Good morning and welcome to EcoRodovias' third quarter of 2025 earnings presentation. With us here today are Marcello Guidotti, CEO, and Andrea Fernandes, CFO. This presentation is being recorded, and all participants will be in a listen-only mode during the presentation. After that, we will begin the question-and-answer session for analysts and investors only when further instructions will be provided. The slides for this presentation are available on the company's investor relations website at ri.ecorodovias.com.br in the Results Center section. After the end of the earnings presentation, the recording will be available in the same section. Before proceeding, we would like to clarify that the forward-looking statements that may be made during this presentation relating to EcoRodovias' business prospects, projections, and operational and financial targets are based on the management's beliefs and assumptions, as well as on currently available information.
They involve risks, uncertainties, and assumptions as they refer to future events and, hence, depend on circumstances that may or may not occur. Investors should understand that general economic conditions, industry conditions, and other operating factors may affect the future performance of EcoRodovias and lead to results that differ materially from those expressed in such forward-looking statements. I will now turn the floor over to Andrea Fernandes, who will discuss the results. Andrea, you may proceed.
[Foreign language]
Good morning. Welcome to EcoRodovias' third quarter 2025 earnings presentation. We thank you all for attending. We start the presentation with the highlights of the period. Comparable traffic grew 3.2% in the quarter and 4.1% in the nine months of 2025. In comparison, the ABCR index posted an increase of 2% in the quarter and 2.3% year to date. Adjusted cash costs, excluding Ecoporto, whose operation is under its transition agreement, and provisions related to the signing of Ecovias Capixaba's contractual amendment decreased 3.6% in the quarter and 2% in the nine months, while inflation in the last 12 months was 5.17%, demonstrating for another quarter EcoRodovias' efficient cost management. Adjusted EBITDA reached BRL 1.5 billion in the quarter and BRL 4.1 billion in the nine months, with a margin in Q3 of more than 76%.
Net income attributable to controlling shareholders reached BRL 430 million in the quarter and BRL 781 million year to date. These numbers already reflect the effects of another highlight of the period, which was the signing in August of the contractual amendment for the modernization of the Ecovias Capixaba concession agreement, with a concession term of 24 years, new investment conditions, reclassification and staged increase of toll rates, and the readjustment of the Internal Rate of Return. In October, Ecovias Leste Paulista signed the contractual amendment that extended the concession term for another three years and four months. This rebalancing considered the investments that were not foreseen in the agreement already made by the concessionaire in the extension works of the Carvalho Pinto Highway.
To conclude the highlights, we invested BRL 1.3 billion in the quarter and BRL 3.4 billion in the nine months, delivering 54 km of road widening, additional lanes, and frontage roads. On slide 5, we present the operational performance, highlighting the increase of 4.5% in comparable heavy vehicle traffic in the quarter and 5.5% year to date. This performance mainly reflects the growth at Ecovias Norte Minas, driven by the traffic increase resulting from the capacity expansion works carried out between 2023 and September 2025, totaling 143 km of widened roads, additional lanes, and frontage roads. In the Ecovias Minas-Goiás, Ecovias dos Imigrantes and Ecovias Cerrado concessions, the increase in traffic was driven by the advance of soybean exports.
Moving on to slide 6, we show adjusted net revenue of BRL 2 billion in the quarter and BRL 5.5 billion year to date, due to the growth in vehicle traffic, toll tariff adjustments, and the start of toll collection by the Ecovias Raposo Castelo concession, and in three new plazas on Ecovias Noroeste Paulista. On slide 7, we highlight the implementation of the third free-flow gantry for electronic toll collection at Ecovias Noroeste Paulista as of November 1st in the municipality of Dobrada in São Paulo. The chart on the left shows the reduction in delinquency from 6.9% in September 2024 to 3.7% in August 2025. It is important to note that 100% of the delinquency is rebalanced by the granting authority in this concession contract.
Additionally, we highlight that Ecovias Noroeste Paulista has developed, since April 2024, campaigns to inform and guide users about the change in toll collection system through social media posts, influencers, local radio stations, as well as visual communication on highways, such as signs, billboards, wrapping of toll plazas, and distribution of information leaflets. Finally, we highlight the 9.3 percentage points increase in toll collection by AVI and digital means, which reached 93% of total toll collection revenue in the third quarter of 2025. Five years ago, in the third quarter of 2020, electronic toll collection accounted for 58% of total toll revenue. Since then, we have recorded a significant growth of 35 percentage points in the adoption of electronic payment methods, as well as the equivalent reduction in cash transactions. On slide 8, we demonstrate cash costs.
