São Martinho (SMTO3) investor relations material

Executive summary

• Third quarter results were impacted by lower sugarcane productivity and TRS due to adverse weather, reducing sugar and ethanol output and raising unit costs.

• Net income surged 169%–168.5% year-over-year, reaching BRL 424.1 million in 3Q26, driven by subsidy credits, tax credits, and mark-to-market derivative adjustments.

• Adjusted EBITDA margin for 3Q26 was 49.4%, down from 57.4% in the prior year quarter.

• Ethanol sales volume dropped nearly 40% sequentially, with inventories shifted to 4Q for improved pricing.

• Corn ethanol production and processing increased 3%–3.2% year-over-year, supporting segment performance.

Financial highlights

• Net revenue for 3Q26 was BRL 1.59 billion, down 13.6% year-over-year, mainly due to lower ethanol sales and prices.

• Adjusted EBITDA for 3Q26 was BRL 787.1 million, a 25.6% decrease year-over-year, with a margin of 49.4%.

• 9M26 net income totaled BRL 663.3 million, up 46.9% year-over-year.

• Net debt at December-end was BRL 5.8 billion, with Net Debt/LTM EBITDA at 1.82x, mainly due to higher working capital and CapEx.

• Cash position at year-end was BRL 3.4 billion, with a comfortable debt amortization schedule and minimal short-term refinancing needs.

Outlook and guidance

• Expectation of improved productivity and cost dilution in the next crop year, with potential cost reductions of 10%-15% if 24 million tons of cane are crushed.

• Cost reductions and margin improvements are expected by the end of the 2025/26 crop season.

• Corn operations and processing volumes remain in line with guidance.

• Ethanol sales were strategically shifted to 4Q to capitalize on better prices.

• Maintenance CapEx is projected to remain stable at BRL 1.9 billion, with productivity gains driving further cost efficiency.