro.

Speaker #1: Resilience and cost management in wood, profitability recovery in sanitary wear and metals, and adjusted productive capacity in ceramic tiles. All converging toward a lower working capital consumption.

Speaker #1: The graph on the left-hand side shows the company's free cash flow evolution. We went from consuming 262 million in the first quarter of 2025 to a positive generation of 158 million in cash in the first quarter of 2026.

Speaker #2: Passo agora ao resultado do nosso fluxo de caixa. O 2o trimestre confirma a trajetória de melhora na geração de caixa operacional, com contribuição das 3 divisões: resiliência e gestão de custos em madeira, retomada de rentabilidade em metais e louças, e capacidade produtiva ajustada em revestimentos cerâmicos, todas convergindo para menor uso de capital de giro.

Speaker #1: The project line also reduced from 267 million to 109 million in the first half of 2026. It's important to highlight that, yes, we did conclude our investments cycle according to the plan.

Lucianna Raffaini: It's important to highlight that, yes, we did conclude our investment cycle according to the plan. In the projects account, we're now seeing investments in forestry and trading. As a result of this combination, discipline in working capital, and by prioritizing investments, the company's operational free cash flow reached BRL 682 million this quarter. The total free cash flow came to a total of BRL 356 million. These two figures are a great summary of H1. Dexco is converting its recurring EBITDA into cash consistently, and all of its actions are under the company's control. On the right-hand side, we see the working capital to net revenue ratio. We finished at 15.8%, the lowest since H2 2025. Now we continue with our indebtedness. The company's position at the end of Q2 2026 confirms our expectations.

Speaker #1: And in the projects account, we're now seeing investments in forestry and trading. As a result of this combination, discipline in working capital and by prioritizing investments, the company's operational free cash flow reached 682 million this quarter.

Speaker #2: No gráfico à esquerda, vemos a evolução do capital de giro, saímos de consumo de R$ 262.000.000 no 1o semestre de 2025 para uma geração positiva de R$ 158.000.000 de caixa no 1o semestre de 2026.

Lucianna Raffaini: Saímos de um consumo de BRL 262 million no H1 2025, para uma geração +BRL 158 million de caixa no H1 2026. A linha de projetos também recuou de BRL 267 million no H1 2025, para BRL 109 million no H1 2026. Vale destacar que sim, finalizamos nosso ciclo de investimento conforme o planejado e passamos a refletir nesta conta de projeto os investimentos em trading de florestas. Como resultado dessa combinação, disciplina em capital de giro e priorização de investimentos, o fluxo de caixa livre operacional atingiu BRL 682 million no semestre e o fluxo de caixa livre total totalizou BRL 356 million. Esses dois números resumem bem o trimestre. A Dexco está convertendo o EBITDA recorrente em caixa de forma consistente, com ações inteiramente sob o controle da companhia.

Speaker #2: A linha de projetos também recuou, de R$ 267.000.000 no 1o semestre de 2025 para R$ 109.000.000 no 1o semestre de 2026. Vale destacar que, sim, finalizamos nosso ciclo de investimento conforme planejado, e passamos a refletir nesta conta de projeto os investimentos em trading de florestas.

Speaker #1: And the total free cash flow came to a total of 356 million. These two figures are a great summary of the first half of the year.

Speaker #1: Dexco is converting its recurring EBITDA into cash consistently. And all of its actions are under the company's control. On the right-hand side, we see the working capital to net revenue ratio.

Speaker #2: Como resultado desta combinação — disciplina em capital de giro e priorização de investimentos — o fluxo de caixa livre operacional atingiu R$ 682 milhões no semestre, e o fluxo de caixa livre total totalizou R$ 356 milhões.

Speaker #1: We finished at 15.8%, the lowest half of 2025. And now we continue with our indebtedness. The company's position at the end of the second quarter of 2026 confirms our expectations.

Speaker #2: Esses dois números resumem bem o trimestre, a Dexco está convertendo o EBITDA recorrente em caixa de forma consistente, com ações inteiramente sob o controle da companhia.

Speaker #2: No gráfico à direita, a relação capital de giro sobre receita líquida encerrou o 2o trimestre de 2026 em 15,8%, o menor patamar desde o 2o semestre de 2025, reforçando a evolução estrutural desta linha ao longo dos últimos trimestres.

Lucianna Raffaini: No gráfico à direita, a relação capital de giro sobre receita líquida encerrou o Q2 2026 em 15.8%, o menor patamar desde o H2 2025, reforçando a evolução estrutural dessa linha ao longo dos últimos trimestres. Sigo para a nossa projeção de endividamento. Nossa posição de endividamento ao final do Q2 2026 confirma a continuidade da agenda de desalavancagem. Reduzimos o índice da dívida líquida sobre EBITDA para 2.72x, queda de 0.27x frente ao trimestre anterior e de 0.67x na comparação anual, resultado sustentado pela geração de EBITDA recorrente e pela melhora estrutural do capital de giro, que juntas resultaram em uma redução aproximadamente de BRL 200 million em dívida líquida nos primeiros 6 months do ano.

Speaker #1: We reduced to 2.72 times our financial leverage—a reduction of 0.7—excuse me, 0.67 times year-over-year. And this was sustained by our better working capital structure.

Lucianna Raffaini: We reduced to 2.72 times our financial leverage, a reduction of 0.67 times year over year. This was sustained by our better working capital structure, which have led to a reduction of BRL 200 million in net debt during H1. Our average term is 5.1 years, and the average cost is 104.4% of the CDI. We have a comfortable amortization schedule with 87% of the debt in long term and 13% on the short term. In a still volatile macroeconomic scenario, this combination of being deleveraged and having a healthy debt profile allows us to conserve cash and maintain robust liquidity. Now let's look at the division, starting with ceramic tiles. First, we're going to give the sector context, then we'll go into this quarter's results. The sector continues to contract, particularly in the wet route segment.

Speaker #2: Sigo para a nossa projeção de endividamento. Nossa posição de endividamento ao final do 2o trimestre de 2026 confirma a continuidade da agenda de desalavancagem.

Speaker #1: Which have led to a reduction of 200 million in net debt during the first 6 months of the year. Our average term is 5.1 years, and the average cost is 104.4% of the CDI.

Speaker #2: Reduzimos o índice da dívida líquida sobre EBITDA para 2,72 vezes queda de 0,27 vezes frente ao trimestre anterior, e de 0,67 vezes na comparação anual.

Speaker #1: We have a comfortable amortization schedule with 87% of the debt in long-term and 13% on the short-term. In a still volatile macroeconomic scenario, this combination of being deleveraged and having a healthy debt profile allows us to conserve cash and maintain robust liquidity.

Speaker #2: Resultado sustentado pela geração de EBITDA recorrente e pela melhor estrutural do capital de giro, que juntas resultaram em uma redução aproximadamente de R$ 200.000.000 em dívida líquida nos primeiros 6 meses do ano.

Speaker #1: Now let's look at the divisions, starting with ceramic tiles. First, we're going to give the sector context and then we'll go into this quarter's results.

Speaker #2: Encerramos o trimestre com prazo médio de 5,1 anos, custo médio de R$ 104,4 do CDI e cronograma de amortização confortável, com 87% da dívida no longo prazo e 13% no curto prazo.

Lucianna Raffaini: Encerramos o trimestre com prazo médio de 5.1 anos, custo médio de 104.4 do CDI e um cronograma de amortização confortável, com 87% da dívida no longo prazo e 13% no curto prazo. Em um cenário de macroeconomia ainda volátil e incerto, esta combinação de desalavancagem e perfil de dívida saudável nos permite preservar caixa e manter liquidez robusta. Vamos estar entrando nas divisões. Começo por revestimentos cerâmicos, contextualizando primeiro o ambiente setorial e, em seguida, os resultados do trimestre. Em revestimentos, o mercado segue em retração, com a via úmida mais impactada, acumulando queda de 8.7% no ano. Os estoques do setor permanecem em patamar acima do histórico, embora com sinais de estabilização, o que mantém a pressão sobre os preços.

Speaker #1: This sector continues to contract. The wet—particularly in the wet route segment—it has contracted 8.7% year-to-date. Industry inventories remain above historical levels, and despite signs of stabilization, this continues to weigh on pricing dynamics.

Lucianna Raffaini: It has contracted 8.7% year to date. Industry inventories remain above historical levels, and despite signs of stabilization, this continues to weigh on pricing dynamics. Idle capacity remains elevated across the entire ceramic tiles chain. This is a structural feature of the sector, and it reflects a mismatch between supply and demand. Capacity utilization was 65% in Q2 2026, 7.8 percentage points below Q2 2025. Now let's take a look at our results in ceramic tiles. In this context, the company has maintained its volume discipline, with shipments remaining virtually stable year over year. A reduction of 0.3% in Q2 2026 to 4.2 thousand square meters. Year to date, it was a 5% drop to a total of 7.8 thousand square meters. Recurring net debt was BRL 190 million in Q2.

Speaker #2: Em cenário de macroeconomia ainda volátil e incerto, esta combinação de desalavancagem e perfil de dívida saudável nos permite preservar caixa e manter liquidez robusta.

Speaker #1: Idle capacity remains elevated across the entire ceramic tiles chain. This is a structural feature of the sector, and it reflects a mismatch between supply and demand.

Speaker #2: Vamos estar entrando nas divisões. Começo por revestimentos cerâmicos, contextualizando primeiro o ambiente setorial e, em seguida, os resultados do trimestre. Em revestimentos, o mercado segue em retração, com a via úmida mais impactada, acumulando queda de 8,7% no ano.

Speaker #1: Capacity utilization was 65% in the second quarter of 2026. 7.8 percentage points below the second quarter of 2025. Now let's take a look at our results in ceramic tiles.

Speaker #2: Os estoques do setor permanecem em patamar acima do histórico, embora com sinais de estabilização o que mantém a pressão sobre os preços. A ociosidade industrial segue elevada, em toda a cadeia de revestimentos cerâmicos, e já se consolidou como uma característica estrutural do setor no período, refletindo o descompasso entre produção e demanda.

Speaker #1: In this context, the company has maintained its volume discipline with shipments remaining virtually stable year-over-year. A reduction of 2026 to 4.2 thousand square meters.

Lucianna Raffaini: A ociosidade industrial segue elevada em toda a cadeia de revestimentos cerâmicos e já se consolidou como uma característica estrutural do setor no período, refletindo o descompasso entre produção e demanda. A utilização de capacidade instalada foi de 65% no H2 2026, 7.8 percentage points abaixo do mesmo período do ano anterior. Vamos seguir agora para a performance em revestimentos. Neste contexto, a divisão manteve disciplina de volume, com expedição praticamente estável na comparação anual. Recuo de 0.3% no Q2 2026, para 4,221 mil metros quadrados. No acumulado do ano, a queda foi de 5%, totalizando 7,878 mil metros quadrados expedidos.

Speaker #2: A utilização de capacidade instalada foi de 65% no 2o semestre de 2026, 7,8 pontos percentuais abaixo do mesmo período do ano anterior. Vamos seguir agora para a performance em revestimentos.

Speaker #1: Year-to-date, it was a 5% drop to a total of 7.8 thousand square meters, recurring net debt was 190 million in the second quarter, and this reflects the company's discipline and priority in a contracting market.

Speaker #2: Neste contexto, a divisão manteve disciplina de volume, com expedição praticamente estável na comparação anual. Recuo de 0,3% no 2o trimestre de 2026 para R$ 4.221.000 metros quadrados, no acumulado do ano a queda foi de 5%, totalizando 7.878.000 metros quadrados expedidos.

Lucianna Raffaini: This reflects the company's discipline and priority in a contracting market. This can also be seen in the year-to-date figures. The H1 2026 had a reduction of 12.8% and a net revenue of BRL 362 million. Gross margins advanced to 13% this quarter, and this reflects the increased productivity and cost and expense discipline. We're finishing the H1 up 5.1 percentage points, a total of 14.4%. This combination is translated into our results. The adjusted and recurring EBITDA was a total of BRL 7 million in Q2 2026, with a margin of 3.5%, versus BRL 6 million and 2.9% margin in Q2 2025. Year to date, our EBITDA reached BRL 3 million with a 0.9% margin. We will continue with metals and sanitary ware.

Speaker #1: This can also be seen in the year-to-date figures. The first half of 2026 had a reduction of 12.8%, and a net revenue of 362 million.

Speaker #1: Gross margins advanced to 13% this quarter. And this reflects the increased productivity and cost and expense discipline. We're finishing the first half up 5.1 percentage points.

Speaker #2: A receita líquida recorrente foi de R$ 190.000.000 no 2o trimestre de 2026, 11,6 inferior à do 2o trimestre de 2025, refletindo a priorização de disciplina de portfólio e canais frente a mercado de retração, movimento que também se observa no semestre, com o 1o semestre de 2026 acumulando queda de 12,8% e R$ 362.000.000 de receita líquida.

Lucianna Raffaini: A receita líquida recorrente foi de BRL 190 million no Q2 2026, 11.6 inferior à do Q2 2025, refletindo a priorização de disciplina de portfólio e canais frente a um mercado de retração, movimento que também se observa no semestre, com o H1 2026 acumulando queda de 12.8% e BRL 362 million de receita líquida. Em contrapartida, a margem bruta avançou de 8.3% para 13% no trimestre, reflexo do aumento da produtividade e da disciplina de custos e despesas, e fecha o trimestre com incremento de 5.1 percentage points, em 14.4%. Essa combinação de disciplina de receita e ganho de margem, se traduz em resultado. O EBITDA ajustado e recorrente totalizou BRL 7 million no Q2 2026, com margem de 3.5%, ante a BRL 6 million e margem de 2.9 no Q2 2025.

Speaker #1: A total of 14.4%. This combination is translated into our results. The adjusted and recurring EBITDA was a total of 7 million in the second quarter of 2026, with a margin of 3.5% versus 6 million and 2.9% margins in the second quarter of 2025.

Speaker #2: Em contrapartida, a margem bruta avançou de 8,3% para 13% no trimestre, reflexo do aumento da produtividade e da disciplina de custos e despesas, e fecha o trimestre com incremento de 5,1 pontos percentuais, em 14,4%.

Speaker #1: Year-to-date, our EBITDA reached 3 million, with a 0.9% margin. Now we will continue with metals and sanitary ware. The construction materials market has had a contraction during the first half of 2026, with only early signs of stabilization at the end of the second quarter.

Speaker #2: Essa combinação de disciplina de receita e ganho de margem se traduz em resultado: o EBITDA ajustado e recorrente totalizou R$ 7.000.000 no 2o trimestre de 2026, com margem de 3,5%, ante as R$ 6.000.000 e margem de 2,9% no 2o trimestre de 2025.

Lucianna Raffaini: The construction materials market has had a contraction during the H1 2026, with only early signs of stabilization at the end of Q2. In metals and sanitary ware specifically, the market posted a contraction of 2.2 points in metals and 11.1% in sanitary ware versus the same time in 2025. It's important to highlight that this is reflecting the successive price readjustments that were implemented by the industry itself throughout the H1, responding to cost pressures, copper, metals, and others. We also saw some down trading on the consumer side, a part of the consumption has been migrating to lower added value segments as prices go up. We've offset this partially with share gains in higher added value products. Civil construction had a growth this year.

Speaker #1: In metals and sanitary ware, specifically, the market posted a contraction of 2.2 points in metals and 11.1% in sanitary ware versus the same time in 2025.

Speaker #2: No acumulado do semestre, o EBITDA chegou a R$ 3.000.000, com margem de 0,9%. Agora a gente vai seguindo para metais e louças. No ambiente setorial, o mercado de materiais de construção passou por contração no 1o semestre de 2026, com sinais ainda incipientes de estabilização ao final do 2o trimestre de 2026.

Lucianna Raffaini: No acumulado do semestre, o EBITDA chegou a BRL 3 million, com margem de 0.9%. Agora a gente vai seguindo para Metais e Louças. No ambiente setorial, o mercado de materiais de construção passou por contração no H1 de 2026, com sinais ainda incipientes de estabilização ao final do Q2 de 2026. Em louças e metais, especificamente, o mercado apresentou retração de 2.2 percentage points em metais e de 11.15% em louças, frente ao mesmo período de 2025. Vale destacar que esta retração reflete, principalmente, os sucessivos reajustes de preços implementados pelo próprio setor ao longo do semestre, em resposta à pressão de custos. Cobre em metais, frete e gás em louças. Também observamos algum downtrading do consumidor, com parte do consumo migrando para segmentos de menor valor agregado, à medida que os preços sobem. Movimento que temos compensado parcialmente com ganhos de participação em produto de maior valor agregado.

Speaker #1: It's important to highlight that this is reflecting the successive price readjustments that were implemented by the industry itself throughout the first half of the year.

Speaker #1: Responding to cost pressures, copper metals and others. And we also saw some downtrading on the consumer side and a part of the consumption has been migrating to lower added value segments as prices go up.

Speaker #2: Em louças e metais, especificamente, o mercado apresentou retração de 2,2 pontos em metais e de 11,15% em louças, frente ao mesmo período de 2025.

Speaker #1: We've offset this partially with share gains in higher added value products. Civil construction had a growth this year. This was supported by new real estate launches but this has not yet translated into a meaningful increase in demand for finishing products.

Speaker #2: Vale destacar que esta retração reflete principalmente o sucessivo reajuste de preços implementados pelo próprio setor ao longo do semestre, em resposta à pressão de custos, cobre e metais, frete e gás em louças.

Lucianna Raffaini: This was supported by new real estate launches, this has not yet translated into a meaningful increase in demand for finishing products. Let's take a look at our performance. In this division, we are focusing on profitability over volume. This is being supported by commercial discipline, we are executing RGM and go-to-market initiatives designed to capture value through pricing and mix management. In Q2 2026, our recurring net revenue was BRL 471 million, which is basically flat versus Q2 2025. Even with a 15% volume contraction this quarter, we are at a comparable basis, excluding the effect from the Paraíba plant, which was closed in 2025. This price and mix strategy is confirming our results. Our recurring net revenue came to a total of BRL 926 in the H1 2026.

Speaker #1: Now let's take a look at our performance. In this division, we are focusing on profitability over volume. This is being supported by commercial discipline and we are executing our GM in go-to-market initiatives designed to capture value through pricing and mix management.

Speaker #2: Também observamos algum downtrading do consumidor com parte do consumo migrando para segmentos de menor valor agregado, à medida que os preços sobem. Movimento que temos compensado parcialmente com ganhos de participação em produto de maior valor agregado.

Speaker #1: In the second quarter of 2026, our recurring net revenue was 471 million, which is basically flat versus the second quarter of 2025. Even with a 15% volume contraction this quarter, we are on a comparable basis excluding the effect from the Paraíba plant, which was closed in 2025.

Speaker #2: A construção civil, por sua vez, apresentou crescimento no ano, puxado por lançamentos imobiliários, ainda sem movimento relevante no aumento da demanda em acabamentos. Vamos agora passar para a nossa performance de metais e louças.

Lucianna Raffaini: A construção civil, por sua vez, apresentou crescimento no ano, puxado por lançamentos imobiliários, ainda sem movimento relevante no aumento da demanda em acabamentos. Vamos agora passar para a nossa performance de Metais e Louças. Nesta divisão, priorizamos rentabilidade sobre volume, mantendo disciplina comercial e implementando ações de go-to-market e ADM, com foco em capturar valor por meio de preço e mix. No Q2 de 2026, a receita líquida recorrente foi de BRL 471 million, praticamente estável em relação ao Q2 de 2025. Mesmo com retração de volume de 15% no trimestre, já em base comparável, excluindo o efeito da planta de louças de Paraíba, encerrada em julho de 2025. Esta disciplina de preço e mix se confirma no semestre, que encerra com crescimento de 4% na receita líquida recorrente, totalizando BRL 926 million.

Speaker #2: Nesta divisão, priorizamos rentabilidade sobre volume, mantendo disciplina comercial e implementando ações de go-to-market e RDM, com foco em capturar valor por meio de preço e mix.

Speaker #1: This price and mix strategy is confirming our results. Our recurring net revenue came to a total of 926 reais in the first half of 2026.

Speaker #2: No 2o trimestre de 2026, a receita líquida recorrente foi de R$ 471.000.000, praticamente estável em relação ao 2o trimestre de 2025. Mesmo com retração de volume de 15% no trimestre, já em base comparável, excluindo o efeito da planta de louças de Paraíba, encerrada em julho de 2025.

Speaker #1: Gross margins went up from 22.8% to 29.1% this quarter. And the recurring adjusted EBITDA went from 9 to 56 million reais, with an EBITDA margin going up from 1.8% to 11.8%.

