Good morning. Starting our call today, I think that, as usual, we try to summarize, in this case, what the year of 2025 was like, bringing some highlights for you that afterwards we will have the opportunity to go into details.

I think the summary of what we did in 2025, what we demonstrated in 2025, it was a year of solid performance of the company. The company came from two previous years where it was performing a turnaround, and in 2025, we can already see what is a consistent growth, performance, and efficiency of the company.

There are a few points to highlight. When we look at the international growth model, which is one of the pillars for our strategy, we see that in 2025, our volume grew 5%.

In Europe, one of our main markets, we saw a growth of high single digit after two years of decrease. In the US, in addition to maintaining the model we have been selling, we had the change in the business model, and we believe that this change will create the conditions for us to grow in the US because now we have a distribution partnership with Eastman, which was signed in 2025 and it was kicked off in January 2026.

In the international distribution markets—basically, we're talking about Africa and Asia and the Middle East—we also had commercial execution much more focused, eliminating some problems that we had last year with excessive inventory levels or excessive sell-in to our clients, and gaining increasingly more consistency and increasing profitability. This was a region where we used to have prices that not necessarily were aligned with a strategy of profitable and continuous growth of the company.

We handled these more structural problems, and now we can see EBITDA margins which are more consistent with the long-term strategy of the business. In Brazil, we had been experimenting a recovery, a commercial recovery, and now we see sell-out increase of 4.8%.

That's extremely important because we have been telling you consistently that our strategy is that our sell-in will accompany our sell-out. We operate in a business cycle where the sell-out generates demand, and from there, we supply the market, which demonstrates that we had a higher demand in 2025 and brings a perspective of continuous growth in Brazil by showing these high sell-out levels.

In the fourth quarter alone 2025, the sell-out was even higher. It was 8% growth, but in the consolidated number for the year, it was 4.8%, which we consider positive.

The growth always reflects in market share. The sell-out we are experiencing is not only a benefit of the category.

We are more competitive with a more competitive portfolio, with a more competitive commercial strategy, and more capacity to compete. This demonstrated the preference of consumers for our brand.

The two channels which are the most strategic for us where we see the biggest opportunities for growth, which is the specialized channel and the direct-to-consumer, or DTC, there we saw a double-digit growth, which means that these channels are growing faster than the overall growth of the company, which is completely aligned with our strategy because there is where there is not only a better mix of products, which is more profitable, but also because there is where we have the biggest opportunity for market share gains. We have had this strategy for a while and we are executing it, and we can see the results now.

As for the marketing and portfolio, which is the third pillar of our growth, there are several good news to be shared about 2025. We said back then that we were going to follow in the growth of the men's products where we had a smaller participation in the market, and we are seeing good results.

We launched many [words?] , especially [words?]

that have a larger strap or offer more comfort, being this the preference of the men's audience. We see, as a result, a growth in the sale of this men's product family much more accelerated than the overall growth, which, again, shows that the strategy is being executed and creating conditions for us to keep growing in this specific segment where we can still gain more market share.

The Havaianas brand, as we mentioned in previous years, for several reasons, the strategy of the marketing investment in the brand was recovered. In 2025, we consolidated that.

We went back to gaining brand awareness, which is a very important thing for a brand that is massive as Havaianas is. After a few years where we had lost brand awareness, in 2025, once again, our brand gained brand awareness among Brazilian consumers, and we recovered this brand awareness.

This is the beginning of the outcomes of our efforts invested in marketing. We have a better mix of products because of the combination that we're selling more in the DTC and specialized channels.

We are selling more of those innovations, these new products, product releases, which have a higher profitability and higher price point. We're also being able to improve the product mix in Brazil, which resulted in a 10% increase in the return per pair in Brazil.

This is one of the sides. When we look at the other side, which is the allocation of capital and efficiency, we also see improvement.

The first one is about the simplification of the company. We have a Shared Services Center that we brought in-house in 2025, and the goal was first to reduce costs for this Shared Services Center in itself, but more important than that, is to create conditions that starting in 2026 will be able to allow us to continue in the journey of efficiency and simplification, bringing increasingly more activities which are repetitive and can be automated in our center, therefore reducing the costs in our several branches and functions of the company where these activities are performed nowadays.

We see this is a great big step in the simplification journey. We also implemented the SAP S/4HANA in Europe, which is another tool for simplification and the creation of this journey of simplification for the future because it's a much more modern and efficient and effective system to handle our business in Europe, which will allow us, in such an important and strategic market, will allow us to manage our inventory in a more effective way, to manage our revenue generation in a more effective way.

We believe this is going to be a tool that will make it possible to reduce costs, gain efficiency, and also allow the growth in Europe for the next few upcoming years. We continue in our journey of on-time in-full, OTIF, levels, making the supply chain work in a way that clients receive the orders they had placed on the right day, on the right time, with the right quantity.

We, you probably remember, left from 30%, in other words, most orders were not delivered in this accuracy level, and now we are reaching an 80% level. Out of every 10 orders, more than eight are already delivered on the right day, on the right quantity, and with the right products, which means that our consumers are going to find our products at the time they are looking for at the stores they're looking for, which certainly has contributed to our sell-out levels and contributed to our mix of products.

We are still managing our business based on the sell-out. You can see that all the growth we observed both in Europe and in Brazil, as well as in the international distribution markets, was because the sell-out is positive and not because we are creating idle inventory in the chain, which then in the future will turn into smaller sales margins, sales to the end user.

Now we have increasingly more visibility of the sell-out from all of our clients in all of our markets. In Brazil, for example, we have almost 90% visibility of the sell-out.

In Europe, we have a reasonable opportunity to see that. Now the challenge in 2026 is to gain this visibility of the sell-out in these international distribution markets, especially in Africa and Asia, we can manage our business model better.

Last, as for the people, we have a yearly engagement survey, and this year, it was a fundamental year because during the turnaround period, we needed that engagement of our teams was growing, and we can now see the results. We grew compared to the previous years.

We reached a 70% 70% of engagement, 70% of people are saying that they are happy and they would recommend other people for people to work at Alpargatas. This is not the number we want, although it is a good number.

