Even Construtora e Incorporadora S.A. ($EVEN3)

Good morning, and thank you all for holding. Welcome to Even's earnings call concerning the results of the first quarter of 2026. [Operator Instructions] We would like to inform you that this event is being recorded and will be made available on the company's Investor Relations website, ri.even.com.br, where the complete material concerning this earnings call will be available. It is also possible to download this presentation by way of the chat icon in both Portuguese and English. [Operator Instructions] We would like to clarify that any statements that might be made during this teleconference regarding Even's business prospects as well as its operating and financial projections and goals are based on the beliefs and assumptions held by the company's management and on information currently available. Forward-looking considerations are not a guarantee of performance and involve risks, uncertainties and assumptions since they refer to future events and therefore, depend on circumstances that may or may not happen. Investors should understand that general economic conditions, industry conditions and other operating factors may affect Even's future outcomes and may lead to results that materially differ from those expressed in these future considerations. Here with us today are the Chief Executives of the company; Marcelo Dzik, CFO; and Mr. Marcio Moraes, CEO. I will now give the floor to Mr. Marcelo Dzik.

Good morning, everyone. It is with great pleasure that I present Even's results for the first quarter of 2026. Let's begin with the main indicators for the period. Net sales of inventory totaled BRL 252 million, 3% higher when compared with the same period of last year in a quarter without launches. We delivered one project in the quarter amounting to a PSV of BRL 468 million, which is 45% higher than the first quarter of 2025. We purchased 4 lots in prime locations of Sao Paulo, adding up to a land bank worth BRL 5.6 billion Even's share by the end of that period. Concerning our financial indicators, the gross profit in the period was BRL 85 million for an adjusted gross margin of 35.6% which shows a relevant evolution of 6.2% in the annual comparison. Backlog and inventory margins are 38.7% and 33.1%, respectively. The comprehensive net income, that is when the effects of selling participation in controlled SPEs is considered, was BRL 47 million in the quarter. Next, we can see the reconciliation of this figure. Even's consolidated net income was BRL 33 million in the quarter. And when we consider the BRL 14 million resulting from selling our stake in a controlled SPE, which is recognized directly in the variation of shareholders' equity and does not appear in the statement of income, Even's comprehensive net income in the period was BRL 47 million. We consider this figure in the quarter's results because it has a cash effect for the shareholders. In the next slide, we present the net income history for Sao Paulo's operation in the last 13 quarters. We demonstrate our consistency in generating profit quarter-over-quarter and an increase in profitability driven mainly by the gradual recovery of margins and by gains in operating efficiency and capital allocation. For the next quarter, we are preparing 2 high-end projects in prime locations in Itaim neighborhood, Renato 410 and Jano through RFM with even share of the PSV of BRL 231 million and BRL 159 million, respectively. Now we are showing you our sales performance. Net sales of inventory in the quarter were BRL 252 million with a consolidated SoS of 7%. Regarding cancellations, we ended the quarter with BRL 43 million. Our receivables portfolio remains healthy and increasingly concentrated in high-end projects. Moving on to the next slide. We delivered in the quarter Mairin Ibirapuera project consisting of 3 phases with a PSV of BRL 468 million and 529 units in total. Here are some pictures that highlight the quality of our delivery. We ended the period with an inventory worth BRL 3.3 billion, comprised mostly of projects in the high-end and luxury segments. These are projects in prime locations that are highly liquid. The highlight goes to our finished inventory, which represents only 9.2% of total volume. And considering the inventory under construction, 62% have their deliveries scheduled for 2029 and later. The projects to be delivered in 2026 were 80% sold by the end of the first quarter, as we can see in the graph on the bottom right-hand corner of the slide, together with the breakdown of percentages sold by year of conclusion. We bought 4 pieces of land in this quarter with a PSV of BRL 2.1 billion, of which BRL 1.3 billion is Even's share. Our land bank has a total PSV of BRL 5.6 billion. It is located mainly in prime neighborhoods in the south and west sides of Sao Paulo City and is concentrated in the high-end and luxury segments. The next slide demonstrates our solid capital structure. We ended the period with BRL 924 million in cash. Net debt totaled BRL 571 million, which represents 25% of the company's shareholders' equity. This quarter, operating cash burn was BRL 56 million. I will now give the floor to Even's CEO, Marcio Moraes.

