Blau Farmacêutica S.A. ($BLAU3)

[Foreign Language] [Audio Gap] I mean superior Cristina the company. Teladoc as per sample. It's a creaming to made major Italian in tracking on periodic versus macroeconomics kaizen Residence Tantan the set Look at the longer windows, which are more consistent with the nature of the pharmaceutical business. Now we are analyzing the segment and we look at the per segment, we can see the highlight is in the hospital segment. driven mainly by federal bids, performance of mature products, and we've seen, of course, a major resilience in demand and 3% growth in launches. New product lines have still not had revenue in the first quarter 2, and they should start to contribute gradually in the coming quarters with a more significant effect in 2027 growth. Finally, the retail aesthetics segment was practically at the same level of last year. And I think that's mainly due to adjustments we had in the supply and distribution of aesthetics which has generated volatility in the segment's performance ever since for 1 quarter -- the first quarter of '25 when we had the registration of the toxin. So the performance this year should be a little more volatile as well. Potentially, we'll get back to normalizing from 2026 onwards. Fortunately, the performance of the mature products of our core business has been above expectations and more than compensated or offset the performance of the Retail and Aesthetics segment, considering the greater share in the results impacting more positively. Now passing to Douglas.

Thank you, Matt. Well, moving on here guys to talk about our gross profit -- for another quarter, we're able to have an evolution. If you look at this from the beginning of the ramp, Mark in 2024, we have over 800 bps in the comparison versus the first quarter of last year. We have 130 bps compared we go up a whole layer on the margin, and we delivered 41.4%, and this is mainly due to the growth in the revenue, better use of capacity, dilution of our fixed costs of our factories and Bergamo, as we mentioned in the past. It's already operating at the same consolidated level, and we're always going to optimize this within that process you mentioned, which is translating more products to that factory. So of course, currency, we already have signs of improvement, but it's still going to be turning the stock, and so it should be a little more positive in the next quarters. Now as we look at the mix of the revenue, it was also super important. And maybe it's not the mix that was completely planned for the year because as highlighted, I think we still have room for the other business units to grow a bit more. There's still a lack of production in the new lines, and it's good to bring in margin gains. So it's natural that this is the new level that's sustainable. And so will increase this level in regards to next year. So when you see the EBITDA margin, it's kind of following that trend. And in this quarter, the growth of our expenses was in line with the growth of the revenue, so there's no dilution once again. But when you compare the other quarter of 170 bps of margin gain -- EBITDA margin gains. When you look at nominal value of the expense, the expense in the first quarter is really in line and pretty much the same as the last quarter. So it's pretty much a stabilization scenario. And now when you look at the growth of the revenue in the next quarter it's natural that we would also start gaining margin and leverage and increase the EBITDA margin as well, which I think is the biggest plan as well as their initial initiatives internally. That was always the focus. I think managing controls. And however, this year, we're a lot more organized and focused and prepared with a series of different initiatives. And of course, the gains will come throughout 2026. To the next slide, Here, you can see the effects of the currency and the beginning of 25, we have the lost value of the real. As I got a commission -- so the assets are a lot greater considering the receipt of Protea and then you also have this balance mark-to-market. And then we actually wanted to have this comparative chart here to show you what would be the effect of the net income and excluding the effect of the currency variation, which shows growth versus the previous quarter. And that's important to highlight. We always reinforce the tax efficiency in the company, which is continuing. But of course, within a quarter where you have stabilization in the profit is kind of flat. It's not going to be that relevant, right, but continue is to optimize the effective rate, and that's also an important lever to capture operational gains and transform them into net income. So moving on to the next slide. I think it's worth pausing for a second -- when you look at the cash cycle versus the previous quarter, you can see a worsening, but where does this come from? Well, it's important to look at the company's balance sheet and understand that the investments we have for R&D, they don't simply go through the results of tangibles. But also in the current assets of the company, if you look at the inventory composition, in this quarter versus the position of December 2025. We increased $30 million in the stock of products under development. Of course, this really considers the reflexes of the production and advances in [indiscernible]. So when you deduct this effect, of course, we continue to have the same level of the previous quarters when it comes to day percentages of the working capital versus the revenue and the metrics as we prepare to use. But we start this, as mentioned, with the closing of the year to start this stock to in a more accelerated manner, optimizing the levels of stock, and I think that's the biggest lever for optimization and release of the cash position when you look at the working capital. When you look at customer receipts, I think everyone knows that the market is still pretty stressed with the interest base and leverage, but with a lot of discipline, looking at the and diversifying the portfolio of the company had a very important movement with diversifying the portfolio, and we're a lot more vigilant when it comes to credit. We can address the growth and keep a position at least at the same level of days of received, right? So when it comes to suppliers, is a bit of influence in the currency, dollar, et cetera, and some other effects, of course, are one-off in the cycle with the reduction of purchases as well in the first quarter. So we kind of follow that same optimization of working capital to consider the investments the company has to perform this year. And moving on to the next slide. Now we have basically keep it. It's natural every year, you start -- you have to be a lot more careful. You plan your budget, but you don't perform all of the projects at the beginning of the year. and that's that wasn't different in '26. And if you add that, you start off with a lot of volatility than what was expected. But we're still prioritizing this and the investments that are most important and more relevant especially because the company has a healthy position, which allows us to continue with these investments. When you look at the fixed asset CapEx, we still complete the new lines basically looking at this, Barnabas we're going to be adjusting this brings us a bit more comfortable comfort to begin the construction and now considering the calendar rain in the Northeast and also optimizing the cash position once again. Now with intangible, if we look here, there is an important highlight. We're looking at the company's balance sheet, and the company today also invest and performs higher develops this through an intertie science technology and also perform some anticipation to suppliers, and at a moment that will be loaded and will go into the intangibles, but it's just provide clarity and transparency that we're still focusing on the projects that are most relevant and more transformational and that we'll continue to lever the growth in the companies with this discipline really looking at the company's cash position and accommodating this cash generation and investments. On the next slide, of course, to wrap up my part. Once again, we want to highlight the company was able to address this quarter with all the challenges in difficulties with growth and improving margins and then, of course, prioritizing cash position. So we have a cash position that's actually higher than the debt. And so this company is discipline. And this is our DNA -- and then -- that's what's going to be done throughout '26. So we have relevant investments, but they're going to be supported by cash generation and optimization of working capital as well. Looking at the debt, we have a debt that started to mature now on '26. But of course, it's accommodated within our cash position, right? So the company is also searching for other alternatives and also the even reinforcing the structure and in other operations that are even better than what we have. But once again, looking at opportunities, right? So the company has been following a pretty comfortable position to be able to handle the investment and so I'm going to pass it on to Marcelo for his final remarks, and then we'll get into questions and answers.

