Good morning, everybody. Welcome to the earnings release Direcional Engenharia regarding the 3Q 25.

Welcome, investors, market analysts, and all participants in this video conference. I'm André Damião, IR Direcional.

Together with me is Ricardo Gontijo, CEO, and Paulo Sousa, CFO. Our presentation is destined to analysts and investors.

We're going to show you the main financial highlights of the 3Q, and then we open for questions and answers. Those of you that want to post your questions, use the raise your hand tool in Zoom, we can moderate them and we'll keep the questions in order.

Also, we're listening to the YouTube channel Direcional. The link for the transmission is in our RI site.

Also, in our homepage, we have the links for the download of the material we're going to show you in this event. We're recording this presentation.

As always, we can give it to you in our RI site in the results center. All material can be accessed in our RI site.

To begin here the initial highlights, I will give the floor to Ricardo, our CEO.

Thank you, André. Good morning, everybody.

It's a pleasure to be talking to you in this earnings release call with regards to the 3Q 25. In our vision, we are delivering, once again, very consistent results, following a continuous improvement sequence with regards to our operations and efficiency.

In the 3Q, we had the greatest level of launches in the history of the company. It was the best quarter in terms of net sales, greatest revenue, greatest net profit, best ROI.

In fact, it's a quarter that makes us very, very happy with what we've been able to deliver. In this long cycle, quarter after quarter, we see our strategy materializing into numbers.

Also, I would like to use the moment to highlight the gross margin we delivered. For the first time, it was over 40%.

When adjusted by rates, when we consider our SPEs and our projects, the gross margin exceeded 42%. Here, we are seeing the benefits with negotiation capacity that is even greater with our suppliers.

Here, we have a construction process where productivity of our labor is incremented, and this has allowed us in a moment of a lack of labor and where most cost increments come from labor, because we have a huge productivity in this process we adopted since 2009. For more than 15 years, we have been able to maintain gains in terms of costs, capacity and efficiency costs.

I would like to highlight this gross margin we delivered this quarter. When we consider 12 months, we had a gain of more than 3 percentage points of gross margin in a period of almost 1 year, which is very relevant in our business.

Another very important positive indicator is our REF margin. The results of future also continues growing, and in this quarter, it also reached a record over 45%, 45.2%.

It was a 0.3 percentage points growth compared to what we had in the 2Q this year. Also today, we have an inventory of 3.7 billion in terms of REF margin.

So 16. to gross so much in 1 quarter demonstrates that sales have been done with margins that were much greater than the previous margins.

Also the works go to future revenue, and the margins have been very healthy, which is an indicator for what we can expect from future margins in a short period of time, considering the quarters that are to come. This 3Q, we also delivered a net profit of 300 230 million reais, 43% growth when compared to the 3Q last year.

The ROE, as I said, was a record, 35% when we annualize the results of this quarter. When we look at the chart to the right, we can see that in 3 years, we doubled the net margin.

It went from 8.7, and now it is 17.6%. Slightly more than double.

This clearly demonstrates that the scale we have been able to gain in time has translated in the gains of gross margin and benefits of operational leverage. We have reduction of expenses, which allowed us to have a growth of net margin, which was over the gross margin.

This makes clear that the growth has given us greatest competitiveness and more benefits. As long as there is demand and we continue constructing commercialized units, growth generates value and makes sense.

We've been able to show that quarter after quarter, this growth has been sustainable, we are competitive, and we have been able to benefit from this. Another important item to highlight, because the third quarter, there was already a partial sale of the Riva subsidiary operations, we had a growth in the line of minority industry.

If we consider this minority, we reached 218 million reais in the quarter. Since we consolidated the revenue, the total revenue and the minority stake of this partners.

It makes sense to add the profit corresponding to the stake of this minority to the profit of Direcional, which reached 258 million reais, allowing our net margin, considering the stake of this minority, over 22.3% this quarter. It demonstrates what I wanted to say with regards to the benefits of this greater scale that we have operated and has been very positive for the company.

Also, I would like to add that in October, the first month of the 4Q, the total sale of what had been agreed upon at the end of last year with Riva was concluded. They acquired an additional stake.

They had the right to acquire it. So 15% of a stake of the company, Direcional continues with 85%, and based on these 15%, we received in the second quarter until now, October, 416 million reais.

Lastly, also here with regards to our highlights, I'd like to stress the robust cash generation we had this year in the 9 first months, almost 500 million reais. 3Q cash generation, 130 million reais.

