Morning all. Welcome to the video conference of the sharing of results of the first quarter of 2025 of Vittia. This conference is being recorded and you may access it online, where the presentation will also be made available for download. We would like to inform you that all presenters will only watch the video conference during the presentation, and then we will have a session of Q&A when we will have more information. Before we start, I would like to highlight that the declarations here made are based on the beliefs Vittia has and the available information to its management. They may include risks pertaining to future events and therefore depend on things that may or may not happen. Investors, analysts, and journalists should take into consideration that given this factor, all results may be materially different than those expressed here in the declarations made.
Here at the declaration, we have the CEO, Romanini, Alexandre, CFO and Chief Director, and our Director of Marketing. I will now pass the floor to Wilson Romanini, who will begin our presentations. Wilson, you have the floor.
Thank you very much, Laniv. Good morning to all. We would like to showcase the very first result of the first quarter of 2025. Then we will answer to your questions and concerns. Know that we are available to enlighten you. Speaking about our market view, when we talk about Vittia's performance during the first quarter of 2025, we have a growth in consolidated net revenue. You are familiar with this soil growth that we had a very good performance. This has an expression that is very good in terms of aggregated value, but it is also something where we have a smaller margin. What is important is for us to understand that agriculturists and farmers, regardless of difficulties, have believed in their businesses and therefore have invested in their soil.
During the first quarter, we have seen a lower aggregated value that has directly impacted our group, and we have worked in a very intensive fashion as of the end of September of 2023 in a rationalization and betterment of the equation of our resources. We have therefore managed to truly have positive outcomes in terms of collective things. This allows us to understand things that are not available in agro, but to provide health in terms of finances for our company. This year, we have something new, the product that will truly have a great expression in terms of control of diseases, and that affect cultures and leaflets and the leaves. We have a very good opportunity to perform in this segment in terms of disease control. When we talk about risk assessment and opportunities, we truly have a scenario that is challenging in terms of macro agrobusiness.
Currently, we have an analysis of the results from producers regarding all cultures, and we see that this result is still positive. But we see a high index of leverage within the sector, and we have a tax rate that is truly expressive. So those that have high leverage rates truly face challenges, and this is translated into companies that offer products such as those that have high leverage, and truly we know that things are not as easy as they should be. An important topic that we should talk about is that we have a product that controls cigarrinha, as you know it. And this year, due to a lack of Bt resistance, we have seen a high incidence of pests, and producers had to use strong chemicals for control. Automatically, this allowed them to have a control of cigarrinhas, and this reduced the use of other chemicals.
The important thing to mention in our work together with Bovéria and other technologies that we have is that they are very efficient in the control of such pests. We are getting ready for next year in order to address the caterpillar issue as well as the leafhopper issue. We have, as we mentioned, a better expectation in terms of results for rural producers. This shows that a company such as Vittia, that is well-structured, has done its homework and allows us to truly choose the best possible harvest for 2025 and 2026. We are still positioned in the same way. There is a discipline and financial solidity regarding the rationalization of the structure of the company. We know that agro has, as of April 30th, in terms of what has been received, we have been truly efficient, particularly in the credit concession lines that we had.
We did a great job on this, and this allows us to have a lower leverage within the company. We have continued to face the same things. Our commercial branch is well regarded. We have representatives throughout the entire territory, always strengthening our commerce and the portion pertaining to our products. Now talking about improvements, we are always trying to improve in terms of efficiency of what we have, and without a shadow of a doubt, we look for innovation in terms of products so that we can offer things that are always more interesting for rural producers. Next slide, please. Now talking about our highlights. We have had a net value growth during the first quarter of 2025 in comparison to 2024 of 13.4%, and as I mentioned, we have done intensive work in terms of growth in the soil fertilizer segment.
We had an expressive growth of 55.2%, and as I said, this is a product of lower result, but it showcases that producers are indeed invested in their crops and harvest. Within our intensive works, we have worked on the rationalization of expenses. We had a decrease of 1.9 in our SG&A in comparison to last year. We had a small growth in the EBITDA. We had a CapEx of 11.8% regarding the yearly allocation, and this is aligned with what has been done in 2024. The net result was negative. This is aligned with the products that we have done.
