Good morning, ladies and gentlemen, and welcome to Eternit's conference call to discuss the results for the first quarter of 2026. This conference is being recorded, and the replay will be available on the company's investor relations website, ri.eternit.com.br. The presentation is also available for download. We inform all participants that after the presentation, we will begin the Q&A session. Further instructions will be provided at the beginning of the Q&A. Before proceeding, I would like to reinforce that forward-looking statements are based on Eternit's management's beliefs and assumptions and on the information currently available to the company. These statements may involve risks and uncertainties as they relate to future events, and therefore depend on circumstances that may or may not occur.
Investors, analysts, and journalists should take into account that events related to the macroeconomic environment, the industry, and other factors may cause actual results to differ materially from those expressed in such forward-looking statements. Present with us, Mr. Rodrigo Inácio, CEO, and Ms. Carisa Cristal, CFO and DRI, and Mr. Saulo Martini, Controlling Manager and RI. I would like now to turn the floor over to Mr. Rodrigo Inácio, who will begin the presentation. Please proceed.
Good morning, everyone. It's a pleasure to be here once again to discuss the results for the first quarter of 2026. I would like to begin by highlighting some important points on this slide that reflect the company's evolution and the strengthening of our businesses during the quarter. The first highlight is EliteMov, which began gaining traction this quarter.
The platform is consolidating itself as a competitive differentiator, operating as an exclusive logistics provider for our clients and adding value through a faster, more predictable, and more connected service. EliteMov brings Eternit even closer to the end consumer and supports the entire customer chain, offering a superior experience, strengthening relationships. We are consolidating the business and see significant revenue generation potential as the company scales up.
Alongside it, the Cliente Coruja program continues to expand engagement, training, and support, reinforcing our relationship and service strategy. In the industrialized construction segment, we continued to accelerate. Revenue grew 17.7%, reflecting the increasing adoption of faster, cleaner, and more efficient construction solutions. This is a structural moment in the sector, and we are capturing this trend with discipline and execution capability. The fiber cement business once again demonstrated its resilience, even with the market declining around 4%, according to Abramat data.
We managed to maintain our sales volume, confirming the strength of our brand, our commercial reach, and the consistency of our execution. Finally, regarding the overall results, we delivered a quarter in line with the expectations impacted by the typical seasonality of the chrysotile segment. This period includes the scheduled maintenance shutdowns, which temporarily reduce operational availability, combined with a new market dynamic involving quarterly contracting cycles and shipping dilution throughout the year, following a new purchase cadence. These points show that we continue to execute with discipline, strengthening our strategic pillars, and preparing the company to capture opportunities sustainably. Moving on to slide 4, I would like to provide context on the economic environment that marked the beginning of 2026. The quarter still reflected the effects of a restrictive monetary policy with more persistent inflation and higher interest rates for longer.
In addition, geopolitical tensions in the Strait of Hormuz pressured logistic costs and some inputs, adding volatility to the scenario. At the sector level, Abramat points to signs of recovering demand for construction materials. In March, the sector's deflated revenue increased 3.1% compared to February, interrupting a sequence of nine months of contraction. Despite this positive inflection, accumulated indicators still show a challenging environment with a 4% decline for the year. In the construction sector, the INCC rose 0.54% in March, accumulating 5.9% over 12 months, maintaining the pressure on material and labor costs. This environment is also reflected in household behavior. Household indebtedness reached 80.4% in March, above the previous month and the same period in 2025. Even with more stable delinquency levels, household budgets remain pressure limiting consumption and investments in renovations and housing. On the other hand, we had a positive indicator.
The consumer confidence index rose two points in March, reaching 88.1 points. It is still a low level, but this improvement usually precedes a recovery in durable goods consumption and greater willingness to finance purchases. In summary, the first quarter reflects a transitional environment. Persistent inflation, high interest rates, external pressure still weigh on the market, but confidence, activity, and sectors indicators are beginning to point toward a gradual recovery scenario, which affects the entire construction material industry, including Eternit.
Moving on to slide 5, I will provide an overview of the performance of our main businesses during the quarter. In industrialized construction, we continue with the strong acceleration, consolidating this segment as the main driver of growth and portfolio diversification. Demand continues to advance, and our execution capacity has allowed us to consistently capture this movement. In fiber cement, we maintain commercial discipline and a focus on profitability.
