Welcome to Camil's video conference to discuss the Results of the First Quarter of 2023. Present here today are Mr. Luciano Quartiero, Director President, Flávio Vargas, CFO and IR Officer, and the company's investor relations team. We would like to inform you that this event is being recorded, and that all participants will be in a listen-only mode during the company's presentation. At the end, we will open for questions for analysts and investors only. We would like to emphasize that any forward-looking statement that might be made during this conference call related to Camil's business outlook, projections, and financial and operating goals, are based on beliefs and assumptions of the company's management, as well as information currently available. These may involve risks, uncertainties, and assumptions as they refer to future events, and therefore, depend on circumstances that may or may not occur. Investors must understand that such general economic industry conditions and other operating factors may lead to results that differ substantially from those expressed in such forward-looking statements. We will now start the presentation with Mr. Quartiero, followed by Flávio's presentation, and at the end, we will open for a 15-minute Q&A. Thank you. Hello, starting the crop year 2023, welcome to Camil's comments on the Results of the First Quarter from March to May 2023. In these first slides, we present an update on how Camil stands today as one of the most complete brand platforms with leading positions in the food market in Latin America. We have 35 plants and 23 distribution centers in South America, with more than 8,000 employees operating in the categories of grains, sugar, fish, pasta, coffee, and cookies in Brazil. In the international segment, we are present with grains in Uruguay, Chile, Peru, and Ecuador, in addition to a line of healthy products in Uruguay with the acquisition of Silcom. In all the countries, we also have leading brands in the regions where we operate. On slide three, we give you an overview of how we will present our results going forward. In 2021 and 2022 in Brazil, we added new categories to the portfolio that boosted the company's diversification. These categories, namely pasta, coffee and cookies, have relevant growth potential and higher added value. To facilitate market analysis and to align the publication of our results to our strategy, our communication will now be focused on three business fronts: the high turnover segment, which in Brazil comprises grains and sugar, the high value segment, which includes pasta, cookies, coffee, and fish, and the international segment, which combines the results from Uruguay, Chile, Peru, and Ecuador. Moving on to the financial highlights of the period, our gross revenue was BRL 3.1 billion, and our net revenue stood at BRL 2.7 billion, up 11% year-on-year. Once again, a record turnover, setting a new level of scale for the company. EBITDA stood at BRL 199 million in the quarter, with a margin of 7.5%. Despite the year-on-year reduction, we point out that the first quarter of 2022's comparative base was a strong one for the company. We delivered sequential EBITDA growth. We will elaborate on the sequential effect later on. What is worth mentioning is that on the operating side, the first quarter of 2023 was a result of the resumption of sales volume against the fourth quarter of 2022 in Brazil. At the end of last year, our industry was impacted by the lower seasonality and the temporary reduction of purchases by retailers. This effect led to lower volumes and also a lower dilution of fixed costs and expenses in the fourth quarter, impacting the profitability of the period. This first quarter of 2023, with the normalization of this effect and the resumption of sales volume, we saw a sequential growth of 1.2 points in the EBITDA margin. After the integrations and acquisitions that we have been through over the last two years, the company is now focused on sales and efficiency projects. We hired a consulting firm that has been working on a project to review our integrations, synergies, and expenses, focusing on maintaining our structure lean, agile, and integrated. In the commercial area, we continue to focus on the product mix with a greater added value and on training and structuring of our sales team. Among our priorities is our cross-selling, improving our strategy to leverage sales across categories. In Brazil, the operating highlights include a reduction in volumes in high turnover when compared to the previous year, but sequentially, we grew 23%. This result came as a consequence of the previously mentioned effect of the resumption of purchases by retailers. Profitability of grains improved in the period. We continue to experience an adverse impact on profitability in the sugar category, due to the more competitive pricing scenario from competitors. In the high value category in Brazil, which includes fish, pasta, cookies, and coffee, volume grew by 37% versus the 1st quarter of 2022, and 16% sequentially. This effect reinforces the continued growth of the new categories, as well as the entry of cookies with the acquisition of Mabel. Giving you a little bit more detail on each of the new categories, we continue to leverage our profitability with the recently acquired pasta operation, simplifying and repositioning the portfolio in the last year, which is driving the