The highlight was the reduction in adjusted cash costs of 3.6% in the quarter and 2% in the nine months, excluding Ecoporto and the provisions related to the signing of the contractual amendment of Ecovias Capixaba. This reduction is mainly due to lower expenses with conservation and maintenance due to the higher level of services in the same period of the previous year. Normalizing the schedule of these services, adjusted cash costs would have increased 1.3% in the third quarter of 2025 and would have remained stable in the nine months. In addition, we present cash costs over adjusted net revenue, which reached 24.7% year to date, down 2.8 percentage points compared to 2024 and 10.6 percentage points compared to 2022, reflecting the various efficiency and innovation initiatives adopted by the company.
We also highlight the integration of Ecovias Noroeste Paulista into the São Paulo Operations Center, which started to cover all four concessions in the state, being responsible for monitoring almost half of EcoRodovias' traffic. On slide 9, consolidated Adjusted EBITDA reached BRL 1.5 billion in the quarter and BRL 4.1 billion in the nine months, up 23% and 19%, respectively, with an Adjusted EBITDA margin of 76% in the quarter and 75% year to date. The highlight was the Adjusted EBITDA margin of highway concessions, which reached 77% in the quarter. On the next slide, we demonstrate net income, the result of our sound operating performance and efficient cost management, demonstrated by the increase in EBITDA, in addition to the effects registered at Ecovias Capixaba. The result was also influenced by robust investment in expansion and improvements in our highway concessions, as well as the scenario of high interest rates.
On slide 12, investments totaled BRL 1.3 billion in the quarter and BRL 3.4 billion in the nine months, with the delivery of 54 km of widened roads, additional lanes, and frontage roads, in addition to the implementation of 10 overpasses and 16 intersections. Next slide, we have the evolution of the works throughout the quarter. The highlights are the delivery of road widening works at Ecovias Capixaba and Ecovias Minas-Goiás, and the progress in the expansion works at Ecovias Rio Minas, Noroeste Paulista, Araguaia, and Norte Minas. Moving on to slide 14, we demonstrate that the successful debt management strategy resulted in a more efficient capital structure and aligned with cash generation from assets. In September, the net debt of highway concessions reached 69% of total net debt compared to only 41% in 2022.
In line with expectations, we ended the quarter with consolidated leverage of 3.8x , while Pro Forma Leverage calculated based on the adjusted annualized EBITDA of Ecovias Raposo Castelo remained stable at 3.6x . Another relevant point was the increase in debt indexed to the IPCA, reinforcing the alignment between the debt profile and the toll tariff adjustment index. Next slide, the implementation of the debt management strategy resulted in the contracting of more than BRL 20 billion in structured financing in 2025 and increased the average debt maturity from 5.7 years in December 2024 to eight years in September 2025. As shown in the debt amortization schedule, we ended the quarter with 83% of maturities as of 2029, in addition to BRL 11.5 billion in financing still to be dispersed in the coming years, according to the construction schedule.
In addition, in November, we issued BRL 1.25 billion in debentures at EcoRodovias Infraestrutura e Logística, further strengthening our cash position. Finally, on slide 17, we present the main sustainability highlights of the period. EcoRodovias was once again selected to be part of the B3 Diversity Index portfolio, reinforcing our commitment to the diversity and inclusion agenda. We also started testing 100% plant-based biofuel in the service truck fleet at Ecovias Noroeste Paulista and launched the EcoRodovias Biodiversity Conservation Plan, and some of our concessions received the GRI awards. We conclude this presentation, reinforcing our commitment to move forward with the works to expand capacity and improve highway concessions and generate value from our current portfolio. We maintain operational efficiency, innovation, and safety as pillars of our journey. We would now like to move on to the questions and answers session. Thank you.
We will now begin our Q&A session for investors and analysts. To ask a question, please click on the raise hand button. If your question is answered, you can leave the queue by clicking lower hand. Our first question, Fernanda Recchia, BTG. Fernanda, your microphone is enabled.
Good morning, Andrea, Guidotti, Camillo. Two points here to explore with you. First, thinking about profitability, and congratulations on the work you've been doing to reduce cash costs over revenue that we saw. The indicator went from 35%- 28%. I'd like to understand what we should consider for the evolution of these indicators going forward. Do you have more initiatives mapped out to continue to reduce this indicator, or if you can give us any metrics going forward, what we should expect? And the second point about capital allocation, we had some important bids in Paraná.
