Good morning. Welcome to Camil's video conference to discuss the results of the first quarter of 2026. 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 all participants will be in listen-only mode during the company's presentation. At the end, we will open for questions from analysts and investors. 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 of 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 understand that such general economic, industry conditions, and other operating factors may affect Camil's performance and lead to results that differ substantially from those expressed in such forward-looking statements. We will now start the presentation with Mr. Quartiero, followed by Flavio's presentation, and at the end, we will open for a Q&A. Thank you.
Hello, welcome to the management's comments on the first quarter of 2026 results for the period ending May 2026. On this second slide, we present a consolidated overview of our business segments and the key indicators for the quarter. Q1 of 2026 was marked by an acceleration in volumes in Brazil and in our international operations. We reached 594,000 metric tons for the period, an 18% increase compared to the first quarter of 2025. In Brazil, volume grew by 14%, while the international segment grew by more than 25%.
Despite deflationary pressure on rice prices, both in the domestic market and in Latin America, net revenue remained virtually stable at BRL 2.7 billion when compared to the first quarter of 2025. This result demonstrates that economies of scale largely offset the impact of lower prices during the period. EBITDA totaled BRL 210 million, with a margin of 7.9%. We now turn to the highlights of each segment. In the high-turnover segment, comprising grains and sugar in Brazil, volume hit 333,000 metric tons, up 14% over Q1 2025, with positive contributions from both grains and sugar. This performance reflects all the work we have been doing in recent quarters. Our brands continue to gain relevance, commercial execution has improved consistently, the growth plans we have previously structured are yielding concrete results in terms of volume.
As a result, the high-turnover segment continues to consolidate its position through its scale and market reach. Net price was BRL 3.82 per kilogram, a 3.5% year-on-year decline in line with lower rice and sugar prices. On a quarter-over-quarter basis, however, we saw a recovery. Net price was up 16% from Q4 2025, volume was up 14%. In the high-growth segment, which includes pasta, cookies, coffee, and fish, volume totaled 49,000 tons, a 15% increase year-over-year. The main drivers of growth were fish, coffee, and cookies, offsetting the decline in pasta. Coffee remains a standout category for the company. The initiative has been gaining momentum quarter by quarter, we continue to innovate in our portfolio, expanding distribution, strengthening brand presence, and consistently gaining market share. In cookies, revitalization efforts continue to yield results with year-over-year volume growth.
Net price was BRL 17.52 per kilogram, a 15% increase over Q1 2025, reflecting the product mix and positioning in high-growth added category. This trend towards high growth reinforces the consistency of our value-added growth strategy. The international segment recorded a total volume of 211,000 tons, up 26% from Q1 2025, driven by performance in Uruguay, Paraguay, and Chile, and partially offset by a decline in volume in Ecuador and Peru during the period. The international segment establishing itself as one of the company's strategic pillars for diversification and growth. The average net price fell by 32% year-on-year, in line with the trend of declining rice prices, which affects the entire supply chain in the region.
To conclude my remarks, we believe that our portfolio of leading brands, our operating discipline, and a very clear value creation strategy position us to sustain consistent growth over time, as evidenced by the volumes reported for the period. I will now turn the floor over to Flavio, who will present the financial highlights for the quarter.
Well, thank you, Luciano. Thank you all for joining us in this earnings release presentation. Starting with the year-over-year comparison, net revenue totaled BRL 2.7 billion, remaining virtually flat for the period. The cost of goods sold declined by 3% due to lower input prices, both in Brazil and abroad. As a result, gross profit rose to BRL 652 million with a gross margin of 24%, an increase of 1.9 percentage points year-over-year.
Regarding operating expenses, SG&A accounted for 20% of net revenue, up by 3.0 percentage points compared to the first quarter of 2025. Sales expenses were 13% of revenue. This increase reflects higher transport volumes and freight rate adjustments during the period, including effects from route mix and the adjustments to ANTT's freight rate schedule, as well as the ongoing commercial restructuring, which includes expanding the sales force and adopting more efficient operating models for the company's reps. As for general and admin expenses, which accounted for 7% of revenue, that increase was related to legal provisions totaling approximately BRL 22 million related to a settlement reached in a road toll voucher lawsuit, other provisions, and expenses associated with personnel and technology. It's also important to note that the SG&A ratio to net revenue is impacted not only by the growth in expenses, but also by revenue dynamics.
