Good morning, ladies and gentlemen, and thank you for waiting. Welcome to the Raízen's webinar to discuss the results of the Q3 of 2021/2022. Today with us we have Felipe Casali, IR Head; Guilherme Cerqueira, CFO and IRO; and Ricardo Mussa, CEO. We would like to inform you that this event is being recorded and has simultaneous translation to Portuguese. During this event, all participants will be able to listen to the presentation. Afterwards, we will begin the question and answer section when further instructions will be given. Before proceeding, let me mention that forward-looking statements that may be made during this presentation regarding the company's business prospects, operating and financial projections and goals are based on beliefs and assumptions of the Raízen's management, as well as in information currently available to the company. Forward-looking statements are no guarantees of performance. They involve risks, uncertainties and assumptions as they relate to future events, and therefore depend on circumstances that may or may not occur. General economic conditions, industry conditions, and other operating factors may affect the company's future results and may lead to results that differ materially from those expressed in such forward-looking statements. Now, I would like to turn the conference over to Mr. Felipe Casali. Please, Mr. Casali, you may proceed. Hi, everyone, and thank you for attending Raízen's Q3 earnings conference call of 2021/2022 crop year. With me today are Ricardo Mussa, our CEO, and Guilherme Cerqueira, our CFO and IRO. We ended the Q3 of the 2021/2022 crop year reaching a new EBITDA record, where segments of renewables and marketing and services were the highlights. The strong progress we achieved on a consolidated basis attests to the strength and delivery capacity of our business portfolio. We continue to make progress on our return on capital employed and over 75% of our results comes from renewable or non-fossil sources, reinforcing our commitment on providing cleaner and sustainable energy on a global scale. Following the same dynamics of the last presentations, I will go through each segment highlights, so we'll have more time for questions and answers. Starting on the agro-industrial production, we ended the crushing period of the crop year achieving nearly 76 million tons, a drop of 13% compared to last year due to the drier climate and the impacts of frosts, which reduced the availability of sugarcane in the Center-South region of Brazil. The drop in agricultural productivity measured in TRS per hectare was smaller due to the higher concentration of sugars in the cane. As we have been disclosing every quarter, there is an important highlight here, the results of Raízen's journey to capture agricultural efficiencies and productivity gains. On the right-hand side of the slide, we show that our TCH, which measures the tonnage of sugarcane per hectare, was less impacted by climate than the industry average, both in the state of São Paulo and in the Center-South region of Brazil. This is even more relevant when we compare the first cut sugarcane with a slight improvement over the last year, while the state of São Paulo posted an average decline of 12%. This is an important metric to emphasize that Raízen continues steadily on track to reach the benchmarks. Regarding cash costs, excluding the effect of Consecana index, it's necessary to point out the elements that have been pressuring numbers. First, the crop setback that reduced efficiencies due to the lower dilution of fixed costs. In addition to that, inflation over agricultural inputs and raw materials, as well as the price of diesel that have also impacted our results. Speaking about CapEx, with the beginning of the intercrop season earlier than expected, there was an acceleration of expenditures on maintenance as well as HSE, focusing on the safety and integrity of our teams and assets. Regarding the projects investments, the highlight is the BRL 50 million investment made this quarter in the construction of our second generation ethanol plant. The start of works on 2 other plants is also expected to take place shortly, totaling 3 plants under construction during 2022. Moving on to the next slide to discuss renewables segment. The strong result reflects the quality of our integrated bioenergy platform. Despite the drop in volume sold, which is in line with the crop setback, we delivered a growth in revenues as well as some 30% expansion in EBITDA. In ethanol, we captured the market opportunities in our own operations and mainly in resale and commercialization, taking advantage of the price scenario both in local and international markets. The result was a significant contribution and improvement on profitability this quarter. It is always important to point out that we have been increasing our market reach, offering a unique portfolio of biofuel for several applications addressing different markets, which positions Raízen as a leading global biofuel player. As of this quarter, we have improved the method in how we report our average ethanol price, providing a better disclosure on how we maximize returns using our efficient logistics and market intel. Raízen ethanol price now reflects the average price of own products sold, plus the margin realized from resale and commercialization operations. In bioelectricity, the volatility in the spot market prices also contributed to the improved results. Important to remember that Raízen is the largest generator of bioenergy based on cogeneration in Brazil. We continue to expand our generation from other sources such as urban waste, biogas, solar and hydro, so all clean energy sources here for our production generation of energy. Continuing with the presentation, let's move on to the next slide to talk about sugar. The drop in EBITDA reflects the lower production and volumes of sugar sold during the quarter, in addition to the higher costs mentioned earlier. These effects were partially offset by improved prices for the commodity. We have been consistently efficient on pricing, taking advantage of the commodities upcycle in BRL terms, balancing the hedging of future cash flows and returns. As you can see in the chart, we have already fixed the growing prices for the next crops, which should ensure the continued improvement of returns in this business. This positive scenario reflects the smaller crop in Brazil with more ethanol in the production mix, the consistent growth in global demand for sugar, and the current level of prices that is below cost of production of most producing countries. We continue to expand our share in the sugar value chain, reaching 40% of sales directly made to destination without intermediaries. Our goal is to achieve 90%, increasing further our relevance in the global sugar trade flow. Let's now move on to the next slide to discuss the results of the marketing and services segment, which includes our integrated platform for fuel distribution and proximity in Brazil and Argentina and the recently acquired operation in Paraguay. The results presented here are on a consolidated basis and include the first month of the recently acquired operation in Paraguay. Sales volumes showed a recovery compared to last year, however, with a slight contraction from the Q2 of the crop year. The volume of diesel continues to grow, driven by passenger and cargo transport sectors, as well as agriculture. In the Otto cycle, volumes in Brazil decreased by 4%, which can be partially explained by the increase in COVID-19 cases and