Hello, welcome to the presentation and comments on the results for the third quarter ended November 2025. On slide two, we present the categories of activities and the main indicators for the quarter. The third quarter was marked by increased profitability, even in a more challenging revenue scenario. Net revenue totaled BRL 2.9 billion, down 5% year on year, mostly driven by prices. On the other hand, volumes totaled 616,000 tons, growing year- on- year. We ended the period with EBITDA of BRL 239 million, up 39% in an yearly comparison, and an EBITDA margin of 8.1%. This represents a 2.6 percentage points growth compared to the third quarter of 2024. This result reflects operating discipline and improved mix and consistent growth in the higher value-added and international categories. We will now look at performance by category.
In the High turnover category, which includes sugar and grains in Brazil, we saw an 8% decline in volumes when compared to the previous year. This movement was mainly explained by lower sugar export volumes, partially offset by growth in grain volumes compared to the third quarter of 2024. In sugar, it is worth reinforcing an important point. We continue to see a gradual improvement in profitability, which has contributed to more favorable margins in the category. In sequential comparison, high turnover showed a 12% drop in volume, again explained by sugar. Grains remained at a stable level in sequential volumes, but with lower prices that put pressure on their profitability. In the high growth category, which includes fish, pasta, coffee, and cookies, we recorded volume growth both in annual and sequential comparison on all fronts. Coffee and fish were the main highlights of the quarter.
In pasta, the Camil brand continues to expand its share in the São Paulo metropolitan area. In cookies, we proceeded with our efforts to revitalize the Mabel brand with a clear focus on improving profitability. As for coffee, we continue to strengthen União's presence with high visibility initiatives and a focus on positioning in the higher growth segment. The high growth category continues to be a structural pillar of growth and margin for the company. We continue to execute our growth strategy with a focus on mix and added value, supported by investments in innovation and brand strengthening. In the international market, we recorded volume growth both year on year and sequentially. In the annual comparison, the advance was driven by the higher pace of exports in Uruguay and increased volumes from Paraguay after the completion of the acquisition on September 1st, 2025.
In the sequential comparison, the growth mainly reflects Paraguay's incremental contribution to the consolidated results. This stems from the implementation of our regional expansion strategy in South America, while at the same time we accelerate operating efficiency initiatives in other countries. Our commitment remains the same: quality, discipline, and sustainable value creation. The combination of strong brands, regional presence, and strategic projects support our growth trajectory. I now turn the floor to Flavio, who will comment on the financial highlights for the quarter.
Well, thank you, Luciano. Good morning, everyone, and thank you for joining us for another earnings release presentation. Compared to the third quarter of 2024, net revenue stood at BRL 2.9 billion, down 5% year- on- year. Cost of goods sold fell 11%, mainly reflecting the reduction in raw material prices both in Brazil and in the international segment, with emphasis to the high turnover category.
The lower reduction in revenue compared to COGS boosted gross profit for the period, which reached BRL 669 million with a gross margin of 22.7%. SG&A expenses represented 17.3% of net revenue. On the international segment, the increase reflects higher volumes in Uruguay and the inclusion of expenses from Uruguay in the consolidated results. In Brazil, we posted growth in sales, expenses, and commissions, and in G&A, associated with increased commercial activity and investments in personnel and consulting services. As a result, we ended the quarter with EBITDA of BRL 239 million and a margin of 8.1%, reinforcing the trend of increased profitability. In the sequential comparison, net revenue was down by 1%, accompanied by a 1% reduction in COGS. Gross profit fell 1%, with a margin that remained virtually flat at 23%. EBITDA was down 5%, mainly reflecting the seasonal impact on volumes and operating dimension.
As for our debt position, we ended the quarter with net debt of BRL 3.8 billion and leverage of 4.2 x net debt over EBITDA of the last 12 months. It's also important to emphasize that our working capital is structurally seasonal, especially due to rice. The beginning of the fiscal year requires greater cash consumption, while the final quarters tend to generate capital release, especially in the fourth quarter. For this reason, the net debt to EBITDA covenants currently set in our main issuance are at four times and are only tested at the end of the fourth quarter when we historically notice a reduction in leverage. It is worth noting that in November 2025, we concluded the 15th issuance of the debentures in the amount of BRL 1.25 billion, with a focus on extending maturities and strengthening liquidity.