When we look at some breakdowns, when we look only at the admin personnel, we are already above 85%, which is an excellent number, and we would like to continue. Exclude the factories, for example, where we want to keep growing this engagement number.

We are going to be talking a little bit more during André's presentation, but a few important points: this year, we returned 1.2 billion Brazilian reais to shareholders in a different number of formats. We increased our return on invested capital, and this is a priority for 2026 and forward.

The inventory levels, which was a pain for the company because it was in excess and it was not an inventory of quality, it was not from current seasons, it was from inventory seasons. Now we have resolved those pains.

Now our inventory levels are at normalized levels. More importantly, they are in a condition that today are from the current season, we can sell at a full price and at full.

Not like previous years where we had to give aggressive discounts or to have write-offs. We so as to say sanitized the inventory levels.

Last, the EBITDA, which is a consequence all of this, has reached record levels in the profitability of the business. I think the summary is that 2025 closes the cycle of a turnaround which we started back in 2023.

We believe that the strategy that was defined with three pillars of growth, and three pillars of efficiency were adequate and they were achieved. They, by the way, will not change.

They will still be the pillars we will continue to pursue in the upcoming years, but now based on a foundation that is firm, solid, sturdy, and under control so we can accelerate our growth. Thank you very much.

Now I give the ground to André, our CFO.

Good morning, everybody. Moving on on the presentation, I would like to start by talking about like a global standpoint of view of our volume and sales.

In the fourth quarter, we sold 67 million pairs globally, which is a 2% growth compared to the fourth quarter 2024, which was affected especially by the international where we saw growth of sales in all geographies. When we look at the USA market, we see a growth of 300%.

Obviously, this growth is not organic based on demand. It's resulting from a change in our business models since May, when we made the announcement of this new partnership, the new operational model we were going to have in the US.

We have been telling you a little bit about this transition, right? In 2025, it was exactly the year we expected to run this transition, and we did it.

Part of this included selling our inventories present in the US so we could actually close all the warehouse and all the warehousing contracts and all other contracts in the US. It was important to take this first step in the transition and make this transition into Eastman.

This volume of obviously shows and reflects the old model and the anticipation of model to them is part of the business model that is now current so they can start the year prepared in 2026 for their selling season. When we look at the Europe market, we had an important growth.

It was a weak period. It is a weak period in the Northern Hemisphere, but yet we saw 30% increase in in the European numbers, which consolidate a season that was, overall, a season of growth at high single digit, which is an important symptom after a few years where we had our sales volume compressed.

Going back to grow in Europe, which is an extremely profitable market, it is important. This is where we would like to see this growth happening, and it is happening.

As for the international distribution markets, which covers all the other global geographies, we also saw a growth after a first half of year, which, you must remember, we saw a strong contraction of sell-in when we were reducing the inventory levels in the chain. Now in the second half, we grew like 70%.

This is also based due to the comparison basis. In the fourth quarter 2024 had also been a very small volume, but we also see a recovery of volume in those geographies.

On the other hand, in Brazil, in addition to seeing a very strong growth of sell-out, especially in the last quarter of the year, we also had diminish decreasing this sell-in compared to the fourth quarter 2024, following the discipline that Liel mentioned, because we're not they're not going to be aligned all the time, we need to be managing them all the time. In average, the sell-in and sell-out must be balanced.

It was, did, in 2025. We commented a lot about the 20 throughout the year in 2025 and about the sell the the sell-out in advance that we made of the inventory in the first half of 2025.

We operated those inventories in a way that to manage to sell them and operated them strategically in a way that we could make the market stocked at the right moment and unstocked in the right moment without compromising the sales to the end consumers. On the next slide, I'm going to show you the same vision, but for the whole of the year.

We saw a growth of 1% in the entire year. All the geographies, except the in this IDM markets, saw growth.

In the US, we have a 50% growth. Basically, all the growth comes from this transition into this partnership with Eastman.

We exclude that, our volume would have been close to flat compared to the previous year, therefore without any surprises because it's a relatively stable volume that we had been able to sell in previous years, but it was important to walk this transition for the reasons I mentioned previously. In Europe, we can see the whole season, the whole year, with a growth of 80%, which is an important symptom of our recovery.

In the IDM geographies is where we can see some loss in compression, but an increase compared to the first half of the year. In the first semester, in the first half of the year, we had seen a decrease of about 32% in of decrease, and in the four the second half of the year, we had an increase strong growth closing the year near a balance compared to the previous year.

In Brazil, we saw a growth of 1% in the sell-in, even though our sell-out expanded much more than that. This way, we unstocked the chain throughout the year, which was an important movement to, considering our strategy.

Moving on to the next slide, I would like to talk a little bit about our cash generation. We generated above 250 million Brazilian reais throughout the year.

It was near zero in the fourth quarter, and this is connected to the cash flow, which grew in the fourth quarter for reasons I'm going to explain to you, but mainly as drivers of this bigger sale we had in certain geographies and in certain channels, and also because of the acceleration of our investment levels at the end of the year, but totally within what we expected for the year and the numbers we had predicted, forecast in our plan. When we look at our leverage, after a reasonably long reason of stability under zero, now we are back to a leverage, yet in a very comfortable position for the company at 0.8.

We are making a better use of the sources of capital for the company, and we did this movement through a a meaningful distribution of interests on own capital and also dividends, which took us to 0.8 leverage. We will continue to administer and manage this leverage, but it's also a something that tends to reduce as we generate more cash in the upcoming quarters.

It's something we are constantly monitoring and managing the company in a way that we are in a company structure capital structure which is optimized. On the next slide, I show you the working capital variation.

As I told you, we had a consumption of 97 million of our working capital. This consumption is connected to the composition of channels.

We grew our sales in the channels which are channels of a higher deadline for the for the payables. The modern channel and the specialized and franchise, they usually have higher deadlines for payment, and also we had a higher growth in the IDM markets.

There is also because of the another effect of the receivables, which is due to the transition to the sales to Eastman, and those receivables are still to to be due along the year of 2026. This consumes a little bit of our working capital, but without any risk, relevant risk for the business.

This is part of the driver, and this is part of this additional volume we sold in the fourth quarter of the year. When we look at the investment level, CAPEX, or CapEx, it was a little bit higher in the fourth quarter, and this is the natural trend in our business cycle.