seasonality. In international operations, in addition to our entry in Paraguay, volumes in Argentina also grew. In aviation, our recovery in volumes should happen more slowly and gradually. Total adjusted EBITDA reached BRL 1.2 billion. This quarter's expansion reflected our efficient supply strategy in Brazilian operations. When I talk about the supply strategy, that includes imports, which became more important during the quarter on the new market dynamic, and inventory gains with price movements. We are seeing a healthier business environment and good opportunities to capture efficiencies and gains by optimizing our logistics infrastructure. We maintained our focus on the return on capital employed, which continued to make progress this quarter. In Argentina, the result was impacted by greater challenges in restoring profitability at the pump level. Despite the challenge of the quarter, we kept the focus on the long-term relationships with our clients and resellers, reinforcing our role of ensuring supply under any given scenario. Investments in the quarter were mainly allocated to the expansion and maintenance of our service station network. It is worth remembering that we are making investments to improve the product quality at the Argentine refinery in line with the current regulations, which explains the increase in both the quarter and year-to-date figures. In Paraguay, we started the rebranding of the stations, a process that should accelerate in the coming months. Now a quick update on proximity operations. Over the last 12 months, we accelerated the opening of new stores with 69 own OXXO-branded stores. With good set of results, we are accelerating new openings in line with our expansion plan. Shell Box, our digital loyalty and payment management tool, continues to evolve at an accelerated pace with more than BRL 5 billion transacted in the platform over the last 12 months. We also started operating the app in Argentina, and in less than three months, more than 60% of service stations engaged. Now let's move to the following slide with some financial consolidated figures. We closed the quarter with a net debt of BRL 19 billion, while net debt pro forma adjusted EBITDA leverage was 1.7 times, still affected by product inventories that will be sold in the upcoming months. We had some specific changes in the cash flow for the quarter, as shown in the reconciliation on the right-hand side of the slide, and I will highlight some of them here. First, the strong cash generation from operations of BRL 3.5 billion reflected the results of Renewables, Marketing and Services segments. Considering cash flow from investments, in addition to the acceleration of higher recurring CapEx during the intercrop season, we had the disbursement of the first installment for the acquisition of the Paraguayan operation and investments in Argentina that I mentioned before. In financing, the impact was mainly on higher debt amortization with lower funding levels in the period. Moving on to the next slide, let's review our guidance and expectations for the end of the crop year, the current one that ends in March 2022. Our portfolio maintained consistent and solid performance using the growth on the results expected for the year. We came out of a period of considerable volatility in demand, in commodity prices, exchange rates, inflation, and even on the weather conditions. We maintained it at somewhat wider range, which seems necessary at this time in order to absorb impacts that could occur in this more challenging environment. Starting with the operations of our bioenergy parks, with crushing already completed, we should have some sugarcane to be processed in March, so we're still within the plan, provided. CapEx reflects investments focused on keeping and maintaining progress in our agricultural productivity and already considers the impact of inflation on inputs and materials and along intercrop period this year. In renewables, we increased both ends of the range to reflect the good results of the Q3, which were above what we had initially projected. The last quarter of the year is likely to be more challenging as a result of the recent drop in Otto cycle demand in Brazil and prices in addition to the cost pressures we had discussed earlier. In sugar, we reduced the projections due to the lower volume produced, the higher Consecana costs, and the commercial strategy that may shift part of the sales to the next crop year to maximize the return and profitability from sales. For marketing and services, the guidance reflects the better performance of the business in the first nine months of the year. The Q4 of the crop year should also be challenging, as we have seen some reduction on the demand for the auto cycle in Brazil. Also, ethanol prices have been decreasing since November, possibly affecting supply strategy. In international operations, in addition to the incorporation of Paraguay, the recent price increases announced in Argentina may contribute positively to the results. Looking at the consolidated figures, we moved the guidance range upwards, resulting in a significant growth year-on-year. Before moving on to the Q&A session, on the next slide, we will give you a quick update on the progress made at Raízen's ESG journey. As you know, our commitment is to provide products and services that allow Raízen and our customers to reduce emissions. To go even further, we created a vice presidency area here at Raízen that combines the strategy, new business development, M&A, and ESG areas. That is led by Paula Kovarsky, who most of you already know. Recently, Raízen became part of CDP's prestigious A List, the highest level of the climate change ranking, and which showcases the company as an important agent in the decarbonization of the global energy matrix. We also took part in COP26, the most important global forum on combating climate change, and showed how Raízen and sugarcane can contribute to a low carbon economy. I invite you to visit our ESG portal, which can be reached through the IR website, and learn more about this and other initiatives that we are focused on right now. With that, I conclude the presentation, and we can now move on to the Q&A session. As a reminder, I have Ricardo Mussa, our CEO, and Guilherme Cerqueira, our CFO, here with me today. Thank you. Thank you. We will now start the Q&A section. Questions can be asked through the audio by clicking on the Raise Hand icon available at the bottom of the screen. At this point, a request to open the microphone will appear on your screen, and you should click on unmute. Participants who are connected by phone will be able to ask questions by typing star nine. The moment your question is collected, you will receive an announcement to unmute your microphone by typing star six. Questions in Portuguese will be received via text only. Luiz Carvalho from UBS would like to make a question. Hi, everyone. Can you hear me well? Yes, we can hear you. Go ahead, Luiz. Thank you. Hi, Mussa. Hi, Guilherme. Hi, Felipe. Thanks for taking the questions. I think that the expectation that you gave of the guidance made it more clear. I would like to explore three other topics. The first one is on the fuel distribution in Brazil, how you're seeing the recent changes on Petrobras. I would say strategy to actually make some cuts on the volume. The company has been already mentioning that it's very likely to make some adjustments within the contracts with the fuel distribution companies, potentially, I would say implementing the high credit risk, or