continued profitability of the operation. As for coffee, we keep growing our sales volume and working hard to gain scale, and also launch new products under the União brand. With one year and three months of operations, we grew our share from 0% - 5% in regions of São Paulo and Rio, with one of the most traditional brands in Brazil, that was once the market leader in coffee. Regarding the entry into cookies in November of 2022, which posed many operating challenges, we worked diligently and quickly reaped excellent results, improving volumes and also improving profitability since its entry into Camil. The grouping of high value categories represents an important step towards diversification of the company, with categories that have relevant growth potential, higher added value, and strong brands, which further boost our positioning as one of the main food platforms in Latin America. We remain confident in its growth and potential. On the international front, the result of the segment was impacted by the continuation of a challenging macroeconomic scenario in Peru and Chile. We made the necessary moves to minimize impacts in the segment, including our diversification with the entry into the Ecuadorian rice market and the acquisition of Silcom in Uruguay last year. Regardless of a more challenging macro scenario for our high turnover operations in Latin America, we are confident that our growth strategy and diversification has great potential within the company's growth expectation for the coming periods. 2023 is a very special year, as we celebrate 60 years of Camil's history with a track record of entrepreneurship and growth in Latin America. With a high value product mix and geographic diversification, we continue to strengthen our brands that are highly recognized by consumers in all categories and countries where we operate. I'll turn the floor to Flávio. You may continue, Flávio. Thank you, Luciano. Good morning, everyone. Starting the analysis of the quarter's financial performance, we reached BRL 2.7 billion in net revenue in the quarter, up 11% year-on-year. Cost of goods sold also grew due to prices and the entry into new categories. Our gross profit stood at BRL 550 million, with a margin of 20.7% in the quarter. SG&A amounted to 16.5% of net revenue for the period, with an increase in freight, trade marketing, personnel, and the entry of the cookie category from the acquisition of Mabel. In other operating revenues, we had the impact of the price adjustment and the revision of the fair value of the assets acquired in the cookies acquisition. With these effects, EBITDA for the quarter totaled BRL 199 million, with a margin of 7.5%. The net financial result showed expenses of BRL 105 million, due to the increase in interest rates between periods, resulting in higher financial expenses. Net income amounted to BRL 64 million, with a net margin of 2.4%. It is worth highlighting on slide nine, the recovery of the main indicators in a sequential manner. As mentioned by Luciano, the first quarter of 2023 reflects the resumption of sales volume vis-a-vis the fourth quarter of 2022, we improved profitability in grains and in high value. This effect, together with the price movement in the period, led to a 6% increase in net revenue, growing both nominally and in gross profit margin. Our SG&A remained flat at 16.5% of revenue compared to the previous quarter. This combined result led to a 26% growth in our sequential EBITDA, with a margin of 7.5%, up 1.2 percentage points. Our net income posted a sequential improvement of 303%, with a margin of 2.4%. This effect was also driven by taxes in the period, which included tax credit subsidy exclusions. The company's net debt reached BRL 3.1 billion, with net debt to EBITDA for the last 12 months of 3.5 times in the period. As a subsequent event, the company concluded the 12th issue of CRA-backed debentures in June of 2023. The issue consists of simple debentures in a single series in the amount of BRL 625 million, at CDI plus 0.9% per year, maturing in a single installment in December of 2025. With this issue and other fundings carried out in the last period, we are in a comfortable position to meet the company's commitments for the next 12 months. Working capital amounted to BRL 2.8 billion, higher than the previous year, due to the relevant seasonality over the quarters, more specifically in the rice category. In the 1st quarters of the year, our business model shows an increase in working capital, and the 4th quarter shows a free-up and improvement of operating cash flow. CapEx amounted to BRL 95 million in the quarter, including capacity expansion projects already contemplated for the pasta and coffee categories. In regards to ESG, our actions are reported in the new sustainability report, available to you at CVM and on the IR website, consistent with Camil's business planning for the coming years, and also in line with our focus on taking actions that are effective in our surroundings. We continue to highlight our efforts in the environmental area, with the acquisition of own generation of renewable energy through our rice operation, as well as our actions in the area of climate change. In terms of social investments, in addition to Camil's partnerships and support to several projects, we highlight the confectionery and business school, Doce Futuro União, which offers technical content on the