Good morning. Thank you so much for being here in our video conference for the results of fourth quarter '25 and the year 2025.

Here, I'm going to start with this slide that summarizes the fourth quarter of the year. Giving a bit of context of the market, we observed a domestic demand that was pressured by macroeconomic factors, such as high interest rates and suppressed income and indebtedness of the population.

We observe major competition with imported products in 2025. We also observed a growth, very strong one, of imported goods in our market.

It grew 21% for 20 million pairs of imported goods. When we look at the ICM 6402 of plastic shoes and rubber, we can see a robust growth of 26% with 16.4 million pairs.

For you to have an idea, only now in January 2026, the growth of total volume of footwear, imported footwear, is 34%. When we look at the ICM tax 6204 that represents plastic shoes, it's a growth of 22%.

Competition is coming very strong with domestic manufacturers, but also with imported goods. With that, we observed an adjustment of inventory in many channels through the reduction of sell-in.

We also observed punctual impacts in the international market, for example, in the United States, the big tariffs impacted our exports for the USA with delays in orders and postponement. Instability in the Middle East, also as we have seen, impacting greatly logistic chains and hinder negotiations.

Also anticipating orders that were done in the third quarter impacted our volume of sales in the fourth quarter. Another thing that impacted sales, we had a longer winter in the third and fourth quarter in the South and Southeast, and impacted sales also.

When we look at our operating management, facing this context I just mentioned, the focus of the company was to maintain the price strategy and a mix preserving margins. Volume is a major driver of margins for Grendene.

With reduced volume and a significant decrease, as we are going to see later, we could manage to keep healthy margins above other factors that we had in the market. We have big volumes of orders, and we did an adjustment of production and in the structure, we could adequate Grendene's structure to the level of demand.

We can see that that's positive. The inventory levels of our clients—Division 1 brands and Melissa—they have healthy levels.

The results of this management—focus in price and mix and preservation of margins—it generates cash, R$57 million, a very robust financial result, and a distribution of dividends that is approved of over R$1 billion, 1.4 billion. Talking a little bit in detail about the performance of Division 1 brands in this first quarter, we saw a decrease of sell-out on the second quarter as a whole, which ended up bringing adjustments with lower volumes of sell-in to adjust their inventory levels with more conservative clients operated with more smaller inventories.

We observed sell-out in most of the channels, especially in the distribution channels and magazines. The only one that's growing is the self-service.

The decrease of sell-in from 21.7% reflects a decrease in the sell-out in the third quarter and either in the fourth quarter. We can see a reduction of sell-in in revenue and in volume in all the segments, except the Pega Forte brand.

As I mentioned before, the adjustments of clients' inventories was done to improve the selling volume. Today, our clients that work with Division 1 brands, they are operating with healthy levels of inventory.

When we look at the performance of Melissa in the internal market, we can see the growth of sell-out in revenue, even though with the reduction in volume, and that because of the growth of the average ticket and more share of products with added value. It's a reflection of decisions made about products with more perceived value by clients.

The performance of sell-out is aligned with the performance of the sell-in, which shows that our stores, our retailers, they have healthy levels of inventory. We can see an increase in the integration of digital and mortar and brick channels.

We can see a growth in 24% sales online in the omnichannel channel. We also had an expansion of our stores, the Melissa Clubs, throughout the year, and we closed the year with 438 stores when compared to 422 in the previous year.

Talking a little bit about the e-commerce, as I mentioned, we have observed a robust growth in online sales. The GMV grew 27.1%, the volume of GMV grew 27.1%.

Even with the smaller volume of sessions, the gross margin is stable, almost 70% as margin. EBIT, recurring EBIT grows almost 29% for R$6.4 million.

The share of online sales of Grendene when compared to the total sales of the domestic market goes from 5.2% to 7.6%. When we isolate Melissa, online sales of Melissa represents 18.7% of the whole of the sell-in in the domestic market.

Now talking a little bit about exports, it suffered in the quarter. We observed a decrease in the volume of 14.7% and the gross revenue in reais went down 9%.

When we exclude the GGB data of this, the volume decreases 14.7% and revenue, 1.5%. We had a few impacts, as you can see, in the United States brought a postponement and reduction in orders, and instability in the Middle East ended up impacting logistic chains and negotiations and deals with partners with countries in the region.

The anticipation of shippings for the third quarter, especially for Latin America, compromised the performance of exports in the fourth quarter. Having said that, these are our results: the volume reaches 35.3 million pairs, a decrease of 19.8% in the quarter.

The volume in exports decrease 14% and the domestic market decreases 21%. Gross revenue, almost R$915 million, is a decrease of 12.2%.