Even after paying 350 million reais in dividends in the beginning of July, in the beginning of the 3Q, we closed the quarter with extremely low leverage, reaching 3.8% in terms of net debt over the net equity, slightly over 100 million reais. Very, very deleveraged, our operations, which is extremely positive in this moment where capital cost is high, where we need to work in a very conservative way.

We have maintained our conservatism. Also in a moment where we had this discussion on eventual taxes of income parting from next year and dividends that would be taxed, those shareholders that receive more than 50,000 reais a year, 600,000 reais a year, this low leverage gives us a very flexible position to define what to do with regards to this when we consider this period we have to the end of the year.

Now to page 5, in terms of launches, we launched 2 billion 152 2 billion 152 million. We grew 54% compared to last year.

The first 9 months of this year, our launches reached almost 5 billion reais, growing 33% in relation to the first 9 months last year. It's interesting to analyze here to the right that from 2020 to '25, we multiplied this company almost 4 times, 3.9 times, in total amount of launches.

Now going to page 6 with regards to sales, in the 3Q, net sales reached 1 billion 642 billion reais. It's important to stress that the share of operacional grew in an important way this quarter.

When we look at the Direcional share, it was record in terms of sales, although the sales in the 3Q compared to the second had a slight reduction. When we look at the Direcional share, the growth was 11% in the 3Q compared to the second, and 16% when we compared the 3Q this year to 3Q last year.

When we consolidate the first 9 months of '25, sales were over 4 billion 600 million reais, almost 4 million 650 with and here growth 5%. When we look at the Direcional shares, the growth was 9.1% when comparing the first 9 months of this year compared to the first 9 months in '24.

Now I want to give the floor to Paulo for the main financial highlights, and I will be at your disposal then for questions and answer afterwards.

Thank you, Ricardo, for the presentation. To continue with financial results and beginning here with revenue and aligned with what Ricardo said and also the works ongoing in the 3Q, our revenue grew 9% compared to the previous quarter, almost 1.2 billion reais, going from 27% compared to the 3Q 24.

With this, we accumulate a 29% growth in the year, reaching 3 billion reais in revenue compared to 2 400 last year. Here to the right, here in this red bar here, our accounting revenue, SPEs that we do not consolidate in the results, we see in 9 months, we reached 4 billion reais.

The point to observe here are the in the four. When we compare to the number of launches, Ricardo just mentioned, we launched almost 5 billion in the period, a little more than 5.

This indicates that we still have a catch-up to make in terms with launches, almost 25% catch-up. We still have a growth journey in revenue and results also.

With this, try to go after dilutions in the next quarters. To continue, now going to gross margin that we closed the quarter with 41.1 gross margin, and it was a very complicated because of markets, past price transfers, and because of the scenarios.

Also, we had a macro scenario helping with inflation and everything relative controlled. We grew 41.8, and here, 41 we closed here with 41.8, almost 4 percentage points of margin year after year.

To the right, we closed the 3Q with almost 4 billion reais in revenue, almost the whole month that we had, the REF margin, right? It's important that the REF margin, the growth of REF margin means that we are selling products that are entering and they're greater than what is leaving.

Here, it's a solid gross margin. In the short term, they will remain close to the levels we're delivering now.

We see a scaling quarter after quarter, a growth of the REF margin, still with growth this quarter. This is a very positive scenario.

To continue and now going to the net profit, our net profit, the adjusted for non-recurring effects, the accounting was 230 million, and the results 205, we're removing 25 of non-recurrent results in this second quarter. Here, in order to show you in numbers what Ricardo said, we have the effect of the minority stake in our business.

This red bar is the net impact of the results of SPEs that we have here with partners. Here, we're removing the minority stake and the equity income here from our results, and here we see an important growth, less dilution of this line.

In the upper part of the chart where we have the margin, although the accounting net margin, which is the blue line, was 600 600 compared to the last Q, or 5 bps, right? When we look at the red margin, the net margin discounting the minority effect, this is the profit of the business, right?

We're removing the effect of the stake of a project. Our net profit grew a lot.

It went from 17.7 to 20 point 20.9 gain of gross margin, and in the 9 months, 17.1 to 19.9. This is the net margin of the business, and we should look at our operations here, a net margin of almost 20% in 9 months, and 21 when I look at the semester, right?

It is a very expressive result. To the right, we have the quarterly evolution.

The margin goes from 16.5 in '24, reaching 29 in the 3Q 25. The brown line is the ROE.

Here, considering our profit over our equity, net equity, we reached 35.2 in returns. A strong scale in these last quarters.

The first quarter of the '24 was close to 25%, it's always almost 10 percentage points. It's important to say that everything is deleveraged, and this return came from results, not leverage of the balance sheet, right?