preparation and commercialization of sweets as a source of income, and has already trained 652 people. After the end of the cycle, 42% of the participants stated that the production of sweets already represented one of the main sources of income for the family. As for governance, we highlight the performance and composition of our board of directors, with 67% of independent members, and also with the Women on Board seal. In case you want to learn more, I invite you all to read our report and contact our IR team in case you have questions or suggestions. To conclude, as already highlighted by Luciano, we are working hard to maximize sales and increase our efficiency with acquisitions in this new moment of Camil. Today, we have initiatives aimed at increasing our profitability and exposure to high-value categories, as well as working in internally with specialized consultants to optimize cost expenses in our structure. We are confident that both initiatives can lead the company to new levels of scale and profitability. We are now available to answer your questions in case you have any pending issues. Thank you all very much. We will now initiate the Q&A session to investors and analysts. In case you have questions, please press the Raise Hand button. If your question is answered, you can leave the queue by clicking that same icon again. Our first question comes from Gustavo Troyano, from Itaú BBA. You may proceed, sir. Good morning, Luciano and Flávio. There are two points that I would like to learn more about it. The first relates to sugar. Just want to understand the competition moment, which is a bit fierce at the moment. Would it be reasonable to assume that the margin competition in the consolidated numbers versus what Camil, you know, delivered in the past, is due to that sugar dynamic? I mean, if the grains were normalized in this quarter, could we assume that then the sugar would be running at a low digit margin? Would that make sense? Maybe I would like to hear from you whether you've experienced any other similar moment in the past, and whether you can make a comparison between this margin comparison in sugar at this point, when compared to other previous moments of the company's history. I also want to understand whether there is anything that the company could do to minimize this impact, or whether the normalization will happen as the industry becomes more rational. My second question refers to this new segmentation when you have the high value segment. Could you give me an update about the profitability of this segment? I just wanna get a better understanding about, you know, what you already bought with margins under, you know, more pressure, and what would be a normalized margin, and whether the break-even in the cookie segment has been reached. Thank you. Good morning, Gustavo, thank you for your questions. I think sugar, I mean, your question about whether we've experienced similar moments. I mean, with this intensity and with this duration, no. In the past, there were a few months when competition was, you know, under pressure for some specific issues. You know, with a length of time like this one, this is the first time, and I think this will still linger for a few more quarters. You know, when we will be feeling this effect. As we do not break down our margins per segment, what I could tell you is that this sugar impact, and with this margin compression that we are experiencing with this segment, and also considering the drop in volumes that we had in the past quarters, is just a result of that. We've been closely monitoring prices, and we are trying to strike a balance, you know, in terms of when we insist in our price, how much volume we lose when we try to defend our margins. We probably let go of volume in the past quarters in an attempt to hold on to our margins. This margin restriction, maybe giving you a flavor of the impact that that could have in the high turnover segment, may fluctuate between 100 and some basis points. That is a significant impact for us. I believe that the solution or maybe the end of this period in sugar can be in two ways. I mean, we think that it will take a few quarters until things go back to normal, or in order for it to shorten the time, this will depend on greater rationality on the part of competitors. I would say that I don't think it will be any worse than what it is now. Even though, you know, this statement may be, you know, strong, I don't think it can be any worse. Now, in terms of value, pasta has been quite an interesting segment to us. I think that since our entry into the segment, we've been going through a long learning curve in a short period of time, and also facing many adverse scenarios. Right when we started in this segment, we were hit by the war in Ukraine and this spike in the wheat prices, the company navigated very well through that period. Now what we are experiencing is a significant drop in the price of wheat, and we are very curious to learn what will be the impact of that to the market. We are closely monitoring prices, you know, all over the place. Not only I mean, if we look at the macro scenario, not only looking at the retail prices of wheat and, you know, sales, the impact of sales due to lower purchasing power, we are closely monitoring this market to see whether there will be any additional drop in the prices of pasta. I mean, there has been a significant drop