even the volume difference between players. If you can comment on that. The second one is on the E2G. When we look at the CapEx that you disbursed so far, in our view seems a bit low, close to BRL 54 million. We were expecting somehow significant higher number due to the guidance that you provided, in terms of number of plants coming online. If you can comment about the CapEx base here. Very lastly, if I may, you mentioned about that you already increased the direct sale of sugars to close to 40%. If you can comment about the, let's say, the gains that you are making on margins front, from you know this strategy to try to get closer to the final consumer, that would be very useful. Thank you. Thank you, Luiz, and thanks for the question. The first one related to the recent changes on Petrobras, clearly what happened, what we saw on the last quarter of the calendar year was Petrobras not importing. That was very good, to be honest, because it clearly showed that the market moving to a market dynamics. I think the privatization of Landulpho Alves Refinery from the RLAM was also clear that changed the scenario. This was very good, to be honest, because it's the new dynamics that we always said was going to happen is happening. How this affect that, of course, the market has to be focusing more on supply and guarantee of supply. Our company, we never missed for our clients any single volume that they put on the table, the request. This gives additional strength for those companies that have the ability to supply either from imports or locally. Clearly, that's what's happening in the last quarter. We don't see that changing in the future. That's happening right now, the same thing that we saw in the last quarter. This is a new dynamic that we didn't have in the past, and it's working. Related to the contracts, Luiz, we already seen, of course, with the privatization of RLAM, this is already happening. With Petrobras, the same. Petrobras engaging new contracts with everyone, talking about long-term contracts that differentiate things like payment terms and credit risk and volume, so on and so forth. This is happening. Nothing that we of course cannot share here. Everything's confidential, but this is moving in the right direction. I think the main point here, Luiz, as you mentioned, is that the market is operating, is working. The good part of that, there is not any shortage of fuels in Brazil in the last quarter. That was very good. It was a very good test even for the consumer here that the market works and we can guarantee the supply of the entire country. To your point on E2G, you're seeing, of course, we are on track even a little bit faster than we anticipated on the investments of E2G. Already three plants under construction. You haven't seen that on the numbers yet. On the next quarter you will see even a little bit higher CapEx on our side in anticipation of E2G. The plants are pretty much on time, a little bit ahead of the game on the E2G. Direct sales of sugar, we cannot share how much money we are making on that, but it's because of confidentiality. On the last quarter. What you're going to see more and more, Luiz, once we move into the final destination, we will no longer follow as much the just delivering on the tape, because now we have more clients, and we need to decide what's the best for the client. You see that we moved part of the sugar from the last quarter, that's why you see on the guidance to the Q1 of 2022, 2023, because of client base that we need to reach and adjust our curve of delivery to them. This is the most important thing for us right now. What I can share is that we are very happy what we have achieved on margins, what we have achieved on service. More than that, Luiz, we are getting premiums for non-GMO, for Bonsucro certified. So we have multiplied by more than ten times the value that we used to get from certificates for those clients that pay that. So when we are selling to trading companies, that was not the case, and this is going to be reflecting our numbers in the future. I think the strategy, as I always said, is replicate the successful business model of ethanol in sugar, and you're going to see that over time happening, and we are even faster than we also talked during the IPO. Okay. Thank you, Mussa. Very clear. Thank you very much. Thiago Duarte from BTG Pactual would like to make a question. Thank you. Good morning, Mussa. Good morning, everybody. I'd like to focus my three questions on the sugar and renewable segments. The first one is just an additional clarification if I may on the guidance for the sugar, right? You mentioned three things when changing the guidance versus the previous guidance in the last quarter, right? You mentioned lower productivity, you mentioned Consecana cost, and you mentioned the carryover of more sugar inventories into the next crop. So just wanted to understand how each of these impact the decision to lower the guidance, right? Because my understanding is that the first two elements they were already there three months ago, right? It looks like the carryover of inventories explain the majority, if not all the guidance change. Just wanted to if you could walk us through how these three elements impact the change in the sugar EBITDA guidance. That would be the first question. The second question is one specific one regarding ethanol prices, right? If we look at your domestic ethanol sales and exports, and we try to understand what the average price was when we do the math for it, particularly for exports, we're looking at over BRL 8 per liter, right? Which is incredibly high and very compelling. Just wanted to get more color on. You know, clearly you guys have been making a very good progress in terms of developing new export markets and capturing premium and delivering to clients, just like Mussa was saying just now. If you could explore that a little bit more, I think it's very interesting, something that we could be missing, going forward. The third question is with regards to the first cut productivity on the sugarcane. I appreciate that you guys are keeping us updated on how the first cuts are evolving and they look very promising as you roll out this better, let's say, planting. My question is actually regarding CapEx, right? My understanding is that the CapEx over the last two years has been a little bit higher when we look at the planting CapEx. My question is, if you believe that this higher CapEx is something that we should expect for a few more years before you renew your entire sugarcane farms to this, let's say, new technology or new methodology that is yielding much higher productivity. Just a discussion on the CapEx and the better productivity. Thank you. Thank you, Tiago. Some great questions here. First on the sugar guidance, that's the major two points, and almost half and half is the Consecana impact and then moving part of the volume for the Q1 of the fiscal year of Raízen. On the Consecana impact, what happened, Tiago, is that the ethanol prices was much higher than we had on the previous guidance. What happen when you have ethanol prices going up, you have a switch between the Consecana. Of course, the cost of Consecana goes up, the ethanol price goes up, and the sugar price are fixed. What happens is that you reduce almost half of the BRL 400 million is coming from that. You reduce the sugar gains, but you increase the exactly same amount on the ethanol side. There is just a switch between ethanol and sugar. I even talking to Felipe Casali here about when you're talking about