Good morning. Welcome to the video conference of MDS Branco with reference to the results of the 2025. We I have with us today Gustavo Lopez Tidozio, Vice President of Investments and Controllership and Fabrice Fali, Director of New Business and Investor Relations. We inform that this event will be recorded and that during the presentation of the company, all participants will be only hearing the teleconference. Afterwards, we will begin the question and answer session only for analysts and investors. The translation is available clicking on the button interpretation. For those listening to the conference in English, the original audio in Portuguese can be silenced clicking on mute original audio in the lower part of the screen. The transmission is also being done simultaneously on YouTube and the address www.youtube.com.ri.mds. We'd like to also mention that eventual declarations, which may be made during this teleconference relative to business perspectives of MDS Branco, projections and operational goal and financial goals, are beliefs and premises of the directors of the company as well as information on information currently available. They involve risks and uncertainties and premises as they refer to future events, which depend on circumstances which may or may not happen. Investors should understand that economic conditions of the industry and other factor operational factors can affect the future performance of MDS Branco and lead to results which differ materially from those considerations mentioned here. I'd like to pass it over to Senator Gustavo, who will begin the presentation. Gustavo, please go ahead. Good morning. Welcome to our teleconference results for this second semester. Before we start in the numbers, I'd like to initiate expressing my thankfulness to the entire MDS Branco team for the excellent performance which we have seen in this quarter, a direct result of the dedication and the work and the passion of each one of our collaborators, each one of our employees. We have the pleasure to announce that thanks to these forces, MDS Pananco had a quarterly with very solid results, showing the resilience of our business and the efficacy of our strategy. Even though the challenging scenario, the company has had a performance, a financial performance, which was in relation to creation of value, operational operational efficiency and the evolution consistent evolution that we have been commenting to you all in our calls results in our results calls, earnings calls. I'm going to pass it over to Sefali, who's going to start off by pointing out some of the points, which marked highlighted this performance in the period. First of all, our net profit reached $16,000,000 which represents an increase of 14% in relation to the previous year and overcoming over surpassing significantly the expectation of the market pressured greatly by the efficient financial management and EBITDA of three forty an increase of 2.4% year on year, demonstrating a controlled expenses and and general expenses of sales and administrative expenses representing 28% of our revenue. When we compare it to last year, this group of SG and A represented almost 24%. And we talked a lot about the initiatives for optimization, increase of productivity, and many actions which we have taken of cost controls. We expected an absolute number year on year. We not only neutralizing inflationary impact, however, beyond that we made real savings year on year over and above inflation. This represents a free cash flow, operational free cash flow of $416,000,000, almost doubling in relation to the same period of last year. Growth of 97% beyond the discipline. Lots of discipline in SG and A and working capital. We are closing the free cash flow of $228,000,000 maintaining our AAA rating in Fitch and our solid capital structure and a with a very low level of leverage. We are we're looking at future opportunities for growth. These results are reaffirming our strategy. We're implementing for quite a while, focusing on strengthening our commercial capacities in this area as compared to last year. Just looking at these I expect to earn these results, see these results, and continuing this search for sustainable growth with attractive margins for the coming quarters. I want to thank again all of your presence and pass it over to Sefali. And afterwards, we'll come back for questions. Fabio, please go ahead. Thank you all very much for the introduction. Good morning to everyone who are accompanying us in our second quarter call. Before starting entering the numbers, I'd like to just mention that this image which is on the screen is a photo which was taken at the sales convention of MDS at the beginning of this year, which united all of the areas of the company, that sales team, the industrial manufacturing, logistics, finances, HR, sustainability, marketing, absolutely the entire team and shows that everybody Our first question comes from Mr. Go ahead. Thank you very much for the opportunity. Congratulations on the results. I have two questions here. First, the release mentions a readjustment in trajectory of investments with areas for greater possibilities of growth in principal products. If you could detail the regions and qualitatively, the principal effects, positive effects that you see helping this result for the quarter? My second question is about the effective tax rate, which was quite low. Thank you for your questions. I'm going to start off by talking about the effective rate, and then we'll