in the prices of wheat, over 20%. We have to see how things will evolve going forward. Profitability in the pasta segment is doing well. We are performing very well. We are investing in, you know, increasing capacity. We are looking at this segment with a lot of optimism, not only in terms of margin, but also in terms of potential growth. Now, looking at cookies, we said that there will be, you know, a period between six to eight months, and last quarter, we announced that we reached break even. Now, our margins are performing very well on a positive side. We are not yet where we wanted to be, which would be, you know, having a two-digit margin. We are halfway through our path. The company is quite optimistic about this segment. We are now in the process of recovering margins, but this also depends on higher sales volumes. We still have a lot of idle capacity in our plants. We are within our course, and we are probably ahead of the curve in this path. As for coffee, sales continue to grow. As I mentioned during my presentation, we already reached 5% of market share in a few markets. Now we are experiencing some decline in prices. Any drop in prices in any segment poses challenges. We are also feeling that our competitors are becoming more aggressive. This has impacted our margins. That's why the high value category margins are being pressured down. Fish. We are experiencing the post-lent period. The peak of sales happened between November and March, approximately. The lower sales volume occur in the months post-lent. This is the period where we find ourselves right now. That's why, you know, lower fish sales, when we look at the mix at the high value category, this is what put prices down. When we look at the high turnover and high value categories, the performance is better, despite all of these challenges in the high value category when compared to the high turnover category. I think I was able to answer your question. I don't know whether you have any additional question. It's very, very clear, Luciano. Thank you so much for your answers. Our next question comes from Mr. Pedro Fonseca from XP. Sir, your microphone is enabled. Good morning, Luciano and Flávio, and the entire team of Camil. My first question is about the tax reform. We know that there are still a lot of things that are yet to be defined in the pipeline, and maybe probably some of your products will be part of their basic staple, but there are still a lot of things to be decided. In your internal studies and analysis, do you have any estimate of what will be the impact of that tax reform to the company? Or maybe do you believe that there are still some points that should be addressed? If you could give us some light about the tax reform impact, I would appreciate it. My second question is just a follow-up on what Flávio said about pasta. In your release, you said that you are repositioning and simplifying the pasta portfolio. Could you please give me a little bit more light about what are the actions towards that, and what do you expect in terms of profitability and volume, you know, as a result of this strategy, comparing where you are today to where you want to be after you do that repositioning and simplification of the pasta sector? Thank you, Pedro, for your questions. As you said it yourself, the tax reform still has many issues to be defined. Considering the current landscape and looking at everything that has been approved up to now, the company remains optimistic. Our business, I mean, every category will go through different impacts. When you look at the concept of the basic staples, what is in the basic staple? Rice, beans, sugar, coffee, and pasta. That's a very significant, you know, number of products that our company produces, so the impact would be quite good. Cookies and fish would then be taxed. Looking at the categories that are part of the basic staple, in the grain category, all of the incentives we have in different states in our segment, unlike what happens to other companies, we always include that in our price formulation. I often refer to the Pernambuco plant when there is an incentive that reduces the tax rate for ICMS in that state. We put all of the benefits in the pricing of that product, and those that are out of that state may not be as competitive in that state. We always consider all of the incentives in the price formulation, when there is a reform that ends up with that, for us, that's very good. Because this goes straight to pricing, so we have no losses, and when you have regions where there is any tax barrier for the entry products, then I can become more competitive. I have the possibility of being more competitive with that. Otherwise, I wouldn't have that same benefits with the tax barrier. With rice and beans, this is very good for us because it opens up a lot of opportunities in Brazil, and that is the ideal scenario that I always dreamt of having. With a zero tax rate, you almost eliminate the unfair competition coming from the informal players. We become more competitive, and the informal players will probably, you know, have no effect. When we go to sugar and coffee segments, our plants are located in producing regions, so we understand that there might be no impact. Once the tax rate is eliminated, I think, you know, in terms of the basic staple, this new tax reform can be very positive. What could be, you know, the things that the