guidance, this is going to happen very often. We haven't done that in the past, so maybe combining those two on the guidance may be the right thing to do just to avoid these discussions in the future. Pretty much half of the difference here that we're talking about is a switch between lines, between ethanol and sugar. Nothing more than that. The other thing is when you're carrying stocks for the next quarter, that's much more related to our client base to do that. There is an advantage for Raízen doing that. Remember that we build storage facilities for that. There might be, depending on how and we are concerned about when we start the harvest. If it's going to be late AP or not, we need to guarantee volumes to our client. That's why we are doing that. It has no impact whatsoever on the year. There's no impact. It's just moving from one quarter to the other. On ethanol prices, again, we cannot open exactly the details of our commercial strategy. It's a bundle of very different things here, Tiago. We had a very good quarter on commercializing the higher grades to final destinations. We have very good results outside Brazil on our trading activities. We have also great results here on the commercialization of what we bought and the things that we sell. It was all in all, a lot of things. It has been very consistent to what we did in the past. Of course, when you have more volatility, it helps, but nothing different. Our risk profile hasn't changed. We remain with the same risk policy that we had in the past, so it's pretty much the same as going to the destination more than ever and trading much more than ever to final clients. Okay. On the first cut, you raise a very important topic here. I think the results that we are getting on the first cut gave us the confidence to move forward and keep increasing our planting. You should expect a record planting on this next crop season. We should still see high CapEx for planting for the next crop season. The reason for that, Thiago, is that I think we finally, after a few years, we managed to get this right, and that's why we are very confident. The results that we are getting here on the planting, on the quality, we changed the KPIs for the team, are always coming very, very good. We are fixing and we are right on track a little bit faster also on that stage. To your numbers, you should expect high investments on planting, high recurring CapEx for the sugarcane side. When you look into the prices that we see in the future, Thiago, this is pretty much a no-brainer to do that because you can really reduce the risk of those planting right now with very good prices going ahead. That's what we're doing. Justifying also these investments, because really is the right thing to do. For me, the most important is checking every quarter how is the evolution of that. Now also look into the second cut, and it's fantastic. So far so good. Very nice, Mussa. If I may, a quick follow-up. When you say that for next year you should be progressing even further in terms of replanting the sugarcane, does this by any means suggest that you will be sort of harvesting a smaller area? The reason I'm asking this is because whether this should impact how your sugarcane volumes, available sugarcane volumes will grow next crop vis-à-vis the rest of the center-south region. Yeah. Good point, Thiago. We, of course, we are right in the middle of the debenture here. We cannot share much projections because we are under the quiet period. In the end, we are prioritizing the planting. We see that as something that we really are more confident that we are doing the right thing, so we should anticipate that. We're seeing a record planting for us. Again, all that we are doing, we are hedging accordingly to make sure that we guarantee those returns moving forward. Again, next year also is going to be a good recovery on the weather, a more regular weather. This all in all, it will. I cannot share, Thiago. Sorry for that, for the quiet period of the debenture. I understand perfectly. Thank you, Mussa. Gabriel Barra from Citi would like to ask a question. Hi, Mussa, Guilherme, Felipe. I have two questions here following up the last question about the sugarcane productivity. As we remember, during the IPO, I think that we had a very challenging scenario for the productivity this year, right? Not only for Raízen, but in the center-south as a whole. Looking to the company estimate during the IPO that it was expected to reach something close to 96 million tons in crushing capacity in 2025, how do you evaluate these numbers today? Do you think that this target is still feasible to reach in 2025 or maybe you should expect a postponement in this number? This is the first question. The second one, talk a little bit about Cellulosic Ethanol business. For sure it's a really interesting business, great upsides. I think that in terms of demand and price, it's really not a problem for this kind of business. My main question here is regarding the company operation. If you could give us some color into the costs and expectation for this current capacity utilization in 2021, 2022, it will help a lot to us here. In addition, if you could give us an update on the company contract pipeline, it also would be really helpful for us. Thank you. Thank you, Barra. The first one. If you look into our results of this current crop season, you're going to see that we have very distinct. Look into our first and second crops harvesting are phenomenal compared to the market. When you look into our fifth and sixth cut, they're pretty lousy. In our average, we are losing less in the market, but very distinct on the first and second cut compared to the fifth and sixth. This is again a very good sign that we are on track. There is nothing here that changed what we talked on the IPO. We are even more confident. That's why we're increasing the planting because we are more confident that we are doing the right thing, and the numbers are showing that. We have zero concern about delivering what we promised on the. Of course, weather can change. For me, it's more important to compare us to our suppliers, compare us to the competitors to check the evolution. That's what the numbers are telling here, is that we are doing a much very better job than we anticipated at the beginning on catching up on the quality of. Of course, we have to deal with the old sugarcane. It is what it is. This it still have some in our system that in the next two to three years we should end. That's very good encouraging numbers. Not talking about one year, we are talking about now two years down the road that we already succeed on closing the gap. On E2G, I don't know if I understood your question correctly, but you're talking more, Barra, about the E2G contracts and cost related? Sorry, could you reframe for me to understand exactly what are the points- Sure ... that you raised? No, sure. I think that one thing is regarding the cost and the current capacity utilization in the current crop. I remember that you have like 41 million tons capacity, million liters capacity. I would like to understand what's the current production for this current crop. The second point, if you could give us an update on the contract pipeline, if there is any update on that, so in terms of price and volumes already contracted by some players. Please. Oh, great. No, understood, Gabriel Barra. Thank you for the questions. The plant, the run rate of the plant is great, so the current plant that we have, if you look, we run the plant by the end of this year at a very