Good morning. Welcome everyone to our quarter 1 2026 earnings conference call.

I would like to spend a few minutes talking about some internal matters relative to the executive structure of the company, and then I will go into what happened in the market in the first quarter of this year, and the main highlights of our performance in quarter 1. I would like to start with the recent executive board structure that was approved in our latest general meeting on April the 30th.

This is a simplified structure. Three of the vice presidencies were removed from this structure.

It continues to be a functional structure. The four VPs have very clear roles, and this will continue until the operational standards and the models in this company are consolidated and closer and closer to excellence.

Also, from the functional standpoint, going beyond Flavia, our investor relations, strategy, and M&A director, we have Clarissa Rebelo, who has now joined our executive board, and she is responsible for legal, regulatory, and compliance with a very clear investment that we made to improve our governance model, the quality of our processes, and so on. This entire team is present with us today in this conference call.

This is a collegiate executive board. We're migrating to collegiate and integrated decision-making, because this integrated operation model is very important for us at this point in time.

The four VPs, all of them will be directly in charge of business. In addition to their functional roles, they also are responsible for important businesses.

Here, I'd like to highlight two characteristics that are helping focalize Viveo and simplify our vision in two types of business: one that services logistics, manufacture, the healthcare chain, and institutional chain in Brazil. For example, Cris has 26 years of experience, and she will be responsible for distribution and Insumaria, our compounding pharmacy business.

Here, I also would like to highlight in servicing the healthcare institutional chain, we also have Prevena Prevena. Arthur today, Arthur Avancini, is responsible for Prevena, and in addition to his experience with people and management, he has more than 10 years in healthcare and 8 years in diagnostics.

He will be in charge of our business division that services the diagnostic chain in Brazil. Last but not least, we have Luiz with his brilliant career in consumer goods in different instances, and he will be in charge of our consumer businesses in addition to his VP of operations position.

We also have Fred, our CFO, who has a long track record in digital business, and that is why he will be responsible for Humania, our startup, and he will lead Humania to the next level. This is the simplified structure of our executive board after reducing the layers and after the vast investment that we made in governance and management.

Simplification, focus continue to be the two core aspects here. Now let's move to the external scenario.

This chart explains what happened in the first quarter, and quarter 1 is very important because that's when we have the CMED definitions. CMED recorded the lowest price adjustment of the past 20 years.

Quarter 1 is also very busy in one specific segment, which is oncology in Brazil. I think that you've probably heard the news.

There's a lot of turnover, players, novelties, and important aspects in oncology. It's also important to highlight that the institutional distribution market in Brazil continues to grow, according to IQVIA, at double-digit rates.

This is a very prominent segment with a lot of events, facts, re-accommodations, clean transformation, sometimes positive, and sometimes there are some headwinds, but in a frank transformation. Also, there are changes in the business model in healthcare, payers, verticalization, partnerships between large groups, this continues to be a trend, and also changes in the business model.

The regulatory advancement in Brazil for clinical research is making important changes to this sector and is driving a very important set of innovations, and this will make this segment even more dynamic in the upcoming months and years. Here, I give highlight to the expiration of some patents in oncology and the GLP-1 agonists, which will probably accelerate the dynamics in this market.

Finally, we have the macroeconomic outlook. It's pressured by persistent inflation, very high interest rates, and also the war.

We took some important actions, for example, to hold back the prices of petrochemicals, some decisions to invest in some locations and stock and inventory opportunistically, but also there's a lot of foreign exchange volatility that we should expect looking forward. This was the start of 2026 in Brazil, and we should see a similar picture in the rest of the year.

Finally, I would like to go over the main highlights of the quarter before I turn the conference over to Fred. The first highlight is this idea of the consolidated net revenue.

We are now pursuing quality of business, margin, ROIC. This is the focus of the organization now.

Of course, this leads to a resumption in our results indicator. The gross margin was 15.8% of the EBITDA, and this is an important point.