We do ask for a little bit of adaptability in the operation and we have also done payments and recompras and buybacks of JCP, and we have a great project that is Triunfe, that will be implemented for the harvest of 2025 and 2026. I would now pass the floor to Frizzo and he will move forward with our presentation.
Thank you very much, Wilson. Good morning to all. I am going to start talking about an extraordinary event that took place this year, where we have done the reclassification of operating segments, looking for the reality of businesses as well as looking at international tendencies, understanding the logistics behind the classification. The first two lines, where we have joined the information pertaining to soil micronutrients and soil conditioners and organominerals that have similar characteristics in terms of being soil fertilizers of lower aggregated value have been addressed jointly. We had a strategy and a different business plan for organominerals, and as you know, we weren't successful in this initiative. This line lost potential and relevance within our business as well as the micro soil micronutrients, which isn't truly a focus of our efforts.
These are two branches that are considered marginal in our day-to-day activities, and we try to have more synergies in terms of leveraging businesses. These lines were jointly classified as soil fertilizers , as I mentioned. Then we looked at biopesticides and inoculants, which are also branches that we saw in a joint fashion. But we have re-adequated this because in terms of bio-classification in the market, we have understood that there is a need to expand the scope of what we understand in terms of biopesticides. We think that it is important to share and talk about this in a way that the market can understand. So on top of biopesticides and inoculants, we brought together the biostimulants and atypical defenders based on many roles. We call this entire category biological and natural solutions , which is a terminology that is commonly used in the marketplace.
Lastly, we have the line of foliar fertilizers , which is something we had already pointed out as a net revenue that can be seen in a joint fashion together with industrial products and others. I believe that within this classification, we have simplified the way in which we see our businesses, and we align this with the international tendencies of companies that report outside of Brazil, even though we don't have a direct comparison here in the country. But we have classified within this product line that has been regathered, reclassified. Now, talking about our performance, as Wilson has already said, we've had a trimester of great sales, where the segment of soil fertilizers between micro and organomineral have grown from 50%-55%. We had an expressive growth in the portion of industrial foliars that was propelled by products of lower margin.
This growth has come from markets where Vittia wasn't working beforehand, markets that had and still have product demands of lower aggregative value, such as sugarcane and the production of citric fruits. So what we did was look for more businesses, but they came with a margin that was tighter given the products that are consumed by our clients during the quarter. In terms of biological products and natural solutions, we had a growth, but the line of biological defenders had a strong impact in terms of technologies in our portfolio, particularly in this portfolio, because we have addressed a more specific matter within the market of corn, which is one of our biggest marketplace. But this is a long-term matter. We believe that we have these technologies to place products in the market, given the higher incidence of pests, of caterpillars in this year.
Given that we've noticed that products weren't really being dealt with because this was not a recurrent plague for the past few years. Moving on to the next slide. In terms of gross profit, we had a slight drop in margin, and this happened because of the mix, as explained in the previous slide. The best-performing lines of investments were those where we focused on lower aggregated value products. This had to do with the moment of the market. We see that producers are more conservative and are looking for more conventional solutions. However, we see there is a use of technologies, and we believe that this tendency can change throughout the year with an expectancy of a better harvest for 2025 and 2026. Talking about SG&A, we had another reduction in our quarter of SG&A. This is not really a process that we do from semester to semester.
However, this was something that was announced as of the end of 2023, where we understood we would have a harder market, particularly in terms of grains. We looked for a rationalization of the company's structure, particularly the commercial portion. Last year, we structured the company so that we could be more rational, and this showed itself during the fourth quarter and now the first quarter of 2025. For the rest of the year, we do not expect new reductions. You see that we have a challenging market and that we'll have to accelerate certain expenses and investments. But we do see a slight increase in expenses given the present scenario of agrobusiness.
