Good morning, ladies and gentlemen, and welcome everyone to Orizon Valorização de Resíduos conference call to discuss results relative to Q3 2025. This conference is being recorded and a replay facility will be made available at the company's website, ri.orizonvr.com.br.

The respective slide deck is also available for download at the company's Results Center at the company's IR website. All participants will be connected in listen-only mode during the company's remarks.

After that, we'll start a Q&A session, and by then, further instructions will be provided. Before moving on, please have in mind that forward-looking statements are based on beliefs and assumptions on the part of the company's management and also on information currently available.

Such forward-looking statements might involve risks and uncertainties, as they involve future events that depend on circumstances that may or may not materialize. Investors, analysts, and journalists should have in mind that events related to the macroeconomic scenario, to the industry, and other factors might lead to results being considerably different from those expressed in these forward-looking statements.

Joining for the conference, we have Mr. Milton Pilão, CEO of Orizon, and Mr.

Leonardo Santos, the company's CFO and IRO. I'd like now to turn the conference over to Mr.

Pilão, who'll start with his opening remarks. Over to you, sir, you may proceed.

Good morning, everyone. Thank you all for participating in our earnings call for Q3 2025 of Orizon.

My name is Milton Pilão, I'm the company CEO. I have here with me, I'm joined by our CFO Leonardo Santos, and as we usually do, we'll be sharing the presentation in four different pillars.

Number one, I'll start and then Leo takes over for the second and third parts, and I'll be back at the end. Right off the bat, we'll be talking about the period's highlights.

On slide number four, basically, this quarter was yet another quarter of consistent results from the company, as you can see. We had net revenues at R$281 million in the quarter, EBITDA at about R$131 million, which already shows running to the tune of R$520 million yearly before the positive impact coming from the biomethane plants, which will account for a higher impact as of Q4.

We are growing our EBITDA annually even before the biomethane ramps up. The adjusted net income at R$42 million, R$41.9 million to be exact, recurring net income, which is quite significant, even being impacted by financial expenses coming from CAPEX investments we've been doing both for Barueri, over R$400 million invested, it's a plant under construction, and also biomethane at Jaboatão and Paulínia.

In terms of our consistency, in terms of predictability and final disposal, we have kept our growth at a good level, both in average price and also in waste volume. Once again, we see waste volume going up, we see average price going up above inflation, IPCA plus 4 percentage points.

Those are numbers we have shown recurrently for the past quarters, and we intend to be doing the same in the coming quarters. We are now midway of this growth curve in terms of volume and price.

We should see this going forward for the coming quarters as well. In terms of carbon credit, as we have said before the last quarter, once again, significant sales and a good recurring net revenue in the quarter.

We said that our investments back in the commercial front on restructuring our carbon credit sales would reap results, and that's what we see now. We see recurring revenue in the quarter, yet another quarter with R$14 million revenue posted.

In addition to that, to the financial impact, of course, the quality of our final consumer, of our client. Of course, we cannot disclose all the clients that we have, but one of them I can mention because it made the headlines: Google.

Google bought significant amount of carbon credits from the company. We do have quality, international quality clients buying carbon credits from us, which will, of course, disseminate and spread the good news around the world to possible potential clients.

That will see Orizon as an important provider of carbon credits in the international market. In addition to that, our solid capital structure is worth mentioning in this quarter.

We had this swap by reducing cost of capital in part of our debt. We have prepaid about R$250 million of a debt that had a cost of CDI plus 3.8% on a yearly basis, and we brought that cost down to CDI plus 1.45% per year, per annum, as you can see on the slide.

Once again, bringing down our capital structure in terms of cost, in addition to extending our average term. Today, average term for that debt is at about above 6.5 years.

In other words, a very solid capital structure ready for future growth, both through M&As and also through investments in renewable natural gas, biomethane. Lastly, I'll be talking about the Jaboatão plant.

We finally had the initial the ramp-up of the plant. The plant went into operation at last.

We had the authorization from the ANP, the federal regulator. The Jaboatão plant already operational in Q4, and the biomethane plant in Paulínia also on track for its construction.

It should be operational, as we said before, early in January. We should start injecting gas in January in Paulínia, our biomethane plant.

On the next slide, if I may, we talk about the acquisition of the Oeste Paulista EcoPark in Presidente Prudente, a city in the west of the state. We have already announced that, an acquisition of the EcoPark, very similar to what we had in our track record for acquisitions.

