Dexco (DXCO3) investor relations material

Executive summary

• Net revenue grew 6.1% year-over-year to R$2,018.5 million in 1Q26, driven by strong performance in the Wood and Metals & Sanitary Ware divisions, despite a challenging macroeconomic environment and continued weakness in Ceramics.

• Adjusted and recurring EBITDA increased 38.3% year-over-year to R$477.9 million, with margin expansion to 23.7%.

• Net income reached R$71.9 million, up 22.7% year-over-year, reflecting margin gains and operational improvements.

• Free cash flow was R$235 million, supported by disciplined capital allocation and strong cash generation.

• Celebrated 75th anniversary, emphasizing sustainable profitability and operational improvements.

Financial highlights

• Gross profit rose 24.2% year-over-year to R$553.8 million, with gross margin up 4.0 p.p. to 27.4%.

• EBITDA margin improved by 5.5 p.p. to 23.7% year-over-year.

• Net debt decreased to R$5,323.3 million, with leverage (Net Debt/EBITDA LTM) at 2.99x, down from 3.45x a year ago.

• Free cash flow was R$235 million, reflecting strong EBITDA generation and disciplined capital allocation.

• ROE reached 4.0%, up 0.6 p.p. year-over-year.

Outlook and guidance

• Management expects continued resilience in Wood and Metals & Sanitary Ware, with ongoing operational improvements in Ceramics.

• Cost pressures from commodities and logistics are expected to intensify from Q2 2026, but mitigation measures are in place.

• The company remains focused on portfolio profitability, operational efficiency, margin expansion, and cash generation.

• The company is prioritizing deleveraging and maintaining a conservative liquidity strategy.

• LD Celulose anticipates continued high productivity and possible improvement in dissolving pulp prices.