Due to a result that has been considered stable in terms of growth, revenue, and profit, we have managed to deliver an EBITDA that was very well adjusted in comparison to the worst semester we had last year. We understand that this is a reasonable result. We have low representativity in the semester in comparison to the year. This does not compromise our expectations for the rest of the year, where the spells of our harvest will strongly impact the rest of the year. Even if this showcases what we have lived during the harvest of 2024, 2025, which was a very hard scenario for producers and input companies, and I believe we have navigated this period well, trying to leverage our mix of products.
We understand that our mix wasn't ideal, but we have to remember that we have technologies to help producers when they are trying to have lower expenses and when they're looking for rejections. In this sense, it is better to have this kind of contribution than to have no contribution at all. Now when we have an increase of investments from producers, we'll have an increase of aggregated value. I believe that this is a result that is satisfactory, particularly given this strong scenario of our harvest of 2024, 2025. Moving on to CapEx, we've had a considerable drop, but it is seasonable. It is not what we expect for the entire year. But given we have already announced this is a strategy where aligned with the current market momentum, we are being conservative in terms of CapEx.
We have increased our investment in biopesticide last year, and the current strategy is to focus on small investments within our structure so that we may increase production and reduce costs looking for a rentability of our manufacturing infrastructure and our base of capital. This is the strategy we have implemented for the past few semesters, and we'll continue to do so throughout the rest of the year. Regarding cash flow, we have had in the quarter a consumption margin which is natural. It is a cash variation that is natural before we receive our harvest where our net debt naturally increases. But last year we had a relevant increase on this cash flow because of the recompra program. During the last 12 months, we have invested around BRL 64 million, and this, without a shadow of a doubt, has a strong impact on our net debt.
However, we still understand that we are still comfortable and under leverage in a way. We could continue to rotate this up to 2x and 2.5 x, given that the depreciation can happen within this context of agro that I already mentioned. We feel very comfortable what is happening currently. Now, due to the increase of name base leveraging, we had a lower net profit and net margin, which was the main factor that caused an increase in the tax paying and personal contributions. We had a strong impact last year regarding the end of subvention. Our assessment will be very similar in comparison and should not hinder the comparative result in comparison to last year. I will now pass the floor to Edgar so that he can talk about our launching strategy and innovation strategies.
Thank you very much, Frizzo. First of all, good morning to all. I would like to briefly talk about what we have done in terms of development. We are focusing on the launching of Triunfe. It is innovative as a mineral multisite. In comparison to those available in the market, it has showcased very superior results. It is more stable as well, which is something that we have stated as an issue in terms of competition. It has over 35 partner institutions and have been validated in 80 field tests. We are very confident in following this strategy, and we would like to focus on this product. Within our R&D investment in innovation, we follow forward with our investments. We have had a decrease of 23% in comparison to last year, particularly in terms of CapEx, but this has to do with seasonality.
We have not reduced the number of projects we have, nor have we reduced the number of collaborators in our R&D domain. We have launched two new registries that are important for us. Bioproducts that will replace those that are in line in terms of innovation, and which will also bring more rentability, profitability, and results to our producers. That is what I wanted to talk about.
Thank you, Edgar. Regarding our stock market and our recompra program, as I mentioned, we have over BRL 60 million for the past 12 months, and during the first quarter we had BRL 4.3 million repurchased, resulting in around 25% of what we have in terms of approved limit in our fourth recompra program. During the quarter, we also had the payment of around BRL 20 million reference to the personal capital that was liberated on last year. We have a difficult scenario in terms of stock market, as you know. But we remain confident in Vittia and our long-term strategy, and we believe that we are living this harsher agrobusiness scenario. Vittia is very well prepared, as mentioned by my colleague. We have done and will continue to do our homework regarding adequately to the market and its current situation.
But we sustain our focus in the improvement of our restructure as well as in looking for new technologies within our efforts of innovation. As Edgar has already mentioned, we have not therefore reduced anything regarding our seasonality. We can now move on to the Q&A session, please.