In the international market, a decrease of 2%, and domestic, 13.1%. Gross profit goes down 27.1%, almost R$319 million, with a gross margin of 5.7 pp for 14—45.2%.

I'm going to talk about it in detail later on, but the most factor that impacted was the smaller volume and reduction of costs. The recurring EBIT went down 43.7%, reaching 122.5 million, and the EBIT recurring margin goes down to 17.7%, increasing 41.7 pp compared to last year, reaching a result of R$286 million, minus 17.7%, and gross recurring margin, 41%.

Here, you can see a strong influence from GGB in our revenue and expenses. I will try to isolate the impacts of GGB, because in the past, GGB as it had only 49.9% of the operation, the results of GGB impacted only the equity method.

Since we acquired 100% of the operation, the GGB results started to impact every single one of our lines at the DRE. Our gross profit, total one, was 12.2%—decreased 12.2%.

It would have decreased 16% if we excluded GGB. The net revenue decrease 18% and would have decreased 20.2%.

Gross profit, 27.1%; without GGB, it would have a decrease 28%. Operating expenses grew 17.2%; they would have decreased 13.7%.

Our EBIT that was 47.7%—and also making adjustments in the financial results because part of that comes from equity method, because part of our real estate investments, these are holdings, the results of these holdings come via equity method. Our cash results, we do an adjustment and we detract from the EBIT and use in the financial result.

Making these adjustments, excluding results of our real estate projects, our EBIT was 47.7% and would have decreased 43.7%. We will live from 47.7% to a decrease of 43.7%, and the net profit, 24.5%, would have presented 17.7%.

Our impact over the revenue, it drops 12.2% in term of volume with a drop of R$174 million, price and mix with a R$66 million of revenue. Volume reduced by 34 million, price and mix of our international market adding R$28.2 million, and the real over 7% stronger than the dollar, reducing our exports by R$16.3 million.

We lost about 5.7% of gross margin, going to 45.2%, a drop of minus 5.7%. That's very healthy when compared to other players in the sector.

Our CPV that was 49.1% represents now 54.8%, and the main impact is the labor representativity, 48% points percent compared to last year, which is the higher of this whole series. The raw material is stable, the lower percentage in this historical series, and OGF is stable with a growth of 0.7%.

Impact over labor and the gain of 4.8%. Let's see: the lower volume of orders, embarked orders, a lower volume, and then we dilute less our fixed cost.

Another impact: the payroll increased. We had a gradual increase since last year, structure adjustment, the increase of 4.8 percentage points.

It involves the reduction of our structure, labor structure in the factory, we had one-off costs in the period, and we had a difference between the incoming order and adjustment of labor. Grendene works with placed products.

When we receive the order in March, I get all the orders in to deliver in April. Historically speaking, we have a high concentration of incoming orders at the last week of the month.

Last year, we had higher concentration, especially in the last two days of the month. We get the orders, the orders had a lower volume than what we expected.

This volume comes in at the end of the month and lower than expected. The time to be able to adjust the whole structure of the factory to produce the following month was very short.

We adjust the structure, however, this concentration of orders at the end of the month really harmed the labor component in our CPV, which is the COGS. When we look at our operational expenses, 17.2% of increase when we consider the recurring expenses, they drop 13.7%.

Total commercial expenses drop 4.8%, administration expenses totally advance 23.3%. The GGB impact is present here.

I try to eliminate this impact, I have a correct comparison. Total commercial expenses drop 4.8% in the quarter.

I eliminate the GGB numbers, I have a higher drop of 18%. Administrative expenses grow 23.3% in total; when I exclude GGB numbers, I have an increase of 7.2%.

This growth is really impacted within personnel expenses because of increase of payroll and expenses with adjustments in the administrative structure. Here, I show the variations of each line, their impacts over the accounting EBIT with a decrease of 47.7%, the recurring EBIT, 43.7% of drop.

We have variation of net revenue because of volume, commercial expenses varied and helped our EBIT, administrative expenses, and the equity variation really harm our EBIT. In the quarter, we have R$33.5 million of non-recurring items, and out of the 33.5 million, we have two main accounts: R$71.4 million the results of real estate investment via holdings, and has impact over EBIT, we take that result out and include it in the financial one, because it's really the remuneration in our cash flow.

Then we have non-recurring GGB results as well. Financial results here, really robust.

We have a high total. Our financial result was 8.6% above the fourth quarter last year, almost R$161 million, and the main impact here of the financial result, higher CDI, 3.8%.

It's a superior exchange result. A result of exchange and CDI took us to almost R$161 million.

We have investment in projects, real estate projects, almost R$990 million. This portfolio is started up in the second half of 2019 with a nominal result of 310, almost 311% of the CDI.

