Grupo CCR S A : Transcript 4Q21

Conference Call Transcript

4Q21 Results

CCR S.A. (CCRO3 BZ)

February 25, 2022

Operator:

Good afternoon, ladies and gentlemen, and thank you for holding. At this time, we would like to welcome you to the CCR S.A. conference call to discuss the results, referring to the 4Q21.

We would like to inform you that all participants will be in listen-only mode during the Company's presentation. Ensuing in this, we will go on to the Q&A session when further instructions will be given. Should any participant require assistance during the conference, please press *0 to reach the operator.

Please bear in mind that the forward-looking statements made during this conference call, referring to the Company's business outlook, projections and operational and financial goals are based on the beliefs and assumptions of the CCR Management, as well as on information currently available to the Company. These forward-looking statements are no guarantee of performance. They involve risks, uncertainties and assumptions, as they refer to future events and therefore depend on circumstances which may or may not occur. Investors should understand that general economic conditions, industry conditions and other operating factors could impact the future results of the Company and lead to results that differ materially from those expressed in the forward-looking statements.

I would like to give the floor to Mr. Marco Antônio Cauduro, the CEO of CCR. You may proceed, sir.

Marco Antônio Cauduro:

A good day to all of you, and thank you for your participation in this conference call, where we will present the results for the year 2021 and the 4Q.

This year for his CCR has represented an achievement. This is a very strong word, and perhaps we should say achievements in the plural, in the three models that we had defined would be strategic for the Company. We had significant growth in urban mobility, in airports as well as in highways.

Another very appropriate word that I would like to bring here to describe our trajectory in 2021 is consistency. All of the movements that we did, complied with our ambition to get to 2025 through an interaction of valuing people, a constant attention to our risk matrix and, of course, discipline in our capital.

We understand that the path towards creating value, of course, is geared by our shareholders, but depends on all of our stakeholders. And not differently from this, we have to focus on the social part, sustainability, as well as in governance.

Our strides have been broadly disseminated, but I would like to remind you of some of our achievements. We gained the federal concessions of 15 airports in the 6th round, as well as achieving the state concession for Pampulha in Belo Horizonte. This is put together with Confins, that are considered the best airports in Brazil.

We were able to gain a new concession for NovaDutra with a very innovative proposal based on state of the art technology, strengthened by our experience of more than 20 years with this asset.

1

Conference Call Transcript

4Q21 Results

CCR S.A. (CCRO3 BZ)

February 25, 2022

In Sao Paulo, we won that dispute four lines 8 and 9 of CPTM, guaranteeing a very strong position in the metropolitan railroad system. Still in Sao Paulo, we had a very important achievement. After more than a decade of negotiations, we concluded an agreement with the state government leading to the rebalancing of the concessionaire of ViaQuatro subway, equating phase one of the project. Still in Sao Paulo, we celebrated a preliminary agreement different from the concession contracts of AutoBAn, ViaOeste and SPVias.

And in Paraná, we returned to the governance of the state Rodonorte. After managing it for 24 years, we are convinced that we have returned a more enhanced highway compared to when we took it on.

At the same time in which we strove for achievements, we were also very attentive to the consequences of the covid 19 pandemic, and in 2020, we saw the best measures to strengthen our positioning in the sanitation crisis. Thanks to the advance of vaccination, we had an increase of circulation of our customers and cargo on highways, subways and airports.

Still in the year 2021, we sought to strengthen the agenda and give greater robustness to a cross-cutting topic. We built the ESG masterplan approved by our Board. We have strategic goals, action plan, definition of KPIs and goals that are linked to variable remuneration. These will be disseminated in the ESG quarterly panel, strengthening the transparency of the Company with its stakeholders.

In terms of the material issues in environmental, social and government areas, we worked with the materiality matrix, engaging all of the leaders and integrating ESG practices in our decision-making process, bolstering a connection with activities in an integrated way.

For example, the inclusion of ESG in the Management and People Committee; a decarbonization project, we carried out a diagnosis of the management of emissions of this CCR Group to identify the opportunities to reduce greenhouse gases, and we identified the economic alternatives, the ones that would be best for the CCR Group.

