Kepler Weber S A : Earnings Release | 2Q22

2Q22 EARNINGS RELEASE

"The best second quarter in the historical record, with

growth in Revenues and Profitability"

HIGHLIGHTS

NET REVENUES amounted to R$360.1 million for 2Q22, up 48.4% from R$242.7 million for the same quarter of the previous year. For the 1st half of 2022, net revenues amounted to R$797.7 million, up 66.6% compared to the R$478.8 million for the same period of last year.

EBITDA amounted up to R$94.3 million for 2Q22, up 340.7% from R$21.4 million for 2Q21. EBITDA margin for the quarter was 26.2%, increasing by 17.4 percentage points relative to 2Q21. For the first half of 2022, EBITDA amounted to R$241.1 million, up 344.7% compared to the same period of 2021. EBITDA margin for the 1st half of 2022 was 30.2%, or 18.9 percentage points higher than that for the 1st half of 2021.

NET INCOME amounted to R$60.2 million for 2Q22, up 410.2% relative to 2Q21. The net margin was 16.7%, with an increase of 11.9 percentage points relative to 2Q21. Net Income for the 1st half of 2022 amounted to R$153.8 million, with a net margin of 19.3%, or 13.2 percentage points higher than the result for the same period of last year.

2Q22 EARNINGS RELEASE

São Paulo, July 27, 2022 - Kepler Weber S.A. (B3: KEPL3), Kepler Weber group's parent company and a leading supplier of grain storage equipment and post-harvest solution in Latin America, is announcing its consolidated earnings for the quarter and six-month ended June 30, 2022 ("2Q22" and "6M22"). The consolidated information is prepared according to the International Financial Reporting Standards ("IFRS").

MESSAGE FROM MANAGEMENT

For 2Q22, the Company continued moving forward on its expansion strategy with sustainable growth, keeping focus on efficiency and productivity, while positioning itself as a premium brand in the market segments we serve. We had the best second quarter in the Company's history in terms of both net revenues and profitability, which put us in an outstanding market position thanks to assertive movements on the back of the favorable scenario in the agribusiness, making profitable deals in all segments.

We announced on June 29 a major strategic move, as we signed a Memorandum of Understanding ("MoU") to acquire 50% plus one of the shares in Procer, Brazil's leading player in specific post-harvest management technologies. The new acquisition, which is subject to a final agreement being signed, is a movement in line with the Company's innovation strategy that is going to accelerate the digitization of post-harvest activities for the entire supply chain, increasing efficiency for farmers and the agribusiness through products and services supported by technology 4.0.

On June 29 we announced the 2022/2023 Crop Plan, where R$5.13 billion (24.5% more than last year) will be channeled into the Warehouse Construction and Expansion Program, at interest rates attractive to producers- below inflation rates. These conditions will enable producers seeking financing to accelerate their storage expansion projects aimed at increasing their efficiency gains for the next crop season.

The good earnings for this quarter are the result of the team's successful work across the Company's value chain, from our strategic position through to our efficient supply chain management and our manufacturing process optimized using the Lean system, ensuring quality deliverables on appropriate schedules. Such performance was recognized by two important market awards: the "RS Export Award," presented by the Marketing and Sales Leadership Association in Brazil (ADVB/RS), for the Company's outstanding position in the machinery and equipment industry; and the "Rural Magazine Top of Mind" award, naming Kepler the top- of-mind brand among producers in its category, based on a survey conducted with agriculture and livestock farmers in all regions of Brazil, with 1,034 respondents.

We should point out that the 340.7% increase in EBITDA against 2Q21 represents an advancement towards increasing the level of production activity and expanding margins in our business segments, resulting from efficient operations management combined with price management with customers.

Our ROIC evolved for another quarter, improving by 57.0 percentage points against LTM 2Q21, reaching 101.5%. This reflects the positive variation in Net Operating Income, which amounted to R$281.1 million for 2Q22 against R$73.7 million for 2Q21. In addition, the level of capital invested displayed, on the average for the quarters, a +67.1% variation, amounting to R$277.0 million against R$165.7 million for the same period of last year.

