Morning. Welcome to Camil's video conference to discuss the Results of the Second Quarter of 2025. Present here today are Mr. Luciano Quartiero, Director-President, Flavio Vargas, CFO and IR Officer, and the company's Investor Relations Team. We would like to inform you that this event is being recorded, and then all participants will be in a listen-only mode during the company's presentation, and at the end, we will open for Q&A for analysts and investors only. We would like to emphasize that any forward-looking statement that might be made during this conference call related to Camil's business outlook, projections, and financial and operating goals are beliefs and assumptions from the company's management, as well as information currently available. These may involve risks, uncertainties, and assumptions as they refer to future events and therefore depend on circumstances that may or may not occur.
Investors must also understand that such general economic industry conditions and other operating factors may affect Camil's performance and therefore lead to results that differ substantially from those expressed in such forward-looking statements. We will start the presentation with Mr. Quartiero, followed by Mr. Vargas ' presentation. At the end, we will open for a 50-minute Q&A. Thank you. Hello, and welcome to the comments on the results for the second quarter ended August 2025. On slide two, we highlight the categories where we operate and the main indicators for the quarter and the year. We posted net revenue of BRL 3 billion and EBITDA of BRL 251 million, up 11% and 7.5% when compared to the first quarter, respectively. The EBITDA margin for the period was 8.4%. Volume reached 634,000 tons, with emphasis on annual and sequential growth. We will go into more details in the following slides.
In the high turnover category, which includes grains and sugar in Brazil, we saw a 1.5% reduction in volume due to the decline in grains . The drop reflected a stronger comparative base in the second quarter 2024, a period in which prices and sales volume were right because of the right supply movement after the tragic flood in Rio Grande do Sul. Therefore, we underscore that despite the annual reduction, the performance of the quarter was positive for grains, with volumes in line with seasonality. In sugar, unlike in previous quarters, we saw a gradual improvement in profitability, driven by cost reductions, which has contributed to more favorable margins. Sequentially, the high turnover category grew by more than 20% in volume, supported by this recovery in sugar and one-off exports during the period.
In the high growth category, which includes fish, pasta, coffee, and cookies, we saw an annual and sequential decline in the quarter. This reduction was mainly driven by fish, partially offset by growth in coffee sales volume. To boost the category's results, we continue to invest in new product launches and in strengthening our brands. In pasta, the Camil line continues to expand its share in the São Paulo metropolitan area, a key market for brand recognition and cross-selling potential. As for coffee, after the launch of the Gourmet line, we introduced União capsules, strengthening the portfolio and also the presence of the União brand in the high-added value segment. In cookies, we maintained the campaigns to revitalize the Mabel brand and actions to boost profitability gains.
In the international segment, we saw volume growth both year on year and sequentially, driven by exports from Uruguay and increased volume in Chile. On the other hand, profitability for the quarter was pressured in Peru, reflecting a challenging local context. As a subsequent event, we finalized the acquisition of Villa Oliva in the Paraguayan rice market, expanding our regional presence and diversifying our origination. This step strengthens our leadership in Latin America and increases competitiveness in the rice segment. We continue to expand our presence in the markets where we operate and increase our operating efficiency. Our commitment is to offer quality food and create value in a consistent and sustainable manner. We consolidated brand and strategic initiatives. We will continue to drive our growth and consolidate our leadership in the food industry in Latin America.
I now turn over to Flavio to comment on the financial highlights for the period. Thank you all. Hello, thank you for joining us today. Starting with the financial highlights in the annual comparison. In the second quarter 2025, we achieved net revenue of BRL 3 billion, down 8% from Q2 2024. Cost of goods sold fell 10%, mainly reflecting the reduction in raw material prices in the high turnover category, and as a result, gross profit was BRL 674 million in the quarter, with a gross margin of 22.6%. SG&A expenses for the quarter accounted for 16.7% of net revenue, with increase mainly in the international segment driven by Uruguay and partially offset by lower expenses in Brazil. As a result, our EBITDA stood at BRL 251 million in the quarter, with a margin of 8.4%.