look at the first quarter, the first question. First of all, a question of the context. We had an effective rate in this quarter close to 3%. We commented in recent quarters that due to the taxes investment subsidies, we should have an increase in the effective rate, partial increase close to 15% in an annual vision, perhaps having some volatility quarter on quarter, principally due to the effects. And that's exactly what we saw in this quarter. It was a provision of expenses in The U. Results financial results with reference to some losses in swaps in noncash effects, which could affect which could change in the future. Swaps of these debts in dollars where we exchanged dollars for CDI. So there was appreciation of the real in this period. And so we had this unfavorable impact on our cash, which winds up contributing to this rate, effective rate in the quarter below 15%. However, perhaps in a more structural way, in the annual vision, idea the would be to consider a rate closer to 15%. Let me also add here one comment. Fabio, listen to the effective rate. Fernando, thank you for your question. We also launched this quarter credits after the new law which taxes these these subsidies, calculating over the quarters, we're seeking together with the governments the approviation approval of the different assets which are in the courts. We were able to have a approved list by the government's asset by asset at the end of the quarter. So this quarter now, you'll see a credit to to the depreciation. The taxation of fiscal incentives accumulated for the quarter and then they have and but released only in this quarter in the coming quarter. This is Fabio again. So going back to your first question in relation to the expansion in the regions with the greatest potential for growth. We're talking basically about the South Southeast, and I think it's important to point out that some questions have been done during recent months. The first, we have a united team, which looks at Brazil as one day as one market from the standpoint of commercial for the principal business areas, which are cookies, crackers, and pastas and margarines. We have the synergies with the other areas of ideas from the angle of our clients segment from the point of view of our clients. The second point is that the entire process of revenue management, which involves both the process of pricing as well as the management of commercial's revenue management, we have done a good equilibrium with the pricing, the growth in volumes and margins, the investments in marketing, which have been done, both for the construction of our brands as well as such as Pirake, which is a very important brand in all of Brazil, but especially in the Southeast as well as the investments in marketing and in trademark in The U. S. Stores to give turnover for our products and also to cite some free examples. For example, we have in fact contributed to gaining improvement these regions, which have the greatest potential for growth. Thank you, Fabio. Thank you, Gustavo. Our next question comes from Felipe from Scotiabank. This is Fabi from Diaz. Send this question by email. I'm gonna read this question. Later on, we will respond. Filippi asked for us to comment about prices and the implementation phases of competition. The question is the following: the price readjustments, are they completely implemented? Or do you think that you will need to make new increases? Especially But what I can see to see is time look at wheat production wheat production doing well. The Americans have with their, harvest. We have a a provision of 22,000,000 tons. Brazil had a slight reduction in area in Parana. But in general, when we look at the global offering, we don't see for weeks any perspective from pricing. The exchange rate in Brazil is has pulled back. Looking at these scenario, we don't see any perspective for big increases. MGS has gone to the market. We've got out first. We released our price list before our competitors did, and all of the competitors have been accompanying our prices. We had several specifically in pastas, which had a slightly lower prices, and we lowered our prices sequence. And in the month of July, when you compare the price of the mix. It has changed. We can confirm that everybody want them. Price index The following. So there's a disconnect. There's no disconnect in pricing. But the future, the thing that is extremely strategic is some sort of a category which has gone less than it should with some specific impact of some specific raw material, but in the table for these products, which is not what we're seeing for this year unless the scenario changes completely. Our next question comes from Santander. Please go ahead. Jeremy, thank you for your question. Good morning. With respect to the question of tariffs, we don't see the standpoint of purchasing between Argentina and Brazil, we have 80% of our wheat comes from these two countries and comes from US and Canada. So looking forward We're looking at these trading companies, we don't see any risk outside of raw materials, any relevant differences in raw materials. Trading companies. On the top line sales blood materials in export area, which has a ball the top line in The US market. But initial work was selling something like 5,000,000 million dollars per month. This represents 0.5% of the total sales. But it's also nothing relevant. We wind up presenting we're producing in Uruguay, which will help a little bit. But it will have an effect sales, normally, The