This is an important point and a reflex of the work we've been doing here. Now going to the next page, the last slides here before we go to Q&A, this is capital structure.

For us, here, all the discussion here, this is a quarter where we worked to reinforce our balance. We maintained the company deleveraged, very low, 3.8, when we see the first chart to the left.

We worked in these last months to increase the cash volume. Here in the middle chart, we see 1 year ago, our cash was 1.5 billion, and we closed the cash with almost 2.5 billion reais now in the 3Q.

Also, we're working here trying to stretch our debt. It has the longest term in the sector, 67 months, the cash reinforcement, capturing from the market, a long debt, and with this, we have been able to reinforce even more our capital structure.

A lot of cash, long debt, everything deleveraged gives us enormous comfort to be able to continue with our business without the balance being something that we have to concern ourselves with. It is the maintenance of our profile.

Those of you that are with us many years, you can see that we have always worked in this way, and there's no hint that we're going to change this. Now I will go back to André for the Q&A session, and we are available for your answers.

Thank you, Paulo, Ricardo, for the presentation. We will begin now with our Q&A.

Fanny, Santander.

Hello, everybody. Congratulations for the results.

I have a question. What draws my attention is the improvement you presented in gross margin in this 3Q, which already came from a very strong base, you had expanded the margin, and now you presented a very expressive margin.

My question here: there are some government measures that might help you increase the margin, for example, the change of the subsidy curve that will help you in a state where you have important representation of sales in the Amazon. I want to understand your mind side with regards to the balance between gross margin and VSO, net sales speed.

Would it make sense to waive, to forego expanding margin because we have a positive scenario for costs in order to try to speed up this net sales? That would my question.

How are you with this balance between net sales and margin?

Fanny, I'm going to tell you. To tell you about the changes approved the day before yesterday, these are very positive changes, and I think here, these changes, these adjustments that are very consistent, always considering the sustainability of the FGTS, is very positive.

Clearly, the north region, in this moment, had a strong focus where subsidy curves not only went towards the right, also including average subsidy, and in the north region, there was an increment of 10,000 reais. No doubt, we have important operations in Manaus, and certainly we have a volume of families included in the market where we will be able to meet their needs.

When you see our REF margin growing, this is an important indicator for future gross margin. We always say this moment, our priority is turnover, sales speed, net sales.

We had an important increment of launches this quarter. In the quarter where launches grow, you have a smaller period, a shorter period to sell recent launches because they can occur during the quarter, not exactly in the first month.

Launches that happen in the first month of the quarter has a shorter period to be sold. There is an impact of the VSO here, but here, our priority is sales speed to have a greater amount of families buying and not margin gain.

The main point here, and where we believe we will be able to extract the best value, is in the working capital.

Today, can you tell us the areas where you would be able to work to improve the net sales speed?

I think, Fanny, there are some places where we see opportunities here. Once we gain on scale in these areas, right, as well as having a greater negotiation capacity with suppliers, which translate into more competitive construction costs and the gross margin, we see a net sales speed we'll have a well-known brand, we have more products to offer to the clients, we have a greater conversion into sales here.

The areas where we have less mature operations, certainly there are net sales speed gains opportunities, like in the northeast, Recife, Salvador. This is very clear.

I believe that in Rio, there is an important work to be done here, where we see net sales speed gains in this moment. I would mention these three areas where we see the gains in net sales speed.

This is not from one day to the other, specifically in the northeast where we have a long path, a long journey before us. Products being offered simultaneously for potential buyers, this happens gradually.

In Rio, which is a operation where we've been working more time in, we have perspective of gain in shorter period when we do the right work.

Thank you very much. Congratulations for your results.

Thank you, Fanny, for your question. Next one, André Mazini, Citi.

Good morning, Ricardo, Paulo, André. Thank you for the call.

My first question, if you could tell us about the transactions results, do you expect to have more effects of this type in terms of the minority interesting? In the disclosure of Riva, we see that the ROE of Riva, when we analyze the greed, is 71%, which is very high and greater than the consolidated of Direcional.

What are the main reasons for this being greater in Riva? Would it be the purchase of lands or working capital?

If we can see the demonstrations of Riva, can it be independent in Direcional, maintaining this ROE and net margin? If you would separate things, would the demonstration results grow here?

Paulo, will you tell us about the non-recurrent events, new sales in terms of stake? Then I will add to another point here.

Mazini, this is a non-recurring effect, but this is a sale of shares that we do of SPEs. This happens with some interest.

These are SPEs where we have capital invested. After approval and feasibility of project approved, we try to have an investor that has a lower capital cost than ours to carry this invested capital.