Our product mix continues to be a competitive differentiator, sustaining margins and volumes even in a more challenging market environment. In the chrysotile mineral segment, we face short-term pressures as expected for the period. Maintenance shutdowns and the new commercial dynamic with more spaced contracting cycles and shipments distributed throughout the year impacted costs and volumes during the quarter. These are seasonal and structural business factors already anticipated by the company.
Finally, looking at the portfolio as a whole, we remain more robust even in an adverse environment. Inflation in inputs and logistics continue to pressure results, but the fundamentals of our business remain solid, supported by diversification, operational efficiency, and disciplined execution. This combination reinforced the company's ability to navigate challenging cycles while preparing the ground to capture opportunities as the environment improves. Moving on to slide 6, I will present the evolution of volumes during the quarter.
In fiber cement, we deliver virtually stable performance compared to last year. Volume increased 0.5%, reaching 176,000 tons. Even in a pressured market, we managed to maintain slight growth, reinforcing the consistency of our operation and the quality of our product mix. In the chrysotile mineral segment, we recorded a 26.9% decline, totaling 22,000 tons during the quarter. As previously mentioned, this result reflects the current market dynamics and the scheduled maintenance shutdowns. In summary, we maintain resilience in volumes despite a challenging environment and remain focused on operational discipline and efficiency. I will now hand the floor over to Carisa, who will detail the main financial indicators.
Good morning, everyone. Thank you, Rodrigo. Moving on to slide 7, I would like to begin by noting that this quarter reaffirms management's committing to Eternit's pillars.
It's strengthening the brand through the resilience of fiber cement roofing products, innovation through growth in the industrialized construction business, continued focus on operation and financial efficiency, and social responsibility through new initiatives that bring us closer to society, which Rodrigo will comment on later. On this slide, I highlight the evolution of net revenue by segment. Industrialized construction recorded growth of 17.7% during the quarter. This performance reflects not only increased demand, but also the fact that this business has higher margins, contributing significantly to sustaining the company's consolidated revenue. In fiber cement roofing, central graph, we recorded a 3.1% decline, in line with the behavior of the construction market during the period. Even so, our product mix and commercial discipline have helped preserve margins and keep the business resilient. In the last graph, we see the chrysotile mineral segment revenue declined 29.2%, pressuring consolidated revenue.
This variation reflects an unfavorable exchange rate effect during the quarter, combined with the new commercial dynamics already mentioned by Rodrigo, as well as seasonal effects of scheduled maintenance shutdowns. It's important to note that the scheduled shutdown ensures the longevity of the company's assets and the appropriate cadence of the production process throughout the year. Overall, these movements demonstrate the importance of portfolio diversity.
The acceleration of industrialized construction with more robust margins has offset part of the pressures observed in the other segments. Moving on to slide 8, we will discuss gross profit. Consolidated gross profit totaled BRL 33.9 million in the first quarter of 2026, a decline of 17.2% compared to the first quarter of last year. This movement is mainly explained by performance of chrysotile mineral segment, which recorded a 55.5% drop in gross profit. The impact comes from the reduction volumes and from the margin compression.
Although dollar-denominated prices increased by an average of 6.1%, this was not enough to offset the depreciation of the U.S. dollar against the Brazilian real during the period. In fiber cement, gross profit totaled BRL 26.5 million, remaining virtually stable year-over-year. This variation is linked to increased costs resulting from inflationary pressure on raw materials and the effects of geopolitical scenario that has increased logistic and input costs. It's also worth highlighting that the quarter results already include the consolidation of EliteMov's operation, which has gradually been gaining scale and now contributes to the company's gross profit performance. As a result, consolidated gross margin closed the quarter at 12.9%, a reduction of 1.7 percentage points compared to the previous year. Now on slide 9, we move on to detail expenses during the quarter. Total expenses decreased 2.4% in the first quarter of 2026, as shown in the chart.