US. As far as the deactivation of factories, remembering that we deactivated Rio. Factory for cookies in the interior of Sao Paulo in the city of Les Sois, Palistas, Rio De Janeiro continues the same way. The company is hibernating these factories, doing maintenance and other factories without production. And in the case of Les Sois, area of the region South Southeast region. This has helped us this caused us to reactivate the factory in Swiss Polynesia is also in hibernation. To North Face mentioned that we would be deactivating it temporarily until the volumes grew enough to to justify it. So that's exactly what happened. We thought that this would be something for the third or fourth quarter. But previous call. But measures taken for by the new team have already started to have effect at the end of the second quarter. So So these actions deliver are the results going forward? So this has caused us to reactivate that factory to not run any risk of having a shortage of products for the market. We're very much concentrated on this. Our next question is Peter Fonseca of XP. Please go ahead. Thank you for taking our questions. First of all, I wanted to make a follow-up regarding prices. There's no expectation on the part of the company who have to change prices before the end of the year due to the cost scenario. But I wanted to hear from you what have you seen The second question is in relation to had an efficiency. Very interesting this quarter. I wanted to hear from you a little bit more about in relation to that, what should we expect going forward? The new run rate that we should expect from the company Or if you have little bit more used to squeeze out of these measures that have already taken. According to my external things. Hear from you more about start here with Then Fabio can complement. As far as prices, the market has matured. We see anyone doing anyone doing anything crazy as we've seen in the past. We create various commodities or exchanges. This generates confusion. Because they not everybody has a hedge or inventory on hand. And sometimes it takes a while to to implement these price changes. Maybe smaller companies don't have an area for revenue management, So it's more complicated when you have these huge macroeconomic type of changes. What we're seeing now with the Market being more stable. Means that the We have less critical mass, less volume, and we have done an important job of efficiency and the operation of our distribution center, the size of our fleet. And the evolution has been very relevant. In fact, our cost per ton, we have an economy of savings excluding the volume of the purchase. The company is operated in a more efficient way. I see opportunity for reduction in selling costs. The marketing is We've We've actually held on a little bit on that team as big I think I said filled big trades. Now we have everybody on board. So we imagine that the campaigns the marketing campaigns will begin in a more consistent way. So I would say as far as selling expenses, I see I see the cost of serving. And board investments and board of sale with parking. But that's what we see looking forward. I don't see overall, I don't see any big changes in the level of SG and A as a whole. Minus on between eighteen percent and twenty percent of net revenue will be our target. This is Fabio. Just to add to the points in relation to this point, which Gustavo mentioned. When we look at the selling, selling has logistics, marketing, commercial expenses. The cost of freight in the '24 to the '25 per kilo fell 3.8%. This is the direct results of all of the initiatives that we have underway for the reduction of this line for the search for productivity, such as, for example, the delivery of products from factories directly to the stores without the need of certain items passing through our distribution centers. Another important point for us to mention here is the question of marketing. In recent years, we've launched made important launches, product launches such as the Unfried Almond from last year and this year, the decision was to slow down the number of launches and focus on what we already have in the portfolio. So this is demanding a little bit less in marketing investments. And part of that budget is being allocated in the trade area to give Our next question comes from Isabella Simonata from Bank of America. Isabella, please go ahead. Thank you for the Two questions. First, focused on dynamic revenue. Still calls our attention the performance of volume even when we look at the semester. Year on year 2023, the volumes are are lower. So I wanted to understand understand that you're not gonna need to raise prices. But really, moving what is up to the company to execute it for the category overall. What do you see in the way of performance going forward? You mentioned the reopening of capacity, increasing capacity, but in our vision, it seems seems very pressured. I'm not sure if it's too clear what you've done with the implementation of prices in the last two calls. For the fourth quarter. If I understood correctly, the message was that you were not going to lead the price increases in the category. In the in line with the with the pricing differences of the is not categories. Think that's However, what said here is that this changed a little bit And you this time, let the price increases, the recent price increases. And when we compare your prices to your performance Of course, there is impact from the mix. When we look at combined. Lot of the