Metalfrio Solutions S.A. ($FRIO3)

Good morning, everyone. And thank you for joining us. This is the webcast related to the performance of Metalfrio Solutions for the first quarter of 2026. We are pleased with the strong performance delivered in the first quarter of 2026, which continues the positive momentum we have seen over recent periods. During the quarter, volumes increased by 12% with growth supported by contributions from all regions. At the same time, EBITDA grew 48.4% year-over-year. reflecting not only stronger performance, but also meaningful gains in operational efficiency across the business. In the Americas, demand remained very robust partly supported by preparations for the upcoming FIFA World Cup, which utilize a significant portion of our production capacity in the region. South America delivered an outstanding performance reaching a record EBITDA margin of 20.2%. In Mexico, we achieved a double-digit EBITDA margin of 10.6%, the highest level we have seen in several years. In Turkey, we continue to execute our strategy of prioritizing margins over volumes. While revenues remained stable year-over-year, EBITDA more than tripled increasing from BRL 5 million to BRL 17 million. This performance reinforces our confidence in the effectiveness of this strategy. Overall, the company reported a net income of BRL 18. 9 million in the quarter compared to a net loss of BRL $9.2 million in the same period last year. This represents a significant improvement in profitability and highlights the consistency of our operational execution. Net debt increased during the period, mainly due to higher accounts receivable balances in Mexico and in Turkey, reflecting the natural seasonality of the business. As a result, leverage increased from 2.25x net debt EBITDA to 2.47x. We expect this effect to normalize and reverse during the second half of the year. As we look ahead, we believe 2026 has started on a very solid food, and we remain optimistic about the prospects for the remainder of the year. At the same time, we continue to monitor the geopolitical tensions in the Middle East, which intensified in February. While the impact does not materially reflected in our first quarter results, we are seeing growing cost pressure globally, particularly in naphtha-related materials. inputs such as plastics and boluretane may be affected, although the magnitude is still uncertain. Freight costs are also showing upward pressure. From a demand perspective, so far, we have only seen softness in the activities are actually connected to the Middle East. We are closely monitoring developments and actively evaluating alternatives to mitigate any potential impact on our operations. Now, I invite you to follow the set of slides that's made available in our website. Starting with Page #2. We refreshed the highlights for this quarter. Net revenues of BRL 606.7 million, 11.6% above last year. we have growth across all regions led by the Americas with 19.8%. Gross profit was BRL 116.9 million, 19.3% gross margin versus BRL 91.7 million with a 16.9% gross margin in the same period of 2025 with positive performance again across all geographies. EBITDA of BRL 78.1 million, with 12.9% margin, which is 3.2 percentage points above the same period of last year. and growing 48.4% on absolute terms. Net income of BRL 18.9 million, reversing a net loss of 9.2% in the same quarter of last year. In Slide #3, we see the source of the growth in this quarter in terms of net revenues. And we see that the majority of it comes from the Americas, with South America growing BRL 26.9 million; and Central and North America growing BRL 34.6 million. Therefore, the participation of EMEA, region in the whole pie reduced from 43% to 39% because of that. In Slide #4, shows net revenues by region with the split of services and products. You see that for South America, there was a growth in products and services in the quarter. In Central America, there is a substantial growth in products of 43.1% and a drop in services of some 48.5%, and that's related to 1 of the key customers there in Mexico that postponed demand for remanufacturing products. In Turkey, European, Middle East and Africa, EMEA region, you see a stable volumes in terms of net revenue and a growth in services and a small drop in products. On Slide #5, you see the beautiful performance of the EBITDA of the company, growing from BRL 53 million to BRL 78 million in the quarter, a full 48.4% growth with all regions contributing South America with BRL 8 million Central North America with BRL 7. 3 million and Turkey with BRL 10.3 million reaching an EBITDA margin of 12.2%, which is a very good figure for all standards. Slide #6, you see our balance sheet after the capital increase that happened in 2023, you can see a much stronger picture with shareholders' equity growing slowly in shortly quarter-after-quarter, reaching a figure of BRL 458 million this quarter. The operational cash flow, picture shown in Slide #7, the pics see consumption of working -- of operational cash flow of BRL 66 million. And the reason here is that the seasonality of the business in North America and EMEA which demands more capital for accounts receivable, as you see there, a growth of BRL 148 million. And the growth in inventories is compensated by the growth in the accounts payable as well. Brazil, however, had delivered a positive cash flow for the quarter, which brings the picture for the whole company in terms of leverage, mentored by net debt EBITDA for the last couple of months from 2.25 the past quarter to 2.47 this quarter. But the true comparison should be made in the first quarter of '25 because of the seasonality of the business that I just mentioned. And then -- and here, the picture shows an improvement to BRL 2.47 million coming from 3.02% in the first quarter of '25. And then in my last slide, #8, the working capital picture in terms of inventory turns and days of working capital. You see, as I said, because of the seasonality of this quarter, growth in the total cash cycle from 61 days by the end of last year to 78 days in the first quarter of this year. But again, the fair comparison should be in the first quarter of '26, where you see a stable situation of 77 days. Thank you so very much for your attention. we remain available here at our IR department for any doubts that you might have. Thank you, and goodbye.