Good morning. Thank you, everybody, for your presence in our video conference to disseminate the results of the second quarter of '26 and the first half of the year.

The quarter was marked by an environment of a challenge in consume. In this environment, we try to preserve the profitability, operating profitability of the business and cash generation.

We have observed signs of recovery, a gradual recovery of our lines. In the domestic market, it remained with a very selective consumption because of this very challenging environment, because of the high indebtedness levels of the population and high inflation rates influencing low-income people.

Added to that, population, especially the low-income population, they have less money on their pockets for consume, especially to buy non-essential items such as footwear. This environment created a more selective consumer trying to make purchases in the more accessible categories.

In the international market, we continue growing in volume, focused a lot more in Latin America that supported the shipping for international markets. We try to preserve our profitability.

Gross margins are stable, positively impacted by raw materials that have compensated the pressure of labor and a mix of commercial products that are more accessible. Also, we continued very rigorous with our operating expenses in this control.

Our net income had a drop, especially pressured by lower financial results because of the extraordinary distribution of dividends that happened in the last year, in the end of last year, that our net cash flow had a significant reduction. Still, we have we kept a very robust cash position with R$1.5 billion in net cash.

Having said that, in the second quarter, the volume was up 26.8, a decrease of 0.9%. This decrease is concentrated in the domestic market, where we noticed the volume decrease 1.9%, while in the international market, we observed a growth of 4.8%, focused highly on the region of Latin America and concentrating almost all of our shipments.

The gross revenue decreases 3.2%, reaching R$731.8 million. The net income has a smaller decrease of 0.4%.

The markets have behaved the domestic and in the international one. There was a retraction of 5%, while in the international market, we observed a growth of 2.3%.

The gross profit grew 0.6%, and it was supported by the good behavior of raw materials, good performance that have compensated the labor in COGS, as I'm going to mention in a while. Gross margin reached 42.2 48.2% of 4 pp.

Adjusted EBIT decreased 48.6%, R$95.3 million, with a margin of 3.3%, a decrease of 1 2.2 pp. It was adjusted by the GGB numbers.

Excluding GGB numbers, we have this decrease of 2.8 pp in our gross margin. The net adjusted net income decreases 48.6% for 9 95.3 million, impacted by the financing financial results, especially because of the high distribution of dividends on the quarter.

The net margin, recurring one, is a retraction of 17.5 pp. Now going to the detail of every single market, if we observe the domestic market, Division 1, all the brands except for Melissa are in the Division 1.

In the domestic market, we observe a consumer that's more selective, concentrating a demand in more accessible categories and channels that circulate more money like self-service, direct and indirect channels. They are our distributors and wholesalers that buy our products to sell to small smaller markets in neighborhoods.

The gross revenue of the brands decreased 7.5%, especially impacted by the revenue per pair because of the commercialization of a demand of products with lower prices. The volume have a decrease retraction minus 1.8%, revenue per pair minus 5.8%.

The highlight is the growth of 15.7% in the e-commerce of with online Division 1 online brands. When we see the dynamics of sell-in and sell-out, we observe a scenario that is more important than the higher than the sell-in, indicating more cautious in the reposition of inventories, recomposing inventories for the future.

As I mentioned before, the more accessible categories and the channels that with more circulation, they have better performance inside the brands of Division 1, Ipanema, with the men segment with Rider, Cartago, and the boot segment. They are the ones that led the growth.

We had they led the growth in the second quarter with products with more value added. These products have a more challenging scenario.

Then talking about Melissa, Melissa grew in revenue 2.6%. Volume decreased 3.2%.

We observe that as revenue grows, volume decreases, we have a a gross a revenue per pair of 6.0% growth. We could keep our premium positioning and our capability of selling products with more added value, even in this challenging environment.

Online Melissa sales GMV that take into consideration sales done by Grendene and by our franchises using our online platform, they grew 6.9%. Then observing this dynamic of the sell-in and sell-out of Melissa, we can notice that the sell-in and sell-out have similar behaviors, indicating a balance between fine end consumer and reposition in the retailers.

In the second quarter, we had a World Cup where we could observe a significant reduction in the flow in the Melissa clubs, the stores during the World Cup. As I mentioned before, e-commerce had a very positive performance, compensating for the less flow in the physical, the brick-and-mortar stores.