When you look at the graph, the movement along 2024 was quite similar. We also We always start the year less accelerated, and then after, as projects catch up, we invest more in the fourth quarter.

The overall amount of CapEx invested was as it was forecast in the year and approved by the Assembly of Shareholders, it was totally aligned to expectations. On our next slide, speaking a little bit of Brazil, the Brazilian market, we saw a sell-out more accelerated in the fourth quarter, a sell-out of 8%, which is extremely relevant and important.

Liel has already mentioned a little bit about the reasons behind this sell-out, but even though we had this sell-out, our sell-in was a little bit smaller than in the fourth quarter 2024 precisely to make this balancing of inventory in the chain. When we look at the full year, even though the sell-out was saw an increase of 4%, the sell-in grew 1%, which allowed us to deleverage over the year about 1 million pairs.

If we look throughout the quarters, this movement was quite a difference in the first and second quarter where we stocked up the inventory in the chain, and then in the third and fourth, we destocked the chain. It's a kind of a swing like to find this balance in managing this chain inventory levels so we can always keep the inventory at the right place, at the right moment, with the right quality.

We don't miss our sales nor have excess of stock in unwanted places where we don't want. We are carefully doing this management, and what we see as the most important to be highlighted is the end users or consumers demand.

They are going to the points of sales and looking for Havaianas. Also, the net sales per pair, it's an increase of 10%, which is not due to higher prices.

It's due to having having been accelerated the sell-out as well as due to a more premiumized mix of products. This happens totally by the actions of the consumers and totally healthy and part of the demand that we are seeing with our end users.

Now on this next slide, speaking about the gross margin, this was the largest gross margin ever we have made in the Brazilian operations. We reached almost 51% in our gross profit margin.

The history series speaks for itself. It's much higher than what we had in the past four to five years, even in periods where we had had a much more favorable scale effect, such as in '22, '23, when we had we sold higher volumes than we sell nowadays.

Yet, we have a much higher margin now. The last two years, 2023, 2024, had seen write-offs in our results, but even if we result those margins removing the write-offs that were made in 2023, 2024, yet we saw a positive evolution of margin of 3 percentage points when compared to 2024.

When we look at the full year, we had gross margin of 48% in Brazil, which is also all-time high in our series, with an evolution of 8 percentage points compared to 2024. Even if we adjusted with the by removing the write-offs, we would still have an gross margin expansion in the whole of the year versus 2024.

I think this is an important movement which is associated with our actions and efficiency and manufacturing operations, and also a little bit of the scale we have gained, but mainly because of the effects of efficiency that we have been implementing since 2022, 2023. On the next slide, please.

I can see the evolution of the selling, general, and administrative expenses. We have separated the variable expenses as a percentage of our revenue.

It has been evolving well. Of course, we shouldn't be looking at each quarter isolatedly.

We should be looking at the trends. We can even see the full year on the graph on the right-hand side.

The expenses, fixed expenses diminished from 8 to 7% throughout the year, and yet you can see here the expenses for marketing. This is important to highlight because also for the marketing, this is the analysis we deem correct is when we look at a higher period of time.

If we look at a monthly or quarterly analysis, this might not reflect our program. Our program, our calendar does not necessarily respect the monthly apports or injection of marketing investments.

There are some quarters which have a little bit of a lower investments. We only invested 4% of our revenue in marketing in the third third quarter.

At the end of the year, in the fourth quarter, it's natural because of the season campaigns. We had a little bit higher marketing investments of 10% of our revenue.

If you look historically speaking, we can always We are always keeping what we mentioned that is normalized and which is a benchmark in this industry. At first, this is what we will keep pursuing, being at 7 to 8%, which we understand to be a healthy level of investments in marketing.

When we look at the fixed expenses, there was an important decrease from 252 to 40 245. We continue to pursue efficiency and we'll keep on this trend.

Moving on to the next slide, we see the EBITDA margin here. We had an EBITDA margin of 24%.

It is a important expansion compared to the fourth quarter '24 when we had only 15% of EBITDA, and is compared to EBITDA margins that we had back in 2021 when we had sold a volume which was substantially bigger. It's important mentioning here that when we look at the numbers at the bottom, now the EBITDA per pair is 4.2 reais per pair compared to 3 reais per pair in the fourth quarter 2021.

This is an expansion of 1.2 reais. The efficiency effect is actually equal to 2.9 reais of margin per pair, which is almost the full So only the the efficiency we have done so far is almost equivalent to the all the margin they used to have in 2021.

It's important to highlight that these components are quite different between them. There is an efficiency component which advanced much more than this 1 real and 20 cents.

This scale effect that we still don't have because we sell less now than we used to sell in 2021, this scale effect is a effect that as the company sells more, you can see that our sell-out has been growing and it is at a good pace to develop, we should have a room to pursue more efficiency and gain more margin through our efficiency, when compared to previous periods of time. When you look at the 825, which it was the total EBITDA for the year, which is the highest number too, and it's an important increase from 16 to 24% compared 2024 to 2025.

It's a meaningful increase and this is based on on the expenses that were smaller, the efficiency in the COGS. There is some volume expansion year-over-year, but at the end of the the day, it's a mixture of several things.

There is not a one single component. There is a very hard work of several areas behind that that reflects this.

When we look at the international market, we see that there was an expansion of 80% of volume. Obviously, the international, as it contains a lot of seasonality and different seasons among the different geographies, maybe it makes sense to look at the full year rather than the quarters.

Yet, looking at the fourth quarter, I had already gone over that: almost 30% growth in Europe and almost 300% in the US. We are close to stability if we consider what the volume sold to Eastman, and 60% of evolution of our international distribution market.

Moving on, we can see the reflects that in the gross margin. We have a decompression of the gross margin, which is extremely relevant.

We go back to having a gross margin of 47%. It's an evolution of 1% only in the fourth quarter 2024, 1 13% in the fourth fourth quarter 2023.

It was extremely relevant, the fourth quarter. As I said, we had been saying we needed to re-energize the brand, but obviously, we also needed to resume and recover the scale and volume sold in our international operations, which we are doing right now.