Lucianna Raffaini: Gross margins went up from 22.8% to 29.1% this quarter, the recurring adjusted EBITDA went from BRL 9 to 56 million, with an EBITDA margin going up from 1.8% to 11.8%. This was one of the strongest quarters in this division in the last few years. Gross margins went up 7.3 percentage points, the EBITDA margin went up 8.4 percentage points versus the H1 2025. This confirms that we've been posting a consistent trajectory over the first two quarters. Our adjusted and recurring EBITDA in the H1 reached BRL 95 million, which is more than the entire year of 2025. We will continue with the wood division, starting with the sector environment. According to data from IBÁ, the domestic panels market maintained healthy fundamentals in Q2 2026 with stable demand.

Speaker #2: Esta disciplina de preço e mix se confirma no semestre, que encerra com crescimento de 4% na receita líquida recorrente, totalizando R$ 926.000.000. A margem bruta avançou 6,3 pontos percentuais no trimestre, de 22,8% para 29,1%.

Speaker #1: This was one of the strongest quarters in this division in the last few years. Gross margins went up 7.3 percentage points. And the EBITDA margin went up 8.4 percentage points versus the first half of 2025.

Lucianna Raffaini: A margem bruta avançou 6.3 percentage points no trimestre, de 22.8% para 29.1%. O EBITDA ajustado recorrente saltou de BRL 9 billion para BRL 56 million, com margem EBITDA passando de 1.8% para 11.8%, um dos trimestres mais fortes de rentabilidade na divisão nos últimos anos. No acumulado do semestre, a margem bruta avançou 7.3 percentage points e a margem EBITDA avançou 8.4 percentage points frente ao H1 de 2025, confirmando uma trajetória consistente ao longo dos dois trimestres. O EBITDA ajustado e recorrente no semestre atingiu BRL 95.1 million, superando o resultado do ano inteiro de 2025. Agora a gente vai passar para Madeira. Começando com o ambiente setorial. De acordo com dados do IBÁ, o mercado interno de painéis manteve fundamentos saudáveis no Q2 de 2026, com demanda em níveis estáveis.

Speaker #2: E o EBITDA ajustado recorrente saltou de R$ 9.000.000,00 para R$ 56.000.000,00, com margem EBITDA passando de 1,8% para 11,8%, dos trimestres mais fortes de rentabilidade na divisão nos últimos anos.

Speaker #1: This confirms that we've been posting a consistent trajectory over the first two quarters. Our adjusted and recurring EBITDA in the first half of the year reached 95 million.

Speaker #1: Which is more than the entire year of 2025. Now we will continue with the wood division. Starting with the sector environment. According to data from EBA, the domestic panels market maintained healthy fundamentals in the second quarter of 2026, with stable demand.

Speaker #2: No acumulado do semestre, a margem bruta avançou 7,3 pontos percentuais e a margem EBITDA avançou 8,4 pontos percentuais frente ao 1º semestre de 2025, confirmando uma trajetória consistente ao longo dos dois trimestres.

Speaker #1: It went up 5% this quarter and 6% in the first half of 2026, while the foreign market continues to contract with reductions of 21% and 19% respectively.

Lucianna Raffaini: It went up 5% this quarter and 6% in H1 2026, while the foreign market continues to contract with reductions of 21% and 19%, respectively. This was led by MDF and MDP, which grew about 5% in volume in Q2. For H1, MDF went up 7.2%, while MDP grew 4%. This was a quarter that was marked by cost pressures in oil byproducts and resins, and this had to be passed on before a price readjustment. Now, let's continue with our results. In the Wood Division, volume and revenue continue to perform well. Operating at 96% capacity utilization in Q2. Increased costs related to the war were partially mitigated through price increases, productivity initiatives, and cost management. In Q2, panels volume went up 5.2%, and recurring net revenue went up 9.6% to BRL 1.57 million.

Speaker #2: O EBITDA ajustado e recorrente no semestre atingiu R$ 95,1 milhões, superando o resultado do ano inteiro de 2025. Agora a gente vai passar para madeira.

Speaker #1: This was led by MDF and MDP, which grew about 5% in volume in the second quarter. For the first half, MDF went up 7.2%, while MDP grew 4%.

Speaker #2: Começando com o ambiente setorial. De acordo com dados do IBA, o mercado interno de painéis manteve fundamentos saudáveis no 2o trimestre de 2026, com demanda em níveis estáveis, cresceu 5% no trimestre e 6% no semestre, enquanto o mercado externo seguiu em retração, com quedas de 21% e 19%, respectivamente.

Speaker #1: This was a quarter that was marked by cost pressures in oil byproducts and resins, and this had to be passed on before price readjustment.

Lucianna Raffaini: Cresceu 5% no trimestre e 6% no semestre, enquanto o mercado externo seguiu em retração, com quedas de 21% e 19%, respectivamente. Esta performance foi puxada tanto pelo MDF quanto pelo MDP, que cresceram cerca de 5% em volume no Q2. No acumulado do semestre, o MDF avança 7.2% e o MDP, 4%. O trimestre foi marcado, sim, por pressão de custos em derivados de petróleo e resina, com repasse à estrutura produtiva, antecedendo o movimento de reajuste de preços. Agora vamos para o resultado. Na divisão Madeira, o volume e receita seguiram saudáveis, com a divisão operando a 96% de utilização da capacidade no Q2. O aumento de custos decorrente da guerra no Oriente Médio foi parcialmente compensado por ações de repasse de preço, produtividade e gestão de custos e despesas.

Speaker #2: Esta performance foi puxada tanto pelo MDF quanto pelo MDP, que cresceram cerca de 5% em volume no 2o trimestre. No acumulado do semestre, o MDF avança 7,2% e o MDP 4%, o trimestre foi marcado sim por pressão de custos em derivados de petróleo e resina, com repasse à estrutura produtiva, antecedendo o movimento de reajuste de preços.

Speaker #1: Now let's continue with our results. In the wood division, volume and revenue continue to perform well. Operating at 96% capacity utilization in the second quarter.

Speaker #1: Increased costs related to the war were partially mitigated through price increases, productivity initiatives, and cost management. In the second quarter, panels volume went up 2 excuse me, 5.2% and recurring net revenue went up 9.6% to 1.57 million.

Speaker #2: Agora vamos para o resultado. Na divisão Madeira, o volume e a receita seguiram saudáveis, com a divisão operando a 96% de utilização da capacidade no 2º trimestre.

Speaker #1: And the same trend can be seen in the first half. Which had an increase of 2.4% in volume and 8.9% in gross excuse me, in net revenue.

Lucianna Raffaini: The same trend can be seen in H1, which had an increase of 2.4% in volume and 8.9% in net revenue, a total of BRL 2.96 billion. We saw an increase in the EBITDA margin this quarter due to our operational efficiency. Adjusted and recurring EBITDA came to a total of BRL 485 million with a 30.9% margin. This is capturing our cost management, price discipline, and gains from the trading operations carried out in wood. For H1, we posted a growth of 19.2% in our EBITDA to BRL 927 million with a margin of 31.3%. We will now continue with LD Celulose. I'd like to remind you that these numbers are representing 100% of our operation. In this division, volumes were resilient, reflecting the company's operational strength and maturity.

Speaker #2: O aumento de custos decorrente da guerra no Oriente Médio foi parcialmente compensado por ações de repasse de preço, produtividade e gestão de custos e despesas.

Speaker #1: A total of 2.96 billion reais. We saw an increase in the EBITDA margin this quarter due to our operational efficiency. Adjusted and recurring EBITDA came to a total of 485 million, with a 30.9% margin.

Speaker #2: No 2o trimestre de 2026, o volume de painéis cresceu 5,2% e a receita líquida recorrente avançou 9,6% para R$ 1.570 bilhão. A mesma tendência se confirma no 1o semestre de 2026, que fecha com incremento de 2,4% em volume e 8,9% em receita líquida, totalizando R$ 2.972 bilhões de reais.

Lucianna Raffaini: No Q2 de 2026, o volume de painéis cresceu 5.2% e a receita líquida recorrente avançou 9.6% para BRL 1.570 bilhão. A mesma tendência se confirma no H1 de 2026, que fecha com incremento de 2.4% em volume e 8.9% em receita líquida, totalizando BRL 2.962 bilhões. Tivemos avanço de 2.7 pontos percentuais de margem EBITDA no trimestre, decorrente da eficiência operacional. O EBITDA ajustado e recorrente totalizou BRL 485 milhões, com margem de 30.9%, capturando gestão de custos, disciplina de preço e ganhos advindos das operações de trading na madeira. No acumulado do ano, entregamos crescimento de 19.2% no EBITDA para BRL 927 milhões, com margem de 31.3%. Passo para a LD Celulose. Lembro que os números a seguir correspondem a 100% da operação. Na LD Celulose, o volume seguiu resiliente, refletindo solidez e maturidade operacional.

Speaker #1: This is capturing our cost management, price discipline, and gains from the trading operations carried out in wood. For the first half of the year, we posted a growth of 19.2% in our EBITDA to 927 million, with a margin of 31.3%.

Speaker #2: Tivemos avanço de 2,7 pontos percentuais de margem EBITDA no trimestre, decorrente da eficiência operacional. O EBITDA ajustado e recorrente totalizou R$ de 30,9%, capturando gestão de custos, disciplina de preço e ganhos advindos das operações de trading na madeira.

Speaker #1: We will now continue with LD Cellulose. I'd like to remind you that these numbers are representing 100% of our operation. In this division, volumes were resilient, reflecting the company's operational strength and maturity.

Speaker #1: Shipments were stable quarter over quarter. At 158,000 tons, and it grew 6.7% in the first half of the year. Revenues and margins were impacted and were below the second quarter of 2025.

Lucianna Raffaini: Shipments were stable quarter-over-quarter at 158,000 tons, and it grew 6.7% in H1. Revenues and margins were impacted and were below Q2 2025. Our adjusted and recurring EBITDA reached BRL 339 million, and our margin dropped by 36%. This reflects DWP prices in international markets and adverse exchange rate effects. We were impacted by non-cash effects as foreign exchange fluctuations on our US-denominated asset base generated deferred tax volatility, which impacted our net revenue but had no direct cash impact. We will now continue with our ESG results. I'd like to highlight our publication of the Climate-Related Risks Report for 2025. This was prepared in accordance to the TCFD. These recommendations have been published since 2021 with limited assurance provided since 2023.

Speaker #2: No acumulado do ano, entregamos crescimento de 19,2% no EBITDA para R$ 927 milhões, com margem de 31,3%. Passo para LD Celulose. Lembro que os números a seguir correspondem a 100% da operação.

Speaker #1: Our adjusted and recurring EBITDA reached 339 million, and our margin dropped by 36%. And this reflects DWP prices in international markets and adverse exchange rate effects.

Speaker #2: Na LD Celulose, o volume seguiu resiliente, refletindo solidez e maturidade operacional. A expedição ficou estável na comparação trimestral, em 158.000 toneladas, e avançou 6,7% no semestre.

Lucianna Raffaini: A expedição ficou estável na comparação trimestral em 158,000 toneladas e avançou 6.7% no H1. A queda de receita e margem, receita líquida recorrente de BRL 715 milhões, 18.3% abaixo do Q2 de 2025. O EBITDA ajustado recorrente de BRL 339 milhões, com margem de 47.4%, reflete a queda do preço do DWP no mercado internacional e os efeitos cambiais. O lucro líquido de BRL 58 milhões no trimestre foi pressionado por efeitos não caixa. A variação cambial sob a base dos ativos dolarizados no balanço da LD Celulose, gera volatilidade em sua base de impostos diferidos, o que impacta o lucro líquido no período, mas não gera efeito direto no caixa da companhia. Sigo para ESG. Em ESG, destaco a publicação do nosso relatório de riscos e oportunidades relacionadas ao clima, referente ao ano de 2025, produzido conforme as recomendações da TCFD.

Speaker #1: So we were impacted by non-cash effects, as foreign exchange fluctuations on our US-denominated asset base generated deferred tax volatility. Which impacted our net revenue, but had no direct cash impact.

Speaker #2: A queda de receita e margem receita líquida recorrente de R$ 715 milhões, 18,3% abaixo do 2o trimestre de 2025, o EBITDA ajustado recorrente de R$ 339 milhões, com margem de 47,4%, reflete a queda do preço do DWP no mercado internacional e os efeitos cambiais.

Speaker #1: We will now continue with our ESG results. I'd like to highlight our publication of the climate-related risks report for 2025. This was prepared in accordance to the TCFD.

Speaker #2: O lucro líquido de R$ 58 milhões no trimestre foi pressionado por efeitos não caixa, avaliação cambial sob a base dos ativos dolarizados no balanço da LD Celulose gera volatilidade em sua base de impostos diferidos, o que impacta o lucro líquido no período, mas não gera efeito direto no caixa da companhia.

Speaker #1: These recommendations have been published since 2021, with limited assurance provided since 2023. This report marks an important step towards the publication of the IFRS S2 report scheduled for 2027, based on fiscal year 2026.

Lucianna Raffaini: This report marks an important step towards the publication of the IFRS S2 report scheduled for 2027 based on fiscal year 2026. Our focus for 2026 is to advance preparation for the sustainability-related financial disclosures in line with IFRS S2 requirements. To give you an update on Dexco's transformation plan announced in September 2025, we remain focused on continuing to execute our five strategic priorities. I have an update on their advances this quarter. Starting with the financial deleveraging project, we reduced our net debt to EBITDA ratio to 2.72 times with a reduction of BRL 200 million in our net debt this quarter. This was sustained by the company's robust operational cash generation. In addition to that, as we disclosed this week, we also sold the tiles plant, continuing our deleveraging journey. Our priority is still very clear.

Speaker #2: Sigo para ESG. Em ESG, destaco a publicação do nosso relatório de riscos e oportunidades relacionados ao clima. Referente ao ano de 2025, produzido conforme as recomendações da TCFD.

Speaker #1: Our focus for 2026 is to advance preparation for the sustainability-related financial disclosures in line with IFRS S2 requirements. To give you an update on Dexco's transformation plan announced in September 2025, we remain focused on continuing to execute our five strategic priorities.

Speaker #2: Publicamos estas informações desde 2021, com asseguração limitada desde 2023. Esse relatório representa avanço rumo à publicação do relatório conforme o IFRS S2 prevista para 2027, com ano base 2026.

Lucianna Raffaini: Publicamos estas informações desde 2021, com asseguração limitada desde 2023. Esse relatório representa um avanço rumo à publicação do relatório conforme o IFRS S2, prevista para 2027, com ano base 2026. Nosso foco para 2026 é justamente a preparação do report de informações financeiras relacionadas à sustentabilidade, conforme os requisitos do IFRS S2. Atualizando o plano de transformação da Dexco, anunciado em setembro de 2025, com foco na continuidade da execução dos cinco projetos prioritários. Trago a seguir uma atualização sobre o avanço concreto de cada um deles neste trimestre. Começando pelo projeto Desalavancagem Financeira. Reduzimos o índice da dívida líquida sobre o EBITDA para 2.72 vezes, com queda de aproximadamente BRL 200 milhões em dívida líquida no trimestre, sustentada pela forte geração de caixa operacional. Adicionalmente, conforme divulgamos no início desta semana, concluímos também a venda da planta de revestimentos encerrada recentemente, dando sequência à jornada de desalavancagem.

Speaker #1: So I have an update on their advances this quarter. Starting with the financial deleveraging project, we reduced our net debt-to-EBITDA ratio to 2.72 times with a reduction of 200 million reais in our net debt this quarter.

Speaker #2: Nosso foco para 2026 é justamente a preparação do reporte de informações financeiras relacionadas à sustentabilidade, conforme os requisitos do IFRS S2. Atualizando o plano de transformação da Dexco, anunciado em setembro de 2025, com foco na continuidade da execução dos 5 projetos prioritários.

Speaker #1: This was sustained by the company's robust cash operational cash generation. In addition to that, as we disclosed this week, we also sold the tiles plant continuing our deleveraging journey.

Speaker #2: Trago a seguir uma atualização sobre o avanço concreto de cada deles neste trimestre. Começando pelo projeto Desalavancagem Financeira. Reduzimos o índice da dívida líquida sobre o EBITDA para 2,72 vezes, com queda de aproximadamente 200 milhões de reais em dívida líquida no trimestre, sustentada pela forte geração de caixa operacional.

Speaker #1: Our priority is still very clear. We want to reduce our indebtedness by consistently improving operational results and selectively sell non-operational assets. Continuing with the tiles turnaround project, we are adjusting our production capacity, focusing on executing sustainable profitability actions.

Lucianna Raffaini: We want to reduce our indebtedness by consistently improving operational results and selectively sell non-operational assets. Continuing with the tiles turnaround project, we are adjusting our production capacity, focusing on executing sustainable profitability actions. This includes closing a plant to realign our production to the actual demand from the market and reduce excess inventory, which is still a pressure on the industry. Our decision is to rationalize our capacity, and this is not a reactive response to the additional deterioration of the demand, although the environment is still structurally challenging with no signs of changing in the short term. Continuing with the metals and sanitary ware competitiveness project, the leap we saw here is a direct effect of our price readjustments and execution. These results are connected to our go-to-market project and RGM. To tell you a bit about the go-to-market project.

Speaker #2: Adicionalmente, conforme divulgamos no início desta semana, concluímos também a venda da planta de revestimentos encerrada recentemente, dando sequência à jornada de desalavancagem. Nossa prioridade permanece clara: avançar na redução do endividamento por meio da melhora consistente dos resultados operacionais, combinada à venda seletiva de ativos não operacionais.

Speaker #1: And this includes closing a plant to realign our production to the actual demand from the market and reduce excess inventory, which is still a pressure on the industry.

Lucianna Raffaini: Nossa prioridade permanece clara: avançar na redução do endividamento, por meio da melhora consistente dos resultados operacionais, combinada à venda seletiva de ativos não operacionais. Passando agora para o projeto Turnaround Revestimentos. Avançamos nas decisões de ajuste de capacidade produtiva da divisão, com foco na execução de ações de rentabilidade sustentável, incluindo o fechamento de uma planta, com o objetivo de realinhar a produção à demanda real do mercado e reduzir o excesso de estoques que ainda pressionam o setor. É uma decisão deliberada de racionalização de capacidade, e não uma resposta reativa a uma deteriorização adicional da demanda, ainda que o ambiente permaneça estruturalmente desafiador, sem sinais de reversão no curto prazo. Passando para o projeto Competitividade Metais e Louças. O salto de EBITDA de BRL 9 milhões para BRL 56 milhões no trimestre, é reflexo direto da agenda de produtividade, reajuste de preços em execução.

Speaker #1: Our decision is to rationalize our capacity and this is not a reactive response to the additional deterioration of the demand. Although the environment is still structurally challenging, with no signs of changing in the short term.

Speaker #2: Passando agora para o projeto Turnaround Revestimentos. Avançamos nas decisões de ajuste de capacidade produtiva da divisão, com foco na execução de ações de rentabilidade sustentável.

Speaker #1: Continuing with the metals and sanitary wear, competitiveness project. This leap to the leap we saw here is a direct effect of our price readjustments and execution.

Speaker #2: Incluindo o fechamento de uma planta com o objetivo de realinhar a produção à demanda real do mercado, e reduzir o excesso de estoques que ainda pressionam o setor.

Speaker #2: É uma decisão deliberada de racionalização de capacidade, e não uma resposta reativa a uma deterioração adicional da demanda. Ainda que o ambiente permaneça estruturalmente desafiador, sem sinais de reversão no curto prazo.

Speaker #1: These results are connected to our go-to-market project and AGM. So to tell you a bit about the go-to-market project, go-to-market actions and AGMs are being executed across all the companies' divisions to capture value through price and mix through our pricing strategy and channels and product lines.

Lucianna Raffaini: Go-to-market actions and RGMs are being executed across all the company's divisions to capture value through price and mix through our pricing strategy in channels and product lines. The most visible advances are in metals and sanitary ware, where this agenda is already a part of our margin expansion in this division this Q3. The wood division has also advanced on this strategy and is capturing value through prices and mix in its product lines. Forestry trading operations have contributed to our cash generation and to the division's margin resilience, even in a pressure marked by cost pressures. We will now conclude with an outlook for Q3 2026. Starting with ceramic tiles. Continuing the productivity capture plan with a focus on higher manufacturing utilization and commercial restructuring initiatives.

Speaker #2: Passando para o projeto Competitividade Metais e Loças. O salto de EBITDA de R$ 9 milhões para R$ 56 milhões no trimestre é reflexo direto da agenda de produtividade, reajuste de preços em execução.

Speaker #1: The most visible advances are in already a part of our MAG margin expansion in this division this quarter. The wood division has also advanced on this strategy and is capturing value through prices and mix in its product lines.

Speaker #2: Este resultado conecta-se diretamente ao nosso projeto de go-to-market e RDM. Então, falando pouquinho do projeto de go-to-market: as ações de go-to-market e RDMs estão em execução em todas as divisões da companhia, com foco em capturar valor por meio de preço e mix, através da precificação por canal e linhas de produto.