Starting with the selling expenses, we closed the first quarter 2026 at BRL 24.6 million, a reduction of 2% compared to the same period last year. This movement follows the dynamics of net revenue, which also declined. General and administrative expenses totaled BRL 22.9 million during the quarter, a slight increase of 1.4% compared to the same period of 2025, representing a variation below inflation for the period, supported by cost containment initiatives and reinforcing the company's commitment to the efficiency pillar. Therefore, we continue to maintain an expense structure under control, aligned with the company's current stage and the strategic priorities defined for the year. Now on slide 10, I present consolidated results for the quarter. The first quarter of each year is usually marked by the typical seasonality of the chrysotile segment.
This year in particular, as I already mentioned, changes in commercial dynamics and exchange rate pressure affected this segment. On the other hand, the company showed resilience by maintaining performance levels in the fiber cement segment, containing selling and administrative expenses and delivering a more efficient financial result. Net income and EBITDA reflect exactly this operational context. Lower chrysotile volumes during the period, maintenance-related cost, and the transition to this new contracting pattern. It is important to highlight the external factors that influenced the quarter. We continue to observe inflationary pressures on relevant inputs, in addition to the indirect effects from the geopolitical scenario, increasing volatility in logistics and raw material costs. These elements add complexity to the short-term environment and impact the company's cost structure.
Therefore, the results presented should be interpreted within the set of seasonal, operational, and external factors, all previously mapped and consistent with the expected behavior for the period, reinforcing the company's discipline in execution and portfolio management. Concluding my presentation, slide 11 shows the evolution of capital structure. In the first quarter of 2026, Eternit recorded a net debt, BRL 124.7 million. The net debt to recurring EBITDA ratio stood at 1.87x . As I always like to reinforce, as you are already used to hearing, none of our debt carries financial covenants. This provides us with flexibility and security in managing our capital structure. Today, we maintain a very attractive average debt cost, approximately 11.04% per year, with a real cost close to 6%. When adjusted by accumulated inflation, this level reinforce the efficiency of our financial structure and our disciplined capital allocation.
The increase in gross indebtedness is also reflected in the evolution of financial expenses during the quarter. On the other hand, the growth of our financial investments and the positive effect of exchange rate variations help balance this movement. When we analyze the debt and the financial results together, we see a balanced structure. On one side, debt with a competitive cost, no covenants, and a healthy profile. On the other hand, our financial result benefiting from investments and exchange rate variations, even in a more volatile environment. Finally, we continue strengthening our cash policy, prioritizing liquidity, robustness to face potential macroeconomic fluctuations and ensure flexibility for the company. With that, I conclude my remarks and return the floor to Rodrigo for the final comments.
Thank you, Carisa. To conclude on the final slide 12, I would like to reinforce our value drivers, which clearly reflect Eternit's current moment.
The first is the acceleration of industrialized construction, which has already consolidated itself as our main growth and diversification driver. This business has been gaining scale, expanding our presence, and bringing a much more predictable and sustainable dynamic to the portfolio. The second driver is a more qualified product mix, which has sustained margins and reduced volatility. We are increasingly focused on higher value-added products and solutions aligned with our customers' needs and sector trends. Finally, the third driver, service excellence. Here, I would like to highlight EliteMov, which continues to evolve, expanding coverage, improving lead times, and reinforcing our delivery capability, a fundamental step toward raising service levels and strengthening customer relationships. Reinforcing Eternit's social commitment, we highlight the launch of the Reconstruir Program, a social initiative that fills us with pride.
The program promotes the reintegration of formerly incarcerated individuals through productive inclusion, generating real social impact while also contributing to industrialized construction operations. It's a movement that combines purpose, efficiency, and human development, exactly the type of transformation we want to encourage. These three drivers demonstrate that we are building a stronger Eternit, closer to customers, and better prepared for the future. I will now hand the floor back to the operator, who will proceed with the Q&A session.
Thank you. We will now begin the Q&A session. Please identify yourselves and ask all your questions at once while awaiting the company's response. To ask a question, simply type it into the call chat.
Good morning, everybody. An investor is asking about Reconstruir Program. Can you detail the implementation schedule? The initiative will reach all the units and the company's unit. Rodrigo, the question is for you, please.