Capex for the quarter was BRL 95 million, mainly earmarked to the construction of the new grain and thermoelectric plant in Itaqui, the state of Rio Grande do Sul. This is a very strategic project for medium and long-term efficiency and competitiveness. In conclusion, our main focus on strengthening our brands, gaining operating efficiency, and executing our growth with financial discipline. We are confident that the company's strategies support a new cycle of evolution with consistent margin improvement and value creation to shareholders. We are now available to take your questions. Thank you 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. If your question is answered, you can leave the queue by clicking on that button again. Our first question comes from Henrique Brustolin with Bradesco.
Good morning, Flavio, Luciano, and Jennifer.
Thank you for taking my questions. I have two questions. My first question is about volume in the high growth segment. We saw a significant volume growth in the quarter under any comparison base. You also mentioned a favorable contribution coming from all categories. But if you could please elaborate a little bit more, telling us what was the main factor that led to that growth and what can we see going forward in terms of this growth, given the fact that this is one of the most important pillars of the company's growth strategy. So this is my first question. Second question is about margin recovery in the international segment. Sequentially, we see that you recover profitability.
Can you please tell us what drove that improvement and whether there was any particular country that contributed to that improvement, or this is related to Peru that had been a detractor in that result? And how can we look at that profitability going forward?
Thank you. Henrique, thank you very much for your questions. In the high growth category, I think that if we look at all the categories, they all contributed to our growth. Pasta had a slight volume recovery. Coffee as well. We had a significant volume improvement. Fish. Now we start at the beginning of Lent, and that's when we have higher sales because of seasonality. And I think these are our main growth drivers.
We are still very much focused on the execution and growth of the cookie segment, but I think the two main highlights for that quarter, especially if you think about sequential, is the pre-Lent period for fish and the performance coming from coffee, and I can further on give you more details about the other categories. As for the international segment, Peru was indeed a country that posted the highest challenge. In this last quarter, we were able to initiate the process of recovering profitability. We made important steps in that direction, and the trajectory is set. Therefore, I'm more optimistic with that Peru landscape. In Chile, we also posted margin improvement. Chile was in the process of recovering profitability, so now we reached a good level of profitability.
So without giving any guidance, I think if you look at the international segment, I think the challenge we have going forward refers to rice prices. What impacts Brazil also impacts the international segment. But apart from the rice price challenge, going forward, I would say that we will be able to maintain what we are doing so far.
I don't know whether you have a follow-on, but yeah, I just have a follow-up on the coffee side. You talked about a strong volume growth. I remember you said that the profitability in that category was better. So can you elaborate a bit more in terms of how you see this evolving going forward with all the changes that you implemented and how confident you are with that category going forward?
As for coffee, and I think our pricing expectation is a bit lower in view of the good harvest for this year. We changed the commercial execution a little bit, and now we are reaping the benefits of this new dynamics. And I think this has been going on for the past four to five months. We are now reaching a revenue level, and I think last time we said that we would supersede BRL 1 billion of revenue. I think this year our net income for coffee would be BRL 1.1 billion. This is a significant growth when compared to the previous year, not only due to prices, but also in view of our volume performance. We were able to gain more market share. Our market share is growing in São Paulo and Rio.
We are also coming in stronger in other states of the country, meaning that we still have a significant path to grow going forward. In the first 18 months, we posted constant growth, and then there was a stagnation for a few months, and now we are resuming growth. The company is quite optimistic. We superseded 55% of the utilization of our plant. And so despite the fact that the scale in this industry is not so relevant as in other segments, we are reaching a level that consolidates the profitability that we have in this segment. I think these are my comments on the coffee side.
Excellent, Luciano. Thank you very much.
Our next question is from Gustavo Troyano with Itaú BBA.
Good morning, and thank you for taking my questions. My two questions are about profitability in Brazil, and the first question focuses on the gross margin.
I saw that you grew your gross margin in Brazil sequentially despite lower rice prices. And then you also referred to the expansion of sugar margins as one of the main growth drivers. Luciano, I would like to get a better understanding about the intention of this sugar improvement, given the relevance of rice, which takes a bigger part of your P&L. But do you believe that the sugar margins are already normalized, or maybe it's even higher just to compensate for the rice performance? So if you could comment on that, I would appreciate it. And my second question, and now speaking about the EBITDA margin, even though the sequential gross margin in Brazil was good, it tends to be compressed a bit because SG&A has expenses with consulting services and personnel.
So my question about SG&A is, what could we expect going forward in terms of investments in your channels and even consulting services, or what could be a one-off expense so that we can monitor expenses a little bit better going forward? And what is the new way to operate, and what will be left behind in the world? What would be history?