When you look at the closed year, the growth evolution of the gross margin is also a very meaningful growth from 52% to 63%, we can pursue higher scale, efficiency, and therefore more more better results. Moving on to the SG&A of the international operations, just likewise, they have been balancing themselves and accommodating at lower levels.

The fixed expenses, when you look at the historical series at the bars at the bottom, we look that we see that this is going down from 80 to 69 million now in the last quarter in 2025. When we look at the annual graph, we also see a reduction of the fixed expenses and a reduction of our variable expenses compared to our revenue, and also marketing expenses.

We decided to have some marketing actions more accelerated in the third quarter, we reduced some investments in the fourth quarter. We understood it was not the best level.

We have already made a few comments in the past. We decided to accommodate throughout 2024 '25.

This is reflected here in this on this graph. Now moving on, we can look at the EBITDA for the international operations.

In the fourth quarter, we have extremely important recovery compared to the last fourth quarter of the 2023, 2024 where we had 100 million negative, 120 million negative. Now we are back to a level of minus 40, which is more similar to where we had in in in the year 2021, for instance.

Again, it's important to look at the annual, period, which closes the 2025. We have an EBITDA that was from a minus 156 million in 2024 to plus net positive 42 million in EBITDA, which is an evolution of almost 200 million of This is a very important evolution year-over-year.

Naturally here, we have actions still to be implemented in 2026. We don't give guidance, as you all know, but you also know we are making an important transition in the American market where we have the expectation to be able to work through a different business model where we're going to have reduction in our expenses and all, which also should impact this indicator that you see on the screen right now.

Moving on, we see the evolution of Rothy's. Rothy's continues in an evolution of growth of EBITDA and in the last 12 months, since 2022 where we had we were at minus $30 million, now we are close to surplus of $20 million, a positive $20 million.

The year saw some challenges, especially because of the tariffs imposed to China products, and this was a detractor to the gross margin of the company, but yet, the company was able to implement other efficiency actions and SG&A, which resulted in having a recovery and to keep growing its EBITDA. It has been performing well compared to its peers and in the industry, and also with the performance of their stores.

We see with very good eyes the actions and the opening of new channels, sales channels, such as the wholesale channel that has been created. I think there is a series of opportunities here for the company to keep on performing well.

I think this was my last slide. Oh, and now it was the last about the quarter specifically, but we decided also to bring to you a little bit of a more comprehensive vision, looking back to the past and looking at this move.

Looking at the first graph on the left, we see the margins, both both EBITDA and gross margins in Brazil. We also created with and without the adjustments to write-offs so we could beat the trend.

The trend is a growth of a gross margin and the growth of EBITDA margin over those past three years. When you look at the share, market share, in the second graph, orange, we also see a positive evolution from 74 to 78% over three years, which is a gradual gain, which is a correct way of growing over time.

When we look at the sell-out, the green bars, we see that it has also been growing in Brazil. This is also very important symptom as a driver for us to gain scale.

Remember, we keep insisting that gaining scale is extremely important for our results. When we look at the bottom, we look at international.

We went from two years where we were losing volume in Europe for the first year where we actually grew our volume. We did not recover naturally the the volumes we have already sold in Europe one day in the past, but we see a very important symptom for the brand of the brand being re-energized, re-empowered.

We have important doors being opened to us in Europe of opinion makers. We We think this is very good, relevant, and brings very good expectation towards about the upcoming years for our growth trajectory.

As for the US, we already talked a lot about. It was a turnaround year because of the model transition we were undergoing.

So 2026 is the first year that we are only going to conduct the design, manufacturing, and marketing, but the entire commercial, warehousing, support functions will be conducted by and managed by our partner, Eastman Group. This is going to allow us to have a very strong participation in the as the G&A.

When we look at the international distribution markets, the yellow graph, we're going to see an important work that has been done of reduction and reaccommodation of inventory levels in the chain, which was extremely meaningful in 2023 because of the high inventory stock-up made in '21 and '22. This is something that we have been managing country by country and distributor by distributor.

Now on the next slide, we see the trajectory of the SG&A. I think it's important to highlight is that this is very consistent to the entire narrative we have had over the past three years where we have been saying that it's important to gain efficiency in the company, but not in the marketing, not sacrificing the long term and the value of the company and the structure of the company in the long term.

We did not aim to reduce those expenses in marketing, but all but to reduce what was excess in the operation in the SG&A, something everything that was not essential. These results are extremely meaningful.

We went from 31% of net sales to 22% is a huge gap. We we kept the the the marketing stable, the marketing investment stable, our marketing investments are preserved.

When we look at the international EBITDA, we see that after two years affected by the scale, we have the first year which actually was positive. We have a very strong expectation for 2026 for the international markets.

Rothy's also showed an important growth of EBITDA. It's a turnaround from negative in 2023 to positive in 2024, 2025.

If we went back before 2023, the results were even worse than those. When we look at the inventory evolution, we got together the raw material and finished products inventory.

It went from 1.3 billion to 700 million Brazilian reais in inventory, almost half of the inventory we used to carry is what we carry right now, which releases working capital to us. This can be seen seen in the graph at the bottom, in the middle, in the free cash flow to equity.

In 2023, we still generated operation results which was negative. On the other hand, we released a lot of We freed We freed up a lot of capital.

In 2024, we started to generate positive cash flow operationally speaking, but yet there was a great consumption of free cash. Now we generate an operational cash even bigger compared to 2024, although we had some consumption of working capital for the transition business model in the USA and other reasons I have explained, but which are typical of growth.

Last, putting all of these things together, we were able, after two years having shareholders distribution, we managed to distribute 1.2 Brazilian reais over 2025, which was extremely important, and this is are the results of everything and every little results we have showed you so far. I'd like to thank you for your time and open now for the questions.

Good morning, everybody. Thank you for taking my question.

Good morning, André and Liel. I have two questions on my side.

The first one is about growth. Natal, you mentioned that sell-out and sell-in were balanced, not necessarily exactly equal, but balanced.

When we look at last year, we have seen this recovery of the sell-out happening. It's gradual.