It should be noted that, as already mentioned by Luciano, the base of Q2 2024 reflects the impacts of high prices and high demand resulting from the tragic floods in Rio Grande do Sul, mainly in rice. If we compare our results sequentially on the next slide, on slide seven, the result for the period reflects an 11% growth in net revenue accompanied by cost of goods sold. Our gross profit grew 11% with a margin of 22.6%, and EBITDA grew 7.5%. Net income for the period was up 19%. These indicators reflect a positive quarter and sequential improvement when compared to Q1 2025, resulting from the operating improvement detailed by Luciano. In relation to debt, the company reached net debt of BRL 3.5 billion, and net debt to EBITDA for the last 12 months stood at 4.1 times in the quarter.
We reiterate that the company has significant working capital seasonality throughout the quarters, especially in rice. The first period of the fiscal year usually requires more working capital and consequently higher cash consumption, while the rest of the year usually frees up cash. It is also worth noting that our net debt to EBITDA covenants are calculated only in the fourth quarter due to this typical seasonality of working capital in our business model. CapEx totaled BRL 155 million in the quarter, earmarked for the continuation of ongoing works in Camaquã in Rio Grande do Sul, where the new grain plant will be located, and for the new thermal electric plant. Also, in the quarter, we had a more concentrated phasing of the investment plan for the year in Uruguay.
Now, moving on to slide nine on ESG, I would like to highlight that last week we published the Brazilian Corporate Governance Report, highlighting the best practices adopted by companies regarding the Practice or Explain CBGC model. We continue to follow the best market methodologies and present our initiatives and results via the sustainability report. In case you want to learn more about our actions and indicators, please contact our IR and ESG team for suggestions and questions. And to conclude, as Luciano has already mentioned, we continue to work hard to leverage our brands and operations. We remain confident that the company's strategy will take us to a new level of scale, operating efficiency, and financial results. We are now available for the Q&A session in case you have any questions. Thank you all very much. We will now initiate the Q&A session for investors and analysts.
In case you have questions, please press the raise hand button. Once your question is answered, you can leave the queue by clicking in the same icon again. Please wait while we collect the questions. Our first question is from Gustavo Troyano from Itaú BBA. Please, Gustavo, your microphone is available. Good morning, and thank you for taking my questions. There are two topics, Luciano, that I would like to explain with you. One about sugar. I think we've been talking about the potential of margin recovery for a few years and the impact on the consolidated margin, that we would eventually see sugar resuming its old level. That was right after the IPO. I mean, in your release, you said about your sugar business and the additional amount, just to understand whether this could be the first step towards the path to recovery of that structural margin.
This is a subject we've been looking at for quite some time. I just want to know whether this is something recurring or this is what we've been long waiting for? And now I would like to get your view, maybe, about sugar and ethanol migrating more toward ethanol in terms of the Brazilian production and whether this could probably equalize the market of bagged sugar . And how do you see that variable in your profitability equation? And my second question is about rice. We've seen prices under pressure for rice. But then when we look at year-on-year comparison, we understand that the comparison base is hard. But looking ahead and even if we look at the price of the product today, it seems like the price today is something not very profitable for your operation.
So I would just like to learn your view about rice going forward and the producers' position as well. Thank you. Gustavo, thank you for your questions. I think to answer your first point on sugar and the drop in international sugar prices, this helps us because it brings further competitiveness to the company. So in the last few months, we've been coming from a recovery process of our profitability. This has been significant, and we expect this to resume historical profitability levels throughout the next quarter. Therefore, finally, sugar is resuming its historical position after almost four years when we struggle with our cost structure because we were impacted by prices. So we are quite optimistic. And from everything I've been reading from the market, you know, prices and what the analysts are saying, this landscape tends to persist next year.
So the price of sugar, I mean, we don't expect any major changes. Therefore, we are quite optimistic in this category going forward. This rebalancing between ethanol and sugar, we are humble enough to recognize that we are not experts on the topic. But from what I've seen, I do not expect any major impact. Here is just more my own perception of the reports I read rather than a very firm opinion of what the trend represents. So I think our only opinion is what I said before, that in fact, the landscape for next year is more favorable to this category, especially when compared to the last four years, which is great news. Still, in sugar, we still feel the supply impacts coming from Raízen's new refinery, but the impact now was less severe when compared to the last quarter.