Lucianna Raffaini: Este resultado conecta-se diretamente ao nosso projeto de Go to Market e ADM. Falando um pouquinho do projeto de Go to Market. As ações de Go to Market e ADMs estão em execução em todas as divisões da companhia, com foco em capturar valor por meio de preço e mix, através da precificação por canal e linhas de produto. O avanço mais visível está em metais e louças, onde essa agenda já aparece na expansão de margem da divisão no trimestre. A Divisão Madeira também já opera com maturidade sobre esta mesma estratégia, capturando valor por meio de preço e mix em suas linhas de produtos. Falando sobre o projeto Inovação Madeira. As operações de trade florestal têm contribuído de forma relevante para a geração de caixa e para a resiliência de margem da divisão, mesmo em um trimestre de pressão de custos.

Speaker #1: Forestry trading operations have contributed to our cash generation and to the division's margin resilience, even in a pressure marked by cost pressures. We will now conclude with an outlook for the third quarter of 2026.

Speaker #2: O avanço mais visível está em Metais e Loças, onde essa agenda já aparece na expansão de margem da divisão no trimestre. A divisão Madeira também já opera com maturidade sobre esta mesma estratégia, capturando valor por meio de preço e mix, em suas linhas de produtos.

Speaker #1: Starting with ceramic tiles. Continuing the productivity capture plan with a focus on higher manufacturing utilization and commercial restructuring initiatives, the key watching point here is that the market continues to be challenging with ongoing volatility and uncertainties, and a reduced demand.

Speaker #2: Falando sobre o projeto Inovação Madeira: as operações de trade florestal têm contribuído de forma relevante para a geração de caixa e para a resiliência de margem da divisão, mesmo em trimestre de pressão de custos.

Lucianna Raffaini: The key watching point here is that the market continues to be challenging with ongoing volatility and uncertainties and a reduced demand. In metals and sanitary ware, we are observing price increases after costs have increased as well. Our challenge is to maintain these volumes with the new prices. For wood, we expect moderate volumes in line with consumption trends and supported by the favorable seasonal pattern in this H2. We expect to gradually capture the implemented price increases. The key watching point here is that we continue to monitor cost volatility driven by geopolitical developments, which impact key input commodities for our operation. In LD Celulose, we have no scheduled maintenance shutdowns this Q3, and we will continue with strong productivity, sustaining our position in the first quartile of the global dissolving pulp cost curve.

Speaker #2: Para encerrar, passo às perspectivas do terceiro trimestre de 2026. Vamos começar falando de revestimentos. Dando continuidade à execução do plano de captura de produtividade, com foco em melhor ocupação fabril, reestruturação comercial do atendimento e otimização dos investimentos.

Lucianna Raffaini: Para encerrar, passo às perspectivas do Q3 2026. Vamos começar falando de revestimentos. Dando continuidade à execução do plano de captura de produtividade, com foco em melhor ocupação fabril, reestruturação comercial do atendimento e otimização dos investimentos. Como ponto de atenção, o mercado segue desafiador, com volatilidade, incerteza e queda de volume no setor. Para metais e louças, como ponto de atenção, observamos o comportamento da demanda frente aos nossos reajustes de preços, subsequentes, decorrentes do aumento de custos. Nosso desafio está na manutenção dos volumes sobre os novos preços. Para Madeira, esperamos volumes em trajetória mais moderada, em linha com o cenário de consumo, com suporte da sazonalidade positiva do semestre e captura gradual dos reajustes de preços já implementados. Como ponto de atenção, seguimos monitorando a maior volatilidade de custos decorrente do cenário geopolítico global, com impacto sobre commodities relevantes para a operação. LD Celulose.

Speaker #1: In metals and sanitary wear, we are observing price increases after costs have increased as well. Our challenge is to maintain these volumes with the new prices.

Speaker #1: For wood, we expect moderate volumes in line with consumption trends and supported by the favorable seasonal pattern in this half of the year. We expect to gradually capture the implemented price increases.

Speaker #2: Como ponto de atenção, o mercado segue desafiador, com volatilidade e incerteza, e queda de volume no setor. Para Metais e Loças, como ponto de atenção, observamos o comportamento da demanda frente aos nossos reajustes de preços, subsequentes decorrentes do aumento de custos.

Speaker #1: The key watching point here is that we continue to monitor cost volatility driven by geopolitical developments, which impact key input commodities for our operation.

Speaker #2: Nosso desafio está na manutenção dos volumes sobre os novos preços. Para Madeira, esperamos volumes em trajetória mais moderada, em linha com o cenário de consumo, com suporte da sazonalidade positiva do semestre e captura gradual dos reajustes de preços já implementados.

Speaker #1: In LV cellulose, we have no scheduled maintenance shutdowns this quarter, and we will continue with strong productivity sustaining our position in the first quartile of the global dissolving pulp cost curve.

Speaker #1: On the other hand, higher DWP prices will impact our results and margins. This concludes our presentation. Thank you very much for your attention, and we will be available to answer your questions.

Operator: On the other hand, higher DWP prices will impact our results and margins. This concludes our presentation. Thank you very much for your attention, and we will be available to answer your questions. We will now begin the questions and answer session for investors and analysts. If you'd like to ask a question, please click on the raise hand button. If your question has been answered, you may remove yourself from the queue by clicking on lower hand. I will hand it over to Guilherme Setubal, Director of Investor Relations, who will conduct this Q&A. Go ahead, Guilherme. Good morning, ladies and gentlemen. We are very pleased to begin the Q&A for this call. Let's start with the first question. The first question will be asked by Tatiane Congini from JP Morgan. Go ahead. Good morning. First of all, thank you for taking my questions. Congratulations on your results.

Lucianna Raffaini: On the other hand, higher DWP prices will impact our results and margins. This concludes our presentation. Thank you very much for your attention, and we will be available to answer your questions.

Speaker #2: Como ponto de atenção, seguimos monitorando a maior volatilidade de custos decorrente do cenário geopolítico global, com impacto sobre commodities, relevantes para a operação. LD Celulose, não há previsão de parada para a manutenção no trimestre, e seguimos com alta produtividade, mantendo a LD no primeiro quartil mundial de custo de produção de celulose solúvel.

Speaker #1: We will now begin the questions and answer session. For investors and analysts. If you'd like to ask a question, please click on the raise hand button.

Operator: We will now begin the questions and answer session for investors and analysts. If you'd like to ask a question, please click on the raise hand button. If your question has been answered, you may remove yourself from the queue by clicking on lower hand. I will hand it over to Guilherme Setúbal, Director of Investor Relations, who will conduct this Q&A. Go ahead, Guilherme.

Lucianna Raffaini: Não há previsão de parada para a manutenção no trimestre e seguimos com alta produtividade, mantendo a LD no primeiro quartil mundial de custo de produção de celulose solúvel. Por outro lado, o aumento de preço de DWP deve ter impacto direto sobre o resultado e a margem da operação. Com isso, encerramos nossa apresentação. Muito obrigada pela atenção. Permanecemos à disposição e seguimos para a sessão de perguntas e respostas.

Speaker #1: If your question has been answered, you may remove yourself from the queue by clicking on lower hand. I will hand it over to Guilherme Setubal, the investor relations director, who will conduct this Q&A.

Speaker #2: Por outro lado, o aumento de preço de DWP deve ter impacto direto sobre o resultado e a margem da operação. Com isso, encerramos nossa apresentação.

Speaker #2: Muito obrigada pela atenção. Permanecemos à disposição e seguimos para a sessão de perguntas e respostas. Iniciaremos agora a sessão de perguntas e respostas. Para investidores e analistas.

Speaker #1: Go ahead, Guilherme.

Operator 2: Iniciaremos agora a sessão de perguntas e respostas para investidores e analistas. Caso deseje fazer uma pergunta, por favor, pressione o botão Reação e em seguida clique em Levantar a Mão. Se a sua pergunta for respondida, você pode sair da fila clicando em Abaixar a Mão. Passo agora a palavra ao Guilherme Setubal, Diretor de Relações com Investidores da companhia, que conduzirá a sessão de Q&A. Guilherme, por favor, pode prosseguir.

Speaker #2: Caso deseje fazer uma pergunta, por favor pressione o botão "Reação" e, em seguida, clique em "Levantar a mão". Se a sua pergunta for respondida, você pode sair da fila clicando em "Abaixar a mão".

Speaker #2: Good morning, ladies and gentlemen. We're very pleased to begin the Q&A for this call. Let's start with the first question. The first question we'll be asked by Tatyani Kongini from JP Morgan.

Guilherme Setúbal: Good morning, ladies and gentlemen. We are very pleased to begin the Q&A for this call. Let's start with the first question. The first question will be asked by Tathiane Candini from JPMorgan. Go ahead.

Speaker #2: Faça agora a palavra ao Guilherme Setubal, diretor de Relações com Investidores da companhia. Que conduzirá a sessão de Q&A. Guilherme, por favor, pode prosseguir.

Guilherme Setubal: Obrigado. Bom dia a todos e a todas. É com a maior satisfação que iniciamos agora o nosso Q&A referente ao Q2 2026. Vamos à primeira pergunta.

Speaker #2: Go ahead. Good morning. First of all, thank you for taking my questions. Congratulations on your question is about Decca. I think your EBITDA was a positive surprise when we look at our numbers, but I'd like to understand some of the things that you mentioned during your presentation and on the release.

Tathiane Candini: Good morning. First of all, thank you for taking my questions. Congratulations on your results. My first question is about Deca. I think your EBITDA was a positive surprise when we look at our numbers, I'd like to understand some of the things that you mentioned during your presentation and on the release. You mentioned a downtrading movement that has been offset by your better mix market share, we saw a significant contraction quarter-to-quarter. What should we expect for the next quarters in your margins? How much of this margin recovery that you saw is sustainable despite reduced volumes and weaker demands? Still in Deca, you mentioned a cost price due to copper and due to the lower volume. How do you see this trend now in Q3 since we're halfway through it?

Tatiane Congini: My first question is about Deca. I think your EBITDA was a positive surprise when we look at our numbers, I'd like to understand some of the things that you mentioned during your presentation and on the release. You mentioned a downtrading movement that has been offset by your better mix market share, we saw a significant contraction quarter-to-quarter. What should we expect for the next quarters in your margins? How much of this margin recovery that you saw is sustainable despite reduced volumes and weaker demands? Still in Deca, you mentioned a cost price due to copper and due to the lower volume. How do you see this trend now in Q3 since we're halfway through it? Thank you, Tatiane.

Speaker #3: Bom dia a todos e a todas. Meu nome é Satisfação, que iniciamos agora o nosso Q&A referente ao segundo trimestre de 2026. Vamos à primeira pergunta.

Speaker #2: You mentioned the downtrading movement that has been offset by your better mix market share, but we saw a significant contraction quarter to quarter. So what should we expect for the next quarter's in your margins?

Speaker #2: Nossa primeira pergunta vem da Tatiane Candini, da JPMorgan. Tatiane, seu microfone já está liberado.

Operator 2: Nossa primeira pergunta vem da Tathiane Candini, da JP Morgan. Tatiane, seu microfone já está liberado.

Speaker #4: Boa gente, bom dia. Primeiro, obrigada por pegar minhas perguntas aqui. Parabéns pelo resultado. Eu acho que minha primeira pergunta vai começar por Deca. Eu acho que o EBITDA foi uma surpresa positiva quando a gente olha os nossos números.

Tathiane Candini: Olá, gente, bom dia. Primeiro obrigada. Vou pegar minhas perguntas aqui. Parabéns pelo resultado. Eu acho que minha primeira pergunta vai começar por Deca. Eu acho que o EBITDA foi uma surpresa positiva de quando a gente olha os nossos números, eu queria destrinchar algumas coisas que vocês mencionaram, tanto agora na apresentação quanto no release. Vocês mencionaram o movimento que vocês estão vendo de downtrading, que tem sido compensado por esse market share de produtos de mix melhor. Apesar disso, a gente viu uma contração expressiva ali no tri contra tri. A minha pergunta aqui é: como que a gente pode seguir pensando nas margens e olhando o segmento pros próximos tris? Quanto dessa recuperação que a gente viu de margem tri contra tri é sustentável, mesmo com esse volume caindo e com uma demanda que parece ser um pouco mais fraca?

Speaker #2: How much of this margin recovery that you saw is sustainable despite reduced volumes and weaker demands? Still, in Decca, you mentioned a cost price due to copper and due to the lower volume.

Speaker #4: Mas eu queria destrinchar algumas coisas que vocês mencionaram, tanto agora na apresentação quanto no release. Vocês mencionaram movimento que vocês estão vendo de downtrending, que tem sido compensado por esse market share de produtos de mix melhor.

Speaker #2: So how do you see this trend now in the third quarter since we're halfway through it? Thank you, Tatyani. Just a remark, in the second quarter of 2025, we still had the Paraíba operation, and that was the most competitive ceramic product so a part of the volume is explained by this.

Lucianna Raffaini: Thank you, Tatiane. Just a remark, in Q2 2025, we still had the Paraiba operation, and that was the most competitive ceramic product. A part of the volume is explained by this. I'll hand it over to Raul.

Speaker #4: Apesar disso, a gente viu uma contração expressiva no tri contra tri. A minha pergunta aqui é: como que a gente pode seguir pensando nas margens e olhando o segmento para os próximos tries?

Guilherme Setubal: Just a remark, in Q2 2025, we still had the Paraiba operation, and that was the most competitive ceramic product. A part of the volume is explained by this. I'll hand it over to Raul. Good morning, everyone. Thank you for that question. Well, I think Deca may be the division that advanced the most, as Lucianna Raffaini mentioned during her talk, in our go-to-market strategy. When you talk about income, I think that's something that we're not going to let go of. The industry we work in is made up of several kinds of products with different price levels, different margins, Deca works in most of the segment, not across the entire segment. We dropped a plant in Paraiba. That reduced our production volume, since we have a limited possibility of having adequate margins in this segment.

Speaker #4: Quando a gente cuida dessa recuperação que a gente viu de margem tri contra tri, é sustentável, mesmo com esse volume caindo e com uma demanda que parece ser um pouco mais fraca?

Speaker #2: I'll hand it over to Raul. Good morning, everyone. Thank you for that question. Well, I think Decca may be the division that advanced the most as Luciana mentioned during her talk.

Tathiane Candini: Ainda em Deca, a gente também viu uma pressão em custo, que vocês mencionaram ser um pouco pelo cobre, mas também por esse volume menor. Como que essa trend está seguindo agora, nesse meio de Q4? Depois eu faço minha outra pergunta. Obrigada.

Raul Guaragna: Good morning, everyone. Thank you for that question. Well, I think Deca may be the division that advanced the most, as Lucianna Raffaini mentioned during her talk, in our go-to-market strategy. When you talk about income, I think that's something that we're not going to let go of. The industry we work in is made up of several kinds of products with different price levels, different margins, Deca works in most of the segment, not across the entire segment. We dropped a plant in Paraiba. That reduced our production volume, since we have a limited possibility of having adequate margins in this segment.

Speaker #2: In our go-to-market strategy, when you talk about income, I think that's something that we're not going to let go of. The industry we work in is made up of several kinds of products with different price levels, different margins.

Guilherme Setubal: Obrigado, Tathiane, eu vou passar pro Raul, mas antes disso eu vou fazer uma consideração para todos aqui, que no Q2 de 2025, nós tínhamos ainda a operação de Louças Paraíba Que era o produto mais competitivo de louças da nossa operação. Parte do volume é explicado por essa saída dessa operação de produtos mais competitivos. Vou passar a palavra pro Raul.

Speaker #2: Decca works in most of the segment, but not across the entire segment. We dropped a plant in Paraíba. We took the volume to Recife, but that reduced our production volume.

Raul Guaragna: Bom dia a todos, obrigado pela pergunta. Acho que Deca é talvez a divisão que tenha avançado mais, como a Lucianna comentou na fala dela, no tema de go-to-market. Acho que em primeiro lugar, quando você fala de rentabilidade, isso é algo que a gente não vai abrir mão. Eu acho que efetivamente o segmento que a gente atua é um segmento que é composto de vários tipos de produto, com margens e com níveis de preço diferente. A Deca tem uma vocação pra atuar em grande parte desse segmento, mas não em todo o segmento. Como o Guilherme falou, a gente saiu da operação de uma fábrica de louça supercompetitiva na Paraíba, levou o volume pra Recife, mas diminuiu significativamente o volume de produção, em função da possibilidade muito limitada de ter margens adequadas nesse segmento.

Speaker #2: Since we have a limited possibility of having adequate margins in this segment. We have to separate the impacts and sell in and sell out.

Raul Guaragna: We have to separate the impact in sell in and sell out. When we see the increased service and the genuine concern of taking care of working capital, we see that inventories are being reduced at the end. This shows a reduction of our sales to them, we're still at a healthy sell-out level, and that's great news. As we sell products with the right level of profitability and deliver products that are aligned with what is being sold, we're not building up inventory, and that gives us more pricing predictability. That's very relevant. We also adapted our capacity in Deca, not only in sanitary ware and ceramic tiles, but also in metals. We reduced production lines. It's almost business as usual, we do have a much better-adapted capacity to the demand.

Speaker #2: When we see the increased service and the genuine concern of taking care of working capital, we see that inventories are being reduced at the end.

Speaker #2: So this shows a reduction of our sales to them, but we're still at a healthy sell-out level. And that's great news. As we sell products with the right level of profitability and deliver products that are aligned with what is being sold, we're not building up inventory, and that gives us more pricing predictability.

Raul Guaragna: Acho que aqui tem que separar o impacto do sell-in e do sell-out. Acho que quando a gente olha o sell-out com a melhora do nível de serviço de Deca e com a preocupação muito genuína dos nossos clientes em cuidar de capital de giro, a gente vê uma redução dos estoques na ponta, no nosso cliente. Isso mostra também uma redução da nossa venda pra eles. A gente tem visto um nível de sell-out saudável ainda, muito flat, sem grande redução de volume, o que é uma ótima notícia. À medida que a gente for vendendo o produto com rentabilidade adequada, entregando produtos que estão alinhados com o que se vende na ponta, a gente não constrói estoque na cadeia e começa a ter mais previsibilidade pra trás. Isso é absolutamente relevante. Além disso, a gente adequou capacidade em Deca também.

Speaker #2: That's very relevant. And we also adapted our capacity in Decca, not only in metals, but also excuse me, not only in sanitary wear and ceramic tiles, but also in metals.

Speaker #2: So we reduced production lines. It's almost business as usual, but we do have a much better adapted capacity to the demand. When it comes to metals, we're it's much easier to build up the capacity, and it's also a less costly to work with some idle capacity.

Raul Guaragna: When it comes to metals, it's much easier to build up the capacity, and it's also less costly to work with some idle capacity. We're prepared to sustain this profitability level, and this is a quarter that tends to be stronger. In July, retail has made a slight recovery, and that's how we're going to continue. Concerning cost impacts, this is aligned to everything we did in operational efficiency. Our supply team worked very well, we've been able to align costs to the prices. This also helps justify the higher income profitability. We're aligning our cost structure to purchasing management, which has been excellent. I think that's the right path forward. We're continuing to improve on this step by step. In Deca, we still have some room to advance, we're cautious about the demand because we don't expect any positive surprises for this year.

Speaker #2: So we're prepared to sustain this profitability level and this is a quarter that tends to be stronger. In July, retail has made a slight recovery.

Raul Guaragna: Não só em louças, mas também em metais. A gente fez ajustes ao longo do tri, reduziu linhas de montagem, reduziu turnos. São ações muito mais pontuais, e quase como business as usual, mas sim, a gente está hoje com uma capacidade bastante adequada pra demanda. Quando a gente fala de produção seriada, discreta, quando a gente fala de metais, construir capacidade é muito mais fácil. Trabalhar com alguma ociosidade também é muito menos custoso. A gente está preparado pra manter esse nível de rentabilidade e entra num trimestre sazonalmente mais forte. A gente olhou o varejo em July, já com alguma recuperação modesta, não deixa de ser uma boa notícia, e a gente segue por aí.

Speaker #2: And that's how we're going to continue. Concerning cost impacts, this is aligned to everything we did in operational efficiency. Our supply

Speaker #1: My team worked very well , so we've been able to align costs to the prices . And this also helps justify the higher income profitability .

Speaker #1: So We're aligning our cost structure to purchasing management , which has been excellent . So I think that's the right path forward . We're continuing to improve on this step by step .

Raul Guaragna: Com relação aos impactos de custo, bastante alinhado já, tudo que a gente fez de eficiência operacional, de um trabalho muito efetivo do nosso time de suprimentos, a gente tem conseguido alinhar muito o tema custos e preço. Isso também ajuda a explicar a melhora de rentabilidade. A gente explica por um mix mais rico, por uma boa implementação e com tempo correto de custos e com uma excelente gestão das compras. Acho que é por aí. Seguimos melhorando passo a passo o negócio de Deca. A gente tem espaço pra continuar seguindo, mas ainda cautelosos com a demanda que certamente a gente não espera e não se programou pra esse ano de surpresas positivas de demanda.