high level of run rate. Again, we are very confident on that. This is not a major plant. It's for the new plants, very pretty much similar to this one, but we have made corrections on the design of the plants that we put in that on this smaller plant. The market is better than what we had during the IPO. Prices are better, demand are better. We cannot share because, as I said, with the quiet period on the contracts. But everything from prices, demand from the client, the quality of the clients, and the length of the contracts are better than what we had during the IPO process. What I can share here is that we are more excited about E2G than ever. That's why you're going to see some acceleration on the investments when we talk about the next quarter. This should not change in the future. I think we still have some bottlenecks on the constructions. That's why we're not coming here announcing 10 plants in one year, because. If I could, I would, because the market is pretty much in our favor, both on price, both on volume and quality of the client base. I think what we should follow is really the CapEx, as Luiz talked at the beginning, how we are deploying, how it's moving, how it's progressing. That's a very important KPI for us right now to make sure that we deliver, because demand is not an issue and price is not an issue. Super clear, Mussa. Thank you. Christian Audi from Santander would like to ask a question. Hi. Ricardo Mussa and Felipe, thanks for the opportunity. Musa, I would like to start on the fuel distribution space. If you could comment after these excellent results in the Q4, particularly in Brazil, what you're seeing at the beginning of the year, in Brazil in terms of demand, market share, and whether you feel that these very, very high margins you're generating in the Q4 were not a one-off, but you know, you had several trends, right, helping these margins in the Q4, whether it was potentially inventory gains, among others. I was wondering how you feel about your ability to maintain those margins, particularly at the beginning of the year where demand may be a bit more uncertain. The second question, turning to sugar and ethanol, was if you could comment on your views in sugar and ethanol prices, right. Because we've had quite a little bit of volatility at ethanol prices coming down quite a bit. Sugar prices started weak but then came back up. What's your view for the beginning of the year for sugar and ethanol prices and what that means for your mix between the two products into this year? And then the third, if you could comment, you continue to improve on the sugar operations. What aspects of that improvement have come, in your view, ahead of your expectations, and which initiatives maybe are taking a bit longer? If you could just give a general overview on that would be very helpful. Thanks. Thank you, Christian. I think the first one on the fuel distribution, of course, we have with this new market dynamic, that's why I always tell to my team, I think structurally we are seeing margins should improve in Brazil. I always say that. There is going to be, of course, volatility on that because there is some inventory gains. You have situations when you have more. The arbitrage is, it's higher or lower, it depends. There is going to be more volatility on that. It structurally change. That's why you should always look into a more long term when looking that. It's very difficult to just check that month- by- month. What I can share here, and of course we know that we're on a quiet period. What I can share is that the dynamics of the market on the last quarter was a dynamics that we always have to follow here what's happening on the supply side. We clearly see our client base, our retail, the retail of Raízen very happy that we guarantee supply the service. Of course, the priority was our client base. What we did on that time was really prioritize our clients to make sure they have the volume. This, when that happened, you will see that we are not reducing the amount of conversions of white flags into Shell branded. Clearly at those times, the value that the market gives to a company like ours makes sense because if I say, okay, now it makes sense for me because I have guarantee of supply, good service. It's a differential that Raízen can deliver. It was great because we get much better margins, but we didn't have to give up on increasing our client base with the Shell brand. When you look into market share, sometimes you're going to see some drop in the market share, increase in market share on the White Flag side when you are selling to TRRs. For me, the most important KPI is how our branded share and how they're progressing, and that is still very good. We're still converting, we're still delivering very good results to that. On the Q1 of this year, we are seeing demand. Beginning of the year we have Omicron coming. You see on ANP a little bit lower volumes, especially on Otto cycle. That already answer your point here on the second question. Of course, we are seeing volume picking up a little bit more now, so looks like Omicron is already going behind us. We had a very rainy also the first month of the year. That was good on one side for the planting, but this also takes some volume away on the fuel side. That's normal business, right? That's nothing here that is structurally changing on the volume side of what we're expecting. We saw some reductions on the volumes on January, and we're seeing now the volumes recovering a little bit more. Margins, when you look into that, of course, we cannot share future views on margin because of the quiet period here. Structurally, they are moving on the right direction. That it should be the case. More than that, the Shell branded sites, we are helping that. We're still converting very good relationships, so we are not getting margins out of our distribution base. We are prioritizing them. That's very important. Sugar and ethanol prices, I think Brazil, you see gasoline prices lagging behind international market price. The same thing happening for diesel, but especially on ethanol, we are seeing very high prices of crude oil. It always depends on that. At current level, Brazil, at some point, Petrobras will have to make a move on the gasoline, that's for sure. Because this is not sustainable going ahead. Brazil is not self-sufficient on the gasoline side. It might take a little bit longer compared to diesel because the gap is lower. It tells me that down the road, there is some potential increase on the gasoline price in Brazil just by comparing the international market price. On sugar here, you see the curve is still on degradation. Even that those price level is very high in the end of the day, so it's very high prices moving ahead. We are keeping our strategy of hedging when you have very good prices and not taking any risk on that. We suffer a little bit compared to the spot prices this year, but we haven't seen that. As I always tell Christian Audi, the sugar prices, the main indicator here going ahead is how India is evolving on the ethanol program, and they are doing a good job on the ethanol side to move their sugar towards ethanol, so that's great. That keeps India away to be a subsidized exporter of sugar. That's very good for sugar demand in the future. The RenovaBio program, another program here that will create more stability on on ethanol demand in Brazil. That's why we're still structurally bullish on sugar prices on the long term. This is something to be very to take a deep look on how sugar production in