But in the next coming quarters, I think the situation will be more normalized. Therefore, the landscape for our sugar category is very much in keeping with historical levels, which is quite good. Now, moving to rice, prices are much lower than what the entire industry expected. As I said, last quarter, we thought that prices wouldn't fall as much. But in our earnings release in the fourth quarter, from then on to now, prices were down an additional 10%, which came as a surprise to us. These levels, as you put it quite well, leave growers, I mean, they're not covering production costs. The market estimates that between acreage reduction and lower yield, given the tight profitability, should be 7%-10% lower than the season from last quarter.
There might be a slight change because if prices do not recover, and now we are doing the planting phase, so in the next four to five weeks, we will have a better picture of the impact of rice next year. But maybe there is some room here for some changes in the landscape because indeed, current prices and the projection of, you know, the transfer inventory opens some room, but that room is not enough to cover costs on the grower side. But in the next probably five to six weeks, we will have a better view of what things will be like. And now, speaking about sales in the category, the purchasing pace now is slightly below historical levels, and this reflects the pricing level. Every time prices are dropping, and this is what usually occurs in the fourth quarter, customers reduce their purchases.
So customers are not buying that much because there has been a constant price drop throughout the year. And so now we are asking ourselves what may happen from now until the next crop season. It may be very similar to what happened last quarter. Last quarter, the company thought that prices were at its lowest level, but yet it was down by an additional 10%. So it's not in the place where it should be. Therefore, we do not expect further reductions. But again, we are just sitting and watching to see what will happen. Our inventory is reduced. So any price volatility will have a lower impact or a much lower impact when compared to what happened in the first quarter. So that's it. Thank you. Thank you, Luciano. Our next question is from Guilherme Guttilla from BTG Pactual. Guilherme, your microphone is on. Hello? Good morning.
Before, I mean, I have two questions. First question, I wanted to go over the topic related to rice volume in the first quarters. Last quarter, the first quarter of the year, volume was lower than expected, and especially year on year, mostly due to what you said, a delay in replenishing on the side of retailers. So that replenishment is not yet at the levels that you're used to seeing, but this sequential improvement in high turnover volume, can you please help us understand how much of that comes from restocking on the retail side? And this is question one. Question two is about the Paraguayan acquisition that was concluded. Can you give us some more color about what we could expect in terms of the outcome of that transaction going forward? Guilherme, thank you for your question. I don't see customers restocking.
I mean, rice prices have been dropping continuously, and as I said, the company, I mean, did not, it was not assertive in terms of rice prices. I mean, the entire industry did the same thing, and so that drop lasted longer than expected. We didn't think that would even be possible, so restocking happens when I know that the price has reached its lowest level, and I mean, it has reached its ceilings, and this hasn't happened, so this sequential improvement has to do with the fact that we are putting a lot of focus on sales of all categories trying to extract synergy, so that has been our focus.
And as I said during my presentation, the comparative base of the second quarter is against the second quarter of last year, which was heavily hit by floods in Rio Grande do Sul because that led to very low supplies, and there was great pressure on purchases. So the comparative basis is not very good, but I do not see any restocking on the part of retail, which usually happens after you reach that low level. In terms of Paraguay, we concluded the acquisition as of September 1st, in September 1st. So in the quarter, we do not post any numbers for Paraguay, not yet, but in the next quarter, these numbers will be reported. Paraguay, we will account for a 10% growth in the international rice volume. In Paraguay, we see a large possibility of growth.
We believe that we can double in size in Paraguay in three to four years, so that involves acreage expansion, a lot of growth opportunities, and I think the company is ready to capture these opportunities. It is very relevant because Paraguay adds a lot of competitiveness to our Brazil operation in some specific regions, and by the same token, it also brings competitive increases to our operations in Chile, so this is what adds a lot of value in addition to being a new origination source. The production cost in Uruguay is the lowest in Mercosur, so that's not a country that is cost competitive, so I'm very optimistic with the potential we have in Paraguay today. Thank you. Our next question comes from Pedro Fonseca with XP. Bom dia, Luciano. Bom dia, Flávio. Good morning, Luciano. Good morning, Flávio. Thank you for taking my question.