We also generated 2,449 MWh of renewable energy in 2021, implementing a solar panel plant. We created an environmental commission to enhance corporate governance when it comes to environmental management to standardize processes, controls and reports, and expand communication between units to foster greater alignment and disseminate environmental initiatives among the units of the Group.

We held the CCR Day with a special highlight for ESG. We built an ESG dashboard with material issues of ESG and KPIs. We implemented the Rout Cycle project. We also have a modality for diversity, the sense of diversity and inclusion. And finally, sustainability and provisions EcoVadis, with a focus on the supplier chain.

Before giving the floor to Waldo, I would like to underscore that in 2022, we focused on the challenge of taking on the projects that we had begun, on executing these projects. We constantly see to enhance our portfolio, and of course, we want to strengthen our organizational culture.

2

Conference Call Transcript

4Q21 Results

CCR S.A. (CCRO3 BZ)

February 25, 2022

CCR will continue as the platform for investments and infrastructure in Brazil, and we will continue to be attentive to all opportunities that arise in the fields of infrastructure and urban mobility.

We have found a pipeline of more than R$150 billion of investments. However, we will carry out our due diligence assumptions with capital discipline, generation of value for our shareholders, and always assessing the environmental sustainability of these projects.

I would now like to give the floor to Waldo, who will speak about the main highlights of the quarter. You have the floor, Waldo.

Waldo Perez Leskovar:

Thank you, Marco, and a good day to all of you. I would like to inform you that here with us, we have Flavia Godoy from the IR Superintendency, Douglas Ribeiro, Cauê Esteves and Caíque Moraes from the IR team.

As Marco has mentioned, the year 2021 was full of achievements. Achievements that have generated significant value for the Company, and that also enable us to move forward, consolidating our long term strategy.

We were victorious in several projects. We concluded important rebalancing that demanded long periods of discussion and have brought about greater legal security so that we can continue on to implement our growth strategy, projects that follow our criteria for capital allocation.

I would like to speak a bit about the recovery that we have observed in the movements of the modals in which we act, and the recovery and growth that we observed during 2021, a trajectory that remains for the most recent data.

There is a highlight for the airport segment with a growth of 86.3% in number of passengers in the 4Q21 vis-à-vis the same period the previous year. For the same period, the volume of passengers transported in our urban mobility projects had a growth of 24.9%. Traffic of vehicles on our highways had a growth of 7%. If we exclude Via Costeira and Rodonorte, the growth was 2.5% for the period.

On February 9th, we reported our monthly performance of January 2020 to where we had a growth of 4.8%, 27.2% and 57;6% for highways, for urban mobility and airports, respectively. And all of this data corroborates the trajectory of recovery and growth of our portfolio.

In the 4Q21, we signed the contracts for the Central and South blocks of airports on October 18th and 20th respectively, a stage that represents the strategic planning of CCR materializing as it solidifies our strategy to create a robust and sustainable platform for the airport sector.

Still, in the 4Q21 we disbursed the values of the grants, R$2.9 billion for the Southern and Central blocks, R$2 billion for the concession of Rio-Sao Paulo Highway. After the close of the quarter, we also signed contracts for the Pampulha Airport and Rio-Sao Paulo on January 21st and January 28th, 2022. These are strategic achievements that are in accordance with our qualified growth strategy.

3

Conference Call Transcript

4Q21 Results

CCR S.A. (CCRO3 BZ)

February 25, 2022

Our financial position continues to be very sound, with room to leverage the capture of new opportunities, the core of our strategy.

We ended the quarter with a robust cash position, and we presented a leverage of net debt to EBITDA of 3x, a level above that 2.4x observed in the 3Q21, an increase due to the new funding to be able to phase the disbursements of the granting and the commitment of investments in the projects that we achieved.

We would like to highlight that the EBITDA takes into account the cost of lines 8 and 9 and the airport's blocks South and Central projects that so far have not contributed with cash generation in the 4Q21. Lines eight to nine began their operation in February of 2022, and for airports, we should begin between March and April of 2022.

We continue with a very active management of our indebtedness. For some time, the Company has been working to lengthen that debt. In 2021, we anticipated some refinancing for 2022, and we have been very successful in lengthening the duration of our debt.