It's a young EcoPark, recently licensed, with a useful life of over 50 years, a good gate fee, at a region which is rich in a well-developed state as São Paulo, already receiving 300 tons a day and the potential of quickly, very quickly grow and overcome the level of 600 tons next year, as early as next year, with a high potential to develop and provide biomethane. We know that Presidente Prudente is the first city in Brazil to have a biomethane network connected to the grid to provide for the whole city.

In addition to have to being a very important EcoPark, it also has the additional benefit of working with biomethane. Lastly, talk about the biomethane plant in Jaboatão.

I gave you a spoiler, but what you can see here on the slide, we have received the authorization from ANP, order 1297 on October 10th. After the authorization was issued, it took us about 10 days, 10 days to get the plant operational.

There was there was a series of adjustments to be made before operation started. Operation really started on October the 20th.

Early on, we call it the testing period, when we start the operation and we are able to do the fine-tuning on from both sides, of course, from balancing the network, we start injecting gas into ANP's pipeline, a significant volume of gas, you need to balance the grid, balance instruments, and also you need to fine-tune several operational gateways. We're now going through that testing period.

This period already accepts the injection of gas, but we're doing that gas injection through a period of variation of adjustments of fine-tuning. We expect this testing phase to last until late November, and then starting in early December, we'll have the full injection of gas at the plant so that you can start next year in full steam in terms of gas injection, which is 110,000 cubic meters.

That's the piece of good news I had in terms of Jaboatão. As for Paulínia, there's no slide, but I can tell you we're already going through the verification phases by ANP, and we hope to get authorization by the end of the year also.

I move it over to Leo now, who'll be talking about our operating highlights, and I'll be back at the end to talk about our coming outlook. Thank you, Pilão.

Good afternoon, everyone. We have the picture on the left-hand side, that's the Jaboatão plant, that helps investors to have a grasp of of what we have already put up, established, early operations.

Paulínia is very similar. If you compare the pictures, very similar scenario, just about ready to start.

Here on next slide, waste volume, a growth of 3% year-on-year. A small growth in terms of last in presenting last quarter.

A highlight would be maturing assets coming into operation, no big structural major. Civil construction residue, clients in Barra Mansa, they showed a negative variation because of their activity, nothing structural to be sure.

In terms of positive, we have assets maturing at a good pace. In terms of energy generation and biogas, a fine-tuning, nothing really major either in terms of the drops.

You see no source of concern there. That, of course, reflects on the carbon credits.

We had a generation of 800,000 credits per quarter, 820,000, a sale in this quarter of R$14 million, just about 450,000 credits sold and recognized, the new CPC. Those credits are sold and delivered to the clients or we can already see it's either under accounts receivable, which will lead to an to the gate fee of $5 to $7.

We have been reporting in our previous releases. On the next slide, operating highlights, the net disposal price above inflation year-on-year, very similar to last year, IPCA plus 4.

It's what we reported in Q4 Q3, sorry. We expect to maintain this growth pace in terms of real numbers.

We have been able to do that through adjustments and also through a mix of clients. Those two impacts justify the increase in prices above inflation.

On the next page, we have financial highlights, page 11, year-on-year, a growth of 12.8% in net revenue. Q3 2024, once again, we had a recognition of revenue of R$37 million for carbon credits, and this year, we had something close to R$14 million.

In other words, if we were to put carbon at the same basis, we have a growth in revenue even higher year-on-year. When compared to margins and and income, the drop in gross margins, because carbon has a better margin, direct conversion from revenue and gross margin, you see a margin adjustment year-on-year because of that gap between the sale of carbon from last year to this year.

We sold to Volkswagen, I can mention the name because this was published news. We recognized that in Q3 last year at 1 million credits, so that justifies most of that drop in margins that you can see here in Q3 when you compare both quarters third quarters.

For EBITDA, a small negative variation from last year basically driven to that higher sales last year. As it was said before, last year we only had that in Q3.

In 2023, we had no sales. We start start in 2025 when we start to see carbon credits less chaotic, if you will.

We saw sales in Cuiabá early in the first quarter, early second quarter, R$5 million sold sold in Q2, recognized in our numbers, and now in Q3 to the tune of R$14 million, as I said. We start to see carbon in a more recurrent fashion, that's worth emphasizing, as Esteban also said in his opening remarks.

On the next slide, we have CAPEX, R$142 million. We have been reporting strong CAPEX in the previous quarters, focus on growth.

It's worth mentioning here a reduction when compared to last quarter because of the Barueri project going through schedule, normal evolution of the works, less expenses in the quarter. The project will be operational early 2027.

We had relevant investments in the biomethane plant in Jaboatão and also final disposal projects-wise. We'll see more detail going forward in terms of CAPEX, just to give you an overview of where our CAPEX sits.