categories. You said went a little bit beyond that. Mix, mister Fond duplex. Your mind is how you're thinking about the strategy of pricing increases that are healing, but I'm So we can have this a little more your release direct to the station for the factory to the retails using our own in house fleet. Understand what's the magnitude of this the strategy of distribution. What can we think in terms of the impact of that change? Okay. Isabella, this is Gustavo. Thank you for your question. In terms of volume, the volume is Isabella and Gustavo, got the When you look at the 11 and other companies in the world, they've all had price increases, but the volume of 11 the eleven three have had some type price increase very subtle growth in volume. The whole world is with this. These costs is growing worldwide have brought the prices in, and the consumer has been feeling this for some time, these price increases. So that's what's happening with the market. The cookie market overall, it grew by are things that we cannot control. There are subcategories where everything says 70%. Yeah. Specific is on the market. Whole market to grow we're part that. That. Generally, we have a more resistant market. Resistant to higher pricing space. So it challenges once again to have a better is extremely relevant. We have to come out from What we're doing is more care. Super. The company is having more agility to correct price increases that we're not by the rest of the market. These gaps that we've seen the past, we don't see them anymore. We come out first. We miss out our prices in category by category, region by region. But, eventually, when a competitor doesn't follow us, we have enough agility price. Remembering that The market has fallen all over the world. And so in that case, it's a large part of that price has come from that Direct distribution has a lot to do with the big volumes. Lots to the cash and carry market. It aims basically at the South Southeast where you have a higher level of efficiency and better margins for serving. I don't have a dimension to give you. Perhaps in the next quarter, we can give a little more perspective about how much that will mean to us over time. This is Fabio. You could comment it. Gustavo's comment here. In the next quarter, we'll bring a little more granularity about that question. The question on the direct distribution, what happens is happens countrywide in terms of potential, In terms of magnitude of these movements, we look at the line of freight. In the second quarter, and this is what's in our financial statements, we'll see that there was a a reduction of 3.8% per kilo, as I mentioned in the previous question. In nominal terms, something close to $21,000,000 and does reduce expenses in that area. However, the next call will bring more granularity on that question. Thank you. Question comes from Ehike Bustoni from Ehike from Bradesco Bebe. I also have two. First, for the question of volume. It's really our cost. It should have an improvement now in terms of cost, especially in margin, not just by the cost, but also due to the increase in volumes and fixed costs. If nothing happens, the third quarter and the fourth quarter are better quarters than the first and second quarters of the year. Historically, this is our trajectory. In our case, we see that the actions underway are already having an effect. Out. So that the sales come together with the consumer. We don't want any retailer to be stocked in certain ways and not and not by the following month just at a moment when we have financial costs with the ceiling at 15%. We are doing plans through plans with the traders so that the goals of these plans in according with our sellout. Is changing very quickly. Faster than we thought. The receptivity on the part of the traders for this type of plan has been very well received. We've had good reception. So looking ahead, I see growth in volume by itself with the seasonal question. Growth in volume due to the improvement in the processes, focus on sell out. This is Fabio. I just wanted to add to what Gustavo mentioned that your question that gives us confidence that we can maintain the same level, same traction. What we've seen in recent months is consistency in volumes. Selling the volumes with consistency with the sellout. Pushing the which has been very favorable for the profitability in the quarter. This consistency that we've seen over recent months gives us the confidence that we can maintain same level of volumes. Very good. Thank you very much. Our next question comes from Thiago Duarte from BTG Pactual. Thiago, please go ahead. Fabry, Gustavo, it's good to talk to you. Two questions from our side here. First, I wanted to ask for We have to some information that you used to open up in the past both with respect to the channels. Some of things that that these elements and vision were significant impact in that which we're seeing. Certainly, will be others. But we look at at these initiatives, several of them are heading in the direction of almost the opposite Is there anything Terms What do understand about this commission? This is correction. Brings to the company. Years. Taking advantage to give a when we talk about market share is a line which map. It it was that's so great. But if you could explain that a little bit more for us. Thank you. Correction. But the difference is the past. Since 02/2013, better process of scaling up the brand, which was very concentrated in Rio De Janeiro, is Kalamak. Well known in the rest of the