This week, there was also Autopistas that we saw EcoRodovias did not submit a proposal. There are still some important assets to go to auction this year and the beginning of next year. So what's your mindset, and how should we consider the allocation of EcoRodovias in the coming projects? Thank you.
Good morning, Fernanda. This is Marcello. Thank you for your question. About profitability, this improvement comes from cost reductions and optimization of structures, operational efficiency. It also comes from traffic and revenue with triggers that are being received. So all of that indicates that going forward, we should continue to reduce this margin, increasing efficiency, because we will definitely continue with our digital transformation agenda, cost efficiency, and we should also have a lot of tariff triggers as well.
In other concessions, due to the works and the tariff triggers for widened roads, we expect to get to 2030 with an index at around 20% or slightly below that, 18%. So that's the expectation. Again, connected to two streams, the tariff adjustments that will occur and operational efficiency. About capital allocation, we continue to be very selective. We don't have any investment decisions. We keep track of the federal programs and state programs. It's going well. There's a lot of competition and competition that has been very competitive. We are monitoring, and for 2026, we'll be prepared that there will be other opportunities, but also going forward, we don't have a defined strategy in the short- term. We remain focused on our current portfolio with so much CapEx to realize and amendments that are potential in São Paulo and other contracts. Thank you.
Excellent, Guidotti. Thank you.
Next question.
Filipe Nielsen with Citi. Please, Filipe, you may go ahead.
Good morning. Thank you for this opportunity. I have two points here. The first about CapEx. I'd like to understand a little bit more how you see the execution. We were talking on previous calls, and you were mentioning about a level closer to BRL 5 billion for this year. I'd like to understand if the BRL 5 billion level is still feasible, if there will be an acceleration in the fourth quarter, or if we should see this execution even within what you report historically, slightly below budget, which is normal, but whether the surplus should be transferred for next year or if there's a level of efficiency improvement in this point as well. And then my second point about liability management, we've been seeing all the work you're doing.
Actually, congratulations on how you're leading this process, but I'd like to understand whether the level of indebtedness at the holding, if we look quarter on quarter, it actually increased slightly this quarter, and maybe now with the issuance of October, maybe this level can increase a little bit more in the fourth quarter. So I'd like to understand how you see this level for 2026, if it should still go up before it goes down, or if you already consider a short-term reduction. Thank you.
Hello, Filipe, this is Marcello. About CapEx, today we have the expectation of reaching BRL 4.6 billion by the end of the year. So this is mostly due to the later beginning of some large major works at Rio Minas, Araguaia, Noroeste, in particular due to delays in the receiving of environmental licenses, which are now all issued.
So probably part of this delay will be transferred for next year. So next year, we estimate something between BRL 5 billion or BRL 5.5 billion in CapEx, and that will be normalized. So we maintain this expectation of those values. Efficiencies are being sought in CapEx with value engineering, governance in CapEx, but to maintain CapEx under control, there won't be a lot of CapEx variation, no major reduction of CapEx due to the efficiencies. Efficiencies need to be sought to maintain the CapEx level for us to be able to execute it. That's the main value creator, the timely execution, and there's triggers going up in tariff adjustments, as I mentioned, and traffic induction. About the financing, Andrea will give you more details on your second question.
Good morning, Filipe.
As for liability management, we had a series of operations last year and this year, improving and optimizing the capital structure of the group, making the allocations as we had of financing, the long-term financings, paying the bridge loans of some concessions that already structured their long-term financing. So that allowed us to optimize this structure, also increasing the average maturity of the debts that were below six years. Now it's closer to eight years. We still have operations that will occur, and we have disbursements higher than above BRL 1 billion will have already been contracted, but will start to be disbursed along with the CapEx execution in the concessions should get this index to get even better with an allocation higher than 70% in the coming years.
As we execute CapEx, this index will improve precisely because we have already contracted the financing, but the disbursement will take place over the next few years. Thank you, Filipe.
Excellent, very clear. Thank you.
Next question. Rafael Simonetti at UBS. Please, Rafael, go ahead.
Hello, Guidotti and Andrea. Thank you for taking my questions. Congratulations on the results. I have two quick questions here. The first one about Araguaia. You mentioned a 1.6 increase in the tariff in October due to the Factor C and D. If you can mention something about this and the possible normalization of the concession and the contractual CapEx. The commitments are close to BRL 4 billion, and there's Ecovias Raposo still missing. And my question is what you see in terms of the amount of investment for that concession. Thank you.
Rafael, about Araguaia, Factor D.