My last slide about our financial highlights, talk about our capital structure. As I mentioned before, we gained a little more average term.

We have been following a strategy to work our liabilities without even with no pressure, without a need for that. We have a gain in capital cost, but a gain in term, another 7 years.

So 3, 4 years to go, we got more time now. We took advantage of this to work our liabilities a little better.

Our leverage level reflects a project which is still not operational, it's not very fair to compare that leverage with recurring EBITDA because some investments are not operational yet, as I said, and the average term is above 6.5 years, 6.65 years. Once again, in this quarter, that debt had a prepaid cost of R$56 million and the debt is CDI plus 3.80%.

It's the first debt that we took back in 2021, the first window after the restructuring of the company back in 2010s. It had higher costs right off the bat, which can be deferred throughout the debt profile.

There's a cash effect GP&L, but which of course pressures the net results. I always need to talk about the adjusted net results because there are non-recurring effects as well.

I go back now to Pilão, and we can talk at the Q&A later. Thank you.

Back to you, Pilão. In terms of outlook for the coming periods, that's the beauty of our business, I'd say, to maintain our focus, to do more of the same, more of what's working.

What we expect going forward in terms of organic growth is to continue to see price increases and volume increases. As I've said, the price, there's still a lot of room for improvement above inflation in our net gate fee.

We have already contracted several increases, which will account for important impacts both in Q4 and in Q1 2026. That's an agenda you will see unfolding.

In terms of volume, especially for the young EcoParks, we know that's where we have a possibility to grow more in volumes, not only the organic growth of 2% and 3% in volumes, which is only normal year-on-year. There's room to grow more.

We should also see good volumes coming in, especially in Q1 of next year, but also in Q4 next quarter. Once again, a continuity of growth both in price and in volumes.

For biomethane and its ramp-up in Q4, it will have a more real impact on our results. What was before seen as CAPEX will now be impacting our results.

We'll see Jaboatão impacting, especially in December, impacting our numbers with biomethane for Q4, and then for the whole of new year, we'll have EBITDA numbers which will be quite relevant. The size of EBITDA that the Jaboatão plant brings in for the company, those impacts will now become more material as of early of next year.

Of course, Paulínia also will come along as of Q1 next year as well. Other plants are already under construction.

We maintain our focus on building new plants. Several other biomethane plants will start being built.

Under the same outlook, can also see a drop in CAPEX for the new plants. Terms of payment pretty much the same.

The agenda around biomethane not only does it have an impact on results as of Q4, but it will also continue to impact as new projects start to unfold, which will impact future quarters going forward. In terms of carbon credits, our expectation, as I said before, is to continue to have recurring revenues not only based on what we have already sold, but also based on what we expect to sell.

That's an agenda which is quite heated at the moment and a good momentum. The sales we have made have brought on board a reference for us.

After selling to a Google, if you will, we have other clients from the same area knocking on our doors to buy carbon credits. This mouth-to-mouth at a global level works, and we'll continue to have recurring revenues from that, not only because of our sales efforts, but also because those credits which we sell start to be registered.

We talked about the EcoPark in Paulínia, which has a significant amount of credits to be generated. We'll start to have more supply because more projects are being registered, and going along, a good level, a good outlook for demand coming from our commercial front.

That's very much in line with our organic growth. As for the inorganic growth, as people usually ask, the M&A front, as we had shown previously, we acquired an asset last quarter and we continue to work to have a final pipeline of good acquisitions.

What I can advance to you is that you will certainly see, both in Q4 and in Q1 2026, the announcement of new acquisitions of EcoParks which are now under conclusion, if you will, documentation, final phases of conclusion of maturation. The agenda is still maturing, coming close to a conclusion, as I said.

I think that's what we had. I've mentioned our outlook, perspectives.

We can now move on to the Q&A session, if you will.

now start our Q&A session for investors and analysts. If you have a question, please press the button and click in raise your hand.

If your question has been answered, you may remove yourself from the queue by clicking on lower hand. Our first question comes from Mr.

Victor Cunha from Itaú BBA. Over to you, sir.

Good morning, everyone, or good afternoon, actually. Thank you for taking my question.

We saw a quarter where operating costs per ton of waste grew above inflation. If you could give us some context to explain that increase or if we should expect a drop looking forward as investments unfold in terms of leachate treatment.

If I may ask another question, the CAPEX for maintenance in this quarter was about R$10 per ton and R$12 per ton for expansion. What can we expect in terms of packet for maintenance and expansion going forward?

Based on numbers you have released, can we consider that to be recurring numbers? Hi Victor.

This is Leo here. In terms of costs, investments in leachate should improve in terms of what we have today in terms of cost.