company would have to do, like a changing footprint? There are very few plants that will be affected. This example that I mentioned about Pernambuco or Recife, it's something that we still have to see how things will work. All of our other plants are located in regions that are producing regions, and in this sense, we would not have to allocate plants or use any additional CapEx. The simplification is quite welcome. We are looking at all of the complexity that we have today, so the end of this complexity is quite good for all of us. The company is quite optimistic, and we see just positive impacts. These are my comments about the tax reform. Speaking about pasta, we reviewed the entire portfolio when the company was acquired. There are some things of lower volume that were performed by third parties, so we are reducing the number of SKUs. We are focusing more on lower pricing brands and brands that we already had that had low profitability. That portfolio review and the simplification refer to items of low margin and low value. In the more specific case of pasta, with this lower pricing brand, we are, you know, taking a closer look at that because it had a negative impact on our margin. I think the second part of your question on pasta about profitability and volume. With all of these fine-tuning adjustments, the impact on profitability is very, very insignificant. We have a very good profitability level with pasta, and the growth in terms of, you know, our industrial expansion for the coming years will also bring about further improvements. I think these would be all my comments. Thank you, Flávio. I just have a follow-up on that first point, and thank you for your explanation. That was very clear. According to what you were saying, I think that should be competitors or other players that will lose competitiveness in case this reform is approved. In your view, do you think Camil should resume, you know, its path of M&A? M&A is something that the company is always looking at. I mean, the current scenario, with the current level of interest rates and also taking into account the company's leverage, we are more focused internally and not looking at M&A so much. Certainly, M&A is always an option for the company, you know, to grow further. We have to wait and see, and wait for a better interest rate scenario. We have to also look at the cash generation in the period, certainly, this is something that opens new opportunities. Right now, you know, you have to think about it, you know, whether we will gain competitiveness, who will lose, or where are the markets where we can have a better performance. So far, as I was saying before, we remain very optimistic, and there are many good opportunities along the road. Thank you. Thank you very much. Our next question is from Mr. Tiago Raduyn, from Citi. You may proceed, sir. Good morning, Luciano, Flávio, and the team. I would like to elaborate on two points. The first point is about profitability in the international segment. I understand that the Peruvian market is probably struggling with its margins, whereas on the other side of the platform, the market in Chile is performing a bit better. Does it make sense to say that? I mean, does my view make sense, and how do you see the outlook for these markets going forward? Should we probably see further stability going forward? The second point is probably more objective, relates to coffee. I would like to get more information about capacity management, where is it today, and how we would like to see the company going forward in the next quarters. Thank you. Thank you, Tiago. Thank you for your questions. In the international segment, Peru is a challenge. We are looking for alternatives, and we are putting a lot of efforts in that country, and there are some things that we will exploit further in the second half of the year. We see potential for a slight improvement in Peru going forward. Looking at the other countries, Chile, in fact, had a margin improvement, and apparently, the margin has been recovered. What I mean to say is that the margins are returning to its historical levels, and apparently, these margins will be sustained. Looking at Ecuador, we are quite optimistic. Ecuador is going through a stress in local production as, consequently, rice production locally, and that's why prices are escalating. This is a good opportunity for the company because our supply capacity in Latin America is quite high. Therefore, we should experience higher margins significantly higher than the usual margins for Ecuador. Ecuador, therefore, has a very positive effect. Speaking about Uruguay and splitting Uruguay into two operations, Saman is performing as expected. There are some synergies that we are managing to capture because we are unifying the sales system in Uruguay. In regards to grains, you know, which is the bulk of Uruguay, we had some one-off events in the first quarter that will not happen again going forward. Therefore, in summary, profitability for Latam in the coming quarters should be better than the performance we posted this first quarter. The company is very optimistic with the international segment for the coming quarters. Speaking about coffee again, we just concluded our capacity expansion, and in bulk numbers, we are reaching over 5,000 tons a month, and the last phase involves an equipment to produce in vacuum. We have a lower capacity