Speaker #1: In Deca . We still have some room to advance , but we're cautious about the demand because we don't expect any positive surprises for this year .

Speaker #1: Thank you Raul . If I can ask a second question , I'd just like to ask C-usa . You've been making several decisions to try to increase your profitability there .

Tatiane Congini: Thank you, Raul. If I can ask a second question, I'd just like to ask about Ceusa. You've been making several decisions to try to increase your profitability there. In this quarter, we saw that EBITDA moved towards a positive side. We saw that sales were stronger and costs were down. What's the normalized level that we should expect? Is this current level the new normal, or will we have challenging quarters ahead of us? Thank you. Right. You're talking about ceramic tiles in general. What we did was we closed an old Ceusa plant, but we still sell both brands, Ceusa and Portinari. Ceusa is a very strong brand in retail, and Portinari is a high-end brand. We're going to have to take a look towards our strategy, and we're very confident by doing that ceramic tiles will find a way.

Tathiane Candini: Thank you, Raul. If I can ask a second question, I'd just like to ask about Ceusa. You've been making several decisions to try to increase your profitability there. In this quarter, we saw that EBITDA moved towards a positive side. We saw that sales were stronger and costs were down. What's the normalized level that we should expect? Is this current level the new normal, or will we have challenging quarters ahead of us? Thank you.

Speaker #1: And in this quarter , we saw that EBITDA moved towards a positive side . We saw that sales were stronger in costs , were down .

Speaker #1: So what's the normalized level that we should expect ? Is this current level the new normal or will we have challenging quarters ahead of us ?

Speaker #1: Thank you Right . You're talking about ceramic tiles in general . So what we did was we closed an old Sosa plant , but we still sell both brands .

Guilherme Setubal: Obrigado, Raul.

Tathiane Candini: Obrigada, Raul. Se eu puder só fazer minha segunda pergunta aqui, eu queria mover aqui pra Ceusa. Eu acho que vocês têm tomado diversas decisões pra tentar melhorar essa rentabilidade, e acho que a gente viu nesse tri um EBITDA já vindo pro lado positivo, com vendas mais fortes, queda de custo. Qual é o nível normalizado que a gente pode esperar? Esse patamar positivo, perto dos BRL 10 million, ele é um novo normal ou ainda podemos ter alguns trimestres mais desafiadores, ainda sem muita estabilidade e visibilidade ali pra esse segmento? Obrigada.

Raul Guaragna: Right. You're talking about ceramic tiles in general. What we did was we closed an old Ceusa plant, but we still sell both brands, Ceusa and Portinari. Ceusa is a very strong brand in retail, and Portinari is a high-end brand. We're going to have to take a look towards our strategy, and we're very confident by doing that ceramic tiles will find a way.

Speaker #1: Sosa and Portinari . Sosa is a very strong brand in retail , and Portinari is a high end brand So we're going to have to take a look Towards our strategy .

Speaker #1: And we're very confident by doing that . That ceramic tiles will find a way . We have a plant in Botucatu with a high productivity level , with a high sophistication level in a location that represents 50% of the ceramic tiles demand in Brazil .

Raul Guaragna: We have a plant in Botucatu with a high productivity level, with a high sophistication level in a location that represents 50% of the ceramic tiles demand in Brazil, the Brazilian Southeast. This location will help us as we accelerate. We finished ramping up this plant, which is always complex, but we currently have the right cost levels. Many of the products that we had in the Ouro Soma plant were transferred to Botucatu, where we have lower thickness products, which also help us in reducing costs and being closer to the market. In Criciúma, one of our older plants, we're highly productive in 90 by 90, which is a market leader in this category. We also have smaller lines for special parts, which provide an important margin.

Raul Guaragna: Superbom ponto. Você está falando de revestimento de maneira geral. O que a gente fez foi fechar uma antiga fábrica de Ceusa, mas a gente continua operando com as duas marcas, Ceusa e Portinari. Ceusa é uma marca com bastante personalidade, muito forte no varejo. Portinari é uma marca mais de luxo, de posicionamento diferenciado. Aqui a gente vai precisar olhar o filme. Ao olhar esse filme, a gente tem muitíssima confiança que revestimentos cerâmicos encontra o caminho. A gente passa a ter uma fábrica em Botucatu, com altíssimo nível de produtividade, com altíssimo nível de sofisticação e numa localização que responde por 50% do volume de revestimentos cerâmicos do Brasil. O Sudeste responde por quase 50%. Essa localização vai nos ajudar na medida em que a gente vai acelerando e a gente encerrou o ramp up dessa fábrica, que é algo sempre complexo.

Speaker #1: The Brazilian southeast . So this location will help us as we accelerate . We finished ramping up this plant , which is always complex , but we currently have the right cost levels and many of the products that we had in the auto were transferred to Botucatu , where we have lower thickness products , which also help us in reducing costs and being closer to the market increase .

Speaker #1: One of our older plants , we're high productive in 90 by 90 , which is a market leader in this category . And we also have smaller lines for special parts , which provide an important margin .

Raul Guaragna: Hoje a gente já tem nível de custo adequado, nível de acabamento muito bom, e muitos dos produtos que a gente tinha na fábrica de Urussanga foram transferidos para Botucatu, onde a gente faz espessura menor. Isso também tem ganho de custo e está mais perto do mercado. Em Criciúma, que é uma fábrica mais antiga, é uma fábrica de muita produtividade no 90 por 90, que é o líder de mercado em grande formato. Além de ter capacidade em linhas menores de fazer peças especiais que deixam margem importante. Sempre dizendo que, como a Lucianna fala no início, isso é uma decisão deliberada de escolha de qual é o segmento onde a gente vai atuar. A gente tem um mercado endereçável do superluxo, luxo e o topo do médio, que é onde a gente pode participar.

Speaker #1: But like Luciana said , in the beginning , this is an intentional initiative to select what segment we want to work in . We haven't addressable market from super luxury , luxury and top of the medium , which is where we can take place .

Raul Guaragna: Like Luciana said in the beginning, this is an intentional initiative to select what segment we want to work in. We have an addressable market from super luxury, and top of the medium, which is where we can take place. The lower-end market is not for us. It doesn't have enough margins. It has a very big idle capacity. As we gain in productivity, we have been able to adapt our company very well. When we look at our history, we see that as margins go up, costs go down, inventories go down, and inventories are better adjusted to the demand. We'll have a much leaner portfolio. We removed 600 SKUs from our portfolio, this helps in operational efficiency and also inventory turnover. We're going to see growing margins.

Raul Guaragna: Like Lucianna said in the beginning, this is an intentional initiative to select what segment we want to work in. We have an addressable market from super luxury, and top of the medium, which is where we can take place. The lower-end market is not for us. It doesn't have enough margins. It has a very big idle capacity. As we gain in productivity, we have been able to adapt our company very well. When we look at our history, we see that as margins go up, costs go down, inventories go down, and inventories are better adjusted to the demand. We'll have a much leaner portfolio. We removed 600 SKUs from our portfolio, this helps in operational efficiency and also inventory turnover. We're going to see growing margins.

Speaker #1: The lower end market is not for us . It does . It have enough margins . It has a very big idol capacity .

Speaker #1: So as we gain in productivity , we Have been able to adapt our company very well . But when we look at our history , we see that as margins go up , costs go down , inventories go down And inventories are better adjusted to the demand .

Raul Guaragna: O segmento muito mais de combate não é um segmento para nós, é um segmento que não deixa margem, que tem enorme capacidade ociosa. Agora com a capacidade mais alinhada ao volume de vendas, ao mesmo tempo que a gente consegue ir tendo ganho de produtividade, a gente está com o sistema produtivo muitíssimo ajustado. Isso posto, olhando o filme, a gente vai ver melhor a crescente de margem à medida em que o custo cai, a gente gira o estoque, coloca produto com um nível de custo muito mais adequado no nosso estoque, passa a ter um estoque super ajustado, estoque de produtos que são campeões de venda, um portfólio muito mais enxuto, a gente baixou 600 SKUs do nosso portfólio, isso ajuda na eficiência operacional e ajuda no giro de estoque também. Olhando o filme, a gente vai ver margens crescentes.

Speaker #1: We'll have a much leaner portfolio . We removed 600 SKUs from our portfolio . So this helps in operational efficiency . And also inventory turnover .

Speaker #1: So we're going to see growing margins . But it is possible that in the next two quarters we might see some changes as we have new products coming in .

Raul Guaragna: It is possible that in the next two quarters, we might see some changes as we have new products coming in. There are SKUs being sold, and we're building out our sales team. We've just concluded the last hire to our commercial team focused on ceramic tiles. They have five years of experience in ceramic tiles in general, and the entire commercial team has eight years of experience. These combined initiatives will provide a positive trend. When you look at this on a quarterly basis, we still might see some standouts. Thank you. Thank you, Raul, and thank you, Luciana. Thank you. I'd just like to reinforce something that Raul mentioned. The ceramic tiles market is very challenging. As we can see, there's a lot of pressure. We have excess demand, and there's still a lot of idle capacity in this sector.

Speaker #1: There are SKUs being sold and we're building out our sales team . We have just concluded the last hire to our commercial team focused on ceramic tiles and they have five years of experience in ceramic tiles in general .

Speaker #1: And the entire commercial team has eight years of experience . So these combined initiatives will provide a positive trend But when you look at this on a quarterly basis , we still might see some stand outs .

Raul Guaragna: Isso posto, é possível que nos próximos dois trimestres a gente tenha alguma oscilação, à medida em que tem custo entrando, tem produto novo chegando, tem SKU sendo vendido e a gente está construindo a equipe de vendas. A gente acabou de concluir a última contratação do nosso time comercial focado em revestimentos, e é importante dizer que essa turma tem em média 5 anos de experiência em revestimento. O time comercial como um todo, 8 anos de experiência em revestimento. Isso é muito bom para a gente poder ir focando. Essas ações combinadas vão levar uma trajetória positiva olhando o filme, olhando a foto, é possível a gente encontrar um ou outro trimestre ainda de algum sobressalto de resultado.

Speaker #1: Thank you . Thank you , Raul , and thank you Luciana Thank you . I'd just like to reinforce something that Raul mentioned .

Tathiane Candini: Thank you, Raul, and thank you, Lucianna.

Lucianna Raffaini: Thank you. I'd just like to reinforce something that Raul mentioned. The ceramic tiles market is very challenging. As we can see, there's a lot of pressure. We have excess demand, and there's still a lot of idle capacity in this sector.

Speaker #1: The ceramic tiles market is very challenging as we can see , there's a lot of pressure . We have excess demand and there's still a lot of idle capacity in this sector .

Speaker #1: What we have been doing and something that you can consider for the future , is that this entire adjustment that Raul discussed in costs will continue .

Lucianna Raffaini: What we have been doing, and something that you can consider for the future, is that this entire adjustment that Raul discussed in costs will continue. We've been reinventing ourselves significantly. We worked in reducing product thickness. We're using our energy matrix better. Aligned productivity is much better. We've been advancing on these cost factors significantly. The market, as you know, is still very challenging. I'd just like to underscore what Raul said. There are still many uncertainties in this market, and without a doubt, what's in our hands that can be controlled is being done very well. We still have a huge challenge ahead of us. Okay, thank you. The next question will be asked by Mateus Milani from Santander. Go ahead, Mateus. Hello, thank you. The first point I'd like to raise is leverage.

Tathiane Candini: Muito obrigada, Raul, super claro. Lu, também muito obrigada.

Speaker #1: We've been reinventing ourselves significantly . We worked in reducing product thickness . We're using our energy matrix better align productivity is much better .

Lucianna Raffaini: Imagina. Acho que vale a pena reforçar um ponto que Raul traz. O mercado de revestimentos cerâmicos, que nem a gente tem colocado, está um mercado bastante desafiador. Como a gente está vendo, tem muita pressão, a gente tem um excesso de demanda, e uma ociosidade ainda muito grande no setor. O que a gente vem fazendo, sim, isso você pode considerar, é todo esse ajuste que Raul está falando na questão do ajuste de custo. A gente tem se reinventado bastante, desafiado muito essa coisa. A gente trabalhou em redução de espessura, a gente tem uma otimização melhor da matriz energética, produtividade das linhas está muito melhor. Tem feito um avanço significativo na parte de custos. O mercado é um mercado que a gente vai estar ainda bastante desafiado.

Speaker #1: So we've been advancing on these cost factors significantly . But the market , as you know , is still very challenging . So I'd just like to underscore what Raul said .

Speaker #1: There are still many uncertainties in this market . And without a doubt , what's in our hands . That can be controlled is being done very well .

Speaker #1: But we still have a huge challenge ahead of us Okay . Thank you The next question will be asked by Matthias Milani from Santander .

Tathiane Candini: Okay, thank you.

Guilherme Setúbal: The next question will be asked by Matheus Meloni from Santander. Go ahead, Matheus.

Speaker #1: Go ahead . Mathias Hello . Thank you . And the first point I'd like to raise is leverage . We saw an improvement this quarter .

Lucianna Raffaini: Que nem Raul está colocando, só para reforçar, temos muitas incertezas ainda nesse mercado, sem dúvida nenhuma, o que está dentro da nossa mão, o que a gente controla, a gente está fazendo muito bem, tem ainda um desafio muito grande nesse mercado pela frente.

Matheus Meloni: Hello, thank you. The first point I'd like to raise is leverage. We saw an improvement this quarter. I'd just like to get your take on how leveraging will go for the rest of the year. Do you expect to sell more non-operational assets? What do you expect from this side? I'd just like to get your mindset on deleveraging for the future. I'd also like to ask about wood costs. Looking ahead, do you believe that costs have normalized, or do you still think that there could be an impact in the future? Thank you.

Mateus Milani: We saw an improvement this quarter. I'd just like to get your take on how leveraging will go for the rest of the year. Do you expect to sell more non-operational assets? What do you expect from this side? I'd just like to get your mindset on deleveraging for the future. I'd also like to ask about wood costs. Looking ahead, do you believe that costs have normalized, or do you still think that there could be an impact in the future? Thank you. Thank you, Mateus. I'll let Lucianna answer. I'd like to underscore that, of course, deleveraging is one of the company's number one priorities. We've been talking about reducing net debt. This is what's going to allow us to generate cash more consistently. I'll hand it over to Lucianna, and then Raul will answer your questions about wood division costs. Hi, Mateus.

Speaker #1: And I would just like to get your take on how leveraging will go for the rest of the year . Do you expect to sell more Nonoperational assets And what do you expect from this side ?

Tathiane Candini: Está bom, obrigada.

Operator 2: Nossa próxima pergunta vem do Mateus Meloni, do Santander. Mateus, seu microfone está liberado.

Speaker #1: I'd just like to get your mindset on deleveraging for the future . I'd also like to ask about would costs Looking ahead , do you believe that costs have normalized or do you still think that there could be an impact in the future ?

Mateus Meloni: Opa, bom dia, pessoal, tudo bom? Obrigado pelo espaço aqui para fazer pergunta. O primeiro ponto que eu queria levantar aqui é a questão da alavancagem. A gente já viu uma melhora no trimestre e a ideia é mais entender como é que vocês enxergam esse caminho ao longo do resto do ano. Entender se vocês ainda enxergam mais espaço para venda de ativos não operacionais, talvez alguma outra fábrica, um terreno, enfim, alguma outra coisa. Também entender o que vocês estão pensando, talvez venda de ativos operacionais, enfim, entender um pouco da cabeça de vocês olhando para alavancagem para frente. O segundo ponto que eu queria tocar é um pouco de custos de madeira.

Speaker #1: Thank you Thank you . Mathias . I'll let Luciana answer . And I'd like to underscore that of course , deleveraging is one of the company's number one priorities .

Guilherme Setúbal: Thank you, Matheus. I'll let Lucianna answer. I'd like to underscore that, of course, deleveraging is one of the company's number one priorities. We've been talking about reducing net debt. This is what's going to allow us to generate cash more consistently. I'll hand it over to Lucianna, and then Raul will answer your questions about wood division costs.

Speaker #1: We've been talking about reducing net debt . This is what's going to allow us to generate cash more consistently . So I'll hand it over to then Raul will answer your questions about what the wood division costs .

Mateus Meloni: Entender um pouco se vocês, olhando para frente, vocês estão enxergando que o custo deu uma normalizada ou vocês ainda acham que ainda pode ter algum impacto olhando para frente. Do nosso lado é isso. Obrigado.

Speaker #1: Hi , Mathias . Thank you for your question . So deleveraging as we've been seeing for a few quarters , this is our number one priority It's not even about the ratio , but As we heard , we do want to reduce the amount of the debt .

Lucianna Raffaini: Hi, Matheus. Thank you for your question. Deleveraging, as we've been saying for a few quarters, this is our number one priority. It's not even about the ratio, but as we heard, we do want to reduce the amount of the debt. With these 14% interest rates, this has consumed our cash significantly. As you saw during this quarter, about BRL 380 or 400 million in interest rate expenses. As some of you know, just to maintain consistency and not to repeat myself, we're focusing on the operational side. This quarter you will see what our cash generation is like. We're seeing very healthy EBITDA levels. As we've been saying, this is due to the operations we've been working on. Not just RGM and price, but also portfolio assortment, distribution across the channel. These are all levers that we're working on. Of course, costs.

Guilherme Setubal: Thank you for your question. Deleveraging, as we've been saying for a few quarters, this is our number one priority. It's not even about the ratio, but as we heard, we do want to reduce the amount of the debt. With these 14% interest rates, this has consumed our cash significantly. As you saw during this quarter, about BRL 380 or 400 million in interest rate expenses. As some of you know, just to maintain consistency and not to repeat myself, we're focusing on the operational side. This quarter you will see what our cash generation is like. We're seeing very healthy EBITDA levels. As we've been saying, this is due to the operations we've been working on. Not just RGM and price, but also portfolio assortment, distribution across the channel. These are all levers that we're working on. Of course, costs.

Guilherme Setubal: Mateus, obrigado pela pergunta. Vou passar aqui para Luciana e sempre reforçando que obviamente a desalavancagem é uma das nossas prioridades número 1 da companhia. A gente tem falado muito recorrentemente da diminuição da dívida líquida. A diminuição da dívida líquida é que vai dar para nós uma capacidade de gerar caixa de uma forma muito mais consistente. Tá bom? Vou passar primeiro para Luciana e depois o Raul responde sobre custos de madeira.

Speaker #1: These with these 14% interest rates . This is consumed . Our cash significantly As you saw during this quarter , about 380 or 400 million .

Lucianna Raffaini: Bom dia, Mateus, obrigada pela pergunta. Vamos lá. Desalavancagem, que nem a gente tem falado e vocês têm ouvido lá, já é o Q4 que vocês estão ouvindo da gente, é nossa prioridade 0, é nossa prioridade onde a gente, não é nem a questão do ratio, mas sim, como o Gui acabou de colocar, sim, a gente quer diminuir o valor da dívida. Os juros nesse patamar ainda de 14% tem consumido bastante o nosso caixa, como você viu ao longo do semestre, que a gente está falando de quase que BRL 380 to 400 million de juros de despesa financeira. A nossa linha continua como algum de vocês tem ouvido eu falar, e de novo, só para manter consistência e não ser muito repetitiva aqui, mas muito foco no que é operacional.

Speaker #1: An interest rate expenses So as some of you know Just to maintain consistency and not to repeat myself , we're focusing on the operational side and this quarter , you will see What our cash generation is like .

Speaker #1: We're seeing very healthy EBITDA levels as we've been seeing this is due to the operations we've been working on , not just RDM and price , but also portfolio assortment distribution across the channel .

Speaker #1: These are all levers that we're working on And of course , costs You saw that our productivity improved across all divisions Would even with the costs and everything we expected , have had an improved productivity .

Lucianna Raffaini: Eu acho que o Q2 traz muito limpo o que tem na geração do nosso caixa. Você vê um EBITDA bastante saudável. Conforme a gente tem falado, isso vem das operações que a gente vem trabalhando, não só na parte de RGM, na questão de preço que a gente tem trabalhado, portfólio, sortimento, distribuição no canal, todas essas alavancas que a gente está trabalhando, assim como muito a parte de custos. A gente tem uma melhoria de produtividade, você está vendo, em todas as divisões. Você vê também madeira, os custos com tudo que a gente esperava, o pessoal trabalhando muito na questão da produtividade, numa melhoria que tem trazido reflexo no nosso resultado. A primeira alavanca que eu falo, que é a alavanca operacional, dentro daquilo que a gente controla, além do Capex.

Lucianna Raffaini: You saw that our productivity improved across all divisions. Wood, even with the costs and everything we expected, have had improved productivity, and this is reflected in our results. The first lever, the operational lever in what we control is supported by our CapEx. We concluded the investment cycle. We've been very responsible and disciplined in our investments. Of course, we're not letting go of anything that can compromise us for the future. We've been very disciplined and organized. In the operational level, we're doing very well. We will continue. What we expect, according to our expectations, is to reduce inventories, continue to be disciplined. We have very robust and solid levers to continue to generate operational cash. You mentioned non-operational assets. Yes, as we've been saying, this is the Q4 in which I've been saying this.