There were some one-off events. The growth we had in Sergipe, for example, 50,000 tons in this quarter when compared to last year.

That was a volume of waste which came at a lower margin. It does not come directly to the landfill, there's a cost around transportation.

That's a one-off thing, one-off event. That, of course, increased the cost per ton.

It's about R$500,000 a month, R$0.60, R$0.70 per ton, one-off, as I said, because of a transportation need. Leachate is certainly a point.

Having expanded the treatment plant, we should see a reduction in costs in the coming two years. As for CAPEX, we have reported CAPEX levels at the same level for some time, you could think about something to that tune.

It is recurring, so that level should be expected. For expansion, a little less because it is linked to specific activities around the assets.

We could have a specific session to explain the behavior, if you will, on an asset-by-asset basis when you talk about expansion of landfills, leachate plant. Those are to be monitored on a case-by-case basis.

Thank you. Our next question comes from Mr.

Ricardo Bello from Safra. You may carry on, sir.

Good afternoon. I have three questions.

Number one, about M&A. We heard about what you did last month.

What's the pace for the coming months in terms of an M&A and next month, next year? Also, the auction for capacity reserve, if you could give us some context and what to expect to see going forward based on the most recent news for the auction.

A third question, if we should expect a carbon credit line in a more recurring fashion in the coming quarters. Thank you.

I'll try,

and then Milton can complement. I think M&As, as for M&As, Pilão did mention something.

It's difficult to set a date, but I like the joke and say that M&A is not like marry a marriage. You work It you cannot set a date.

It has its own dynamic. We are working hard, that's as far as I can tell you.

There are opportunities in pipeline, a pipeline of mapped-out opportunities. We are quite excited, but there's no set date for that.

That's That's what I can tell you. I think we are working within our mandate, focusing on what we had planned and announced to you, and we are quite excited in terms of new acquisitions, new businesses being made by the company.

In terms of the capacity auction, we have three three plants that have a vocation, if you will, for that. We have Jaboatão, João Pessoa, and Paulínia.

We'll migrate to biomethane, we do have long-term contracts already signed to provide biomethane. It is feasible to imagine and we'll be participating in those events.

We have been having We're having putting together internal work groups to discuss topics around raw material, molecule providers, to be able to think about the flexibility we have. Those are plants that are within our assets, connected to the grid, some of them, biogas and biomethane on the side, we can do something nice.

Those are smaller projects which might be timely, right? We are excited, as I said.

We have The The schedule is moving forward, and we are keeping a close eye on that, quite in tune with the auction coming up. As for the carbon credits, I think It's nice to try and visualize that throughout history, right?

We had 2022 and 2023 and 2024 strong years in terms of registration of projects, eligibility of those projects for credits. We discussed with investors about whether projects are eligible or not.

We are past that, then we discussed the velocity of sales, when we had one-off sales. Then it's all it's past.

We now have a first year where those events are more recurring or less chaotic, as I mentioned, less erratic. We'll see that more recurrently in our results, in our numbers.

We could discuss the pace or the curve, the growth, 5 million, 15 million per quarter. It's difficult to say, it depends on the dynamics with customers and clients.

Today, we have a very wide array of clients. We have been talking to frequently.

We have redesigned our organizational structure to have a dedicated cell to customers and clients, to have a super senior person traveling around the world talking to those counterparts, and we have managed to achieve or to do good deals. The revenues for the quarter was is not coming from a single transaction, it's a sum total of several transactions.

It's nice to understand and visualize that dynamic. Thank you.

Congratulations on your numbers. Our next question comes from Mrs.

Marta Carizio. She says: "Congratulations on our results.

Much has been said about new acquisitions and new contracts for biomethane. Can we expect something for this year?"

Thank you for your question. We talked about M&As just now.

We are working strongly towards that. We're going to wait to see how those transactions unfold.

The same for biomethane. Our discipline is around only having a project when we have a contract sold.

We have another cell dedicated to that, talking to offtakers for the past two projects in Guapimirim and Curitiba. We did just that, between two to six projects that we think are right to sell biomethane, advanced conversations.

Once again, it's difficult to set a date. We have the counterparts, their own dynamics.

We're talking about contracts which are not off-the-shelf contracts, specificities to be discussed. We have our legal team, our business team with their plates full.

We still have a month and a half to finish the year. Maybe we can do some of this still this year, but yet to be seen.

Thank you. Once again, to ask a question, click on the raise hand button.

If your question has been answered, click on the lower hand button, please. Now wait, please, while we poll for questions.

Our next question comes from Mr. José de Castro.