India and ethanol production in India is moving ahead, and the same thing here in Brazil with the RenovaBio program. Having said that, Christian, we're still very I would say disciplined on the hedging policy of Raízen, despite the fact we're still bullish on prices. To your third point on aspects of improvements on the productivity here, I think we were very happy on the planting, on the quality. The first thing that we changed, Christian, was the KPI of quality, and not only the short-term KPI. Now my team has a long-term KPI for the quality of the planting, and that's the most important thing that changed. That aspect, we are very happy. That's why you see an increase on the planting side. I think the merger was also very good for the quality of the team. They had very good people there, so the mix, the blend that we did with their team, was phenomenal. No hiccup with a major transaction, I mean, like this, we had zero hiccups on the movement from combining the two companies into one single company. I think we did a good job on selecting the best of both, and the numbers are reflecting that too. Okay? Of course, climate was tough, but it was tough on everyone. There's going to be good years, bad years, but the bottom line results are really good. Great. Just a quick follow-up on E2G. Can you remind us how many contracts you've been able to sign already since the IPO or since the start, how many actual contracts have been signed with clients on E2G, please? We cannot share the exact number of contracts. Every plant that we are building are pretty much fully sold already with long-term contracts. We have more than 1 billion liters already under contract for the next 7-9 years. I think the point here, Christian, is that my bottleneck is not signing contracts. If I want, I could sign a lot of plants today, more than 10, 25, but that's not the issue. For me, the issue is the bottleneck in the construction. That's the major challenge for us. It's not the demand side, not price side, it's the bottleneck. That's what we've been working 24/7. Again, we have to be careful here not to promise too much that we cannot deliver. We're already going to three constructions pretty much soon, and one is pretty much on the way, the other two are coming and we are having every single week we are getting good feedback from the procurement team. There is nothing here, there is no pushback on the pipeline that we have. It's only the discussions how much risk we want to take on building more and more plants. We are taking this in a very disciplined manner too. I think demand and contracts, and again I'm repeating that all the time, is not the issue, and I think we are doing a good job on the bottleneck. The numbers should show that. As Luiz asked on the first question, I think the progress of the E2G construction is something that the market should follow very closely, the same way that we are doing. That's why we are always going to give you guys how is the progress. We had investors coming to our plant in December. They were very happy with what they saw. We can also take investors now to visit the second large plant that we are building now in Bonfim Bioenergy Park. Then the progress so far so good. Very on time, a little bit ahead on schedule. So nothing here to report that would change the course of E2G. I think the only good thing is prices are better, demand are better, and we are progressing the bottlenecking of the construction according to plan also. We are very confident that this is going to happen on a even in a better way than we talked on during the IPO. Mussa, this, the bottlenecking, when you talk about it, is it lack of manpower? Is it lack of equipment or a mix of both? It's much more on the equipment side. We have patent and we have IP on the equipment. It's finding the right producer and guarantee that we are protecting the intellectual property, the royalties that we're going to have in the future. That's the real bottleneck here, is the equipment side, not manpower. The building, it's not difficult. If you look into the sense of the, there's a lot of construction of plants is not the bottleneck. Bottleneck is just equipment, and the reason of the equipment is that they are made to Raízen. It's not something that you have on the shelf. It's a patent. Mm-hmm It's just for us. We have to be careful not to take a supplier that would take that project and take someone else. We are protecting very careful on the IP of the entire process, Christian. Very good. Thank you so much. We ask that each analyst make only two questions. Régis Cardoso from Credit Suisse would like to make a question. Hi, Mussa, Guilherme, Felipe. Thanks for taking my questions. Couple of topics I wanted to follow up, one on the recurring margin in the fuel distribution space. I mean, I suppose Q4 calendar year, right, Q3, crop year was helped by inventory gains and, price arbitrage, particularly in the regions in Brazil which are most importer of products. If you could comment on whether you believe inventory gains or the price arbitrage helped most these extraordinarily high margins in the recent quarter. also looking forward, it appears to me that embedded or implied in the guidance you published, there is a more normalized level of margins. There's certainly you know a lot of uncertainty because it bundles the many different regions, but it appears that in Brazil, margins would be anywhere between BRL 90-BRL 120. You know, definitely lower than BRL 155 or BRL 53 that you did in the last quarter. If you could comment on the you know recurring margins, inventory gains, price arbitrage in the last result. The other topic I wanted to touch on is actually looking forward, if you believe there is any impact from the dry weather in this harvest 2021/22, if that would in any way impact productivity in the next harvest 2022/23. Maybe also on those lines of what to expect for next year. There was this significant change in the results between renewables and sugar. Wondering if that is something that would repeat going into 2022, 2023, right? I mean, if the profitability would be mainly in the renewable side as opposed to the sugar side because of ethanol prices, hedges and so on. Thank you. Thank you, Régis, for the questions. The first one, of course, it's difficult to talk about giving you exact numbers. We cannot do that. On what we are seeing right now different from the last quarter, ethanol is moving down, so we are not going to have the benefit of inventory gains. We don't know yet, right? We still have by the end of March to see what's happening. Of course, the numbers of the last quarter helped, the inventory gains helped a little. It's not only that. I think the dynamic of the market hedges on when you have a discussion on supply security and the market became really more a market-driven and needing to have to supply from outside. We're also seeing that happening right now. We are seeing that, maybe not with the same intensity that we had on the last quarter. Think of there's going to be swings, on quarter- on- quarter, but structurally it should be a different level that we have. That's why I always ask the guys to look into longer, broader view to try to move away just from the movements of inventory gains and losses from one quarter to the other. This is going to happen all the way. We don't know how it's going to end this quarter, if there's going to be inventory gains or not. We are still seeing diesel and gasoline in Brazil lagging behind international parity prices. Let's see how the market will