Hi, everyone. Thank you for attending our second quarter result call.

I want to start with the highlights of the following three points. The first one, we reported solid operational results with strong free cash flow, once again showing resilience of the business even with a more volatile geopolitical conditions.

The second point that I also would like to highlight is that on July 1st, we had the Arbex closing, fully aligned with what we had previously expected in terms of timeline. The governance and the management team is already 100% in place, and now we will focus on the integration and on capturing efficiency gains of this new organization.

The third point, I also would like to say that Suzano will keep the focus on reducing the TOD, the total operational disbursing, and, of course, on deleveraging the business. I also want to take the opportunity to say that today is the last call for Aires Galhardo, our Vice President for the industrial operation and also engineering.

Aires is leaving a legacy of major achievements of Suzano, and we all want to wish him every success in his next journey. Thank you very much, Aires.

On the next call, we already have Carlos Aníbal as the company's Industrial and Engineering Executive Vice President. Carlos has been with us for 23 years already, has previously held the roles of Paper Business Vice President, Commercial Vice President, and also Forestry Vice President, huge experience in many areas of the company, and he has been both a supplier and a customer to the industrial area.

We wish him great success in this new cycle. Very welcome, Carlos.

Having said that, I will turn over to Fabio to talk about the paper business.

Thanks, Beto. Good morning, everyone.

Please let's turn to the next slide. Our second quarter performance reflected higher sales volumes and prices, as well as lower SG&A on a quarter-over-quarter basis.

These positive factors were offset by inflationary pressures on wood and oil-related products and logistics, as well as longer-than-expected ramp-up following our annual maintenance downtime in Pine Bluff mill. Looking at our addressable market in Brazil, print and write demand, according to Ibá, remained stable in the second quarter compared to the same period of last year.

On a quarter-over-quarter basis, the 4% growth was driven by seasonality and higher demand for coated papers, benefiting from increased promotional and communication-related activity ahead of this year's elections. On such context, Suzano domestic print and write volumes grew 4% on a year-over-year basis and 10% on a quarter-over-quarter basis.

In the export markets, print and write demand declined 4% year-over-year in the US and Europe, according to PPPC. Latin America showed stability, led by an increase in participation of Asian players in the region.

Now looking at paperboard, demand in Brazil grew 8% in the second quarter when compared to the same period of last year and grew 11% against the first quarter. We noticed some customer inventory buildup in the first half of the year ahead of the implementation of paperboard price increases.

Against this backdrop, Suzano domestic paperboard volumes grew 11% on a year-over-year basis and 28% on a quarter-over-quarter basis. In the US, according to AF&PA's data, SBS shipments grew by 11% year-over-year, albeit at an operating rate around 82%, which is softer year-over-year and stable quarter-over-quarter.

Adjusting for recent capacity closure of Smurfit WestRock's LaTuque mill, Clearwater's Cypress Bend capacity reduction, and the interruption of operations at the Nippon Dynawave facility, operating rates increases to 90% and should support better market dynamics in the second half of the year. Our Suzano packaging sales volumes were quite stable on quarter-over-quarter and year-over-year basis.

Turning to the EBITDA performance, our Brazilian operations improved 28% on a quarter-over-quarter basis with higher volumes and better prices domestically and for our exports, despite unfavorable FX. Compared to second quarter 2025, the EBITDA from our Brazilian operations declined 20% due to lower prices, export volumes, and FX.

Suzano Packaging EBITDA was impacted by the scheduled maintenance outage in May, and operational instability returning from the outage, as well as increased costs due to the ongoing Middle East conflict, especially in oil-related inputs, mainly resins and logistics. Looking ahead to Suzano's paper packaging business performance, sales volumes from our Brazilian operations tend to improve across both domestic and export markets given historical seasonality of the third quarter.

In the US, we start Q3 with a strong order book with improvements in supply and demand dynamics. We remain focused on managing inflationary pressures related to the Middle East conflict, mainly in resin and logistics.

Through initiatives already implemented or currently underway, we expect to mitigate most of these impacts going forward. Now I'll hand over to Leo, who will be presenting our pulp business results.

Thanks, Fabio, and good morning, everyone. Let me highlight the main developments in our pulp business unit during 2Q 2026 and share our outlook ahead.