Table 1 | Key Performance Indicators (R$ millions)

	2Q22	2Q21	Δ%	1Q22	Δ%	6M22	6M21	Δ%
Return on Invested Capital (*)	-	-	-	-	-	101.5%	44.5%	57 p.p.
Net Operating Revenue	360.1	242.7	48.4%	437.6	-17.7%	797.7	478.8	66.6%
Net Income	60.2	11.8	410.2%	93.6	-35.7%	153.8	29.0	430.3%
Adjusted Net Income	63.2	13.5	368.1%	94.5	-33.1%	157.6	32.4	386.4%
Net Margin	16.7%	4.9%	11,9 p.p.	21.4%	-4,8 p.p.	19.3%	6.1%	13,2 p.p.
Adjusted Net Margin	17.6%	5.6%	12 p.p.	21.6%	-4 p.p.	19.8%	6.8%	13 p.p.
EBITDA	94.3	21.4	340.7%	146.8	-36.6%	241.1	54.2	344.8%
EBITDA Margin	26.2%	8.8%	17,4 p.p.	33.5%	-7,4 p.p.	30.2%	11.3%	18,9 p.p.
Adjusted EBITDA(**)	98.9	24.0	312.1%	148.0	-33.2%	246.9	59.4	315.7%
Adjusted EBITDA Margin(**)	27.5%	9.9%	17,6 p.p.	33.8%	-6,4 p.p.	31.0%	12.4%	18,5 p.p.
Earnings per Share (EPS)	1.7104	0.4340	294.09%	3.1570	-45.82%	4.3722	1.0884	301.7%

(*) LTM (last 12 months) ROIC

(**) Adjusted EBITDA = EBITDA (-)non-recurring events (provisions for litigations and extemporaneous costs)

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2Q 2022 Earnings Release

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NET OPERATING REVENUES

Net Revenues increased by 48.4% for 2Q22 against 2Q21. Revenues for the 1st half of 2022 increased by 66.6% against the same period of 2021, 89% and 90% of from transactions in the domestic market for 2Q22 and the first half-year, respectively, and 11% and 10% in the international market for 2Q22 and the first half of 2022, respectively. It is worth highlighting that we had the best second quarter in history in terms of Net Revenues. The evolution in proportions of revenues between the national and international markets is shown in figure 1 below.

• Figure 1 | Net Operating Revenues by Market (amounts in R$ millions)

Post-Harvest

NOR	Post-Harvest
2Q22	220,7
2Q21	175,8
Δ%	25,5%
1Q22	263,2
Δ%	-16,2%
6M22	483,8
6M21	346,6
Δ%	39,6%

• Net Revenues from Post-Harvestfor 2Q22 amounted to R$220.7 million, increasing by 25.5% against the same period of 2021. For the 1st half of 2022, we had R$483.8 million, a 39.6% increase against the 1st half of 2021.
• The 25.5% increase for the quarter and the 39.6% increase for the six- month period confirm the assertiveness of the Company's strategic actions, which allowed profitability to grow in all agricultural regions in Brazil, taking advantage of the good level of bargaining power farmers have in connection with the appreciation of commodities. In addition, an assertive price and cost management in the face of price increases for inputs like steel allowed us to achieve this growth in a sustainable manner.

• However, there was a 16.2% drop against 1Q22 due to the seasonality between quarters, resulting from the non-linear dynamics of crops in the different regions of Brazil and also from the expected market release of the 2022/23 Warehouse Construction and Expansion Program.
• Out of the market access strategy, which is one of the bases for the
  Company's growth, we highlight the opening of a new regional sales office, which has enabled us to expand our market coverage at new agricultural frontiers like Tocantins, Maranhão, Piauí, Pará and Bahia.

Significant sales were closed in 2Q22 that will contribute to boosting revenues for the second half of 2022, of which we highlight:

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2Q 2022 Earnings Release

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• Two projects amounting to R$24 million for large producers in the Mato Grosso and Goiás regions.
• Two projects for a large coop in Rio Grande do Sul and Mato Grosso do Sul amounting to R$21 million.
• Various construction works for large producers, particularly in the Paraná, Minas Gerais, Mato Grosso and Piauí regions, which already reflect our expanded market coverage at these agricultural frontiers.