During the period, revenue was pressured by a cycle of low rice prices, but it may benefit from a potential return to more normalized price levels, contributing to the natural dilution of these expenses as a proportion of net revenue. EBITDA for the quarter was BRL 210 million with a margin of 7.9%. Compared to the fourth quarter of 2025, net revenue increased by 6.6%, while cost of goods sold rose by 3%. Gross profit grew by 20%, with the gross margin increasing by 2.7 percentage points. EBITDA grew 8.9% from the previous quarter, with a 0.2 percentage point increase in the margin. Regarding the capital structure, net debt ended the quarter at BRL 4.2 billion with a leverage ratio of 4.7 times net debt to EBITDA for the last 12 months. It is worth noting that Camil's working capital profile is structurally seasonal.
The first quarter is historically the period of highest cash burn due to the buildup of inventory for the rice harvest. Over the course of the fiscal year, this capital is gradually released. For this reason, financial covenants are assessed at the end of the fiscal year, a time when leverage ratios historically decline. Moreover, we raise funds in Brazil to meet our obligations for the next 12 to 14 months under our amortization schedule, totaling approximately BRL 600 million net. CapEx stood at BRL 78 million in the quarter, down by 35% year-over-year and 16% quarter-on-quarter, reflecting the completion of construction on the new grain plant and the thermal power plant in Cambaí in the fourth quarter of 2025, and the resulting normalization of investments to maintenance levels.
In closing, to reinforce Luciano's message, we are confident that our close relationships with our customers, investors, consumers, and partners, combined with the quality of our execution, will continue to drive solid results and strengthen our position as one of the leading food companies in Latin America. With that, we will open the floor for Q&A. Thank you all very much.
We will now initiate the Q&A session for analysts and investors. In case you have questions, please click on the Raise Hand button. Once your question is answered, you can leave the queue by clicking on the icon again. Our first question comes from Gustavo Troyano with Itaú BBA. Your audio is available. Go ahead, sir.
Good morning, thank you for taking my questions. We have two questions. My first question is on gross margin, more specifically in Brazil.
What drew our attention was the fact that you went back to a level that we hadn't seen for quite some time in terms of gross margin. My question relates to what led to that improvement in gross margin in Brazil. Was that one major driver, or was it a combination of factors that led to this new gross margin level? On the same note, I would like to hear whether this is the level of gross margin that we should expect going forward. This is question one. Question two is on working capital and leverage. We notice a significant use of working capital. I do understand the seasonal dynamics and maybe whether we should expect a further capital release going forward.
Could you please quantify a bit better this expectation of working capital release and maybe what you expect in terms of consumption for the whole year, and how comfortable you are with the leverage level that you expect to post until the end of the year vis-à-vis your covenant, or whether we should still expect some non-organic event if the leverage is not ideal for you.
Well, Gustavo, thank you for your questions. I think regarding gross margin composition, the beauty of being a company of multi-categories is because there is always a category that push things upwards and others that mitigate some negative effects. Especially coffee and fish, which posted very good profitability, but it has been hampered by grains, mostly due to drops in rice prices. Considering what is helping and what is hurting us, I think this is a new level for the company.
Obviously, there might be changes depending on the impact from prices. We have a mathematical effect on our gross margin, so if there are significant changes in prices. I think this is also due to our better commercial expansion, without giving you a lot of details, and this is reflected in the performance of volumes for high growth and high turnover segments. Now, Flavio will talk about working capital. I may say that the covenant for the year-end is not a concern for the company, because we're very comfortable with our working capital. There is a significant release of working capital in the fourth quarter. Our covenant that was three and a half is now four. The company is not concerned in terms of complying with the covenant. We are focusing on deleveraging the company by improving our operating efficiency.
What you see in these two categories is the result of that. Having said that, now I'll turn the floor over to Flavio to talk about working capital performance.
Well, thank you for your question. Since you monitor us very quickly, you know how the dynamics of seasonality operates. What is new about this year when compared to the same quarter of last year is that now we have Villa Oliva that is part of our portfolio since last November, and that's why we needed additional working capital. When we started the year, our budget or our planning also contemplated the fact that we knew that raw material prices would be lower, especially in regard to rice. The company is focusing on volume to mitigate this lower price and mitigate it by higher volumes.