Well, before advancing, I want to quickly reflect on the ever since with relevant challenges, some that we're not able to control. We had a macroeconomic environment that is very adipose than what we had at the time of the IPO with the interest rate going from levels that were close to 2% levels at about that made us reach conscious decisions and also postponed some investments with the objective of preserving the capital structure way. So also coexisting with the sale of products in the public channel and the regulatory bar was also more challenging with the delays in nuclear drugs, reducing the pace of growth and returns expected in many channels. Another point was also the peak of the pandemic and that situation was only normalized by 2024 on -- some investments did not deliver the returns expected which was the case of Protea Manus. And because of this, we performed the divestment of Protea last year and -- as could follow the same path in the future. Well, when we look at the other side, we see very relevant achievements even in a scenario that was super challenging. Birla was able to keep a healthy channel with the balance sheet to their most solid in the sector and diversification of the revenue sources, reducing costs and creating a base that's more sustainable for the future. We had significant advances in R&D, increasing our capacity to develop new products in quantity and complexity with an important highlight to the monoclonal antibodies and with a lot of other products that are relevant to add on to our portfolio in the next few years. We also expanded our productive capacity and that creates an important gain in efficiency and scale. And so we advanced significantly in corporate governance and we created a robust basis to support our growth in the future and present always assessing the less combination between risk and return. We're convinced that loss better positioned today than it has -- than it was in its IPO with more capacity for investments, maintaining a healthy capital structure and a better risk return ratio, which makes it serving the liquidity of the stock. Now moving on to the next slide. I want to share our vision for the next 5 years, which could be summarized in 3 major pillars. In the investment pillar, we are going to focus more on projects with the best risk return ratio. We're going to advance into new products and innovation. -- an important emphasis on complex therapies such as monofocal antibodies. We're also going to continue to expand our production capacity with more verticalization or production while seeking support also specialized consultancies and people on process optimization. These investments are going to enable attractive and sustainable growth for cloud, translated into the acceleration of our pipeline and volume growth in the mature portfolio, which should generate relevant opportunities in both the public and private channels as well as enhancing geographic expansion with the help of strategic license in and license out partnerships. We also see greater portfolio differentiation, which will lead to an increase in the average ticket with the objective of exceeding our historical margins in a sustainable manner with the transformational scale. All of this converges to generating value for different stakeholders and value translates into expanding populations access to innovative therapies, strengthening national technological sovereignty and creation of new opportunities for our employees, our partners, customers supplies and, of course, you, our shareholders. We're building a company that is prepared for succession and perpetuity with solid foundations of governance, innovation and execution. And we're also seeing a potential to improve macro and market conditions with in the best operational moment in the company, where we begin to reap the fruits of the investments of previous years. We have no doubt that as the results materialize, the market will reward our actions and our stock opening up new opportunities to generate even more value for state content. Thank you so much for your trust and for being with us. Thank you, Marcelo. Now we're going to begin our Q&A session.

