Dexco S A : Results Presentation 3Q24

Results Presentation 3Q24

November 07, 2024

Disclaimer

The information herein has been prepared by Dexco S.A. and does not represent any form of prospectus regarding the purchase or subscription to the company's shares or securities.

This material contains general information relating to

Dexco and the markets in which the company operates.

No representation or guarantee, expressed or implied, is made herein, and no reliance should be placed on the accuracy, justification or completeness of the information provided.

Dexco does not offer any assurances or guarantees regarding the fulfilment of expectations described.

2

Destaques

3Q24 | 9M24

Pro-forma Adjusted & Recurring EBITDA

of R$ 1,792 million in 9M24, including

the 49% EBITDA from LD Celulose

• Quarterly results driven by a favorable market environment for wood panels, with successful price pass-through;
• Strong results from the Metals and Sanitary Ware Division compared to the previous year and also versus the previous quarter, considering the gradual exit of the Shower and Electric Faucet unit;
• The Tiles Division remains pressured by market conditions, especially in the segment in which it operates;
• Solid operational levels supported results from LD Celulose, closing the quarter with R$ 443.0 million in Recurring EBITDA.

Recurring Net Revenue and Gross Margin R$ million / %

+14%

+37%

1,769 2,239 5.435 6.170

33,9%		36,2%	32,8%
32,6%
3Q23	3Q24	9M23	9M24
		Pro-forma Gross

Net Revenue	Margin %

Adjusted and Recurring EBITDA	Recurring Net Income
and Margin R$ million / %	+24%		R$ million				-40%
+47%					1.792
677
	1.445		+21%		481
				514		285
										188
461	217
457									6
								184
173							152
						58	293	278
				18,2%		20,7%	57
	20,5%
16,3%
							95	125
288	460	989		1278
3Q23	3Q24	9M23		9M24		3Q23	3Q24		9M23	9M24
Adjusted and			Adjusted and Recurring				Net Revenue Income		Adjusted and Recurring
		EBITDA Margin %				Net Income- LD Celulose
Recurring EBITDA			EBITDA

• LD Celulose

3

Cash Flow

3Q24 | 9M24

Working Capital/Net Revenue (~15%), at low levels

• Cash Generation Sustaining of R$ 146 million in the period, +37% compared to 9M23.
• Investments in reforestation made in 2Q24 impacting Sustaining CAPEX for the year-to- date.
• Investment in projects for the 2021-2025 Cycle in 9M24:
• • R$ 206 million: New Tiles unit in São Paulo.
  • R$ 68 million: Productivity projects, product mix improvement, and sanitary ware automation.
  • R$ 30 million: Expansion of the forestry base in the Northeast.

Free Cash Flow YTD	R$ million													Working Capital/ Net Revenue
1.279										9M23			9M24	28%					17%
													12%		15%	5		15%	15%
989																10%		12%
						106	146							2019	2020	2021	2022	2023	1T24	2T24	3T24
	26
														CAPEX R$ million
				(53)	(96)
	(187)	(391)(248)											Investments	3Q23	3Q24		9M23		9M24
										(398)		Forestry OPEX	102	107		256				432
			(465)(601)					(504)(602)	(456)
								Maintenance	81		69		209				170
Recurring	Working	Financial	Sustaining			Sustaining					Total FCF		Sustaining CAPEX2 183	176		465				601
Tax	Projects¹			Projects3,4	193	139		504				413
FCF
EBITDA	Capital	Flow	CAPEX

1 - Projects and LD Celulose | 2 - Maintenance and sustainability of the business | 3 - Projects 3Q24: R$ 102.6 million for modernization, efficiency, and production expansion; Other Projects: R$ 35.9 million | 4 -

Projects 9M24: Quarterly accumulated, DX Ventures, and Casa Dexco | 5 - Excludes non-recurring effects from the fourth quarter of 2023.

4

Corporate Debt

3Q24 | 9M24

Improvement of leverage for 3,10x

• Reduction of the Company's leverage levels as a reflection of improved Adjusted and Recurring EBITDA;
• Liability Management: announcement of a new financing structure for LD Celulose with positive outlook for the controlling shareholders;
• Lower cash outflows expected as the completion of the 2021-2025 Investment Cycle approaches.