Fred will go into more details. Cash generation, also, in quarter 1, which is usually a quarter that we do not produce free cash because of the stocking efforts, the dynamic, and the change in prices, and also control over leverage with consistent deleveraging, ending the period at 3.88 times.

We still have a lot of work ahead. Our ROIC ambitions are still pretty bold.

There's a lot of changes in our management model that we still need to implement. We have a lot of markets for us to choose from.

We have a lot of organizational models that we should make changes to looking forward. It seems to me that in this highly volatile environment, the company is performing really well.

Fred, now I turn the conference to you for a deeper dive into our financial results.

Thank you, André. Let me start in chart number 7 talking about our net revenue.

In quarter 1, our net revenue was slightly higher than 2.8 billion, 1.7% increase versus last year. The first highlight here is that in quarter 1 2025, this number still did not contemplate all the adjustments in contracts and commercial strategy that we started to implement as of the second quarter last year.

The comparison basis here is very different. The management strategies were very different last year.

In quarter 1, we hadn't really applied this level of selectiveness, particularly in distribution, the selectiveness that we started applying starting quarter 2 last year with a full effect in the second half of last year. This increase is a small increase, but it is fully in line with the strategy that we have been implementing to be more selective, and moving away from business with inappropriate return, moving towards adjusting our commercial conditions, and everything that we have been seeing for a few quarters now.

In quarter 1 2026, we see the same dynamic in our top line of previous quarters. Now looking at each of the segments, first, hospitals and clinics, which is where we had the highest performance in quarter 1.

Here, there are several positive factors that had a role, but this is the segment in which we made the most adjustments last year. Seeing it back to growing against a comparison basis pre-adjustment comparison basis last year, this shows that despite all the adjustments that we made, we are still very strong in hospitals and clinics.

We could be growing at a higher pace, but this was the choice of the company to slow down this growth a little bit. Now moving on to labs and vaccines.

Here, there was a slight contraction versus last year, and the main reason here is the incorporation of some vaccines to the public healthcare system. Remember that we do not operate with vaccines in the public system, some important vaccines that we used to sell to clinics to vaccination rooms migrated to the public healthcare system, and that led to a small contraction in our revenue in quarter 1.

We will probably have a lower basis than what we had, because this is a portion of the private market that now will disappear, and these vaccines some of these vaccines are relatively expensive, the private sector will probably carry on with smaller volumes in the future. Now looking at retail.

For retail, we saw a drop in revenue, but this was fully planned. We made a lot of adjustments in retail, particularly in the end of last year.

We had a major price increase. We position repositioned our portfolio.

We decided to move away from some categories and prioritize others, but even with this contraction in our revenue, we had a substantial increment in our margin and gross profit. Despite the drop in net revenue, the gross profit more than compensated for this small contraction.

Retail is now starting a different dynamic, starting this year. As for services, there was also a small drop in our revenue.

Here, we're still seeing the effect of the different comparison basis from last year for a few quarters now, particularly in sterile solutions. We saw some verticalizations by important clients that ended up affecting the performance of our services BU.

Now when we look at the impact on our gross profit, there was a considerable increase versus last year, a 2 percentage point expansion in our gross margin. This result is quite positive.

We had high expectations of being able to recover our gross margin as we implemented our strategy, and we see that quarter after quarter, we've been able to operate with better margins at the same time preserving the volume of business that we want to maintain. This combination of commercial selectiveness, focusing on specific segments, and moving away from businesses that do not bring appropriate return, we see that despite the nearly zero growth in our top line or very low growth in our top line, we were able to grow our gross profit nearly 16%.

This is the direction that we're taking in our commercial strategy, and this is what we have been reinforcing quarter after quarter, and we're starting to see the results now very clearly. Our adjusted EBITDA shows this very clearly.

We it was a an increase of more than 30%, more than 200 million in EBITDA, 208 to be more precise, which is very positive. There was also a major increase in our margin, both compared to quarter 4 last year and also quarter 1 last year.