2Q was marked by different dynamics in pulp markets. In Europe and North America, pulp demand recurrently outperformed expectations, supported by stronger paper production due to water-related effects and inventory replenishments across the value chain as customers aim to get ahead of expected cost increases.

These factors led to consistent month-over-month increases in pulp prices during the quarter. In China, the narrowing softwood-hardwood price spread and the high availability of softwood pulp at Chinese ports weighed on purchasing activity from paper producers, despite solid paper production, higher wood costs impacted integrated local producers, and a greater clarity around the delayed startup of [unclear] mill.

This unfavorable backdrop, driven primarily by softwood dynamics, affected the broader pulp market and led to hardwood pulp price concessions towards quarter end. Even at lower prices, customer purchasing activity remained subdued in June.

At Suzano, our 2Q was marked by constrained production output due to a concentration of planned maintenance downtimes added to our ongoing reduced operating rate, as well as an inventory rebuilding toward minimum operational levels required to support our operations, as previously discussed. As a result, our sales reached 2.9 million tons during 2Q, lower compared to 2Q '25 and slightly above 1Q '26.

Higher prices across all markets combined with the recovery of delayed invoicing to China and Asia drove our average export price to $601 per ton in the quarter. Turning to the right side of the slide, the R$4.2 billion in EBITDA with a 48% margin reflected higher prices in US dollar partially offset by higher cash cogs and FX headwinds.

Now looking forward, I would like to share our view on the key factors influencing pulp market fundamentals. Market dynamics in July were quite similar to those observed at the end of the second quarter: healthy demand in Europe and North America, but mounting pressure in Asia for the same reasons pointed out before.

As hardwood pulp prices in China approached the mid-$500 US dollar range, paper producers stepped up buying activity and our July order intake returned to healthy levels. In addition, our market intelligence team indicates that hardwood pulp inventory levels remained well-balanced both at Chinese ports and on the hand of paper producers in China.

As we move into August, we see a more constructive environment developing in Asia. Seasonal demand is expecting to strengthen, hardwood pulp prices have moved below the cash cost of a number of Chinese producers, and a wider softwood-hardwood price spread enhances the competitiveness of hardwood grades.

Together, these factors should support higher order intake volumes in China and Asia, reinforcing our confidence in a stronger second half of the year. Furthermore, the prospect of paper price increase announcements in Asia should provide additional tailwind for pulp demand in the coming months.

While demand indicators are becoming more constructive, the supply side also presents potential upside risks to market fundamentals. At current CIF China price levels, a meaningful share of global pulp capacity remains under economic pressure.

According to a well-known industry consultancy, their just-updated numbers, approximately 17 million tons of softwood and 5 million tons of hardwood capacity are currently operating below cash cost levels at these China prices, representing close to 30%, 30% of global market pulp production. Production curtailments announcements have reached the headlines during these past months, mostly in softwood pulp, but still insufficient to rebalance the market fundamentals.

At the same time, industry profitability continues to be pressured by rising input costs, several of which are linked to ongoing geopolitical tensions. Still on the pulp supply side of the equation, a stronger El Niño season this year may increase the likelihood of weather-related disruptions in key producing regions, with possible implications for wood availability and production costs.

Together with the recent forest license revocations in Indonesia, these factors could contribute to a tighter-than-expected S&D scenario in the short term. To conclude, I would like to reiterate that Suzano's unmatched business platform, supported by our best-in-class assets and an unique end-to-end logistics capability, provide us the agility to respond quickly to any market conditions and capture commercial opportunities.

With our inventory levels already aligned with our operational needs, we remain well-positioned to navigate the ongoing volatile global environment. With that said, I would now like to invite Aires to share our cash cost performance for the quarter.

Thank you, Leo. Good morning, everyone.

Cash cost excluding downtime reached R$804 per ton in the second quarter '26, broadly in line with our guidance. The 5% sequential increase mainly reflect higher input costs, particularly natural gas, caustic soda, and chlorine dioxide amid continued pressure from global commodity and energy markets from the conflict in the Middle East.

Wood cost also increased quarter on quarter, mostly driven by longer forest radius and mill production mix. These effects were partially offset by stronger utilities results supported by a higher export volumes, favorable FX, and fixed cost dilution from higher production volumes.

The conflict in the Middle East remained a direct factor affecting our year-over-year cost performance, contributing to higher chemical and energy price. Wood cost were pressured by higher logistics and harvesting activities, driven by transportation mix, labor, and maintenance.