Amortization timeline	R$ million				16%	Financial leverage	R$ million
			Avg. Term¹		Avg. cost			Short			Net Debt			Net Debt/Recurring EBITDA (LTM)
			4.4 years		104.3% of CDI	Term			3.47x	3.11x	3.32x	3.46x	3.10x
						84%
2.903				Long		2.942							5.224	5.215
														4.922
	750							4.706	4.336
Revolving
Credit
		2.153		1.050	1.099	1.034
		632				610
Cash
Cash position 2024	2025	2026	2027	2028	2029 and after	3Q23	4Q23	1Q24	2Q24	3Q24

1 - Average weighted debt term

5

WOOD

6

Sector Environment

Wood Panels

IBÁ Data

• Maintenance of high-volume levels in both the domestic and international markets.
• Factory utilization levels boosted by increased demand for MDP and MDF from the furniture industry.

Total panels	Volume 000m3	MDF Domestic	Volume 000m3
vs 2023	3Q24	9M24	Market
				+18%
Domestic Market	+15%	+16%	+24%
Foreign Market	+71%	+51%		3.862
		+20%	1.488
			3.261

MDP Domestic Market Volume 000m3

+12%

+16%

2.210

+21%		1.202
	7.040

2.122	2.558
5.882

674

1.980

784

3Q23

3Q24

9M23

9M34

3Q23

3Q24

9M23

9M24

3Q23

3Q24

9M23

9M24

7

WOOD

Results

• Best volume level since 4Q20, driven by high demand for panels in retail channels and the furniture industry.
• Successful price pass-through and improvement in product mix, combined with efficient cost management, driving sequential and annual improvement in Recurring Net Revenue.
• Completion of forestry transactions at the end of the quarter.
• Adjusted and Recurring EBITDA of R$ 407 million in 3Q24 and R$ 1,165 billion for the year, with margin improvement during the period.

Capacity	Total	MDF	MDP
Utilization
99%
100%	96%
3Q24
%

Volume

Recurring Net Revenue

Adjusted and Recurring EBITDA¹

000m3

+18%

and Pro-forma Gross Margin

and Margin

R$ million / %

R$ million / %

+21%

+14%

+42%

+24%

2.342

1.984

+27%

3.533

4.025

962

1.165

833

407

674

1.458

286

28,9%

1.148

43,8%

27,2%

37,9%

27,9%

40,5%

36,6%

24,9%

3Q23

3Q24

9M23

9M24

3Q23

3Q24

9M23

9M24

3Q23

3Q24

9M23

9M24

Net Revenue

Pro-forma Gross

Adjusted and Recurring

EBITDA Margin %

Margin %

EBITDA

1 - Adjusted and Recurring EBITDA is net of the effects of the variation in biological assets.

8

Dissolving Wood Pulp

• Improvement in operating performance with record of production and EBITDA levels in 3Q24;
• Greater efficiency in the use of chemicals and wood, optimizing costs;
• Stability in the price of dissolving pulp, with a positive outlook for 2024 compared to other sectors.

RESULT FOR 100% OF THE OPERATION

Recurring Net Revenue		EBITDA and Margin EBITDA
R$ million		R$ million | %
	+9%	+13%
+27%	+25%

732	1.827	2.001		443	933	1.050
577			354
			61.3%		51.1%	52.5%
				60.5%

Net Income

R$ million

117 119

188

14

3Q23		3Q24	9M23	9M24	3Q23		3Q24	9M23	9M24
		Recurring Net Revenue				Adjusted and Recurring	EBITDA
							EBITDA		Margin

3Q23

3Q24

9M23

9M24

Net Income

9

New

Financing

Structure

for LD Celulose

Successful operation, with investor demand for the bond exceeding 4.5x the issuance, and loan syndication with 9 financial institutions.

Extended amortization schedule with an appropriate capital structure, enabling accelerated deleveraging.

Extension of the average debt maturity from 3 to 5.5 years.

Forecast for the early release of dividend payments to shareholders.

• Total amount of US$ 1 billion, composed as follows:
• • US$ 650 million: bond maturing in 2032 with an interest rate of 7.95% per year.
  • US$ 350 million: bank loan maturing in 5 years with initial interest of SOFR + 3.95% per year.
• Covenants restricted to the operations of LD Celulose, aligned with operations

and financial obligations, eliminating the guarantees of the shareholders.

1 - Relevant Facts published on 09/20/2024 and 09/27/2024