What we anticipate in relation to working capital is that it should stand pretty much in line with what we had last year. Eventually, if there is any volume increase, and on the other hand, you should expect a lower average price, we expect to come to year-end with a very consistent working capital release, very consistent with the past, with our historical numbers. Working capital will be very similar to what we saw last year. That's why we are not anticipating a heavy consumption of working capital, even because there were movements in opposite directions, higher volumes, but with lower prices. This helps us out in this aspect. That's why we are not anticipating any surprises.
Thank you. That's very clear.
Next question comes from Julia Zaniolo with Bank of America. Your audio is now open. Go ahead.
Good morning. Thank you for taking my questions. I have two questions. My first question is related to higher volumes. I would just like to understand or hear from you how much of that has been related to your commercial strategy and the effort to gain scale, and how much of that or whether this also contemplates earlier purchases. Maybe we can anticipate price improvements or price increases, particularly in grains, looking forward. I think prices were weak. Can you elaborate a bit more about what happened on the international segment that led to that, and what is your expectation in terms of EBITDA margin, thinking about expenses Given that we should see a price recovery that would lead to lower costs. If that does not materialize, what are you doing, or how are you preparing yourselves to reach a better margin level?
Thank you for your questions.
In fact, when you look at volumes, our new way of going to market and all of the strategy we deployed, which was part of a plan that we started focusing on since the second half of last year, is now bearing fruits. These additional volumes stem from the strategy and rather than the movement you mentioned of anticipating purchases, which happens at the end of the crop season, especially in grains and rice, when they anticipate purchases, and then April and May is when they resume their purchases. This quarter does not reflect that, even because this volume growth did not only happen with rice, but it also happened with sugar and almost all of the other categories of the high-growth segment. This is part of this new commercial strategy. The pace continues.
We are in the midst of the second quarter, and we are seeing the same kind of pace. The quarter is not over yet, but we see the same performance and the same behavior. As you put it quite well when it comes to the international segment, the levels are below historic levels in that segment, and this is a reflection of price decline. This is a similar effect of what we saw in Brazil, which is being mitigated by the other categories. This drop in prices since has been long-standing. It happened for a long time, and quite significantly, this hurt our profitability. Now, we believe that the worst moment is over in terms of rice prices here and abroad.
Of course, we don't know how much El Niño will impact prices in the second half and how much we will be able to produce in South America, or whether this will anticipate the expected spike in prices in the second half. I think we are already seeing a slight recovery in prices because prices have reached bottom, and I think now we should expect some recovery. Now, on the international segment, again, the countries posted important volume growth. There is the effect of the entry of Uruguay, but Paraguay and Chile are posting higher volumes. It's only Peru and Ecuador that recorded a slight decline in Ecuador has a different dynamics because they have two crop seasons, and then the impact of price drop is a bit different, and it goes hand-in-hand with the results. These are two countries that are detractors when we look at the LATAM operation.
With that, I think I was able to answer your questions, Julia.
That's great. Thank you.
Next question comes from Leonardo Alencar with XP. Leonardo, you are free to talk.
Good morning, Luciano and Flavio and Jenifer. Thank you for taking my questions. Maybe I think I have a follow-up from Julia's question about whether there will be an increase or whether you will be able to sustain that level of production. It even seems that this will not be a one-off scenario, but it may become a trend. Given the scenario and given the fact that part of the recovery of margins for the second half is very much related to how rice will perform, but you are in a good position to capture that.
Could you please elaborate a bit more on rice prices? Maybe you can tell me a little bit about the dynamics for the year going forward, because I think there is room for some positive outlook for rice. My second point is whether you could give me some more color or some insights, because we were surprised to see the margins. I understand that there is a little bit of non-recurring factors, but within the first quarter, was that a ramp-up of this effect? Is there still some additional factors that will be carried over to the second quarter? What would be the outlook for sales expenses for the following quarters, not only in terms of recurring or non-recurring expenses, but the pace of things.
Leonardo, thank you for your question. I think that the entire sector has been talking about the impacts from El Niño.
In our last call, we talked about the increase of the likelihood of having a super El Niño, that likelihood has increased significantly. Last time I read something, there was an indication that there will be 80% by year-end, even January and February of next year, the impacts of El Niño. Theoretically, we are assuming an increase of rainfall in September and October when it's planting time. If there is rain in that period, it will be more difficult for farmers to plant. Then there will be a more intense rainfall at the turn of the year when there is less sun and more rain, this tends to reduce yield. There is a second element speaking on the farmer side. They are selling the crop today; prices today are below production cost. Credit offering is lower, acreage may shrink.