equipment, but the second phase is of another equipment that should be completed and installed in the second half of the year. With that, we conclude our capacity expansion for coffee. There has been a slight delay, but nothing that has jeopardized sales. Therefore, our willingness to grow in the second half is still very much in tune with what we expected, because we are growing our available capacity. Any other questions? No, everything was very clear. Thank you very much. Next question comes from Mr. Guilherme Palhares from Santander. Your microphone is on. You may proceed, sir. Good morning, Luciano and Flávio. I have two very quick questions. Yeah, we talked about demand before. Demand has been a very important issue, particularly in the fourth quarter, due to retailers. You said at the beginning of the call that this is a situation that is going back to normal. Is this something that has been happening in all segments? I just want to understand: How do you see the behavior of consumers? When we look at the different channels, I would like to understand whether you see any changes in terms of consumer behavior between the different channels, and whether this poses additional challenges or maybe some benefits for the company, you know, as you have probably a higher share in some channels where consumers are heading to. Well, Guilherme, our feeling today is that the entire process of inventory reduction started back in August and September, and this process is already over. This is our current feeling. When we look at some customers, we see that they are operating, you know, in terms of inventory days, below historical levels. This reduction process brought about some challenges, not only to our customers, but to ourselves as well, because of the supply chain. It was painful, but we feel that that's over. I think that the major adjustment has been concluded. Now, looking at the end consumers, the expectation, and still talking about our own feeling, is that with deflation and the fact that many items had price reductions, and one of the cases is coffee, the purchasing power of consumers may increase because prices are lower. This should bring about further normalization. In the first months of the year, these consumers look for different alternatives because, you know, they couldn't afford to buy as much. In the second quarter, considering price reductions, things became a bit better. As you were saying, we are part in different channels, so depending on where, you know, there's higher demand, the company has all of the necessary capacity. We haven't felt any significant change, but in July, in particular, in the last 10-15 days of the month, we saw customers going back to their historical levels of consumption. This is a good sign, and that's why I say, you know, at the beginning of my answer, that this inventory reduction was probably over. I believe this is what I have to say, just to answer your question. Perfect, Luciano. This migration of channels, the understanding is that there is no structural migration that could pose any further challenges to the company, right? Yes, you're right. Thank you. Thank you, Luciano. Our next question is in writing by Mr. Carlos Goma from CG Investments. He says: Good morning. First of all, I would like to congratulate the company for the presentation. However, there is something that concerns me as an investor. The increase on the net debt over EBITDA to 3.5 times, does that concern the company? Is there like a ceiling that you impose for this indicator? Thank you. Thank you for the question. I think that leverage topic or net debt over EBITDA topic is not something that concerns us, but the company is always very, you know, alert. Just to put things into context, the company has, you know, a seasonal dynamics, and this impacts our working capital numbers, and that's why the leverage indicator may fluctuate throughout the year. There is a growing curve in the first and second quarters due to the cash positioning that the company needs to have to run the operation. In the third or fourth quarters, you have a working capital free up, and therefore, there is a reduction in that net debt over EBITDA ratio. The ratio that the company has in most of its contracts is 3.5 times of net debt over EBITDA ratio. This ratio in 2025 increases by four-folds, you know, net debt over EBITDA ratio. Therefore, the company and the management of the company, we have been monitoring this leverage level so as to comply with all of the indicators. Still on that note, it's important to remember that the company, you know, is actively managing its liabilities. In this last month of June, the company just concluded a new CRA-backed debentures of BRL 625 million, with a cost to investors of CDI plus 0.9%. The company also conducted a series of one-off transactions with its main financial partners to do a refinancing, trying to look at the need to get refinancing in our amortization schedule for the next year. In terms of cash, the company took some measures to face that amortization schedule for the next 12 months. Today, the company is not concerned, but we are constantly looking and monitoring all of the KPIs so that our financial management is up to speed and according to schedule. The Q&A session is now concluded. Camil's video conference is now concluded as well. We thank you so much for joining us, and we wish you a very good day.