I have two questions about the cookies category. In your release, you say that the company remains focused on revitalizing the Mabel brand. So I would like to learn more about the main actions you're taking for the brand. I just want to understand, you know, marketing, activities, etc. And also, if you can tell us where do you stand in terms of your capacity level, what capacity level would be ideal for the business? And my second question still about the cookie business. We've heard from retailers and also from the market that there is probably a structural change, which refers to products of higher added value that are now gaining momentum among consumers. So are you also noticing that change?
We know that the company has the Toddy brand in the market, but I just want to learn whether that makes sense or whether the company is thinking about any new launches to surf on that trend. So I would just like to understand these points. Thank you for your questions, Pedro. I think the company is focused on revitalizing the brand. This process is very much related to the execution of a marketing campaign, execution at the POS. It goes through a change in the portfolio. We just launched Cookie Mabel. This is related to the second part of your question on premium products. Maybe unlike the other players, we have a double focus. We want to have premium products, but at the same time, we focus on scale products, if I can call them that. Mabel has always been very strong in higher volume products.
So the fact that we are revisiting these categories, that's also part of our strategy, so that involves a new marketing plan, their launch of new products, the execution of the combined categories. It's all that will lead us to where we want to go. Today, we are operating slightly above 50% of our plant capacity, and I wish they were operating close to 80%. And that's when we will dilute our commercial costs for this category, and this will bring about the desired effect. Therefore, I'm saying I would say that we are running at one third or one fourth of the total capacity of the company, and in order to reach its capacity, that means that we will have to increase the utilization of the plants. We have to adjust our portfolio, and we are reviewing the portfolio.
It's not yet concluded, but this also includes new launches. So without giving you a lot of information to my competitors, this is the company's plan. We are working on it, and quarter on quarter, we've been evolving, and I'm very pleased with the work being done by the company and also with the potential going forward. Thank you. That was very clear, and thank you very much for your answers. Next question is from Laura Hirata with Santander Bank. Laura, your microphone is on. Good morning, Luciano, Flávio, and Jennifer. Thank you for taking my questions. I would like to go through two points. First one is about your leverage and what the company is running. I think you're running slightly over four times net debt to EBITDA ratio. I would just like to understand where, at this point, we could look at things.
And together with that, this quarter, I noticed some working capital optimization. What is a one-off situation and what we could see as something that would be more structural? And my second point is on the consumer's behavior in Brazil. We see many retailers speaking about a more challenging environment, more like under pressure. So what is Camil's behavior given this scenario and also given the fact that you are positioned in several pricing points and you have products of dry groceries in, I mean, more basic products? So these are my points. Thank you. So, Laura, thank you. I think I will address your first question on leverage or net debt to EBITDA. I think this is within the company's plan.
I think it's important to remember that this quarter, when compared to the previous one, last year, we had a very strong first quarter, a second quarter also very strong, but on the other hand, in the second quarter, I mean, the EBITDA was about BRL 170 million-180 million . And then when we look at that comparison, you're taking the last 12 months, that in the second quarter, the level was quite pressured. So another backdrop has to do with working capital seasonality. Because of that, throughout the year, we experience higher leverage levels, but on the third and fourth quarter, when there was a reduction in working capital and working capital release, that leverage comes down. So once you add up everything, we hope that in the remaining of the year, we will see more consistency both in operating terms as well as working capital release.
Our expectation today is that come February 28, 2026, the leverage level should even be below what we experienced last year. I mean, speaking about working capital, I mean, in fact, when we try to focus on managing customers and suppliers, there are two factors that are structural factors that also led to that significant reduction in working capital exposure, especially in the rice category, which is quite significant to our business, so in that category, prices are lower, and that means that you allocate less capital, and given that lower price, the company tried to work with lower inventory levels when compared to what we had last year, especially in our Brazil operations, so all in all, this led to lower working capital levels when compared to what we had last year, so this dynamic of working capital, we think that this will remain seasonal.
So we release working capital in the third and fourth quarters so that we reach that level of February. Now, speaking about consumption and retail, we are seeing a challenging landscape. This deflation in some of our categories and price reductions had an impact on retail. And this alone makes it more difficult for our customers. And what we've seen, and it has drawn our attention, and I may not be able to explain the reasons why, is that we are seeing customers with very aggressive pricing promotions of some of our main products that usually, when they do that, that generates greater traffic of consumers in the stores. And what I've been hearing is that the efficiency of the promotions is not as good as they used to be. So this is a point of attention.