System.

Speaker #1: And this is reflected in our results . So the first lever , the operational lever in what we control Is supported by our CapEx .

Speaker #1: We concluded the investment cycle . And we've been very responsible and disciplined in our investments . Of course , we're not letting go of anything that can compromise us for the future .

Speaker #1: But we've been very disciplined and organized . So in the operational level , we're doing very well and we will continue What we expect , according to our expectations , is to , you know , reduce inventories , continue to be disciplined .

Lucianna Raffaini: Acho que você está vendo, a gente concluiu o ciclo de investimento, a gente tem trabalhado de uma forma muito disciplinada e responsável nos investimentos, jamais sacrificando qualquer coisa que pode nos comprometer pro nosso futuro, mas com muita disciplina e organização que a gente tem feito. Nessa alavanca, que eu falo que é a alavanca operacional, a gente está indo muito bem e a gente vai continuar. O que a gente espera e está dentro da nossa expectativa, é que a gente continue com essa disciplina. Ainda tem oportunidade, sim, na questão de otimização dos estoques. A gente tem alavancas bastante robustas e sólidas pra manter consistência nessa geração de caixa operacional.

Speaker #1: So we have very robust and solid levers to continue to generate operational cash . You mentioned Nonoperational assets . So , yes , as we've been saying , this is the fourth quarter in which I've been saying this .

Disciplinary.

Speaker #1: We still feel the sense of urgency . We're assessing any everything that can be assessed . And we're trying to well , equipment , land areas and other non-operational sales .

Lucianna Raffaini: We still feel the sense of urgency. We're assessing everything that can be assessed, and we're trying to sell equipment, land areas, and other non-operational sales. We have to highlight that the last sale still wasn't reflected in Q2, we're still expecting approval from the monetary authorities and so on. We also expect this to improve our cash position. Yes, we're still consistent in this operation with discipline. We're focusing on what we can control. We're focusing on expenses. We do our monthly cash position, and we're very disciplined in advancing this. We're focused on operational efficiency. We expect to finish at 2.7 and 2.5, as we've been saying in the last two Qs. Raul will now discuss the costs. Thank you for your question. That was very relevant.

Speaker #1: But we have to highlight that The last sale still wasn't reflected in the second quarter . So we're still expecting approval from the monetary authorities .

Lucianna Raffaini: No que você comentou de ativos não operacionais, sim, conforme a gente vem falando, acho que é o meu Q4 que eu estou repetindo aqui, a gente continua com esse senso de urgência ligado e avaliando tudo que tem que ser avaliado e a gente sim, está buscando venda de equipamentos, de terrenos e outras vendas não operacionais pra compor esse nosso caixa. Vale ressaltar que a entrada da venda não foi refletida ainda no fechamento do Q2, é uma entrada com a aprovação de CADE e todo o trâmite que a gente tem que fazer operacional, a gente espera também uma melhoria de caixa. Resumindo, sim, a gente continua consistente na geração operacional, com disciplina e muito foco naquilo que a gente controla. Muito foco também em despesa.

Speaker #1: And so on . And we also expect this to improve our cash position . So yes , we're still consistent in This operation with discipline .

Speaker #1: We're focusing on what we can control . We're focusing on expenses We do our monthly cash Position . And we're very disciplined in advancing this .

Okay.

Speaker #1: So we're focused on operational efficiency . We expect to finish at 2.7 and 2.5 . As we've been saying in the last two quarters , Raul will now discuss the costs Thank you for your question .

Raul Guaragna: Thank you for your question. That was very relevant. I won't go on for too long. I just want to add to what Luciana said. We've been saying this since last year, that we want to be between 2.5 to 2.7 in our net debt to EBITDA ratio. We're not going to be pleased only with the numbers. We're seeing our EBITDA growing, and that also helps. We need to reduce the absolute value of the debt. This needs to be reduced significantly because at the end of the day, like Luciana said, when you look at the cash generation that we had, since we're paying a lot in servicing the debt, this hurts. Regardless of being at 2.5 or 2.2, the nominal debt needs to go down, and all initiatives are valid here. We're seeing improved margins, reducing costs, selling operational and non-operational assets, and this all continues on the table.

Speaker #1: That was very relevant . I won't go on for too long , but I just want to add to what Luciana said . We've been seeing this since last year that we want to be between 2.5 to 2.7 in our net debt to EBITDA ratio , but we're not going be pleased only with the numbers we're seeing .

Lucianna Raffaini: A gente tem uma comissão de caixa hoje, que a gente faz mensalmente com o top management dos negócios, com bastante responsabilidade e disciplina pra gente continuar avançando. Na questão operacional, é o nosso maior foco, não muda absolutamente nada. Nossa expectativa continua em linha de fechar entre BRL 2.7 e BRL 2.5, como a gente vem falando ao longo dos quarters. Agora eu vou passar pro Raul pra ele falar um pouco dos custos.

Raul Guaragna: I won't go on for too long. I just want to add to what Luciana said. We've been saying this since last year, that we want to be between 2.5 to 2.7 in our net debt to EBITDA ratio. We're not going to be pleased only with the numbers. We're seeing our EBITDA growing, and that also helps. We need to reduce the absolute value of the debt. This needs to be reduced significantly because at the end of the day, like Luciana said, when you look at the cash generation that we had, since we're paying a lot in servicing the debt, this hurts. Regardless of being at 2.5 or 2.2, the nominal debt needs to go down, and all initiatives are valid here. We're seeing improved margins, reducing costs, selling operational and non-operational assets, and this all continues on the table.

Speaker #1: Our EBITDA growing . And that also helps . But we need to reduce the absolute value of the debt This needs to be reduced significantly because at the end of the day , like Luciana said , when you look at the cash generation that we had , since we're paying a lot in servicing the debt , this hurts .

Management.

Raul Guaragna: Obrigado, Mateus, pela pergunta, acho super-relevante. Sem me estender muito, mas só pra compor um pouco mais o que a Lucianna disse. Acho que isso é superimportante. A gente fala desde o final do ano passado, desde outubro, que a gente precisa fechar, e tem essa meta de fechar entre 2.5 and 2.7 a nossa dívida líquida EBITDA, mas a gente não vai ficar satisfeito só com o número. Por outro lado, a gente está vendo o EBITDA crescer também, isso ajuda demais. A gente precisa baixar o valor absoluto da dívida. A gente viu nesse tri uma queda de BRL 200 million, a gente tem que baixar essa dívida significativamente, porque no final das contas, a Lucianna comentou aqui, quando você olha a geração operacional de caixa de quase BRL 700 million e você paga BRL 380 million de custo da dívida, é algo que dói.

Speaker #1: So regardless of being at 2.5 or 2.2 , the nominal debt needs to go down and all initiatives are valid here We're seeing improved margins , reducing costs , selling , operational and non-operational assets .

The beach.

Speaker #1: And this all continues on the table . We still have four assets . They're not easy to sell but they're not material . But when we add up all of these assets , we have hundreds of millions of reais to sell .

Raul Guaragna: We still have four assets. They're not easy to sell, but they're not material. When we add up all of these assets, we have hundreds of millions of BRL to sell in non-operational assets. When it comes to operational assets, we have nothing on our radar. We are still paying attention to what can be done. Switching to wood costs, I think you're right in saying that costs of wood will be more stable. We still have a deficit for the next few years. We have CMPC, Arauco, Bracell. We have a demand for corn ethanol, this will all pressure our wood costs. I see that regionally, we're going to have different behaviors. Maybe in São Paulo, the demand for wood will be lower. In Rio Grande do Sul they have a strong demand.

Speaker #1: And non-operational assets . When it comes to operational assets , we have nothing on our radar , but we are still paying attention to what can be done Switching to wood costs , I think you're right in saying that costs of wood will Be more stable , but we still have a deficit for the next few years .

Raul Guaragna: Independente da gente estar com 2.5, com 2, com 2.2, a dívida tem que baixar. Aí todas as ações são válidas, a gente tem visto redução de Capex, aumento de EBITDA no top line, redução de capital de giro, melhora de margem, controle de custo, venda de ativos operacionais e não operacionais. Tudo isso segue na mesa. Ativos não operacionais, a gente ainda tem quatro ativos fechados por aí. Não é nada muito fácil de vender, e também não é nada supermaterial, mas somando esses vários ativos, tem centenas de milhões de BRL pra gente vender em ativos não operacionais. Ativos operacionais não tem nada no radar nesse momento, mas seguimos olhando, seguimos atentos pro que pode ser feito.

Speaker #1: We have CNBC , Arauco Brasil We have a demand for corn ethanol . So this will all pressure our wood costs . But I see that regionally we're going to have different behaviors .

Speaker #1: Maybe in Sao Paulo , the demand for wood will be lower . And Rio Grande do Sul , they have a strong demand .

Raul Guaragna: Virando a chave pra custos de madeira, eu acho que você tem razão ao dizer que você vai ter custos mais comportados de madeira, mas ainda existe déficit de madeira estrutural pelos próximos anos. Tem projeto de celulose da CMPC, tem projeto de celulose da Arauco, tem projeto de celulose da Bracell, tem a demanda por vapor pra etanol de milho no Centro-Oeste, tudo isso vai colocar alguma pressão nos custos de madeira. Eu vejo que regionalmente a gente vai ter comportamentos distintos, talvez em São Paulo, um pouco menos demanda de madeira, no Rio Grande do Sul uma demanda importante, no Centro-Oeste uma demanda importante.

For.

Speaker #1: And the Brazilian Midwest , the demand will be strong as well . So since we're agile and since we can move quickly , we're still going to see opportunities in forestry business .

Raul Guaragna: In the Brazilian Midwest, the demand will be strong as well. Since we're agile and since we can move quickly, we're still going to see opportunities in forestry business. We're not expecting a significant cost increase in our biological assets. Let's remember that the price of wood has more than tripled, and it continues to be a competitive advantage if you are an integrated company like Dexco. It's not easy to buy wood, not only because of the cost, but also the supply. Not every wood is available to you. Some part of it will be regional. You may also have different kinds of wood. There's kinds of woods that people don't sell for wood panels and for pulp. We still see some pressure here. It's still expensive, but we see only some regional variations. Thank you. That was very clear.

Speaker #1: But we're not expecting a significant cost increase in our biological assets . But let's remember that the price of wood is more than tripled .

Speaker #1: And it continues to be a competitive advantage . If you are an integrated company like Dexco And it's not easy to buy wood not only because of the cost , but also the supply .

Raul Guaragna: Aqui, como a gente é ágil e consegue se movimentar rapidamente, a gente ainda vai ter oportunidade de fazer negócios florestais, mas não estamos prevendo, de fato, um novo aumento de custo importante no ativo biológico, mas vamos lembrar que o preço da madeira mais do que triplicou ao longo do tempo e continua sendo uma vantagem competitiva importante pra quem é integrado como a Dexco. Não está efetivamente fácil Você comprar madeira não só pelo custo, mas também pela oferta. Tem que lembrar que nem toda madeira é disponível. Você tem um lado que é regional, você tem um lado que é a vocação daquela madeira de serraria mais antiga, ninguém vai vender pra fazer celulose ou pra fazer painel. Sim, segue pressionado, sim, segue caro, mas com comportamento mais estável, com variações regionais.

Speaker #1: Not every wood is available to you . Some part of it will be regional . You may also have different kinds of wood There's kinds of woods that people don't sell for wood panels and for pulp .

Speaker #1: So we still see some pressure here . It's still expensive , We see only some regional variations Thank you . That was very clear The next question will be asked by Gustavo Huang from HSBC .

Matheus Meloni: Thank you. That was very clear.

For.

Gustavo Wong: The next question will be asked by Gustavo Wong from HSBC. Go ahead. Good morning, everyone. Can you hear me? Great. First of all, congratulations on your results. Thank you for taking my questions. I have a couple of very quick points. First, about metals. You've continued with your value over volume strategy, and you've passed prices on to the chain due to increases in copper values. How sustainable do you believe that this is? Another point is, you mentioned in your release, and Lucianna commented on the down-trading movement. Do you believe that this will continue in H2, and how would you react to that? That's my first question. The second question is also on metals and sanitary ware.

Guilherme Setúbal: The next question will be asked by Gustavo Hwang from HSBC. Go ahead.

Speaker #1: Go ahead Good morning everyone . Can you hear me Great . First of all , congratulations on your results . Thank you for taking my questions .

Gustavo Hwang: Good morning, everyone. Can you hear me? Great. First of all, congratulations on your results. Thank you for taking my questions. I have a couple of very quick points. First, about metals. You've continued with your value over volume strategy, and you've passed prices on to the chain due to increases in copper values. How sustainable do you believe that this is? Another point is, you mentioned in your release, and Lucianna commented on the down-trading movement. Do you believe that this will continue in H2, and how would you react to that? That's my first question. The second question is also on metals and sanitary ware. In H1, you posted some results, and I'd like to understand if your expectations for the year are in line with what you saw in H1. Thank you.

Speaker #1: I have a couple of very quick points . First , about metals . You've continued with your value over volume strategy and you've passed prices on to the gene due to increases in copper values .

Mateus Meloni: Muito obrigado, pessoal. Muito claro. Valeu.

Speaker #1: How sustainable do you believe that this is ? And Another point is you mentioned in your release and Luciana commented on the Downtrading movement Do you believe that this will continue in the second half of the year ?

Guilherme Setubal: Nossa próxima pergunta vem do Gustavo Wang, do HSBC. Gustavo, seu microfone está liberado.

No.

Gustavo Wang: Bom dia, pessoal, tudo bem? Vocês me escutam? Perfeito. Primeiro, parabéns pelos resultados e obrigado por pegar minhas perguntas. Tenho dois pontos bem rápidos aqui. Primeiro seria sobre metais. Vocês vêm seguindo aí com uma estratégia de value over volume, priorizando o produto mais premium e conseguindo repassar o preço na cadeia mais por conta do aumento do preço de cobre. Queria saber o quão sustentável vocês acham que são esses repasses. Um outro ponto seria, vocês até colocaram aí no release, e a Lucianna comentou mais cedo no call sobre o movimento de downtrading, queria saber no caso que isso se intensifique no H2, como vocês reagiriam a isso. Essa é minha primeira pergunta.

Speaker #1: And how would you react to that ? That's my first question . The second question is also on metals and sanitaryware . In the first half , you posted Some results and I'd like to understand if your expectations for the year are in line with what you saw in the first half .

Gustavo Wong: In H1, you posted some results, and I'd like to understand if your expectations for the year are in line with what you saw in H1. Thank you. Raul will answer your questions. Thank you. These are great questions. Yes, we do need to have a better mix. There's still a lot of room to work on the mix as we debottleneck the operations and improve our service level. Deca has always been known, over the last 20 years, for having a long delivery level. We never really knew what was happening at the consumer end, if they were just replacing inventory, if they were using it, if these were customers making use of an opportunity. It was very difficult to fine-tune between the supply and demand.

Problem.

Speaker #1: Thank you Raul . Answer your questions Thank you . These are great questions So yes , we do need to have a better mix .

Guilherme Setúbal: Raul will answer your questions.

Raul Guaragna: Thank you. These are great questions. Yes, we do need to have a better mix. There's still a lot of room to work on the mix as we debottleneck the operations and improve our service level. Deca has always been known, over the last 20 years, for having a long delivery level. We never really knew what was happening at the consumer end, if they were just replacing inventory, if they were using it, if these were customers making use of an opportunity. It was very difficult to fine-tune between the supply and demand.

Gustavo Wang: Minha segunda pergunta seria sobre metais e louças também, mas nesse Q1 vocês reportaram aí. Queria saber se vocês continuam com o nível de BRL 200 million como referência para este ano, ou se esse nível pode ser o piso para performance da divisão. Obrigado.

Speaker #1: There's still a lot of room to work on the mix as we debottlenecking the operations and improve our service level . Deca has always been known over the last 20 years for having a long delivery Level .

To me.

My name is.

Guilherme Setubal: Gustavo, obrigado pela pergunta. Eu vou passar aqui pro Raul, que vai falar sobre a performance de Deca de uma forma geral e respondendo suas duas perguntas.

Speaker #1: So we never really knew what was happening at the consumer end . If they were just replacing inventory , if they were using it , if these were customers and making use of an opportunity .

Raul Guaragna: Muito bom, são ótimas perguntas. Acho que aqui a gente sim, precisa priorizar o mix melhor, tem muito espaço pra trabalhar em mix, na medida em que a gente também desengargala nossas operações, melhora o nível de serviço. Deca sempre foi conhecida ao longo dos últimos 20 anos por ter um nível de entrega longo. Isso demandava muito estoque na cadeia, então a gente perdia, ficava cego entre o que estava vendendo na ponta e o que eu estava vendendo. Eu nunca sabia se era reposição, se era construção de estoque, se era algo oportunista esperando um aumento de preço, se era cliente aproveitando uma oportunidade de fechamento de trimestre. Isso dificulta bastante a pilotagem fina do que é oferta e demanda.

Speaker #1: So it was very difficult to fine tune between the supply and demand . Now , since we have ten days deliveries , it starts making less sense for our clients to have a large inventory .

Raul Guaragna: Now, since we have 10 days on deliveries, it starts making less sense for our clients to have a large inventory, and it's great that they don't. It's great that they can trust our service level and our plans. This is helpful, but it creates a short-term effect because customers are going to now sell their inventory first before making an order since they know that these orders will be fulfilled quickly. We saw this in the basic lines. We saw a huge volume loss. For basic products, we can now deliver within two or three days. This is wonderful. It really helps us to keep track of what's happening at the end. I also see that service levels have improved. We have a better portfolio. We reached a very good cost level, and this also allows us to spread out.

Speaker #1: And it's great that they don't It's great that they can trust our service level and our plants . This is helpful , but it creates a short term effect because customers are going to now sell their inventory first before making an order , since they know that these orders will be fulfilled quickly .

Speaker #1: We saw this in the basic lines . We saw a huge volume loss , but for basic products we can now deliver within 2 or 3 days .

Raul Guaragna: Quando a gente melhora pra 10 dias de nível de entrega nos produtos da Deca, e a gente vê o nível de custo tão alto, começa a fazer muito menos sentido o nosso cliente carregar estoque. É ótimo que ele não faça assim. Que ele consiga comprar e vender, fazer a sua margem, mas precisar carregar menos estoque e confiar no nível de serviço que a fábrica faz. Isso ajuda demais, mas ele tem um efeito de curto prazo de que o cliente vai girar o estoque dele primeiro antes de repor, agora que ele confia que ele pode botar um pedido e a gente vai entregar rapidamente. A gente viu muito isso na linha de básicos. Aí tem uma grande perda de volume, mas também a gente zerou a carteira e básico, aquele que vai dentro da parede, a gente entrega em two, three days.

Speaker #1: So this is wonderful . It really helps us to keep track of what's happening at the end I also see that service levels have improved .

Speaker #1: We have a better portfolio . We reached a very good cost level and this also allows us to spread out We have data showing that we are reaching a small part of the points of sale in Brazil .

Raul Guaragna: We have data showing that we are reaching a small part of the points of sale in Brazil. This is interesting to hear because we're in most households, but if you go to more remote areas in Brazil, you don't necessarily find a Deca there. Daniel is in a sales convention with his team, and the topic there is distribution or helping Deca to reach more customers. This will definitely have a very positive effect, this combination of better margins, better service level, and important portfolio with something that helps build up the fixed cost volume. The name of the game here is profitability and volume. The first part was evident. It was improving service level, reducing volumes because you're no longer pushing out your inventory to the chain, increasing prices, which are now much better adjusted.

Speaker #1: This is interesting to hear because we're in most households , but if you go to more remote areas in Brazil , you don't necessarily find Deca there .

Raul Guaragna: Isso é sensacional pra que a gente consiga ir acompanhando pari passu o que está sendo de venda na ponta e o que eu estou vendendo pro meu cliente. Além disso, eu vejo também essa melhora de nível de serviço, a linha de portfólio adequada que a Deca tem, o nível de custo que a gente conseguiu chegar, nos permite também pulverizar. A gente tem dados pra dizer que a gente chega numa parcela pequena dos pontos de venda do Brasil. É curioso ouvir isso. Uma marca que está presente em todas as casas, mas, de fato, se você vai em grandes pontos mais remotos do território brasileiro, você não necessariamente encontra Deca lá. Nesse momento, o Daniel está com o time dele numa convenção de vendas. Efetivamente o tema é pulverizar, fazer a Deca chegar, tanto metais quanto louças, em mais clientes no Brasil.

Speaker #1: So Danielle is in a sales convention with his team and the topic there is distribution or helping to Deca to reach more customers .

For.

Portfolio.

Speaker #1: So this will definitely have a very positive effect . This combination of better margins , better service level and important portfolio with something that helps build up the fixed cost volume So the name of the game here is profitability and volume .