He says: "What can we expect for 2026 and next years? Recently, I saw news of sales to customers such as Google and Volkswagen.

Should we expect clients of that magnitude?"

You're

talking about carbon credits, right? Yes, the answer is yes, as I've said before.

Just to be sure, our sales effort is international. Today, as you are still waiting for the carbon market to become official or rather regulated in Brazil, we basically sell abroad, volunteer international market.

North American clients, European clients, those are our main offtakers now for carbon credits. The beauty of what we've done on our commercial front was to have taken this in terms of economic, social, and financial feasibility to those clients.

We were, if you will, validated by a company like Google. I don't know if you've seen that, but Google came to Brazil, they had footage, it is part of our social media, this little footage from Google, which is being shown around the world showing our Paulínia EcoPark, showing the whole work done not only by the Orizon Institute on the social side, but also highlighting the impact of our carbon credits and the relevance of that impact on the environmental, social side in terms of eliminating Brazilian dump sites and on the correct waste disposal, the reduction of emissions coming from organic residue in Brazil.

That's really, really nice. When you do that, you have Orizon stand out as a reference, as a role model, as an important player in this industry.

Of course, this will help attract other clients, and you will see sooner than later I cannot mention any names, of course, but you'll see relevant, well-known names coming to our offtaker base for carbon in the coming months. Our next question comes from Mr.

Daniel de Araújo from BNDES. Over to you, sir.

I think you are on mute, Daniel. We cannot hear you.

You may carry on, sir. We'll move on to the next question then.

Our next question comes from Mr. Andre Aguiar from Método Investimentos.

Over to you, sir. Hello everyone.

Congratulations for the results, and thank you for taking my questions. The first one I have about Jaboatão biomethane, during the testing phase, can you share some more data about the production average and if, up to now, that average meets the contract with the gas company, the local gas company?

Also about debt, your net debt, what drove the higher impact in addition to the CAPEX numbers in Q3? Thank you.

I'll

wait for Leo to answer the CAPEX answer, but I'll talk about the first question. The testing phase, the testing period, you have two different parameters: volume and spectrometer quality of the gas.

Basically, gas is being delivered at a quality lever defined by ANP. Throughout the tests, whenever we deliver gas, it met the expectations of ANP at 100%, according to their specs.

That's the good news. In terms of volume, the volume is impacted by tests because you start to deliver in volume, then you increase I'll give you a practical example of what happened during the testing phase to make it more concrete.

The plant is delivering 60,000 cubic meters per day, and then the Copergás informs us that they have a higher pressure on the grid balances, you have to decrease volume, and then you increase again. When you talk about testing phase, during the testing period, you cannot obtain normal levels, normal volumes, because that's what the testing phase is for, to actually balance the pipeline, balance the grid, fine-tune the instruments and measurement parameters.

That's all expected, and there's no impact on the quality of the gas. The plant today has already shown during the testing phase that it can reach the volume parameters and the quality parameters, it's all according to specs.

Now, as long as you do not finalize this testing period, this final balancing, we cannot deliver volume, daily volume at a stable pace. Goes up, goes down, up and down, depending on the testing phase.

That's why I say that we expect stability to emerge in December. It does not mean that October, November you won't be measuring.

We will. Those tests, you have variability, but I'm already delivering and I measure that at the end of the month.

Stability in terms of volume will only be reached when we have a full month in December. As for debt, we see a fast CAPEX pace, and of course, debt follows along.

It's worth mentioning that you have a strong cash composition front to make investments and have organic growth, but the answer is yes. The investment level justifies the level of net debt, which we'll gain more space in the balance sheet as our new projects become operational.

Thank you. Our next question comes from Mr.

Manoel Guedes. He says: "The company has a cash position reported above 1 billion and a leverage level which is under control.

Can you talk a bit more about that strategy for new debt issuances and refinancing, given that there is no pressure on that front?" Thank you for your question.

I think you have captured our strategy in your question. We believe it's worth taking advantage of the fact as debts reach their lock-up position to extend our liabilities and freeing up space on our balance sheet to be able to capture growth opportunities in terms of acquisitions and starting new projects.

That's exactly the strategy, as you mentioned, to have a robust cash position, controlled leverage, but will continue to issue debt, to refinance, because that has a present value which is positive and allows us more time, more terms to capture growth opportunities. The Q&A session is now over.

I'd like to turn the floor back over to Mr. Pilão for his final remarks.

Good morning, everyone. Thank you so much for participating in our call, for your questions.

Any additional question or comment, our IR team remains available. Once again, thank you.

Have a nice weekend, see you next time. This concludes Orizon's conference.

Thank you all for participating. Have a nice day.