International Business

Intenational

• Net Revenues from International Business for 2Q22 amounted to

NOR

Business

R$40.5 million, up 46.2% against the same period of 2021 and up

7.1% against 1Q21. For the 1st half of 2022, they amounted to

2Q2240,5

2Q2127,7

Δ%46,2%

1Q2237,8

Δ%7,1%

6M2278,3

6M2150,8

Δ%54,1%

R$78.3 million, increasing by 54.1% against the 1st half of 2021.

• The 46.2% increase is due to the fact that the Company held on to

its premium position in the international market, which enabled it to

capture profitable deals even amid inflation of logistics costs and

exchange rate volatility. We can also point out that our stronger

portfolio at the turn of 2021 to 2022 thanks to deals closed in late

2021 in Africa and Central America, where we are expanding our

business.

• We made important sales in 2Q22 to various countries, especially

sales to Southeast Asia and large projects in South America that will

contribute to boosting our revenues for the third quarter of 2022.

Ports and Terminals

NOR

Ports and

• Net Revenues from Ports and Terminals for 2Q22 amounted to

Terminals

2Q225,9

2Q212,0

Δ%195,0%

1Q220,0

Δ%34605,9%

6M226,0

6M2112,3

Δ%-51,2%

R$5.9 million, increasing by 195.0% against the same period of

2021. For the 1st half of 2022, the business unit's Net Revenues

amounted to R$6.0 million, decreasing by 51.2% against the same

period of 2021.

• This segment is characterized by high-ticket project with extended

sales cycles than give rise to major fluctuations in revenues from one

quarter to the next, if considered separately. This quarter saw the

beginning of revenues from a sale closed in the 2nd half of 2021 to

an export terminal in Santos.

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2Q 2022 Earnings Release

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• In the first half of 2022, the Company made a significant new sale to a large port terminal in Paranaguá, amounting to approximately R$34 million, which will drive an increase in revenues in this segment for 1Q23.

Agro Industries

NOR	Agro Industries
2Q22	47,5
2Q21	0,0
Δ%	100,0%
1Q22	93,9
Δ%	-49,4%
6M22	141,4
6M21	0,0
Δ%	100,0%

• Net Revenues from Agribusiness amounted to R$47.5 million for 2Q22 and R$141.4 million for the 1st half of 2022. Projects in this segment are characterized by their high complexity and, as result, they involve longer sales cycles, as do projects in the Ports and Terminals business. We should point out that the Company started to report this new segment in 1Q22, so no comparison to the revenues for same period of the year 2021 is provided.
• The 49.4% drop against 1Q22 is primarily due to a large volume of deliveries being concentrated in the first quarter, as a result of the strong portfolio at the turn from 2021 to 2022.
• For 2Q22 and the 1st half of 2022, we continued reaping the rewards of sales we closed in the previous year. Additionally, in 2022 we sold four significant new projects for the corn ethanol mills located in Mato Grosso do Sul.
• In this 2Q22, the Company continued capturing orders that translated to significant sales in the form of 6 projects of one customer in Mato grosso and Rondônia, amounting to approximately R$40 million that will increase revenues in the segment for 4Q22.

Replacements and Services (R&S)

Cu Balsas | MA
Campo Grande | MS
Cascavel | PR
Cuiabá | MT
Pagominas | PA
Panambi | RS
Rio Verde | GO
NOR	Replacement and
Services
2Q22	45,5
2Q21	37,2
Δ%	22,3%
1Q22	42,7
Δ%	6,6%
6M22	88,2
6M21	69,1
Δ%	27,6%

• Net Revenues from Replacements and Services for 2Q22 amounted to R$45.5 million, increasing by 22.3% against the same period of 2021. For the 1st half of 2022, Net Revenues from R&S amounted to R$88.2 million, increasing by 27.6% against the same period of the previous year.

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2Q 2022 Earnings Release

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