While the sell-in just accompanied the increase of the sell-out. We started the second quarter with 478 438 franchises when compared to 419 in 2025.

In the international market, Latin America just supported the shipping growth. We have positive KPIs of gross revenue in dollars and reais.

Gross revenue increased 2.3%. When we look in in dollars, it was 14.8%, and the volume grew 4.8%.

It was supported by the shippings to Latin America. What we could observe in the international market, an environment challenging one, marked by regional conflicts, exchange rates, and and our international distributors also were very careful with their inventories.

The growth is concentrated in Latin America because of the conflict regional conflicts, we can see a lot of logistics disruption and implement the growth in international freight costs. Then started with the online sales, the digital channel combined growth with higher profitability and share gains in the domestic sales.

GMV grew 12.1%. Volume per pair grows 4.1%, even with a decrease of 14% in volume of sessions.

Gross margin grew 2.2 pp, reaching 71.3%, while recurring EBIT on the online channel grew 10.8%, going up to R$1.4 million. The general share of our online sales in the domestic market on total sales is 6.3% when compared to 5.3% in the second quarter of 2025.

When we isolate Melissa, the online sales represent 18.2% of everything we sell in the domestic market. Here we are showing the what impacted the gross revenue from 756.2 to 731.8 is a decrease of 23.

The volume reduced our internal revenue and impacted negatively our gross revenue in R$17.5 million. Volume, price, and mix: volume adds R$8.7 million, while price and mix, they added R$18.4 million.

The exchange rate, the average was R$5.4 compared to R$5.65 last year in the second quarter, it reduced decreased our gross revenue in R$23 million. Now starting with our COGS, the reduction of our the costs in our raw materials was the main reason for our growth in gross margin, which went We had a increasing 0.4 pp.

When we observe the factors that compose our COGS, as I mentioned before, raw materials that went up from 23% and it's representing now 22.3%, it's a gain of 1 percentage point, while labor is the share was 0.2 pp, and this increasing labor reflects basically the payroll. Since last year, we have been observing the the payroll costs.

With the commercialization of products that are more accessible, we have an a dilution of our fixed costs. Also, we have an increased complexity of products sold.

Even though they are more accessible, we observe a more complexity in in the production of models. Looking to our operational expenses, total ones, I include the GGD, and I include the results as well.

When we invest through a bonus, and then you have other costs. When I consider the total expenses, 9.7%, and when we do the adjustment, recurrent the operational recurring remained practically stable with a growth of 1.5%, which is below the inflation.

Now total commercial is 2.4%, and when I consider the expenses recurring expense of of GGB, I have a growth of 1.8%. Now the administrative and general expenses total once they they dropped 14.1%, and when I exclude GGB data, I have 1.2% of growth.

When we look to the commercial total commercial expenses and the total administrative expenses, we have retractions of the expense. When I exclude GGB, we have a growth because this shows the work that was of restructuring that we did in the structure of GGD, where we had significant reduction of the operational structure of the company.

Here we can see a graph that shows the impact of our EBIT. Here in the left part, we have the EBIT at the end the second quarter 2025, it was 43 R$42.5 million, and for the second quarter, it went for R$9.7 million.

Here we see that the net income brought a negative impact of R$2.4 million, and the negative impact of 5 R$58 million. As I mentioned, we have in real estate investment around R$1 billion, and basically, the instrument that we use, they are the either these COGS or holdings.

When the investment are done in holdings, the return impact the the impacts. In the second quarter, we had several project launching.

How how does the accounting part, the booking part work through holdings? When we do the investment until a project is launched, we then carry this investment for the the value of the main value.

When the project is launched, all the profit the all the profitability is seen during the launching. Last year, we had several project launching that had the they had retained profitability that was seen in the second quarter.

This year, we did not have the launchings, we have a profitability, retained profitability to be recognized because there was no launchings of the referred projects. All the other items, variation of the of IOE and oh, sorry, COGS, they helped us to have a positive EBIT.

When I do the reconciliation of accounting EBIT, which was R$9.7 million, for the adjusted EBIT, we have R$6 million of recurrent expenses in the second quarter of 2026, basically regarding to the GGB, basically referring to operation of GGB plus R$2 million, which is the inventory for GGB. Here you see the financial result, as I mentioned.