Numbers of 2025 here: in the whole year, we had a drop of 11.1% of the volume, almost 124 million pairs; a drop in the international market of 4% and in domestic, almost 14%. We have a strong effect of GGB in gross, but I eliminate that effect.

Domestic market, a drop of 2.6%. Net revenue drops 5.8% to almost R$1.169 billion.

Gross margin also drops. EBIT, R$367 million; recurring EBIT of 15.2%, variation of 2.4%.

Liquid results, net results, almost R$16 million, growth of 2.4%. Net margin, a gain of 3.4%.

I here eliminate the GGB numbers. The gross revenue growing 5.1% would have dropped 4.4%.

The net revenue dropping 1.7% would have dropped 7.8%. The gross results also with improvement.

Total expenses would have dropped over 11%. EBIT with 27.7%.

Here again, I have the CPV, the explanations are the same, many per quarter. Gross revenue from 47.2% to 45.2%, and the production factor that impacts the loss of margin is concentrated here in labor, and raw materials as the lowest level in terms of net revenue share, and lower labor with lower dilution of fixed costs, and increase of payroll, adjustment of structure, and the difference that I mentioned before.

Total operational expenses grow 23.5%, total commercial expenses 22.4%, total administrative expenses 31.6%. Strong impact of the GGB numbers; when I eliminate them, operational expenses from 23.5% drop 1.6%, commercial expenses grew 22.4%, excluding GGB we have a drop of 4.4% general, total administrative grew 31.6%, would have reduced to 11.3%, the increase of payroll, adjustment of structure, and tax expenses impact here.

Financial result grows 33% in the year, reflecting a higher CDI, a result 7.5% higher. Then we have our development project, real estate projects in other assets, financial assets, and equity equivalency also present here, showing a result of R$488.9 million.

Our result, net result, was of R$64.8 million, 118.5 of reserves for our tax, ICMS, reserve for income tax as well, and then legal reserve, we have R$21.5 million for legal reserve. R$409.1 million to be distributed, we have distributed 326 million, the October result and part of November's result mentioned.

We still have R$83 million to go to R$1.1 million of dividend and R$67 million net of COGS. The shareholders that have shares as of the 24th of April, our shares will be ex-dividend.

Out of R$409 million distributed in December last year, we have exceptional distribution of almost R$980 million to be paid in four parts. The first part was paid, R$400 million in January; on the 18th of March, R$200 million; on the 10th of June, 200 million; and on the 9th of September, R$179 million.

This pay flow was devised in a way not to impact our net results. The total of dividends we had since opening, going public held company, the total paid dividends, nominally, R$7.6 billion.

Dividends itself, alone, they are worth more than some of our companies of the sector. If we correct with the IPCA rate, 7.7 million, they will turn into 11.2, and if we correct that with the CDI, we have R$16.1 billion.

This graph, I can see it as a very positive graph to show the resilience of Grendene and the capacity we have to generate results throughout the period with positive or negative scenarios. Year after year, we have been distributing dividends, and every year since going public, we have this distribution of dividends.

Now, that's it, I'm going to wrap up and I'm going to be open for a Q&A session.

"There was an internal discussion and legal one about the possibility of distributing dividends coming from tax reserves, and is there a future risk of this decision being questioned by the public entities?"

Good morning, Eduardo. Thank you for this question.

In our evaluation, the risks of questioning are minimum. We have major legal advisors saying that we had a lawsuit that it was ruled valid and the prize that the IRS had to start with an action, two years after the ruling, we didn't have any questions afterwards in this period.

According to our lawyers, we are really safe about this decision of distributing the incentive reserves, the state ones. Remember, we only distributed incentive reserves for ICMS.

Thank you for your answer.

"Good morning, everybody. Could you give more details of what has done related to the projection, adjustment, and structure to adequate to current volumes?

What can we expect from the operating operations in 2026 and international competition? Thank you so much."

Thank you, Tadeo, for your question. Basically, what we did was to reduce our people, and we also reduced the administrative structure.

These adjustments are easier with direct labor, the people that have direct contact with production, and we also made adjustments in support labor. Your second question is perspectives for 2026.

We understand it's still a challenging year, and the elements that made 2025 a challenging year, they remain. Added to that, we have elections in 2026, and we have World Cup and many holidays.

We expect to grow in revenue, volume, and margins. As I mentioned before, we had adjustments in structure of labor, raw materials are helping us.

We are relying in that we're going to have positive results. We believe that greatly.

Once again, I would like to thank you for your presence in our video conference. Our IR team is available if you have any questions.

Please send it to us.