It came from a period of where which was extremely challenging, but what can we think about the recovery of volume growth in Brazil? I understand there are adjustments to channels and other factors, I'd like to understand what's you what do you see about the growth, volume recovery in Brazil?

My second question is about profitability. If I'm not mistaken, you said in your release that you reached a new level of profitability, which is my understanding is more structural, and from now on should be a good base scenario with a few leverages for you to evolve from now on.

Considering that there is a lot of things happening, for example, there is a commercial business model happening, mix of channels changing, and we have also seen the dynamics of the raw material changing over the past months, what how much evolution do you think there is still, how much room do you think there is to evolve there whether by internal initiatives, you mentioned about, the scale growth. Maybe if you can understand us, do you understand what the the leverages are for the growth?

I know you guys don't give guidance, but understand how you are going to build this evolution of volume.

Thank you, Dani. I'm going to start with the first one, and André can talk a little bit about profitability.

Obviously, we cannot predict what the growth of the demand will be. What I'm going to tell is much more what we can do to generate the demand.

I think the word that we are optimistic about Brazil's volume for 2026, there are three reasons for that. The first one is that we saw a fourth quarter where the sell-out was high, 8% in the quarter.

We believe that in the first quarter, there is no structural reason for this trend to change. We believe that in the first fourth of 2026, we are also going to see this continuation of sell-out growth.

I wouldn't dare mentioning levels, what levels we are expecting, but the growth we saw in the fourth quarter 2024, we shouldn't have any reason not to have the sell-out growth in the first quarter. Maybe different levels because the basis of comparison is different, but we should still see growth because we are at a sell-out growth momentum.

The second reason is because of the portfolio. We saw that our 2026 collection had very strong acceptance by consumers, much higher than we had before.

We gave less discount levels. It was easier for us to transform our sell-in into sell-out, which enable a faster depletion of our inventories.

The third is our commercial competitiveness. In Brazil, we executed a lot of our point-of-sale execution both because of the availability of the products, but the fact we are above 80% means that more times consumers will find the products they want, the Havaianas products, which generates more sales that were lost sales in previous years.

Better sales levels to retails. We maintained our marketing investments at the levels that André mentioned, which was between 7 and 8%, allowing the visibility of the brand whether on the media, whether at the points of sales to be adequate.

We believe that because of the acceptance of our portfolio, the speed we have been running and selling our portfolio, and because of the visibility of our products at the points of sales, our expectation is that this growth can be seen also in 2026, of course, considering all the other things that could happen in the economic macro environment.

Daniela, thank you for your question. You already mentioned that we don't give guidance.

Yet, trying to discuss some of the leverage, I think you have a good question and it comes at a good time. Indeed, we reached a record margin in Brazil even without having the same volume sales we used to have in 2021, 2022.

Thinking what is behind that means that a lot of these impacts come from productivity and efficiency effects and gains in the distribution and manufacturing performances. There is a series of actions that we have already mentioned.

We spoke in details about everything we did, and qualitatively thinking, without giving you any number, we showed to you in the Investors Day Gabriel discussed with you that we are, maybe, in the middle of this journey. We're far away from saying that we are at the peak of our efficiency.

There is still a lot of opportunity in our processes, manufacturing processes. There is a cluster of actions inside our integrated manufacturing and management plans that will enables to keep pursuing improvement.

Of course, we have made important evolution, and the graphs show that. Thinking of other leverages, I would like to highlight, we have seen a movement in the market that suggests that our share price sometimes is negotiated or connected to the oil price.

People are a little bit concerned with how much the oil prices affect our margins, and we think that the market apparently overestimates the relevance of the oil price. Of course, our products are manufactured out of inputs which are petrochemicals, but the relevance of this price swing is much smaller.

If you look at how we have already had oil at $150 or $30, and we have all sorts of exchange rates, and yet our gross margins have not been so different. I think the market maybe overestimates the effect of the oil price variation.

We think that obviously this is something that we don't control, that the input prices and the margin, but this doesn't have the same relevance at least. We don't see the same relevance that the market attributes to this variation.

There is also this scale effect. The scale, when you look at our EBITDA per pair versus 2021, the fourth quarter, it used to be 1.70 EBITDA per pair.

I'm not saying that giving you a guidance that we might go back to one to increase 1.70 per pair if we reach the same levels, but I want to say that the scale was equivalent to 1.70 in margin per pair. The scale is a very important leverage that we need to keep growing.

The symptoms of a accelerated sell-out with this scale effect, which is still may contribute to the growth over time and improvement over time in our margins makes us to have a positive expectations. Again, we don't control all of the elements to make this happen.

There are two more important leverages that had an important role in the fourth quarter and over 2025, which are the premiumization of our mix of products. Our mix of products, much more premium, this is the biggest explanation of the improvement of our better margin per pair.

We don't want to talk much about our pricing strategies, but again, the biggest margin came directly from the premiumization of our mix of products. This enabled us to work with a higher net sales per pair, and obviously this is going to affect all the margins.

The same happened to the channel mix. We have an overall index of growth, which connects to Liel's.

We have an over index of growth in channels which are more premium,

are growing more in the DTC and more in the specialized channels, which are channels where the portfolio sold is a richer portfolio than the portfolio in the food channels or grocery channels. As this continues to be a trend, of course, when you look at our share in the specialized and market share, it suggested the specialized channel that should continue to grow over index compared to the grocery channels, and this is also going to be one of the drivers, should be one of the profitability drivers.

I gave you the answers to the leverages without, again, give you numbers for the reasons you already know. All right?

Thank you, I appreciate, André. João now from Citi, go ahead.

Thank you for taking my question. I would like to understand a little bit what Daniela mentioned.

André and Liel, when we look two way one way to look at our cost per pair, if we think about the current price, although many things can affect those prices, based on the improvement that I believe you still can implement and the improvement to the mix of products, how can we think this path? Because we have been seeing for over two years that there is a relevant decrease in this level.

I would like to go a little bit deeper into that and explore it and discuss it. The second point I'd like to explore is when we look at the international markets, thinking about 2026 and based on the comments from Liel and efficiencies to be gained in Europe of the unification of structure, the S/4HANA and SAP, there is also an important component which is expenses cutting.

Could you at least quantify what we can see in terms of opportunity? That would be very important to understand.