We had a retraction of the results of 34%. This reduction is explained because of the low balance invested, 47% that was invested.

We had R$9 billion invested. In the second quarter, we had around R$6 billion.

This was because of the payment of dividends throughout this first quarter. When we do the adjustments, those project real estate project that were launched in the past, I then bring R$50 million inside our financial results.

This result is part of the remuneration of the cash flow and not of the operation. When I do this adjustment, our financial adjusted financial result has a reduction of almost 61%.

We have around R$1 billion invested in our investment real estate investment projects, and since its launch, it has a it has a retained profitability of 27% of the CDI. Here we go more objectively in the first quarter results that are very similar to what we observed in terms of the behavior of the second quarter.

The volume grew 0.3%, reaching 52.5% in pairs. The international market had a retraction, and the domestic market growth in 3%.

Gross revenue drops then, and the retraction we see both in the international market and in the domestic market that reduced 3.7%. The gross profit reduced 6.5%, reaching almost R$465 million, with a gross margin with a retraction of 1.7%.

Adjusted EBIT reaches R$74.8 million, with a retraction of 41%, with a recurring EBIT margin of 7.6%, a retraction of 4.7%. Our adjusted net profit reaches R$270.4 million, very much impacted by the reduction of the average balance, with a retraction of 2.3%.

Here the items that impacted our revenue, the internal market, then the gross revenue, the mix, which is more more accessible, it reduces our gross income. Also, we see the 30 While the mix price added R$65 million in gross revenue, there was a reduction of gross revenue in 42 million because of the 10.5% devalued.

Our CP, our COGS, we had 1.7% raw material is helping the gross margin with a lower intensity as we observed in the second quarter. Representativeness of raw material on the net income went 22%.

Labor in the first quarter, as observed in the second quarter, it represents 1.6% above the net income when compared to this the second quarter. The impact of label and also the remuneration of the payroll and a better dilution of cost because of the commercialization of the portfolio of items that are more feasible, we have a lower dilution of the cost of labor.

Total operational expenses grew 2.4%, being that the commercial expenses 5.4%, and also general and administrative expenses reduced 6%. When we exclude the GGD, the total expenses, they grew 0.3% under the inflation of that period.

Administrative and general expenses then reduced 6% when we consider total expense that grew 1.9% when we exclude GGB data. Once again, the same comment about the second quarter, this reduction when we look to the total with a slight increase under the inflation, when you sue extra expenses of GGB, shows the strong work that you do to reduce the operational structure of GGB in the past.

Here, once again, the graph shows that what impacted our EBIT in the first quarter. Here in the first quarter, the explanation regarding the equity for real estate investment is the same for the period of the first quarter.

As we saw in this second quarter like the first quarter, for example, COGS, commercial, and administrative expenses and others, they have added EBIT to Grendene. When we consider the accounting adjusted EBIT, we had R$3.5 million of non-recurrent expenses, and the main components here are CIDE over foreign income.

It was an agreement that we did with the IRS because of the new understanding of the incidence of CIDE over the payment of the license abroad, and we had the results of the GGB in this first quarter. The financial result, very similar to the first semester, similar to the second, with the average balance, which is 32.5% under, and in the second quarter, it was 58 million.

Now now the adjusted is R$56 million of financial result that impact our EBIT. We do then an adjustment for the financial results because this reflects the remuneration of our cash flow and is not part of the operation.

Lastly, the result, the retained result of the semester was R$191 million. When we take away the reserves, we have R$3 million for the calculation of legal reserve, and when now we have to distribute R$114.3 million.

As we have distributed R$55.7 million in the first quarter, now in the second quarter, we still have to distribute R$58.6 million. How will they be distributed?

R$28.6 million will be distributed because of dividends and almost R$30 million gross or R$24.7 million net through the IOE, which considers the 17.5% of the net value. This will be paid for the shareholders that have shares on the 23rd of August, the share will ex-dividend on the 24th of the eighth.

This is what I had to present regarding the figures of the second and first semester of the year. Now

Good morning, everybody. First, the EBITDA margin adjusted in 3% on the second quarter of '26, what do you consider a connection with mix, discounts, and fixed prices?