The first question we have is from Eduard UBS.

We have 2 questions on our side. First is about the CapEx. Dogus gave us some initial commentary, but the CapEx is a little bit smaller in this quarter. And in the previous calls, had been around BRL 600 million in the year. And I wanted to get a bit I wanted to understand that these levels continue and if the company expects level of CapEx. And then finally, if you guys could give us some color on what you guys expect of the distribution of volumes in regards to the next quarters.

With CapEx. First of all, thank you, Eduardo. Good afternoon, everyone. Logos side of the CapEx, yes. So in the last call, we mentioned this and -- as I mentioned, we always start the year off with a planning initiative, and we understand how the year is going to be performing and of course, the delivery of the results and cash generation. But today, maybe we're closer to about 15% or 15 and the 600 because part of this per number we expected for this year. will probably be more for the first semester of the next year. So we should focus more on packaging and less on the preparation of the basis for this, right? So that's really what's going to make this value a little bit smaller. We start this clinical study this year, and this will definitely lead to an increase in this and the other investments follow the natural course business. And about the Alpha bid, we mentioned also that this year, this is a little bit more phased out during the quarters, but we will have this mismatch this year with the composition and agreement that was made with the government to distribute this in the best way in order to meet the demand, and it was distributed in the 4 quarters.

Next question is from Vanessa is, please, your mark is the least.

Okay, guys, how it going I wanted to explore a little bit. You talked about this during the presentation and in the release. but I wanted to explore a bit more about in the mature portfolio, with the private channel. It's pretty clear with the ground you get had in the in the rooms in gains you had in this quarter. But if you could -- on the private side, mentioned if you had any molecule that called more attention for performance in this first quarter. Or more generalized that ended up impacting price volume that may you guys have this delta that was a little bit better looking at the first quarter. And then the second point is a follow-up on what you guys already mentioned in the presentation, but then also looking at the perspective you guys have in regards to this dollar scenario, does this change in the negotiations with suppliers and the strategy also move me to stock of any kind of stock movement as well, it would be interesting to explore this a little bit, if possible. Thank you.

Okay. Thank you -- good afternoon. On the commercial aspects, we can see that our initiatives focusing more on the end customer promoting the sale of all of the portfolio has really brought in positive results to the company. And we've been growing with all of the products in our portfolio and our sales in the private market. Now about your question for any anticipation movements already backed up in our dollar and unfortunately, we kept this decision-making the Board and the company to keep up this natural hedge, and we decided to keep all of the capital we received from Brazil and a strong currency, but that brought this -- in our balance sheet, it represented a financial expense. And at the end of the day, it's ahead, and we need to use this currency to buyer inputs abroad, and these have pretty stable prices. So I don't see like an advantage of building up even more stock. We have a lot of days of stock every day that goes by even improving our processes so that we can reduce our days of stock, and we actually have our stock. So because of these lines, we were able to get approvals for and for all of these products that we're producing. So we've had a pretty big scope of production that we're going to be processing throughout the year and reduce our stocks. So we don't see much of an advantage at this moment to increase the stocks because by the understanding we have -- we have a forecast of $76 billion of our commercial balance. And we can see that we'll have a real that is stronger for the next months. And the trend to make this even more accentuated intent with the dollar even cheaper zone. And it would be maybe premature to have this investment. But is there is a positive effect on the margin, right? Yes. So then you have the new inventory inflows and you kind of strengthen this cash generation in real. So if the dollar gaining value in regards to the real, then we'll have positive revenue and it will be the opposite, right? So it's a one-off situation because we have this natural hedge in strong currency.