This result is a combination of the better performance in our gross profit, due to everything that I already mentioned, and also very strong discipline in expense management. We are starting to capture some major benefits in our freight lines resulting from all the actions that we took last year.

When we look at the results, I think you can clearly see a very relevant evolution comparing where we came from 18 months ago when we started to implement these adjustments in a more relevant manner and where we're landing now in quarter 1 2026, and also if you look at the past 6 months, they all point to significantly better results than what we had in '24 and the first half of '25. Of course, we understand that there's still a lot of improvements that we must make, but it is clear that the commitments that we took on with the market to improve our profitability, focus on cash generation, and reducing our leverage, we are delivering successfully.

Now on chart number 11, we have our financial result. Here, we saw an increase in our financial expenses in quarter 1.

I think that are two important highlights here. First, in quarter 1 '25, we had some non-recurring gains in our financial results due to the re- buyback of debentures, in line of what we had agreed upon with our lenders in the end of 2024, and also because the base interest rate was is higher now in quarter 1 2026 than in quarter 1 2025.

Now when we compare our operational results with our financial result, we can say that we ended quarter 1 with a net loss of 35 million. Now the next chart shows our cash flow.

We had a very positive performance in our cash flow in quarter 1. Cash generation was a positive 45 million.

Generating cash in the first quarter is always a huge challenge in our business because there are seasonal aspects that have an influence here. First, we have a very strong demand in March right before the price the annual price adjustment by CMED.

The company needs to increase its inventory in quarter 1, and this usually consumes working capital. There's a an unfavorable seasonality in quarter 1.

It is always expected to have cash consumption in quarter 1. This year, with all the efforts, we were able to generate 45 million in cash, which, in our opinion, is a very positive result.

Now when we look at our cycle indicators, we also see very positive points here. Our cash cycle ended at 54 days when we look at the normal cycle, and we adjust by the anticipation of receivables to 65.

Now when we look at when we compare with quarter 1 last year, in both scenarios, there's a relevant improvement between 4 and 5 days of improvement. These 4 or 5 days mean about 100 to 150 million reais in impact of these 4 days of reduction in our cycle.

This is a a relevant impact on the company's working capital, and the company has been working really hard to have more contained and more efficient levels of working capital. We can see this very clearly based on the evolution of our cash cycle indicators.

When we look at our working capital over the net revenue, it's 16.6% for quarter 1. It's a very appropriate level.

Now our net debt, there's something important to highlight here. There was a slight increase in our net debt this quarter, and this was basically because cash generation in quarter 1 tends to be weaker, this is totally expected.

When we look at the company's leverage, there was a major reduction in our leverage in quarter 1. Once again, in quarter 1, we ended the quarter at 3.8 times the net debt over the EBITDA.

Here, it's important to highlight that we had a major drop of the covenants from quarter 4 '25 to quarter 1 '26. Our covenants in quarter 4 last year were 4.5 and now they dropped to 4, and we went even further with 3.88.

After renegotiation of our covenants. On the right, we clearly see how much the company is evolving in terms of its leverage in the past few quarters.

It is clear that our net debt is stable. Of course, there are some small seasonal variations, but it's very clear that we have reached stability, and operational results have improved greatly in the past quarters.

These are very positive news. Also, yesterday, we announced that we're going to hold three general meetings to extend the term for the fourth, fifth, and sixth issuance of debentures.

Because considering the results we have been delivering and all the commitments that we are delivering quarter after quarter, we are now in a very favorable position so that during those meetings, we can effectively roll over the debt maturing in the first half and second half of this year and also next year. We will be finalizing that phase of major adjustments that we started implementing in the end of 2024.

Now we can certainly say that we are very close to having a company with stable leveraging indicators and with operational results already recovered. I stop here, and we will open now for questions.

Thank you.

Good morning. I have two questions.

First question is about the seasonality of your cash cycle. You really highlighted this point during your presentation, the seasonality of the working capital in quarter 1.