We will now begin our Q&A session for investors and analysts. If you wish to participate, please raise your hand so you may use your voice, or you can use the Q&A button to write down your question. Our first question comes from Ryu Matsuyama, analyst from Itaú BBA.
Good morning to all. Good morning, Frizzo, Wilson, Edgar. I have some colleagues here with me, and I wanted to understand the margin of producers, how you're looking at this. You have emphasized that you are very optimistic for the rest of the year, but I want to understand because there was a raise in the cost of fertilizers. We have high taxes. So we want to understand how you can be so positive facing the scenario now with the raise of these fertilizer prices. How can we talk about biofertilizers and chemical fertilizers? The other question pertains to the Triunfe itself. We had already talked about the order, and I believe that now you have a better idea of the product performance. But what is the relevance you believe this product can have within your portfolio given that this is a new product?
Can we consider better rentability in comparison to other products with better commodities? These are my questions. Thank you very much.
I'm going to talk to you, and then I believe that Edgar can talk about Triunfe and the price itself. I believe that when we talk about producers' margins, we need to consider certain complexities. When we analyze a harvest with high extraction, such as grains, soy, corn, and its relationship, thinking about the harvest and the second-hand harvest, these are interesting numbers. There are groups that have prepared in terms of acquisition of [B&Q], and this will provide interesting results. But producers that have left this to the last moment, such as the potassium line, won't truly hinder the results, but they will have a drop in margins. This is natural. One of the main issues we face currently, and that we have been facing since 2023, is that of cost.
If we go back three, four years, we had a considerable average of 15%, and we know that there's changes in terms of CDD. So I took part of these events, of these works done within agrobusiness, and we've faced crises such as bird flus, pestitis, we had issues with hydro resources, but things used to recover quicker, and we think that this is an issue that won't resolve itself so quickly. We don't have an expectation in Brazil in terms of tax rate drops, so we have to optimize, analyze case to case, and then start to have a more positive business perspective. However, margins do exist, and we have other cultures that are still having good profitability. So we have coffee, sugarcane. When we look at this from a macro perspective, things are not easy.
But for those who were truly well-prepared, there is no doubt that they will come out of this very well, and this is the work that Vittia has done. It noticed this and slowly reduced expenses and made resources more properly implemented so that we could truly address what is more or less a tradition in agrobusiness in Brazil and around the world. When you talk about bioproducts, we do have technologies. Not only biotechnologies, but also products that can, such as biostimulants that were reformulated under analysis so that we can understand how this has been showcased and diffused around the world. We do have technologies that can improve the performance of nutrition and automatically reduce the process of macronutrients present in soil. We have technologies for this, and this is a work that we have done.
Now, talking about Triunfe, we have an innovative product that we are betting on. For you to understand, this is already a reality in Europe. It is just new for us in Brazil, and this is not a product that provides a very big margin, but has a very interesting contribution. When we talk about the market, we are talking about BRL 3.5 billion -BRL 4 billion , and Vittia wants to intensively take part in this. It has some learned lessons that have shown the efficacy of the product, and currently, this product is aligned with its competitors. It may even be more efficient and provide advantages in terms of applicability. We often mention that this is a product that in order to win, we say the products need to be efficient without a shadow of a doubt, and this product has this freely.
This is a product of high market competitivity, and it has something that is even better than what competitors offer: applicability. It is easily managed, used, has great performance in terms of preservation of equipment, and therefore is revolutionary. So the market needs to assess this. We have conducted work with many consultants and institutions, and we do see that this will indeed have a high performance within the company. I believe that Edgar can talk a little bit more about this.
Yes, indeed. We have seen strong recent results during the harvest work that we have conducted recently, and we see excellent product performance. Something that we have noticed is that we need to fulfill this market space we have understood, and Brazil still has available certain mechanisms that are forbidden elsewhere, and we understand that this may eventually happen. So we need to occupy a new market space.
Perfect. Thank you very much.
Thank you very much. Our next question comes from Pedro Gama, analyst from Citi.