Well, thank you, Gustavo, for your questions. About profitability in Brazil, I think there is a significant impact coming from sugar, as you said it yourself. And I think we reached our historical levels for that category. The scenario, and we were being very conservative about what we expect in terms of maintaining profitability at current levels going forward, we are more comfortable now believing that the current scenario may remain as such until next year.
And if we look at what is happening in the domestic market and the exact pricing, it gives us additional comfort. And apparently, our confidence that this scenario will remain as such until the end of the year, our confidence has increased. So again, after four years struggling with small margins in the segment, the fact that we resume historical levels and having visibility that next year things will be the same, that makes us feel very comfortable. But as you said it yourself, this is not enough to offset everything that is happening in grains. But as for grains, we have the mathematical effect on the gross margin because the way we and the entire industry calculate prices, when raw material prices are lower, our gross percentage margin increases.
This is part related to the mathematical effect, and the other part relates to the fact that we hope to have higher percentage EBITDA margins in rice, but this does not compensate for the nominal drop. The challenge is that for next year, we hope to be able to capture EBITDA percentage margins that could be higher. The current pricing scenario in the next quarter, in the past, we thought that we had reached the ceiling. Last year, we talked about prices around 60 BRL, but now prices are around 53-54 BRL. These are very, very low pricing levels. At this level, this does not pay off growers. They should be working at a loss. The question is, when will prices recover? There is a large impact coming from the current harvest season. Conab just mentioned a lower acreage. We also have lower use of technology.
Therefore, this should lead to 10% lower margins, and we have also to deal with climate issues that may impact yields, so the estimate we have is that the next harvest will be 10%-15% lower unless there are other climate effects, and this is a very important part of the rice production. I mean, growers that are already harvesting, we know that they are harvesting less, but we cannot tell now how lower the next season will be. If there is no price recovery in the second quarter, probably the acreage and production in the following years will be higher, and probably only in 2027, we will be able to see price recoveries. Therefore, if in the second half of the year, things start to recover, I think prices will recover probably in 2027.
All of these comments are to say that our fourth quarter in grains historically is more challenging because there is seasonality, lower volumes, margins, because you have the pre-harvest topic. So in addition to the historical traditional challenges, we also have to deal with pricing issues that will lead to a more challenging fourth quarter. And I think with that, I answer your first question related to Brazil's profitability. Now I'll turn over to Flávio, who will talk about SG&A.
Well, thank you, Gustavo, for your question. First, about sales expenses, I think this is pretty much related to freight expenses. And again, this is related to volumes. In terms of expectations, we are working hard to seek for further efficiencies, better operations, and have gains per ton.
But this is not going to be a very significant gain like you would be able to gain two digits in a timeline. But SG&A is very much related to volumes, as I said. G&A, in comparing it to the quarters, the one-off we have once you compare quarter to quarters, there is a difference in terms of a collective bargaining agreement. There were also some reductions that we didn't have this quarter. In the past quarter, G&A, we had a loss reversal and impairment. In this quarter, we had BRL 10 million in consulting expenses. So in addition to consulting expenses, which is something that should not happen every quarter, we should be operating at this level. I would just like to add one more thing. With lower rice prices and significantly lower prices of rice, this will impact our total revenue.
In percentage terms, SG&A should also increase its percentage in terms of the total net revenue. We will not have extraordinary nominal increases, but in percentage terms, they will represent more in our total basket.
Thank you. It's very clear.
Our next question is from Guilherme Guttilla with BTG Pactual.
Hello. How are you? Good morning. I have two questions. My first question, we would like to have a better understanding about the new Itaqui grain plant. Can you please give us a little bit more information in terms of what are the efficiencies you expect to have since it's in its final construction phase and how this could improve the production capacity of the company? And another topic, now moving on to Paraguay, if you could give us some more information about what are the growth possibilities that you envision for the country.
Also, I mean, this Paraguay operation could help this internal operation in Brazil if you intend to supply a few markets like São Paulo and Minas Gerais with rice coming from Paraguay.
Thank you, Guilherme, for your questions. The Camil plant in Itaqui will add an additional production capacity. Thinking about Brazil, it will add 15%-20% capacity growth. Obviously, this is a state-of-the-art plant. If the plant operates at the capacity level that we expect, it will be the best industrial cost of the entire company. We believe that this will pay it off because we invested a lot of money in that plant. It was a very high investment. In addition to the rice plant, we have a thermoelectric plant that we use the husk, and then we will also have rice mill. This will be a plant that will generate BRL 500 million-BRL 600 million.