Speaker #1: So the first part was evident . It was improving service level reducing volumes because you're no longer pushing out your inventory to the chain , increasing prices Which are now much better adjusted .

Raul Guaragna: Isso certamente vai ter um efeito muito positivo de combinar margens melhores, um nível de serviço melhor no luxo, um portfólio importante com algo que ajuda a compor custo fixo, volume, que é o portfólio mais médio e básico que a gente tem. O nome do jogo aqui é fazer rentabilidade, mas também aumentar o volume. A primeira perna foi evidente, foi de melhorar nível de serviço, diminuir um pouco de volume, até porque você não empurra mais estoque na cadeia, fazer aumento de preço, que agora já está muito ajustado na sua pergunta. Não tem muito mais necessidade de curto prazo de fazer ajustes de preço por inflação, mas sim por gestão, por RDM, por gestão de receita e de preço competitivo. Olhando o mercado, a gente vai sempre fazer, mas não por pressão de custo. Aí, downtrading é algo que tem que estar sempre atento.

Speaker #1: We don't need to adjust for inflation , but rather for OGM To have more competitive prices . So we're always going to do this .

Raul Guaragna: We don't need to adjust for inflation, but rather for RGM to have more competitive prices. We're always going to do this, but not due to the cost pressure. Down-trading is something that we always need to pay attention to. We do see, especially in sanitary ware, that super competitive products have been gaining space, but there's not much we can do. Our response to this is to step out of the segments in which we cannot compete. On the other hand, Deca is very flexible. We can sell metal products that cost BRL 180 to products that cost thousands of BRL under the same brand. We can address an important part of the market. We're not going to be able to address the BRL 40, BRL 50 faucets and very competitive basins that cost under BRL 300 for a kit.

Speaker #1: But not due to the cost pressure and downtrading is something that we always need to pay attention to We do see , especially in Sanitaryware , that super competitive products have been gaining space , but there's not much we can do .

Parcela pickles.

Speaker #1: Our response to this is to step out of the segments in which we cannot compete . On the other hand , Deca is very flexible .

Speaker #1: We can sell products that cost 180 eyes to products that cost thousands of eyes under the same brand . So we can address an important part of the market .

um,

Speaker #1: We're not going to be able to the , you know , 40 , 50 . I faucets and very competitive basins that cost under 300 eyes for a kit .

Raul Guaragna: A gente vê, sim, principalmente em louças, o supercompetitivo ganhando espaço. Aí que não tem muito o que fazer. Nossa resposta a isso é sair de segmentos onde a gente não consegue competir. Por outro lado, Deca tem essa abrangência. A gente consegue vender produtos de metais, desde BRL 180 até milhares de BRL com a mesma marca. Sim, eu consigo endereçar a parte importante do mercado. Não vou conseguir endereçar a parte de entrada do mercado, torneiras de BRL 40, BRL 50, e as bacias supercompetitivas abaixo de BRL 300 um kit. Sim, tem um pedaço de demanda que a gente vai escolher não jogar. Na mesma resposta para Deca que eu dei para revestimento, olhando o filme, sim, a gente vai continuar vendo melhoras e buscar a Deca melhorando sequencialmente ao longo do trimestre.

yeah.

Speaker #1: So yes , there's a part of the demand in which we'll need to choose not to play in So as I said before , when we look at the long term , we're going to continue to improve This is a business that needs to find better EBITDA margins around 2,025% .

Raul Guaragna: Yes, there's a part of the demand in which we'll need to choose not to play in. As I said before, when we look at the long term, we're going to continue to improve. This is a business that needs to find better EBITDA margins around 20% and 25%. This is something that we need to do. It's not going to be a short journey. We're going to see sequential improvements. The Q3, again, is seasonally stronger, but it probably won't be as strong as the last few years. It is reasonable to think that at least the demand won't deteriorate anymore. Thank you, Raul. The next question will be asked by Gabriel Barra from Citi. Go ahead. Hi, Raul, Lucianna Raffaini, and Guilherme. I have two questions. First, we always need to talk about de-leveraging, since this was one of your main pillars recently.

Speaker #1: This is something that we need to do , but it's not going to be a short journey . We're going to see sequential improvements the third quarter , again , is seasonally , seasonally stronger , but it probably won't be as strong as the last few years .

Speaker #1: But it is reasonable to think that at least the demand won't deteriorate anymore Thank you . Raul The next question will be asked by Gabriel Vara from Citi .

Raul Guaragna: Esse é um negócio que precisa buscar, ao longo dos próximos anos, margem EBITDA na casa de 20% e 25%. Esse é o caminho que a gente tem que buscar. Não vai ser uma jornada curta, mas a gente vai vendo sequencialmente melhoras. A gente viu a gente entregar 100% do resultado de 2025 em dois trimestres em 2026. O Q3, de novo, é um trimestre sazonalmente mais forte, mas que provavelmente não virá tão forte quanto veio nos últimos anos, mas também é razoável pensar que pelo menos a demanda não deve ter novas deteriorações.

Gustavo Hwang: Thank you, Raul.

Guilherme Setúbal: The next question will be asked by Gabriel Barra from Citi. Go ahead.

Speaker #1: Go ahead Hi , Raul Lores . I have two questions First , we always need to talk about deleveraging since this was one of your main pillars recently .

Guilherme Setúbal: Hi, Raul, Lucianna and Guilherme. I have two questions. First, we always need to talk about de-leveraging, since this was one of your main pillars recently. One point that drew my attention is that we were talking about a target leverage of 2.5 to 2.7, and you're very close to that. We're very close to this 2.7 level. You mentioned that you want to continue to de-leverage, looking at the net debt and not only EBITDA. When we add all of this together, we might be aiming towards something below 2.5, because your EBITDA is higher and your net debt will be lower. I'd like to understand if that makes sense, and if it doesn't, if 2.5 is the real number, you're going to have some leftover cash. What would you do with that? Would it be dividends? Buyback? Do you see any projects that would consume it? That's my first point. My next question is on ceramic tiles. We've been talking about capacity adjustments.

Speaker #1: One point that drew my attention is that we were talking about a target leverage of 2.5 to 2.7 . And you're very close to that So we're very close to this 2.7 level .

Gabriel Barra: One point that drew my attention is that we were talking about a target leverage of 2.5 to 2.7, and you're very close to that. We're very close to this 2.7 level. You mentioned that you want to continue to de-leverage, looking at the net debt and not only EBITDA. When we add all of this together, we might be aiming towards something below 2.5, because your EBITDA is higher and your net debt will be lower. I'd like to understand if that makes sense, and if it doesn't, if 2.5 is the real number, you're going to have some leftover cash. What would you do with that? Would it be dividends? Buyback? Do you see any projects that would consume it? That's my first point. My next question is on ceramic tiles. We've been talking about capacity adjustments.

For.

Gustavo Wang: Perfeito, Raul, obrigado.

Operator 2: Nossa próxima pergunta vem do Gabriel Barra, da Citi. Gabriel, seu microfone está liberado.

Gabriel microphone.

Gabriel Barra: Raul, Luciana, Guilherme, obrigado. Vou pegar minhas perguntas. Tenho dois pontos aqui. O primeiro, inevitavelmente, sempre vai falar bastante sobre alocação de capital e desalavancagem, dado que foi talvez um dos grandes pilares da tese de investimento nos últimos tempos. Um ponto que me chamou a atenção, Raul, é quando no trimestre passado a gente estava falando sobre uma alavancagem 2.5 a 2.7 vezes, que já está bem perto desse número. Quando você bota ainda a venda de ativo que aconteceu nesse trimestre, que não está refletido nos números do Q2, você está muito perto dessa banda de 2.7. Juntando a isso, você fala que a ideia aqui é continuar a desalavancagem olhando pra dívida líquida, não só olhando pra nível de alavancagem EBITDA, porque o EBITDA também está subindo.

Speaker #1: You mentioned that you want to continue to deleverage . Looking at the net debt and not only EBITDA , but when we add all of this together , we might be aiming towards something below 2.5 because your EBITDA is higher and your net debt will be lower .

Speaker #1: So I'd like to understand if that makes sense . And if it does well , if it doesn't , if 2.5 is the real number , you're going to have some leftover cash .

Speaker #1: So what would you do with that ? Would it be dividends buyback Do you see any projects that would consume it ? So that's my first point My next question is on ceramic tiles .

Gabriel Barra: Quando a gente bota isso tudo junto, me parece que talvez a gente esteja até mirando aqui um número abaixo de 2.5 nessa discussão, porque você vai ter um EBITDA maior com uma dívida líquida menor. Primeiro, faz sentido o que eu falei? Eu queria ouvir um pouco de você sobre isso. Se não fizer sentido, se o 2.5 for realmente o número aqui, vai ter uma sobra de caixa. Aí a discussão é o que fazer com essa sobra de caixa. Vai ser o quê? Buyback, dividendo? Vocês veem algum projeto aqui pra melhora de eficiência que talvez vá consumir esse montante? Esse é o primeiro ponto. Acho que acaba sendo duas perguntas aqui em uma, nesse primeiro ponto, que encaixa com a segunda pergunta, que é a questão de revestimento.

Speaker #1: We've been talking about capacity adjustments . Louisiana mentioned Capacity cuts to adjust to the business So I'd like to ask about any potential asset sales that can generate value with this reshuffle .

Gabriel Barra: Lucianna Raffaini mentioned capacity cuts to adjust to the business. I'd like to ask about any potential asset sales that can generate value with this reshuffle and the possible sales that you might have. Thank you. Thank you, Gabriel. Two excellent questions. When we mentioned 2.5 to 2.7, we knew that this was an ambitious goal. From 3.5 to 2.7, it's not easy to do something like that. Yes, we're on the right track to reach the 2.5 that we set as our goal. No, we're not going to be happy once we get to 2.5. I think you understood it perfectly well. This is a key part of our strategy. We need to reduce debt by over 1 billion. We need to have interest levels that are at the right level because we're not seeing interest rates going down very quickly.

Gabriel Barra: Lucianna mentioned capacity cuts to adjust to the business. I'd like to ask about any potential asset sales that can generate value with this reshuffle and the possible sales that you might have. Thank you.

Speaker #1: And the possible sales that you might have Thank you Thank you . Gabriel . Two excellent questions . So when we mentioned 2.5 to 2.7 , we knew that this was an ambitious goal from 3.5 to 2.7 .

Raul Guaragna: Thank you, Gabriel. Two excellent questions. When we mentioned 2.5 to 2.7, we knew that this was an ambitious goal. From 3.5 to 2.7, it's not easy to do something like that. Yes, we're on the right track to reach the 2.5 that we set as our goal. No, we're not going to be happy once we get to 2.5. I think you understood it perfectly well. This is a key part of our strategy. We need to reduce debt by over 1 billion. We need to have interest levels that are at the right level because we're not seeing interest rates going down very quickly.

Gabriel Barra: A gente vem falando muito sobre melhor utilização de capacidade, eu acho que a Luciana mencionou sobre esse ponto de corte de capacidade pra melhorar e ajustar o business. Aí entra também no ponto de venda de ativo, que tem a ver com a primeira pergunta que eu fiz. O que vocês veem ainda de potencial venda de ativo e geração de valor aqui com esse reshuffle de portfólio e possíveis vendas de plantas, como aconteceu nesse trimestre? São esses dois pontos. Obrigado.

Speaker #1: It's not easy to do something like that . So yes we're on the right track to reach the 2.5 that we set as our goal .

Speaker #1: But no , we're not going to be happy . Once we get to 2.5 . So I think you understood it perfectly well This is a key part of our strategy .

Raul Guaragna: Obrigado, Gabriel, duas excelentes perguntas. Quando a gente colocou 2.5 a 2.7, a gente sabia que era uma meta ambiciosa. Sair lá de 3.5, chegamos a 3.7. Baixar uma vez não é um negócio trivial. Sim, a gente está num bom caminho para chegar nesses 2.5 que a gente colocou aqui, mas não, a gente não vai ficar satisfeito porque chegou no 2.5. Seu ponto é absolutamente pertinente, você entendeu perfeitamente o que a gente vem falando aqui como estratégia-chave. Tem que baixar a dívida, tem que baixar mais de 1 billion de dívida, tem que estar com pagamento de juros num nível adequado, até porque nós não estamos vendo queda de taxa de juro numa velocidade muito alta. Cenário base aqui, curioso, mas 2026 a taxa média de juro vai ser maior do que a de 2025.

So business.

Speaker #1: We need to reduce debt by over 1 billion . We need to Have interest levels that are at the right level because we're not seeing interest rates going down very quickly .

Speaker #1: So The overall scenario , I mean , in 2026 , interest rates will be higher in 2025 . We didn't imagine this when we built our plan .

Raul Guaragna: The overall scenario, in 2026, interest rates will be higher than in 2025. We didn't imagine this when we built our plan. We thought it would be the same or slightly below 2025, but it will be higher. We forget about the fact that 15% was at the end of 2025, and we had to carry it for most of 2026. Anything we can do in selling additional assets to generate cash and reduce indebtedness will be done. We're not going to stop at the 2.2 goal. I hope in the future we can say that our debt is very low and that we will invest. I think there are relevant investment opportunities, but I just want to make it clear that Dexco has never stopped investing into what it needed to invest. We don't need to expand our capacity, and we won't for many years.

Speaker #1: We thought it would be the same or slightly below 2025 . But it will be higher . We forget about the fact that 15% was at the end of 2025 , and we had to carry it for most of 2026 .

Speaker #1: So anything we can do in selling additional assets to generate cash and reduce indebtedness will be done . We're not going to stop at the 2.2 goal .

uh,

Speaker #1: I hope , in the future we can say that our debt is very low and that we will invest . I think there are relevant investment opportunities , but I just want to make it clear that Desco has never stopped investing in to what it needed to invest , but we don't need to expand our capacity , and we won't .

Raul Guaragna: A gente não contava com isso quando construiu o nosso PO. A gente imaginava que ela ia cair mais rápido, ia terminar na média igual ou um pouquinho menor do que foi em 2025. Ela termina maior na média, porque a gente esquece que o 15% chegou mais no final do ano de 2025 e a gente carregou esses 15% durante uma boa parte de 2026, a taxa de juro vai ficar alta. Tudo que a gente conseguir de venda de ativo adicional, de geração de caixa, de redução de endividamento, a gente vai fazer. A gente não vai parar na meta de 2.2. Eu espero que a gente possa ter uma conversa e dizer: Poxa, a dívida está superbaixa. Acho que a gente precisa voltar a investir.

Speaker #1: For many years , like I said , these two plants with small opex adjustments , you know , by using the equipment that we have , by increasing our or by improving our portfolio , we can gain 20 to 30% in capacity .

Raul Guaragna: Like I said, these two plants with small OPEX adjustments, by using the equipment that we have, by improving our portfolio, we can gain 20% to 30% in capacity and service our demand for the next five to seven years without needing to build anything. I don't think that the ceramic tiles segment will have less than these two plants that we have right now. We didn't imagine that we would sell Urussanga, but everything that was done there can be done in Botucatu and more. The potential portfolio in Botucatu is much greater. We closed Urussanga and maintained Criciúma, which is very competitive, has the potential of having smaller equipment that makes very good parts. This is all aligned to the process that we're going through in ceramic tiles. I think that's it.

Speaker #1: And service . Our demand for the next 5 to 7 years without needing to build anything . But I don't think that the ceramic tiles segment will have less than these two plants that we have right now We didn't imagine that we would sell Odusanya , but everything that was done there can be done in Botucatu and more .

Raul Guaragna: Acho que a gente tem oportunidades de investimento muito relevantes, mas eu quero deixar bem claro que a Dexco nunca deixou de fazer os investimentos que precisavam ser feitos. Por outro lado, eu também não preciso fazer investimento em capacidade por muitos anos. A gente, em revestimentos, como eu falei, essas duas plantas que a gente tem aqui, com pequenos ajustes, quase de OpEx, aproveitando equipamento que eu já tenho dentro de casa, ajustando fluxo, com a melhora de portfólio, a gente pode ganhar 20% and 30% de capacidade e atender a demanda pelos próximos five a seven anos sem ter que fazer outra fábrica. Por outro lado, também não vejo um negócio de revestimento cerâmico com menos do que essas duas fábricas que a gente tem hoje. Até era pouco trivial imaginar fechar e vender Urussanga, que é uma fábrica ótima.

scenario support.

Speaker #1: So the potential portfolio in Botucatu is much greater . So we closed Odusanya and maintained Criciuma , which is very competitive Has the potential of having equipment that makes very good parts .

Speaker #1: So this is all aligned to the process that we're going through in ceramic tiles I think that's it . I don't expect to see many opportunities to sell new ceramic tile assets .

Raul Guaragna: Tudo que se faz em Urussanga, a gente consegue fazer em Botucatu, e mais. Tem um potencial de portfólio muito maior em Botucatu. A gente fecha Urussanga, que é uma fábrica mais nova que Criciúma, e mantém Criciúma, que é supercompetitiva, 100% depreciada, com potencial de fornos menores para fazer peças especiais, que dá margem boa. Isso tudo está muito alinhado nesse processo de revestimento cerâmico. Acho que é isso, não vejo oportunidade de vender novos ativos de revestimento cerâmico. A linha agora é continuar produzindo com custo adequado, continuar promovendo as novas categorias, fincar o pé nesse espaço de luxo, superluxo e o topo do médio, um mercado endereçável interessante na ordem de BRL 5 billion. A gente precisa buscar a liderança no luxo e vai buscar, a Portinari é a segunda marca em termos de consideração e de conversão no revestimento cerâmico brasileiro.

Raul Guaragna: I don't expect to see many opportunities to sell new ceramic tile assets. We expect to continue producing at the right cost, continue promoting the right categories, focusing on luxury, super luxury. This is a very good addressable market of BRL 5 billion, and we need to be leaders in luxury. Portinari is the second brand in consideration and conversion. This is the investment journey that we're taking, and that's very important for our portfolio. It's also reasonable to think that you have capacity everywhere. We saw that the market went down 25% and capacity went up 15%. It's not trivial to sell assets right now, especially the ones we have. It doesn't really make sense to look at that. I think we need to improve our business so that we can get better EBITDA margins above 20%.

Speaker #1: We expect to continue producing at the right cost , continue promoting the right categories Focusing on luxury , super luxury . And this is a very good addressable market of 5 billion reais .

Speaker #1: And we need to be leaders in luxury . Portinari is the second . Brand in consideration and conversion So This is the investment journey that we're taking .

um,

Speaker #1: And that's very important for our portfolio . It's also reasonable to think that you have capacity everywhere . We saw that the market went down 25% and capacity went up 15% .

Speaker #1: So it's not trivial to sell assets right now , especially the ones we have . So it doesn't really make sense to look at that .

Speaker #1: I think we need to improve our business so that we can get better EBITDA margins above 20% . We need to have more capacity utilization and really execute the leadership that we have in the super , super luxury and luxury segments .

Raul Guaragna: Acho que é essa jornada de revestimentos que é superimportante para esse nosso portfólio de soluções para melhor viver. É razoável também pensar que você tem capacidade para todo lado. A gente viu o mercado cair 25% e viu a capacidade subir 15%. Não é muito trivial vender ativo aqui agora, principalmente os ativos que a gente tem. Não faz muito sentido, o olhar aqui é muito mais agora de ir melhorando esse negócio, chegar também a margens de EBITDA acima de 20%, ocupar a capacidade e realmente executar impecavelmente essa liderança no segmento superluxo, luxo e o topo do segmento médio brasileiro e liderança absoluta nos grandes formatos.

Guilherme Setubal: We need to have more capacity utilization and really execute the leadership that we have in the super luxury and luxury segments. We need to be absolute leaders in large products. Thank you, Raul. That was very clear. The next question will be asked by Ricardo Monegaglia from Safra. Go ahead. Good morning, everyone. I have two quick questions. First, starting with wood panels, if you could tell us a little bit about what you saw this quarter. We saw that urea prices went up significantly. Prices were passed on with some delay. Now, when we think about the next quarter, you passed on some price increases this quarter. Do you expect this to continue? We're seeing that raw material prices going down.

Speaker #1: We need to be absolute leaders in large products Thank you . Raul . That was very clear The next question will be asked by Ricardo Monegaglia from Safra .

Gabriel Barra: Thank you, Raul. That was very clear.

For.

Guilherme Setúbal: The next question will be asked by Ricardo Monegaglia from Safra. Go ahead.

Speaker #1: Go ahead . Good morning everyone . I have two quick questions First , starting with wood panels , if you can tell us a little bit about what you saw , this quarter , we saw that urea prices went up significantly .

Ricardo Monegaglia: Good morning, everyone. I have two quick questions. First, starting with wood panels, if you could tell us a little bit about what you saw this quarter. We saw that urea prices went up significantly. Prices were passed on with some delay. Now, when we think about the next quarter, you passed on some price increases this quarter. Do you expect this to continue? We're seeing that raw material prices going down.

Speaker #1: Prices were passed on with some delay And now when we think about the next quarter You passed on some price increases this quarter .