Good morning, everybody. Thank you for the Q&A session. I have two questions to make. The previous question was talking about producers and the competition in the input market. I believe that you have taken part in many events for the past few weeks and months. I wanted to hear from you in a detailed way, how you have seen the dialogue between producers, whether the improvement in soy harvest can increase investments regarding this correlation with the cost of fertilizers, and how this can impact the growth of the next harvest. On the other hand, I wanted to know about capital allocation. The company will continue to do this work, and I wanted to hear from you regarding this because we have heard a lot about the distribution of inputs and the difficulties. I wanted to know whether there are conversations that are ongoing.
If you could talk about this, it would be great. Thank you very much.
Pedro, regarding producer feelings and relationships, I believe that we have something that is very well structured. We were concerned and did our due diligence. Of course, these people exist. When we think about grain harvest from the U.S.A., for example, we've heard of lower soy productions in which people created a report pointing towards an increment of productivity. We know that things don't really happen in this fashion. Let's say that we have a full tank, and any change in world offers can provide us with interesting surprises. We have an enormous horizon of producers in Brazil, and I think that there are people who are very well structured and who will indeed make investments. Others will try to re-adequate the process. That's what we've seen. Currently, we see that expenses are an issue not only for agrobusiness, but for all sectors in Brazil.
I think that the biggest observation that we have to do has to do with that, not only to rural producers, but to all who need credit lines. I think this is very clear. I have mentioned this often and said that when we look at previous crisis such as hydro crisis, diseases, they happened and were traumatizing, but they passed on quickly. We don't see this happening. You from the financial market probably see this even better than us, you from the stock market. We still need to work in a more efficient way in terms of businesses in order to provide support for corporations. That's what we see. In terms of capital allocation, I'll pass the floor to Frizzo, who's more of an expert.
Pedro, we have kept this same perspective from the last quarter, sustaining what we have talked about for the past few months. Without a shadow of a doubt, we see a heated market of M&A but we are more conservative in this initiative. We understand that the market is heated because of actives and problems in terms of important levels of leverage or even navigating this in a difficult way due to the current scenario. They are looking for openings in fronts. Of course, some are not yet in this scenario, but are still looking for an evaluation perspective that isn't aligned with the current scenario. We are looking for something that is closer to emblematic transactions of BioVittia, for example. We don't see this as an attractive strategy.
None of these conversations and problems are looking for something comparative to what Vittia has in terms of pricing, so we can't dedicate ourselves to this front. Without a shadow of a doubt, as long as we have more detailing, we can focus on recompra or in this redistribution movement for our acionistas. We are still monitoring, looking at transactions. We continue to be a part of the strategy as a whole, but the current scenario truly doesn't seem to be interesting for us. That's it. I think that was the last question. I don't know whether we have more questions, but that's what I wanted to say. We are further analyzing opportunities, and our current focus is more on the recompra and redistribution program.
Very clear. Thank you very much for that.
Next question comes from Pedro Fonseca from XP.
Can you share the expected numbers of cash collection of 2024? Could you also comment on what you have observed in terms of demands from the quarter of 2025? We also saw a drop in the margin line of foliages. Can you please comment on this, whether it is something particular to our quarter, and what are the expectations for the year?
Okay. Frizzo, if you'd like to comment?
Well, talking about what we have received, we had a very good expression given the current scenario. I understand that this was really good in terms of our receipt history. We have followed the market closely and seen some recoveries for the past few years, so the market continues to be difficult. We still have an important assessment on May 30th, which is often a little bit worse than April 30th. But we believe that we won't face too big challenges in our wallet. However, we are looking for a moment of recovery, which was announced for the past two to three weeks, so we are keeping a close look on this. Talking about capital allocation, we'll only be able to re-execute this strategy in a more intensive way once we have this clear understanding of the liquidity of the year and the financing of the next harvest.
Because, yes, we understand that now is not the moment for selling, and we understand that we will have to, once again, equalize everything, reassess. There is a lot yet to come for us to truly understand what scenario we are dealing with. For now, everything is great for Vittia. I don't believe it's great for everybody, but we have an important certainty in the air, and we understand that we will only be comfortable after May 30th and truly understanding how financing for our harvest 2025, 2026 will be done. So this average affects our subsidies. We know that the government's fiscal situation is delicate, so we need to further assess everything. And currently, the expectation isn't for considerable improvements in terms of liquidity for producers for the current month, the previous month, nor for the next harvest.