Hi João. Thanks for your question.

Obviously, I cannot make any comments about the path forward, first because I don't know, second because I can't. Having said that, I can tell you a few things about it.

As I started to answer Daniela's question, the first point is that we have a perception that many people are overly concerned with this topic about the oil price spike. I think it's worth mentioning that we have inventories of input that are going to be kept until June or July.

Any effects in oil prices spikes are only going to affect us after June or July if this continues. Of course, we cannot tell you what's going to be happening, right, in the political and geographical conflicts and issues ongoing.

Something else is that we don't see any kind of risk to our supply, our rubber supply. We have very little that comes from the other side of the Atlantic.

We don't see any kind of disruption for us to receive raw materials nor to export our products. We are dispatching our products just normally.

Now, again about the raw material standpoint, there is always a try, and I understand your interest in trying to make a connection between what you see on the screen versus what we see in our daily lives, in our daily activities. It's important to say there is a series of imperfections in this price transmission.

It's not a direct price. There are several factors that affect the price from the oil to the raw material.

There is also a time lapse. There is a difference between the price we buy.

The average price of our rubber in our main inventories is still below what has been selling at the market. The convergence of our inventory price to the price of the market right now has not yet happened totally.

In addition to that, there is an imperfection between the cost of production and the costs of goods sold, because only when we sell our products, we truly transform this into COGS and goes into our P&L. This time lapsing makes it very hard to make an estimative of how much the input price will affect the final results.

In addition to that, the delay makes it harder for us to foresee that because they are very small. The raw material is a little bit above the half of the total cost of our products.

Only a little bit half of the raw material is petrochemicals. The rubber is only one part of those petrochemicals.

A very relevant part of this price, and that we, for strategic reasons, have no interest in mentioning, there is a very important part of the formation of our prices, which is a fixed fee. It's a fee of the industrialization of the specialties of products of the rubbers that we use.

This fee that doesn't fluctuate with the oil as the oil price goes up and down. The relevance of the butadiene is a very small part of our costs.

When you look at how this affects, and it's variation, it's even smaller. It's a variation in a small part of another small part.

When we look at that, when we see decreases and increases in the input prices, again, I don't give guidance about our margin. I cannot say it's going to keep up, but all the actions we have taken have proved to be winning actions, even though we have had swings in the exchange rate and in the oil and rubber prices in the market.

I cannot tell exactly what's going to be the path forward because we really cannot forecast, but I can at least make those comments to show you that the prices are relatively stable until the end of the year, and even though those swings might happen after that time, there is a maybe buffer to transfer these increase or decrease in prices to our COGS. This is for good and for bad.

There are many decreasing oil prices that does not affect us in gaining better prices or better margins. Vice versa.

João, I think that before the international markets, I think it's important to remember that our strategy is this balance of three pillars for the growth: Brazil, international, marketing and portfolio; and also three pillars of efficiency to match those first three, where there is simplification, allocation of capital, operational efficiency. Obviously, we are always going to be looking at the opportunity to reduce costs, to make our operations more efficient, more adequate to the volume and to the scale we have.

This is the balance we want to pursue. If you have the right operations of scale, we can protect our future growth.

Speaking of the international market, we already have Latin America, Asia, and Africa, big part of the world is now operated through distributors, where our structure is relatively light. We basically have a commercial structure, a few people, like a dozen people operating those distributors.

There is a smaller opportunity for generating expenses reduction. When we look at the USA market, obviously, we were carrying out costs in 2025 because the entire operation was managed by Alpargatas, and now we are going to also operate through distributor.

Our expenses in the US tends to evolve or reduce, right, and be much closer to the business model that we have for Asia and for the rest of the world. The only exception is Europe, where we have a full-sized operation from end-to-end, and there we will continue with our planning of pursuing efficiency.

I would like to emphasize that the leverage of Europe is much less decreasing costs, but much more generating volume, because the potential they have for generating margin and results means that this growth of 8% in 2025 can be repeated in 20 in the upcoming years. With this recovery of scale, this gain of scale, then, yes, we are going to have an operation that is absolutely profitable and healthy in the European market.

We are always going to be looking at international markets. There are always opportunities there.

There is always opportunity in Europe, but the main focus in the international overall growth is to regain scale and to keep this up from now on in the upcoming years. It's very clear.

Thank you all very much. Moving on, our next question comes from Isabella Lamas, UBS.

Isabella, go ahead. Good morning, Liel, Natal, Melina.

Thanks for taking my questions. A few points from my side.

This 8% sell-out that you posted, we thought it was one of the highlights of the quarter, especially considering this macro context. We see a deceleration in consumption in Brazil.

Were you surprised by this 8% level, and what were the drivers to have such a strong demand? Another point that you mentioned of market share gain, you mentioned 3% market share gain in the grocery reaching 78%, but you didn't mention the specialized market share gains.

Can you tell us where you are right now? The last point, looking at this scenario of volumes, we can see a gradual recovery and in the upcoming years.

Could you please give us some color about how much this could contribute to the margin, especially considering the leaner structure you are operating right now? Thank you, Isabella.

I would say that we also see the sell-out in Brazil as a positive highlight, especially because in previous quarters, we had a good quarter in the first quarter, the second and third quarter were a little bit more, let's say, stable compared to year-over-year, and the fourth quarter came as a good surprise, a recovery of the sell-out in Brazil. The cases, we have already talked about, it's the it's a continuous development of the competitiveness of the company.

We have a better and more competitive portfolio, we have a better visibility at the points of sales and execution at the stores, and we have a invest marketing investment that has been showing results. Our brand awareness has been recovering.

The the image of the company is absolutely intact as it was. This, we believe that the combination of those things is what is generating this increased sell-out, and also a improved mix of products, right, because they are combined, they maximize the results.

More premiumized channels and products, as we mentioned before. Obviously, it is positive.

It's not really a surprise because we track this weekly in the grocery channel, but we saw, yes, we captured this improvement. As I said in Daniela's question, we don't see any changes that could make us believe that the sell-out is going to change the trend in the upcoming in the upcoming years.