The program, Reconstruir, is born with the inclusion of a set of needs in our productive line and social inclusion. Based on this pillar, we are fostering this program for this month in our manufacturing unit in Colombo, including previously incarcerated people in the marketplace. Initial focus is the use of almost six PPLs in this unit, and we are going to start the program with 16 already in the initial phase. If that is beneficial for operation, also social. The objective is to expand in the future to other units as soon as we see the process growing mature and the learning cycle, this new moment of Eternit. We are betting on this program because that is an important role for society in general.
On the other hand, that is an important factor for operation, so we can have labor in our units in a more assertive way. We are hopeful on this program, so it may be expanded to other units. Remember that we have currently eight manufacturing units all over Brazil, and we are starting up this program in Colombo with the team, all of them engaged in this project. Thank you for your question.
Thank you, Rodrigo. We have one more question now about industrialized segment. Industrialized construction segment, the evolution of demand operation, is it aligned with the company's expectation? Do you see additional room for growth and higher participation on this segment in the results, Rodrigo, the question for you.
Industrialized construction is aligned with our vertical growth.
All the effort that the company puts in this project, this is the main project of the company currently, is the focus that we have for the future. We believe that it's going to be the main vertical for growth at the company and profitability. This sector brings better margins because you are working in a line of service provision. In the market, you add service to the product. We transformed one more line of products. In Colombo, we have two productive lines in this vertical, and we are looking forward to this third line under study in the region of São Paulo in our manufacturing unit, Hortolândia. This vertical, we believe, that is a big power for growth in the company, bringing better margins for fiber cement business.
Thank you, Rodrigo. We have one more question, another investor. The result shows how much the company depends on chrysotile sales.
Are the new projects aligned with the expectation for the future recomposition? This question is to Rodrigo. Rodrigo, please.
The company is working in the last years focusing on the verticals, and the main vertical of growth is industrialized construction segment. This is the main bias for growth that we understand that is a big potential. We have also been working with the efficiency of the business, fiber cement, roof tiles in manufacturing units in a consistent way, important results. Another point is operational efficiency. We have been working on this topic of having a business, a manufacturing industry that is linear, creating, example, CSC, shared service center, improving efficiency, reducing cost. We are in a structural movement. They are very important for our business, removing the headquarter from São Paulo, putting inside the manufacturing unit. We are going to conclude this month, in June.
We are going to be in Hortolândia in our new administrative headquarter. Great part of the employees are working there already. The rest of the employees, in June, they are going to work in this new location. This will bring important efficiency to the company and a different point of view from what we had before. You have the units away from the administrative area. The administrative area built in the manufacturing units will bring synergy and structural gains.
Thank you, Rodrigo. We have one more question. The investor is saying, "Can you comment about the company's expectation for EliteMov segment in 2026 and the following years? What are the main drivers for expansion in this business?" Rodrigo, please.
Thank you, Saulo. EliteMov is born from a project.
Expectation is to take to customers a higher level of service, and this has the main focus, the relationship with customers, getting closer to customers, and increase the efficiency of a business that is relevant, a leg of business that is relevant, transport, logistics. We are in need of this topic, logistics, and the decision was taken in the end of 2024, and we started in 2025, a project, EliteMov, our transporting company, with a result already very interesting, showcasing results and potential. We have lots of expectations about the results it generates, gain to the company, and also takes this relationship with the customer with a better level of service. That is again, on the operational aspect, economic result, but also you have client loyalty that is relevant and important for our focus.
We start this project in Hortolândia, and we roll out to Colombo, Goiânia plant, and Simões Filho. Rio de Janeiro was the final plant to have this program, and the next month, we are going to finalize our Caucaia plant. In addition to transporting the products and improving the level of service for customers, EliteMov has other potential points, expanding this operation from the gate out. This intelligence of this business may extend horizons and also offer the market this level of service and logistics that is a potential that we have not measured yet, but we have very high expectations about this expansion for the future.
Thank you, Rodrigo. We would like to comment that you can ask your questions. You can use the chat to write your question. No more questions. The operator has the floor now, please. Thank you so much.
Thank you.
Closing the Q&A. If there are no further questions, Eternit's conference call is now concluded. We thank you, everyone, for their participation. Good morning. Good day.