These headwinds were partially offset by the same positive factors discussed in the quarter-over-quarter analysis, namely favorable FX effects and stronger energy sales performance. In addition to the higher energy export volumes, energy price benefited from the excess energy auction related to Ribas mill, which became effective in January '26.

Beyond the information presented on the slide, I would like to provide some additional color on maintenance downtime costs. The R$129 per ton recorded in the second quarter '26 mainly reflect a heavier maintenance schedule during the quarter, extending downtime at the Três Lagoas mill and the remain impact of Ribas mill downtime that began in the first quarter '26.

Look ahead, the company remains on track to deliver an average 2026 cash cost excluding downtime of approximately R$800 per ton, in line with its guidance and disclosure assumptions, supported by the gradual cash cost decline in coming quarters. This said, I pass the word to Marcos for his presentation.

Thank you, Aires, and good morning, everyone. I'll start on slide seven explaining the impact of higher oil prices in our operations and the effectiveness of our hedging strategy.

In second quarter 2026, our costs increased by R$275 million due to higher oil-related prices, and we had a positive cash impact of nearly R$150 million from our hedging portfolio, compensating nearly 60% of the negative impact. Looking ahead, we have 85% of coverage of our hedgeable exposure in the second half of 2026 and 35% in 2027.

As a sensitivity, if Brent prices remain at today's level of $87 per barrel, Suzano would receive a positive cash adjustment of R$250 million over the upcoming 18 months. Moving to slide eight, I will show that our currency portfolio continues to protect our free cash flow.

In the second quarter of 2026, we had a positive cash adjustment of R$480 million from our FX hedges. Our portfolio of zero cost collars remains solid at $4.6 billion, with an average put option of R$6.11 per dollar, covering 57% of our US dollar exposure.

As a sensitivity, if the BRL remains at today's level of 5.19, Suzano would receive more than R$4 billion in positive cash adjustments in the upcoming 24 months. Moving to slide nine, our positive free cash flow in the quarter contributed to reduce our net debt from $13 billion in first quarter 2026 to $12.8 billion in the second quarter.

Our leverage ticked up from 3.3 times in first quarter 2026 to 3.4 times in the second quarter, mainly explained by the contraction in our last 12-month EBITDA. Following the acquisition of Arbex in the third quarter, we will consolidate 100% of Arbex net debt and only one quarter of EBITDA.

We believe that the correct way of looking at this metric will be to consider the last 12-month EBITDA of Arbex. We remain highly focused on executing our strategy to reduce Suzano's leverage following the conclusion of this transaction.

Lastly, we maintained a very healthy cost of debt at 5.1% in US dollars, with a comfortable amortization schedule of 76 months, with limited amortizations in the short term. Important to mention that we continued our liability management effort in the second quarter 2026, and we issued R$2.5 billion, or $500 million, in local instruments with an average tenor of nearly 11 years and a final cost 60 basis points below the Brazilian benchmark rate for the same period.

Now, I'd like to turn the call to Beto for his final remarks.

Thank you, Marcos. I want to highlight three main points looking forward.

The first one is that we're still expecting higher demand on the second semester, and then stronger sales. That's the first point.

The second one is that we're still confident that we will deliver the guidance regarding the cash cost that we share with all of you. The third one is that we are already expecting efficiency gains from the Arbex operation in the second semester, since the team is already in place.

Having said that, I will open for questions.

Good morning. Thank you for the opportunity.

My first question is on your cash cost guidance for the year, right, which you kept at R$800 per ton, which points toward a drop to levels below R$800 per ton in the second half of the year to achieve that. I know that you guys are confident on achieving that, but I just wanted to see if you can share some more color on the main components, right, of that cash cost and the variables that should help you deliver that guidance.

If you can give us also some color on the general trends that you're seeing for next year, how sticky some of those cost impacts from the conflict are, that would also be great. Then secondly, a question on leverage, right, with the company targeting to reach that level below 2.5 times net debt to EBITDA in 2027 to '28, and you still have to consolidate the net debt from Arbex.

Just wanted to see if you can share some color on the pathway towards achieving that level, if you believe at this point that it can be reached solely with free cash flow generation in the period or to what extent you're incorporating divestments as part of that assumption to reach that level. That would also be very helpful.