So even though prices are more aggressive, they are not generating a lot of people to the stores, and why this is happening, I have no diagnosis, but I think this would merit further attention, so this is a scenario that remains challenged, but maybe my customers would have a better answer for you because, in fact, I cannot say anything rather than what I just said. I don't know whether you want to go into any additional topic, but thank you, Luciano and Flávio. I just have a brief follow-up referring to leverage. What we've seen, and I also wanted to get a better understanding about your outlook, while we have working capital free-up or release, we also have short-term amortizations, and they should take place in up to a year, and then we have additional CapEx.
So can you tell me how do you connect these other variables with that expectation to come to a year-end differently than last year? I think this is another topic, and this has to do with refinancing, how we see our cash position and how we refinance the amortization schedule we have to continue to have liquidity. I mean, we've been working hard on this topic to refinance and refinance in a way that will make sense to address the demand in short-term amortization. And again, aiming at extending the debt so that our debt would fit into a more adequate profile. So this refinancing or amortization does not affect Net Debt, but it does affect the liquidity level, and we are looking at that very closely. So soon enough, we hope to have good news for you. Okay, that's very clear. Thank you very much.
Next question is from Julia Zaniolo from Bank of America. So Julia, your microphone is on. Good morning. Thank you for your time. In terms of coffee, it's been two months since the U.S. is applying the tariffs. So how do you see in terms of prices in the Mexican market, and what do you expect going forward? Julia, thank you for your question. I think the topic of tariffs has experienced ups and downs, especially in the coffee segment. There was a moment when dropping prices was justified because of the tariffs, and then prices were up because they were going to remove the tariffs or they wouldn't remove. I mean, so prices were a bit volatile in the past two months, but the company knew how to navigate through that quite well. In terms of competitive supply, we are performing well.
In the past few months, we had good profitable margins with coffee, and as I said earlier, we are focusing on the execution of sales of all categories, and we've experienced good results in the coffee category. Volumes are growing on a monthly basis. So considering prices of this year in comparison to previous years and considering our volume performance this year comparing to that of last year, this is a category where we will probably reach over BRL 1 billion until the end of the year. So that is a significant growth. And since we are very much focused in the domestic market, having or not having tariffs, prices will continue to fluctuate. And so I just hope the company continues to perform just as well as it has performed in the past months.
I don't have much to say about the tariffs, but I have a lot to say about how much we were able to perform well. This is another category that not only has a very good perspective of growth, but this is helping us to offset the lower rice performance given lower prices. Thank you. Now, if I can have another follow-up on the rice segment, if in the coming months or year, if we continue to see prices under pressure the way they are now, what is your expectation? Do you envision any changes in your strategy, or is there anything we could anticipate, any move for the future? Well, our rice segment is very peculiar because prices are transferred. So if price is 60 or 100 or any movement that may happen between the two extremes, it's something that happens every week.
Therefore, historically, prices are transferred every week. Historically, the company has a percentage margin, so lower prices mean that the nominal result is lower, but every time we go into extremes on either direction, our percentage, I mean, when prices come down too much, we have more room to increase our percentage base to compensate for the lower nominal price, and prices go down too much, the percentage is low because the nominal side is too large, so we always operated like that. Now, when prices started to come down and we noticed lower purchasing appetite on the part of customers and the inventory is carried over, I mean, profitability is pressured, but once this reaches its lowest level, this adjustment of the percentage margin takes place.
So we believe that throughout the next half year, this is what will happen, and then we will have to wait for the next six weeks to see what would be the planted area, what would be the impact of lower yield in the next crop season in February to have a better idea of how prices will perform. But the market consensus is that given the local levels, the growers are not covering their costs. If we have another year with this price level, so they probably growers will reduce the acreage, and that gives room to probably a recovery. So we went through a very tough moment, which was this very gradual and long-lasting drop of the last 12 months. And so here, the outlook for the next coming months is that it will not be as hard as it has already been.
In October last year, the price of rice was between 110 BRL -BRL 120, and the price is BRL 69-BRL70 , so 50% lower prices. So that has been a significant drop, and certainly the impact to growers is quite high. We cannot think that this is the new scenario or a new condition for the mid and long range because this is definitely not sustainable. So that's it. Well, thank you. Our next question comes from Henrique Brustolin with Bradesco BBI. Your microphone is on. Go ahead. Good morning, Luciano, Flávio, and Jennifer. Thank you for taking my question. I would like to go over three points. The first will be a follow-up, Luciano, on your comment of high turnover volume, especially related to sugar because the impact of the rise in refinery is much lower.