Not only we will see lower acreage, but also lower yield. It's hard to tell how heavy this impact will be in every segment. Therefore, this effect also happens in Paraguay, in Argentina, in terms of lower acreage and maybe not so much so in Uruguay. We may expect lower crops. The important aspect is not that there will be a scarcity of rice, but the main topic is that the surplus that goes from one crop to the next will be used. Depending on all of these factors, we will see an expectation. Probably growers will offer less products, that may trigger price increases. I think your second question is how intense that price spike will be. When we look at past El Niños, we should expect high price increases.
I'm not going to give any guidance or say anything about price increases because the whole industry is talking about it, but we should expect significantly higher prices. About BRL 63 today, I would like to remind you that by the end of 2025 and early 2026, there was a big increase. Growers are talking about BRL 70. We still have to reach that mark of BRL 70, which is cost, obviously this will have a heavy impact on prices for next year. This effect, when we have higher prices, profitability of the company, not only in Brazil but also abroad, is better. A good reference are looking at previous years when prices in Brazil ranged around BRL 80, BRL 90, or BRL 100 per bag. That could be a good reference figure. Therefore, about your first questions, these are my comments.
Flavio can elaborate a bit on sales expenses.
Leo, thank you for your question. I think your question focused more on freight, but I'll try to give you some more color on overall sales expenses, because that may explain a lot of your concern. Focused in Brazil, because sales expenses went from BRL 192 million to BRL 249 million, meaning an increase of about BRL 56 million. These BRL 56 million, out of there, BRL 38 million comes from freight. Out of the BRL 38 million, approximately BRL 21 million is due to volume increase. This is a variable increase. There is also part of it that comes from increases in ANTT, BRL 7 million, and then you have about BRL 10 million basically related to mix efficiency. From the other expenses, if you look at other expenses, part of it is linked to growth and our go-to-market change.
Out of that growth, approximately you have BRL 10 million that are non-recurring and BRL 21 million, which is associated to volume. There is an increase associated to cost due to that minimum freight and the ANTT freight table or schedule. The previous question was on gross margin, right? Oftentimes, gross margin and freight is also related to what I just said because that's how we do our pricing. Every time there is cost increase on the freight side, the company makes an effort to increase gross margin to have enough money to pay for all the expenses. Out of the BRL 56 million of growth, in fact, BRL 10 million is non-recurring, and then we have a part that is associated to higher volumes and higher costs because of higher prices.
There is also something related to commercial expenses due to our new approach in our go-to-market strategy.
Thank you. Thank you for all the details.
Next question comes from Guilherme with BTG Pactual. You may go ahead, sir.
Good morning, Luciano and Flavio. I would just like your assistant to help me understand how do you see the return of the Cambaí plant. You just said that the construction work is completed, and I just want to understand whether this could lead to higher volumes or lower SG&A. How do you think we will see that reflected in your results going forward? With that, whether you could help us understand what would be now your maintenance CapEx over the coming years and until the end of this year. Thank you.
Guilherme, thank you for your question.
The Cambaí project, I'm very optimistic about it. It's the first time that the company does something like that with this production volume, with the thermal power plant already connected. This is a very unique industrial system in South America. The return expected from the plant, the unit production cost will be lower than we have today on average. This is the most efficient plant per cost, per kilogram of rice produced. This will reflect in our margin. In terms of return as well, the company has an incentive in Rio Grande do Sul, and that's why we did not postpone that investment, because it has to do with ICMS collection. We have a limited discount related to the amount of the invested and limited to a timeline for that discount. This will start happening since the plant starts up.
We see the opportunity to produce more increased volumes; I mean and supply the market better. Lower cost, in summary, the opportunities of increasing volumes, and also, we have incentives now vis-a-vis the investments we made in that particular state, Rio Grande do Sul. Maintenance CapEx. It should range between BRL 200 million-BRL 240 million a year consolidated figure . This is what the company expects. Thank you.
Our next question comes from Henrique with Bradesco BBI. You may go ahead, sir.
Good morning, Luciano and Flavio. Thank you for taking my questions. I have two specific questions related to volumes in some specific categories. My first question is on sugar. Sugar in Brazil. I know that there was pressure on margins in the past few years, then there was a good recovery. The discussion was about a decline in volume.