The second question: on the quarter, they originated R$333 million in operating cash and accounts receivable. What would be the cash generation and working capital today?

Sorry, it was just too fast. Thank you for your question, Julio.

The first question in relation to the EBIT margin, it was basically impacted by the commercialization of a more accessible mix of products. In the macroeconomic environment that's highly challenged, we observe a demand for more accessible products or goods, and that impacted the EBIT margins with less dilution.

Then remembering that the second quarter is always our quarter with less value because of the seasonality. It's the quarter with less value where we have less dilution of our costs.

Then for the second half, third and fourth quarters, we will have a recovery of margins, and we will commercialize items with more added value. In relation to cash generation, as I mentioned before, our business is highly seasonal.

On the second quarter, it represents 60%, 70% of our sales. We always have to compare the cash generation of the quarter with the same quarter of the previous year.

We don't have a change in the composition of our working capital components, accounts payable or accounts receivable. I don't see a different dynamic than the previous years.

Grendene has a solid history of cash generation, but we notice that the dependence of the domestic market is exposing the revenue to macroeconomic local consequences. What's the strategic barrier so we don't use the idle capacity and for a more robust international capacity?

Secondly, in relation to the line of products, the portfolio is focused always on the same categories. Is there a study to diversify for new segments and materials to avoid market share stagnation and to attract new consumers?

Lastly, observing the capital structure and productive capacity of Grendene, I would like to know the vision of the executive officers of the future expansion for new markets as internationally as a way to reduce dependence on domestic market. Besides that, what stops Grendene from expanding and diversifying its portfolio, trying to find new sources of revenue and value added, just like Vulcabras and Alpargatas are doing?

Many questions in one, but what I understood is that one and three are very similar. It's reducing the dependence on the domestic market and expansion in international market.

We are trying to expand in international market three years ago. I don't know if you remember.

We developed a joint venture with the people from 3G in a way to exploit the two biggest markets of footwear, which are United States and China. 2024, it was it didn't We dismantled that operation.

People from Grendene observed during this period that the expansion for the international market is not something that happens quickly. It It's hard to build international brands and distribution channels internationally that demands financial investments, high ones, time, and dedication.

We've been working very strongly to increase our volumes in the international market. We have been reviewing our international distributors because today, with the exception of United States and China, we work with international distribution distributors in every market because we understand that they know their markets more than we do.

They have more capacity for us than us to understand the market. What happens is the international market is also challenging.

We have been observing in the domestic market, for example, a lot of imports coming, products coming from Asia. That's not only in the Brazilian market.

Asian products, Chinese products, they are invading everywhere, many other international markets. We have been observing a higher competition with Asian markets, not only in the domestic market, but also in the international.

What we have been doing, we have been investing in marketing strategies. We have been investing in actions to strengthen our brands in a way to increase a desire by our products and brands in the international market and the domestic one, too.

To answer your second question that asking why do we keep always the same categories and materials, is in fact, if you observe, we have an we have a broad line of products and categories. We work with slippers, slides, clogs, wedges, boots.

We have a wide portfolio of products to meet the demands of footwear in Brazil and in the world. We also we are also growing our production of EVA products.

They are more comfortable, lighter, and softer. They have more value added perceived by our consumers.

I think we are doing the right movements to grow in the domestic and international markets. As I mentioned before, the consume environment, especially of the low-income people, which are 70% of our consumers, excluding Melissa and some lines of Rider, this low-income population have been suffering, and it's been a while.

Besides developing new products, as we are doing, new archetypes and new material and using new materials, we are also We have also identified that we need to strengthen the desire. We have to increase desire in relation to our brands.

Last year, we decided to strengthen investments in media. We hired one of the biggest advertising agencies in the country to help us to reposition and strengthen the position of Ipanema.

This is something that doesn't happen quickly. It's something that must be consistent.

It takes a lot of commercial efforts to strengthen the desire, to increase the desire of our brands. I think with that, I answer your three or four questions.

Again, thank you and good morning. Thank you for your presence in our video conference, and we are available here in the IR department to answer any questions.

I wish you a very great weekend. Thank you.