Thank you.

Hi, Caio. Thank you.

I'll start with the leverage question. The bulk of the free cash flow generation will continue to come from our operations.

We expect to generate that from our business. As Beto mentioned, we also expect Arbex to contribute on our deleveraging process as they will be able to generate efficiency gains over the upcoming quarters, namely in 2027 and in 2028.

On top of that, as we started mentioning in our last Suzano Day in December last year, we are also focused on a couple of divestments on non-core assets. We mentioned to you that we will have a strategy of selling land plots in Brazil that could be sold to a higher, best use than being only being used by planting forestry.

We started that in the last months and last quarters, and we expect that to also help on the deleveraging process going forward.

Hi, Caio. Aires speaking here.

For second semester, there are three main reasons to choose expecting a decrease in our cash cost. We don't have significant downtimes at our facilities that will increase our production put in the dilution of the fixed costs.

The second one, this downtimes normally impact other costs in the analysis, because normally bring to the general shutdown some other maintenance that will have scheduled today here. The third and most important factor, we expect a reduction of the consumption in the woods, especially because we've been totally in place our deal with [unclear] that we presented in the end of last year, it will take place in a good amount and reduce probably our radius and wood consumption in the coming years.

There is another important effect, that's energy. Probably in a specific quarter, we have an increase of surplus and deliver a better result.

For next year, I prefer Carlos being in place to say what he looking for coming here.

That's very clear. Thank you, gentlemen.

Thank you. Morning, everyone.

Aires, I've been following your work since your Fibria times and very well done. Congrats on the great journey on Fibria and then on Suzano.

It's been truly remarkable the operational deliverables you guys have delivered. Congrats and good luck on the next steps.

I have a couple of questions. The first one on Arbex.

I've seen many LinkedIn updates, clearly you've been moving fast in terms of putting the team together, and I'm sure by now you probably have an even better idea on what the company and the assets and the markets look like versus when you did the due diligence for the acquisition. Be great to hear your updates, early impressions, next steps, and your ongoing conviction on the deliverables that can be expected.

Secondly, maybe on the paper side, I think Fabio mentioned China imports have been hitting the market. We've been hearing about Chinese and Indonesian imports being more harmful to the Brazilian market as well.

Trying to understand if you can see actions being taken by the government in terms of tariffs and how you are positioned for that. Also if you can comment on the US profitability side, that would be great as well.

Thank you both.

Hi, Marcio. This is Beto.

Let me cover the Arbex and then the team here will cover the other questions. I think three things that we should highlight on the Arbex deal.

The first one is that the clean team from Suzano and from Kimberly-Clark have been working together during all this period of time, and they have delivered tremendous job in terms of carveout and also in terms of writing down all the value gain streams that we had in place. All the premises that we shared once we announced the deal, we want to confirm that they all are still in place.

We are now focused to deliver the premises that we also shared with you. The second thing is that the governance also, it's working already.

We have a board already in place with three members from Suzano, two from Kimberly-Clark. They already had the first meeting.

They already are working to implement the plan that we have approved, and secondly, we are very glad about the management team that we were able to put together with people from both companies and also hiring people from outside. We are confident that we have a very strong team to extract all the efficiencies that we share with you once we announced the deal.

The team very confident about what we are able to build with this initiative. Thank you.

Let's go hand over to Leo.

It's Fabio here.

To Fabio.

Marcio, thank you for your question. Let me take the first part about the Chinese imports.

Yes, we have seen a big inflow of Chinese imports in the first half of the year. This is mainly given the stronger real for most of the first part of the year, and also lower freights that we have seen especially in the beginning of the year.

Things have changed a little bit. We have seen some price increases announced by Indonesian and Chinese paper producers.

Also, we have seen rising freight costs main with the Middle East conflict. Also, the Brazilian real has weakened a little bit.

Let's see what happens in the second half of the year with these adjustments. Through Ibá, the main players are discussing ways of protecting the domestic industry, looking at our import duties and see if we have the right level of import duties in order to protect what we're doing.

We are discussing with the Brazilian government ways of protecting the national industry here. Your second question regarding US profitability, we have had a difficult second quarter.

We had a cold maintenance outage, which is first time that we have done that in Pine Bluff. It's the one that we turn off all the utilities at the mill, and so we had some difficulties bring the mill back to operations, and that affect our results in the second quarter.