behave. Also, if there is going to be enough supply of diesel or not by March. There is still. That's why when we did the guidance here, as is, we still have some bend on what's going to happen exactly because of that, right? Unfortunately, we cannot share exactly how much was each one of those things, but it's going to be different from the last quarter for sure, right? I think the message is always hedges. I know that you are always trying to embed in the numbers what's how much of this should be appropriating to the recurring margins, if that's the right word. The structure is moving into a different level. The impact of the dry weather on 2023, I think. If there is an impact, the impact is going to be on the oldest sugarcane. I think the What we are seeing so far is still a little bit early. Good conditions for the growing new cane, but the oldest sugarcane that we had from the previous, that's suffering a lot. Any impact is coming from the old sugarcane than on the new one. Because when you have a sugarcane that was not performing well when you have dry weather, that's the most impacted. There's nothing much you can do about it for this next crop season. Okay? Related, I think you had a question about sugar and ethanol. It's just, I'll ask Casali here to help you guys going through what's the change when Consecana. Because we, for hedging policies, we do not hedge the Consecana exposure. This is what happens when Consecana moves, swings, like we had this big swing on last quarter on ethanol prices. That's what happened that makes a big change on the sugar. That should not impact at all the mix of both, right? Of course, it was exacerbated because we had the move of some sugar into the next quarter. That's the only thing that we have to be more maybe help you guys through the math of the impact of Consecana and what's on sugar and ethanol. For next year, we are still seeing max sugar. We are seeing very good prices of sugar. Of course, with those current prices of crude oil, we still see good prices of ethanol next year, but we hedged a big portion of our sugar already. The mix for us is pretty much given. We still have some ability to change, but should be similar to what we had this year, on the mix. Okay. Very clear, Mussa. Thank you very much for the comprehensive answer. Isabella Simonato from Bank of America would like to make a question. Hi, everyone. Good morning. Do you guys hear me? Yes, we can hear you, Isabella. Thank you, Mussa. Now just quick questions. First of all, on the ethanol, specifically this quarter, right? When we think about your realized prices that were very superior to what we see, right, in market prices and when we look at the breakdown of the results, especially on the export side. If you could give us more color, right? And if it was, what was the strategy behind it? It was just the natural export trade, or was anything different that brought such a big premium to this line specifically in the quarter? The second question is more moving forward. We understand that aside from Consecana, there's a pretty big inflation cost pretty much in every line, right? Diesel, fertilizers and et cetera. Can you anticipate a little bit how you guys thinking about sugarcane costs for 2022, 2023? And also, on the fuel distribution side, if you have any visibility on the end of federal taxes, right? On fuel. How could this impact your results, if you could quantify. I don't know if you have these analyses and you can share with us, but I think this will be helpful. Thank you. Thank you, Isabella. First, on the ethanol side, we, again, this is our, I would say, big strength of Raízen is really the ethanol, the commercial team. They did a terrific job, and they are still doing a terrific job on commercializing our ethanol abroad. So we have enhanced our position in Geneva and the position in U.S. We are doing a fantastic job on the commercialization. We haven't changed. We haven't take much risk compared to the past. Of course, this last quarter, Isabella, there was a lot of volatility. When you have a client base like we have and so many different origins of products that we do, it was a great quarter for the ethanol team. But they have been delivering over time very similar results and improving. It always depends on the volatility and what happens on the ethanol this quarter. Of course, this quarter, ethanol price going down doesn't help much compared to the previous one. We still have 45 days to go, so let's see what's going to happen. For me, the most important piece here, Isabella, is that I cannot be happier with my team here on the ethanol side on how we commercialize that. We never had so much client base. We never had so much product that we delivered to the final destination. It pretty much consistent to what we've been doing and just being in the game, sometimes the market gives you more opportunities. That's it, though. I cannot give you much more detail on that. The strategy is paying off, and that should keep going forward. Inflation for next year, we saw a higher inflation coming on agricultural products like fertilizers, you can see. The agricultural inflation, it's very high, but more than compensated by the prices that we are getting. We don't see those inflations being recurrent, so we see that as things that happen over time. It's not going to be embedded in our recurring. When you have inflation that is like paychecks for labor, that's something that is difficult. The manpower, right, to take away from the system. The inflation of maintenance, when you have steel going up, fertilizer going up, then you can consider that at some point in time will go back to normal. Prices are phenomenal, right, Ishu, in that sense. It's better results overall. Inflation is there. It's part of life. We are doing a good job on the procurement team to offset part of the inflation, but there is so much we can do, and the rest will impact us. I cannot give you guidance on that. Maybe we can share later some numbers specific on steel and fertilizer, what's going to be. It's going to be impacting us. On the fuel distribution, the federal tax, I think the it's a good discussion, to be honest. Remember that one of the major reasons why our business suffer is tax evasion. Anything that reduce tax, reduce the amount of tax evasion, for sure it helps us. Also anything that can makes the fuel cheaper, to increase volume also it's helpful. We see a big movement on the Congress to do that. I believe something is going to change, and I don't see anything that at the beginning, we saw some movements that we are concerned about. We saw the latest proposals, and they're all pretty much good in the sense of trying to reduce mainly ICMS tax, reducing tax overall. That's very good in a point. Not only reduce burden of inflation in Brazil and the burden on the consumer, but also reduce the chances of tax evasion. Whenever that happens, it's helpful to our company. We could expect this to be a positive side to us. Let's see. It's an election year, right, Isabella? Let's see what will happen. I'm confident that at least I've never seen so much alignment in the Congress that something should happen, something should change. At least the changes that I have seen so far, majority of them are on the right side, on the right direction. That's clear. Thank you. Lucas Ferreira from JPMorgan would like to ask a question. Hi, Mussa. Do you hear me well? Yes, we can hear you, Lucas. Okay. Two questions. The first one is, Argentina. How do you see the scenario, next coming quarters