Dexco S A : Results Presentations 2Q22

Results Presentation 2Q22/1S22

July 28, 2022

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.

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Highlights

Adjusted and Recurring EBITDA of R$950 million in 1H22, confirming the new performance levels

Ongoing price and product mix aimed at revenue growth;

Continued strong demand in the main markets the Company operates, sustaining the results; Costs and expenses pressures squeezing margins;

EBITDA of R$446 million in 2Q22, highlighting the strong growth in Deca division.

Adjusted and Recurring EBITDA	Recurring Net Revenue and Gross	Recurring Net Income
and Margin			Margin							R$ million
R$ million / %			R$ million / %
					-5%							+16%						-15%
			-11%				+12%		4.345			-19%
			996	950						3.742			474	401
						2.214
			446			1.974		251
500					203
26,6%	21,9%						35,1%
						35,3%	34,7%
25,3%	20,2%			35,1%
2Q21		2Q22	1S21	1S22	2Q21				2Q22	1S21	1S22		2Q21		2Q22	1S21	1S22
			Adjusted & Recurring	EBITDA					Net Revenue	Gross
			EBITDA	margin %							Margin %						3

Cash Flow

Cash Conversion Cycle remains below pre-pandemic levels

Working Capital/Net Revenue at low levels (~16%), even during a period of inventory rebuilding;

Sustaining Capex impacted in the semester mainly by continued investment in rebuilding forestry assets;

Confirmation of investment in expansion projects in 1H22:

• R$82.8 million for the new Ceramic Tiles unit;
• R$48.0 million expansion project, improvement to the mix and Deca automation;
• R$51.7 million in improving the panels mix, factory debottlenecking and forestry expansion.

Free Cash Flow YTD

R$ million

996	950							1S21			1S22		381		282
												1
		(231)	(46)	(74)	(137)	(50)	(186)			(15)	(139)	(99)
		(409)							(557)			(531)	(670)
Recurring	CAPEX	Financial					Working		Sustaining	Projects &	Total
Taxes		Other	FCF	others²	FCF
EBITDA	Sustaining		Flow					Capital

Cash Conversion Cycle

Days

					1H21				1H22
			85		107	122 120
52	55												42
													15
PMR Client	PME Inventory	PMP Suppliers	Cash Conversion
							2Q21					2Q22
			79	99	113 114
49	51											37
													15
	PMR Client	PME Inventory		PMP Suppliers	Cash Convertion
	CAPEX
	R$ million
	Investment					2Q21		2Q22		1H21		1H22
	FORESTRY OPEX		45		93		86		224
	MAINTENANCE		69		118		146		185
	Sustaining CAPEX³		114		211		231		409
	EXPANSION					81		123		115		537
	PROJECTS³

1 - Expansion Projects, DX Ventures, Investments in LD Celulose, non-recurring payments and receipts | 2 - Investments in maintenance, factory modernization and improvement projects. | 3 - Expansion Projects, DX Ventures, Acquisition of Companies and	4
Investments in LD Celulose

Corporate Debt

Leverage of 1.7x, a low level despite investment in projects

Liability management: extension of debt-payment terms of 0.6 years, at a competitive rate;

Issue of a CRA to the amount of R$800 million, with an approximate total cost of 107.3% of CDI, and an average term of 8.3 years;

Strengthened cash position with an eye to amortizations arising in the second semester.

Amortization timeline

R$ million

Avge term¹:

2,462	4.1 years

Revolving

Credit 500

1,962

Cash

954

632

Liquidity 2022 2023

1 - Average weighted term of the Debt..

Avge Cost:	Short
28%
109% of CDI
	Term
	72%
	Long
	2,017

8921,085

71

2024 2025 2026 2027+

Financial Leverage

R$ million

Net Debt

Net Debt/Adjused and Recurring EBITDA (LTM)

1,5x 1,7x

0,9x 0,8x 1,1x

3.689

3.260

2.448

1.771 1.705

2Q21

3Q21

4Q21

1Q22

2Q22

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