Gmail.

Gabriel Barra: Obrigado, Raul. Você tá claro.

Guilherme Setubal: Nossa próxima pergunta vem do Ricardo Monegaglia, da Safra. Ricardo, seu microfone está liberado.

Speaker #1: So do you expect this to continue . We're seeing that raw material prices are going down . So Given the current context , the supply and demand should we expect a reasonable margin expansion in the panels business in the second half of the year versus what we saw in the second quarter My second question is about Dexco forestry .

Ricardo Monegaglia: Bom dia, pessoal. Raul, Gui, tenho duas perguntas rápidas aqui. Primeiro, começando em painel de madeira. Queria que vocês lembrassem um pouquinho para a gente a dinâmica que a gente viu no trimestre, que foi uma explosão do custo de ureia, os preços sendo repassados com algum lag, e aí tem o ponto de estoque de matéria-prima. E agora quando a gente pensa no próximo trimestre, que vocês passaram alguns aumentos de preço durante o tri, de repente teria espaço para mais alguns aumentos, e hoje a gente está vendo o preço das matérias-primas em queda. Eu acho que a minha pergunta, de modo bem objetivo: dado o contexto do mercado atual, oferta e demanda, faz sentido a gente imaginar uma expansão razoável de margem no business de painéis indo para o H2, em comparação, de repente, com o que a gente viu no Q2?

Ricardo Monegaglia: Given the current context, the supply and demand, should we expect a reasonable margin expansion in the panels business in H2 versus what we saw in Q2? My second question is about Dexco Forestry. I would like to understand what your vision of this business unit is. I see that you are taking more opportunities in forestry trading. If you can tell us a little bit about your long-term goals here, how will these results be reported to the market? What is your expectations from the market when it comes to this forestry business? Thank you. Thank you. I will hand it over to Raul. The next question will be the last one that we answer for the sake of time. Thank you, Ricardo. I think the piloting topic is a key thing.

Just talk.

Speaker #1: I'd like to understand what your vision of this business unit is . I see that you're taking more opportunities in forestry trading . So if you can tell us a little bit about your long term goals here , how will these results be reported to the market And what is your expectations from the market when it comes to this forestry business ?

Ricardo Monegaglia: A segunda pergunta é sobre Dexco Negócios Florestais. Queria entender um pouquinho qual é a visão pra essa unidade de negócio em discussão. Vocês estão começando a aproveitar um pouco mais as oportunidades em trade em florestal, e queria dar a oportunidade de vocês discutirem um pouco mais qual é o objetivo de longo prazo. Como os resultados dessa divisão vão ser reportados pro mercado e exatamente qual é o objetivo que vocês esperam na leitura do mercado, com uma ênfase maior nesse business de Negócios Florestais? Obrigado.

To them, and fighting and business in Japan.

Speaker #1: Thank you . Thank you . I'll hand it over to Raul and the next question will be the last one that we answered for the sake of time Thank you Ricardo .

Guilherme Setúbal: Thank you. I will hand it over to Raul. The next question will be the last one that we answer for the sake of time.

Raul Guaragna: Thank you, Ricardo. I think the piloting topic is a key thing. We got ahead of this process when it came to cost, we also have structural competitive advantages. We have a resins plant. With that, we were able to build urea at the right cost. We had a good contract to receive methanol. The sophistication we have at our operations and processes is not only about the cost, it's also about our competitiveness. I think we're well equipped to pilot these volatile moments, and that's what we did. For some time, we were ahead of the cost because we were able to buy some inventory, later when the inventory was replaced, we saw that this came to our cost levels. Things were more or less aligned. I see very limited space for new price increases in panels.

Speaker #1: I think The piloting topic is the key thing We got ahead of this process when it comes to cost , but we also have structural competitive advantages .

Guilherme Setubal: We got ahead of this process when it came to cost, we also have structural competitive advantages. We have a resins plant. With that, we were able to build urea at the right cost. We had a good contract to receive methanol. The sophistication we have at our operations and processes is not only about the cost, it's also about our competitiveness. I think we're well equipped to pilot these volatile moments, and that's what we did. For some time, we were ahead of the cost because we were able to buy some inventory, later when the inventory was replaced, we saw that this came to our cost levels. Things were more or less aligned. I see very limited space for new price increases in panels.

Speaker #1: We have a resins plant . So with that we were able to build urea at the right cost . We had a good contract to receive methanol .

Guilherme Setubal: Obrigado, Ricardo, pela pergunta. Vou passar pro Raul aqui. Em respeito ao nosso horário, além dessas perguntas, a gente vai fazer mais uma pergunta, pra gente respeitar o horário das 10:00 AM. Raul.

Speaker #1: So the sophistication we have at our operations and processes is not only about the cost , it's also about our competitiveness . So I think we're well equipped to Pilot these volatile moments .

Raul Guaragna: Legal. Obrigado, Ricardo. Acho que aqui muito chave o tema da pilotagem que o nosso negócio de madeira fez nesse momento de aumento de custo. Eu acho que ao mesmo tempo que a gente se antecipou a esse processo, esse tema de aumento de custo, a gente tem vantagens competitivas estruturais importantes. A gente tem fábrica de resina. Ao ter fábrica de resina, a gente conseguiu construir o estoque de ureia num custo adequado, conseguiu fazer um bom acordo, contrato de metanol. Essa sofisticação de operações e de processos que a gente tem não é só custo, ela também é competitividade. Acho que a gente está muito bem equipado pra pilotar esses momentos de volatilidade, e a gente assim o fez.

Speaker #1: And that's what we did For some time we were ahead of the cost because we were able to buy some inventory . And later , when the inventory was replaced , we saw that this came to our cost levels .

For.

Speaker #1: And so things were more or less aligned . I see very limited space for new price increases in panels . I think things are adjusted now , but I also don't see a lot of space for a reduction .

Raul Guaragna: I think things are adjusted now, I also don't see a lot of space for a reduction. Enrique Aldagi here always says something interesting. He says that costs dropped upwards. That's very important. We see that costs went up, costs went down, they stopped above the previous level. Which means that our cost management and price levels are in line with what the market is demanding. Again, when it comes to wood, Q3 is the strongest, usually, even more than in other segments, I don't see any high demand for panels. I see that supply and demand is balanced. Prices are at the levels they should be. We're very robust in piloting this. We developed a very good model. We're not going to let go of it. We're not going to give up any market share to our competitors.

Raul Guaragna: Efetivamente andou por um período à frente do custo, porque a gente conseguiu comprar algum estoque e depois, quando repôs esse estoque, entrou no custo fato, isso entrou no nosso nível de custo e aí as coisas ficaram mais ou menos alinhadas. Eu particularmente vejo espaço limitadíssimo pra novos aumentos de preço em painéis, acho que as coisas estão bastante ajustadas agora, mas também não vejo espaço pra redução, até porque o Henrique Haddad, que está aqui, sempre fala uma coisa interessante, que os custos caíram pra cima. Isso é bem importante. A gente viu aqui custos subindo muito, custos arrefecendo, mas parando num patamar acima do que eles estavam, o que faz com que o nosso olhar de gestão de custo, de suprimentos e de repasse de preços esteja absolutamente adequado ao que o mercado demanda.

Speaker #1: Enrique here always says something interesting . He says that costs dropped upwards . That's very important . We see that costs went up , costs went down , but they stopped above the previous level Which means that our cost management and price are in line with what the market is demanding .

Face.

Speaker #1: Again , when it comes to wood , the third quarter is the strongest . Usually even more than in other segments . But I don't see any high demand for panels .

Speaker #1: I see that supply and demand is balanced . Prices are at the levels they should be And , you know , we're very robust in piloting this We developed a very good model .

Speaker #1: We're not going to let go of it . We're not going to give up any market share to our competitors . We're always going to be aligned to our capacity share .

Raul Guaragna: De novo, na madeira, o Q3 é sazonalmente mais forte, até mais forte na madeira do que nos outros segmentos, mas também não estou vendo euforia de demanda de painéis. Estou vendo oferta e demanda muito equilibrado, preços nos patamares onde eles deveriam estar, e uma robustez de pilotagem do negócio de madeira, que é o nosso diferencial. A gente desenvolveu esse modelo de ocupação ótimo, a gente não abre mão disso de jeito nenhum. Não vou ceder espaço de market share para nossos concorrentes, a gente vai estar sempre alinhado o market share com o capacity share, e isso é inegociável. À medida em que o mercado arrefece, a gente não tem sobra de madeira, mas pode ter negócios florestais operando com a fábrica abaixo desses 96.

Raul Guaragna: We're always going to be aligned to our capacity share, and that's a non-negotiable. As the market cools down, we don't have any wood left over, we might have forestry businesses with the plant under 96. It's interesting because we have been operating over 90. That's the optimal cost level. Continuous production demands an occupied plant. We've been able to get very well-controlled costs. Operational efficiencies have been challenged. We're aligned to what's happening at the end. I think we're very well-balanced here, we're seeing the fundamentals being delivered. We've been at historical levels, we hope to sustain these margins. Any gains that we see will be one-offs, looking at decimals and moving operational details that our team does brilliantly. When it comes to forestry business, we have an incredible year ahead of us.

You know.

Speaker #1: And that's a non-negotiable as the market cools down , we don't have any wood leftover , but we might have forestry businesses with the plant under 96 .

Speaker #1: It's interesting because we have been operating over 90 , so that's the optimal cost level . Continuous production demands an occupied plant . So we've been able to get very well controlled costs operational efficiencies have been challenged And we're aligned to what's happening at the end So I think we're very balanced .

For.

Market share market, share capacity, share.

Speaker #1: Well very well balanced here . And we're seeing the fundamentals being We've been at historical levels and we hope to sustain these margins and any gains that we see will be one offs .

Raul Guaragna: Curioso, e muito interessante, é que a gente vem operando fábrica acima de 90, e aí estamos num patamar ótimo de custo. Produção contínua exige fábrica ocupada, diferente do que eu falei de Deca. A gente tem conseguido ter custos muito controlados, eficiências operacionais, a gente se desafiando a todo momento e um ótimo alinhamento no que acontece na ponta, de demanda e de preço, com o que a gente vê de custo. Aqui estamos bastante equilibrados, estamos vendo esses fundamentos por aí. Temos que lembrar que os níveis de margem de painéis têm sido os maiores históricos. O desafio aqui é manter essa margem ao longo do tempo e qualquer ganho que a gente tiver vai ser ganho pontual, com muito detalhe, olhando na vírgula, mexendo em temas operacionais que o nosso time de madeira faz brilhantemente.

Speaker #1: Looking at , you know , decimals and moving operational details that our team does brilliantly when it comes to forestry business . We have an incredible year ahead of us .

Speaker #1: Or excuse me , we've had an incredible year recently . We launched this by understanding three things . First , that this is Skill that Dexco alone has .

Raul Guaragna: Excuse me, we've had an incredible year recently. We launched this by understanding three things. First, that this is a skill that Dexco alone has. We're one of the best companies in the world in fiber development. We have a very good clone bank of genetic materials that was developed over decades. We have a very efficient operation, and we're very agile. We also have the size. We're not small, but we're not huge, so we're not putting out fires in thousands of hectares. We have a very agile team that can find alternatives. That was the principle that we developed. This gives us a lot of motivation, and we have a huge retention capacity.

Is easy.

Speaker #1: We're one of the best companies in the world in fiber development . We have very good clone bank genetic materials that was developed over decades .

Speaker #1: We have a very efficient operation and we're very agile . And we also have the size . We're not small , but we're not huge .

Raul Guaragna: Do ponto de vista de negócios florestais, a gente tem um ânimo incrível por essa divisão. A gente lançou isso também há menos de um ano, entendendo três coisas. Primeiro, essa é uma competência essencial e replicável que a Dexco tem. A Dexco é uma das melhores empresas do mundo em desenvolvimento de fibra. Tem um banco de clones e de material genético incrivelmente rico, desenvolvido ao longo de décadas. Tem uma operação super eficiente e muito ágil. A gente tem tamanho também, não é pequeno, mas também não é gigante, então não está ali absorvido, em tentar resolver apagar incêndios dentro de milhões de hectares. A gente tem 150 mil, 170 mil hectares e uma equipe muito ágil que pode rodar campo e desenvolver alternativas. Foi com esse princípio que a gente desenvolveu. Até porque também isso traz uma enorme motivação para o time e uma enorme capacidade de retenção.

For.

Speaker #1: So we're not putting out fires and thousands of hectares And we have a very agile team that can find alternatives . So that was the principle that we developed And this gives us a lot of motivation .

Want to try.

Speaker #1: And we have a huge retention capacity . When you don't have so many new forestry projects When you're doing well in capacity , you developing new bases like we did in cortex and Guilherme mentioned recently about our project in the Brazilian Midwest .

Raul Guaragna: When you don't have so many new forestry projects, when you're doing well in capacity, developing new bases like we did in Cartax, and Guilherme mentioned recently about our project in the Brazilian Midwest. When we start developing this new base, you see that we can generate more demand. When we have a good size and we see this as a separate business, we will see this as a separate business unit, but it's not the right moment yet. We have to remember that 90% of what we consume in wood or what we do in wood is in our panels business. We need to focus on that at our core. What we can tell you is that we have a lot of ambition for this business. We hope that this will be a robust business unit. There are limits to it.

Speaker #1: When we start developing this new base , you see that we can generate more demand when we have a good size and we see this as a separate business , we will see this as a separate business unit .

Speaker #1: But it's not the right moment yet . We have to remember that 90% of what we consume in wood , or what we do in wood is in our panels business .

Raul Guaragna: Quando você não tem novos projetos ou não tem tantos novos projetos florestais para produzir novas fábricas, estamos bem do ponto de vista de capacidade, o seu time florestal desenvolver novas bases, como desenvolveu na Caetex, como Guilherme deu uma entrevista até outro dia falando do nosso projeto no Centro-Oeste. Quando a gente começa a desenvolver novas bases florestais, você tem o time se movimentando, se desafiando e a gente gerando demanda. Acho que quando isso tiver tamanho suficiente, inevitavelmente a gente vai olhar isso como uma unidade de negócios separada, mas ainda não é o momento. A gente tem que lembrar que 90% do que a gente consome de madeira ou transaciona de madeira, 85%, 90%, é para o nosso negócio de painel. Então a gente tem que estar com esse foco no core bem estabelecido.

School, you may keep him into.

Speaker #1: So we need to focus on that at our core . But what we can tell you is that we have a lot of ambition for this business .

Speaker #1: We hope that this will be a robust business unit , but there are limits to it . You can't develop a forestry base of thousands of hectares without having a good demand .

For.

Raul Guaragna: You can't develop a forestry base of thousands of hectares without having a good demand at the other end. We have a lot of responsibility, and we're finding, creating opportunities. We're doing our work very well. We have a base in Alagoas which is self-sustaining, and at some point, we're going to see what we can do with it. There's a lot that we can do with forestry by leveraging our main competence, which is spectacular. We have to see this as a business unit, but we need to focus on our core, which is still going to be panels for some time. Excellent. Thank you. The next question will be asked by Marcelo Arazi from BTG Pactual. Go ahead, Marcelo. Good morning, everyone. I have two questions. I'll try to be brief since we're at the end of the call. The first question is for Luciano.

Speaker #1: At the other end . So We have a lot of responsibility and we're finding trading opportunities where Doing our work very have a base in Alagoas , which is self-sustaining .

Raul Guaragna: O que dá para dizer para vocês é que a gente tem uma ambição grande desse negócio, da Duratex Negócios Florestais, ser uma unidade de negócios robusta. Isso posto, tem limites. Não dá para brincar em desenvolver base florestal de milhares de hectares aqui sem ter projeto florestal, demanda na ponta amarrada. Aqui, com muita responsabilidade, a gente vai achando oportunidades de trading, vai desenvolvendo já com demanda bem feita. Temos uma base de 20,000 hectares em Alagoas que se autossustenta, mas que em algum momento a gente tem que ver a vocação, já estamos vendo a vocação dessa base. Tem muito para fazer em floresta, alavancando essa competência essencial da Dexco, que é espetacular.

Speaker #1: And at some point we're going to . See what we can do with it . So there's a lot that we can do with forestry by leveraging our main competence , which is spectacular .

November.

Speaker #1: So we have to see this as a business unit . But we need to focus on our core , which is still going to be panels for some time .

Speaker #1: Excellent . Thank you The next question will be asked by Marcelo Arazi from BTG Pactual . Go ahead . Marcelo . Good morning everyone .

Ricardo Monegaglia: Excellent. Thank you.

Guilherme Setúbal: The next question will be asked by Marcelo Arazi from BTG Pactual. Go ahead, Marcelo.

Is supposed to kiss.

Marcelo Arazi: Good morning, everyone. I have two questions. I'll try to be brief since we're at the end of the call. The first question is for Lucianna. We saw a good level of cash generation this quarter. Obviously, this was helped by your EBITDA and the effects that Raul mentioned. Something that drew my attention was working capital. You mentioned the effort that you've been making, and I think this quarter really showed the results from that. How much of this is going to be recurring? Your Deca outsourcing, can it impact this in any way? A philosophical question for Raul as well. When we look at these profitability levels in the industry and the resilient demand, it's natural to think that Dexco and other companies will increase their panels capacity. Is this a discussion that you've been having? How sustainable is this profitability level for wood panels on the long term? Thank you.

Speaker #1: I have two questions . I'll try to be brief since we're at the end of the call . The first question is for Luciano .

Speaker #1: We saw a good level of cash generation this quarter . Obviously this was helped by your EBITDA and the effects that Raul mentioned But something that drew my attention was working capital .

Marcelo Arazi: We saw a good level of cash generation this quarter. Obviously, this was helped by your EBITDA and the effects that Raul mentioned. Something that drew my attention was working capital. You mentioned the effort that you've been making, and I think this quarter really showed the results from that. How much of this is going to be recurring? Your Deca outsourcing, can it impact this in any way? A philosophical question for Raul as well. When we look at these profitability levels in the industry and the resilient demand, it's natural to think that Dexco and other companies will increase their panels capacity. Is this a discussion that you've been having? How sustainable is this profitability level for wood panels on the long term? Thank you. Thank you, Marcelo. I think those are two great questions on this call.

Raul Guaragna: Não tem por que não olhar isso como unidade de negócio, mas vamos com calma, sem perder o foco no core, que ainda, e vai ser por um bom tempo, painéis.

How can I sustain this on my skin?

Ricardo Monegaglia: Excelente. Parabéns pelo resultado, pessoal. Nossa próxima pergunta vem do Marcelo Arazi, do BTG Pactual. Marcelo, seu microfone está liberado.

Speaker #1: You mentioned the effort that you've been making , and I think this quarter Really showed that the results from that . So how much of this is going to be recurring and your Deca outsourcing , can it impact this in any way So a philosophical question for Raul as well .

Marcelo Arazi: Bom dia, pessoal, tudo bem? Duas perguntas aqui do meu lado. Vou tentar ser mais breve aí também por estar mais no final do call. Talvez uma primeira para Lucianna. A gente viu uma geração de caixa boa no trimestre, obviamente ajudada pelo EBITDA e com esse efeito que o Raul comentou, de uma alavancagem ainda alta, então com uma despesa financeira relevante. Uma linha que chamou um pouco a atenção foi a liberação de capital de giro. Vocês têm falado do trabalho que vocês têm feito nesse sentido, e acho que esse trimestre mostrou um pouco disso. Eu queria entender um pouco de vocês o quanto isso pode ser recorrente daqui pra frente.

For.

Speaker #1: When we look at these profitability levels in the industry and the resilient demand , it's natural to think that Dexco and other companies will increase their panels capacity as this is a discussion that you've been having And how sustainable is this profitability level for wood panels on the long term ?

Marcelo Arazi: Como eventualmente esse outsourcing de Deca pode de alguma forma impactar nisso. Talvez uma segunda pergunta, um pouco mais filosófica para Raul do lado da madeira: quando a gente vê esses níveis de rentabilidade na indústria e essa demanda resiliente, é natural que a gente imagine que não só a Dexco, mas outras empresas pensem em eventualmente aumentar a capacidade de painéis. Como vocês têm visto isso na ponta? É uma discussão que vocês sentem que existe hoje dentro da empresa e eventualmente já tem alguma competição? Entender um pouco de quão sustentável é esse patamar de rentabilidade de madeira, pensando num horizonte de mais longo prazo. Obrigado.

Speaker #1: Thank you . Thank you , Marcelo . I think those are two great questions to end this call on . Before I hand it over to Luciana , I have a brief comment .

Raul Guaragna: Thank you, Marcelo. I think those are two great questions on this call. Before I hand it over to Lucianna, I have a brief comment. Lucianna mentioned RGM. She's a sophisticated person, but RGM is Revenue Growth Management, which is managing your price per channel, per product, and per location. We've been focusing on this in our go-to-market. I know that we're going to get questions about this. Revenue Growth Management in Portuguese.