with, this increasing oil prices? You foresee still kind of challenging spread or margin scenario in Argentina? That's my first question. Second question is, regarding the E2G or let's say advanced biofuel global scenario. We discussed a lot, your projects, but wanted to see if you have an update on sort of the global market. Also, the same question around oil. Oil prices moving up, if you see there is a chance countries kind of push back a little bit on the blending targets. If there will be, in your view, pushbacks in that angle, if it's possible that this happen like it happened last year, right? How is your supply in general? I guess most of or a good chunk of your E2G will go to SAF, right? We see several other projects also aiming at this market in several countries, mainly U.S., I guess. How do you see E2G positioning in this SAF market? Thank you. No, thank you, Lucas. First in Argentina, there was the margin compression that we saw in Argentina on the last quarter because there was an election coming and YPF, the major player there, was not moving prices on the pump. What you saw here happening now in February that the prices move up was between 9%-11%. After the election, that's something that we were expecting. That's why we needed a guidance. We're expecting exactly this. We're expecting the government to go to election without any price adjustments, and after elections price was adjust. We are seeing now decompression of margins because of that. Of course, high prices of crude put additional pressure on the government there. They have some taxes on the export of crude that reduce. We have been able to buy below export parity prices to protect that and protect the margins. I think the scenario is a scenario that you see on the guidance here. We are not expecting a huge increase in margins in Argentina on the short term, but there was a very good sign with the price movement that happened in February, and that was a very good relief. We are back on track now. There is no elections on the next six to nine months, so we should see the market behaving on the right path. On E2G, the global scenario, to be honest, since we did the IPO, the market evolved even better than we anticipated. The discussion may stop to be on one plant per time. People want to talk more higher and bigger contracts. I think we have less difficulty right now to talk about this. We didn't have much difficulty, to be honest, in the past, but now we're talking about much larger volumes. I think the market saw that there isn't much volume, to be honest, especially on the non-crop based biofuel. That's where Europe is going to. When you see the current spot prices of non-crop based advanced biofuel, we're talking about EUR 1,500, very high prices. High prices of crude only support that. I haven't seen any change, to be honest, or any pushback. The pushback that are coming are much more the producer saying we cannot meet the targets. This for us, if you look into the overall size of the market, Lucas, it's nothing. It's we are really a drop in the ocean. For me, the discussion of Raízen is not whether we are going to put the 100% of our biomass of E2G into contracts. It's should we do that? Should we do that into contracts? Should leave something for the spot prices? Should we go to third parties? That's the real debate here. I don't see a change or a trend on that. Even the high prices of fuel only helps on that debate. To be very honest, I haven't had any pushback. I haven't seen any big project of E2G threatening our position here right now. So far so good, Lucas. Excellent. Thank you, Mussa. I would like to give the floor to Mr. Casali to answer the questions asked via text at the Portuguese conference. Yeah. Thank you. We got some questions here on the chat from individual investors. I will make two of them here to Gui and Musa. The first one to Guilherme Cerqueira, our CFO here, is regarding dividend. There are two investors here, Francisco and Antonio, who are asking about any dividend announcements or payout or payment going forward here. Yeah. Thanks. Thanks for the question. We don't give guidance on dividend payments, of course, but the idea is that we continue to pay dividends. We didn't pay in the year of pandemic. We paid some dividends this year already related to last year results, and the idea is that we continue to pay dividends. Of course, we have to ensure that to maintain our balance sheet strong. We have lots of investments to do in the next years for E2G and other very important projects, but the idea is that we continue to pay dividends, maintaining a good leverage in the balance sheet. Okay, thanks. Thank you, Gui. There was one question here from Vitor regarding E2G, but I think we explored that very well during the call. There is another one here, I think it's the last one from Felipe Gomes regarding our agreement with Scuderia Ferrari to export the E2G on the Formula 1. If you can comment a little bit more about this partnership with Ferrari. No, great. You see that the Formula 1 is moving towards a more renewable arena also, so they are imposing biofuels. When Ferrari came to us said, "Okay, we want to have E2G because it's a much lower emission to E1G." We secure a deal with Ferrari to supply to them exclusively our E2G, so the entire source of Ferrari fuels next year, of course, Shell does the all the additives to make even stronger. But the base, the E2G is going to be their base. That's fantastic also because this is showing to the public that if it's good for Ferrari, it should be good for your car. E2G is even better than that because much lower emission. That's a clear statement where the market is going to. It's great to have Ferrari supporting that path and then showing this is not only about. You can get both, you can get performance, and you can get low emissions. At the same time, in our case here, we've had good profitability, so it's a win-win-win. Thank you. This concludes the question and answer section. I will now turn the floor to Ricardo Mussa for his closing remarks. Thank you. I think, great questions. I think the message here, we are right on track. Everything that we talked about, the company during the IPO, I think we pretty much on track or better than what we talked. Of course, there's going to be always good parts and bad parts coming from the market, things that we do not control. But what's under our control has been a terrific year. We are beating. If you look into our numbers, we haven't had so many records on every single line, getting Raízen volumes on margins, on returns. So it has been a great year so far. I think the most important piece to me is looking for the long run. I always tell to the investors, "Just check the progress of things that are material to us, not only on the short term, but especially on the long term." How margins are structurally changed on fuels, how is the E2G progress, how is biogas progress, how is the recovery on our productivity, how is the sugar going to the final consumer. All those things that are really, really important for the company, I think we are doing a terrific delivering. The company, after the IPO, very sound on the results, on the numbers. I'm sorry, not only for the long term, but also on the short term. That's it, guys. Hope to keep improving on the format that we explain things to you guys. We saw some things that we have to improve also for the next round. Keep giving us feedback that we can progress. Thank you very much. Take care. Thank you. This concludes Raízen's webinar. Have a nice day