We continue capturing results from the SPE, but at a lower skate, and we go together with this investor. We carry the capital, and the result is we do a DCF of the result.

We capture an important part of this result and have positive result. We classify this as non-recurring.

In the pipeline, obviously, there are opportunities and possibilities. We here always work with this vision.

For example, if we have a business to do, we will do. It might continue happening, but I wouldn't have this as something that is fixed.

With regards to Riva, tell us about the ROE.

We have the information, and our intention is to open some story, right? We should have this in our our site.

We are preparing this to And I think those of you that want to consider Riva separately, we will give you information for this. Riva has been able to operate with greater efficiency.

The line 4 level 4 has grown, and a fast net sales speed has to do what Fanny asked: net sales speed versus margin. Riva is in the best of both scenarios: high gross margin and high net sales speed.

Riva was over 27% in the last quarter. We have this benefit, and also we have the benefit of the balance of Direcional helping generating efficiency for the balance of Riva.

Of course, it's in a growth cycle. When there is a expressive growth, the return is high, you have less portfolio.

The return of the beginning of the project is always greater than the end, but this adjustment is small. Most of this return comes from deficiency: high margin, high net sales speed.

To add to this, no doubt the fact that we have worked the works execution and engineering being done together, Riva and Direcional, gives a synergy. It is very more positive to have a works execution structure of Direcional and the support for this execution: projects, supplies, safety, where Direcional is doing these Riva works.

This is positive for the company with greater scale, with greater negotiation capacity, greater gains. Also, it's important to remember the first 2 years what Direcional demands from Riva rates is greater.

We have 2 years of Riva with this benefit, but this is it. Riva operations are very solid.

There are benefits in the level 4 products partly launched and the other part in the end phase of approval. Here, we had the possibility of using Direcional balances.

When we had this, it has operated with a fantastic ROE, 75% of this business. No doubt, we have generated value to our shareholders in the operation of this subsidiary that has performed really, really well.

Perfect. Thank you.

André, thank you. Next question, Carla Graça, UBS.

You have the floor, Carla.

Good morning, everybody. Thank you for the opportunity of asking a question.

I have two here. The first one about the level 4, you just said that they have been grown because of this.

Could you tell us about how you see the absorption of level 4, the stake of this level in the current mix, how you see space to expand this in the next quarters? Second question: cash generation.

If we adjust cash burn from SPEs, you end up burning cash in the quarter. Part of this comes from that change from Caixa, some kind of delay in transfers, right?

I'd like to understand how you understand cash burn in the next quarters, specifically for '26. Is there going to be a greater convergence with net profit or do we have adjustments from here on?

Carla, I'll start with your first part of the question. Level 4, no doubt for us, has had a large representativeness.

Riva, when it was created in 2020, it used to operate out of Minha Casa, Minha Vida. In '23, with an increase of the cap, which went from 264 to 250, part of the Riva products began to be eligible for the program, more than 30%.

Now, with the increase of 350 to 500,000 reais, most Riva products have become eligible for level 4 as long as the buying family is below 12,000 reais. Of course, in this moment of a greater funding scarcity because of higher interest rates out of the Minha Casa, Minha Vida program, we have aimed to have products in the Riva segment that have a ticket below 500,000 reais so that we can always offer to the potential buyer level 4 conditions of the program, which are very interesting not because of the lower interest rates, but because of the amortization system.

We have tried to have most products, right, eligible for the program, and this makes an important difference in our net sales speed. I believe that if we continue having this strong demand as we have noticed, it is natural for us to continue offering products considering the future.

I think our priority is to be constructing sold priorities, right? We no way want to build inventory where capital cost is high, right?

We always have stressed that our priority is sales speed. Here, as long as there is a high absorption of this kind of product, we're going to try to prioritize launches of this product so that this growth can happen in a solid and healthy way.

Let us see the behavior of demand, the conditions of the program, how will they be, so that we have greater visibility. The expectation is positive for level 4.

Cash burn: we had an operational cash generation, Carla. I don't know the calculation of the cash burn, but we always consider every received from previous portfolios, we also discount everything we had in terms of cash generation from the sale of assets, which is the stake of future generation, but the market discounts, and we had a cash generation of 40 million reais this quarter.

Obviously, the change in the way of payment of Caixa and also in keeping with what the banks in the market do, which means just pay the amount corresponding to the amount financed by the customer after it went from the registry office. Before, they would begin paying from contract, right?

It would become unlocked after the registry. Now with the payment only after the registry office, during this transition period, until we wait for this stabilization, there has been a cash burn, and in our case, in Direcional, is 150 million reais.