When it comes to evidence, our policy continues and we will act very diligently in managing our cash. We distributed R$153.8 million in dividends in the 4Q21, a payment aligned with the investment cycle and the present day macroeconomic scenario.

We continue quite optimistic with the opportunities that lie before us. We have an extensive pipeline in all of the models in which we act. In highways, we have a bidding or rebidding process of 14 federal highways until 2023, besides the BNDES package with 6,000 km of extension and other state programs, CRT and integrated highways of Paraná.

When it comes to projects with state governments, in Minas Gerais we have the Belo Horizonte Ring Road and two lots for highway concession. In the Rio Grande do Sul state highways, there are 1,131 km that are being divided in three lots. In the state highways of Sao Paulo, the bid for the concession of the North Ring Road has been approved, besides the Northeast Paulista lot.

In the airport sector for 2022, we foresee several processes of privatization. What is underway is a 7th round of concession of federal airports, and we hope the auction will take place in the 2Q21. ANAC is also planning to rebid the airports of São Gonçalo de Amarante and Viracopos in 2022, and conclude the alienation of participation of Infraero in Guarulhos, Galeão, Confins and Brasília.

In terms of urban mobility, we have a revision of the bidding documents for the concession of Line 7, along with the TIC, the interstate train in Campinas. We also have the concession of CBTU Minas Gerais, and other projects are under analysis such as the subway in the Federal District and VLT W3, both in Brasilia.

Finally, I would like to inform all of you that in our investor relations site, we have made available our Integrated Annual Report, as well as a panel with ESG indicators. As Marco has mentioned, we have made significant strides in our ESG agenda, and we are now working towards defining quantitative goals for the middle term for these KPIs.

4

Conference Call Transcript

4Q21 Results

CCR S.A. (CCRO3 BZ)

February 25, 2022

This work is being carried out in a very judicious way, with a very good foundation. ESG is a fundamental pillar for CCR, and it is intrinsic for our sustainable growth strategy.

I would now like to give the floor to Flavia Godoy, who will present in greater detail the results of the 4Q21.

Flavia Godoy:

A good day to all of you. I would like to highlight the main figures IFRS for the 4Q21. We would like to remind you, for the same base numbers, we have excluded new products and nonrecurrent effects, as we have explained in the release.

To begin with the highlights for the quarter, we highlight the vehicle traffic that had a growth of 7% vis-à-vis the 4Q20. We have not considered the traffic of Via Costeira and Rodonorte, and because of this, the growth was 2.5%.

This traffic performance is the result of a growth of 4% in light vehicles compared to the same period the previous year, and a growth of 1.3% in the traffic of heavy vehicles, once again compared to the same period of the previous year.

At the end of our release, we have included a graph where you will be able to observe that, despite the impact caused by the pandemic, we have a clear trajectory for recovery when we think about the beginning of the pandemic in highways and in the other businesses of the Company.

Net revenues reached R$2.8 billion in the 4Q21, representing an increase of 10.9% vis- à-vis the same period the previous year. Adjusted EBITDA had an increase of 37.9%, reaching R$1.5 billion. Adjusted EBITDA margin reached 51.7%, an expansion of 10.1 p.p. when compared to the 4Q20.

Although the quarter was still impacted by the effects of the pandemic, the robust result shows the efforts of CCR to control expenses and to maintain the operational efficiency, in a business where costs are mainly fixed costs, and in an environment of pandemic that impacted several of our business units.

To speak in more detail about the cost, we see that the total cost had a slight increase of 2.6% in the 4Q21 when compared to the 4Q20, reaching R$2.5 billion. This increase is due mainly to a higher level of depreciation and amortization in the Rodonorte concessionaire and the cost of personnel, because of the impact of a reversion of PLR that took place in the last year, amounting to R$93.5 million.

The cash cost on the same basis had a reduction of 12.6%. Considering the Brazilian companies, the reduction was 14.7% once again showing our efforts and discipline in terms of containing costs. For greater details, please consult the cost section in our results release.

Net income same basis was R$182.6 million in the 4Q21, compared to the losses of R$12.3 million in the 4Q20. When it comes to the net indebtedness, we reached R$29.9 billion in the 4Q21, representing increases of 30.6% and 53.2% in the comparisons with the 3Q21 and the 4Q20, respectively.

5