As for the specialized channel, because in the grocery, in the the grocery channels, we have Nielsen's reports that is absolutely reliable and gives us the the grocery results overall. In the specialized channel, we don't have a Nielsen's results equivalent report, we have only like a scarce report.

What I can tell you is that is the specialized channel growth is in double digits right now. Our volume in the specialized channel is growing double digit, more than 10%, which does not seem to be the growth of the channel as a whole.

We believe that our market share growth is also happening in the specialized. The number we have for the specialized channel, but it's it's difficult to to back it up, is that we used to have a market share that was below 40%, and now we are much closer to 50% of the market share, about 45%.

We can see that compared on based on the indication of the market share, the indicators of the market share and the speed of the the growth in this in this channel is much higher than we see in the rest of the market, which makes us believe that, indeed, we are gaining market share in the specialized. I think André can speak a little bit about margin here.

Thank you for your question. Again, from from this perspective of margin, the the margin results from two forces that sometimes help each other, sometimes are constraints to each other, are the large efficiency gains that we have the actions that we have been carried out in the size of the COGS and as well as in the expenses, and on the other side, there is the scale that collaborates with that, which I think is the center of your question.

Again, when we compare to a year ago, like the fourth quarter in 2024, we have a efficiency gains when we look at the the EBITDA per pair that we had in the fourth quarter 25 over compared to fourth quarter 2024, we saw an evolution of almost 2 reais, 1.90 Brazilian reais per pair in the EBITDA per pair. Remember that the EBITDA we had in 2021 was like 3 reais.

Only the evolution comparing 2024, 2025, we saw an evolution almost 2 reais per pair, which are due to efficiency. This is a theoretical mathematics that we do here, but if we had if we were operating at the same volume in 2024, how much it would have been our EBITDA margin, how much was it?

We believe this gap, this this difference is results from a better efficiency. The volume is what we attribute to the scale.

When we look at this 2024 fourth quarter 2024, 2025 is we had an expansion of almost 2 reais because of efficiency, and we lost a little bit of scale because we contracted volume. We had a contraction in volume of 2% in 2025.

We lost the scale of about 20 cents per pair compared in the two quarters. You have the volume numbers, you can make this comparison, and I am explaining that this is the mathematics we do to try to rationalize this.

When you make a larger comparison, for the period of time, then we had a gains of 2.85, almost 3 Brazilian reais in terms of efficiency when you compare. In this case, we also had like the efficiency was gaining helping the the margin, but the scale was a detractor to the margin.

You have the volumes and you can make the math your own and understand how this plays out. I can't give you a number of how much this will be because this would mean I'm giving you guidance of the evolution of our margin.

We have our premises here, our assumptions here, but I can't give you that. What I can give you is this, history and the records.

What I can give you is, something that the Investor Relations can give you more later on to you is our fixed costs and expenses so you can simulate this volume gains versus operational leverage that you can see in the margin expansion, how much this will affect the margin expansion. This should be consistent to these numbers I have told you overall.

Thank you again. Thank you very much for taking my questions.

This already gave me some idea. Moving on, the next question is from Gustavo Fratini, Bank of America.

Gustavo, go ahead. Liel, Natal, Melina, good morning.

How are you? From my end, I think that the sell-out was a very positive highlight and it shows a little bit of your strategy of a more specialized channel.

Can you please talk a little bit about the trade-off that you see in terms of marketing increase and increase in the receivables? Maybe you can give an idea of EBITDA per pair and how much this helps your results.

Also, from the grocery channel point of view, given the fact that the specialized channel is growing double digits, what do you think is happening in those channels? Everybody knows that this channel is destocking, but do you see a recovery of this channel?

Gustavo, thank you for your question. I'm going to start by taking your question and André can maybe give some numbers after me.

First, speaking of the specialized channel, what we see in the specialized channel is that our growth is coming from the leverages that we already had positioned to be executed. As I said before, our portfolio is much more competitive for this channel.

When I talk about this men's product family, this was a gap we had in this channel, now we can compete better in there. We have made some advancements in terms of products offered to children, which is also another segment of of consumers, a different audience.

In the women's products, we had a much higher acceptance because of the quality of the prints, because of the innovation in our model. We can see the specialized channels, our growth there is coming because of the quality, out of the quality of the product mix we offer there and because we are we are also executing better.

They are very sensitive to on-time in-full deliveries, because, for example, if you don't deliver the orders for Father's Day, the client will lose that that sale, and we too. Since we are have improved our on-time in-full numbers, the specialized channels are opening more room for us, creating this virtual cycle, giving more space, giving more demand, more sell-out that is transformed in future higher selling for us.

I don't I think we are not where we would like to be in the specialized channel, far from that, but we managed to build the tools for a sustainable growth: portfolio, on-time in-full service growth, and also visibility using displays, for example, of the of the brand at the the points of sales. I think does that mean we need to make more marketing investments to continue in this journey?

The answer is no. Our marketing investment level is between 7 and 8%.

We are maintaining this level for the past two years and we intend to remain at this level because we believe this gives us the necessary competitiveness we need without extra need for extra investment, except, for the quarters, as André said, we invest 4% in one quarter, 10% in the other quarter, but again, we are going to reach 7 or 8% overall in a year. We believe that the structural growth comes from tools that we have already executed.

We want a portfolio a even more specialized portfolio for this channel. As for the receivables, as André mentioned, the channels have different deadlines, André will we will continue to monitor our cash position, but this does not change the profile of what the company has been performing, especially because we're not talking about, going from 30 days to pay to 120 days to pay.

We're talking about a difference of days and not months. We believe that the specialized channel is not going to compromise our profile of of cash generation.

As for the grocery channel, which was the second part of your question, just one small correction: the grocery channel, we have two grocery channels. One is the traditional, which is served by distributors and wholesalers, and the other one is the modern one, which we serve directly, atacarejo or cash and carry and large clients.

In between those two channels, we realized that the the the volume is not decreasing. What we grow in the modern grocery channel, which we supply directly, like so large chains and and cash and carry, removes from what would be the traditional grocery channel.

Again, the results between those two is neutral or positive, we are not losing volume in the grocery channel. Otherwise, we wouldn't be able to grow 2% in the year as we did.

The sell-out, when we talk about the sell-out, is the combination of all the channels. Again, we made two large movements in the grocery channel.