Good morning, everyone. It is a pleasure to present the results for the first quarter of 2026. I thank the investors, analysts and collaborators for their presence. In recent years, we have focused our efforts in developing high-end projects in prime locations in Sao Paulo, and we are already reaping the rewards for this strategy as it is evident by the consistent performance of the last 3 years and the evolution of margins and profitability as presented by Dzik. The beginning of 2026 brought significant challenges. cost pressure resulting from the conflict in Iran, high interest rates and more restrictive credit. The company is well prepared for this scenario with robust cash flow, financial discipline and a construction company with more than 40 years of experience. Our receivables portfolio, which is indexed to the INCC at around 1.5x the cost of construction to be incurred offers a significant hedge against cost variations. This quarter, we carried out significant volume of sales of inventory, and we bought 4 lots in the highly sought-after neighborhoods of Pinheiros, Jardins and Vila Nova Conceicao. For the year, we have prepared special launches in the luxury segment with a cutting-edge architecture. We continue on a path of evolution with a solid pipeline and financial and operating capacity to take advantage of market opportunity. Thank you all for your presence. We are now available to answer your questions.

[Operator Instructions] Let us now proceed to our first question. It comes from Gustavo Fabris from BTG.

I have 2 questions here. The first one, I would like to know what you expect in terms of gross margin looking forward. The recent projects is to have a smaller contribution, which gives a higher margin. But how do you see the evolution of gross margin along the year? That would be the first question. And the second question is you have been making a huge effort to improve the composition of land bank in the previous quarters. So what have you seen in this process of purchasing land in terms of availability of land, price and the competition? If you can tell me about it, I would appreciate it.

Gustavo, thank you for your questions. Dzik here. Let me answer the first question, and Marcelo will talk about the land bank. Gross margin, we have seen and we have been commenting about this since 2023, a gradual recovery. Our gross margin has been growing with some variations quarter-over-quarter because of the mix. But when we look at longer periods, we see a clear trend that it will keep on growing, and we can see this very clearly, and we have been highlighting this. Our backlog margin, especially, and our inventory margin, not to mention the high-end projects, more recent projects that bring more -- higher margins than the previous projects. And this will have an impact in future quarters, respecting the mix, as I mentioned, and we see a path to grow.

Marcio here. Regarding land bank, the 3 points you mentioned, the availability is still -- is a little better now in terms of competition. I think the competition has decreased. The volume of land purchasing by the market itself has decreased. In some cases, we have been rejecting high prices. And when we come back, the prices are back to a lower level because of the reduction of appetite by the market. So we haven't been fighting a lot for this land. So Sao Paulo presents a challenge because we have sometimes many houses that we have to buy, but we have been able to develop good lots, and we were able to purchase a good lot -- a good series of lots.

Our next question comes from [ Luis ] from Santander.

I would like to ask you concerning the land. You have been purchasing -- in these past 3 quarters, you have been purchasing land. I would like to understand how much more land you're planning on buying? What's your expectations for next year? What we can expect in terms of launches for this -- for the next 2 or 3 years? And also just to complement, I see that you bought a lot with an average unit price at around BRL 350,000. I know it's small, but I'd like to understand what you're planning to do if you're going to set some foot in the affordable segment, if you're planning on increase your presence in this segment or it's just something one-off?

Marcio here. In relation to buying land and the amount of land we are buying, we always project for the next 2 or 3 years in terms of launches. We have a goal of BRL 2 billion, BRL 2.5 billion per year. And we have been land -- we never stopped looking at land. So it takes us 1 or 2 years to close these deals. So we never stop looking. In terms of the size of the land bank, we we are planning on keeping what we have, maybe growing -- increasing it a little bit more. In relation to this detail of smaller units, this is a phase of one of our projects. We do not intend to increase our presence in affordable segment for now. We do not see this happening now. This happened because we had some land that was huge and these were phases of projects that were bigger. So the high end where we operate and luxury where we operate, we have a land bank for the next 2 or 3 years.

Our next question comes from Herman Lee from Bradesco BBI.

I have one question. I'd like to understand how you have seen -- how you see these clients -- your clients, especially these high-end luxury clients that are less sensitive to macroeconomic changes, but we have been having a more challenging scenario. So I would like to understand how -- if these clients are feeling these different scenarios or if you don't see any change. I'd like to understand what your client is thinking at this point?