country. So, naturally, we had to do a branding mark more which was more investments in recent years. So it wasn't branding. Was it was it necessary? I think it was. Yes. I think the results are there. We more than doubled our sales for the Piriquet brands. It is exposed now in virtually all of Brazil. So there was some important branding work to reach that sports devil. This branding work was also very important at this moment. The necessity of bigger pricing. So we've made various attempts to extract but we haven't been able to find this formula. However, conceptually, we're that would have made time that made sense. Percent. We had capacity for pricing, it would be 13%, more 13%. We have a much lower level of pricing power. Exactly what we see at the current moment. However, not with the stable, the stability of the brands. And as Fabio showed that research of recall most present in Brazilian homes. Not because we're gonna not invest in branding, but it is a moment for to reduce a little bit and increase which we have not been prioritizing branding in the past. It's a little bit of the dynamic. These increases in prices have brought us to the loss of market share. It's a big job for execution. So I think beyond that, we need to improve the investments, to increase, to improve this execution. I need to get my product on the on the shelf. The thing is to incinerate the client to pick out our product. How do I do that? By having more sampling in the stores, more in extra sales points, sales, promotions. Investing with the retailers has been a little bit of we're telling our minds. We have to do that to recover your market share that you mentioned. So that's a little bit the logic that we're using. For sales, direct sales market check. It's not a relevant change. Have few opportunities for sale, direct sales. We have lots more industrial plants in the Northeast than in the collections, better involvement with the with the support of the trade marketing teams and the point of sale. We have this change in the service review via direct sales? Did you wanna mention anything, Gustavo, about these channels? Yes. So in relation to I think you must be asking about average prices. Looking at what we've seen in the evolution from the first quarter to the second quarter, there was no big impact of mix between the channels or even between the regions or geographies. The principal differential that permitted an improvement in the mix has a favorable impact on the average price Our next question comes from Lucas Ferreira from JPMorgan. Lucas, please go ahead. Cash generation was very strong in this quarter. But as I see, must have been some gap in the line Looking at the graphs which you which you showed up on raw materials The numbers are still looks like there's still some more price. We have palm oil falling prices falling due to date in dollars. They were all 15 percent to date. You can be. If at the of sale if you're seeing the results of these of Lucas, this is Gustavo. I'm gonna start here, and then Fabi can jump in afterwards. Nothing changes. There is a price improvement already contracted. We see the exchange rates improving, palm oil and wheat prices helping us. However, this freeing up of of working capital has two effects. It has to do with volume as well, the volume stocks. Compared to the previous We have more stock of wheat. Now it's stable. And the stocks are smaller. Inventories are smaller. So it's not just a question of costs, which is From the standpoint of costs, yes, there will be some from the volume of of weeks. Brent stocks are okay. The stocks then? Okay. So we have a much better control of that. Stocks, we can see better costs going forward. At the CapEx, we don't see any big changes coming. CapEx Perhaps for the next We'll have a project of modernization. We're doing a study of that. First discussions with the council on Friday. We have certain things that we're gonna need to do improve our operational costs, our cost of production. It's not gonna hit us this year. We had the CapEx normalized without the effect that we saw last year of At the the SAP. Our next question is from Gustavo Toriano from Itau BBA. BBA. Gustavo, thank you for your taking on questions. I wanted to ask about a little bit more. Is comparison of the top line with the Nielsen data shows the performance of selling of the company performed above the due to this The first point that we when we monitor in our inventories of the f g FGS items in our clients. No big change. No change. Up or down. We are able to have visibility both in the retail clients and also in reading and in distributors. So we don't see any overstock in our clients. I think your reading is correct. The sell in comes in before the sell out when we look at the numbers for the quarter and some reading of the very short term which I've already started to appoint to a recovery of share. Okay. Great. Thank you very much. The question and answer session is now closed. And I'll pass the microphone over to Gustavo for We're his final going to see his posters this time. But thank you all very much for participating with us in this earnings call and reinforce our speak with you, take any doubts or questions you might have. We're very confident in the future. Certain that the we're starting to pick up the results that we imagine will be consistent with our our strategic planning. So once again, thank you all very much. Video conference of MTS Branco is now and we thank you all for your participation, and have a good