Raul Guaragna: Before I hand it over to Lucianna, I have a brief comment. Lucianna mentioned RGM. She's a sophisticated person, but RGM is Revenue Growth Management, which is managing your price per channel, per product, and per location. We've been focusing on this in our go-to-market. I know that we're going to get questions about this. Revenue Growth Management in Portuguese. Hi, Marcelo. Thank you for your question. I'll be very quick here. You saw our working capital, and we still have opportunities. We still have great opportunities to optimize our inventories. As with any cash generation, what we saw is structural, and we have an opportunity to improve this even more. Yes, it is structural, and yes, we do have opportunities ahead of us. When it comes to outsourcing, we've also been working with the opportunity that we had last year.

Speaker #1: Luciana mentioned our GM She's a sophisticated person , but GM is revenue growth management , which is managing your price per channel per product and per location .

Today.

Speaker #1: So we've been focusing on this in our go to market . I know that we're going to get questions about this . So so revenue growth management in Portuguese I Marcelo thank you for your question .

Lucianna Raffaini: Hi, Marcelo. Thank you for your question. I'll be very quick here. You saw our working capital, and we still have opportunities. We still have great opportunities to optimize our inventories. As with any cash generation, what we saw is structural, and we have an opportunity to improve this even more. Yes, it is structural, and yes, we do have opportunities ahead of us. When it comes to outsourcing, we've also been working with the opportunity that we had last year.

Guilherme Setubal: Maravilha, Marcelo, obrigado. Acho que você fechou com duas ótimas perguntas para a gente fechar esse call. Antes de passar para Luciana, eu vou fazer um comentário. A Luciana falou muito em RGM. Ela é muito sofisticada, ela usa essa expressão. Para vocês entenderem, RGM nada mais é do que Revenue Growth Management, que é um pouco da gestão de preço por canal, por produto e por localização. A gente tem focado muito isso dentro do nosso projeto de go-to-market também. Eu sei que vão vir perguntas sobre isso depois para mim, então eu já estou antecipando para todos. Lu, é com você.

Speaker #1: So I'll be very quick here So you saw our working capital and we still have opportunities . We still have great opportunities to optimize our inventories As with any cash generation , what we saw is structural and we have an opportunity to improve this even more So yes , it is structural .

Raul Guaragna: Em bom português, Revenue Growth Management.

Guilherme Setubal: Exatamente.

Revenue growth management.

Lucianna Raffaini: Marcelo, bom dia, obrigada pela pergunta. Vamos lá, bastante objetiva aqui. Você viu, sim, uma geração de caixa de working capital. Para falar, a gente tem ainda oportunidade. Tem oportunidade muito ainda na otimização de estoques. Como toda geração de caixa, você sabe, essa geração que a gente teve é estrutural e a gente ainda tem a oportunidade de melhorar ainda mais nessa administração de estoques, na linha de estoques e ainda um pouco em fornecedor. Sim, é estrutural e sim, a gente tem oportunidades pela frente. Com relação ao que você perguntou do outsourcing que a gente vem fazendo, a gente também tem trabalhado diferente da oportunidade que a gente teve do ano passado, que a gente estava desenvolvendo novos fornecedores chineses, testando, e isso consumiu caixa para prospectar esses parceiros lá fora.

Speaker #1: And yes , we do have opportunities ahead of us When it comes to outsourcing , we've also been working with the opportunity that we had last year .

Speaker #1: We were developing some new suppliers in China . We were testing them . So this consumed some of our cash . Yeah . As we were prospecting these partners .

Lucianna Raffaini: We were developing some new suppliers in China. We were testing them. This consumed some of our cash as we were prospecting these partners. Now we can say that we have a great payment structure, and we can optimize our capital as we structure this operation with our partners. This also improves our cash. A part of what you're seeing here in the supplier line improvement is coming from this negotiation. To answer your question, yes, it is structural, and we do have opportunities for this for the rest of the year. That was a great point. I'd just like to add one thing. When we look at the value chain, the outsourcing to local production reduces our working capital because we're simplifying our portfolio. The highest inventory in metals is not finished goods, but work in process, raw materials.

Speaker #1: Now we can say that we have the a payment structure And we can optimize our capital as we structure this operation with our partners So this also improves our cash or part of what you're seeing here in the supplier line .

Outsourcing.

Speaker #1: Improvement is coming from this negotiation . So to answer your question , yes , it is structural . And we do have opportunities for this for the rest of the year That was a great point .

Lucianna Raffaini: Hoje a gente pode falar que a gente está com uma estrutura bastante adequada de pagamentos, onde a gente consegue otimizar esse capital da forma como a gente estruturou essa operação com os nossos parceiros. Isso também melhora o nosso caixa. Parte do que você vê de melhoria na linha de fornecedores vem dessa negociação que a gente tem feito e desse melhor prazo que a gente vem atuando. Respondendo, é estrutural e sim, temos oportunidades ao longo do ano.

Raul Guaragna: That was a great point. I'd just like to add one thing. When we look at the value chain, the outsourcing to local production reduces our working capital because we're simplifying our portfolio. The highest inventory in metals is not finished goods, but work in process, raw materials.

Speaker #1: I'd just like to add one thing . When we look at the value chain The outsourcing to local production reduces our working capital because there simplifying our portfolio , you need The highest inventory in metals is not finished .

Speaker #1: Goods , but work in process . So raw materials , when you produce a less . In Brazil In luxury products with low cadence .

Raul Guaragna: When you produce less in Brazil, in luxury products with location. We have nine different colors. We have the biggest Deca plant outside of China. Here we can provide an excellent service level. When we connect this with some of the outsourcing products, we have positive results to our working capital. Like Lu said, experience always counts when you're launching new products. You have things that you do well and things that you don't do so well. Sometimes we have excess demand or excess supply, and both things have happened. We've been maturing in our sales and operations planning meetings, and now we are doing a much better job with a very positive result. Yes, we should expect a reduction, but I'm not going to let go of our service levels.

For.

Raul Guaragna: Super bom ponto nesse tema de capital giro. Eu só queria adicionar que a hora que a gente olha a cadeia de valor, essa solução outsourcing produção local reduz o capital de giro. A gente simplifica o nosso portfólio, o maior estoque de metais não é o estoque de produto acabado, é o estoque de produto intermediário, é work in process, matéria-prima. Quando você produz menos no Brasil, muito mais vocacionado para o que essas fábricas são capazes de fazer, os produtos luxo, de baixa cadência, com nível de entrega, a gente tem nove cores diferentes, tem o maior parque de PVD, que a gente chama de coat fora da China. Aqui a gente consegue prover um nível de serviço excelente e a hora que a gente junta essa arbitragem que a gente faz com alguns produtos de outsourcing, o resultado em capital de giro é positivo.

Speaker #1: We have no . Nine different colors We have the . The biggest decode plant outside of China . So here we can provide an excellent service level .

Speaker #1: And when we connect this with some of the outsourcing products , we have positive results to our working capital , like Louis said , we experience always counts .

Speaker #1: When you're launching new products , you have things that you do well and things that you don't do so well . Sometimes we have excess demand or excess supply , and both things have happened .

Outsourcing working process.

Speaker #1: So we've been maturing in our sales and operations planning meetings . And now we are doing a much better job with a very positive result .

Speaker #1: So yes , we should expect a reduction , but I'm not going to let go of our service levels . When we look at the Covid pandemic in 2021 , we had about 8% of the list in inventory .

Raul Guaragna: When we look at the COVID pandemic in 2021, we had about 8% of the list in inventory. Now, we were at 19 last year, and we've reduced this to 13 or 14, and there's still some room to change to a certain point. There's a point in which this is no longer adequate for our volume, but you can do it. Payment methods, financing models, smarter and shorter production cycles. I think when it comes to wood, the industry has learned. Our industry has much more discipline now than it did in previous decades. Before, it was crazy how much capacity was being built, and Duratex was the only one that reduced its capacity. Many people who increased their capacity are having trouble filling these lines. Wood is much cheaper to buy than it is to make, and it's very hard to find wood to buy.

Raul Guaragna: Como a Lu bem falou, todo aprendizado você tem, quando você está lançando produtos novos, desenvolvendo coisas, você tem acertos e erros. Às vezes falta produto, o produto vai melhor do que você imaginava, às vezes a gente compra produto a mais e aconteceu as duas coisas com a gente. A gente vem amadurecendo as nossas reuniões de planejamento de operações e vendas. Hoje a gente está com essa pilotagem muito mais justa, muito mais concreta e com resultados bem positivos. Sim, dá para esperar alguma queda, mas também não vou abrir mão do nível de serviço. Quando a gente olha lá a pandemia, em 2021, a gente teve 8% da rol em estoques.

Speaker #1: Now we were at 19 last year , and we've reduced this to 13 or 14 . And there's still some room to change to a certain point .

Speaker #1: There's a point in which this is no longer adequate for our volume . But you can do it . Payment methods , financing models smarter and shorter production cycles So I think when it comes to wood , the industry has learned Our industry has much more discipline now than it did in previous decades Before we it was crazy how much capacity was being built and Duratex was the only one that reduced its capacity .

The.

Raul Guaragna: Hoje a gente fechou em 2019 o ano passado, já fez uma redução para 13, 14, algo assim, e tem espaço para fazer até um certo ponto onde isso passa a ser adequado para o nosso volume. Dá para continuar fazendo, principalmente em prazo de pagamento, os modelos de financiamento, ciclos de produção mais inteligentes, mais curtos, e a própria melhora e redução e aceleração dessa racionalização de portfólio. Acho que aqui madeira, o setor aprendeu, o setor é muito mais disciplinado hoje. Das décadas passadas, começava a ver ocupação, a turma tinha uma loucura de querer fazer capacidade nova. A Duratex foi a única empresa que reduziu capacidade, muitos dos que entraram com capacidade estão vendo uma dificuldade enorme de encher essas linhas. Tem uma mudança estrutural material, que é o tema da madeira.

Speaker #1: And many people who reduced their capacity or , excuse me , increased their capacity are having trouble filling these lines Wood is much cheaper to buy than it is to make And it's very hard to find wood to buy .

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My discipline.

Speaker #1: So the structural difference also is an important limit to our capacity We also need to learn that the market is growing discreetly and that capacity comes in in batches So what Dexco did very well and other companies will do is .

Raul Guaragna: The structural difference also is an important limit to our capacity. We also need to learn that the market is growing discreetly, and that capacity comes in in batches. What Dexco did very well, and other companies will do, is debottlenecking. With smaller investments, you can increase your capacity, have gains in consuming fibers and resins, increase machine speed. It's important to mention that in 2021, Dexco built the equivalent to one big line, spending 10% of what it would if it had a new line. We made very good investments of about BRL 150 million to gain a lot of capacity. This kind of intelligent capacity gains will continue, and I see that our competitors will continue to see it as well. I have a lot of trouble believing in greenfield for the Brazilian market when it comes to panels.

Raul Guaragna: Madeira saiu de muito mais barato você comprar madeira do que você produzir madeira. 50% mais caro você comprar madeira, com dificuldade de encontrar madeira para comprar. Essa diferença estrutural também limita de forma importante qualquer nova capacidade. Além da disciplina, do aprendizado, de entender que o mercado cresce de forma discreta e a capacidade entra em batelada. O mercado está muito pouco animado com novas capacidades. O que vai acontecer, e que a Dexco fez muito bem, e outras empresas vão fazer, é desengargalamento. É importante você, com menores investimentos, aumentar a capacidade, ter ganho de consumo de fibra, de resina, acelerar a velocidade de máquina. É importante lembrar que lá em 2021, a Dexco construiu o equivalente a uma grande linha, gastando 10% do que gastaria se fizesse uma linha nova.

Speaker #1: Debottlenecking . So with smaller investments you can increase your capacity Have gains in consuming fibers and resins , increase machine speed . It's important to mention that in 2021 , Dexco built the equivalent to one big line , spending 10% of what it would if it had a new line .

Speaker #1: So we made very good investments of about 150 million reais To gain a lot of capacity . So this kind of intelligent capacity gains will continue .

Speaker #1: And I see that our competitors will continue to see it as well . I have a lot of trouble believing in Greenfield for the Brazilian market when it comes to panels I think the market might even consolidate into fewer players .

Raul Guaragna: I think the market might even consolidate into fewer players. That's something that we need to take a look at. Truly, we will try to find more uses for wood. We'll continue to invest into new and innovative products. We just launched a flexible panel. We launched products that are very faithful to the natural panel. We have a lot of space to gain in productivity costs, production volume with low CapEx, and we'll continue to pursue that. We were one of the first companies to run 24/7. We are reducing raw materials. We're improving line speed. We're analyzing defects. We're doing good quality control, and this is all fertile ground to sustain our panels team and keep them driven. There's still a lot we can do. We have a forestry base in the Northeast, which we will find a use for.

Raul Guaragna: Colocou investimentos superassertivos, na ordem de BRL 150 million, e conseguiu ganhar 350,000 m² de capacidade. Esse tipo de ganho de capacidade inteligente a gente vai continuar vendo, e vejo que os nossos concorrentes também vão continuar vendo. Tenho muita dificuldade em acreditar em greenfield para mercado brasileiro em painéis. Acho até que pode ter algum espaço para consolidação desse mercado, onde muitos players menores hoje podem querer consolidar, isso é algo para a gente olhar. De verdade, a gente vai buscar novos usos para madeira, vai buscar Dexco Negócios Florestais, vai continuar investindo em produtos novos, inovadores.

Speaker #1: So that's something that we need to take a look at . But Truly , we will try to find more uses for wood .

Speaker #1: We'll continue to invest into new and innovative products . We just launched a flexible panel . We launched products that are very faithful to the natural panel We have a lot of space to gain in productivity , cost , production volume with low CapEx , and we'll continue to pursue that .

Deck School.

Speaker #1: We were one of the first companies to do To run 24 over seven , we are reducing raw materials . We're improving line speed We're analyzing defects .

Raul Guaragna: A gente acabou de lançar um painel flexível, a gente lançou produtos muito fiéis à lâmina natural, quer dizer, tem um espaço de ganho de mix de produtos nobres aqui gigantesco, tem um espaço de ganhar produtividade, ganhar custo e ganhar volume de produção com baixo Capex, a gente vai continuar perseguindo. A gente foi uma das primeiras empresas a fazer a Indústria 4.0 lá em 2021. A gente tem uma sala de controle que reduz utilização de matéria-prima, melhora a velocidade de linha, faz análise de defeito de qualidade. Tudo isso é terreno fértil para manter o nosso time de painéis bastante motivado, tem muita coisa para fazer. Lembrando que a gente tem a base florestal lá no Nordeste, que a gente vai dar algum destino para ela, estamos olhando.

Speaker #1: We're doing good quality control . And this is all fertile ground to sustain our panels . Team and keep them driven . There's still a lot we can do .

Speaker #1: And we have a forestry base in the northeast , which will which we will find a use for . It doesn't necessarily need to be the wood panel , but if it is might be the international market .

Raul Guaragna: It doesn't necessarily need to be the wood panel, but if it is, it might be the international market. This is still not on our radar. We still have some time for this. That was very clear. Thank you. This concludes the questions and answers session. We will now hand it over to Mr. Raul Guaragna, CEO, for his closing remarks. Thank you, everyone. Great questions. Thank you for participating. You've been covering our business very well, and you've been very constructive about what we've been doing. This long-term vision will continue for us, and this is characteristic of our group. We keep our eye on the ball. We're piloting on the short term, and we have a lot of responsibility when it comes to indebtedness, capital allocation, and providing returns for our investment plan, which was announced in 2021.

Raul Guaragna: It doesn't necessarily need to be the wood panel, but if it is, it might be the international market. This is still not on our radar. We still have some time for this.

Speaker #1: But this is still not on our radar . We still have some time for this . That was very clear . Thank you This concludes the questions and answer session .

Marcelo Arazi: That was very clear. Thank you.

Guilherme Setúbal: This concludes the questions and answers session. We will now hand it over to Mr. Raul Guaragna, CEO, for his closing remarks.

Speaker #1: We will now hand it over to Mr. Raul Guaragna , CEO for his closing remarks Thank you everyone . Great questions . Thank you for participating You've been covering our business very well , and You've been very constructive about what we've been doing this long term vision will continue for us .

Raul Guaragna: Não necessariamente precisa ser fábrica de painel, mas se for, seguramente vai ser algo para mercado internacional, já que a gente está a 30 km do porto, mas ainda não está no radar, tem tempo ainda para a gente tomar essa decisão.

Raul Guaragna: Thank you, everyone. Great questions. Thank you for participating. You've been covering our business very well, and you've been very constructive about what we've been doing. This long-term vision will continue for us, and this is characteristic of our group. We keep our eye on the ball. We're piloting on the short term, and we have a lot of responsibility when it comes to indebtedness, capital allocation, and providing returns for our investment plan, which was announced in 2021.

For.

Marcelo Arazi: Está super claro, pessoal. Muito obrigado.

Operator 2: A sessão de perguntas e respostas está encerrada. Gostaríamos de passar a palavra ao senhor Raul Guaragna, CEO da Dexco, para que faça as considerações finais da companhia.

Speaker #1: And this is characteristic of our group . We keep our eye on the ball . We're piloting on the short term , and we have a lot of responsibility when it comes to indebtedness .

Sure.

Raul Guaragna: Obrigado, pessoal. Excelentes perguntas. Obrigado pelo engajamento e a participação sempre relevante, e a cobertura atenta que vocês fazem do nosso negócio. Eu tenho visto uma leitura muito crítica, honesta e construtiva do que a gente vem fazendo. Acho que pra nós aqui, essa visão de longo prazo continua sendo, e vai ser característica do grupo, o nosso foco, esse olho na bola, essa pilotagem de curto prazo, essa responsabilidade com endividamento, alocação de capital, com retornar os investimentos do nosso plano de investimentos lá anunciado em 2021. A gente vai seguir por esse caminho, melhorando de uma forma consistente, ao mesmo tempo que a gente pilota as incertezas e a volatilidade, não abdica do direito de crescer. A gente precisa ser uma companhia grande, a gente precisa continuar sendo relevante, tem inúmeras avenidas pra gente atuar nesse sentido.

Speaker #1: Capital allocation and our providing returns for our investment plan , which was announced in 2021 . We'll continue to do that And improve our results consistently as we pilot uncertainties and volatility .

Raul Guaragna: We'll continue to do that and improve our results consistently as we pilot in uncertainties and volatility. We're not letting go of our right to grow. We need to continue to be relevant, but there are several avenues that we can explore. After the first three years, we have been going through a cycle in which we unlocked the value that we have in the company. In 2025 and 2026, we've been adamant at keeping this process ongoing, and executing it very well. In 2028, we hope to be closer to the capital cost and to this right to grow. We might grow or we might not. This is a decision we'll make with our shareholders. The fact is that we conserved our capacity, and you can't get quick results with quick decisions. You need to have structuring decisions.

Speaker #1: But we're not letting go of our right to grow . We need to continue to be relevant . But there are several avenues that we can explore After the first three years , we have been going through a cycle in which we unlocked the value that we have in the company in 25 and 26 , we've been Adamant at keeping this process ongoing and executing it very well .

Speaker #1: In 2028 . We hope to be closer to the capital cost and to the thread to grow . We might grow or we might not .

Speaker #1: This is a decision we'll make with our shareholders , but the fact is that we can our capacity and you can't get quick results with quick decisions .

Raul Guaragna: A gente vem de um ciclo dos nossos primeiros three anos aqui, com desbloquear o valor que a gente tem na companhia. 2025, 2026, 2027, a gente tem sido supertenaz em manter esse processo e não sair, muito forte em execução, pra que chegando 2028 a gente esteja ali próximo do custo de capital, 2029 e 2030 a gente conquista o direito de crescer. Podemos crescer ou não, isso é uma decisão que a gente vai tomar junto com os nossos acionistas, o fato é que a gente preservou ao longo desse tempo a capacidade de crescer, que não tem decisão de curto prazo pra resultado rápido, tem, sim, medidas estruturantes e eu fico extremamente satisfeito ao ver que o mercado hoje entende isso. Como nós, está impaciente, porque demora pra fazer os resultados, entendendo que essa é uma jornada consistente.

Speaker #1: You need to have structuring decisions . So I'm happy to see that the market understands that . Now I know that a lot of people are in .

Raul Guaragna: I'm happy to see that the market understands that now. I know that a lot of people are impatient. I know it takes long to get the results, but this has been a consistent journey, so thank you for your interest. This concludes Dexco's conference call. Thank you, and have a good day.

Speaker #1: I know it takes long to get the results , but this has been a consistent journey . So thank you for your interest This concludes Dexco conference call .

Operator: This concludes Dexco's conference call. Thank you, and have a good day.

um,

Raul Guaragna: Muito obrigado por toda essa cobertura e interesse que vocês têm no nosso negócio.

For.

Operator 2: A videoconferência da Dexco está encerrada. Agradecemos a participação de todos e tenham um bom dia.

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