It's part of the process, it's clear. Obviously, there is an impact, but I think no way this has to jeopardize the operations.

With regards to a recurrent cash burn and how we see cash generation compared to the profit, could you make comment upon this, too? Thank you for the answer.

This is what I wanted to say, right? Our calculations here, when we remove non-recurrent effects and when we look at the cash effect, last quarter was close to 30, this almost 50.

I've talked about this. Our business is, quarter after quarter, we have seen cash oscillations, but it is positive.

Even month after month, sometimes it burns more, other months it generates more. There is some volatility, but it's always very positive, and that's the trend, right?

If we can use this strategy mentioned by Ricardo focusing on net sales and working capital, once you do this, things increase, and even in a moment of growth, it's probable for us to grow here. Lastly, you mentioned about transfers, right?

I don't know if you were paying to the habit at the programs of state. Yes, we have an impact in the north region, in the midwest, and also in the northeast, but we don't report this as non-operational.

It is belongs to our business. There are always challenges for us to solve here.

Programs are fantastic, and we want them to continue. We believe that this additional in the states, it generates value even if it's takes longer, right?

We sell faster, and transfer takes longer, but we reduce the prosolute, right? When we have fiscal benefits.

It might take longer, and there might be an impact in cash generation in the year. If we put this in numbers, it's not small, it's relevant, but we're not considering this as non-recurrent.

Yes, we certainly had an impact not only this quarter, but this year, almost this whole year. This business improved and worsened, improved and worsened during the year.

The net here, we should have generated more cash if the program was transferring the same speed as normal, but certainly we want to continue in the program.

Thank you very much. It's clear.

Thank you, Carla. Just a correction, Carla is from Bank of America, not UBS.

Next question, Pedro Lobato, Bradesco.

Thank you, André. Thank you for the time.

I have two questions here, too. The first one: Direcional presented a concentration of launches in the end of the quarter.

They had a slight problem with the net sales, I want to see the evolution of these sales in October, beginning of November. The second is the dividends perspective from here to the end of the year, and also an idea for '26, right?

Do you imagine some kind of level of dividends for next year, too? Thank you.

Pedro, with regards to sales, we have noticed a program that has performed well. We still have a solid demand.

This was a quarter that ends up being shorter because of the Christmas period in December and New Year's, in fact, we have to work to have most products launched by the end of November. We have noticed a positive performance.

Always the question point here is the impact of the period of festivities in this reduction of the time we'll have to commercialize the units. Parting from 15, 20 December, we notice the market really cooling down.

Everything is performing as usual, but the point is to see the end of the quarter. With regards to dividends, Pedro, we've had some discussions.

We had a law that was approved by Senate, right, where there's going to be a taxation of the sale of people going and impacts people that have a strong level of dividends. Here, in the process of approval of this law, guarantee was given that dividends declared in '25 wouldn't be taxed, this would happen from '26, because we have a profit reserve that is significant, I believe.

What is fair here is that this reserve not be taxed or be very little taxed, right? We see what we're going to do here in order to have our shareholder benefiting from this that was given with regards to the dividends of '25.

We're analyzing things now. We want to be conservative here with regards to capital structure, but somehow we believe we are prepared for this reality when we consider our cash position and low leverage below the optimum level in terms of what we believe is more optimized from the point of view of leverage.

Here, we have a certain flexibility with this decision.

There are some discussions occurring, right,

the new law of the corporations and new bill being approved, but we are going to try to minimize the impact for our shareholders with regards to the profit reserves we have, and we believe that by '25, that taxes will be exempt, right? We continue being conservative, and this decision should be taken by the end of the exercise, which is the period we have for this.

Thank you very much, Ricardo.

Thank you very much, Pedro, question. Gustavo Cambauva, BTG Pactual.

Hello, everybody. I want to ask a question here with regards to growth.

You are going to live another year here, '26, with good growth of launches and sales. My question: Ricardo has always mentioned that the challenges of engineering, the sales team, but when we look at your balance, everything seems to be very well equalized.

How do you see the possibility of growing more if there is a level that you are already aiming for '26?

Thank you. Good morning.

Cambauva, thank you for your question. We have noticed that our growth has given us competitiveness with gains of gross margin, greatest operational leverage.

We have become more competitive, more efficient. I think it's important to say that we have been able to grow, maintaining our operations under control, and even with a lack of labor that we have in the country because of low unemployment rates.

This is positive. The buyer of our project is a person that has to have income, it's positive when we look at the market we serve.