Now that profitability is better, you say that there is room to grow this category further. The question is whether you already saw that in this quarter and how this reflected in your results, and how we should expect the performance of sugar in the remaining of the year, whether that could be a positive contribution. On the international segment, I think maybe there should be more volatility in terms of volumes quarter-on-quarter, and there is also Paraguay. My question is whether you can help me understand the performance of volume or growth and what your expectation for the international segment for the full year. Thank you.
Henrique, thank you for the question. Speaking about sugar, in fact, we are already seeing volume recovery.
Profitability was reaching historical levels, this in the last months or at the end of the quarter, this was a bit impacted. We have seen more aggressive prices on the part of our competitors. Profitability was down in this period, especially at the end of the quarter. Volume recovery is related to what the high turnover category presented. If you look at the first quarter of 2026 and the last quarter, there was a recovery ranging between 13%-14%, year-over-year, 20% recovery. We see a recovery in volumes with lower profitability in terms of what we expected considering the current price levels. I think what we had with our supplier in terms of stoppage of the refinery, et cetera, this phase is over and the supply of sugar is now stabilized.
Still on the international segment, the main increment is the entry of Paraguay. Now we have a full year with Paraguay. The volume of the year is a given considering the rice that we received. There is this thing of one quarter being stronger than another, but this is not the pace or the intensity for the year. There is a mismatch effect, higher volumes in one quarter, there might be other quarters when sales will not be as strong. Thinking in terms of LATAM in general, Paraguay is the most significant part because it's the newest increment. In the countries, we see 3%-4% growth. This is what we expect until the end of the year.
Thank you for answering. Thank you very much.
Our next question is from Laura Hirata with Santander. You can go ahead, ma'am.
Luciano, Flavio, and Jenifer, good morning.
I have two points here. The first being working capital, and more specifically related to your receivables line. We saw an increase in days when compared to the same period of last year. I'd just like to get a better understanding to find out whether this is due to a change in the mix of clients or channels, or whether this was due to growth in volumes, or yet if it is a seasonal thing and this is a reflection of your new commercial approach. My second question is related to high growth. In qualitative terms, how is profitability per category compared to what you expected during acquisitions, and what is the current level today? These are my two questions. Thank you.
Thank you, Laura, for your questions. In terms of receivables, nothing comes to mind right now because there was no structural change.
Obviously, here we have large customers with longer receivable days, and other clients it might be different. We have plans and strategies depending on the size of the customer. When we focus on growth, and part of the strategy focuses on large customers, their payment period is longer. The difference is not very significant. I think I would say that this is mostly a seasonal effect rather than a structural change in terms of days of accounts receivable. Now, speaking about high growth categories, as I mentioned before, coffee and fish, our profitability is higher when compared to historical levels. In both categories, we posted volume growth, significant volume growth. Coffee, we continue to grow and gaining market share. This has been a category that is posting very good results, and the company has learned how to operate in this segment. We still see a lot of opportunities.
We still have idle capacity to capture further growth with no need for additional CapEx. This is another important point, because in all categories, we have idle capacity and room to grow in the next two, three years with no need for additional capital. Coffee is above previous levels. There is gain in volume, gain in share. There is the expectation of a drop in prices, but with El Niño, we already see a price increase coming in the second half. Fish profitability is also higher. We grew volumes. Maybe one point of attention in fish is the supply of sardines. Today, there is a yellow light. We will be able to have the necessary supply until the next Lent period. Domestic fish is below the levels that it should be, and imports are not yet happening. Cookies. We continue to grow volume.
Our focus is in increasing scale and distribution to better dilute our industrial costs, which will lead to better profitability. Profitability remains on an upward movement. We also grew volumes quarter-over-quarter and year-over-year. Our point of attention has been on the pasta side. Profitability on the pasta side is below historical levels, and we haven't seen growth in volume. We are gaining share in São Paulo, particularly with the Camil brand. We have been posting growth, and we've seen increase in distribution. With pasta, we are now focusing in Rio de Janeiro and Minas Gerais. We are focusing in these two markets to recover volume because we want to see volumes in line with the other categories. Pasta is the detractor in our high growth category. I think I covered all of them, right?
Yeah, it's very clear. Thank you.
Thank you, Luciano, very much. Good morning, all.