Raízen (RAIZ4) Q1 24/25 earnings summary

Executive summary

• Strong start to the crop year with record sugarcane crushing, robust operational and financial performance, and evolving priorities focused on returns from recent investments and operational improvements across all business pillars, including mobility, sugarcane, renewables, and power.

• Mobility segment saw significant margin recovery and profitability in Brazil, Argentina, and Paraguay, with Shell lubricants up 91% YoY and operational excellence in Latam.

• Renewables & Sugar achieved record sugarcane crushing, improved agroindustrial efficiency, and ramped up second-generation ethanol (E2G) with three plants (one operational, two near completion) and over 80 million liters annual capacity targeted.

• Continued commitment to disciplined capital allocation, deleveraging, and maintaining investment grade, with a focus on cash generation and operational excellence.

• Inventory build-up in sugar and ethanol expected to support future sales at better prices, with strong inventory positioning and fixed prices for the harvest.

Financial highlights

• Net revenue reached BRL 57.8 billion, up 18% year-over-year, with net income up 59% to BRL 1.1 billion; adjusted EBITDA was BRL 2.3–3.3 billion, down 29% YoY.

• Leverage increased to 2.3x net debt/adjusted EBITDA, with net debt at BRL 31.6 billion and average debt maturity over 6 years.

• Monetized over BRL 1.2 billion in tax credits this quarter, with a target of at least BRL 4 billion for the year and similar potential for the next three years.

• CAPEX was BRL 2.2 billion, flat year-over-year, with a focus on completing major investments and entering a cash generation cycle.

• Free cash flow for shareholders was -BRL 6.4 billion, reflecting seasonality and inventory build-up.

Outlook and guidance

• 2024/25 guidance: sugarcane crushing between 82–85 million tons, favorable cost dynamics, and expanding exports.

• Adjusted EBITDA guidance of BRL 14.5–15.5 billion (+14% YoY); CAPEX guidance of BRL 10.5–11.5 billion (-13% YoY), with focus on renewables and agricultural business.

• E2G program targets 4 operational plants and over 80 million liters of cellulosic ethanol production.

• Leverage expected to fall below 1.8x by year-end, supported by inventory sales and strong free cash flow generation.

• Mobility segment expects a new profitability plateau and network expansion.