The main point of attention in this growth, is availability of qualified and trained labor to maintain productivity levels that we have in our business. Also, we've noticed that our growth has been very healthy and sustainable.

From point of view of landbanks, we have a huge landbank, and with sales speed that is interesting that allows us to give this with the least demand for working capital, and that's why it's important to have high net sales speed between launch and beginnings of works so that works can begin with a certain amount of units already sold where we minimize our cash exposure. Here, I see that our execution is doing really well.

Once again, growth is not our priority at this moment. Our priority is continuity where we increment ROE, where we continue growing, returning capital to our shareholders, where our book has the lowest growth even when we see revenue and profit growing.

This is what has allowed our ROE to have the best performance quarter after quarter. If we have demand and net sales speed and delivering this growth with the least demand per working capital, we can continue growing gradually.

Once again, it's not a priority. Priority is sales speed and depending of what we find in terms of demand.

The comfort in terms of execution capacity, I would say, is greater than a year ago, Cambauva. I think this is the scenario.

That's great.

Thank you very much. Have a very good day.

Thank you, Cambauva. XP, Ygor from XP, XP.

Hello, everybody. Congratulations for the results.

I would like to explore the partnerships that you have with Moura. Can you give us an update?

Do you have more granularity on the launches pipeline? Would you increase launches?

Would it be more? Would it be greater launches than you would do anyway?

How do you see Moura helping and where do you have space here? I want to know this evolution with this new.

Also with regards to Riva, Riva, you said that dynamics was very good in terms of sales speed, and margin. When we think of this point here, does it make sense to Riva continue growing?

Could Riva grow even more?

Ygor, with regards to the partnership with Moura, well, a disclaimer: we cannot begin any operations without the approval of CADE. We are in this process now.

CADE, once it authorizes us, and this is what we have been waiting for, there is no movement. Nothing will happen before this approval.

We're in this process now. Once we have the approval by CADE, we are very optimistic with this operations.

We have noticed in the northeast in Minha Casa, Minha Vida has had a growth, has gained relevance this year. Adjustments were done before that increased reportability in the northeast.

Now the day before yesterday, it was focused in the north region. We're very positive.

We're very optimistic. Moura, the operation here can bring us growth in relation to what we had imagined before because business origination capacity in the northeast by Moura is big.

Everything that's going to happen, there's always a demand, right? Then we can redistribute our operations in Brazil.

We can prioritize growth in a region or another. I don't want to give a perspective for the operation as a whole, right, because we can migrate launching from one region to the other depending on the demand.

We see positive perspectives for the northeast. We are enthusiastic with Moura's relevance in the region.

Direcional, with the execution and the experience in Minha Casa, Minha Vida, Moura has huge capacity for origination in the region. It's known, access to land.

I think here there's a very positive symbiosis for both companies. Let's wait for CADE, and then we will define how we are going to do and what happens with these perspectives from here on.

They tend to be good for both companies. Riva: yes, we've noticed very positive Riva performance.

Once again, how is this defining our business? Here we have demand, and depending on what happens with demand, we can have a greater amount of launches.

We can have more. What I can say until now, Riva has performed well, sales speed has been good, level 4 has been positive, and this is why in this 3Q, you saw Riva having greater net sales than Direcional and strong relevance in launches.

We can't say it will have the same relevance and then the 3Q because of the size of the landbank. Riva has 15 billion, Direcional 35.

Riva is almost 30% of the landbank of the company as a whole. It is natural that the larger volume in Direcional tends to be Riva.

The fact that we always have the possibility to choose in what segment to work in is a huge flexibility for our operations, and this has made sense for Riva. From here on, we always look for sales speed.

These adjustments done in the program increases the product attractiveness of the north region. There was a strong change in the subsidy curve, and this change is more relevant, the lower the income.

These adjustments allow the demand to change, and we have flexibility to operate from 1 to 4. We migrate part Riva, part Direcional, according to what we perceive in terms of demand of sales speed.

This is our priority. We can't say one company is going to grow more than the other.

It is demand that rules things here, right?

Thank you, Ricardo.

Thank you, Ygor, for your question. Next one, Rafael Safra.

Good afternoon, everybody. Thank you for the question.

Two points I would like to explore with you. First one, gross margin, but the separation between Direcional and Riva.

What drew attention was the gross margin of Riva this quarter, over 43%, and I want to see with you if you consider this as a recurring level for the next quarters. Also I want to understand if you see Riva operating with a gross margin above Direcional, more than Direcional the next quarters.

Second point, I want to consider the sensitivity you see with cash generation and net sales speed. Do you have a level or some kind of idea 1% of net sales speed margin or how much it can contribute with cash generation in the company?