Also, we have a delay in price protection. We have 80% of our volume under contract, and our contracts they offer some inflation protection prices, but there's a lag of three months between when the cost hit us and when we can increase price to customers.

That second quarter was the lag period that we had higher costs and prices start rising now in the third quarter. We are optimistic about the second half of the year, as I mentioned.

There's some things happen in the market. Our main competitor had a major accident at the mill, is still down, not operating.

That's Nippon Dynawave. We have received a very strong orders book for the second half of the year.

We now need to produce well and so that we can collect all these volumes that we have already in place here with us in terms of orders. We're very positive about the second half of the year.

We have no major event in terms of maintenance planned for that period. We see the mill running much better now in August already.

We're optimistic.

Great. Thanks a lot, Beto and Fabio.

I'll turn it over.

Good morning. Thanks for taking my questions.

Aires, thanks for the interactions over the past few years. Wishing you good luck and congrats, Aníbal, for the new position.

First question on pulp market. Leo, your speech seemed a bit more constructive versus what we have been hearing over the past one or two months.

I just wanted to hear thoughts on how strong you believe demand will be in the end of August as we approach a stronger demand seasonality. If you are comfortable to call where we are in hardwood pulp as the bottom, and any other comments that you can provide on the cycle could be interesting as well.

The second question, Beto, on capital allocation. The company still have some potential investments going forward, like you have the right to increase your share in Lenzing, in Arbex.

You also have a buyback program open, and you have this priority now to deleverage. I just wanted to hear your thoughts and your framework here on which areas you should prioritize.

If you can consider any sort of asset sales to accelerate deleveraging, and your overall thoughts on how you're going to balance the buybacks, the potential investments, and this deleveraging process. Thank you.

Hi, Rafael. Good morning.

Thank you for your question. Yes, indeed, we are a bit more constructive when it comes to volume allocations.

As we know, second half of the year is seasonally higher than the first half of the year. During this first weeks of August, all interactions that we are having with our Asian customers and Chinese customers, obviously, are extremely positive.

We expect that August order intake will exceed significantly our average order intake pattern, we are quite confident of that. We're also seeing now the first signs of integrated Chinese producers, mainly the higher cost ones, already coming to the table to start discussing and negotiations, so that's always a big indication of higher volumes going forward.

Regarding your question if we see hardwood pulp reaching the bottom, obviously, we cannot give forward-looking statements, but we are confident as negotiations have started that at current levels or very close to them, we will see the industry moving in China and in Asia, and consequently in Europe and North America as well. We are very confident of a strong second half of the year.

Hi, Rafael. Thank you for the question.

To be very straightforward in terms of capital allocation, our priority, it's really deleveraging. This is where we're going to focus despite rights that we might have on those deals that you mentioned before.

This is also related to buyback. Again, the focus and the main priority of the company is deleveraging, and this is what we're going to focus on.

Regarding asset sales, you know that we own nearly 1 million hectares in terms of land, and we have a small part of that, very small part of that, that we call higher and best usage of the land that we might divest. Actually, we have started already.

Besides that, there's no other important divestment process that we are taking into consideration at this time.

Perfect. Thank you, Beto and Leo.

Hi, everyone. Thanks for the opportunity.

Before we start, I'd also like to thank Aires for all the trainings we've had over the years, your constant availability to engage with us. It's really been a privilege to follow your journey across Aracruz, Fibria, and Suzano, best of luck in your next steps.

My first question, Marcos, you mentioned that you expect the internal free cash flow generation to be the main driver of your deleveraging path over the next few years, followed by some opportunities to divest from non-core assets, and so on and so forth. At what time or at what point do you believe the company can rethink about its formal policies so as to maybe send a clearer message to the market in regards to shareholders returns, for instance, by changing its dividend policy?

Because I think that the main point of discussion we've had with investors since last night was with super strong free cash flow, operating free cash flow, that you posted this quarter, right? Once this continues to materialize after the incorporation of Arbex, maybe you are going to start to be asked about capital allocation, and so on and so forth.

I'd like to understand how your official policies enter into this discussion. Then, maybe my second question to Leo.