And when we see that profitability is recovering, whether this should lead us to a scenario that in terms of high turnover volume, we shouldn't see any major changes vis-à-vis last year or whether you anticipate any other factor that should change the volume? This is my first question. Second question is on the profitability of the international segment for the quarter. There was an unfavorable component coming from Peru in the quarter, but also I saw a component of operating deleveraging given lower rice prices. So how should we see the margin going forward and whether this price component could be a relevant factor? And the last point on financial expenses, when we look at the debt interest line, it's relatively stable in the past year and a half despite the significant increase of Selic rate in the period.
So the question is, how should we think about the composition of your debt and financial expenses going forward? Thank you. Henrique, thank you for your questions. Speaking about sugar, I mean, it's not yet 100% normalized, but the expectation is that in the next two and three quarters, it will go back to normal. In terms of volume comparison, there is a difference because last year we had higher export volumes because it was a one-off situation. And this year, export volumes, I mean, we had one export in the second quarter, and we do not expect to see any more exports until the end of the year. So once I exclude export volume, I expect to see growth. But in the category, volumes tend to be lower than that of last year because of exports. As for Peru, as you said, the landscape remains challenged.
We have a plan to recover profitability. We had some evolutions in Peru, some progress in Peru. There was some impact due to pricing, and then that also applies to some other countries. Prices that went down in Brazil were prices that went down all over the world. So this landscape of lower prices applied to many other countries. So recovery will start from now on. The impact of lower prices was also seen in Uruguay and Ecuador, very similar to what we've seen before. We believe that impact of reductions, I mean, while it continues to happen, I think the impact now is over. And by the same token, in Uruguay, they experience a higher supply of rice, and they've been experiencing a good pace of sales in this last crop season. I mean, the crop season was pretty high.
I mean, it was very good both in Brazil and abroad, so the impact was the same both here and abroad, and we were concerned about performing at a very good sales pace. It's very clear when you look at the numbers that the pace is quite strong. That was something that we needed to do, and we were able to execute that quite well. This effect of the margin in the international segment is lower because of lower prices impact, and as for financial expenses, I will turn the floor to Flávio. When you look, I'm not certain whether you want to talk about gross or net expense. I am looking at gross expense from interest rates. When you look at gross expenses and total debt compared to last year, we had BRL 6.3 billion in August. It was BRL 5.4, so you have two movements that operate in opposite directions.
You have gross debt coming down, and on the other hand, you have increased CDI. So on and on, you have stability. When you look on the net side, you see that last year we had BRL 188 million of financial expenses, BRL 260 million this year in the consolidated scenario. So even though net debt was pretty much flat year on year, this reflects an increase in financial expenses attributed to higher CDI. And I think that the team can then talk to you later on to show you the effects of price and volume to address your question in more details. Great. Thank you, guys. Next question came in writing from Eduardo Lazzaretti with GTI. He says, "Good morning. Could you please elaborate further on the drop of the EBITDA margin in the international segment, whether this was a one-off situation of this quarter and what happened?
We saw a good recovery in Brazil, but this quarter alone in that international segment was worse contrary to what we've seen in past quarters." Eduardo, thank you for your question. I think it's related to what I said or my answer to the last question. Prices were down in the international market as well. Uruguay prices were lower. Chile also experienced lower prices, and the same thing happened in Ecuador. So comparing to what happened in Brazil, this was just the same without having other categories that helped to mitigate that. So when I look at a rice segment in Brazil, there was a worsening in the margin, very similar to what happened abroad, but in Brazil, this was offset by other categories. Therefore, I wouldn't say this is a one-off process, but it is just a reflection of the price drop that occurred in the period.
As we are reaching the lowest price level, because it has to do with growers planting at this level, I think the moment now is over. There should be a slight impact in the third quarter, but going forward, the expectation is that things will be normalized and will go back to previous levels. Thank you for your question again. The Q&A session is now concluded. Thank you very much for joining us today, and we wish you a very good day.