And in addition, we have an ICMS incentive coming from Rio Grande do Sul that is helping us to pay off that investment. But I believe that the major issue here is the unit cost reduction of production. It will be our lowest unit production cost. And the thermoelectric plant, we will start testing in January and February, and I think it should be fully completed as of June. So I think these are the main messages. As for Paraguay, it brings 15% growth of international volumes. International today accounts for 15% growth. There is also additional potential. And thinking about a country, our initial volume in Paraguay, which is 100,000 tons-110,000 tons a year, we envision a huge growth potential there. When we communicated the market about the acquisition, the company believes that we can double or triple the size of Paraguay in five years' time.
So Paraguay has a rice production cost, I mean, thinking in terms of the grower, which is the lowest in Mercosur. So their production cost is lower than that of Rio Grande do Sul, Paraguay, or Argentina. So it's very competitive. And obviously, the destination of that rice, in addition to what you mentioned about Brazil, this rice will also go to Chile and could also go to Peru. We see a lot of opportunities and further competitiveness, but this does not mean that we will migrate our rice origination from Brazil to Paraguay. We are taking an existing position and just giving it an additional destination. It's incremental to us. It's not replacing the current supply. And this is an important message because you may think that eventually we would remove production from Brazil. That's not the case.
We are expanding our Itaqui plant in Rio Grande do Sul because we see a lot of potential and competitiveness there. And Paraguay is just an additional competitive source, an additional supply to our operations in Brazil. As you said it yourself, this rice will come to São Paulo and mainly also Minas Gerais.
Thank you. Thank you for your answers.
Next question comes from Pedro Fonseca with XP.
Good morning, Luciano and Flavio. Thank you for taking my question. My first question, in fact, is a follow-up regarding the high growth question. We saw relevant growth in the quarter. And Luciano, you talked about changing the strategy mainly in the coffee segment. If you can share with us what that change is?
And in line with that growth in volume, I remember that mainly in the wheat category, the company had a strategy to follow market pricing, of course, keeping price relativity. But while you didn't have enough volume, you would follow the market price. But in the high growth category, I think the company is approaching a level that maybe you could change your pricing strategy. This is my first point. My second point that I would like to hear from you. In the high turnover, can you tell us what you see in terms of inventory levels in that channel? Because sometimes we try to purge exports, we would think that the high turnover volumes would grow. So how do you see the inventory levels and consumption in the high growth value category?
Pedro, the coffee strategy is a very sensitive issue, and it's sensitive in terms of telling you something about it. I don't know what I can tell you without exposing what we've been doing, but in general terms, trying to speak a little bit about our very assertive change. Maybe if you look at how we started operating in grains, we had a way of thinking about pricing and the product negotiation very much based on the way we started way back then, and now, it's not that we are looking at it now, but from the very beginning, we look at how trading and marketing worked. We look at things that worked and didn't work, and our last change was really assertive. Therefore, I think the topic that is most important is execution.
There is a second part to it, which is the launch of the new products and our integration. We started with roasted and ground, and then we went to gourmet coffee and more recently, we launched the capsules or the pods. We are adding to our portfolio and all of these additional segments and launches in coffee also bring about important profitability and they are evolving quite well. This is all I can tell you about coffee. Our pricing strategy remains in line. We don't have the necessary relevance to influence the market at the moment. Therefore, in these categories, I mean, except for fish, where we have a more relevant stake and pasta in Minas, but except for these specific categories, we are price followers. We follow the competition, and that's relevant in our pricing strategy.
Inventory in the high turnover channel. This has the effect. This also contemplates the effect of sugar exports that didn't happen. We did mention that. Our third quarter that ended in November. This was a process throughout the year. It will probably be more intense at the end of the year. This is the additional issue related to working capital. We do not see inventory levels in the industry. In the previous quarter, I said that our customers, rice and grains, were not very active in their purchases. They were keeping low inventory levels because the prices were low. The same thing remains to date. My opinion is that the inventory in the channel is lower than historical levels. This is not something very specific of this quarter because this has been happening throughout the year.
And so I don't know whether I was able to answer your question.
Yeah, you did answer, Luciano. Thank you very much.
Yeah. Thank you.
Our next question is from Laura Hirata with Santander.
Good morning, Luciano, Flavio, and Jennifer. Thank you for taking my question. I have two questions. The first, in fact, is a follow-up of the previous questions. In high growth, how do you see the consumption environment in Brazil? We've seen a lot of food companies talking about structural changes in volumes, especially in this category of groceries. How do you see that? And my second question is about sugar. What do you see in this category going forward, and what would be the potential impact coming from the ethanol and sugar mix in Brazil and the crop season in other countries? And how do you think that could affect the profitability of that category?