The first one was a higher aggressiveness to gain more market share in the modern grocery channels where our market share level was much lower as measured by Nielsen than in the traditional grocery. We have been accelerating there.

A large part of this 3% growth of market share in the past two years has been exactly through the grocery channels where we went from about 60% of market share, now we are above 65%. In the traditional channel that is supplied by the distributors and wholesalers, the channel as a whole has been falling, but we don't lose market share.

Our market share is too high. We're talking about almost 85% of market share, and we have been keeping that.

The market share gains will be we maintain our share in this traditional grocery channels, but we acceleratedly gain market share in the grocery in the modern grocery chair. Overall and both combined, we gain market share in the grocery channel.

We don't see this is a problem. We see as the grocery the modern grocery channel as a path, a road for growth, by offering a a better mix of products, because this is another factor: when consumers, go to this traditional grocery, especially because of the size of the stores, and they go to the modern mixed grocery channel, they have a higher range of products that they can choose from, we always gain benefit from that because the price points are higher.

In the specialized, we have a lot of growth space for growth in the market share, especially for the men product family, children, and also in the grocery channel, we have been keeping our market share in the traditional grocery channel and accelerating our growth market share in the modern grocery channel. Good morning, Gustavo.

I think Liel talked about the main points. I would only like to highlight that from the receivables standpoint, we have not given more deadline.

If you go channel by channel, all the channels remain the same or is smaller than we had a year ago. In other words, what I mean is that the drive to this growth is not inflated by a more aggressive strategy in the channels or within the channels by payment conditions.

This is not happening. The growth was absolutely organically.

What we do have is different deadlines, comparing different channels. Some channels, they have a better payment terms for this channel, which affects a little bit how the payment is made, but we have not made any changes to boost the sales by giving better payment conditions.

Just giving a few figures to what Liel mentioned, we saw a sell-out expanding of about 4%, in the last quarter, 8%. What is the difference between those two paces, right?

One is the double the other. The difference is exactly the grocery channel.

The grocery channel that was showing a strong trade-off between traditional channel losing participation, it came to lose like 20 like a high single digit in part of the year, while the modern grocery, which are the cash and carry and long chains, were growing above 20%. This trade-off made us overall in the grocery channel to have small growth.

The sell-out was higher in the specialized in DTC. The change in the end of the year is that also in the grocery channels, we also had an additional growth in the sell-out.

Therefore, the sell-out as a whole for the grocery became a relevant growth numbers. We can see the grocery as a whole, both including the modern grocery and the traditional grocery, we see a good movement of both types of grocery channel in this last quarter of the year.

Therefore, the consolidated numbers of the grocery, both grocery channels, had a stronger impact in the end of the year. This combination was important because the sell-out as a whole grew at a more accelerated number than it had been growing at the beginning of last year.

Nicolas from JP Morgan now. Thank you for taking my questions.

I have the first question in the US: what you could comment about early thoughts of your partnership with Eastman, how this rollout has been happening? This would be welcome to understand how things are going.

You said that leverage is still at 0.8, which is very comfortable for the company. I'd like to understand what idea you have from now on for the leverage.

This is what I had as questions. Starting with the USA, Nicolas.

It's too soon to say. We can say that the partnership we made in 2025 was a partnership of mutual benefits where we benefit from a distribution network that is much bigger and robust of Eastman, and they start to have a very strong brand in their portfolio.

We are observing that in the first quarter, as we said, we made a transition of the inventory that belonged to Alpa and it was at our warehouses, and it was moved into Eastman's warehouses in December 2025. Ever since, they are placing those products in all the channels where they operate.

Since this is still too recent, we still need to adjust and evolve the measurement of each one of the channels, but the principles are proving true so far. We changed our business model, we're not going to be anymore a company that's going to be end-to-end operation.

We're not going anymore to have from importation to sale. Now we are exclusively focusing on marketing and portfolio management.

Eastman took over all the operation part. This has already been made.

We started in January 2026. Eastman is already since February supplying to some channels, and now we need to see what the effect will be in terms of having more doors open to our brand, the speed of our sales in each one of those doors so we can weigh up the final results.

Hi Nicolas, thank you for your question. About capital allocation, I think that at first, we follow the same logic we commented here before.

The company will continue to generate cash. This is the running rate that we have right now.

We have been generating cash for three consecutive years. We don't foresee any need for a CapEx higher than the levels we have been already delivering.

Basically, we have CapEx to adjust the depreciation or some one-time investment. It's an investment level that we would call sustained capital, which is the need for the maintenance of our manufacturing operational environment.

Out of that, we have been investing without losing any of the opportunities we understand to be important for profitability, cost reduction, or that make our operations better. We also have some planning for investment in the future, but there will be no big bangs for some technologies that we have in some factories.

We want to make some expansion of capacity to be able to continue producing this more premiumized mix of products that we mentioned and that has been a good bet according to our latest results, but we all believe that we are going to do this gradually and side-by-side with the expansion of the demand for those items and not a one-time transformational project that is going to require very relevant investments. From the payout standpoint, we have no reason to preserve cash in the company.

We have made a proposal. We are going to send those proposals soon where we had a large distribution.

We distributed 1.2 billion reais and this is a symptom. We don't have any desire to preserve cash in the company unless there is a specific use for this cash that we can actually map ahead of us for doing so.

Otherwise, we should always be considering the different ways of distributing this cash to our shareholders according to the generation of cash is actually realized. Again, in order to do that, we have to have a profit basis so we can have some money in order to do that.

That's why we were without distribution for some time, that's why we reduced our leverage. I think this is a symptom of how we expect to behave about this element in 2026.

The company will tend in our mind it will be less leveraged over time. We should be managing our capital structure in the form of distribution of intelligent use of capital as opportunities appear.

Of course, if opportunities which are different from that appear and we understand that they make sense to be made, we might change a little bit the direction of what I just told you. At first, this is the initial mindset we have ahead of us.

Super clear, I appreciate for taking my questions. The video conference regarding Alpargatas' fourth quarter 2025 results is now concluded.

The Investor Relations department remains available to address any further questions or inquiries. Thank you very much to all participants and have a good day.