If you could expand a little bit more, Leo, of course, you can't say whether you're close or not to the bottom of prices for this cycle, but if you could give us more information or more details about what you just said, that there are some high-cost integrated Chinese producers maybe considering buying market pulp, right? What are your estimates in regards to the Chinese pulp production cost depending on if they use domestic wood or if they import wood chips from Vietnam, for instance, because we're seeing wood chip prices increasing across South Asia in general, right?

That would be really helpful. Thank you, everyone.

Hi, Daniel. Thank you for your question.

First, I would say that we continue to be very focused on our strategy. The first point is we will continue to be never satisfied in terms of how competitive we can be in our operations.

We're always looking for opportunities to improve our efficiency in all the value chain that we have, starting from the forestry, actually from the nursery, to the forestry, to the logistics, on the commercial area, in the industrial area, on and so forth. This will be a top priority for us.

This we believe that this will help and contribute to generate cash to reduce our leverage. Second point, as we mentioned, we will continue to extract value from our recent growth investments that we made, and the most relevant one is Arbex, for sure.

We are confident that we will be able to deliver the efficiency gains that we are expecting for that business. Last point, we should look for optionalities that we can have and that we can bring to the table, as we have a irreplicable asset base in our hands.

We start with the land plots, as we mentioned, but we could extrapolate that into other business that we have. Of course, whenever trying to extract value from our asset base, this could take some time.

We mentioned to you before that we have very strong and competitive logistic assets that we have in Brazil, replicable as well, that we could extract value from that in the future, but could take more time. For the short term, we are definitely focused on bringing the leverage to the level that we believe it's healthy for the company, 2.5 times.

As we reach that, we will be able to decide on a more aggressive or not return to shareholders. I would say that the main assumption behind considering a new return to shareholder would be focus on deleveraging the company to 2.5 times.

Super clear, Marcos. Thank you.

Hi, Daniel. This is Leo here.

Thanks for your question. I'm going to try to give a color in other variables other than just wood to fund the momentum why we see a constructive second quarter or second half of the year with several potential upsides in the model.

First, with all our market intelligence team in China and all the work we do, our current estimate of average cash cost for pulp production in China ranges from $540 or $535 to $550. That's the average Chinese cash cost, obviously older mills operate at a higher cash cost and newer mills at a lower cash cost.

Prices, as are very close to these levels and already breaching the cash cost of higher-cost Chinese producers. I'm not even talking about marginal cash costs, because that's in our view around $630.

We really think that something has to go on this global pulp scenario. As I mentioned before, continue to say it's completely unsustainable to see an industry operating with 30% of the total production underwater.

This cannot be sustained for a longer time. A bigger evidence of that is the amount of unplanned downtimes and closures announcements that we have seen so far.

I have always been saying that this is one of the drivers of change that's not in our forecasting models, but that happened and could happen in cycles like this. Just to exemplify, the unplanned downtimes and closures last year totaled roughly 1.7 million tons adding softwood and hardwood.

What we know up to today with yesterday's announcement of Metsä Tissue, we are now reaching 2.5 million tons already. Again, that's just until yesterday, it's a 45% increase in unplanned downtimes and closures up into August, right?

That's almost 1 million tons of product that's now less available to market, but in my view still insufficient. We still need to see more closures for market to recover balance.

Last but not least, it's important also to look at the inventory levels at Chinese ports. They are high indeed, but they are reducing.

We see a reduction from peak of roughly 300,000 tons. In our view, that's all softwood inventory is being reduced.

Few months ago, inventories of softwood represented 65% of what was available at ports based on our marketing info and teams in the ground. Today, we see maybe a 50/50% build up in terms of what is the Chinese stocks, meaning that if you make the calculations, hardwood is completely on balance, but there's still a overstock in softwood grades, which we believe with this number of announcements of closures and expected future announcements to come under this economic scenario, which I mentioned, should again reshape and rebalance Chinese inventories and consequently the market as well.

Thank you, Leo.

good morning. I have a couple of questions.

One is just to Marcos on working capital outlook, just wanted to hear if you have any visibility on potentially freeing up some working capital to help that process of deleveraging in the second half of the year. The main question I have is for Beto on strategy.

When we discuss the investment case for Suzano, one pushback that we constantly receive is, again, because of the past, and the fears of potential opportunistic M&A shifting the focus away from deleveraging and shareholder returns into more investments. I just wanted to make the question very vocally to you so that we can, for sure, clarify even better that how management sees M&A as in your toolkit of potential things to do, and just how you look at it as a whole.