What comprises the tariff is a set of different indicators in the IPCA, and we've been applying Factor C, Factor D throughout the year, and that materializes in the tariff. But part of it is due to the delays, including those delays of the environmental licenses. So these are normal moves. I think that we could consider a normalized tariff because the D Factor intends to rebalance delays of cash disbursement. So it's almost neutral, I'd say, in terms of cash disbursement and tariffs. So I think for modeling purposes, it could be normalized, maintaining the CapEx usual normal with no delays. About the contractual CapEx, we expect Ecovias Raposo Castelo to come in with approximately BRL 7.8 billion that will be incorporated, taking the total CapEx to BRL 51.8 billion in total to the end of all concessions. So that's a CapEx with a strong maintenance conservation component.
It's not all expansion CapEx. It's not all concentrated in the next few years. It's CapEx that includes technology, the position of technology, infrastructure, maintenance, conservation, and expansion that, as I said, are what lead to triggers or tariff triggers. But our numbers are very much under control with no expectations of any further changes. We updated all of the CapEx regularly based on the IPCA level. So we're very comfortable with the execution and the fit this CapEx has with our business plan.
That makes sense. Thank you.
Next question. Daniel Gasparete, Itaú BBA. Please go ahead.
Good morning. Thank you for the call. I have two questions as well. First, to go back a little bit to what you mentioned earlier about CapEx. Guidotti talked a little bit about the efficiencies.
I'd like to explore it a little further, maybe FX or what we can think about the potential efficiencies to be achieved in CapEx if there's any upside of having a decrease in FX. And the second is to talk about the third lane or third road at Immigrantes, what you're considering in the next steps and your expectations. Thank you.
Thank you for your questions, Daniel. About the CapEx efficiencies, again, CapEx is a very broad set of different lines. Each of the lines have different efficiency strains. For example, the materials, the application of amendments. There's all of the work being developed to reach efficiencies not only in costs but also in the durability and comfort, the use of recycled asphalt component, and all the initiatives and different numbers being applied.
All of that, if not to reduce costs, at least not to have an impact due to an increase in price of the asphalt material, as we saw in 2021, for example, that affected the initial works at Araguaia. All of that are ways for you to control or seek efficiency and gains, but also to control the inputs and the prices of inputs. There's technologies as well that we seek locally, but there's also imports and making organized purchases or procurement for all concessions, trying to bargain for better prices that may not bring huge savings, but it keeps the price rising under control. And then we have all the work in value engineering that is done regularly. And then, of course, we could have positive surprises if there are better alternatives detected.
Major alternatives and value engineering studies are being carried out in the works that will begin in Raposo Castelo's agreement, which would allow for potential gains. We don't have anything concluded, but we're studying in particular that contract. About the third lane, the third road, everything's going well. We're meeting the timeline agreed on with the concession authority. Our obligation today, as a reminder, is to deliver a complete executive study with the environmental licenses by mid-next year. That's with the contract amendments that will be rebalanced, and the works are going very well. We are being able to go through all the stages, and next year, I believe we will have time to discuss how this will be done and at what time this investment will be made and whether there will be an amendment to Ecovias' contract.
At that time, we are focused on advancing with the studies. We still have a lot of work ahead, but everything's going well.
Excellent. Thank you for the answers. Have a great day.
Next question. Gabriel Frazão, Bank of America. Please, Gabriel, you may go ahead.
Good morning. Thank you for this opportunity. I have a question about traffic performance for yet another quarter. It is a positive surprise. So if you can talk about not only your expectations for traffic increase in the coming months, but also to remember or remind us whether on the short- term, at least next year, you should deliver any widened road or any work that could bring such a strong traffic increase such as we saw in Norte Minas in recent periods?
Good morning, Gabriel. Thank you for your question.
Thinking about 2025, what really drove traffic, those in traffic increase and the deliveries that, as we conclude widened roads and deliver works, that happens very strongly at Norte Minas this year. This is something that we also expect to occur with Ecovias Capixaba. I think that heavy vehicle traffic has been surprising, even the company every month. I think the soybean exports were very strong during the third quarter. During the third quarter, I think we'll still benefit from that. Our expectation is to end the year pretty much in line with what we saw in terms of the numbers in the third quarter. Something close to 3.5%-4%. Noting that this year had a strong impact of this long winter that we had. The light vehicle traffic was affected because of that.