Can you please remind us of the trajectory of the seasonality between quarters during the year and what you expect for 2026? This is my first question.

The second question is about the competitive environment. We are seeing some recent movements and changes in the sector involving other players.

How do you see the competitive environment, and is it somehow helping your good results in hospitals and clinics?

This is Fred. Thank you for your question.

The seasonality, usually, the first quarter is a cash consumption quarter, then quarters 2 and 3, you recover what was consumed in quarter 1, and quarter 4 is not so different from the others. The excess working capital that you consume in quarter 1, you recover throughout quarters 2 and 3.

This is the regular, the usual seasonality. When we look at our cash generation this year, we don't give any formal guidance, but our view is that we're generating sufficient cash to service the interest rates and with some clearance here.

This is how we are piloting the business. If we need to decelerate our growth, we will.

We will be piloting the business so that we can generate the cash that we need to pay our debt with some clearance. Now as for the competitive scenario, yes, we believe the competitive scenario is very favorable right now.

This is one of the reasons why, in hospitals and clinics, we have been able to improve our margin and resume our growth despite our highly selective commercial strategy. We are not tapping all opportunities that come our way.

We have been declining some businesses that we don't think have an appropriate margin or working capital below the minimum hurdles that we have established to run our business. Yes, we believe the competitive scenario has been favorable to our strategy.

Thank you. Have a great day.

Good morning. Can you please help me better understand the dynamics of your gross revenue and net revenue?

The gross revenue increased 2% and net revenue was down 2%, I want to understand what are the rebate effects and tax effects that may have influenced this revenue in quarter 1. A follow-up question about your gross margin.

Can you help me understand the grid of your gross margin from 13.8 to 15.8? What in this is pricing?

What is mix, procurement, any efficiencies, or commercial conditions, or even one-off items that may have influenced? Thank you.

In respect to our gross revenue and net revenue, there are some effects here. One is structural: we have a much lower level of returns.

We are working on a set of improvements in our operational indicators to decrease the number of mistakes in our orders or deliveries that are off deadline. Part of it is explained by the lower level of returns, and also the mix.

Because within drugs, we have some drugs that are tax-exempt; you have drugs that have a tax rate of 18, 19, 22. Yes, there's an important participation of the mix.

Product mix and also channel mix. Because the taxes over consumer products and distribution can be quite different.

Yes, there's the product mix, there's the business mix and the lower returns. Now about the gross margin, the important point here is that we had a significant growth of our gross margin in all our segments, particularly in consumer.

In consumer is where we saw the greatest growth in our gross margin. There's many reasons for that: we changed our portfolio, we changed our prices, we moved away from some segments and prioritized others, we changed our commercial policy, there are different effects here, and we are now running a consumer business with structurally higher margins than what we used to have in the past.

Now when we look at distribution, in distribution, we also have higher margins. Here, what I can tell you basically is that this is an effect of price.

We're focusing on improving commercial conditions, we're declining businesses, we are exiting contracts that have a very low margin. When we look at distribution, yes, I think pricing is the main reason, is the main effect here.

Now when we look at the other business units, in sum, the businesses that we lost are businesses that had a much lower margin than the average margin that we operate with. Despite the drop in revenue, margins are higher.

In sum, we are trying to operate at higher margins in all our segments. It's not necessarily that the margin in quarter 1 will be exactly the same in the coming quarters.

I think there are some one-off aspects also, for example, a positive foreign exchange effect in some of our inputs, and we are now assessing whether we're going to transfer that to the price or not. There are some points here that helped us having a slightly higher gross margin in quarter 1 than we usually see.

This is what's happening. Yes, we should operate with significantly higher levels of gross margin than in the past.

Thank you.

Thank you very much for attending. The company will continue on this trajectory of focus, sharp focus, simplification, selectiveness, and certainly, transformation of its culture and its organizational structure.

Thank you very much for attending, and have a great day.