That's it from me. Thank you very much.

Hi, Rodolfo. Thank you for your question.

On working capital, definitely we have a very strong focus on improving that line. This is a target, an internal target for the company, and it resounds on the never-satisfied approach that we have.

How can we be more effective and more efficient on our inventories? How can we be more efficient on our CapEx, on and so forth?

We will continue to look at this line with a very close eyes and looking to capture opportunities. However, I would say that there are fluctuations in that line that are very frequent, right, in most of the accounts that are relevant.

Accounts receivables, accounts payable, CapEx postponements, on and so forth. It's very difficult to predict or to forecast anything on that line.

You can bear in mind that this is a strong focus of the management at this point in time.

Hi, Rodolfo. Thank you for your question.

I have been saying that our strategy, it's very concentrated currently on reshaping the level of competitiveness of our company. We still have a lot to do on that area in the next couple of years.

The commercial team have been doing a great job, and creating new demand through the fiber-to-fiber strategy. The potential of those initiatives is still in place and still growing.

As I said, on the very short term, the next two, three years, deleveraging the business. There's no M&A in the pipeline at all.

This is what we're going to keep focus, and this is what we want to do. Thank you, Rodolfo, for your question.

Very clear. Thank you.

Yes, thank you. The question that I have tries to put together some of the comments that you have made during the presentation.

The fact that China is exporting more, what you mentioned about the situation in China, and we know that consumption in China has been very weak recently, overall consumption, not only paper. This is something that more people are starting to think this is a structural, not something cyclical, and at the same time they are producing more.

I'm wondering if at some point are you considering what could happen if you start having overcapacity and more supply in China, more exports, the need for more exports as we have seen in many other industries? What grades and what markets you think could be more exposed?

What would be the strategy, especially this is important especially as you are getting more exposure to new markets through Arbex? If you can comment on how this situation could unfold or what are your thoughts about what we are seeing today?

This is Leo here. I'm going to answer your questions, but before that, I'm going to get back to Daniel's question when he asked about the wood impact in China, and just to clarify, because I skipped that one.

We are seeing today the Chinese industry using roughly 58% to 60% of their needs from local wood in China, and roughly 40%, 42% imported. The important part of it, there is a price increase, as we all know, that ranges from $30 to $50 from end of last year.

I think in two calls ago, I mentioned that this could be a probable impact related to the revocation of the Indonesian licenses, and now Indonesia importing wood from Vietnam, which is what's happening. In China, there's also a uplift in prices compared to early last year's prices of roughly $30 BDMT.

We see a lot of volatility in the short term, very related to the typhoon season. There's a big correlation of wood prices in China and this weather-related event.

Every time a typhoon occurs, and obviously the recurrence of those in a strong El Niño year is higher, we see peaks every once in a while. All in all, if we consider the lowest part of this range of $30 BDMT increase, we're talking about $60 increase in the cash cost of the Chinese producers.

If we consider the upper range of $50, that's a $100 per ton cash cost increase for Chinese integrated or pulp producers. That's our view on wood.

Now going to Alfonso's question, this is a big dilemma, right, Alfonso? I'd start by saying what I don't agree to.

We don't agree that the consumption in China in paper grades is weak. We see in most grades, packaging and tissue, double-digit demand growth in China.

It is not our view that we're seeing a contraction of demand in that grades. Obviously, printing and writing grades still grow domestically, the demand for those still grow, but at a lower pace and not double-digit.

We're not seeing at all in any of these grades a trend in paper grades that point out to a negative consumption trend. It is a positive consumption trend in China, obviously excluding exports and adding imports to that.

Yes, there is an overcapacity in the industry. This is not new.

This is not 2026 information. This has been going on for many years or decades.

It's important to say that there are grades that are easier to be exported, which are more efficient in logistics, I would say, printing and writing and packaging grades. As you kind of correlated to Arbex, your question, and tissue, tissue obviously is a product that's much harder to be exported because logistics and the cost of logistics is a key component.

It's a product that usually you would reach efficiency closer to your production basis. Risk levels differ among different grades in terms of paper production.

That's very helpful. Thank you.

Thank you very much again, all, for our second quarter 2026 results. I want to thank you, and if there is any further question, please get in contact with our RI team.

We will be keen to answer any further though. Thank you very much, and have a good day.