Guys, the next question is from Mirel Olivera at Bank of America.

Thank you, Marcel. -- with an IR team. Thanks for the I have 2 on my side. First, about the revenue -- if you could talk about what we should expect in regards to acceleration in each of the quarters in the year we transiting this the new correction lines and in the last quarter -- you had mentioned that partners will contribute to this. And so I wanted to the company you understand the update to the company and the expectations further contribution seen each quarter? And the second 1 would be question from our colleague about the CapEx. If you give us some more color on what we could expect -- the seasonality remains 515 million throughout the quarter.

Okay. Just about the CapEx a bit now. I think what we can say is we can base ourselves on the history. If you look at the companies between sees, CapEx should be accelerated during the year. So the lowest value in the first quarter and greater in the fourth quarter should probably have a similar phasing this year. But we're not going to do anything crazy here. And no investment that we cannot honor and generate our own cash. So the company versus a debt, it's not a good moment. And so it's still not a good moment to perform this expense and bringing returns to investors with interest at this level is going to be really complicated. Now what can we expect in line with what Mats mentioned. To repeat the expenses in the first quarter. We're going to spend about a little more in the next quarters, but not too much more. So it's kind of like the issue the company already has in the previous years. Now about revenue what we've seen from the bank analyst, is really in line with what we plan to deliver this year in the company. So Naturally, we're going to bring in these results. And we've been pursuing these results actually better results. But we are also convinced that we have what it takes in the market and in the company despite the current situation without having all these lines approved, we understand that we like very little for this to happen. And we've also been improving efficiency as a whole with the current line that are approved. And so we understand that we're going to bring in results in a very smooth way this year.

The next question is from the Andreas City.

Thank you Thanks, guys. Good afternoon, 2 questions here, and I say. The first 1 is about working capital. I noticed that there's some volatility in the currency. And as Degas also talked about the effect of all of the innovation of this issue -- and considering this new moment in the company, what would be feasible considering these in these specific effects with the levels of working capital. What are you guys focusing on here? And what can you share as perspective I think that would be interesting to hear from you guys about and that's the first point. And then second one, if you could talk about the margin. The company has better perspectives for growth. And with the operational leverage as well. So if you could talk about the sustainability scenario, what we can work on here in the EBITDA margins? I think that would be a good point.

Thank you for this question. When we start about the margin, I think in the first quarter, we went up another -- another layer here on the growth of the revenue. We have the new lines at enter operation -- you have other topics as well that could interfere positively in the eviction of the margin Besides the currency itself, so it's natural to expect to wait for the maintenance of the margin in the first quarter and then possible improvement which I think is our main objective, right, of having trying to win about 100 to 100 bps this year. Now when we look at the working capital, I think to receive from customers, we don't see a lot of room for improvements, considering the scenario we have. That company has been working on different diversification movements for base and direct sales, an interesting initiative. We started. We still have the distribution channel, which is super important for the company, sale of the public with a normalized scenario. We still need to reflect a bit of the scenario from a macroeconomic perspective. to keep at that level of 90 days and then the big objective is the stocks, right? For us, that's the biggest goal. There was this improvement in the first quarter than you ever R&D that we need to isolate considering the investments companies we're working on. And then you get back to that point, which is we should have an improvement of about 45 days in the cash cycle coming mainly from inventories. But of course, if you have any of the opportunities with customers and suppliers that may be at a lower level than what we've been searching for inventories. When you go back to 2024, we had the same trend of growth in the revenue and the working capital can keep up with this normally, right, getting back to that target or level. Okay. Thank you very much.

Next question is from Eduardo Heng from BTG.

The first 1 is following upon our colleague on the images in the beginning of the presentation, you talked about different initiatives for commercial expenses and administrative expenses, if you could provide some details on the biggest, what has been done internally and a follow-up on the final confusions. You mentioned on the possibility of divestments at Amyris. And if you could also just maybe give us the status on the asset -- and if you guys already have any process underway for this possible divestment?