Thank you.
Two good questions. In terms of consumption, in general, not only our company, but what I hear from customers is that life is tough, meaning that the end consumer has no money. I mean, you see income growth on the one hand, but you don't see that being reflected in consumption. And there are many different explanations for that. You have the issue of the bets, something new. Last year, we talked a lot about that, and this has impacted income. The estimate of bet expenses, I mean, on an annual basis, is higher than the five largest revenues from the five largest retailers and wholesalers in Brazil. So there's a lot of money going into bets. So it's difficult to put that into perspective and make it more tangible.
And the second topic, and this has appeared often in reports from banks and studies from other organizations, and this is related to Ozempic and generic products and how this could impact consumption. There is a lot of people looking at the impact in the U.S. market as well. And I was surprised when I read that information that Brazil is the second largest consumer of this kind of medication. And I believe that this makes us think about what will happen when the generics will come into play, and they are expected to hit the market at the end of this year. And I've been hearing different opinions. Some believe that consumption of this medication will increase, and this could also bring a bigger impact, especially in the categories that are more, how could I say, something like cookies, oh, indulgent when you indulge yourselves.
So maybe this category should be more heavily impacted. And also, the generic product will be much cheaper when compared to the current products. And this may release some money for consumption of other products. So these are the comments that I've heard. I know that they are different from one another, but in fact, we have to wait and see what will happen. In our categories, when I look at consumption and the impact from this type of product or medication, and I think that since our categories involve more basic products, we will not be as impacted as cookies or other indulgent products. And this can only accelerate consolidation because every time there is a drop in consumption and we operate in markets that are very spread around, this gives room to further consolidation. This is a point of attention.
At the same time, I mean, it's a given that something will happen. The company is closely monitoring that. I believe these are the two comments I have in relation to consumption, Laura. As for sugar, the company is humble enough to acknowledge that we are not experts in the field. I read a lot of reports, and our entire team reads. They read a lot as well. We believe, as I said earlier on, that the current landscape should remain the same throughout the year. There are many variables taking place. I think that the main topic is this direct relation we have with oil prices because this impacts ethanol production, and it also impacts the higher or lower sugar production.
What I can state is what I said before, Laura, that for the next 12 months, we believe that prices will remain as they are right now, and this is good for the profitability of the company. I mean, thinking about an additional year, for me, that's a bit hard to think further down the road.
That's very clear, Luciano. Thank you very much for your answers.
Our next question is from Julia Zaniolo with Bank of America.
Good morning, guys, and thank you for your time. You mentioned that Paraguay has a lower cost, and they are growing within that category. Can you help us to quantify what would be the impact on profitability and margin in the international segment, considering that contribution from Paraguay, and how much of the improvement this quarter comes from improvement from other regions versus Paraguay being consolidated into the results?
Julia, thank you for your question. I think what I can say is that Paraguay, if you think about an operation, profitability will be similar to our other international businesses. What happened last quarter? I mean, Paraguay was not boosting profitability. I think the improvement came mostly from Peru, which had a bad performance, but is now on the recovery track. So I think this is what I can tell you. A great growth potential, profitability is similar in our international operations. This is what we expect.
Okay, thank you. Thank you very much.
Our next question is from Gabriel Avila with Condor Insider.
Looking forward, how does the company see this balance between mix and volume in 2025? The expansion of higher growth category tends to be the main driver of margin, or there is room for recovery and profitability also in high turnover, especially in grains and sugar?
I think that the topic of sugar profitability, I mean, we went back to we are now back to historical levels. We recovered our profitability. The company still focuses on growing volume in high growth categories. We see great potential to recover the space that Mabel occupied in the past. So we still have recoveries in the pasta segment, in the Rio de Janeiro market. We also see pasta recovering in São Paulo with the Camil brand. Coffee, we still have a lot of growth to recover going forward. So the high growth category has good growth potential, but that certainly depends on our execution. Now, looking at high turnover, the current challenge remains with rice prices. Rice prices are impacting profitability. But we believe that if we haven't hit the bottom, we are close to hitting the bottom. The recovery of rice margins will start happening soon.
It may sound like we are over-optimistic, but it involves all fronts. There is room for us to grow in the high growth area, and we see also opportunities in high turnover, and we want to grow in high turnover. I talked about sugar profitability, but we still have to recover sugar volumes because we lost that space due to competitiveness due to the competition. So there are many options to pursue growth.
Thank you.
The Q&A session is now concluded. We thank you all for joining us, and we wish you a very good day.