Things you can detail here would be great.

Rafael, Riva gross margin versus Direcional, in fact, Riva has a margin that is slightly over Direcional, greater, right? If we look at the previous quarters, we can see some other quarters, right?

This is a common scenario somehow. It is difficult to say that this 43 level will occur in a recurring way, right?

I think it's a good scenario. Riva helped by level 4.

If we look at Riva's REF margin is over, in the short term, these levels should remain. I think it's very difficult to just say yes, yes.

Another point with regards to cash generation versus the net sales speed, well, no doubt it's net sales speed. As long there is that transfer to the plant, less cash exposure here, but I don't want to risk committing myself with these percentage points versus billion, millions in the other, and even because it depends on many variables.

No doubt, if we can have this strategy of increasing sales speed, things will be lighter and smoother and less working capital in the operations. Ricardo, would you like to add to this?

I think that yes, I think we have more or less 5 billion in inventory. 1% of net sales in every quarter increases in growth, and our sales have been direct table, right?

With less cash generation. The average should be close to 40%, 50%, you can do some calculations here.

Not everything is as simple. Things vary.

You might have a period of transfers, higher period, lesser period. Generally, a net sales speed is done in recent launches with less POCs, but this data is all public, right?

This is more or less the impact is big, and the greatest value we can generate here is the net sales speed. We're very focused here, right?

In spite of this improvement happening gradually, it's not from one day to the day. It's important to stress this.

It's not going to be from one month to the other or quarter to the other. It's one day after the day during several days until operation is more mature, sales is more qualified, more products being offered, it's gradual.

Because definitely we're not going after this in the areas, we see the perspectives of continuing having this improvement. This is what we've gone afterwards.

Great. Thank you very much, everybody.

Thank you, Rafael, for your question. Next one, Marcelo, JPMorgan.

Thank you. A question.

Ricardo mentioned in the beginning of the call Riva, the performance. I don't know if you can tell us a little bit about how the due date here, as was mentioned after approval of level 4, at least in our vision here, it would be possible to reach this.

I want to know how this can impact Direcional's operations.

Paulo, help me here,

just to confirm some detail. This was in the third year with a profit goal that we need to deliver in Riva, there's reasonable time before us.

I don't know if it's another 2 or 3 years in function of this liquidation. I think it's very early to count on anything now, but certainly we thought it would be important in case the operation had a better performance than projected.

We want to continue having good performance in the company. 85% is captured by Direcional, but we're very conservative, it's a little difficult to talk about this.

Let's focus in the operations and generating value, and then afterwards, we are going to see whether we're going to have this in the defined date.

Can you give us details here?

The earnout is 20% over the TSCD, and the most important is that more than 80% of Riva is ours. Somehow, I'm saying that the earnout is good, but is not so relevant for the consolidated results of the company because it's based on the percentage that was sold, it's in a calculation we have time to do in.

It's not something that will transform Direcional.

Perfect. Thank you.

Thank you, Marcelo, for the question. Next question, Elvis, Itaú.

Hello, everybody. I want to know you'll explore the distribution between level 1 and level 2 and increase of subsidy for the client of the company, and also because there's a regional checking.

How do you capture this with more products in the area, increasing sales speed, or is it via margin? The second topic here is about how the exemption, right, of tax, how should this benefit the average buyer of Direcional, how this market can change here, how much of sales come from informal market, and if you can give us an idea of this numbers here.

In Manaus specifically, the level 1 and 2 share is one of the greatest we have in our operations when compared to any city in the country, perhaps Manaus and Brasília, but Manaus certainly is the most relevant in income rates that are below the program. We have products for this product, and certainly we have the conditions of offering product in the short period, very quickly.

We're very enthusiastic with these perspectives of subsidy increase because many people can begin to have purchasing power, and we can offer products destined to these families in Manaus. Manaus is 15% of our business, in terms of launches and sales, between 13 and 15.

These are small details that when summed, make the difference in our operations. There is one detail that completely changes results because of the fact that we don't have a concentration in one single region, one single segment.

We see very positive perspectives for Manaus because it is an area where we have a lot of products that meet the needs of families in this income level, because in these families that had an increase of affordability with this change. Now, Paulo, tell us about the income tax exemption here.

The possible benefits of our business with regards to tax exemption or income, our business is credit, right? The reduction of taxes increases net income, the first impact is the client to have more available income to pay the installments of Caixa and ours.

We see a huge possibility of reduction of default and more credits being granted to these clients. Also second point that I believe can be relevant, obviously it depends on other movements, but is the possibility of a huge formalization of income of the Brazilian man.