Marcio here. Well, the high-end customer, as we saw in the first quarter, we see there is a seasonality that this customer is not in the country in the first quarter. So in terms of decision, you mentioned the point, the main point, it's an extension in the time it takes to make a decision. Until the end of last year, we had more offers. So they were choosing -- they were able to choose more. So this timing for decision has been extended. It's taking 60 days to close a deal, but the interest is still there. So this customer was predicting a decrease in the interest rate because this was remunerating their capital in a different way, but it didn't happen. And we have good projects for the next quarter, and I hope we'll keep our rhythm.

Our next question comes from [ Juliana Vega ] from Itau BBA.

I have 2 questions here. The first one is regarding the level of provisioning you are making. I see 2 sides. When we look at net revenues, we see a provision for higher cancellations this quarter, but at the same time, a contingency provision that will impact other expenses in your P&L. If you could elaborate on this issue, your positioning, if it's more conservative or if you see some additional problem at the end? And the second question is more general regarding the expectations for cash generation in the year. What kind of dynamic you see? How that will impact leveraging for 2026, 2027?

Juliana, Dzik here. Thank you for your question. Let's start by the second one, the leverage. We have some information. What we have been saying and what we have been doing, we see an optimum level of leverage around 30%, more or less. So it depends on the quality of the debt on the extended maturity on this debt that is comfortable in relation to our cash position. But we are at 25% now. So we are going to burn some additional cash. And our base scenario is this. So we're going to launch at around BRL 100 million or BRL 200 million. So we may end at the end of the year a little above what we are now, but this is what we are looking at.

Juliana, Tiago here. Provisioning for contingencies, what we had in this quarter is more or less a natural level. We have been observed around BRL 8 million for the quarter. We had this one-off effect. And regarding cancellations, we still see we have a very healthy portfolio. Sometimes we may have some -- one or another unit in a specific quarter can cause a higher provisioning, but we do not see any change -- any significant change in the levels of cancellations, considering the numbers we have been showing quarter-over-quarter.

[ And just to complement Tiago's point, we highlight this that we have been moving towards this high end. And more and more, our portfolio is a more resilient one with a higher input of cash and lower LTV. And the truth is we have -- we are in a good period with a very low level of cancellation and default in our portfolio is very low, too.

Our next question comes from [ Juan Pedro ] from XP.

I have 2 questions. The first, I'd like to confirm regarding the selling expenses in this quarter. It were a little lower because of the absence of launches in the quarter. I'd like to confirm if that's what happened? And when you launch more, the selling expenses will grow more in coming quarters. And the second one concerns Herman's question in the beginning. In the extension of this period to make a decision, we see some signs that buying launches is taking longer for a decision to be made, especially because the INCC is showing the impact that the war abroad is having here.

Thank you for your question here. Dzik, here. Yes, our selling expenses follows our flow of launches, obviously. Part of it is related to the remaining inventory. But as Marcio said, and we say, real estate market has a seasonality, especially in the very high end. And yes, January and February is a period with less activity. Generally speaking, our customers are not here or they are not thinking about this. So we have a decrease. Next quarter, we're going to increase our launches again and then selling expenses will go up again, but within our plan. Concerning INCC index, we talked about the LTV low that we have in our -- the loyalty we have. But even with interest rates higher and this kind of customer usually makes shorter payments and even advance the payment of this purchase. So yes, of course, these issues have been a topic. We do not like it. It's not good for the market that these costs are high, but we are very well protected when we talk about our operation concentrated in the very high end. Our level is around 40% of our PSV. Our customers usually pay in cash, and we do not have a significant accumulation of LTV and with a higher inflation, the price of the apartments may not work for the client anymore. So we haven't seen the effects yet. We have been monitoring it with our teams of cost and pricing. We are analyzing what is the inflationary impact, and we have partners, suppliers and pre-contracting our services. So we minimize these effects. But we have this in our information. And we have 1.5x the portfolio in relation to our costs. So we are very well protected against any changes that may happen.

[Operator Instructions] We'd like now to inform that Q&A session is now closed. I'd like to give the floor now back to the company for their final remarks.

I would like to thank you all for being -- attending this call. We'll see you again in the next earnings call. Thank you.

Even's earnings call concerning the results of the first quarter of 2026 is now concluded. The Investor Relations department is at your disposal to answer any further questions you may have. Thank you all to participate and wish you a nice day. [Statements in English on this transcript were spoken by an interpreter present on the live call.]