I mean, it's November already, and there are still some cold days or chilly days, but we're also benefiting a lot from heavy vehicle traffic. So year after year, we've been seeing sustained growth compared to previous years with significant growth, even higher than what we saw in the year 2025. Thinking about 2026, our projection is of something around 3%, considering a GDP, as we've been seeing the projections. The GDP at around 1.5%, but we continue and we have deliveries in other concessions during 2026 that may drive traffic, as well as the harvests. There are some regions, some highways that benefit greatly from the harvest season.
Of course, we saw some concessions that have a stronger impact of consumer goods that had a weaker performance, but we see that the harvests have been allowing, along with the delivery of the road widening works and the investments, the traffic has been increasing. Traffic has been induced in the highways. That's why we consider it so important to continue with our investment cycle, because that also brings traffic. Our numbers are much higher, for example, than the ABCR index. So I think that CapEx, along with the quality of our portfolio, the distribution of the loads that's very diverse, brings a good performance to EcoRodovias' assets. Thank you for the question.
Thank you, Andrea.
Next question, Matheus Sant'Anna from Bradesco. Please, Matheus, you may go ahead.
Hello, Guidotti and Andrea. Good morning. Thank you for taking my question. I have two on my side.
First, thinking about Eco101, actually now Ecovias Capixaba. This is a concession where the contract has a much stronger enforcement level in terms of the delivery of the works. I'd like to understand, especially the part of the executive plan, licensing. I think it's too soon to start asking about the works themselves. And then a second question would be, thinking that Ecosul concludes next year and there's no public advanced negotiation with the government yet, how do you see this? Will there be a rebid of that asset? How do you see the scenario? Those are my questions. Thank you.
Matheus, thank you for your question about Ecovias Capixaba. CapEx, it is true, the first three years are a transition period where the concessionaire is inspected through independent reports to fulfill 100% of the timeline agreed and contract, and that was part of the agreement.
The good news is that we have pretty much everything ready. The licenses are already available. We are already opening some months ahead of schedule stretches where recently we released a 7 km, actually 12 km stretch, and we are ahead of schedule in the delivery of those CapEx very comfortably. We are concluding now contracting for next year, another 60 km. Again, we've been getting good responses from the market, good feedback from the subcontracting markets. A lot of people interested, large companies wanting to participate, and now we're selecting them so that we can continue with the works next year, 2026. We have no licensing issues, and I think this transition period will be fulfilled smoothly. Obviously, reminding that these deliveries will also activate tariff triggers for the 2026. We already have a 28% tariff trigger for Ecovias Capixaba.
About Ecosul, we are operating. The contract is concluded in March. Of course, the rebidding will not be immediate. There will be a period with no concession. We don't know if it's going to be another year or two in this process. Until March, we'll be there. It's a discussion that the government has already indicated that the maintenance, not so much the operation, but the maintenance will be done with a DNIT, and the new concession will be a concession that we'll analyze as we are analyzing all the others. No particular decisions. But until then, we will be operating the concession.
Very clear. Thank you for the answers.
Next question. Julia Orsi with JPMorgan. Julia, you may go ahead.
Good morning, Guidotti and Andrea. We have two points here on our sides. The first is about leverage.
We saw a slight reduction quarter on quarter, getting to 3.8x . With that said, what's your expectation for the coming quarters? And the second point is a follow-up about profitability results. In the last call, I think we discussed the target of getting to an EBITDA margin close to 80% in the coming years. With that said, was there any change in this perspective? Thank you.
About indebtedness, and as Andrea said before, we'll realize CapEx captured the debt that's already contracted, and the leverage tends to increase. In particular, starting from the second quarter of next year, we will no longer have Ecosul, Ecovias Sul EBITDA, which was a strong EBITDA generation because it's a live track, and then we're going to see a peak.
Starting with the second quarter, there will be a peak on leverage that will be normalized and getting to a higher level during 2027, 2028, because that's when the CapEx starts to build up. Then starting in 2029, 2030, it starts to go down. It's an expected cycle, completely under control with no issues, but that's expected. The first quarter will still be a net debt over EBITDA comparable to 2025, but starting on the second quarter, once Ecosul's out, the level goes up and maintains at a higher level for the next two and a half, three years. Okay? About the second question, what was it? The EBITDA margin, our number will be slightly above 80% until 86% of EBITDA margin, and that is maintained. I expect and believe we can aim at higher numbers.
Thank you. Have a good day.
The questions and answer session is concluded. I would like to turn the floor to Ms. Andrea Fernandes for her closing remarks.
Good morning. I'd like to thank you all for participating, and I and my team remain available for any further questions you have after the call. Thank you. Have a great day.
EcoRodovias' earnings presentation is concluded. We thank you all for your participation. Have a great day.