Perhaps now talking about the next question in terms of drops in margin of the line of foliars. This is more a matter of mix and not truly of drops of the same product. We have industrial lines that had expressive growth. We had products with greater commodities that presented such growth, and this is why we needed to look at the line growth, which isn't normal for the current market scenario. We have grown in terms of industry in the market that we were not truly taking place in, such as sugarcane. So we understand that without this growth, perhaps our margin would have been a little bit more considerable, expressible as better. Perhaps not that better, because you know that the grain market isn't really great. We know that the secondhand corn production, for example, has these kinds of issues, such as climate risks.
But without these market openings, perhaps we wouldn't have a margin that would be so terrible in comparison to last year. This is why we are assessing everything in terms of gross profit and low losses. Now, given this specific dynamic and representativity, we do not expect this for the rest of the year and the other quarters. We actually expect for a gross net profit margin that is closer to what happened last year. We are not looking for recovery. As we mentioned, we hope that there will be a better scenario of looking at investors and seeing them invest in technologies, but that is not what we see currently in current negotiations, nor is it what we have seen in the first quarter.
We see a margin that is closely related to what happened last year, and what will guide us more will be the assessment of mixes, because mixes tend to remain the same from year- to- year. However, we saw a significant change in this quarter. I do not know whether you would like to comment on this.
Not at all. I think you explained it very well. We have a portfolio for this period now comparing it with the same period of last year. We have a higher wallet, but the market is late. We have just started to focus on the purchase of seeds, and producers do this in alignment with the use. They are not truly concerned with the averages that we are mentioning here. We know that people have started to work with defenders and seeds. We know that another branch that has increased has been the management of soil, which is aligned with NPK, and we know that it will start to be effective in terms of products and pesticides. Our portfolio, in comparison to 2024, has an improvement within Vittia.
Reminding you that in order to ask questions, you can raise your hand or ask questions through the Q&A button. Our next question comes from [Matheus Saito].
Good morning. With the joint actions of organomineral, we see an impact that is aggregated considering that the gross margin was of 1% in the quarter. Could you explain the recent dynamic of these lines? Organomineral continue to be one of the main factors. If yes, what are the expectations on normalization?
Frizzo?
Yes. Dynamic continues in a similar way. Organomineral cannot contribute given the assessment of our unit at Patos de Minas. We are still doing a sanitization work, and we expect that up to the end of the year, we will be able to wrap this up. Our unit of organomineral has already provided a positive contribution and our portion of microsoil as well. Even if these contributions are good, they are still much lower in comparison to other lines. Even if you have considerable growth, this does not make a truly relevant difference in our results. So it compensates a little bit of the negative results we still see, for example, at Patos de Minas.
We hope to have another quarter that will allow us to wrap up the sanitization process, and the unit will finally stop stealing results, and therefore will have a more normal result in terms of soil fertilizers with the cigarrinha unit operating in a positive way as well as in the management of microsoil.
There being no more questions, we will wrap up our Q&A session, and we would like to pass the floor to Wilson Romanini for the final remarks from the company.
Thank you very much, ladies. Once again, I would like to thank you all for being here today and to say that what we see in agrobusiness is a particularity, some difficulties. Vittia is a company of over 50 years of experience, not 50 days, not five years. After a while, we have learned to work with the market during harsher moments, easier moments, and Vittia is well prepared to do this within our model. We have the process of conservativism, and of course, we understand what people need, and I believe that we are very well equipped to face 2025 in a positive way, regardless of the issues we are facing. We also need to understand that we need to prepare ourselves for 2026, 2027, and all following years. That's the message I would like to leave you.
Once again, thank you very much for being here today, and have a great day.
Our video conference is closed. The area for investors is open for Q&A. We thank you all for the participation. Have a great day.