Thank you for the question. Let's start up with made still don't have any decision and we talked about a possible divestment. We're prospecting this sale of the plasma. Now we're negotiating with different parties. We continue with this negotiation, and we see some players are really well stocked up as plasma with a bit of a pandemic impact still where they invested a lot on actioning and collect and blacks and there are other players, however, that are entering the market from other countries in Saudi Arabia and other countries that are also interested in our plasma and we've also seen the possibility of selling our plasma to the potential customers, and that's where we're going to make a decision if we're going to perform this divestment and -- if we can sign this sales deal and at levels we desire, bringing in margins and improvements in our consolidated revenue then we'll certainly be able to value this asset and be able to perform the divestments and better ization. Of course, you want to have the best for our business, but we're still at this moment, prospecting and reaching a conclusion of this agreement that can be positive for everyone in the sense for the sale of a problem. So then about the initiatives, I think a this year has been a lot more structured and organized. We're looking at a exercise. Its apart from consulting firms for more strategic planning and that, of course, involves other initiatives, and we have this internal team prepared to work on reviewing processes and management and control of these expenses looking at the resources and search for better productivity and efficiency and another initiative also looking at transforming the company, especially with technology advances and changes in our systems and artificial intelligence and so certainly, you have the engagement from our internal team and external support as well. And we can say we're really searching for this and we're going to search for reduction initiatives and optimization, which combine the growth of the revenue and we're really optimistic and trusting the engagement of our team. So it's the sale loosely been organized with different initiatives especially looking at processes and ongoing improvements, really well structured. And today, you can talk to people and everyone is searching for solutions and understanding what is to be done. So just to add on, in our goals, each director within their business has to bring in as a target. The presentation and application within their business of artificial intelligence bring benefits to the company and the consulting services that are rolling in to have their gains when you bring up to the solri? This brings in methodology, in shorts process with the methodology and know-how, the template and who's going to actually implement the transformation is our internal team. They're doing this, and they're really engaged, and it's great to see how finance is together with Marcelo as well. I've been helping this and supporting this. So it's been great, and we're definitely going to reap the fruit. It's very clear, guys.

Then we have some questions on the chat as well. I think the first 1 is from Paolo Neto here from law Fortunately, his question is very similar. -- come large question about the EBITDA margin. So I think that's already answered and to add this. We can also say that normally, the first quarter has worse seasonality than the other quarters. So on the other ones, we should have nominal revenue that is higher than the first quarter, which could eventually make the margins grow. And but the main point, of course, is these issues with optimizing all of the company's processes. Here, we thank you, Paolo, for the question. And here, we have a question from Antonio is an individual shareholder. Well, good afternoon to generate more value to the shareholders, we think we should increase the free plot. Can we talk about this?

Well, every call we have been receiving this question. And I think we would also like to increase the brief flow of the company. We want to increase the number of daily transactions as well with our shares. And I think that's going to happen naturally as you bring in results increasing the revenue margin, profitability and shareholders are going to start really valuing this as you bring in the macro results as well. And naturally, our stocks will be valued at a reasonable value so that we can then think about increasing the free flow through maybe some kind of an M&A having an operation there so that we can increase our shareholder base, right? But -- that's what we're searching for. And -- but of course, at the values we have today, everyone knows we're 1 of the companies with the lowest value in the market. We're talking about 4-point something. And that's almost 5x our EBITDA. So it's very little to be trading at. We have no other peer in the market that's having this kind of result in our sector right it's very difficult. And over time, we're going to bring in more trust to investors and more results. And for sure, we'll be able to become 1 of the companies that investors are going to be seeking to invest in. Great. That's it. That was the last question. I want to thank you all. These are 5 years, everyone our IPO and its first earnings after the 5 years in the AP and I'm more confident in the business more than ever. With this enthusiasm, focus, as mentioned, and we're really building a company to be perpetuated a really well organized with a more engaged team searching for efficiency and also measuring productivity, which is super important for each person here in the company and so that we can also compensate in the most adequate way, whoever is bringing more productivity to the business. And I'm really confident, especially with the future launches and the future production lines, plan in Fernando. I think at every moment, we've been experiencing growth ending this growth in an organized way I want to thank you all for your interest for being with us in the trajectory in our history and investing in our business -- thank you all so -- have a great Friday and a great weekend. It's Friday. Thanks guys. Have a nice day. Bye-bye.