Today, in the credit analysis of the financing bank, the informal income, it is only accepted for families with income below 2 850, any client or customer that has informal income and wants financing, they need to formalize the income, right? This changing allowing customers to formalize their income without having to pay tax, this is an important impact.

The financier has to work together with the Federal Reserve and include these customers with informal income to formalize their income so that they can get financing. There is an positive increase of demand and the addressable market.

It's very important in the program. There's the two main impacts that could influence our business: and the net sales speeds and increase of net sales, credit, and a reduction of default.

Right? This is very positive.

Thank you, Paulo, Ricardo. Thank you for the question, Elvis.

Next question, Ana Júlia, UBS.

Good morning, everybody. I want to go back to margin, as has been mentioned.

The Riva's gross margin ended up raising the consolidated results this quarter. More information with what explains the difference and performance of margin, Riva's trend to be growing margin and Direcional more flat?

Also the partnership with Moura, what margin level can we expect for products within this partnership, right? Would they be closer to Riva or Direcional?

Is there a perspective you can share with us? This would be great.

Thank you.

Ana, as we mentioned, Riva ended up being more benefited. The program improved football, Direcional and Riva.

We have been able to transfer prices, but with regards to sales speed and the sales speed delivered by Riva in these first 9 months, we see a strong demand and greater price elasticity in the program. The entrance of level 4 allowed us to gain in price, increase area of units.

We don't have 350. Now we have a product that would be 2 rooms and a suit.

Now we sell with 3 rooms. We gain a margin here, but there is a lot of things that helped Riva this year specifically, right, and allowed the Riva margin to be faster than Direcional.

When we look in a macro way, the both companies were very healthy margins. Cost scenarios positively impacted both.

Direcional and Riva benefits with inflation below expected certainly helps both companies. From here on, it is difficult to see how this is going to continue.

You might have new factors, right? This Minha Casa, Minha Vida impacts Direcional and not Riva, but things might change, right?

It's difficult to say. I don't know if Ricardo would like to say With regards to Moura, I think it's too early to talk about margin.

Generally, we shouldn't have margins that are different than what we operate in, otherwise we wouldn't be making business, right? Generally, we don't begin a business where we don't have margin that is not enough to pay for our capital.

As Ricardo said, we're waiting for the approval of CADE to begin to doing things, right? This is a discussion for after this approval and the beginning of the business, in fact, launching the first product and really understanding the landbank.

The fact is that we have a relevant opportunity here, right, to expand operations in the region that is object of this partnership. Ana?

Perfect. Thank you very much, everybody.

Thank you for the question, Ana. Next question, Ygor, Goldman Sachs.

Good morning, everybody. Thank you.

I want to explore more the acquisition of these 12 lands you talked about. One has already mentioned that the land inventory is big, but I want to understand more about these landlots acquired, the potential of sales of 2.7 million.

I want to understand where these landlots are, product focus, anything that would help us understand. Also, I would like to understand how you see the land acquisitions for the next quarter and the next year.

Thank you. Ygor, well, the landlots, we have always tried to prioritize landlots in those areas we notice greater absorption speed of the market and where we have room to increase launches.

There are places where our landbank is healthy and big, but when we consider it as a whole, it's healthy for the amount of launches we've had for more than 5, 6 years, right? Most is acquired via swap, there's no capital allocated here.

It doesn't damage our return when it's in the approval phase. There are certain areas we see need and opportunity to continue growing and launching and gaining share, and this is what we need to have gains in net sales.

I said Salvador and Recife, for example, are areas that are less mature than others. Our operations began at a later period.

São Paulo is an area where our share is small, but there is room, there's huge market. We try to prioritize areas in those cities where sales speed are high and where we can have more products being launched than we have when we analyze the demand.

Obviously, when we notice sales speed of Riva and we have a greater demand, a need to acquire segments in landlots in this segment, most probably we're going to go after more areas where you have this Riva product and where we have greater net sales and slower landlots. We always prioritize the landlot which has as a target the city where we have target clients that can buy this land, and in cities where we can gain share so that we can have a return over the capital we spend in that area.

Thank you very much.

I think we have no more questions here at the moment, we close our questions and answers session. I would like to thank you all for your presence and give the floor to Ricardo for the final highlights here.

Once again, thank you very much, everybody. I would like to say that our team is always at your disposal for any questions that might emerge after the end of this call and eventual announcements of the program.

We want to be always at your disposal. We want to continue very optimistic and trying to do the best work possible from our side.

Thank you very much, everybody, and have a very good day.